EX-99.1 2 b60687miexv99w1.htm EX-99.1 PRESS RELEASE DATED APRIL 26, 2006 exv99w1
 

Exhibit 99.1
     (MICROFINANCIAL LOGO)
     
 
  Contact:
 
  Richard F. Latour
 
  President and CEO
 
  Tel: 781-994-4800
MICROFINANCIAL INCORPORATED ANNOUNCES
FIRST QUARTER 2006 RESULTS
Woburn, MA — April 26, 2006 — MicroFinancial Incorporated (AMEX-MFI) a financial intermediary specializing in vendor based leasing and finance programs for transactions in the $500 to $15,000 range, today announced financial results for the first quarter ended March 31, 2006.
Net income for the quarter was $764 thousand, or $0.05 per diluted share on 13,905,902 shares, compared to a loss of $2.7 million, or a loss of $0.20 per share, in the first quarter of 2005.
First quarter revenue for the period ended March 31, 2006 was $8.9 million compared to $10.9 million in the first quarter of 2005. Income on leases and loans was $672 thousand, rental income was $5.7 million, and other income components contributed $2.5 million for the quarter.
Total operating expenses for the quarter declined 48.4% to $7.7 million from $14.8 million in the first quarter of 2005. Selling, general and administrative expenses decreased $2.1 million to $4.2 million from $6.3 million for the same period last year. The reduction in the SG&A expenses compared to last year included $0.7 million in compensation costs and $0.8 million in collection expenses. Headcount at March 31, 2006 was 85 as compared to 98 at the same period last year. The first quarter provision for credit losses decreased to $1.6 million from $5.8 million for the same period in 2005, while net charge-offs decreased to $2.8 million versus $10.1 million. Sequentially, amounts greater than 31 days delinquent on March 31, 2006 decreased to $15.2 million from $18.1 million on December 31, 2005.
Richard Latour, President and Chief Executive Officer said, “We continue to develop our originations team. In the first quarter of 2006 new contract originations improved by 26% to $2.9 million as compared to the fourth quarter of 2005. The volumes included a small portfolio purchase in the amount of $240 thousand in the month of March. During the quarter we also approved 182 new vendors and processed over 2,900 applications.”
Total interest bearing debt at March 31, 2006 was $1.0 million compared to $5.2 million for the same period last year. Cash received from customers for the quarter was $12.2 million compared to $16.1 million during the same period in 2005.

 

 

MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
                 
    December 31,     March 31,  
    2005     2006  
     
ASSETS
Cash and cash equivalents
   $ 32,926     $ 31,690  
Net investment in leases and loans:
                
Receivables due in installments
     29,139       27,830  
Estimated residual value
     3,865       2,908  
Initial direct costs
     98       113  
Less:
                
Advance lease payments and deposits
     (35 )     (36 )
Unearned income
     (3,658 )     (4,743 )
Allowance for credit losses
     (8,714 )     (7,548 )
     
Net investment in leases and loans
     20,695       18,524  
Investment in service contracts, net
     1,626       1,238  
Investment in rental contracts, net
     3,025       1,752  
Property and equipment, net
     719       733  
Other assets
     1,315       1,100  
Deferred income tax
     4,882       4,392  
     
Total assets
   $ 65,188     $ 59,429  
     
LIABILITIES AND STOCKHOLDERS’ EQUITY
                 
    December 31,     March 31,  
    2005     2006  
     
Notes payable
   $ 161     $ 201  
Subordinated notes payable
     2,602       802  
Accounts payable
     1,099       525  
Dividends payable
     4,114       689  
Other liabilities
     2,094       1,913  
Income taxes payable
     431       281  
     
Total liabilities
     10,501       4,411  
     
 
                
Stockholders’ equity:
                
Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued at December 31, 2005 and March 31, 2006
     —       —  
Common stock, $.01 par value; 25,000,000 shares authorized; 13,713,899 and 13,785,273 shares issued at December 31, 2005 and March 31, 2006, respectively
     137       138  
Additional paid-in capital
     43,839       44,098  
Retained earnings
     10,711       10,782  
     
Total stockholders’ equity
     54,687       55,018  
     
Total liabilities and stockholders’ equity
   $ 65,188     $ 59,429  
     

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MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
                 
    For the three months ended  
    March 31,  
    2005     2006  
Revenues:
                
Income on financing leases and loans
   $ 1,508     $ 672  
Rental income
     6,429       5,721  
Income on service contracts
     1,088       555  
Loss and damage waiver fees
     819       551  
Service fees and other
     1,017       1,418  
     
 
                
Total revenues
     10,861       8,917  
     
 
                
Expenses:
                
Selling general and administrative
     6,348       4,207  
Provision for credit losses
     5,810       1,610  
Depreciation and amortization
     2,484       1,765  
Interest
     205       81  
     
 
                
Total expenses
     14,847       7,663  
     
 
                
Income (loss) before provision (benefit) for income taxes
     (3,986 )     1,254  
Provision (benefit) for income taxes
     (1,322 )     490  
     
 
                
Net income (loss)
     ($2,664 )   $ 764  
     
 
                
Net income (loss) per common share:
                
Basic
     ($0.20 )   $ 0.06  
     
Diluted
     ($0.20 )   $ 0.05  
     
Weighted-average shares:
                
Basic
     13,254,838       13,762,979  
     
Diluted
     13,254,838       13,905,902  
     
About The Company
MicroFinancial Inc. (AMEX: MFI), headquartered in Woburn, MA, is a financial intermediary specializing in leasing and financing for products in the $500 to $15,000 range. The Company has been in operation since 1986.
Statements in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “anticipates,” “expects,” “views,” “will” and similar expressions are intended to identify forward-looking statements. The Company cautions that a number of important factors could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Readers should not place undue reliance on forward-looking statements, which reflect the management’s view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure that it will be able to anticipate or respond timely to changes which could adversely affect its operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of the Company’s common stock. Statements relating to past dividend payments or the Company’s current dividend policy should not be construed as a guarantee that any future dividends will be paid.

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For a more complete description of the prominent risks and uncertainties inherent in the Company’s business, see the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission.

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