Exhibit 99 |
Contact: |
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Richard F. Latour |
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President and CEO | |||
Tel: 781-994-4800 |
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MICROFINANCIAL INCORPORATED ANNOUNCES
FIRST QUARTER 2005 RESULTS
Woburn, MA -- April 27, 2005 -- MicroFinancial Incorporated (NYSE-MFI) a financial intermediary specializing in vendor based leasing and finance programs for transactions in the $500 to $15,000 range, today announced financial results for the first quarter ended March 31, 2005.
The net loss for the quarter was $2.7 million, or $0.20 per share, compared to a loss of $4.7 million, or $0.36 per share, in the first quarter of 2004.
Revenue in the first quarter of 2005 was $10.9 million compared to $18.0 million in the first quarter of 2004. Revenue from leases and loans was $1.5 million, rental income was $6.4 million, and other revenue components contributed $3.0 million for the quarter.
Total operating expenses for the quarter declined 42.5% to $14.8 million from $25.8 million in the first quarter of 2004, driven by ongoing cost rationalization initiatives implemented in the past several quarters. Interest expense was $0.2 million, a result of lower debt balances. Selling, general and administrative expenses decreased $1.0 million to $6.3 million from $7.3 million in the first quarter of last year, reflecting a continued reduction in personnel-related expenses.
Depreciation and amortization expense declined 42.2% to $2.5 million for the quarter, reflecting the decline in the number of rental and service contracts from the first quarter of 2004. The first quarter provision for credit losses decreased to $5.8 million from $13.4 million in the first quarter of 2004, while net charge offs decreased to $10.1 million versus $19.6 million
Richard Latour, President and Chief Executive Officer said, "As part of our plan to rebuild the origination business of our subsidiary, TimePayment Corporation, we are actively increasing our industry presence with more focused and targeted sales and marketing. We continue to invest capital to build the infrastructure to support these plans, and have brought in new leadership to spearhead the effort. In order to add new vendor relationships and provide new revenue sources to drive our growth, we are attending multiple trade shows, increasing advertising in trade publications, and developing new sales and marketing materials.”
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As part of this new business development effort, in the first quarter of 2005, the Company approved 67 new vendors to bring the total number approved since July 1, 2004 to 105. During the first quarter, the Company sourced from this core group of vendors approximately 500 applications which resulted in $1.1 million in new originations. In addition, more than 70% of the applications were processed utilizing the Company’s proprietary internet based credit approval system.
Recent company initiatives include:
• | Bolstering the sales and marketing infrastructure to support the launch of new originations in 2005, including the appointment of Tom Herlihy to Vice President of Sales & Marketing. |
• | Reinstating a dividend policy and approval of a dividend payment of $0.05 per share payable on May 13, 2005. The dividend policy will be reviewed by the board on a quarterly basis. |
Balance Sheet
Sequentially, amounts greater than 31 days delinquent on March 31, 2005 decreased to $23.6 million from $33.3 million on December 31, 2004. Cash received from customers for the quarter was $16.1 million compared to $25.2 million during the same period in 2004. Sequentially, cash and cash equivalents improved to $18.0 million at March 31, 2005, compared to $9.7 million at December 31, 2004.
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MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
| December 31, | March 31, | ||||
| 2004 | 2005 | ||||
ASSETS | ||||||
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Cash and cash equivalents | $9,709 | $18,006 | ||||
Net investment in leases and loans: |
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| Receivables due in installments | 59,679 | 42,928 | |||
| Estimated residual value | 9,502 | 7,737 | |||
| Initial direct costs | 453 | 300 | |||
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| Advance lease payments and deposits | (25) | (29) | |||
| Unearned income | (6,313) | (4,552) | |||
| Allowance for credit losses | (14,963) | (10,639) | |||
Net investment in leases and loans | $48,333 | $35,745 | ||||
Investment in service contracts, net | 4,777 | 3,840 | ||||
Investment in rental contracts, net | 1,785 | 2,448 | ||||
Property and equipment, net | 754 | 759 | ||||
Other assets | 2,412 | 2,161 | ||||
Deferred income tax | 3,500 | 4,822 | ||||
| Total assets | $71,270 | $67,781 | |||
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
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| December 31, | March 31, | ||||
| 2004 | 2005 | ||||
Notes payable | $34 | $79 | ||||
Subordinated notes payable | 4,589 | 4,628 | ||||
Capitalized lease obligations | 41 | 9 | ||||
Accounts payable | 2,474 | 1,703 | ||||
Dividends payable | - | 659 | ||||
Other liabilities | 2,039 | 2,585 | ||||
Income taxes payable | - | 14 | ||||
| Total liabilities | 9,177 | 9,677 | |||
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Stockholders' equity: |
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| Preferred stock, $.01 par value; 5,000,000 shares authorized; |
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| no shares issued at December 31, 2004 and March 31, 2005 | - | - | |||
| Common stock, $.01 par value; 25,000,000 shares authorized; |
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| 13,410,646 shares issued at December 31, 2004 and March 31, 2005 | 134 | 134 | |||
| Additional paid-in capital | 45,244 | 42,980 | |||
| Retained earnings | 19,186 | 15,203 | |||
| Treasury stock, at cost (225,480 and 16,751 shares at December 31, 2004 |
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| and March 31, 2005, respectively) | (2,420) | (166) | |||
| Deferred compensation | (51) | (47) | |||
| Total stockholders' equity | 62,093 | 58,104 | |||
| Total liabilities and stockholders' equity | $71,270 | $67,781 | |||
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MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
| For the three months ended | ||||
| March 31, | ||||
| 2004 | 2005 | |||
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Revenues: |
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| Income on financing leases and loans | $4,167 | $1,508 | ||
| Rental income | 8,465 | 6,429 | ||
| Income on service contracts | 1,731 | 1,088 | ||
| Loss and damage waiver fees | 1,131 | 819 | ||
| Service fees and other | 2,515 | 1,017 | ||
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| Total revenues | 18,009 | 10,861 | |
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Expenses: |
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| Selling general and administrative | 7,280 | 6,348 | ||
| Provision for credit losses | 13,408 | 5,810 | ||
| Depreciation and amortization | 4,295 | 2,484 | ||
| Interest |
| 846 | 205 | |
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| Total expenses | 25,829 | 14,847 | |
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Loss before benefit for income taxes | (7,820) | (3,986) | |||
Benefit for income taxes | (3,129) | (1,322) | |||
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Net loss | ($4,691) | ($2,664) | |||
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Net loss per common share – basic and diluted | ($0.36) | ($0.20) | |||
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Weighted-average shares used to compute: |
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| Net loss per share – basic and diluted | 13,179,548 | 13,254,838 | ||
About The Company
MicroFinancial Inc. (NYSE: MFI), headquartered in Woburn, MA, is a financial intermediary specializing in leasing and financing for products in the $500 to $15,000 range. The Company has been in operation since 1986.
Statements in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes," "anticipates," "expects," "views,” “will” and similar expressions are intended to identify forward-looking statements. The Company cautions that a number of important factors could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Readers should not place undue reliance on forward-looking statements, which reflect the management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure that it will be able to anticipate or respond timely to changes which could adversely affect its operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of the Company's common stock. Statements relating to past dividend payments or the Company's current dividend policy should not be construed as a guarantee that any future dividends will be paid. For a more complete description of the prominent risks and uncertainties inherent in the Company's business, see the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission.
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