AMRESCO, INC. Reports Third Quarter Earnings
DALLAS, Nov. 8 /PRNewswire/ -- AMRESCO, INC. (Nasdaq: AMMB) reported a net
loss of $82.0 million for the quarter ended September 30, 1999, or a loss per
diluted share of $1.71. It is important to note that the Company recorded
non-cash write-offs of $86.5 million during the quarter primarily related to
home equity retained interests and home equity goodwill related to the closure
of retail branches. The home equity retained interest write-down was due to
adjusting the anticipated cash flow projections to reflect increased loss and
default rates experienced during the quarter as well as a sustained level of
prepayments. Strong performance by AMRESCO's commercial businesses was more
than offset by poor performance by the consumer businesses. The asset
management, commercial finance and commercial mortgage banking businesses
generated $25.4 million of operating income for the quarter.
On November 5, AMRESCO closed the sale of nine communication loans for an
undisclosed amount. The proceeds were used to pay down bank debt. Consistent
with AMRESCO's strategy to de-leverage their balance sheet, the Company has
elected to make a permanent reduction in AMRESCO's revolver line of
$95 million after this loan sale. Liquidity after this transaction is
approximately $50 million and should remain at or above this level given the
normal collection of maturing loans. Additionally, the Company plans on
disposing of other assets to further reduce leverage. AMRESCO continues to be
in compliance with the debt covenants.
"We continue to work toward a definitive agreement with Lend Lease. As
previously announced, Lend Lease is considering the purchase of the asset
management platform, the commercial mortgage banking businesses and the real
estate structured finance platform," says Robert H. Lutz, Jr., chairman and
chief executive officer of AMRESCO. However, no assurance can be given that a
definitive agreement will be entered into. |
