Credit Store Posts Profits for 2Q FY 2000.Business Editors SIOUX FALLS Sioux Falls, city (1990 pop. 100,814), seat of Minnehaha co., SE S.Dak., on the Big Sioux River; settled 1856, inc. as a village 1877, as a city 1883. Settlers abandoned the site in 1862 because of Native American raids, but with the establishment (1865) of Fort , S.D.--(BUSINESS WIRE)--Feb. 10, 2000 The Credit Store, Inc. (EBB: PLCR) released today its results for the second quarter and first six months of its fiscal year 2000, ended Nov. 30, 1999:
FY 2000, 2Q FY 1999, 2Q
ended 11/30/99 ended 11/30/98
Total Revenues $13.138 million $ 9.634 million
Core Revenue $ 8.079 million $ 7.328 million
Gain on Portfolio Sales
&Securitization Interests $ 5.059 million $ 2.306 million
Provision for Losses $ 1.703 million $ 1.170 million
Total Expenses $ 8.430 million $ 8.354 million
Net Income $ 3.005 million $ 0.110 million
Comprehensive Income $ 2.227 million $ 0.894 million
Preferred Dividend $ 0.500 million $ 0.500 million
Net Income (Loss) Applicable $ 2.505 million $ (0.390)million
To Common Stock
Earnings (Loss) per Common
Share
Basic $ 0.07 $ (0.01)
Diluted $ 0.06 $ (0.01)
Weighted Average Shares
Outstanding
Basic 34,761,965 34,761,965
Diluted 47,091,240 34,761,965
Revenues. Total revenue for the quarter was $13,138,269, a 36.4% increase from $9,633,962 during the year-ago second quarter. The increase was fueled by an increase in core revenues as well as higher gains from sales of portfolios and securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. interests. The Company refers to &uot;core revenue&uot; as revenue derived de·rive v. de·rived, de·riv·ing, de·rives v.tr. 1. To obtain or receive from a source. 2. from the Company's credit card and receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed management operations, excluding gains from credit card portfolio sales and securitizations. As such, core revenue increased 10.3%, to $8,079,431 in the current year's second quarter, from $7,328,238 in the year-ago quarter. Within core revenue, income from credit card receivables (including interest, fees and interchange An interchange is a location where two things meet, usually perform some kind of exchange, and possibly go on their ways again. It is most commonly used in four contexts:
ECR European Congress of Radiology ECR Electron Cyclotron Resonance ECR El Camino Real (Kings Highway; California) ECR Electronic Cash Register ECR East Coast Radio (South Africa) ) decreased 13.5% from $5,438,193 to $4,705,340 due to continued seasoning of the previously acquired non-performing consumer debt portfolios and the performing credit card receivables generated from these portfolios. As previously reported, the Company uses the cost recovery method to recognize the cost of acquiring non-performing consumer debt portfolios. Under cost recovery, the Company fully recovers the cost of an acquired portfolio through cash flow, before recognizing revenue in excess of costs recovered (ECR). Servicing and all other income increased from $341,061 to $1,120,877 primarily due to income related to the previously securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. portfolios. The Company recorded gains on portfolio sales and securitization interests of $5,058,838 during the second quarter of fiscal year 2000, versus $2,305,724 in the same period of fiscal 1999. The former was primarily related to the November November: see month. sale of the Company's interests in its securitization subsidiaries which held approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $19 million in performing credit card receivables while the latter was related to the securitization of approximately $6.2 million of credit card receivables in September September: see month. , 1998. Expenses. The Provision for losses increased 46% during the period to $1,702,991 from $1,170,365 in the second quarter of fiscal year 1999 based on a higher average balance of principal funded on credit card receivables. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter increased less than 1% to $8,430,081 from $8,353,515 during the second quarter of fiscal year 1999. The largest expense component, salaries and employee benefits, increased 22.2% from $2,739,335 to $3,348,192 and increased as a percentage of core revenue from 37.4% to 41.4%, based on additional employees hired, training and relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. expenses. Interest expense increased 20.8% from $936,535 to $1,131,552 based on higher average amount of debt outstanding. As a percentage of core revenue, interest expense increased from 12.8% to 14.0%. Professional fees declined 27.3% from $836,052 to $607,482 and as a percentage of core revenue declined from 11.4% to 7.5%. Depreciation and amortization increased 2.5% from $639,825 to $655,657 and as a percent of core revenue declined slightly from 8.7% to 8.1%. Third party services declined 13.3% from $1,101,207 to $954,606 and as a percent of core revenue declined from 15.0% to 11.8%. All other expenses as a group declined 17.5% from $2,100,561 to $1,732,592. Net income was $3,005,197 for the second quarter of fiscal year 2000, versus net income of $110,082 in the second quarter of fiscal year 1999. After accruing for preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) of $500,000 in each quarter, net income applicable to the Common Stock was $2,505,197, or $0.07 per common share and $0.06 on a fully 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. basis in the second quarter of fiscal 2000, versus a net loss of $389,918 or $(0.01) per common share, basic and fully diluted in the second quarter of fiscal 1999. Comprehensive income, which includes unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. on securitized credit card receivables, for the quarter was $2,227,367, a 149.0% increase from $894,430 during the year-ago second quarter.
Six Months FY 2000 Results
FY 2000, 6 months. FY 1999, 6 months.
ended 11/30/99 ended 11/30/99
Total Revenues $ 21.263 million $ 19.849 million
Core Revenue $ 16.213 million $ 14.200 million
Gain on Portfolio Sales
&Securitization Interests $ 5.050 million $ 5.649 million
Provision for Losses $ 3.738 million $ 2.559 million
Total Expenses $ 17.031 million $ 16.971 million
Net Income $ 0.494 million $ 0.319 million
Comprehensive Income $ 0.494 million $ 1.103 million
Preferred Dividend $1.000 million $ 0.800 million
Net Loss Applicable
To Common Stock $ (0.506) million $(0.481) million
Loss per Common Share $ (0.01) $ (0.01)
Weighted Average Shares
Outstanding 34,761,965 34,761,965
Revenues. Total revenue for the six months ended Nov. 30, 1999 was $21,262,894, a 7.1% increase from $19,849,089 recorded during the six months ended Nov. 30, 1998. Core revenue increased 14.2% as a group during the first half of fiscal year 2000. Income from credit card receivables (includes interest, fees and interchange) increased 43.1% from $3,002,109 to $4,294,788 due to a higher amount of funded credit card receivables during the period. Revenue in excess of costs recovered decreased 2.5% from $10,156,697 to $9,905,257, while servicing and all other income increased from $1,040,865 to $2,013,037, primarily due to income related to previously securitized portfolios. Gains from portfolio sales and securitization interests declined 10.6% from $5,649,418 to $5,049,812 during the period. As previously disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). , the Company sold its securitization interests in the second quarter of fiscal year 2000, but conducted no sales in the first quarter, fiscal year 2000. The Company recorded gains from portfolio sales and securitizations in both the first and second quarters of fiscal year 1999. The above factors combined for a 1.4% increase in net revenue from $17,290,045 to $17,525,027. Expenses. The provision for losses increased 46.1% from $2,559,044 to $3,737,867 and increased as a percentage of core revenue from 18.0% to 23.1%. Total operating expenses for the first half of fiscal year 2000 increased less than 0.5% from $16,971,181 to $17,031,402. Salaries and employee benefits increased 12.6% from $5,878,047 to $6,615,777, but decreased as a percentage of core revenue from 41.40% to 40.81%. Interest expense decreased 3.6% from $2,219,073 to $2,139,454, based on a lower average amount of debt outstanding. As a percentage of core revenue, interest expense decreased from 15.6% to 13.2%. Professional fees declined 9.8% from $1,229,946 to $1,109,517 and as a percentage of core revenue declined from 8.7% to 6.8%. Depreciation and amortization increased 5.8% from $1,260,364 to $1,333,893 but as a percent of core revenue declined slightly from 8.9% to 8.2%. Third party services declined 5.3% from $2,123,114 to $2,010,651 and as a percent of core revenue declined from 15.0% to 12.4%. All other expenses as a group declined 10.3% from $4,260,637 to $3,822,110. Net income before dividends was $493,625 for the first half of fiscal year 2000 versus net income of $318,864 in the first half of fiscal year 1999. After accruing for preferred dividends of $1,000,000 in the first half of fiscal year 2000, the net loss applicable to common shareholders was $506,375, or $(0.01) per common share, versus preferred dividends of $799,999 and a net loss of $481,135, or $(0.01) per common share, in the first half of fiscal year 1999. In the first half of fiscal year 1999 the Company had $784,348 in unrealized gain on retained interests Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. in securitized credit card receivables, which after added to net income produced Comprehensive Income of $1,103,212. The current period had no unrealized gain on retained interests. Thus, Comprehensive Income equaled Net Income of $493,625 for the current period. At November 30, 1999, the Company owned and managed $67.8 million in performing credit card receivables compared to $79.3 million at November 30, 1998, and $78.7 million at May 31, 1999. The decrease during the current period was due to the sale of the securitization interests in November 1999. Through the end of November 1999, the Company had made cumulative purchases from inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. to date of non-performing consumer debt of $3.6 billion compared to $2.6 billion through November 30, 1998. Martin J. Burke The name Burke (from Irish Gaelic de Burca, of Norman origin). In English the meaning of the name Burke is "fortified hill." See also Berkley. Places Australia
As previously disclosed, The Credit Store has filed a Registration Statement on Form 10 with the Securities and Exchange Commission (SEC). Upon being declared de·clare v. de·clared, de·clar·ing, de·clares v.tr. 1. To make known formally or officially. See Synonyms at announce. 2. To state emphatically or authoritatively; affirm. 3. effective by the SEC, which is expected to occur in early March, the Company will become a reporting public company under the SEC's rules and will begin filing all required periodic reports, including Form 10Q and Form 10K. The National Association of Securities Dealers National Association of Securities Dealers (NASD) Nonprofit organization formed under the joint sponsorship of the investment bankers' conference and the SEC to comply with the Maloney Act, which provides for the regulation of the OTC market. (NASD NASD See: National Association of Securities Dealers NASD See National Association of Securities Dealers (NASD). ) is requiring all companies that wish to remain publicly traded via the Electronic Bulletin Board, to become fully reporting companies and has established various effective dates. The Credit Store, Inc. is a technology based, 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 credit card products to consumers who may otherwise fail to qualify for a traditional unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. bank credit card. The Company reaches these consumers by acquiring portfolios of non-performing consumer receivables and offering a new credit card to those consumers who agree to pay all or a portion of the outstanding amount due on their debt. The new card is issued with an initial balance and credit line equal to the agreed repayment Repayment The act of paying back a debt. Notes: Everyone has to repay their debts eventually. See also: Debt, Defeasance, Loan amount. After appropriate seasoning, the Company seeks to sell or securitize Securitize The practice of a company selling accounts receivables or other debts owed to it. The third party that buys the debt assumes ownership of it and the responsibility for collecting the debts, and keeps the repayments when made. the credit card receivables generated by this business strategy. This press release contains certain 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. that involve risk and uncertainties. Future trends or results may differ materially from those discussed in this press release. Factors that could cause or contribute to such differences include, but are not limited to, risk and uncertainties related to the need for additional funds, the rapid growth of operations, the ability of the Company to operate profitably after the initial growth period is complete, historic and future default and delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rates and losses, the market for and market value of the Company's credit card receivables, the competitive environment and other risks. |
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