AMRESCO, INC. Announces First Quarter Results
DALLAS, May 14 /PRNewswire/ -- AMRESCO, INC. (Nasdaq: AMMB) reported a net loss of $10.6 million for the first quarter, 2001. The quarterly loss included a special provision for a structured finance loan, a loss on the sale of small balance REO assets, an impairment to our conventional lending residual interest due to delayed cash flow caused by delinquencies and a currency loss, which has been partially reversed in the second quarter.
During the first quarter and the beginning of the second quarter a number of positive events occurred. In particular, AMRESCO for the first time recognized income from its 36% interest in Finance America, a home equity lending joint venture with Lehman Brothers. The company had a first quarter expense level of $12.9 million, excluding interest, provisions for loan losses and other special charges, which was 46% lower than the comparable expense level for the fourth quarter of 2000 and the company is continuing its efforts to further reduce costs. More recently, the company consummated the sale of various CMBS securities resulting in a $0.9 million gain and completed an additional $5.6 million of subordinated note repurchases, resulting in reduced overall leverage and a gain of $2.4 million.
The company recently announced that it hired Greenhill & Co., Inc. as a financial advisor to evaluate strategic alternatives to maximize shareholder value. In conjunction with the hiring of Greenhill, the company is currently in discussion with third parties in an effort to explore opportunities to provide funds to expand its business lending operations and accelerate its deleveraging program.
At March 31, 2001, the company had total assets of $726.9 million, $532.2 million in debt and $154.7 million in shareholders' equity. Tangible net worth (shareholders' equity less intangible assets) was $35.3 million or $3.33 per share.
Randy Brown, the company's Chairman and Chief Executive Officer said, "While we are still negotiating warehouse lines of credit to support our operating businesses, AMRESCO has made tremendous progress in eliminating expenses, reducing interest costs and rationalizing our businesses. The company is also working with Greenhill to determine the most effective way to stabilize our balance sheet and maximize shareholder value. Going forward the company expects to experience quarterly earnings volatility coinciding with the timing of securitizations. With more frequent securitizations, this pattern would become less volatile." |
