Credit Depot announces improved fiscal 1996 year end results; Revenues increase 44%; Net loss narrows by 14%.GAINESVILLE, Ga.--(BUSINESS WIRE)--Sept. 11, 1996--Credit Depot Corporation (Nasdaq: LEND) today announced financial results for the fiscal year ended June 30, 1996. For the twelve months ended June 30, 1996, revenues increased by 44% to $2,278,899 from $1,578,342 a year ago. Net loss for 1996 narrowed by 14% to $4,114,822, or $1.30 per share, from a net loss of $4,790,938, or $1.42 per share, recorded in the prior fiscal year. Subsequent to the close of the fiscal year and as previously announced, the Company completed a $9 million offering in new debt-based capital. The slight improvement in operating results for fiscal 1996 reflects principally an increase in 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. of approximately 25%. Loan originating activity was, nonetheless, severely constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. throughout the year by capital availability, which situation was significantly improved by the August 15, 1996 financing. Finance income and fees earned in fiscal 1996 increased by 13% to $640,390 from $566,648 in fiscal 1995, primarily as a result of an increase in the Company's average loan portfolio. Gains on sales of mortgage loans in the 1996 fiscal year increased 76% to $1,578,088 from $898,546 in the 1995 fiscal year due to the increased volume of loan sales and the higher margins received on sales made to a major loan securitizer. Gerald F. Sullivan Sr., President and Chief Executive Officer, stated: "Our 1996 fiscal year was a year of progress, including strengthening of our origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real and collection infrastructures and refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar our strategic marketing focus to enhance on-going asset quality. The major event for the Company was the completion of a $9 million convertible debt offering in August 1996, the majority of which had been received in June 1996, improving our year-end balance sheet, but coming too late to affect operating results in the period. For the first time in its history, Credit Depot now has a financial foundation to support our in-place asset gathering, monitoring and collection infrastructures that together should enable us to build a significant presence in what is a rapidly growing and potentially highly profitable industry segment. "With the fresh capital in hand, we believe we will begin to see revenues increase by the end of the fiscal first quarter. We have already begun to see the initial impact of our improved financial foundation on loan originations, which are running substantially in line with the Company's operating plan in the fiscal 1997 first quarter. We anticipate that our net loss will continue to narrow in the fiscal 1997 first half, with the Company having the potential to achieve profitability in fiscal 1997. "Credit Depot's singular SINGULAR, construction. In grammar the singular is used to express only one, not plural. Johnson. 2. In law, the singular frequently includes the plural. focus is on extending first mortgage loans to credit-impaired individuals who are generally unable to obtain financing from conventional lending sources but whom we believe are viable borrowers who also afford us sound loan-to-value ratios Loan-to-value ratio (LTV) The ratio of money borrowed on a property to the property's fair market value. on their underlying property. The key factors that contribute to the success of a Company in our business an understanding of the dynamics of the subprime residential mortgage finance industry, automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. processing and tracking systems and credit collection and financial disciplines are developed strengths of our Company, now complemented by our improved financial foundation. We believe that we have the resources to enhance shareholder value over time." "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: The statements in this press release regarding matters that are not statements of historical fact, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc plans, strategies, expectations and future economic results, are 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 Section 21E of the Securities Exchange Act of 1934, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. . Actual results may differ materially from the statements made, as a result of various factors, including risks associated with the Company's mortgage loan investments, such as the risks of defaults on mortgage loans, economic and other factors which impact real estate values and prevailing interest rates, the Company's ability to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. a sufficient volume of mortgage loans, the Company's ability to resell re·sell tr.v. re·sold , re·sell·ing, re·sells 1. To sell again. 2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. the mortgage loans in the secondary market, and other factors which are listed from time to time in the Company's Securities and Exchange Commission filings. Credit Depot Corporation is a multi-state financial services 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. Company that provides residential real estate financing to individuals unable to secure loans through conventional sources. The Company currently originates loans through its offices in Florida, Georgia, Indiana, 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. , Ohio, South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , Tennessee and Kentucky. These loans are collateralized by first mortgages, primarily on owner-occupied residential properties. -0-
Credit Depot Corporation
Condensed Consolidated Statements Of Operations
(Unaudited)
Three Months Ended June 30, Twelve Months Ended June 30,
1996 1995 1996 1995
Revenues:
Finance income and fees earned $ 12,768 $ 61,866 $ 640,390 $ 566,648 Gain on sale of receivables 515,344 63,239 1,578,088 898,546 Other (17,547) 14,893 60,421 113,148 Total revenues 510,565 139,998 2,278,899 1,578,342 Expenses: Salaries and employee benefits 749,445 694,132 2,733,816 2,711,812 Legal and professional fees 51,630 174,927 288,012 347,041 Other operating expenses 834,915 692,747 1,980,443 1,828,387 Provision for credit losses 110,000 114,993 185,000 534,899 Interest 120,161 191,675 1,206,450 947,141 Total expenses 1,866,151 1,868,474 6,393,721 6,369,280 Loss before provision for income taxes (1,355,586) (1,728,476) (4,114,822) (4,790,938) Provision for income taxes - Net loss $ (1,355,586)$ (1,728,476) $ (4,114,822) $ (4,790,938) Per share amounts: Net loss $ (0.40)$ (0.51) $ (1.30) $ (1.42) Weighted Average Shares Outstanding 3,378,761 3,378,761 3,378,761 3,378,761 CONTACT: Gerald F. Sullivan/Charles Farrahar Credit Depot Corporation (770) 531-9927 or John P. Kehoe/Van Negris Kehoe, White, Savage & Co. Inc. (212) 888-1616 |
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