Creditrust Annnounces First Quarter Results.Business Editors BALTIMORE Baltimore, city (1990 pop. 736,014), N central Md., surrounded by but politically independent of Baltimore co., on the Patapsco River estuary, an arm of Chesapeake Bay; inc. 1745. , Md.--(BUSINESS WIRE)--May 30, 2000 Creditrust Corporation (Nasdaq:CRDTE) Introduction Creditrust Corporation (Nasdaq:CRDTE) today announced financial results for the first quarter ending March 31, 2000. First quarter earnings per 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. share were $0.25, and collections for the first quarter were $25.5 million. Earnings Overview For the quarter ended March 31, 2000, net earnings were $2.6 million, or $.25 per fully diluted share, compared to $2.4 million, or $.28 per fully diluted share for same quarter in 1999. Earnings from operations for the first quarter of 2000 increased to $7.0 million from $4.4 million in 1999. Collections Collections on managed 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 reached $25.5 million for the quarter ending March 31, 2000 over $13.4 million for the same quarter a year ago. Creditrust made no purchases of finance receivables in the first quarter of 2000. As of March 31, 2000, the Company had over 2.0 million accounts under management with a face value of $4.9 billion. Operating Results Revenues for the quarter ending March 31, 2000 increased 79% to $21.5 million, from $12.0 million for the first quarter of 1999. 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. increased 91% from $7.6 million to $14.5 million in the first quarter of 2000 over 1999 reflecting the increase in operating costs operating costs npl → gastos mpl operacionales associated with the growth in revenue. Income from operations increased 59% to $7.0 million for the first quarter of 2000 from $4.4 million for the same period in 1999. For the quarter ending March 31, 2000, earnings before interest expense, income taxes, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) rose to $8.1 million from $4.7 million for the same quarter last year. Cash collections and operating expenses are more fully detailed in the Portfolio-Based Data Table included as supplemental information herein. While the Portfolio-Based Data Table does not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to present the Company's operating results in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). , the Company believes the presentation provides additional information useful in assessing the Company's performance. The Company's policy is to assess estimates against actual collections. For the first quarter of 2000, the Company reevaluated some of its remaining future collection estimates and revised them to reduce income on finance receivables by $1.4 million after tax. The resulting effect was to amortize amortize To write off gradually and systematically a given amount of money within a specific number of time periods. For example, an accountant amortizes the cost of a long-term asset by deducting a portion of that cost against income in each period. more collections to return of capital and less to income. Financing and Liquidity The Company has not experienced any losses, but obligations to retire retire v. 1) to stop working at one's occupation. 2) to pay off a promissory note, and thus "retire" the loan. 3) for a jury to go into the jury room to decide on a verdict after all evidence, argument and jury instructions have been completed. debt on its revolving line of credit Revolving line of credit A bank line of credit on which the customer pays a commitment fee and can take and repay funds at will. Normally a revolving LOC involves a firm commitment from the bank for a period of several years. , coupled with the contractual servicing fees on its Series 1998-2, warehouse, and Series 1999-1 credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities which are lower than the Company's total cost of operations, and the Company's inability to raise additional financing or sell significant assets has resulted in the Company's inability to meet all of its debt service obligations. As a result, the Company was unable to meet its debt service payments to Sunrock Capital and a default has been 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. . The default would enable the lender LENDER, contracts. He from whom a thing is borrowed. 2. The contract of loan confers rights, and imposes duties on the lender. 1. The lender has the right to revoke the loan at his mere pleasure; 9 Cowen, R. 687; 8 Johns. Rep. 432; 1 T. R. 480; 2 Campb. Rep. to accelerate the loan. No acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. has been declared. In addition, this caused a cross default under the Series 1999-2 facility and the Series 1998-1 facility, which could also be accelerated. The servicing on Series 1998-2, 1999-1 and the warehouse has been terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: which directly effects the Companies resources to pay operating costs and debt service. The Company's default of the revolving line of credit and other defaults and occurrences described above may raise doubt about the Company's ability to continue as a going concern. The Company is currently working with all of its lenders and investors to obtain the necessary waivers under the terms of the agreements and is negotiating with them to stabilize stabilize See peg. its lender relationships by establishing certain operating plans. The Company also retained the services of an outside consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a to assist it in accomplishing management's objectives. The Company has also evaluated the disposal of certain assets, raising new capital for future operations, and reducing operating costs by certain staff and other cost reductions. However, there can be no assurance that the Company will be successful in achieving its objectives. The accompanying ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Company Description Founded in 1991, Creditrust Corporation acquires, manages and collects delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. consumer receivables utilizing an information-driven strategy. The Company uses proprietary technology to acquire receivables primarily consisting of charged-off Visa(R), MasterCard MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and (R), and private label credit card accounts issued by major banks and merchants. This press release contains statements that are forward looking and based on current expectations that are subject to risks and uncertainties. The Company included in its Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for 1999, particularly in "Risk Factors and Forward Looking Statements," certain cautionary statements which were intended to identify certain important factors that could cause the Company's actual results to differ materially from those contained in 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. of the Company made by or on behalf of the Company. Pursuant to the "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. " provisions contained in the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Act of 1995, the Company hereby makes reference to such statements for complete discussion of those factors, which include maintaining good relations with the credit grantors, availability of financing to purchase additional receivables and finance the company's growth, the collectibility of receivables, the risks associated with rapid growth, labor availability, fluctuations in quarterly results as the result of timing and amount of portfolio purchases, liquidations, and sales, and uncertainties associated with completed and future 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. activities. The Company's 1998 securitizations have had a material effect on quarterly results.
Creditrust Corporation
Condensed Consolidated Statements of Earnings
(Unaudited)
Three Months Ended
(Dollars in thousands, except share data) March 31,
-----------------------------
-----------------------------
2000 1999
-----------------------------
Revenue:
Income on finance receivables $ 19,496 $ 9,132
Servicing fees 1,028 1,563
Income on investment in securitization 961 1,329
-----------------------------
Total Revenue 21,485 12,024
Expenses from Operations
Personnel 9,454 5,660
Communications 978 545
Rent and occupancy 1,384 475
Professional fees 1,526 715
General and administrative 1,120 249
-----------------------------
Total Expenses from Operations 14,462 7,645
-----------------------------
Earnings from Operations 7,023 4,381
-----------------------------
Other Income (Expense)
Interest and other 164 148
Interest expense (2,895) (543)
-----------------------------
(2,731) (394)
-----------------------------
Earnings Before Income Taxes 4,292 3,985
Provision for Income Taxes 1,674 1,555
-----------------------------
Net Earnings $ 2,618 $ 2,431
=============================
Basic Earnings per Common Share $ 0.25 $ 0.29
----------------------------------------------------------------------
Diluted Earnings per Common Share $ 0.25 $ 0.28
----------------------------------------------------------------------
Weighted Average Shares Outstanding
Basic 10,453,548 8,358,889
Diluted 10,453,548 8,673,070
EBITDA $ 8,104 $ 4,676
Creditrust Corporation
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands) March 31, December 31,
-------------------------------------
Assets 2000 1999
-------------------------------------
Cash and equivalents $ 8,281 $ 11,927
Finance receivables-net 183,741 84,858
Finance Receivables Held for Sale - 3,126
Residual investment in securitizations 29,741 31,169
Property and equipment 10,184 9,297
Deferred costs 6,061 3,111
Other assets 1,038 2,087
---------- ----------
$ 239,046 $ 245,575
---------- ----------
Liabilities
Accounts payable and accrued expenses $ 7,453 $ 4,986
Notes payable 99,044 111,306
Capital leases 5,536 5,208
Other liabilities 1,610 1,606
Deferred income taxes 20,875 20,132
---------- ----------
134,518 143,238
---------- ----------
Stockholders' Equity
Common stock 105 105
Paid-in capital 72,109 71,078
Stock held for benefit plans (269) (269)
Unrealized gains 801 2,259
Retained earnings 31,782 29,164
---------- ----------
104,528 102,337
---------- ----------
$239,046 $ 245,575
========== ==========
Creditrust Corporation
Condensed Consolidated Statements of Earnings
(Unaudited)
Three Months Ended Three Months Ended
(Dollars in thousands,
except share data) March 31, 2000 December 31, 1999
-------------------- -------------------
% of % of
Actual Revenue Actual Revenue
-------------------- -------------------
Revenue:
Income on finance
receivables $ 19,496 $ 23,940
Servicing fees 1,028 1,321
Income on investment
in securitization 961 1,152
--------- ---------
Total Revenue 21,485 100.0% 26,413 100.0%
--------- ---------
Expenses from Operations
Personnel 9,454 11,072
Communications 978 1,086
Rent and occupancy 1,384 1,106
Professional fees 1,526 723
Forward flow termination - 1,300
Extinguishment of
deferred costs - 436
Other expenses 1,120 2,691
--------- ---------
Total Expenses from
Operations 14,462 67.3% 18,414 69.7%
--------- ---------
Earnings from Operations 7,023 32.7% 7,999 30.3%
--------- ---------
Other Income (Expense)
Interest and other 164 320
Interest expense (2,895) (2,717)
--------- ---------
(2,731) -12.7% (2,396) -9.1%
--------- ---------
Earnings Before Income Taxes 4,292 20.0% 5,602 21.2%
5,602
Provision for Income Taxes 1,674 2,197
--------- ---------
Net Earnings $ 2,618 12.2% $ 3,405 12.9%
========= =========
Basic Earnings per
Common Share $ 0.25 $ 0.33
--------------------------------------- ---------
Diluted Earnings per
Common Share $ 0.25 $ 0.32
--------------------------------------- ---------
Weighted Average
Shares Outstanding
Basic 10,453,548 10,453,072
Diluted 10,453,548 10,564,423
EBITDA $ 8,104 37.7% $ 8,679 32.9%
8,679
Creditrust Corporation
Portfolio-Based Data Table
For The 3 Months Ended March 31, 2000
(Unaudited)
Portfolio-
Securitization Owned Based
Notes: 1998-1 1998-2 Portfolio Total
(Dollars in thousands)
Collections
$1,715 $3,937 $ 19,839 $ 25,491
Operating Expense (504) (1,229) (14,462) (16,195)
Collections Less
Operating Expense
(Cash Margin) 1,211 2,708 5,377 9,296
Cash Margin Ratio 0.7x 0.7x 0.3x 0.4x
Chargeoff Balance 1,286,123 977,344 2,643,658 4,907,125
(1) Weighted Average
Chargeoff Balance 1,286,123 977,344 2,643,658 4,907,125
(2) Weighted Average
Carrying Value N/A N/A 176,965 176,965
Original Bond Issued 14,500 27,500 N/A 42,000
Date of Issue 6/19/98 12/28/98 N/A N/A
Coupon Interest 6.42% 8.63% N/A N/A
(3) Expected Maturity August-00 March-02 N/A N/A
(4) Bond Balance 1,546 12,221 N/A 13,767
Cash Collected (Q1 00) 1,550 3,455 19,839 24,844
Bond Paydown (Q1 00) 1,174 2,366 3,540 N/A
(5) Collection Rate
Jan 00 17.9% 8.6% 3.8%
Feb 00 22.5% 9.2% 3.8%
Mar 00 29.7% 10.0% 3.6%
(6) Q1 Total 68.1% 27.7% 11.2%
Notes: (1) Weighted average charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. balances in securitization 98-1 and 98-2 at date of securitization, and owned portfolio as of quarter end. (2) Weighted average amortized cost of owned receivables as of quarter end. (3) Projected date of bond payoff based on estimated recoveries net of debt service, servicing, and trust expenses. (4) Bond balance outstanding at quarter end. (5) Collections / average bond outstanding on 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. pools; collections / average carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. on owned pool. (6) Quarterly collection rates will be lower in the earlier periods of ownership, while the newly acquired accounts are put into payment plans. Accounts in 1998-1 have been under management for at least over 2 years, and for as long as over 8 years. Pool 1998-2 accounts were acquired on average 1.5 years ago. Owned Receivables have been under management since December December: see month. 1998, and are on average 7 months old. |
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