Rockford Industries Inc. Reports $59 Million in Originations for Third Quarter; 48% Increase Over the Prior-Year Period.SANTA ANA Santa Ana, city, El Salvador Santa Ana (sän'tä ä`nä), city (1993 pop. 129,873), W El Salvador. It is the second largest city in the country and the commercial and processing center for a sugarcane, coffee, and cattle region. , Calif.--(BUSINESS WIRE)--Nov. 5, 1998--Rockford Industries Inc. (Nasdaq:ROCF ROCF Rosicrucian Order Crotona Fellowship ) Thursday announced a 48 percent increase in finance contract originations, vs. the same period last year, to $59 million for the quarter ended Sept. 30, 1998. The company also reported diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.16 for the quarter. Finance contract originations for the third quarter increased by approximately $19.1 million from $39.9 million in the third quarter of 1997. Revenues for the quarter were $5.9 million, compared with $5.4 million in the prior-year quarter, an increase of $500,000 or 9%. Net income for the quarter was $714,000, or $0.16 per 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, on 4,501,000 diluted shares outstanding, compared with $884,000, or $0.20 per diluted share during the prior-year quarter on 4,458,000 diluted shares outstanding. During the third quarter, the company sold approximately $60.7 million of finance contracts for a gain of $3.7 million, vs. $37.0 million of finance contract sales and a gain of $3.2 million in the same quarter in 1997. The gain margin during the quarter was 6.1%, vs. 6.3% for the third quarter of 1997 (excluding the one-time gain resulting from an approximate $900,000 restructure of the SunAmerica 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. facility in August 1997). The decline in gain margin is primarily a result of increasing the gain on sale loss reserve assumption from 1.5% in 1997 to 2.5% in 1998, partially offset by a lower cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. . For the nine months ended Sept. 30, 1998, finance contract originations increased by approximately $45.6 million or 37 percent, to $167.8 million, compared with $122.2 million for the comparable period in 1997. Revenues for the nine months were $15.8 million, compared with $14.5 million for the prior-year period. Net income was $1.6 million or $0.38 per diluted share on 4,471,000 diluted shares outstanding, compared with $2.3 million or $0.53 per share for the prior-year period on 4,422,000 diluted shares outstanding. Gerry Ricco, president and chief executive officer, commented on the results: "We are very pleased to see finance contract originations up 48% for the quarter, vs. last year. Our core business is stronger than ever, due in large part to increased contributions from the key vendor programs we have initiated over the past year. "These contributions are accelerating faster than we had anticipated, further validating val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. our belief that our technology is the true growth driver in the small ticket equipment financing sector. "Our core markets remain strong and we continue to launch new significant vendor financing Vendor Financing The lending of money by a company to one of its customers so that the customer can buy products from it. By doing this, the company increases its sales even though it is basically buying its own products. programs. In the third quarter, we signed a two-year agreement with Life-Tech Inc., and a two-year agreement to provide private label financing for Medic Computer Systems Inc., one of the top health-care-information-system firms in the country. "In July of this year, we joined the Office of the Future Research and Development Consortium as its financing partner. This consortium consists of some of the largest and well-known medical equipment firms in the U.S. "Finally, in September, we inked a three-year agreement with Respironics Inc., one of the largest and most respected names in home health-care equipment. These agreements had no impact on third-quarter results, but we expect revenue growth from these contracts in subsequent quarters. "We have built a broad-based broad-based Of or relating to an index or average that provides a good representation of the overall market. The S&P 500 and NYSE Composite are generally regarded as broad-based stock indexes, while the popular Dow Jones Industrial Average is biased platform that provides a very strong foundation for future growth. It is providing us with the results we had hoped for and we look forward to the challenges and opportunities that lie ahead." The Company Rockford Industries is a leading specialty finance company, providing equipment financing, leasing and other value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. to the health-care, information-technology, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and office-product marketplaces. For more information on Rockford, visit the company's Web site at www.rockfordindustries.com. "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 matters discussed in this news release related to future business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets 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. that involve risks and uncertainties. Such risks and uncertainties include changes in demand for small ticket equipment financing, changing vendor requirements, and competition from other financing sources. Historical results are not necessarily indicative of future prospects for the company. More information on factors that could affect the company's financial performance are included in the company's reports on 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. and 10-Q filed with the Securities and Exchange Commission. -0-
ROCKFORD INDUSTRIES INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
In thousands, except share data and ratios
Quarter Ended Nine Months Ended
Sept. 30, Sept. 30,
1998 1997 1998 1997
REVENUES
Gain on sale of
financing transactions $ 3,707 $ 3,247 $ 9,654 $ 7,803
Finance income 879 920 2,782 3,047
Servicing-related income 486 747 1,437 2,439
Other income 843 488 1,899 1,223
Total revenues 5,915 5,402 15,772 14,512
COSTS
Operating expenses 3,988 2,661 10,793 7,207
Provision for losses 461 921 942 1,872
Interest expense 295 423 1,281 1,568
Total costs 4,744 4,005 13,016 10,647
Income before income taxes 1,171 1,397 2,756 3,865
Income taxes 457 513 1,077 1,500
Net income $ 714 $ 884 $ 1,679 $ 2,365
Net income attributable to
common shareholders: $ 680 $ 849 $ 1,577 $ 2,275
Net Income Per Share:
Basic 0.17 0.21 0.38 0.55
Diluted 0.16 0.20 0.38 0.53
Weighted average number of shares outstanding:
Basic 4,109 4,106 4,108 4,106
Diluted 4,501 4,458 4,471 4,422
Other Data:
Originations ($ Millions) 59.0 39.9 167.8 122.2
Gain on Sale Volume
($ Millions) 60.7 37.0 159.7 113.9
Serviced Portfolio
($ Millions) 321.9 230.2 321.9 230.2
Delinquencies (over 30 days) 4.9% 5.4% 4.9% 5.4%
Gain Margin % 6.1% 6.3% 6.0% 6.1%
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