-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J6AF9Hr/1RmrS/T2tTroi0YRo+r0HprRpIXr9vyYzaDS/UlOxp9txO0NRx/Nhl4p OH+JSZhxkbKl9gjBsMlKRg== 0001275287-05-003083.txt : 20050808 0001275287-05-003083.hdr.sgml : 20050808 20050808161208 ACCESSION NUMBER: 0001275287-05-003083 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050808 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050808 DATE AS OF CHANGE: 20050808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARLIN BUSINESS SERVICES CORP CENTRAL INDEX KEY: 0001260968 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 383686388 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50448 FILM NUMBER: 051006127 BUSINESS ADDRESS: STREET 1: 300 FELLOWSHIP ROAD CITY: MT. LAUREL STATE: NJ ZIP: 08054 BUSINESS PHONE: 8884799111 MAIL ADDRESS: STREET 1: 300 FELLOWSHIP ROAD CITY: MT. LAUREL STATE: NJ ZIP: 08054 FORMER COMPANY: FORMER CONFORMED NAME: MARLIN BUSINESS SERVICES INC DATE OF NAME CHANGE: 20030822 8-K 1 mb3330.txt ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [LOGO OF MARLIN BUSINESS SERVICES CORP.] FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) August 8, 2005 MARLIN BUSINESS SERVICES CORP. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Pennsylvania 000-50448 38-3686388 - ---------------------------- ------------ ------------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 300 Fellowship Road, Mount Laurel, NJ 08054 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (888) 479-9111 -------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. This Form 8-K is a replacement for the Form 8-K furnished to the Securities and Exchange Commission on August 4, 2005. The press release attached as Exhibit 99.1 to this Form 8-K contains a corrected quotation by the Registrant's Chairman and CEO. There were no other changes. The information in this Current Report, including the Exhibit hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document filed with the Securities and Exchange Commission. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Press Release issued by Marlin Business Services Corp. on August 4, 2005. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MARLIN BUSINESS SERVICES CORP. ------------------------------ (Registrant) Date : August 8, 2005 /s/ DANIEL P. DYER ------------------------------ Daniel P. Dyer Chief Executive Officer INDEX TO EXHIBITS 99.1 Press Release issued by Marlin Business Services Corp. on August 4, 2005. EX-99.1 2 mb3330ex991.txt Exhibit 99.1 MARLIN BUSINESS SERVICES CORP. REPORTS STRONG INCREASE IN SECOND QUARTER NET INCOME MOUNT LAUREL, N.J., Aug. 4 /PRNewswire-FirstCall/ -- Marlin Business Services Corp. (Nasdaq: MRLN) today reported net income of $4.5 million for the second quarter ended June 30, 2005, a 31.5% increase over $3.4 million for the same period in 2004. Second quarter 2005 diluted net income per share was $0.38, a 31.0% increase over $0.29 per diluted share reported in the second quarter of 2004. Annualized returns on average assets and equity in the second quarter 2005 were 3.13% and 18.09%, respectively. For the six months ended June 30, 2005 net income was $8.4 million, or a 30.6% increase over $6.5 million for the same period in 2004. Diluted net income per share for the six-month period ended June 30, 2005 was $0.71, a 29.1% increase over $0.55 per diluted share reported for the same period in 2004. Annualized returns on average assets and equity for the six months ended June 30, 2005 were 3.0% and 17.50%, respectively. "Our strong financial performance continued with record lease production and stronger asset quality in the second quarter," said Dan Dyer, Chairman and CEO of Marlin. "Asset originations grew more than 20% over the second quarter of 2004 and asset quality improved with charge-off rates and portfolio delinquencies near the lowest levels ever experienced by the company." Highlights for the quarter ended June 30, 2005 include: -- Annualized Returns on average assets and equity were 3.13% and 18.09%, respectively, in the second quarter of 2005. -- The Company set records for new lease originations for both the quarter at $85.0 million and a single month of $30.1 million in June. Net investment in leases exceeded $537 million at June 30, 2005 and the number of active leases in our portfolio exceeded 100,000 for the first time. -- Asset quality strengthened as annualized net charge-offs were 1.74% of average net investment in leases during the second quarter of 2005 compared to 1.98% for the first quarter of 2005 and 1.99% for the full year ended December 31, 2004. As of June 30, 2005, 0.57% of our minimum lease payments receivable were 60 or more days delinquent compared to 0.65% as of March 31, 2005 and 0.66% as of June 30, 2004. -- For the quarter ended June 30, 2005, net income was $4.5 million, a 31.5% increase over net income of $3.4 million for the quarter ended June 30, 2004. -- Diluted net income per share was $0.38 in the second quarter of 2005, a 31.0% increase over $0.29 diluted net income per share in the quarter ended June 30, 2004. Asset Origination -- Based on initial equipment cost, lease production was $85.0 million in the second quarter of 2005 compared to $77.3 million in the first quarter of 2005 and $70.5 million in the second quarter of 2004. Net investment in leases grew to $537.5 million at June 30, 2005. -- Our end user customer base grew to more than 80,000 at June 30, 2005 compared with 78,000 as at March 31, 2005 and 72,000 at June 30, 2004. The number of active leases in our portfolio was approximately 101,000 at June 30, 2005. Credit Quality -- Net charge-offs totaled $2.2 million for the quarter ended June 30, 2005 compared with $2.4 million for first quarter of 2005. The provision for credit losses was $2.3 million for the second quarter of 2005 and $2.7 million for the first quarter of 2005. -- On an annualized basis, net charge-offs were 1.74% of average net investment in leases during the second quarter of 2005 compared to 1.98% for the first quarter of 2005 and 1.99% for the full year ended December 31, 2004. -- As of June 30, 2005, 0.57% of our total lease portfolio was 60 or more days delinquent, compared to 0.65% as of March 31, 2005 and 0.66% as of June 30, 2004. -- Allowance for credit losses was $6.3 million as of June 30, 2005, consistent with $6.3 million as of March 31, 2005. Allowance for credit losses as a percentage of net investment in leases was 1.21% at June 30, 2005 compared to 1.26% at March 31, 2005. -- At June 30, 2005, the allowance for credit losses was 179.8% of leases 60 or more days delinquent compared to 164.1% at March 31, 2005. -- In conjunction with this release, static pool loss statistics have been updated as supplemental information on the investor relations section of our website at http://www.marlincorp.com. Our last four years of production are tracking below our expected loss curve. Net Interest and Fee Margin and Cost of Funds -- The net interest and fee margin was 12.60% for the quarter ended June 30, 2005, a decrease of 18 basis points compared to 12.78% for the quarter ended March 31, 2005. A combination of lower asset yields and higher borrowing costs led to the decrease. -- The average implicit yield on new business was 12.70% for the quarter ended June 30, 2005 compared to 12.84% for the quarter ended March 31, 2005. -- Fee income as a percentage of average net investment in leases was 3.57% for the quarter ended June 30, 2005 compared to 3.63% for the quarter ended March 31, 2005. The decrease in fee income is primarily attributed to a $151,000 reduction in late fee income in the second quarter of 2005 compared to record late fee income in the first quarter. -- The average cost of funds as a percentage of net investment in leases was 3.73% for the quarter ended June 30, 2005. This was a 6 basis point increase from the 3.67% for the quarter ended March 31, 2005 and is primarily attributed to increased borrowing levels and interest costs on the Company's variable rate warehouse facilities. Interest rates on such facilities have risen due to recent Fed actions to raise short-term rates. Borrowing levels on the Company's warehouse facilities routinely increase in advance of the company's next term securitization transaction now planned for August 2005. Operating Expenses -- Salaries and benefits expense was $4.4 million in both the first and second quarters of 2005. Salaries and benefits expense was 3.4% as an annualized percentage of average net investment in leases for the second quarter of 2005 compared to 3.6% for the first quarter of 2005 and 3.1% in the second quarter of 2004. -- Other general and administrative expenses were $3.0 million for the second quarter of 2005, an increase of $200,000 from $2.8 million for the first quarter of 2005. Other general and administrative expenses as an annualized percentage of average net investment in leases were 2.3% for both the first and second quarters of 2005 compared to 2.5% in the second quarter of 2004. Funding and Liquidity -- Capital exceeded $100 million for the first time as we raised $179,000 in additional capital from the sale of 10,031 common shares through the Employee Stock Purchase Plan on June 30, 2005. An additional $906,000 was added to capital through the exercise of employee stock options and the related tax benefits during the first six months of the year. -- Our debt to equity ratio was 4.36:1 at June 30, 2005 compared to 4.40:1 at March 31, 2005. Our continued strong returns on equity and capital raised through the stock transactions mentioned above combined to lower this ratio. Conference Call and Webcast We will host a conference call on Friday, August 5, 2005 at 9:00 a.m. EDT to discuss our second quarter 2005 results. If you wish to participate, please call (800) 894-5910 (International participants please use (785) 424-1052) approximately 10 minutes in advance of the call time. The conference ID will be: "7Earnings." The call will also be Webcast on the Investor Relations page of the Marlin Business Services Corp. website, http://www.marlincorp.com. An audio replay will also be available on the Investor Relations section of Marlin's website for approximately 90 days. About Marlin Business Services Corp. Marlin Business Services Corp. is a nationwide provider of equipment leasing solutions primarily to small businesses. The company's principal operating subsidiary, Marlin Leasing Corporation, finances over 60 equipment categories in a segment of the market generally referred to as "small-ticket" leasing (i.e. leasing transactions less than $250,000). The company was founded in 1997 and completed its initial public offering of common stock on November 12, 2003. In addition to its executive offices in Mount Laurel, NJ, Marlin has regional offices in or near Atlanta, Chicago, Denver and Philadelphia. For more information, visit http://www.marlincorp.com or call toll-free at (888) 479-9111. Forward-Looking Statements This release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All forward-looking statements (including statements regarding future financial and operating results) involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. All statements contained in this release that are not clearly historical in nature are forward-looking, and the words "anticipate," "believe," "expect," "estimate," "plan," "may," "intend," and similar expressions are generally intended to identify forward- looking statements. Economic, business, funding, market, competitive, legal and/or regulatory factors, among others, affecting our business are examples of factors that could cause actual results to differ materially from those described in the forward-looking statements. More detailed information about these factors is contained in our filings with the SEC, including the sections captioned "Risk Factors" and "Business" in the Company's Form 10-K filed with the Securities and Exchange Commission. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise. MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Consolidated Balance Sheets (in thousands)
June 30, December 31, 2005 2004 ------------ ------------ Assets Cash and cash equivalents $ 6,259 $ 16,092 Restricted cash 26,940 20,454 Net investment in direct financing leases 537,497 489,678 Property and equipment, net 3,624 3,555 Accrued property tax receivables 935 625 Fair value of cash flow hedges 2,273 618 Other assets 6,536 6,737 ------------ ------------ Total assets $ 584,064 $ 537,759 ============ ============ Liabilities and Shareholders' Equity Debt and secured borrowings $ 441,355 $ 416,603 Other liabilities: Accrued expenses and other liabilities 18,054 12,696 Deferred income tax liability 23,352 18,110 ------------ ------------ Total liabilities 482,761 447,409 Shareholders' equity: Common Stock, $0.01 par value; 75,000 shares authorized; 11,701 and 11,528 shares issued and outstanding 117 115 Preferred Stock, $0.01 par value; 5,000 shares authorized; none issued and outstanding - - Additional paid-in capital 78,112 75,732 Stock subscription receivable (38) (54) Deferred compensation (2,221) (1,380) Other comprehensive income 1,336 374 Retained earnings 23,997 15,563 ------------ ------------ Total shareholders' equity 101,303 90,350 ------------ ------------ Total liabilities and shareholders' equity $ 584,064 $ 537,759 ============ ============
MARLIN BUSINESS SERVICES CORP. AND SUBSIDIARIES Consolidated Statements of Operations (dollars in thousands, except per share amounts)
Three Months ended Six Months ended June 30, June 30, --------------------------- --------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Income: Interest and fee income $ 20,975 $ 17,326 $ 41,137 $ 33,539 Interest expense 4,792 3,624 9,285 7,555 ------------ ------------ ------------ ------------ Net interest and fee income 16,183 13,702 31,852 25,984 Provision for credit losses 2,270 2,445 4,950 4,768 ------------ ------------ ------------ ------------ Net interest and fee income after provision for credit losses 13,913 11,257 26,902 21,216 Insurance and other income 1,217 1,005 2,389 2,090 ------------ ------------ ------------ ------------ Operating income 15,130 12,262 29,291 23,306 Salaries and benefits 4,391 3,428 8,824 6,660 General and administrative 2,971 2,742 5,797 5,040 Financing related costs 410 451 783 933 ------------ ------------ ------------ ------------ Income before income taxes 7,358 5,641 13,887 10,673 Income taxes 2,874 2,230 5,453 4,217 ------------ ------------ ------------ ------------ Net income $ 4,484 $ 3,411 $ 8,434 $ 6,456 ============ ============ ============ ============ Basic earnings per share: $ 0.39 $ 0.30 $ 0.73 $ 0.57 ============ ============ ============ ============ Diluted earnings per share: $ 0.38 $ 0.29 $ 0.71 $ 0.55 ============ ============ ============ ============ Shares used in computing basic earnings per share: 11,508,519 11,283,348 11,483,678 11,252,744 ============ ============ ============ ============ Shares used in computing diluted earnings per share: 11,912,329 11,676,895 11,891,369 11,668,954 ============ ============ ============ ============
SUPPLEMENTAL QUARTERLY DATA (dollars in thousands, except per share amounts)
Quarter Ended: 6/30/04 9/30/04 12/31/04 3/31/05 6/30/05 - ---------------------------------------- ---------- ---------- ---------- ---------- ---------- New Asset Production: # of Sales Reps 98 98 100 99 95 # of Leases 8,489 7,974 7,518 8,248 8,798 Equipment Volume $ 70,515 $ 68,849 $ 66,761 $ 77,346 $ 85,007 Average monthly sources 1,317 1,233 1,195 1,312 1,361 Implicit Yield on New Business 14.07% 13.75% 13.71% 12.84% 12.70% Net interest and fee margin Interest Income Yield 12.87% 13.01% 12.91% 12.82% 12.76% Fee Income Yield 2.92% 3.02% 3.36% 3.63% 3.57% ---------- ---------- ---------- ---------- ---------- Interest and Fee Income Yield 15.79% 16.03% 16.27% 16.45% 16.33% Cost of Funds 3.30% 4.00% 3.83% 3.67% 3.73% ---------- ---------- ---------- ---------- ---------- Net interest and Fee Margin 12.49% 12.03% 12.44% 12.78% 12.60% ========== ========== ========== ========== ========== Average Net Investment in Leases $ 438,976 $ 458,270 $ 473,363 $ 490,293 $ 513,919 Portfolio Asset Quality: 60+ Days Past Due Delinquencies 0.66% 0.73% 0.78% 0.65% 0.57% 60+ Days Past Due Delinquencies $ 3,540 $ 4,067 $ 4,453 $ 3,849 $ 3,535 Net Charge-offs $ 2,137 $ 2,198 $ 2,495 $ 2,426 $ 2,231 % on Average Net Investment in Leases Annualized 1.95% 1.92% 2.11% 1.98% 1.74% Allowance for Credit Losses $ 5,569 $ 6,031 $ 6,062 $ 6,317 $ 6,355 % of 60+ Delinquencies 157.3% 148.3% 136.1% 164.1% 179.8% 90+ Day Delinquencies (Non-earning) $ 1,569 $ 1,722 $ 1,944 $ 1,529 $ 1,705 Balance Sheet Assets Investment in Direct Financing Leases $ 448,875 $ 466,943 $ 479,767 $ 500,766 $ 526,934 Initial Direct Costs and Fees 15,684 16,127 15,973 16,250 16,918 Reserve for Credit Losses (5,569) (6,031) (6,062) (6,316) (6,355) ---------- ---------- ---------- ---------- ---------- Net Investment in Leases $ 458,990 $ 477,039 $ 489,678 $ 510,700 $ 537,497 Cash and Cash Equivalents 12,686 66,774 16,092 5,997 6,259 Restricted Cash 18,257 19,505 20,454 28,527 26,940 Other Assets 10,580 11,492 11,535 17,465 13,368 ---------- ---------- ---------- ---------- ---------- Total Assets $ 500,513 $ 574,810 $ 537,759 $ 562,689 $ 584,064 ========== ========== ========== ========== ========== Liabilities Total Debt $ 390,271 $ 459,681 $ 416,603 $ 426,747 $ 441,355 Other Liabilities 28,264 29,725 30,806 38,991 41,406 ---------- ---------- ---------- ---------- ---------- Total Liabilities $ 418,535 $ 489,406 $ 447,409 $ 465,738 $ 482,761
SUPPLEMENTAL QUARTERLY DATA - continued (dollars in thousands, except per share amounts)
Quarter Ended: 6/30/04 9/30/04 12/31/04 3/31/05 6/30/05 - ----------------------------------- ------------ ------------ ------------ ------------ ------------ Shareholders' Equity Common Stock $ 115 $ 115 $ 115 $ 116 $ 117 Paid-in Capital, net 73,304 73,822 74,298 74,771 75,853 Net gain (losses) on cash flow hedges - (488) 374 2,552 1,336 Retained Earnings 8,559 11,955 15,563 19,512 23,997 ------------ ------------ ------------ ------------ ------------ Total Shareholders' Equity $ 81,978 $ 85,404 $ 90,350 $ 96,951 $ 101,303 Total Liabilities and Shareholders' Equity $ 500,513 $ 574,810 $ 537,759 $ 562,689 $ 584,064 ============ ============ ============ ============ ============ Capital and Leverage: Tangible Equity $ 81,978 $ 85,404 $ 90,350 $ 96,951 $ 101,303 Debt to Tangible Equity 4.76 5.38 4.61 4.40 4.36 Expense Ratios: Salaries and Benefits Expense $ 3,428 $ 3,538 $ 4,249 $ 4,433 $ 4,391 Salaries and Benefits Expense annualized % of Avg. Net Invest. 3.12% 3.09% 3.59% 3.62% 3.42% Total personnel end of quarter 264 265 273 271 277 General and Administrative Expense $ 2,742 $ 2,490 $ 2,532 $ 2,826 $ 2,971 General and Administrative Expense annualized % of Avg. Net Invest. 2.50% 2.17% 2.14% 2.31% 2.31% Efficiency Ratio 41.95% 40.37% 42.73% 43.10% 42.31% Net Income: Net Income $ 3,411 $ 3,395 $ 3,608 $ 3,949 $ 4,484 Annualized Performance Measures: Return on Average Assets 2.79% 2.53% 2.59% 2.87% 3.13% Return on Average Shareholders Equity 17.13% 16.23% 16.42% 16.87% 18.09% Per Share Data: Number of Shares - Basic 11,283,348 11,354,023 11,420,247 11,451,551 11,508,519 EPS - Basic $ 0.30 $ 0.30 $ 0.32 $ 0.34 $ 0.39 Number of Shares - Diluted 11,676,895 11,728,015 11,798,968 11,842,236 11,912,329 EPS - Diluted $ 0.29 $ 0.29 $ 0.31 $ 0.33 $ 0.38
SOURCE Marlin Business Services Corp. -0- 08/04/2005 /CONTACT: Bruce E. Sickel, CFO, Marlin Business Services Corp., +1-888-479-9111 ext. 4108/ /Web site: http://www.marlincorp.com / (MRLN) -----END PRIVACY-ENHANCED MESSAGE-----