FOR IMMEDIATE RELEASE
April 13, 1999
POINT WEST CAPITAL CORPORATION
ANNOUNCES FIRST QUARTER RESULTS
AND FINANCIAL CONDITION
SAN FRANCISCO-(April 13, 1999) Point West Capital Corporation (Nasdaq
Symbol: PWCC) today reported the following: (Dollars in thousands, except per
share amounts)
Three Months Ended
March 31,
1999 1998
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Net loss $ (500) $ (80)
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Total comprehensive income $ 21,088 $ 323
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Basic loss per share $ (0.15)* $ (0.02)**
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*Based on 3,273,628 weighted average shares of common stock outstanding.
**Based on 3,253,324 weighted average shares of common stock outstanding.
The Company's results of operations for the three months ended March
31, 1999 are not comparable to those for the three months ended March 31, 1998,
partially because of the establishment of two new businesses (Fourteen Hill
Capital, L.P. and Allegiance Capital, LLC) in the second half of 1997, which
generated substantially more activity in the first quarter of 1999 compared to
the first quarter of 1998. In addition, prior to the third quarter of 1998, all
losses associated with Dignity Partners Funding Corp. I ("DPFC"), a wholly owned
special purpose finance subsidiary of the Company, were charged against a
reserve which was originally established in 1996 for the estimated loss of Point
West's equity interest in DPFC. During the third quarter of 1998 the reserve was
fully depleted. In the first quarter of 1998, the $801,000 loss realized by DPFC
was charged
against the reserve and, therefore, was not reflected in the net loss. In the
first quarter of 1999, the $1.1 million loss realized by DPFC was reflected in
the net loss. At March 31, 1999, DPFC's accumulated deficit was $2.8 million.
Any future losses associated with DPFC will increase the amount of the deficit.
Upon the retirement of the securitized notes issued by DPFC, the Company will
recognize a gain in an amount approximately equal to any accumulated deficit
reflected at that time on DPFC's balance sheet.
At March 31, 1999, Fourteen Hill Capital had loans outstanding in the
aggregate principal amount of $619,000, non-marketable securities carried at a
cost of $1.5 million and marketable securities carried at $34.1 million. Any
unrealized gains or losses on marketable securities, net of applicable taxes,
are reflected as "Accumulated Comprehensive Income -- Net Unrealized Investment
Gains (Losses)" in stockholders' equity. At March 31, 1999 and December 31, 1998
the accumulated unrealized gains (losses) were $21.4 million and ($189,000),
respectively. This substantial increase, as well as the related increase in
"Total Comprehensive Income" for the quarter ended March 31, 1999, is primarily
the result of one portfolio company, FlashNet Coummunications, Inc., completing
an initial public offering in the first quarter of 1999 and the Company's
holdings in FlashNet becoming marketable securities. Any unrealized gains or
losses will be recognized on the income statement, if ever, upon sale of the
marketable securities.
Non-marketable securities include certain preferred shares convertible
into marketable securities. If the Company had converted certain of such shares
in the first quarter of 1999, the unrealized gains would have been $1.6 million,
net of applicable taxes.
Allegiance had eight loans outstanding at March 31, 1999 in the
aggregate principal amount of $15.4 million. All loans bear a fixed interest
rate, which on a dollar weighted basis was 9.4%.
The following is summary balance sheet information as of March 31,
1999:
Cash and cash equivalents...................................$7,243,627
Restricted cash (1).........................................$2,114,616
Investment securities......................................$34,158,218
Loans receivable, net of unearned income of
$261,254 and net of an allowance on loan
losses of $75,000 ......................................$15,935,030
Purchased life insurance policies...........................$33,124,945
Non-marketable securities....................................$3,153,617
Total assets................................................$97,009,971
Revolving certificates......................................$11,797,272
Long term notes payable.....................................$38,528,914
Debentures...................................................$3,000,000
Deferred income taxes........................................$6,598,514
Total liabilities...........................................$60,575,280
Accumulated comprehensive income --
net unrealized investment gains........................$21,399,005
Retained deficit..........................................$(12,147,103)
Total stockholders' equity..................................$36,434,691
(1) $1.9 million of restricted cash is pledged by the Company's wholly owned
financing subsidiary, Dignity Partners Funding Corp. I, to secure the repayment
of long term notes payable.
(KEYWORD CALIFORNIA AND INDUSTRY KEYWORD: SPECIALTY FINANCE EARNINGS).
CONTACTS: POINT WEST CAPITAL CORPORATION, SAN FRANCISCO.
Alan B. Perper, 415/394-9467