Loraca International Reports First Quarter 2000 Results
SEATTLE--(BUSINESS WIRE)--May 19, 2000--
First Quarter Achievements Include Acquisition of The Lexus
Companies and Relocation of Headquarters to Seattle
Loraca International, Inc. (OTCBB:LCAI), an emerging business-to-business e-finance services holding company, reported its financial results for the first quarter 2000 as the company continued development of its proprietary internet-based technology and implementation of its strategic plan to provide its technology to broaden product availability and revenue generating capabilities to third-party mortgage originators.
As a wholesale mortgage banker specializing in non-prime loans, Loraca's revenues are derived from the origination and sale of mortgage loans, which are sensitive to seasonal trends. Total revenues for the first quarter increased 39% to $72,400 compared to $52,300 in the first quarter of 1999, reflecting higher gain on sale of loans.
Total operating expenses increased to $1.6 million in the first quarter of 2000 compared to $0.6 million a year ago due to investments in the development of its e-commerce web site; expenses related to the elimination of its retail operations in Lake Oswego, Oregon and Albuquerque, New Mexico to reduce duplication in its operating platform; relocation of its headquarters to Seattle, Washington; and the hiring of an experienced executive management team. Gain on sale of investments, while 38% below last year's first quarter levels, contributed $1.1 million to this year's first quarter operating results, compared to $1.7 million in the first quarter last year. As a result, the company reported a loss of ($434,000) or ($.06) per share for the quarter ended March 31, 2000, in comparison with net income of $1.2 million or $.17 per share in the first quarter of 1999.
During the three months ended March 31, 2000, marketable securities declined $2.5 million as the company experienced a 22% decline in the market value of its holdings and the sale of securities to fund technology development and operating activities. At quarter end, goodwill totaled $3.5 million, a $3.1 million increase from year-end, reflecting the purchase of The Lexus Companies and Calumet. In addition, the acquisition contributed $5.3 million of mortgage servicing rights, $5.1 million in notes payable to bank and various other net assets creating a net equity value of $3.8 million offset by a $2.3 million Seller Note.
"On March 31, 2000, Loraca completed the acquisition of The Lexus Companies, Inc. and its wholly-owned subsidiary, Calumet Securities Corporation. Calumet, a 68 year old full-service mortgage origination, servicing and insurance platform, provides Loraca with a mortgage servicing platform to complement its origination and internet strategies. As one of the oldest continuously operating mortgage companies in the Midwest, Calumet Securities also originates conventional and government loans for FNMA, FHLMC, FHA, GNMA, VA and various private investors. The Company will continue its development and engagement of strategic partners to expedite the execution of its business strategies. Calumet's platform will enable us to aggressively execute on our strategy to roll-up selective mortgage originators throughout the country and implement our technology solution to third-party originators providing an enhanced product offering as well as create direct distribution and revenue diversity for our Company," stated Bernard Guy, President.
LORACA INTERNATIONAL, INC.
Consolidated Statements of Operations and Comprehensive Income
(unaudited)
Three Months ended March 31,
2000 1999
Revenues:
Gains on sales of loans $ 47,734 $ 27,392
Interest income 24,695 24,863
Total revenue 72,429 52,255
Expenses:
Interest expense 26,494 29,141
Personnel and commission expense 500,645 283,319
General, administrative and
development expense 1,041,639 261,628
Total expenses 1,568,778 574,088
Loss from operations (1,496,349) (521,833)
Other income:
Dividends 809 755
Gain on sale of investments 1,061,872 1,721,435
Total other income 1,062,681 1,722,190
Net (loss) income (433,668) 1,200,357
Other comprehensive income:
Unrealized holding (losses)
gains arising during period (2,283,314) 4,593,907
Comprehensive (loss) income $ (2,716,982) $ 5,794,264
Basic and diluted net (loss)
income per share $ (0.06) $ 0.17
Weighted average number
of shares outstanding 7,012,942 7,000,000
LORACA INTERNATIONAL, INC.
Consolidated Balance Sheets
(unaudited, unless otherwise stated)
March 31, 2000 December 31, 1999
Assets (audited)
Cash and cash equivalents $ 208,128 $ 155,072
Marketable securities 3,852,608 6,367,541
Loan receivables held
for sale, net 619,939 1,315,301
Prepaid expenses and
accounts receivable 503,796 58,785
Mortgage servicing rights 5,344,598 -
Furniture, fixtures and
equipment, net 177,129 51,153
Capitalized leased
assets, net 82,120 98,023
Receivables, other 176,314 26,782
Goodwill, net of
amortization totaling
$64,005 at 3/31/00 and
$56,324 at 12/31/99 3,495,330 404,512
Total Assets $ 14,459,962 $ 8,477,169
Liabilities and Stockholders' Equity
Liabilities
Warehouse lines of credit $ 532,443 $ 1,288,797
Notes payable to bank 5,115,186 25,762
Accounts payable 670,160 397,150
Accrued liabilities 419,002 162,463
Escrow deposits 348 298
Capitalized lease liabilities 96,526 102,252
Note payable to stockholder 876,514 859,568
Total Liabilities 7,710,179 2,836,290
Floating rate convertible
subordinated note payable 2,300,000 -
Stockholders' Equity
Common stock 7,391 7,003
Additional paid-in-capital 4,817,907 3,292,409
Other accumulated
comprehensive income 2,159,578 4,442,892
Accumulated deficit (2,535,093) (2,101,425)
Total stockholders' equity 4,449,783 5,640,879
Total liabilities and
stockholders' equity $ 14,459,962 $ 8,477,169
Statements made in this news release that are not historical facts are forward-looking information. Actual results may differ materially from those projected in any forward-looking information. Specifically, there are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Those factors include, but are not limited to, changes in technology and product acceptance, regulatory approval processes, ability of Loraca to successfully integrate the acquired businesses, and general economic conditions. Additional information on these and other factors which could affect the Company's financial results are included in its Securities and Exchange Commission filings.
CONTACT:
Loraca International, Inc.
Bernard Guy, President
206/332-0400
KEYWORD: WASHINGTON NEW MEXICO
BW1311 MAY 19,2000
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