FOR IMMEDIATE RELEASE
November 16, 2000
POINT WEST CAPITAL CORPORATION
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ANNOUNCES THIRD QUARTER RESULTS
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AND FINANCIAL CONDITION
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SAN FRANCISCO -- (November 16, 2000) Point West Capital Corporation
(Nasdaq Symbol: PWCC) today reported the following: (Dollars in thousands,
except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
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(Loss) gain before extraordinary gain
$ (4,724) $ 4,163 $ (8,151) $ 5,421
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Net (loss) income $ (4,724) $ 4,163 $ (6,909) $ 5,421
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(Loss) income
per share
before extraordinary gain:
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Basic $(1.41) (1) $ 1.24 (2) $(2.43) (4) $ 1.63 (5)
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Diluted $(1.41) (1) $ 1.17 (3) $(2.43) (4) $ 1.49 (6)
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Net (loss) income per share:
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Basic $(1.41) (1) $ 1.24 (2) $(2.06) (4) $ 1.63 (5)
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Diluted $(1.41) (1) $ 1.17 (3) $(2.06) (4) $ 1.49 (6)
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<FN>
(1) Based on 3,352,624 weighted-average shares of common stock outstanding.
(2) Based on 3,350,624 weighted-average shares of common stock outstanding.
(3) Based on 3,549,536 weighted-average shares of common stock outstanding.
(4) Based on 3,352,504 weighted-average shares of common stock outstanding.
(5) Based on 3,321,888 weighted-average shares of common stock outstanding.
(6) Based on 3,648,029 weighted-average shares of common stock outstanding.
</FN>
The net loss for the three and nine months ended September 30, 2000 is
primarily attributable to a net loss on securities held by Point West Ventures,
which makes loans to and invests in small businesses. During the three and nine
months ended September 30,
2000, Ventures wrote-down or wrote-off investments in nine different companies
in the aggregate amount of $2.7 million and $7.4 million, respectively. The
write-downs or write-offs were a result of deterioration of growth prospects for
some companies and the uncertainty that such companies will be able to raise
additional capital in light of the market downturn related to Internet and other
technology stocks.
In addition, during the nine months ended September 30, 2000,
Allegiance recorded a $1.3 million loss incurred in connection with a loan it
previously held, which was the subject of litigation and settled in the third
quarter of 2000.
The nine months ended September 30, 2000 reflects a $1.2 million
extraordinary gain on a troubled debt restructuring, net of income taxes of
$822,000, recognized during the first quarter of 2000 in connection with Dignity
Partners Funding Corp. I, the Company's wholly-owned viatical settlement
subsidiary.
The Company also reported that, at September 30, 2000, Allegiance
Capital, which makes loans to funeral home and cemetery owners, had 23 loans
outstanding in the aggregate principal amount of $33.8 million, all of which
bear interest at a fixed rate. This amount is down from 24 loans outstanding in
the aggregate principal amount of $36.0 million at June 30, 2000.
At September 30, 2000, Point West Ventures had non-marketable
securities carried at an aggregate cost of $13.2 million and investment
securities (available-for-sale) carried at fair value in the aggregate amount of
$413,000. These amounts are down from non-marketable securities carried at an
aggregate cost of $13.8 million and investment securities (available-for-sale)
carried at fair value in the aggregate amount of $1.2 million at June 30, 2000.
At
September 30, 2000, Point West Capital (the parent company) had non-
marketable securities carried at an aggregate cost of $939,000.
Point West Capital and three other individuals formed SocietyPool.com,
LLC ("SocietyPool") in May 2000 to develop and pursue a new financial product.
One of those individuals was a special consultant (the "Former Special
Consultant") and one was the chief executive officer (the "Former CEO") of
SocietyPool. Point West Capital is currently involved in litigation with the
Former Special Consultant and Former CEO regarding the control and management of
SocietyPool and its assets and whether certain actions of Point West Capital
constituted constructive termination of the Former CEO's employment.
The Former CEO and Former Special Consultant have asserted that Point
West Capital ceased being the manager of SocietyPool and that Point West
Capital's voting and economic interests in SocietyPool were reduced to 15.67%.
They have further alleged that they are the majority owners of SocietyPool and
that one is the manager of SocietyPool. They then filed a petition in bankruptcy
court on behalf of SocietyPool in September 2000. Point West Capital filed a
motion to dismiss the bankruptcy petition, which is scheduled to be heard in
November 2000. Management of Point West Capital believes that the claims of the
other two members of SocietyPool are without merit and that the bankruptcy
petition was fraudulently filed.
Point West Capital is a specialty financial services company. Further
information regarding the Company, its results of operations and the other
matters discussed in this press release is contained in the Company's Form 10-Q
for the quarterly period ended September 30, 2000 filed with the Securities and
Exchange Commission on November 16, 2000.
The following is summary balance sheet information as of September 30,
2000:
Cash and cash equivalents...................................$6,752,192
Restricted cash...............................................$572,335
Investment Securities -- available-for-sale...................$467,759
Loans receivable, net of unearned income of
$541,624 and net of an allowance for loan
losses of $175,000 ....................................$32,863,906
Purchased life insurance policies..........................$30,653,603
Non-marketable securities..................................$14,089,851
Total assets...............................................$90,502,806
Revolving certificates......................................$4,900,607
Term certificates..........................................$24,066,213
Securitized notes payable..................................$35,749,202
Debenture payable...........................................$6,500,000
Total liabilities..........................................$72,142,577
Accumulated comprehensive loss, net of tax..................$(177,497)
Accumulated deficit.......................................$(8,723,842)
Total stockholders' equity.................................$18,360,229
(KEYWORD CALIFORNIA AND INDUSTRY KEYWORD: SPECIALTY FINANCE EARNINGS).
CONTACTS: POINT WEST CAPITAL CORPORATION, SAN FRANCISCO.
Alan B. Perper, 415/394-9467