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Share Name | Share Symbol | Market | Type |
---|---|---|---|
NewtekOne Inc | NASDAQ:NEWT | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.15 | 1.36% | 11.16 | 11.00 | 11.24 | 11.32 | 11.1052 | 11.18 | 93,399 | 01:00:00 |
Second Quarter 2019 Financial Highlights
Financial Highlights - Six Months Ended June 30, 2019
Loan Highlights
2019 Dividend Payments & Increase in 2019 Annual Dividend Forecast
Subsequent Second Quarter 2019 Highlights
Barry Sloane, Chairman, President and Chief Executive Officer said, “We are extremely pleased with how the year has progressed and how the Company’s management team and staff have been able to execute on its plan. The seeds are planted for future opportunity and benefits, and we have invested in and borne the expenses of establishing the foundation for continued growth.”
Mr. Sloane continued, “Our recent bond issuance trading under symbol ‘NEWTL’ on the Nasdaq, the increase in our Capital One Bank facility, hiring additional senior executives in lending, obtaining additional space, launching our joint venture Newtek Conventional Lending, and the operational improvements in certain of our portfolio companies have all incurred present and past commitments to the immediate expense line without corresponding revenue benefits. However, we believe we are positioned for growth and, despite these investments in the first half of 2019, we achieved strong second quarter 2019 year-over-year comparisons for several metrics, particularly ANII, NII and dividend payout. We would like to point out that over the past several years, we have experienced a seasonally stronger second half of the calendar year, which has historically represented approximately 55 percent of annual earnings, demonstrating that the Company has been a strong performer in the second half of the year.”
Mr. Sloane concluded, “We believe that the recent increase in our annual dividend forecast to $1.95 per share is indicative of the confidence that management has in its business model and the current market for our business solutions. Many BDCs trade at or below NAV and struggle to maintain the payment of the historical dividend. The Company, however, has steadily grown its annual dividend from the forecasted $1.50 per share in 2015, and we have increased our 2019 dividend forecast to $1.95 per share, with the goal and expectation to have it paid out of taxable income. We look forward to you joining our call tomorrow morning at 8:30 a.m. to discuss our stellar second quarter 2019 financial results, and are excited about our future.”
Investor Conference Call and WebcastA conference call to discuss second quarter 2019 results will be hosted by Barry Sloane, President, Chairman and Chief Executive Officer, and Christopher Towers, Executive Vice President and Chief Accounting Officer, tomorrow, Wednesday, August 7, 2019 at 8:30 a.m. ET. The live conference call can be accessed by dialing (877) 303-6993 or (760) 666-3611.
In addition, a live audio webcast of the call with the corresponding presentation will be available in the ‘Events & Presentations’ section of the Investor Relations portion of Newtek’s website at http://investor.newtekbusinessservices.com/events-and-presentations. A replay of the webcast with the corresponding presentation will be available on Newtek’s website shortly following the live presentation and will remain available for 90 days.
1Use of Non-GAAP Financial Measures - Newtek Business Services Corp. and SubsidiariesIn evaluating its business, Newtek considers and uses ANII as a measure of its operating performance. ANII includes short-term capital gains from the sale of the guaranteed portions of SBA 7(a) loans and conventional loans, and beginning in 2016, capital gain distributions from controlled portfolio companies, which are reoccurring events. The Company defines ANII as Net investment income (loss) plus Net realized gains recognized from the sale of guaranteed portions of SBA 7(a) loan investments, less realized losses on non-affiliate investments, plus or minus loss on lease adjustment, plus the net realized gains on controlled investments, plus or minus the change in fair value of contingent consideration liabilities, plus loss on extinguishment of debt.
The term ANII is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. ANII has limitations as an analytical tool and, when assessing the Company’s operating performance, investors should not consider ANII in isolation, or as a substitute for net investment income, or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, ANII does not reflect the Company’s actual cash expenditures. Other companies may calculate similar measures differently than Newtek, limiting their usefulness as comparative tools. The Company compensates for these limitations by relying primarily on its GAAP results supplemented by ANII.
2Note Regarding Dividend PaymentsAmount and timing of dividends, if any, remain subject to the discretion of the Company’s Board of Directors. The Company's Board of Directors expects to maintain a dividend policy with the objective of making quarterly distributions in an amount that approximates 90 - 100% of the Company's annual taxable income. The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year.
Newtek Business Services Corp., Your Business Solutions Company®, is an internally managed BDC, which along with its controlled portfolio companies, provides a wide range of business and financial solutions under the Newtek® brand to the small- and medium-sized business (“SMB”) market. Since 1999, Newtek has provided state-of-the-art, cost-efficient products and services and efficient business strategies to SMB relationships across all 50 states to help them grow their sales, control their expenses and reduce their risk.
Newtek’s and its portfolio companies’ products and services include: Business Lending, SBA Lending Solutions, Electronic Payment Processing, Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing, Insurance Solutions, Web Services, and Payroll and Benefits Solutions.
Newtek® and Your Business Solutions Company®, are registered trademarks of Newtek Business Services Corp.
Note Regarding Forward Looking StatementsThis press release contains certain forward-looking statements. Words such as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or similar expressions are intended to identify forward-looking statements. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, intensified competition, operating problems and their impact on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters. Risk factors, cautionary statements and other conditions, which could cause Newtek’s actual results to differ from management’s current expectations, are contained in Newtek’s filings with the Securities and Exchange Commission and available through http://www.sec.gov/. Newtek cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements.
SOURCE: Newtek Business Services Corp.
Investor Relations & Public RelationsContact: Jayne Cavuoto Telephone: (212) 273-8179 / jcavuoto@newtekone.com
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES(In Thousands, except for Per Share Data) | |||||||
June 30, 2019 | December 31, 2018 | ||||||
ASSETS | (Unaudited) | ||||||
Investments, at fair value | |||||||
SBA unguaranteed non-affiliate investments (cost of $386,753 and $355,589, respectively; includes $270,171 and $323,388, respectively, related to securitization trusts) | $ | 378,626 | $ | 349,402 | |||
SBA guaranteed non-affiliate investments (cost of $13,572 and $17,217, respectively) | 15,142 | 19,100 | |||||
Controlled investments (cost of $78,492 and $74,279, respectively) | 178,715 | 171,585 | |||||
Non-control/affiliate investments (cost of $1,000 and $1,000, respectively) | 1,000 | 1,000 | |||||
Investments in money market funds (cost of $9 and $9, respectively) | 9 | 9 | |||||
Total investments at fair value | 573,492 | 541,096 | |||||
Cash | 3,585 | 2,316 | |||||
Restricted cash | 26,094 | 29,034 | |||||
Broker receivable | 48,533 | 42,617 | |||||
Due from related parties | 3,561 | 3,232 | |||||
Servicing assets, at fair value | 23,399 | 21,360 | |||||
Right of use assets | 8,512 | — | |||||
Other assets | 14,718 | 13,686 | |||||
Total assets | $ | 701,894 | $ | 653,341 | |||
LIABILITIES AND NET ASSETS | |||||||
Liabilities: | |||||||
Bank notes payable | $ | 94,609 | $ | 34,700 | |||
Notes due 2022 | 8,060 | 8,019 | |||||
Notes due 2023 | 55,798 | 55,564 | |||||
Notes payable - Securitization trusts | 187,492 | 216,507 | |||||
Notes payable - related parties | 24,063 | 16,840 | |||||
Due to related parties | 1 | 4 | |||||
Lease liabilities | 10,486 | — | |||||
Deferred tax liabilities | 10,005 | 9,241 | |||||
Accounts payable, accrued expenses and other liabilities | 18,028 | 25,021 | |||||
Total liabilities | 408,542 | 365,896 | |||||
Commitment and contingencies | |||||||
Net assets: | |||||||
Preferred stock (par value $0.02 per share; authorized 1,000 shares, no shares issued and outstanding) | — | — | |||||
Common stock (par value $0.02 per share; authorized 200,000 shares, 19,137 and 18,919 issued and outstanding, respectively) | 383 | 379 | |||||
Additional paid-in capital | 259,043 | 254,498 | |||||
Accumulated undistributed earnings | 33,926 | 32,568 | |||||
Total net assets | 293,352 | 287,445 | |||||
Total liabilities and net assets | $ | 701,894 | $ | 653,341 | |||
Net asset value per common share | $ | 15.33 | $ | 15.19 | |||
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)(In Thousands, except for Per Share Data) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Investment income | |||||||||||||||
From non-affiliate investments: | |||||||||||||||
Interest income | $ | 7,034 | $ | 5,503 | $ | 14,051 | $ | 10,677 | |||||||
Servicing income | 2,503 | 2,008 | 4,931 | 4,073 | |||||||||||
Other income | 1,566 | 1,108 | 2,487 | 2,163 | |||||||||||
Total investment income from non-affiliate investments | 11,103 | 8,619 | 21,469 | 16,913 | |||||||||||
From Non-control/affiliate investments: | |||||||||||||||
Dividend income | 28 | 10 | 59 | 10 | |||||||||||
From controlled investments: | |||||||||||||||
Interest income | 218 | 200 | 435 | 349 | |||||||||||
Dividend income | 2,800 | 2,575 | 5,950 | 5,200 | |||||||||||
Total investment income from controlled investments | 3,018 | 2,775 | 6,385 | 5,549 | |||||||||||
Total investment income | 14,149 | 11,404 | 27,913 | 22,472 | |||||||||||
Expenses: | |||||||||||||||
Salaries and benefits | 3,484 | 5,212 | 7,072 | 10,090 | |||||||||||
Interest | 4,712 | 3,792 | 9,447 | 7,304 | |||||||||||
Depreciation and amortization | 124 | 116 | 253 | 236 | |||||||||||
Professional fees | 643 | 587 | 1,627 | 1,527 | |||||||||||
Origination and servicing | 2,128 | 2,168 | 3,781 | 3,773 | |||||||||||
Origination and servicing - related party | 2,471 | — | 4,659 | — | |||||||||||
Change in fair value of contingent consideration liabilities | 9 | 7 | 55 | 17 | |||||||||||
Loss on extinguishment of debt | — | — | — | 1,059 | |||||||||||
Other general and administrative costs | 1,657 | 1,656 | 3,084 | 3,373 | |||||||||||
Total expenses | 15,228 | 13,538 | 29,978 | 27,379 | |||||||||||
Net investment loss | (1,079 | ) | (2,134 | ) | (2,065 | ) | (4,907 | ) | |||||||
Net realized and unrealized gains (losses): | |||||||||||||||
Net realized gain on non-affiliate investments - SBA 7(a) loans | 12,051 | 10,319 | 21,395 | 20,200 | |||||||||||
Net realized gain on controlled investments | — | 52 | — | 52 | |||||||||||
Net unrealized (depreciation) appreciation on SBA guaranteed non-affiliate investments | (382 | ) | 105 | (312 | ) | (175 | ) | ||||||||
Net unrealized (depreciation) appreciation on SBA unguaranteed non-affiliate investments | (4,572 | ) | 1,702 | (1,943 | ) | 2,694 | |||||||||
Net unrealized appreciation (depreciation) on controlled investments | 4,865 | (1,250 | ) | 2,918 | (80 | ) | |||||||||
Change in deferred taxes | (1,294 | ) | 326 | (765 | ) | 27 | |||||||||
Net unrealized depreciation on servicing assets | (911 | ) | (1,499 | ) | (1,467 | ) | (2,078 | ) | |||||||
Net realized and unrealized gains | $ | 9,757 | $ | 9,755 | $ | 19,826 | $ | 20,640 | |||||||
Net increase in net assets resulting from operations | $ | 8,678 | $ | 7,621 | $ | 17,761 | $ | 15,733 | |||||||
Net increase in net assets resulting from operations per share | $ | 0.45 | $ | 0.41 | $ | 0.93 | $ | 0.85 | |||||||
Net investment loss per share | $ | (0.06 | ) | $ | (0.11 | ) | $ | (0.11 | ) | $ | (0.26 | ) | |||
Dividends and distributions declared per common share | $ | 0.46 | $ | 0.42 | $ | 0.86 | $ | 0.82 | |||||||
Weighted average number of shares outstanding | 19,113 | 18,680 | 19,058 | 18,588 | |||||||||||
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIESNON-GAAP FINANCIAL MEASURES-ADJUSTED NET INVESTMENT INCOME RECONCILIATION:
(in thousands, except per share amounts) | Three months endedJune 30, 2019 | Per share | Three months endedJune 30, 2018 | Per share | |||||||||||
Net investment loss | $ | (1,079 | ) | $ | (0.06 | ) | $ | (2,134 | ) | $ | (0.11 | ) | |||
Net realized gain on non-affiliate investments - SBA 7(a) loans | 12,051 | 0.63 | 10,319 | 0.55 | |||||||||||
Net realized gain on controlled investments | - | - | 52 | 0.00 | |||||||||||
Loss on lease | (26 | ) | (0.00 | ) | (76 | ) | (0.00 | ) | |||||||
Change in fair value of contingent consideration liabilities | 9 | 0.00 | 7 | 0.00 | |||||||||||
Adjusted Net investment income | $ | 10,955 | $ | 0.57 | $ | 8,168 | $ | 0.44 | |||||||
(in thousands, except per share amounts) | Six months endedJune 30, 2019 | Per share | Six months endedJune 30, 2018 | Per share | |||||||||||
Net investment loss | $ | (2,065 | ) | $ | (0.11 | ) | $ | (4,907 | ) | $ | (0.26 | ) | |||
Net realized gain on non-affiliate investments - SBA 7(a) loans | 21,395 | 1.12 | 20,200 | 1.09 | |||||||||||
Net realized gain on controlled investments | - | - | 52 | 0.00 | |||||||||||
Loss on lease | (105 | ) | (0.01 | ) | (152 | ) | (0.01 | ) | |||||||
Change in fair value of contingent consideration liabilities | 55 | 0.00 | 17 | 0.00 | |||||||||||
Loss on debt extinguishment | - | - | 1,059 | 0.06 | |||||||||||
Adjusted Net investment income | $ | 19,280 | $ | 1.01 | $ | 16,269 | $ | 0.88 | |||||||
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES | |||
DEBT TO EQUITY RATIO – PROFORMA AT JUNE 30, 2019 | |||
(in thousands): | |||
Broker receivable, including premium income receivable | $ | 48,533 | |
Less: premium income included in broker receivable | (4,988 | ) | |
Broker receivable | 43,545 | ||
90% advance rate on SBA guaranteed non-affiliate portions of loans sold, not settled | $ | 39,191 | |
Proforma debt adjustments: | |||
Total Senior Debt as of June 30, 2019 | $ | 375,058 | |
Proforma adjustment for broker receivable as of June 30, 2019, as calculated above | (39,191 | ) | |
Total proforma debt at June 30, 2019 | $ | 335,868 | |
Proforma Debt to Equity ratio at June 30, 2019: | |||
Total proforma debt | $ | 335,868 | |
Total equity | $ | 293,352 | |
Debt to equity ratio - proforma at June 30, 2019 | 114.5 | % | |
1 Year NewtekOne Chart |
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