Velocity Asset Management, (AMEX:JVI)
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From Jun 2019 to Jun 2024
Velocity Asset Management, Inc. (AMEX: JVI) (“Velocity”),
which collects delinquent consumer receivables using an outsourced
litigation model, today announced operating results for the three- and
six-month periods ended June 30, 2008.
2008 Q2 Conference Call/Webcast Information:
Conference Call:
Monday, August 18, 2008 at 11:00 a.m. ET
Dial-in Number:
800/735-5968
Replay Number:
800/633-8284, code 21391071; until 1:00 p.m. ET, Aug 20th
Webcast:
www.velocitycollect.com,
available for 30 days
Summary Financials
Three Months Ended
Six Months Ended
June 30,
%
June 30,
%
2008
2007
2008
2007
Revenues
$
3,661,913
$
3,296,214
11
%
$
7,498,122
$
6,371,089
18
%
Operating Income
1,603,795
1,502,044
7
%
3,729,033
2,840,592
31
%
Income from continuing operations
750,509
738,173
2
%
1,798,427
1,304,450
38
%
Loss from discontinued operations
(452,095
)
(92,441
)
389
%
(843,297
)
(128,910
)
554
%
Net Income
298,414
645,732
(54
%)
955,130
1,175,540
(19
%)
Net (Loss) income attributable to common holders
(46,586
)
300,732
NA
265,130
485,540
(45
%)
EPS (fully diluted)
(0.01
)
0.02
NA
0.01
0.03
(67
%)
EPS (continuing ops.)
0.02
0.02
0
%
0.06
0.03
100
%
Diluted Shares Out.
17,604,453
17,719,398
(1
%)
17,355,102
17,802,517
(3
%)
VI* Receivables Under Management
500,000,000
433,000,000
15
%
500,000,000
433,000,000
15
%
VI* Gross Collections
4,739,198
4,534,102
5
%
9,160,316
8,215,905
11
%
*Velocity Investments – a wholly owned
subsidiary in the distressed consumer receivables business
Velocity’s Q2 2008 revenue grew 11 percent as
the Company’s outsourced litigation collection
model continued to perform on-plan. Velocity reported Q2 ‘08
operating income increased 7% to $1.6 million and income from continuing
operations rose 2% to $751,000, versus Q2 2007. Reflecting a higher tax
provision of $580,000 (43.6%) in Q2 ’08 vs.
$370,000 (33.4%) in Q2 ‘07 and a loss from
discontinued operations of $452,000, primarily due to a $400,000
impairment charge in connection with a Florida investment property,
Velocity reported a Q2 net loss attributable to common shareholders of
$47,000, or $0.01 per diluted share, compared to net income of $301,000,
or $0.02 per diluted share, in the prior year period.
“In the face of challenging capital markets
and concern about the consumer economy, Velocity’s
disciplined collections model continued to perform according to
expectations during the 2008 second quarter,”
stated Velocity President and CEO Jack Kleinert. “Despite
an improved operating performance in our core Velocity Investments
business, our Q2 results were adversely impacted by a loss from
discontinued operations as a result of an impairment charge on a Florida
investment property and a higher income tax provision.
“As we have indicated in recent quarters, it
continues to be a very attractive environment for acquiring charged-off
receivables. In order to pursue these opportunities and support the
growth of our portfolio, we issued Subordinated Notes in the aggregate
principal amount of $700,000 in a private placement offering, and
secured approximately $794,000 in net proceeds from a private placement
of Units during the period.
“We deployed some of the aforementioned
proceeds by purchasing five new charged-off consumer receivables
portfolios aggregating approximately $13.9 million of initial
outstanding amount. In aggregate, Velocity has acquired 89 portfolios
with an initial outstanding amount of approximately $500 million since
inception,” concluded Mr. Kleinert.
As of June 30, 2008, the Company had $11.6 million outstanding, and
$10.9 million in availability on its $22.5 million senior credit
facility with Wells Fargo Foothill, Inc.
Velocity Asset Management continues to wind-down the discontinued
operations of its J. Holder and VOM subsidiaries and expects to complete
this process by the end of 2008. These divestitures should free up
additional capital and allow management to focus exclusively on its
core, consumer receivables business, Velocity Investments.
About Velocity Asset Management, Inc.
Velocity Asset Management, Inc., through its wholly owned subsidiary,
Velocity Investments, LLC, is focused on the purchase and collection of
distressed consumer receivables, principally through an outsourced
litigation model. The Company purchases consumer receivable portfolios
that are of “litigation quality.”
By focusing on the quality of the portfolio prior to purchase, Velocity
aims to diminish its risk and improve its overall collection rate as a
percentage of principal balance. For more information, visit www.velocitycollect.com.
This Press Release contains or may contain forward looking statements
and information that are based upon beliefs of and information currently
available to the Company's management as well as estimates and
assumptions made by the Company's management. When used herein the words
''anticipate", "believe", "estimate", "expect", "future", "intend",
"plan" and similar expressions as they relate to the Company or the
Company's management identify forward looking statements. Such
statements reflect the current view of the Company with respect to
future events and are subject to risks, uncertainties and assumptions
relating to the Company's operations and results of operations and any
businesses that may be acquired by the Company, including future
collections, increased revenue, increased operating income and consumer
receivables under management at the Company's Velocity Investments
subsidiary. Should one or more of these risks or uncertainties
materialize, or should the underlying assumptions prove incorrect,
actual results may differ significantly from those anticipated,
believed, estimated, intended or planned.
VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
JUNE. 30, 2008
DEC. 31, 2007
(Unaudited)
Cash and cash equivalents
$
167,166
$
162,180
Consumer receivables, net
46,826,499
46,971,014
Property and equipment, net of accumulated depr.
52,984
64,420
Deferred income tax asset, net
78,000
98,600
Security deposits
30,224
30,224
Other assets (including $0 and $115,146 employee loan to a related
party at 6/30/08 and 12/31/07, respectively)
395,316
487,071
Assets of discontinued operations
5,868,656
6,793,319
Total assets
$
53,418,845
$
54,606,828
LIABILITIES
Accounts payable and accrued expenses
$
359,652
$
552,269
Estimated court and media costs
6,218,590
7,374,212
Lines of credit
11,627,437
14,429,138
Notes payable
200,000
-
Notes payable to related parties
700,000
200,000
Convertible subordinated notes
2,350,000
2,350,000
Income taxes payable
1,093,609
820,222
Liabilities from discontinued operations (including notes payable
to related parties of $2.3 mm at 6/30/08 and 12/31/07)
5,419,377
4,374,441
Total liabilities
$
27,968,665
$
30,100,282
STOCKHOLDERS' EQUITY
Series A 10% convertible preferred stock,
$0.001 par value, 10,000,000 shares authorized, 1,380,000 shares
issued
and outstanding (liquidation preference of $13,800,000)
1,380
1,380
Common stock, $0.001 par value, 40,000,000 shares authorized,
17,875,987 and 17,066,821 shares issued and outstanding,
respectively
17,875
17,066
Additional paid-in capital
25,921,639
25,243,944
Accumulated deficit
(490,714
)
(755,844
)
Total stockholders' equity
25,450,180
24,506,546
Total liabilities and stockholders' equity
$
53,418,845
$
54,606,828
VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months
Ended June 30,
For the Six Months
Ended June 30,
2008
2007
2008
2007
REVENUES
Income on consumer receivables
3,660,073
3,291,023
7,494,926
6,347,066
Other income
1,840
5,191
3,196
24,023
Total revenues
3,661,913
3,296,214
7,498,122
6,371,089
OPERATING EXPENSES
Professional fees (including fees paid to related parties of
$226,104 and $273,866 and $436,645 and $611,450 for the periods
ended June 30, 2008 and 2007, respectively)
1,401,163
1,209,140
2,570,707
2,124,864
General and administrative expenses
656,955
585,030
1,198,382
1,405,633
Total operating expenses
2,058,118
1,794,170
3,769,089
3,530,497
Income from operations
1,603,795
1,502,044
3,729,033
2,840,592
OTHER EXPENSE
Interest expense (including interest incurred to related parties
of $3,500 and $3,500 and $7,000 and $7,000 for the three and six
month periods ended June 30, 2008 and 2007, respectively)
(273,708
)
(394,049
)
(608,778
)
(739,367
)
Income from continuing operations before provision for income taxes
1,330,087
1,107,995
3,120,255
2,101,225
Provision for income taxes
579,578
369,822
1,321,828
796,775
Income from continuing operations
750,509
738,173
1,798,427
1,304,450
Loss from discontinued operations (including fees paid and interest
incurred to related parties of $0 and $25 and $0 and $192 and
$58,139 and $54,853 and $116,278 and $109,103, respectively, for the
three and six month ended at 6/30/08 and 6/30/07, and net of tax
benefit of $231,390 and $48,337 and $295,554 and $94,164 for the
three and six months ended June 30, 2008 and 2007)
(452,095
)
(92,441
)
(843,297
)
(128,910
)
Net income
298,414
645,732
955,130
1,175,540
Preferred dividend
(345,000
)
(345,000
)
(690,000
)
(690,000
)
Net income (loss) attributable to common shareholders
$
(46,586
)
$
300,732
$
265,130
$
485,540
Earnings Per Share:
Income from continuing operations:
Basic
$
0.02
$
0.02
$
0.06
$
0.04
Diluted
$
0.02
$
0.02
$
0.06
$
0.03
Discontinued operations:
Basic
$
(0.03
)
$
0.00
$
(0.05
)
$
(0.01
)
Diluted
$
(0.03
)
$
0.00
$
(0.05
)
$
0.00
Net income:
Basic
$
(0.01
)
$
0.02
$
0.01
$
0.03
Diluted
$
(0.01
)
$
0.02
$
0.01
$
0.03
Average Common Shares - Basic
17,488,534
16,163,936
17,267,963
16,151,144
Average Common Shares - Diluted
17,604,453
17,719,398
17,355,102
17,802,517