Exhibit 99.1
For Immediate Release
Waterside Capital Corporation
3092 Brickhouse Court
Virginia Beach, VA 23452
Contacts for Waterside Capital Corporation:
| | | | |
Franklin (Lin) Earley Chief Executive Officer (757) 626-1111 x 307 lin.earley@watersidecapital.com | | Julie Stroh Chief Financial Officer (757) 626-1111 x 301 julie.stroh@watersidecapital.com | | |
Waterside Capital Announces Earnings Release
VIRGINIA BEACH, VA –November 27, 2009 – Waterside Capital Corporation (Nasdaq: WSCC), a Small Business Investment Company (SBIC), today reported financial results for the three months ended September 30, 2009.
The company’s netdecrease in stockholders’ equity resulting from operations (which includes net operating income plus realized and unrealized gains or losses on investments) was$435,000 or a $0.23 loss per share for the three months ended September 30, 2009, compared to a decrease of $373,000 or a $0.19 loss per share for the three months ended September 30, 2008. The per share performance was calculated using shares outstanding of 1,915,548. The decrease in stockholders’ equity resulting from operations at September 30, 2008 included a one time expense of $113,000 representing financing costs related to the $16.1 million refinancing of Waterside’s SBA debentures. Operating expenses have increased by $97,000 compared to September 30, 2008, excluding the one time expense related to the redemption of SBA debentures. The increase in operating expenses was primarily attributable to the Company contracting with two individuals and legal expenses associated with advising and evaluating strategic alternatives available to the Company in order to enhance and preserve shareholder value. Additionally, the decrease in stockholders’ equity from operations at September 30, 2009 included $170,000 of unrealized depreciation in the investment portfolio.
At September 30, 2009, Waterside’s loans and investments had a fair value of $17.9 million, compared with $20.8 million reported at September 30, 2008. For the three months ended September 30, 2009, the company originated new investments of $99,000 and received proceeds from principal collected on notes receivable and debt and equity securities of $160,000. This compared to the Company’s funding of $190,000 in new investments for the three months ended September 30, 2008, and receiving proceeds from
principal collected on notes receivable and debt securities of $30,000. The net asset value of the common shares decreased to $2.56 per share at September 30, 2009 from the $3.64 reported at September 30 2008. The decrease in net asset value was due to the above mentioned $435,000 decrease in shareholders equity resulting from operations.
About Waterside Capital Corporation
Waterside Capital Corporation is a Small Business Investment Company (SBIC) headquartered in Virginia Beach, Virginia with a portfolio of approximately $17.9 million of loans and investments in 13 companies located primarily in the Mid-Atlantic region. Waterside Capital’s individual investments range from $500,000 to over $3 million. Visit Waterside’s web site atwww.watersidecapital.com.
Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are “forward-looking statements” including Waterside’s optimism regarding the growth of its portfolio companies (within the meaning of the Private Securities Litigation Reform Act of 1995) that involve a number of risks and uncertainties. It is possible that the assumptions made by management—including, but not limited to, investment opportunities, results, performance or expectations, ability to cure the SBA Capital Impairment default, ability to close on transactions designed to enhance shareholder value, etc.—may not materialize. Actual results may differ materially from those projected or implied in any forward-looking statements. In addition to the above factors, other important factors including the risks associated with the performance of the Company’s portfolio companies, dependencies on key employees, delays, interest rates, the level of economic activity, and competition, as well as other risks described from time to time in the Company’s filings with the Securities Exchange Commission, press releases, and other communications.
WATERSIDE CAPITAL CORPORATION
Financial Summary
(In thousands except per share data)
| | | | | | | | |
| | | Three Months Ended September 30, | |
| | | 2009 | | | 2008 | |
Statement of Operations data: | | | | | | | | |
| | |
Total operating income | | $ | 345 | | | $ | 466 | |
Interest expense | | | 263 | | | | 267 | |
Other operating expenses | | | 347 | | | | 363 | |
| | | | | | | | |
| | |
Net operating loss | | | (265 | ) | | | (164 | ) |
| | |
Realized loss on investments | | | – | | | | – | |
| | |
Change in unrealized appreciation (depreciation) on investments | | | (170 | ) | | | (209 | ) |
| | | | | | | | |
| | |
Net decrease in stockholders’ equity resulting from operations | | $ | (435 | ) | | $ | (373 | ) |
| | | | | | | | |
| | |
Per share data (basic): | | | | | | | | |
Net operating loss | | $ | (0.14 | ) | | $ | (0.09 | ) |
Net decrease in stockholders’ equity resulting from operations | | | (0.23 | ) | | | (0.19 | ) |
| | |
| | | At September 30,
2009 | | | At September 30,
2008 | |
Balance Sheet data: | | | | | | | | |
| | |
Cash and cash equivalents | | $ | 161 | | | $ | 741 | |
Invested idle funds | | | 2,167 | | | | 606 | |
Loans and investments, at fair value | | | | | | | | |
Loans | | | 362 | | | | – | |
Debt securities | | | 4,454 | | | | 6,479 | |
Equity securities | | | 10,705 | | | | 11,122 | |
Options and warrants | | | 1,560 | | | | 1,966 | |
Notes receivable and other | | | 869 | | | | 1,279 | |
| | | | | | | | |
| | |
Total loans and investments | �� | | 17,950 | | | | 20,846 | |
| | |
Debentures payable | | | 16,100 | | | | 16,100 | |
Stockholders’ equity | | | 4,908 | | | | 6,974 | |
| | |
Net asset value per common share | | $ | 2.56 | | | $ | 3.64 | |
