Credit Store Reports First Profit.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)--March 22, 1999-- Profit for the First Two Quarters of FY 1999 Marks Important Milestone “Milemarker” redirects here. For the American indie rock band, see Milemarker (band). A milestone or kilometre sign is one of a series of numbered markers placed along a road at regular intervals, typically at the side of the road or in a median. for The Credit Store, Which Began Operations in Oct. 1996 Results for FY 1998 And Results for FY 1997 Also Released as Grant Thornton Thornton, city (1990 pop. 55,031), Adams co., NE Colo., a residential and industrial suburb of Denver; inc. 1956. Industries include oil and gas development and the production of computer graphics systems, wood products, coffee and tea, building components, infant Completes Its First Full Audit as The Credit Store's New Auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together The Credit Store, Inc. (EBB:PLCR) released today its results for the first and second quarters of its fiscal year 1999, results for fiscal year 1998 and results for fiscal year 1997.
Second Quarter FY1999 Results
FY 1999, 2Q FY 1998, 2Q
ended 11/30/98 ended 11/30/97
Total Revenues $11.06 million $2.79 million
Total Expenses $9.52 million $11.57 million
Net Income (Loss) $1.54 million $(8.77) million
Preferred Dividends $0.50 million $0.10 million
Net Income (Loss) Applicable
to Common Stock $1.04 million $(8.87) million
Earnings (Loss) per Share $0.03 $(0.28)
Weighed Average Share Outstanding 34,761,965 32,220,081
-0- For the three months ending Nov. 30, 1998 (unaudited), the second quarter of fiscal 1999, total revenue was $11.06 million versus $2.79 million in the prior second quarter, a 296 percent increase. Total expenses in the second quarter 1999, including 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. , interest expenses and provision of losses, were $9.52 million, versus $11.57 million in the prior second quarter. Net income applicable to the common stock was $1.04 million or $0.03 per common share, versus a loss of $8.87million or a loss of $0.28 per share in the prior second quarter. The weighted average of common shares outstanding was 34.76 million, versus 32.22 million in the prior second quarter. The second quarter FY 1999 represents the first profitable quarter on a per share basis for The Credit Store since the Company commenced operations on Oct. 8, 1996. 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
v. 1. To bring into being; create. 2. To come into being; start. new performing credit cards from the non-performing consumer debt we purchase. Our credit cards help to restore financial flexibility to a significant number of consumers, and in the process, the revenue from these cards creates profit for the Company." Increased revenue for the second quarter was due in part to an increased level of credit card 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 , and also in part to the previously announced Sept. 1998 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. of $6.2 million in seasoned performing credit card receivables. These factors contributed to a 61 percent increase in accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. and fee income from $0.93 million during the second quarter of fiscal 1998 to $1.50 million during the second fiscal quarter 1999 and to an increase in the excess of revenue over cost recovered (ECR ECR Efficient Consumer Response 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) ) from $1.35 million to $9.13 million for the same periods, respectively. (ECR is defined below.) Expenses fell during the second quarter due in part to a reduction in average headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. enabled by the Company's investments in technology and systems; in part by lower provisions for losses; and in part by a substantial drop in professional fees paid as the Company moved to more routine operations. Through the second quarter ended Nov. 30, 1998, The Credit Store had purchased a cumulative $2.587 billion face amount of non-performing consumer debt through various transactions since its inception in October October: see month. , 1996. The Company owned $68.8 million in credit card receivables at Nov. 30, 1998, versus $68.9 million at Nov. 30, 1997. At Nov. 30, 1998, the Company also serviced an additional $6.2 million in receivables, held within securitizations.
First Quarter FY1999 Results
FY 1999, 1Q FY 1998, 1Q
ended 8/31/98 ended 8/31/97
Total Revenues $10.22 million $1.03 million
Total Expenses $10.01 million $8.82 million
Net Income (Loss) $0.21 million $(7.79) million
Preferred Dividends $0.30 million $0.10 million
Net Income (Loss) Applicable
To Common Stock $(0.09) million $(7.89) million
Earnings per Share $0.00 $(0.25)
Weighed Average Shares Outstanding 34,761,965 32,207,465
-0- For the first quarter of fiscal 1999, ended Aug. 31, 1998, (unaudited) The Credit Store reported total revenues of $10.22 million, versus $1.03 million in the prior first quarter, an 892 percent increase. Total expenses in the first quarter 1999, including operating expenses, interest expenses and provision of losses, were $10.01 million, versus $8.82 million in the prior first quarter. The Company had a positive net income of $210,000 for the period, prior to preferred dividends preferred dividend n. a payment of a corporation's profits to holders of preferred shares of stock. (See: preferred stock) . After payment of preferred dividends, the net loss applicable to common stock was $90,000 or $0.00 per share, versus a loss of $7.79 million or a loss of $0.25 per share in the prior first quarter. The weighed average of common shares outstanding for the period was 34.76 million, versus 32.20 million, in the prior first quarter. Increased revenue for the quarter was primarily due to increased average credit card receivables outstanding and to the previously announced sale of performing credit card receivables to a bank in June June: see month. , 1998. These factors contributed to a 106 percent increase in accrued interest and fee income from $0.68 million during the first quarter fiscal 1998 to $1.41 million during the first quarter fiscal 1999 and drove the increase in the excess of revenue over costs recovered (ECR) from $0.12 million to $8.06 million for the same periods, respectively. Expenses increased primarily due to increased interest expense and third-party credit card expenses, which increased in relation to the increased number of credit cards outstanding. Through the first quarter ended Aug. 31, 1998, The Credit Store had purchased a cumulative $2.482 billion face amount of non-performing consumer debt through various transactions since inception versus $1.687 billion at Aug. 31, 1997. The Company owned $73.1 million in credit card receivables at Aug. 31, 1998, versus $57.6 million at Aug. 31, 1997. In addition, the Company serviced portfolios of credit cards for third parties in both periods.
Six Months FY1999 Cumulative Results
FY 1999, 6 mths. FY 1998, 6 mths.
ended 11/30/98 ended 11/30/97
Total Revenues $21.27 million $3.82 million
Total Expenses $19.53 million $20.38 million
Net Income (Loss) $1.74 million $(16.57) million
Preferred Dividend $0.80 million $0.20 million
Net Income (Loss) Applicable
to Common Stock $0.94 million $(16.77) million
Earnings per Common Share $0.03 $(0.52)
Weighed Average Shares Outstanding 34,761,965 32,220,081
-0- For the six months ending Nov. 30, 1998 (unaudited), The Credit Store reported total revenues of $21.27 million, versus $3.82 million for the first six months of fiscal 1998. Increased average receivables caused accrued interest and fee income to increase 81 percent from $1.61 million during the six months ended Nov. 30 1997 to $2.91 million during the six months ended Nov. 30, 1998. The June portfolio sale and the September September: see month. securitization contributed to an increase in ECR from $1.46 million for the period ended Nov. 30, 1997 to $17.20 million for the six months ended Nov. 30, 1998. Total expenses, including operating expenses, interest expenses, and provisions for losses, were $19.53 million, versus $20.38 million in the year-ago six months. Net income applicable to the common stock was $944,415 or a profit of $0.03 per common share for the first six months of fiscal 1999, versus a loss of $16.77 million or a loss or $0.52 per share for the first six months of fiscal 1998. The weighted average common shares outstanding for the sixth months ended Nov. 30, 1998 was 34,761,965, versus 32,220,081 for the six months ended Nov. 30, 1997.
FY 1998 Results
FY 1998 FY 1997
ended 5/31/98 ended 5/31/97
Total Revenues $13.29 million $2.58 million
Total Expenses $42.44 million $16.82 million
Net Income (Loss) $(29.15) million $(14.25) million
Preferred Dividend $0.40 million $0.01 million
Net Loss Per Common Share $(0.89) $(0.55)
Weighed Average Shares Outstanding 33,109,781 25,912,465
Note: FY 1998 contained 12 months; FY 1997 contained the eight month
period from inception through May 31, 1997.
-0- Total revenue for fiscal year 1998 was $13.29 million, a 415 percent increase over the prior fiscal year. The increase was due in part to fiscal 1998 containing 12 months of results versus fiscal year 1997 which included approximately eight months of results. Interest earned increased ten-fold Adj. 1. ten-fold - containing ten or ten parts denary, tenfold multiple - having or involving or consisting of more than one part or entity or individual; "multiple birth"; "multiple ownership"; "made multiple copies of the speech"; "his multiple from $104,489 to $1.19 million period over period, while credit card fees increased 237 percent from $792,549 to $2.67 million. The excess of revenue over cost recovered (ECR) increased from $3,934 in the prior period to $8.042 million. Interest expense increased from $751,729 to $4.76 million based on a higher level of outstanding debt during fiscal year 1998 while the provision for losses increased from $1.49 million to $6.48 million based on a higher level of outstanding credit card receivables. Total operating expenses increased 114 percent from $14.58 million to $31.19 million in line with the volume of business generated and the costs associated with building the business platform. Inception through May 31, 1998, The Credit Store had purchased $1.958 billion face amount of non-performing consumer debt, versus $1.067 billion, inception through May 31, 1997. The Company owned $74.10 million in credit card receivables at May 31, 1998, versus $33.20 million the year prior. In addition, the Company serviced portfolios of credit cards for third parties in both periods. The Company replaced its proprietary 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 system with a new origination system, which was placed in service effective November November: see month. 1998. The new software rendered obsolete OBSOLETE. This term is applied to those laws which have lost their efficacy, without being repealed, 2. A positive statute, unrepealed, can never be repealed by non-user alone. 4 Yeates, Rep. 181; Id. 215; 1 Browne's Rep. Appx. 28; 13 Serg. & Rawle, 447. the old system in use previously. The Company wrote down the old origination system, taking a charge of $816,667 against income in the fourth quarter, fiscal 1998. The development costs of the new software will be capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. and amortized over its estimated useful life of 5 years. Also in the fourth quarter, the Company wrote off approximately $1.2 million in receivables and investments in two sub-prime mortgage companies. The Audit and Significant Changes to Accounting Procedures In July July: see month. 1998, as previously announced, The Credit Store retained Grant Thornton LLP  This article or section is written like an .Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using . as its independent auditor Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. . The Company determined subsequently that it would not release further financial data until Grant Thornton had completed its full audit, during which, as previously announced, the Company revised its methods for recognizing the acquisition costs of non-performing consumer debt portfolios. Today's announcements reflect the full effect of those new or revised methodologies and procedures introduced at the recommendation of Grant Thornton. The Company said it would now resume the regular and routine release of its financial results on a quarterly basis. The Company has adopted the cost recovery method of accounting. Cost recovery is the more conservative option prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). in FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). Practice Bulletin 6 for recognizing the purchase costs of distressed assets. It requires that cash flows related to a portfolio purchased at a discount must first be applied to reduce the purchase price of the portfolios on the balance sheet prior to recognizing revenue from that portfolio. Once the cost of a portfolio has been recovered, portions of the ensuing en·sue intr.v. en·sued, en·su·ing, en·sues 1. To follow as a consequence or result. See Synonyms at follow. 2. To take place subsequently. cash flow may be recorded as the "Excess of revenue over Cost Recovered" (ECR). While the Company will seek to manage its assets in ways to smooth quarterly revenue flows, the use of the cost recovery method of accounting holds the potential that revenues of the Company will fluctuate significantly from quarter to quarter. Prior to adopting cost recovery accounting, the Company had followed a method that recovered the purchase price less a residual value Residual value Usually refers to the value of a lessor's property at the time the lease expires. residual value The price at which a fixed asset is expected to be sold at the end of its useful life. over a period of months subsequent to the purchase. Fiscal 1997 has been restated to reflect the method of cost recovery accounting, which caused the reported net loss to be $3.1 million higher than previously reported. The Company has redefined the presentation of its principal assets into two classes, in order to provide an easier measure of the Company's principal business. The former category `investments' represented all consumer receivables owned by the Company whether performing or non-performing. The `investments' category has now been divided into two separate categories on the balance sheet: `investments in nonperforming consumer debt' and `credit card receivables'. `Investments in nonperforming consumer debt' represents portfolios purchased by the Company as its raw material for operations. `Credit card receivables' represents the new charges by cardholders, and fees and interest accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. on the new charges. Additional Financial Data Available The Consolidated Financial Statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge for fiscal 1998 including restated results for fiscal 1997 and the unaudited financial statements for 1Q 1999 and 2Q 1999 are available from the Company upon request. Accounting procedures now used by the Company are detailed in the Notes to Consolidated Financial Statements for FY 1998. The Credit Store is a nationwide 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 engaged in the acquisition and recovery of non-performing consumer receivables and the origination and servicing of credit cards. The Company acquires portfolios of non-performing consumer receivables and originates new credit cards 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 Credit Store attempts 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 its 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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