Exhibit 99.1
Contact: | Suzy W. Taylor | |
866-652-1810 |
FirstCity Financial (NASDAQ FCFC) Reports First Quarter 2005 Earnings of $2.5 Million
Waco, Texas May 12, 2005...
Highlights of the Quarter:
• | FirstCity reports 1st quarter 2005 earnings of $2.5 million, or $.21 per diluted share | |||
• | FirstCity invested $2.2 million in portfolio assets for the quarter. | |||
• | FirstCity invested an additional $2.0 million in equity investments. | |||
• | Pipeline for portfolio assets remains strong. |
FirstCity Financial Corporation today announced net earnings to common stockholders for the quarter ended March 31, 2005 of $2.5 million or $.21 per share on a diluted basis.
Components of the results are detailed below (dollars in thousands except per share data):
Three Months Ended | ||||||||
March 31, | ||||||||
(unaudited) | ||||||||
2005 | 2004 | |||||||
Portfolio Asset Acquisition and Resolution | $ | 4,188 | $ | 4,046 | ||||
Corporate interest | (73 | ) | (1,000 | ) | ||||
Corporate overhead | (1,566 | ) | (1,312 | ) | ||||
Earnings from continuing operations | 2,549 | 1,734 | ||||||
Discontinued Consumer operations | — | 3,115 | ||||||
Net earnings to common stockholders | $ | 2,549 | $ | 4,849 | ||||
Diluted earnings per common share | $ | 0.21 | $ | 0.41 | ||||
James T. Sartain, President and CEO of FirstCity said, “We remain very optimistic regarding the portfolio acquisition business. Our pipeline is as strong as it has ever been. We are currently evaluating eighteen different transactions representing over $5 Billion in face value of assets. These prospects, coupled with our strong liquidity, position the company to perform very well in 2005.”
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Portfolio Asset Acquisition and Resolution
FirstCity purchased $14.9 million in portfolio assets through Acquisition Partnerships during the first quarter of 2005. Purchases consisted of four portfolios – three in the United States and one in Mexico. Equity invested during the quarter by the Company was $2.2 million, consisting of $1.5 million in the U.S. and $.7 million in Mexico. | ||||
Portfolio purchases are detailed below (in millions): |
Domestic | Europe | Latin America | Total | Invested Equity | ||||||||||||||||
2005 | ||||||||||||||||||||
1st Quarter | $ | 12.1 | $ | — | $ | 2.8 | $ | 14.9 | $ | 2.2 | ||||||||||
2004 | ||||||||||||||||||||
4th Quarter | 23.2 | — | 22.7 | 45.9 | 11.1 | |||||||||||||||
3rd Quarter | 26.6 | — | 9.5 | 36.1 | 27.1 | |||||||||||||||
2ndQuarter | 34.9 | 9.8 | 40.7 | 85.4 | 18.5 | |||||||||||||||
1st Quarter | 6.5 | — | .2 | 6.7 | 3.1 | |||||||||||||||
Total Year 2004 | $ | 91.2 | $ | 9.8 | $ | 73.1 | $ | 174.1 | $ | 59.8 | ||||||||||
Total Year 2003* | $ | 92.6 | $ | 31.2 | $ | 5.4 | $ | 129.2 | $ | 22.9 | * | |||||||||
Total Year 2002 | $ | 61.4 | $ | 98.7 | $ | 11.7 | $ | 171.8 | $ | 16.7 | ||||||||||
* | The Company invested $3.4 million in partnerships during 2003 in addition to the acquisitions above. |
During the quarter, FirstCity also invested $2.0 million to increase its ownership percentage in a French servicing company from 10% to 12% and in an Acquisition Partnership located in France from 33% to 43%.
Operating contribution from the Portfolio Asset Acquisition business for the first quarter was $4.2 million. The earnings are comprised of $9.6 million in revenues and $5.4 million of expenses. The business generated 62% of the revenues from domestic investments, 25% from investments in Latin America and 13% from investments in Europe. The major components of revenue for the quarter include equity earnings in Acquisition Partnerships and servicing entities of $3.4 million, servicing fees of $3.2 million, gain on resolution of Portfolio Assets of $1.9 and interest income and other of $1.1 million.
Operating contribution from the Portfolio Asset Acquisition business for the first quarter includes net foreign currency gains of $549,000, which is comprised of $319,000 in Mexican peso gains and $230,000 of Euro gains. Quarterly results were less impacted by foreign currency fluctuations, as the Company borrowed in Euros to hedge the risk associated with foreign currency exposure.
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The following table details the impact of these items on corporate earnings.
Three Months Ended | ||||||||
March 31, | ||||||||
(unaudited) | ||||||||
Illustration of the Effects of Currency | ||||||||
Fluctuations(dollars in thousands) | 2005 | 2004 | ||||||
Earnings from continuing operations as reported | $ | 2,549 | $ | 1,734 | ||||
Mexican peso gains | 319 | 463 | ||||||
Euro gains | 230 | 309 | ||||||
Mexican peso exchange rate at valuation date | 11.29 | 11.09 | ||||||
Euro exchange rate at valuation date | 0.77 | 0.82 |
Conference Call
A conference call will be heldtoday at 9:00 a.m. Central timeto discuss first quarter 2005 results. A question and answer session will follow the prepared remarks. Details to access the call and webcast are as follows:
Event: | FirstCity Financial Corporation First Quarter 2005 Conference Call | |
Date: | Thursday May 12, 2005 | |
Time: | 9:00 a.m. Central Time | |
Host: | James T. Sartain, FirstCity’s President and Chief Executive Officer | |
Web Access: | FirstCity’s web page-www.fcfc.com/invest.htm or, CCBN’s Investor websites-www.streetevents.com and,www.earnings.com |
Dial In Access: | ||||||
Domestic | 866-761-0749 | |||||
International | 617-614-2707 | |||||
Pass code - | 19967857 | |||||
Replay | ||||||
Domestic | 888-286-8010 | |||||
International | 617-801-6888 | |||||
Pass code - | 12567178 | |||||
Available until | Thursday, May 26, 2005 |
Forward Looking Statements
Certain statements in this press release, which are not historical in fact, including, but not limited to, statements relating to future performance, may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, performance or achievements, and may contain the words “expect”, “intend”, “plan”, “estimate”, “believe”, “will be”, “will continue”, “will likely result”, and similar expressions. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. There are many important factors that could cause the Company’s actual results to differ materially.
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These factors include, but are not limited to, the performance of the Company’s subsidiaries and affiliates, availability of portfolio assets, assumptions underlying portfolio asset performance, risks associated with foreign operations, currency exchange rate fluctuations, interest rate risk, risks of declining value of loans, collateral or assets; the degree to which the Company is leveraged, the Company’s continued need for financing, availability of the Company’s credit facilities, the impact of certain covenants in loan agreements of the Company and its subsidiaries, the ability of the Company to utilize net operating loss carry forwards, general economic conditions, foreign social and economic conditions, changes (legislative and otherwise) in the asset securitization industry; fluctuation in residential and commercial real estate values, capital markets conditions, including the markets for asset-backed securities, uncertainties of any litigation arising from discontinued operations; factors more fully discussed and identified under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” risk factors and other risks identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 22, 2005, as well as in the Company’s other filings with the SEC.
Many of these factors are beyond the Company’s control. In addition, it should be noted that past financial and operational performance of the Company is not necessarily indicative of future financial and operational performance. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements.
The forward-looking statements in this release speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
The Company is a diversified financial services Company with operations dedicated to portfolio asset acquisition and resolution with offices in the U.S. and with affiliate organizations in France and Mexico. Its common (FCFC) stock is listed on the NASDAQ National Market System.
FirstCity Financial Corporation
Summary of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Revenues: | ||||||||
Servicing fees from affiliates | $ | 3,172 | $ | 3,032 | ||||
Gain on resolution of Portfolio Assets | 1,862 | 75 | ||||||
Equity in earnings of investments | 3,401 | 4,175 | ||||||
Interest income from affiliates | 451 | 444 | ||||||
Interest income — other | 486 | 85 | ||||||
Other income | 349 | 1,338 | ||||||
Total revenues | 9,721 | 9,149 | ||||||
Expenses: | ||||||||
Interest and fees on notes payable to affiliates | 8 | 25 | ||||||
Interest and fees on notes payable — other | 872 | 1,688 | ||||||
Interest on shares subject to mandatory redemption | — | 66 | ||||||
Salaries and benefits | 4,158 | 4,077 | ||||||
Provision for loan and impairment losses | 85 | — | ||||||
Occupancy, data processing, communication and other | 1,913 | 1,449 | ||||||
Total expenses | 7,036 | 7,305 | ||||||
Earnings from continuing operations before income taxes and minority interest | 2,685 | 1,844 | ||||||
Income taxes | (139 | ) | (84 | ) | ||||
Earnings from continuing operations before minority interest | 2,546 | 1,760 | ||||||
Minority interest | 3 | (26 | ) | |||||
Earnings from continuing operations | 2,549 | 1,734 | ||||||
Discontinued operations | ||||||||
Earnings from operations of discontinued components | — | 3,143 | ||||||
Income taxes | — | (28 | ) | |||||
Earnings from discontinued operations | — | 3,115 | ||||||
Net earnings | $ | 2,549 | $ | 4,849 | ||||
Basic earnings per common share are as follows: | ||||||||
Earnings from continuing operations | $ | 0.23 | $ | 0.15 | ||||
Discontinued operations | $ | — | $ | 0.28 | ||||
Net earnings per common share | $ | 0.23 | $ | 0.43 | ||||
Wtd. avg. common shares outstanding | 11,262 | 11,198 | ||||||
Diluted earnings per common share are as follows: | ||||||||
Earnings from continuing operations | $ | 0.21 | $ | 0.15 | ||||
Discontinued operations | $ | — | $ | 0.26 | ||||
Net earnings per common share | $ | 0.21 | $ | 0.41 | ||||
Wtd. avg. common shares outstanding | 12,002 | 11,792 | ||||||
Selected Unaudited Balance Sheet Data | ||||||||
March 31, | December 31, | |||||||
2005 | 2004 | |||||||
Cash | $ | 9,067 | $ | 9,724 | ||||
Portfolio Assets, net | 31,609 | 37,952 | ||||||
Loans receivable | 21,501 | 21,255 | ||||||
Equity investments | 57,825 | 57,815 | ||||||
Deferred tax asset, net | 20,101 | 20,101 | ||||||
Service fees receivable and other assets | 7,844 | 10,193 | ||||||
Discontinued mortgage assets held for sale | 1,377 | 1,817 | ||||||
Total assets | $ | 149,324 | $ | 158,857 | ||||
Notes payable to affiliates | $ | 560 | $ | 491 | ||||
Notes payable — other | 48,223 | 50,812 | ||||||
Minority interest and other liabilities | 5,337 | 6,048 | ||||||
Liabilities from discontinued consumer operations | 989 | 9,033 | ||||||
Liabilities from discontinued mortgage operations | 40 | 50 | ||||||
Total liabilities | 55,149 | 66,434 | ||||||
Total equity | 94,175 | 92,423 | ||||||
Total liabilities and equity | $ | 149,324 | $ | 158,857 | ||||
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FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Portfolio Asset Acquisition and Resolution: | ||||||||
Summary Operating Statement Data | ||||||||
Revenues | $ | 9,608 | $ | 8,945 | ||||
Expenses | 5,335 | 4,899 | ||||||
Operating contribution before provision for loan and impairment losses | 4,273 | 4,046 | ||||||
Provision for loan and impairment losses | 85 | — | ||||||
Operating contribution, net of direct taxes | $ | 4,188 | $ | 4,046 | ||||
Aggregate purchase price of portfolios acquired: | ||||||||
Acquisition partnerships | ||||||||
Domestic | $ | 12,108 | $ | 6,549 | ||||
Latin America | 2,763 | 150 | ||||||
Europe | — | — | ||||||
Total | $ | 14,871 | $ | 6,699 | ||||
Purchase | FirstCity's | |||||||
Price | Investment | |||||||
Historical Acquisitions — Annual: | ||||||||
2005 year to date | $ | 14,871 | $ | 2,213 | ||||
2004 | 174,139 | 59,762 | ||||||
2003 | 129,192 | 22,944 | ||||||
2002 | 171,769 | 16,717 | ||||||
2001 | 224,927 | 24,319 | ||||||
2000 | 394,927 | 22,140 |
March 31, | March 31, | |||||||
2005 | 2004 | |||||||
Portfolio acquisition and resolution assets by region: | ||||||||
Domestic | $ | 69,887 | $ | 44,776 | ||||
Latin America | 21,105 | 13,748 | ||||||
Europe | 20,119 | 19,598 | ||||||
Total | $ | 111,111 | $ | 78,122 | ||||
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Revenues by region: | ||||||||
Domestic | $ | 5,962 | $ | 4,146 | ||||
Latin America | 2,397 | 2,597 | ||||||
Europe | 1,249 | 2,202 | ||||||
Total | $ | 9,608 | $ | 8,945 | ||||
Revenues by source: | ||||||||
Equity earnings | $ | 3,401 | $ | 4,175 | ||||
Servicing fees | 3,172 | 3,032 | ||||||
Interest income — loans | 902 | 523 | ||||||
Gain on resolution of Portfolio Assets | 1,862 | 75 | ||||||
Other | 271 | 1,140 | ||||||
Total | $ | 9,608 | $ | 8,945 | ||||
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Three Months Ended | ||||||||
March 31, | ||||||||
2005 | 2004 | |||||||
Analysis of Equity Investments in Acquisition Partnerships: | ||||||||
FirstCity’s Average investment in Acquisition Partnerships | ||||||||
Domestic | $ | 36,552 | $ | 36,595 | ||||
Latin America | 1,518 | 1,015 | ||||||
Europe | 18,874 | 18,459 | ||||||
Total | $ | 56,944 | $ | 56,069 | ||||
FirstCity Share of Equity Earnings: | ||||||||
Domestic | $ | 2,313 | $ | 1,949 | ||||
Latin America | 3 | 112 | ||||||
Europe | 1,085 | 2,114 | ||||||
Total | $ | 3,401 | $ | 4,175 | ||||
Selected other data: | ||||||||
Average investment in wholly owned portfolio assets and loans receivable: | ||||||||
Domestic | $ | 36,315 | $ | 6,490 | ||||
Latin America | 19,096 | 13,167 | ||||||
Europe | 530 | 2,155 | ||||||
Total | $ | 55,941 | $ | 21,812 | ||||
Income from wholly owned portfolio assets and loans receivable: | ||||||||
Domestic | $ | 2,393 | $ | 196 | ||||
Latin America | 363 | 376 | ||||||
Europe | 8 | 26 | ||||||
Total | $ | 2,764 | $ | 598 | ||||
Servicing fee revenues: | ||||||||
Domestic partnerships: | ||||||||
$ Collected | $ | 27,434 | $ | 26,353 | ||||
Servicing fee revenue | 1,141 | 1,038 | ||||||
Average servicing fee % | 4.2 | % | 3.9 | % | ||||
Latin American partnerships: | ||||||||
$ Collected | $ | 9,130 | $ | 14,846 | ||||
Servicing fee revenue | 1,981 | 1,956 | ||||||
Average servicing fee % | 21.7 | % | 13.2 | % | ||||
Incentive service fees | $ | 50 | $ | 38 | ||||
Total Service Fees: | ||||||||
$ Collected | $ | 36,564 | $ | 41,199 | ||||
Servicing fee revenue | 3,172 | 3,032 | ||||||
Average servicing fee % | 8.7 | % | 7.4 | % | ||||
Servicing portfolio (face value) | ||||||||
Domestic | $ | 450,204 | $ | 415,835 | ||||
Latin America | 1,446,059 | 1,007,366 | ||||||
Europe | 867,078 | 811,951 | ||||||
Total | $ | 2,763,341 | $ | 2,235,152 | ||||
Number of personnel at period end: | ||||||||
Domestic | 65 | 61 | ||||||
Latin America | 129 | 162 | ||||||
Corporate | 31 | 30 | ||||||
Total personnel | 225 | 253 | ||||||
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