American Residential Provides Fourth Quarter Earnings Guidance; Expects 2003 Consolidated Net Income of Approximately $3.56 Per Diluted Share; Updates 2004 Guidance.Business Editors SAN DIEGO--(BUSINESS WIRE)--Jan. 16, 2004 American Residential Investment Trust, Inc. (AMEX AMEX See: American Stock Exchange (R):INV INV abbr. in vitro fertilization ), the parent company of American Mortgage Network (AmNet), a wholesale mortgage bank serving mortgage brokers nationwide, today revised its fourth quarter and full-year 2003 earnings guidance. The Company now expects a fourth quarter consolidated net loss of approximately $400 thousand, or $0.05 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share on an after tax basis, inclusive of inclusive of prep. Taking into consideration or account; including. $1.1 million, or $0.14 per diluted share related to tax benefits. Previous guidance for the fourth quarter was a consolidated net gain of $0.25 per diluted share. Consolidated net income for 2003 is expected to be approximately $29.0 million, or $3.56 per diluted share, inclusive of approximately $11.0 million, or $1.35 per diluted share related to tax benefits. Previous guidance for 2003 anticipated consolidated net income of $3.70 per diluted share. Consolidated net income in 2002 was $1.1 million, or $0.20 per diluted share. The Company funded $10.2 billion in mortgages for 2003 compared with $4.2 billion in 2002. Book value as of December 31, 2003 is expected to be approximately $11.23 per outstanding share. "In the fourth quarter, mortgage financing activity slowed dramatically from previous levels," noted John M. Robbins, Chief Executive Officer. "The market has recalibrated very quickly. Like many other mortgage lenders, we experienced lower mortgage volume coupled with increasingly competitive pricing pressures. While we anticipated that loan volume and profits would decrease during the fourth quarter of 2003, and indicated that in our previous guidance, both the decrease in volume was sharper than we anticipated and the margins on that volume were smaller. As a result, we initiated a number of measures, including accelerated reductions in administrative staffing and elimination of contract and temporary personnel. Our objective was to realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. our cost structure with updated, expected funding levels." Robbins continued, "Due to the anticipation of slightly lower loan volumes and potentially narrower margins, we are modifying our 2004 annual guidance range to $1.40 to $1.60 per share. We are continuing to take costs out of the existing branch system, while expanding our sales presence nationally and building market share in both new and existing locations. The number of account executives in existing offices grew 11% in the fourth quarter alone. Our focus continues to be on providing our mortgage broker customers with the products and services they need to compete effectively." The Company's cash and cash equivalents are estimated to be approximately $46 million, or $5.84 per outstanding share as of December 31, 2003. 2004 Guidance Based on the decline of loan originations The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. at year end, narrower loan sale margins, single-family home sales forecasts Sales forecast A key input to a firm's financial planning process. External sales forecasts are based on historical experience, statistical analysis, and consideration of various macroeconomic factors. for 2004 and the Mortgage Bankers Mortgage Banker A company, individual or institution that originates, sells and services mortgage loans. Notes: Don't confuse a mortgage banker with a mortgage broker. Association's (MBA's) estimate of overall market size of $1.6 trillion, the Company modified its expectations for 2004 consolidated net income to a range of $11.5 million to $13.0 million, or $1.40 to $1.60 per diluted share. Pre-tax earnings for 2004 are anticipated to be in the range of $19.8 million to $22.4 million. This would represent a decline from estimated 2003 pre-tax earnings due to increased infrastructure costs, including new loan production offices, as well as the assumption that AmNet will realize lower per loan revenues due to increased competitive pressure. Additionally, while the Company realized significant tax benefits in 2003, it is assuming a full effective combined tax rate of 42% for 2004. AmNet's loan production for 2004 is now expected to be approximately $11 to $12 billion. The Company expects to report fourth quarter and year-end 2003 financial results in the first half of February. About American Mortgage Network Headquartered in San Diego, California “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. , AmNet is a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of American Residential Investment Trust, Inc. AmNet originates loans for the national mortgage broker community through its network of branches and business-to-business over the Internet. AmNet has loan production offices in Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Minnesota, New Jersey, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Oregon, Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. , Texas, Virginia and Washington. AmNet has a total of $1.4 billion in warehouse borrowing capacity and is approved to do business in 48 states and the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). either by license or exemption. AmNet has 4,000 broker customers across the nation. For more information, please visit www.amnetmortgage.com. About American Residential Investment Trust American Residential Investment Trust, Inc. is the parent company of American Mortgage Network. For more information, please visit www.amerreit.com. Forward Looking Statement Certain matters discussed in this press release may constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of federal securities laws. Forward-looking statements include statements regarding the expected net loss in the fourth quarter of 2003 and consolidated net income amount for the year 2003, the Company's expected book value at December 31, 2003, per share income for 2004, building market share in new and existing branch locations, the estimated amount of cash and cash equivalents at December 31, 2003, the MBA's estimate of the mortgage market size in 2004, anticipated pre-tax earnings in 2004, the assumed effective combined tax rate for the Company in 2004, AmNet's expected mortgage loan fundings in 2004 and the expected reporting timeframe for fourth quarter and 2003 financial results. Actual results and the timing of certain events could differ materially from those projected in or contemplated by these forward-looking statements due to a number of factors, including but not limited to: finalization Writing the table of contents (TOC) on a recordable CD or DVD disc. The finalization process ensures that the disc can be played back on most CD and DVD players. See disc-at-once. of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results, income tax analyses and the year-end audit; the level of interest rates generally; economic conditions generally; the size of the national mortgage market; uncertainty as to the percentage of the loan pipeline that will result in mortgage loan fundings; fluctuation in the margins, net of hedging, of loans in the Company's pipeline; the predictability of the Company's expenses; the future correlation of volatility in forward mortgage sale instruments to the Company's loan lock commitments; interest rate volatility; the availability of financing for the funding of mortgage loans; the Company's liquidity position; the availability of qualified mortgage professionals and other risk factors outlined in American Residential's SEC reports. |
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