FMAC Reports 1998 Third Quarter Earnings.LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Oct. 20, 1998--Franchise Mortgage Acceptance Company's (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :FMAX) revenue, net income and earnings per share were down sharply in the 3rd quarter of 1998 from previous quarterly results due to recent unprecedented capital market price movements. FMAC FMAC Find, Meet, Attract, Close FMAC Financial and Management Accounting Committee FMAC Fédération Mondiale des Anciens Combattants (French: World Veterans Federation) FMAC FEMA Map Assistance Center FMAC FPGA Mission Assurance Center earned $0.05 per share during the 3rd quarter of 1998 compared to pro forma earnings pro forma earnings Income not necessarily calculated in accordance with generally accepted accounting principles. For example, a company might report pro forma earnings that exclude depreciation expense and nonrecurring expenses such as restructuring costs. per share of $0.39 for the same period in 1997. Revenue for the 3rd quarter of 1998 was $15.5 million, compared to $22.7 million for the 3rd quarter of 1997. Third quarter 1998 net income was $1.3 million compared to pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $8.6 million in the corresponding period of 1997. FMAC's revenue for the quarter ended September September: see month. 30, 1998 would have been $32.3 million, were it not for a $16.8 million loan portfolio hedge loss associated with loans sold in the Company's 3rd quarter $374 million 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. . FMAC, like many other specialty finance lenders, experienced a significant hedge loss associated with its loans held for sale. The loan hedging strategy formerly used by FMAC has worked well during the past seven years, but not during the 3rd quarter of 1998. Accordingly, the Company hired Chatham Chatham, city, Canada Chatham, city (1991 pop. 43,557), S Ont., Canada, E of Detroit, Mich., on the Thames River. It is an industrial center in a rich mixed farming and fruit-raising region. Financial as advisor for FMAC's ongoing loan portfolio hedging program. Results for the first nine months of the year were similarly impacted by the unsettled market during the quarter. Revenue for the first nine months of the year was $69.3 million, compared to $45.3 million during the same period of 1997. Net income was $18.4 million compared to pro forma net income of $16.6 million during the first nine months of 1997. Earnings per share for the first nine months of 1998 were $0.64 compared to pro forma earnings per share of $0.76 during the same period of 1997. FMAC loan origination 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. was a record $664 million, up 220 % over the 3rd quarter of 1997. In addition, the Company's loans held for sale on its balance sheet were $714 million at the end of the 3rd quarter, up 239% from $211 million at the end of the 3rd quarter of 1997. Assets at the end of the 3rd quarter of 1998 were $872 million, up 252% from $248 million as of September 30, 1997 reflecting strong demand for the Company's restaurant, energy and multi-family loan products. "I am pleased that we were able to complete a successful securitization despite the tumultuous market and the inability of some lenders to complete any transactions at all. The fact that FMAC realized a significant cash gain underscores the Company's strong fundamentals in loan origination, underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and securitization," commented FMAC's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Wayne Wayne, city (1990 pop. 19,899), Wayne co., SE Mich., a suburb of Detroit, on the Lower Rouge River; inc. as a village 1869, and with surrounding areas as a city 1960. It has automobile and aircraft industries and other varied manufactures. Knyal. "While general capital market conditions have been volatile and unpredictable, we believe FMAC's management team is focused and capable of meeting the challenge of this complex market environment." FMAC (Franchise Mortgage Acceptance Company), founded in 1991, is a specialty commercial finance company engaged in the business of originating and servicing loans and equipment leases to small businesses, with a primary focus on established national and regional franchise concepts and multi-family apartment operators. The Los Angeles-based company has provided more than $5 billion in customer financing and has enabled investor participation through 13 securitizations of pooled loans totaling more than $2.1 billion. The company's servicing portfolio is currently $5 billion. FMAC has regional offices in Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. , Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. , Greenwich Greenwich, borough, Greater London, England Greenwich (grĭn`īj, grĕn`–), outer borough (1991 pop. 200,800) of Greater London, SE England, on the Thames River. Manufactures include telephone equipment and underwater cable. , Newport Beach Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. and Parsippany, N.J., with local offices in several other states across the country. Statements contained herein, other than historical data, may be forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. and are subject to risks and uncertainties including, but not limited to, the Company's ability to achieve its revenue and marketing plans, while effectively managing expenses, as well as those risks set forth in the Company's 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 the period ended December December: see month. 31, 1997 and other SEC filings. Editor's Note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : For more information, interested parties should contact Executive Vice president of Capital Markets Kevin Burke Kevin Burke is an Irish fiddler. He was born in London to parents from County Sligo in 1950. He took up the fiddle at age eight, eventually acquiring a virtuosic technique in the Sligo fiddling style. at 1888 Century Park East, 3rd Floor, Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , CA, 90067, phone: 888-912-3622, or access FMAC's Website at http://www.fmax.com. -0-
FMAC
Balance Sheets
(Unaudited)
(In thousands, except share data)
Pro forma (1)
ASSETS 9/30/98 9/30/97
Cash and cash equivalents $23,169 -
Cash and cash equivalents - restricted 5,751 2,705
Securities available for sale 24,058 7,858
Loans and leases held for sale 713,910 210,862
Retained interest in loan securitizations 13,933 1,679
Purchased and originated servicing rights 25,932 -
Premises and equipment, net 6,161 2,196
Goodwill 38,055 4,430
Accrued interest receivable 4,253 1,575
Other assets 16,390 16,424
------ ------
Total assets $871,612 $247,729
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowings $659,789 $201,818
Deferred income taxes 27,548 11,115
Book overdraft - 1,138
Other liabilities 27,425 12,760
------ ------
Total liabilities $714,762 $226,831
Minority interest in subsidiary 55 -
Stockholders' equity:
Preferred stock, $.001 par value; 10,000,000
shares authorized, none
issued and outstanding at September 30,1998 - -
Common stock, $.001 par value; 100,000,000 shares
authorized,
28,715,625 shares issued and outstanding at 29 22
September 30, 1998
Additional paid in capital 118,330 20,876
Retained earnings 38,436 -
------ ------
Total stockholders' equity 156,795 20,898
------- ------
Total liabilities and stockholders' equity $871,612 $247,729
======== ========
(1) Pro forma balance sheet information is presented as if the
company had been taxed as a corporation, for comparative purposes.
FMAC
Statements of Income
(Unaudited)
(In thousands, except earnings per share)
Three Months Ended September 30, %
1998 1997 (1) Change
Revenue:
Gain on sale of
loans and leases $ 4,740 $ 20,690 - 77.1%
Interest income 17,015 8,180 108.0%
Interest expense (11,038) (6,394) 72.6%
Net interest income 5,977 1,786 234.7%
Servicing income 4,812 854 463.5%
Other income (loss) (16) (588) - 97.3%
Total revenue 15,513 22,742 - 31.8%
Expenses:
Total expenses 13,292 8,040 65.3%
Net pretax income 2,221 14,702 - 84.9%
Minority interest
in subsidiary (55) -
Income tax expense 956 6,104 - 84.3%
Net income $ 1,320 $ 8,598 - 84.7%
Basic earnings per share $ 0.05 $ 0.39 - 88.3%
Average shares 28,716 21,888
Diluted earnings per share $ 0.05 $ 0.39 - 88.3%
Average shares 28,742 21,888
Nine Months Ended September 30, %
1998 1997 (1) Change
Revenue:
Gain on sale of
loans and leases $43,978 $ 40,497 8.6%
Interest income 42,540 18,947 124.5%
Interest expense (28,484) (15,788) 80.4%
Net interest income 14,056 3,159 345.0%
Servicing income 10,680 2,230 378.9%
Other income (loss) 563 (588)
Total revenue 69,277 45,298 52.9%
Expenses:
Total expenses 37,544 16,633 125.7%
Net pretax income 31,733 28,665 10.7%
Minority interest
in subsidiary 55 -
Income tax expense 13,305 12,039 10.5%
Net income $ 18,373 $ 16,626 10.5%
Basic earnings per share $ 0.64 $ 0.76 - 15.8%
Average shares 28,716 21,888
Diluted earnings per share $ 0.64 $ 0.76 - 16.2%
Average shares 28,878 21,888
(1) Pro forma income tax, net income and earnings per share for the
first nine months of 1997 are presented as if the company had been
taxed as a corporation, for comparative purposes.
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