Loraca International Reports Second Quarter 2000 Results
8/15/0 18:42 (New York)
Business Editors
SEATTLE--(BUSINESS WIRE)--Aug. 15, 2000--
Second Quarter Achievements Include Integration of The Lexus
Companies, Inc. and Calumet Securities Corporation Acquisitions and
the Selection of Xpede(TM) to Provide Third-party Originators with a
Web Solution for the Mortgage Process
Loraca International, Inc. (OTCBB:LCAI), an emerging
business-to-business e-finance services holding company, reported its
financial results for the three months ended June 30, 2000, as the
company continued development of its internet-based technology and
implementation of its strategic plan to acquire and roll-up revenue
generating wholesale origination platforms through which Loraca will
distribute its technology to third-party mortgage originators to
enhance its revenue base and capture market share.
As a full-service mortgage banker specializing in conforming and
non-prime loan origination, Loraca's revenues are derived from the
origination and sale of mortgage loans, which are sensitive to
seasonal trends. For the three months ended June 30, 2000, total
revenues increased 1,840% to $1,229,370 compared to $63,351 for the
three months ended June 30, 1999, reflecting the impact of Loraca's
recent acquisition of Calumet Securities Corporation, an old line
origination, servicing and insurance platform headquartered in the
Midwest.
Total operating expenses for the three months ended June 30, 2000,
increased $2,033,550 to $2,812,677, as compared to $779,127 a year ago
due to the acquisition of Calumet, investments in the development of
its e-commerce web site; expenses related to the elimination of its
retail operations in Lake Oswego, Oregon and Albuquerque, New Mexico
to reduce duplication in its operating platform; relocation of its
headquarters to Seattle, Washington; and the hiring of an experienced
executive management team. As a result, the company reported a net
loss of ($1,149,746) or ($0.16) per share for the three months ended
June 30, 2000, in comparison with a net loss of ($46,141) or ($.0.01)
per share in the three months ended June 30, 1999. Additionally, net
cash increased 105% to $1,363 for the six months ended June 30, 2000,
compared to a net decrease in cash of ($27,069) for the comparable
period in 1999.
During the three months ended June 30, 2000, marketable securities
declined $2.9 million, as the company experienced a 60% decline in the
market value of its holdings and the sale of securities to fund
technology development and operating activities. At June 30, 2000,
goodwill totaled $3.4 million, a $3.0 million increase from year-end,
reflecting the purchase of The Lexus Companies and Calumet. In
addition, the acquisition contributed $5.3 million of mortgage
servicing rights, $5.1 million in notes payable to bank and various
other net assets creating a net equity value of $3.8 million offset by
$2.3 million in convertible subordinated Notes as of closing on March
31, 2000.
The acquisition of The Lexus Companies, Inc. and its wholly-owned
subsidiary, Calumet Securities Corporation, a 68-year-old full-service
mortgage origination, servicing and insurance platform, provides
Loraca with a mortgage servicing and insurance platform to complement
its origination and internet strategies. As one of the oldest
continuously operating mortgage companies in the Midwest, Calumet
Securities also originates conventional and government loans for
Fannie Mae, FHLMC, GNMA, FHA, VA and various private investors. The
Company will continue its technology development, engagement of
strategic partners such as Xpede, Inc. and pursue revenue generating
acquisition candidates to expedite the execution of its business
strategies. "Calumet's platform is enabling us to aggressively execute
on our strategy to roll-up selective mortgage originators throughout
the country and implement our technology solution to third-party
originators providing a broad product offering directly to our
distribution network to enhance revenue diversity for our Company,"
stated Bernard Guy, President.
Additionally, the selection by Loraca of Xpede, a leading provider
of on-line Financial Relationship Management solutions, will provide
on-line mortgage fulfillment technology services for its wholesale
mortgage customers to strengthen its business-to-business e-finance
strategies. Loraca will enable lenders to quickly establish an on-line
presence under their own brand to expand, retain and cross-sell to
their customer base. "Under the Go2efinancial.com brand, Loraca will
leverage Xpede's technology and utilize Calumet's infrastructure to
support third-party originators through the Web and significantly
compress the mortgage fulfillment process in both time and cost to
enhance our revenue base," said Ron Baca, Chairman and CEO of Loraca,
International, Inc.
Loraca International, Inc. is a rapidly evolving mortgage banking
aggregator and technology provider, supplying web-enabling technology
to firms involved in the mortgage lending, loan servicing and
community banking industry. The company moved its headquarters to
Seattle, Washington from Albuquerque, New Mexico in February 2000. For
more information go to www.Go2eFinancial.com and www.Loraca.com.
Statements made in this news release that are not historical facts
are forward-looking information. Actual results may differ materially
from those projected in any forward-looking information. Specifically,
there are a number of important factors that could cause actual
results to differ materially from those anticipated by any
forward-looking information. Those factors include, but are not
limited to, changes in technology and product acceptance, regulatory
approval processes, ability of Loraca to successfully integrate the
acquired business, and general economic conditions. Additional
information on these and other factors which could affect the
Company's financial results are included in its Securities and
Exchange Commission filings.
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LORACA INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
and Comprehensive Income (Loss)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
Revenues:
Servicing fees $ 783,860 $ $ 783,860 $
Loan processing
fees 109,748 109,748
Gain on sales of
mortgage loans
held for sale 99,006 51,542 146,740 78,934
Interest income 109,107 11,809 133,802 36,672
Insurance
commissions 120,617 120,617
Appraisal and
credit report
fees 5,708 5,708
Other 1,324 1,324
----------- ----------- ----------- -----------
Total revenue 1,229,370 63,351 1,301,799 115,606
----------- ----------- ----------- -----------
Expenses:
Interest expense 216,025 23,617 242,519 52,758
Interest on
subordinated
notes 53,731 53,731
Personnel and
commission
expense 793,540 325,948 1,294,185 609,267
General,
administrative
and development
expense 938,004 421,882 1,971,962 675,829
Amortization of
intangible assets 85,352 7,680 93,033 15,361
Amortization of
mortgage
servicing rights 726,025 726,025
----------- ----------- ----------- -----------
Total expenses 2,812,677 779,127 4,381,455 1,353,215
----------- ----------- ----------- -----------
Loss from
operations (1,583,307) (715,776) (3,079,656) (1,237,609)
----------- ----------- ----------- -----------
Other income
Dividends 13,681 3,947 14,490 4,702
Gain on sale of
investments 419,880 665,688 1,481,752 2,387,123
----------- ----------- ----------- -----------
Total other income 433,561 669,635 1,496,242 2,391,825
----------- ----------- ----------- -----------
Net income (loss) (1,149,746) (46,141) (1,583,414) 1,154,216
----------- ----------- ----------- -----------
Other comprehensive
income (loss):
Unrealized holding
gains (losses)
arising during
period (1,929,260) (2,725,630) (4,212,574) 1,868,277
----------- ----------- ----------- -----------
Comprehensive
income (loss) $(3,079,006) $(2,771,771) $(5,795,988) $ 3,022,493
=========== =========== =========== ===========
Basic and diluted
net income (loss)
per share $ (0.16) $ (0.01) $ (0.22) $ 0.16
=========== =========== =========== ===========
Weighted average
number of shares
outstanding 7,390,876 7,000,000 7,201,909 7,000,000
=========== =========== =========== ===========
LORACA INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
2000 1999
------------ ------------
Assets
Cash and cash equivalents $ 156,435 $ 155,072
Marketable securities 980,109 6,367,541
Loans receivable held for sale, net 180,046 1,315,301
Prepaid expenses and accounts receivable 720,533 58,785
Mortgage servicing rights, net 4,642,426 -
Furniture, fixtures and equipment, net 170,734 51,153
Capitalized leased assets, net 66,217 98,023
Receivables, other 17,162 26,782
Goodwill, net of amortization of $56,324
(1999) and $149,357 (2000) 3,418,323 404,512
------------ ------------
Total assets $10,351,985 $ 8,477,169
------------ ------------
Liabilities and Shareholders' Equity
Warehouse lines of credit $ 129,045 $ 1,288,797
Notes payable to bank 4,903,654 25,762
Accounts payable 497,209 397,150
Accrued liabilities 311,524 162,463
Escrow deposits 348 298
Capitalized lease liabilities 88,238 102,252
Note payable to stockholder 751,190 859,568
------------ ------------
Total liabilities 6,681,208 2,836,290
------------ ------------
Floating rate convertible subordinated
note payable 2,300,000 -
Commitments and contingencies
Stockholders' Equity
Common stock:
Par value - $.001 per share; 50,000,000
shares authorized; 7,003,047 (1999) and
7,390,876 (2000) shares issued and
outstanding 7,391 7,003
Additional paid-in-capital 4,817,907 3,292,409
Other accumulated comprehensive income
(Loss) 230,318 4,442,892
Accumulated deficit (3,684,839) (2,101,425)
------------ ------------
Total stockholders' equity 1,370,777 5,640,879
------------ ------------
Total liabilities and stockholders' equity $10,351,985 $ 8,477,169
------------ ------------
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--30--APS/se*
CONTACT: Loraca International, Inc.
Bernard Guy, 206/332-0400
KEYWORD: WASHINGTON
INDUSTRY KEYWORD: BANKING EARNINGS INTERNET
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