First Profit in Company History Announced By Westmark; Mortgage Division Contributes 11 Cents Per Share
PR Newswire, Wednesday, July 16, 1997 at 15:09
DELRAY BEACH, Fla., July 16 /PRNewswire/ -- For the first time in its
11-year history, Westmark Group Holdings, Inc. (NASDAQ:WGHI) today reported a
bottom-line profit on a consolidated basis for the current quarterly reporting.
period.
For the Second Quarter ended June 30, 1997, WGHI reported net income of
$33,038 (or $.01 per share). This compares to a loss of $374,072 (or $.12 per
share) for the corresponding period last year, and marks the first quarter in
which WGHI, or its predecessor companies, has reported earnings since the
organization was originally founded in 1986.
In addition, WGHI announced it had nearly tripled in the Second Quarter
compared to last year, and the Company had already exceeded full year 1996
loan origination and sales volumes in only the first six months of 1997.
"These first-ever quarterly earnings are ultimately the result of a full-
scale, 18-month turnaround of WGHI that started with the recruiting of a new
management team and the initiation of a top-to-bottom reorganization of the
Company beginning in January of 1996," explained Mark Schaftlein, President of
WGHI.
Prior to this reorganization, WGHI was in the business of providing
traditional mortgage loans to borrowers with agency-conforming credit. Today,
however, more than 93% of WGHI's revenues are derived from the origination
purchase and sale (to investors) of high-quality, non-conventional loans
(secured primarily by first lien mortgages) which are made to a growing
segment of the population which has sub-prime (or "B" and "C" grade) credit
histories.
Record Revenues, Originations, Loan Sales:
As a result, total revenues for the Quarter were $1.78 million, nearly
triple the $653,706 in revenues generated in the same period last year. For
the First Half of 1997, revenues were $3.09 million, a 132% increase over
revenues for the first half of last year -- and in excess of the total
revenues booked for the full year 1996.
Meanwhile, WGHI also set new company records for loan originations and
loan sales in the Second Quarter and First Half -- already surpassing the
previous company records for full-year volumes established over the entire 12
months of 1996 -- and putting the Company on track to more than double total
originations and sales for this year.
By completing its first-ever "$10 million month" in June, WGHI pushed
total B/C loan volume to $29.6 million for the Second Quarter, a 196% increase
over last year. For the First Half, originations were $49.4 million, a 269%
rise over the first six months of last year and a 19% increase over the full
year 1996.
In addition, B/C loan sales to investors also jumped 311% in the Second
Quarter to $29.3 million, and 321% in the First Half to $48.8 million. The
first half total also exceeds by 33% full year loan sales for all of 1996.
Annualized Run-Rate of $120 Million:
More importantly, according to Schaftlein, "At more than $10 million in
loan originations and loan sales during the month of June, this puts WGHI at
an annualized run-rate in excess of $120 million in both categories. This
means we are currently operating at a rate that is more than triple our prior
company records for originations and sales set, a pace which would rank
Westmark among the nation's fastest-growing producers and sellers of sub-prime
mortgages."
"Looking back over the past six months, we are very pleased to report that
our two-year strategic plan to enact a turnaround in the holding company --
and to re-focus efforts of our core mortgage operations -- has been
successfully implemented and, in fact, has progressed well ahead of schedule,"
said Schaftlein.
Mortgage Division Achieves Record Earnings:
Indeed, progress to date has been rapid. In the First Quarter of this
year, WGHI's primary operating subsidiary, Westmark Mortgage Corp., reported
its own first operating profit, a mere 15 months after the division changed
its business strategy from conventional lending to the more highly-profitable,
sub-prime mortgages.
In the Second Quarter, the Westmark Mortgage division earned $604,490 --
or $.11 per share -- on a stand alone basis. This pushed year-to-date
operating income to $876,483 -- or $.16 per share -- for the mortgage
division.
Currently, Westmark Mortgage is primarily active in the growing mortgage
and consumer lending markets of Florida, California, Missouri, Georgia
(Atlanta area) and Illinois (Chicago area).
Westmark is distinguished from its competitors not only by its pace of
growth, but also by the relationships it has with purchasers of its loan
packages, which includes some of the largest names in the mortgage lending
industry, including Household International, Inc.
Divisional Profits, Bottom-Line Earnings:
Meanwhile, only three months after showing profits in the mortgage
business, continued improvement in these core operations -- coupled with an
ongoing effort to restructure overhead and administrative costs at the holding
company has resulted in WGHI gaining the ability to push profits all the way
through to the bottom line.
"By demonstrating profitability in our core mortgage unit only 15 months
after kicking off our reorganization -- and then by successfully achieving net
earnings on a consolidated basis this quarter -- we feel we have validated our
strategic business plan and have begun to rebuild confidence within the
investment community," said Schaftlein. "This dramatic turnaround reflects a
tremendous effort and commitment on behalf of the Board of Directors, the
management, and all of our employees to implement a full-scale, corporate
restructuring of WGHI."
"This announcement of first-ever quarterly earnings should be considered
by investors as only the first step in a plan to ultimately achieve continued
and consistent profitability, and the opportunity for WGHI to gain full market
valuation based -- not only on its operating results and inherent franchise
value but also -- on a standard industry multiple-to-bottom-line earnings per
share," Schaftlein concluded.
Westmark Group Holdings, Inc. is a diversified financial services holding
company which is primarily engaged, through its Westmark Mortgage Corp.
subsidiary, in the nationwide origination, purchase, and sale to institutional
investors of non-conventional, sub-prime ("B-and-C" credit) loans secured by
mortgages on its borrowers' primary residences. Westmark also owns Green
World Technologies, Inc., a manufacturer and marketer of energy conservation
devices for use in residential and commercial air conditioners, heat pumps and
refrigeration systems.
Common stock of Westmark is publicly traded on The Nasdaq Stock Market
under the symbol "WGHI."
SELECTED CONSOLIDATED FINANCIAL RESULTS:
($ In Thousands/000's,
except per share amounts)
Three Months Ended Six Month Ended
June 30, June 30,
1997 1996 1997 1996
Total Revenues 1,782 654 3,087 1,331
Total Expenses 1,853 1,098 3,460 2,365
Other Income, Tax Benefit
& One-Time Gain 104 70 139 70
Net Income/(Loss) 33 (374) (234) (964)
Net Earnings/(Loss)
Per Share .01 (.12) (.04) (.33)
Weighted Average Shares
Outstanding 5,581 3,016 5,581 3,016
OPERATING RESULTS BREAKDOWN:
Three Months Ended Six Month Ended
June 30, 1996 June 30, 1996
Net Income (Loss) Net Income/(Loss)
From Operations From Operations
WGHI/Holding Company (.07) (.15)
Westmark Mortgage Corporation .11 .16
Green World Technologies, Inc. (.03) (.05)
Total / Consolidated .01 (.04)
Mortgage Operations/Six Month Results:
Sub-Prime (B/C) Sub-Prime (B/C) Total
Loan Loan Lending (*)
Originations Sales Division
Revenues
January, 1997 $6.3 million $5.5 million $307,000
February, 1997 $5.7 million $6.0 million $367,000
March, 1997 $7.9 million $8.0 million $458,000
April, 1997 $9.8 million $9.6 million $489,000
May, 1997 $9.6 million $9.2 million $545,000
June, 1997 $10.1 million $10.5 million $627,000
First Half 1997 $49.4 million $48.8 million $2,793,000
First Half 1996 $13.4 million $11.6 million $1,401,000
Full Year 1996 $41.0 million $36.7 million $2,907,000
(* -- Total Lending Division Revenues = sales of both "A" and "B-and-C"
credit loans. Does not include revenues from Green World Technologies and
other non-lending division entities)
SOURCE Westmark Group Holdings, Inc.
-0- 07/16/97
/CONTACT: Louis J. Resweber, 888-389-2266 or Alan H. Adelson,
800-240-2014; or Ira W. Miller, 800-496-4553/
Companies or Securities discussed in this article:
Symbol
Name
NASDAQ:WGHI
Westmark Group Holdings |
