Net Income of $1.19 Million, or $0.37 Per Share, Reported for Year-End 1998 By Westmark
BOCA RATON, Fla., March 31 /PRNewswire/ -- Westmark Group Holdings, Inc. (Nasdaq: WGHI - news) today reported net income of $1.19 million -- or $0.37 per share -- for the year ended December 31, 1998.
This represents a $2.66 million turnaround from a net loss of $1.47 million (or $1.06 per share) for 1997. Moreover, this marks the Company's first year-end net income in its 13-year history.
''During 1998, Westmark set new company records for income, revenues, loan production and loan sales,'' said Mark Schaftlein, President & Chief Executive Officer. ''In addition, we retired the majority of our long-term debt and significantly improved our balance sheet.''
Income From Operations:
In 1998, income from operations was $1.71 million (or $0.54 per share diluted) -- prior to provisions, charges, tax benefits and other credits, the combined effect of which was to reduce earnings by $520,000.
''In 1998, we wrote-down substantially all of our remaining investment in Greenworld Technologies, took charges on our exchange agreement with Medical Industries, and accounted for losses incurred on prior real estate investments,'' he said, ''all of which should better position WGHI for the new year.''
''The final resolution of these issues allows us to report the results of our core business -- sub-prime mortgage lending -- without the prior distractions of historical involvement in un-related businesses.''
Members of Westmark management will be available to review these 1998 results -- and report on loan production for the First Quarter ended today, March 31, 1999 -- during an ''open-line'' Conference Call to be held immediately after the close of the Nasdaq market at 4 p.m. Eastern Time on Monday, April 5. All current and prospective investors are welcome to participate by dialing, toll-free, 1-800-749-9918.
Loan Volume, Sales, Revenues:
In 1998, Westmark originated and/or purchased $290.2 million in sub-prime mortgages loans, primarily made to borrowers with less-than-perfect credit ratings under traditional banking guidelines. This represents a 126% increase compared to $128.2 million in sub-prime loans in 1997.
Reflecting this rise in mortgage production, loan sales to third-party institutional investors totaled $276.9 million in 1998, a 121% increase compared to loan sales of $125.4 million in 1997.
As a result, total revenues, derived primarily from loan sales to investors, were $17.3 million in 1998. This was more than double the $8.34 million in revenues generated in 1997.
Shareholders' Equity:
From a balance sheet perspective, shareholders' equity was $2.49 million at year-end 1998, a nearly 40-fold increase from $62.305 on December 31, 1997.
Westmark Group Holdings, Inc., through its wholly-owned subsidiary, Westmark Mortgage Corp., is primarily engaged in the origination, purchase and re-sale of non-conforming, residential mortgage loans secured by a first or second lien on the borrower's primary place of residence. The majority of these loans are made to borrowers with ''A-minus, B and C'' rated (or sub-prime) credit histories who might not qualify for federal-agency-conforming mortgages under traditional banking guidelines. Westmark then pools these loans and sells them on a bulk basis to institutional investors in the secondary market. Westmark distinguishes itself from many of its peers in that it sells these pools on a servicing-released basis, and substantially all of its loans are sold monthly on a whole loan, cash basis, with revenues recognized only after the sale is completed.
Common stock of Westmark trades on The Nasdaq Stock Market under the symbol ''WGHI.''
12 Months Ended December 31,
Selected Operating Results: 1998 1997
Sub-Prime Mortgage Loan
Production $ 290,154,464 $ 128,169,131
Sub-Prime Mortgage Loan Sales $ 276,938,431 $ 125,358,240
Selected Financial Results:
Gain on Sale of Loans $ 13,592,080 $ 6,735,709
Loan Origination Fees 1,650,143 667,029
Interest Income 1,881,755 808,975
Other 176,121 130,793
Total Revenues $ 17,300,099 $ 8,342,506
Operations Costs & Expenses $ 15,583,452 $ 9,032,329
Income (Loss) From Operations $ 1,716,647 ($ 689,832)
Other Income (Expenses):
Dividend Income $ 105,000 $ 140,000
Provision for investment in
preferred stock (Greenworld) (800,000) --
Provision for investment in real
estate (PBF Land) (110,000) (590,000)
Loss from exchange agreement
(Medical Industries) (349,945) --
Other (85,768) 68,978
Net Other Expenses ($ 1,240,713) ($ 381,022)
Income (Loss) from Continuing
Operations Before Taxes $ 475,934 ($ 1,070,845)
Income Tax Expense (Benefit) ($ 710,784) 147,000
Income (Loss) from Continuing
Operations $ 1,186,718 ($ 1,217,845)
Discontinued Operations:
Loss on divestiture of subsidiary,
net of tax effect of $147,000 -- ($ 250,225)
Net Income (Loss) $ 1,186,718 ($ 1,468,070)
Net Income (Loss) Per Share
Basic
From Continuing Operations $ 0.37 ($ 0.89)
From Discontinued Operations -- ($ 0.17)
Basic Net Income (Loss) Per Share $ 0.37 ($ 1.06)
Diluted
From Continuing Operations $ 0.37 n/a
From Discontinued Operations -- n/a
Diluted Net Income (Loss) Per Share $ 0.37 n/a
Weighted Average Shares Outstanding
Basic 2,891,820 1,506,204
Diluted 3,229,314 n/a
(NOTE: This News Release contains forward-looking statements. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words ''projects,'' ''plans,'' ''believes,'' ''expects,'' ''anticipates,'' and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause the Company's actual results -- including, without limitation: interest rate fluctuations; the ability to generate, acquire, re-package and sell loans to institutional investors on favorable terms; loan production; loan sales; revenues; net income; and other factors as set forth in WGHI's 1998 Annual Report (Form 10-KSB) under the caption ''Certain Factors That May Affect Future Results'' -- to differ materially from those indicated by such forward-looking statements.)
CONTACT: Louis J. Resweber, 888-389-2266, lou@wghi.com, or Christina B. Domingue, 225-927-9330, or Amy M. Varisco, 800-240-2014, all of Westmark Group Holdings, Inc.
SOURCE: Westmark Group Holdings, Inc. |
