AMRESCO, INC. Announces First Quarter Results
DALLAS, May 4 /PRNewswire/ -- AMRESCO, INC. (Nasdaq: AMMB) reported net
income of approximately $2.0 million for the quarter ended March 31, 2000, or
$.04 per basic share. During the quarter, AMRESCO recognized a pre-tax net
gain of $47.9 million on the sale of certain of its assets and operations to
Lend Lease (US) Services, Inc. The company received cash proceeds on the sale
of approximately $203 million and a $25 million promissory note. Net cash
proceeds were used to pay-down the senior credit facility. Additionally,
AMRESCO anticipates recording an additional $15 million in gain in future
periods on the sale to Lend Lease upon the receipt of certain consents.
Operating results for the quarter were reduced by, among other things; (i)
$10.6 million in losses from the residential mortgage banking division, (ii)
$7.6 million in losses from the home equity division, (iii) $14.5 million in
losses associated with (a) the sale and mark-to-market of various assets
(including certain CMBS assets and the European assets and operation), and (b)
certain other charges, and (iv) ongoing corporate costs. Management has taken
steps, including exercising the MIC option agreement, transferring the home
equity origination operation to Finance America and reducing corporate
overhead, which should reduce the negative impact of these areas on future
operating results.
Continuing operations include the commercial finance division, asset
management division, home equity division and unallocated corporate overhead.
With the completion of the Lend Lease transaction and the MIC option
agreement, certain business units (commercial mortgage banking and residential
mortgage banking) have been reflected as discontinued operations for financial
statement purposes. Further, substantially all of the proceeds of the Lend
Lease transaction were allocated to discontinued operations. This allocation
resulted in a pre-tax gain of $81 million on the sale for discontinued
operations and a loss of $33.1 million on the sale for continuing operations.
For the quarter ended March 31, 2000, continuing operations generated a
pre-tax operating loss of $2.2 million, before $33.1 million in losses on the
Lend Lease transaction, $14.5 million in other charges and $15.1 million in
unallocated corporate overhead.
The commercial finance division, AMRESCO's primary on-going operating
division, generated $3.7 million in pre-tax operating income, excluding the
impact of the Lend Lease transaction and other charges, on $23.8 million in
revenues for the first quarter of 2000. Results of operations for the
comparable period in 1999 reflected pre-tax operating income of $7.9 million
on $34.7 million in revenues. The reduction in operating income and revenues
came primarily as a result of (i) reduced interest income due to the
disposition of substantially all of the company's communications and real
estate structured finance loan portfolios and (ii) a reduction in the volume
of loans securitized for the period. For the quarter, the asset management
and home equity divisions generated pre-tax operating income (loss) of
$1.7 million and $(7.6) million, respectively, excluding the impact of the
Lend Lease transaction and other charges.
As of March 31, 2000, AMRESCO held approximately $610 million in earning
assets in the commercial finance division as well as $390 million in other
earning assets, primarily composed of real estate and loan portfolios, CMBS
bonds and home equity residuals.
As of April 30, 2000, after giving effect to the execution of the MIC
option agreement, the Company had drawn approximately $47.9 million on the
senior revolver commitment. The total liquidity of the Company as of that
date was approximately $27.1 million, which consisted primarily of
availability under the senior facility.
Bob Lutz, the Company President and Chief Executive Officer, stated, "We
are pleased with the progress the Company has made on its transition plan. We
will continue to work with Prudential and other advisors to strategically
position the remaining business units to maximize shareholder value."
This news release contains certain forward-looking statements that involve
risks and uncertainties. Words such as "anticipates", "should", "expects",
"intends", "will", and similar expressions are intended to identify forward-
looking statements. Forward-looking statements include references to the
Company's belief that certain cost reduction measures will improve future
operating results. Such statements are only predictions, and the company's
actual results may differ materially from those anticipated in these forward-
looking statements.
AMRESCO, INC. is a diversified commercial finance company. Based in
Dallas, AMRESCO has offices nationwide. For more information about AMRESCO,
visit the website at www.amresco.com.
Investors and Analysts Contact:
Jon Pettee investor@amresco.com
(214) 953-7942
AMRESCO, INC.
(Nasdaq: AMMB)
(Unaudited; in thousands, except per share data)
Consolidated Condensed Statements of Income
Three Months Ended
March 31
2000 1999
REVENUES:
Interest and other investment income $ 34,155 $ 66,460
Asset management and resolution fees 3,884 4,837
Mortgage banking and servicing fees 2,004 3,978
Other revenues 1,566 1,144
Gain on sale of loans
and investments, net 1,422 26,403
Total revenues 43,031 102,822
EXPENSES:
Personnel 18,096 29,912
Interest 31,910 39,838
Loss on disposal of assets 38,431
Other general and administrative 12,519 16,897
Depreciation and amortization 4,753 5,523
Provisions for loan
and asset portfolio losses 2,255 3,718
Total expenses 107,964 95,888
Income (loss) from continuing operations
before income taxes (64,933) 6,934
Income tax expense (benefit) (19,588) 2,886
Income (loss) from continuing operations (45,345) 4,048
Income from discontinued operations,
net of income taxes 47,346 6,190
NET INCOME $ 2,001 $ 10,238
Basic earnings (loss) per share:
Loss from continuing operations $ (0.94) $ 0.08
Income from discontinued operations,
net of income taxes 0.98 0.13
Net income $ 0.04 $ 0.21
Diluted earnings (loss) per share:
Loss from continuing operations $ (0.40) $ 0.08
Income from discontinued operations,
net of income taxes 0.42 0.13
Net income $ 0.02 $ 0.21
Weighted average common shares outstanding:
Basic 48,259 47,677
Diluted 112,266 49,162
Operating Income (Loss) by Continuing Line of Business (A) (B)
Three Months Ended
March 31,
2000 1999
Asset Management $ 1,665 $ 13,407
Commercial Finance 3,709 7,932
Home Equity Lending (7,611) (2,794)
(A) Operating profit (loss) less intangible amortization
(B) 2000 results exclude losses on the Lend Lease transaction and
other charges for Asset Management and Commercial Finance of
approximately $(25.6) million and $(3.5) million, respectively.
Key Consolidated Balance Sheet Information
March 31, December 31,
2000 1999
Loans held for sale, net $ 148,701 $ 295,041
Retained interests
in securitizations-trading
(at fair value) 305,023 299,311
Total assets 1,441,774 1,932,811
Total debt 933,559 1,390,538
Shareholders' equity 465,630 459,719
Tangible net worth 336,233 320,957 |
