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Non-Tech : USAB - USABancShares.com -- Ignore unavailable to you. Want to Upgrade?

To: usab_long who wrote (2239)	10/30/1999 9:58:00 PM
From: dharampal luthra	Read Replies (3) \| Respond to of 2419

Understanding 3rd quarter Earnings Release: The company stated that: "After one-time expenses of $1.3 million related to marketing and advertising, $230,000 related to systems conversion, an addition to loan loss reserves of $825,000 and a one-time gain on sale of loans of $1.4 million, the Company posted an operating loss of $563,000 or $0.11 diluted earnings per share, compared to net income of $269,000 or $0.06 diluted earnings per share for the quarter ended September 30, 1998. " If you remove all one time expenses: Income (loss) would be: Reported Operating Loss (825,000) One time expense (marketing) 1,300,000 One time system conversion 230,000 Loan loss reserves 825,000 One time gain on Sale of Loan (1,400,000) Pure Net operating Income (loss) = - 825000 + 1,300,000 + 230,000 + 825,0000 - 1,400,000 = 130,000 or 2.4 cents per share If you include one time gain on sale of loan , with the assumptions that such gains would continue in such an amount on their other loans then the earnings this quarter would be $1,700,000 or a whopping 28 cents per share. With different assumptions the results would be different. Regardless, what we have here is a basically profitable and swiftly growing little company. But since internet companies are evaluated on the basis of growth first and income much later I am glad to see the little loss shown by the management. The carry forward losses will generate tax relief down the road and have positive consequences in case of acquisitions. I would like to see very aggressive growth at reasonable expense and the current thrust of the company's advertising campaign meets that bill.