November 20, 1998 IMN FINANCIAL CORP (IMNF)
Quarterly Report (SEC form 10QSB)
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant factors which have affected the Company's financial
position and operating results during the periods included in the accompanying condensed consolidated financial statements.
RESULTS OF OPERATIONS - NINE MONTH PERIOD ENDED SEPTEMBER 30, 1998 VS.
SEPTEMBER 30, 1997
Total revenues for the nine months ended September 30, increased to $22,957,083 as compared to $7,459,961 for the same
period in 1997, an increase of 208%. The Company attributes the increase to the various acquisitions since August 1, 1997.
Total general and administrative expenses for the nine months ended September 30, increased to $10,970,998 as compared to
$4,414,515 for the same period in 1997, an increase of 149%. The Company attributes the increase to the increase of sales
volume mentioned above. This increase is 59% less than the increase in sales due to ongoing acquisitions related cost
reductions.
Total interest expense for the nine months ended September 30, increased to $3,796,929 as compared to $693,035 for the same
period in 1997, an increase of 448%. The Company attributes the increase to the increase of sales volume mentioned above.
Total field and direct expenses for the nine months ended September 30, increased to $6,508,515 as compared to $2,243,605
for the same period in 1997, an increase of 190%. The Company attributes the increase to the increase of sales volume
mentioned above. This increase is 18% less than the increase in sales due to ongoing acquisitions related cost reductions.
Total net income for the nine months ended September 30, increased to $768,778 as compared to $108,806 for the same period
in 1997, an increase of 607%. The Company attributes the increase to the increase of sales volume mentioned above.
RESULTS OF OPERATIONS - THREE MONTH PERIOD ENDED SEPTEMBER 30, 1998 VS.
-
SEPTEMBER 30, 1997
Total revenues for the three months ended September 30, increased to $10,011,388 as compared to $5,013,049 for the same
period in 1997, an increase of 100%. The Company attributes the increase to the various acquisitions since August 1, 1997.
Total general and administrative expenses for the three months ended September 30, increased to $4,380,936 as compared to
$3,166,230 for the same period in 1997, an increase of 38%. The Company attributes the increase to the increase of sales
volume mentioned above. This increase is 62% less than the increase in sales due to ongoing acquisitions related cost
reductions.
IMN FINANCIAL CORP. AND SUBSIDIARIES
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FORM 10 - QSB
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS - THREE MONTH PERIOD ENDED SEPTEMBER 30, 1998 VS.
-
SEPTEMBER 30, 1997 (CONTD.)
Total interest expense for the three months ended September 30, increased to $1,586,844 as compared to $521,555 for the
same period in 1997, an increase of 204%. The Company attributes the increase to the increase of sales volume mentioned
above.
Total field and direct expenses for the three months ended September 30, increased to $3,166,230 as compared to $1,191,304
for the same period in 1997, an increase of 166%. The Company attributes the increase to the increase of sales volume
mentioned above.
Total net income (loss) for the three months ended September 30, increased to $364,233 as compared to $(99,717) for the same
period in 1997, an increase of 465%. The Company attributes the increase to the increase of sales volume mentioned above.
LIQUIDITY AND CAPITAL RESOURCES
-
The Company believes that current operations will provide adequate cash flow to meet current obligations. The Company has
$4,953,683 in points and fees receivable and investments of $7,405,297 as its present capital resources. Management believes
that these resources provide adequate working capital for the Company.
YEAR 2000
-
THE COMPANY'S STATE OF READINESS
80% of the Company's information technology systems are presently year 2000 compliant, including having been tested as to
their compliance. The remaining 20% of the systems are expected to be upgraded and tested within the next several months,
resulting in year 2000 compliance by early 1999. In addition, the Company is regulated by the NYS Banking Department, which is
overseeing the year 2000 compliance of the systems through various questionnaires. Thus, far, the Company is in compliance
with the oversight of the NYS Banking Department.
Year 2000 compliance of the Company's non-information technology systems has not yet been addressed. The year 2000
compliance of these systems is expected to be addressed and in place by mid 1999.
IMN FINANCIAL CORP. AND SUBSIDIARIES
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FORM 10 - QSB
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
YEAR 2000 (CONTD.)
There are currently several third parties whose year 2000 compliance is important to the Company's continuing operation. These
include banks and other financial institutions which provide the Company's operational financing. The Company is presently
developing questionnaires to be answered by the third parties regarding their level of year 2000 compliance. In addition, the
NYS Banking Department is overseeing the year 2000 compliance of the systems for some of these third parties as well.
THE COSTS TO ADDRESS THE COMPANY'S YEAR 2000 ISSUES
- The company is in the process of replacing the remaining outdated information technology systems within the next several
months. This replacement encompasses the remaining 20% of the system which will be year 2000 noncompliant. These costs
are not directly associated with making the systems year 2000 compliant, as they are incurred in connection with the routine
upgrade of the systems.
The estimated year 2000 costs in connection with the non-information technology systems and third party compliance is not
expected to exceed $15,000.
THE RISKS OF THE COMPANY'S YEAR 2000 ISSUES
- The most likely worst case scenario with regard to the Company's information technology and non-information technology
systems would be in connection with several small branches which operate independently. Should there be a problem with their
systems, the operations could be carried on from the main location in the interim. The potential lost revenue from such an event
would be immaterial in amount.
The most likely worst case scenario with regard to the third parties would be in connection with their ability to provide timely
financing. The Company has lines of credit with several different financial institutions in order to provide financing. In the event
that one or more were to be affected by year 2000 issues, the remaining available lines of credit should provide the financing
necessary to continue the normal day to day operations of the business. The potential lost revenue in connection with the
aforementioned scenario should be minimal.
THE COMPANY'S CONTINGENCY PLANS
- Presently, the contingency plans that exist are discussed above in "The risks of the Company's year 2000 issues" section.
Over the next several months, the Company will evaluate the current contingency plans to determine if any modifications are
necessary.
IMN FINANCIAL CORP. AND SUBSIDIARIES
FORM 10 - QSB |
