DALLAS, Nov. 14 /PRNewswire/ -- AMRESCO, INC. (Nasdaq: AMMB - news) reported a net loss of $18.4 million for the quarter ended September 30, 2000, or ($1.90) per basic and diluted share. Operating results for the quarter were reduced by, among other items; (i) $27.0 million in write-downs on home equity retained interests, (ii) $5.6 million in losses related to the sale of the homebuilder finance assets and operations, (iii) a $3.8 million loss on the sale of a commercial mortgage backed security, (iv) $2.7 million in write-downs on commercial finance retained interests in securitizations related to telephone equipment finance loans and (v) a $2.5 million write-down of a real estate asset. These losses were offset in part by $20.8 million in gains from the securitizations of conventional business loans and small business administration loans and a $3.5 million after tax gain on repurchases of subordinated debt.
During the third quarter 2000, the Company repurchased $10 million of its senior subordinated notes. The repurchase resulted in a pre-tax gain of $5.7 million and an after tax gain of $3.5 million, which is reflected as an extraordinary gain in the Company's third quarter financial statements. Through November 6, 2000, the Company utilized a substantial portion of its cash position to repurchase an additional $183.7 million of senior subordinated notes. These subsequent repurchases will result in net pre-tax gains of $73.1 million, and net after tax gains of approximately $45.3 million in the fourth quarter.
As of September 30, 2000, the Company had $1.1 billion in assets, $853.5 million in liabilities and $270.0 million in shareholders' equity. Tangible net worth (shareholders ' equity less intangible assets) was $109.9 million at quarter end, or $10.95 per share.
``The sale of the assets and operations of the Company's homebuilder finance division in September and October produced cash of $148.7 million, which was a significant step in the Company's strategic plan'' said Randy Brown, the Company's new Chairman and CEO. ``The funds made available through the homebuilder sale were used primarily to repurchase senior subordinated notes. The Company anticipates holding a majority of its current cash and cash equivalents position for future working capital uses, loan repurchase obligations and other operating and financing needs.''
The Company has experienced significant losses during current and prior quarters. A substantial portion of these losses resulted from write-downs on retained interests in securitizations due to increased default and loss severity on the underlying collateral. The Company has also encountered deterioration of asset quality on certain other owned asset classes resulting in increased charge offs and provisions for loan losses during current and prior quarters. Current performance trends indicate that additional write-downs, charge offs and provisions may be necessary in future periods. |
