8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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): April 25, 2007

MICROFINANCIAL INCORPORATED

(Exact name of registrant as specified in its charter)

MASSACHUSETTS

(State or other jurisdiction of incorporation)

1-14771	04-2962824
(Commission file number)	(IRS Employer Identification Number)

10-M Commerce Way, Woburn, MA 01801

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 781-994-4800

N/A

(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):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02.      Results of Operations and Financial Condition.
	Item 9.01.      Financial Statements and Exhibits.
SIGNATURES
EX-99 Press release dated April 25, 2007

Item 2.02.      Results of Operations and Financial Condition.

     On April 25, 2007, the Registrant announced its results of operations for the fiscal quarter ended March 31, 2007. Pursuant to Form 8-K, General Instruction F, the Registrant hereby incorporates by reference the press release attached hereto as Exhibit 99.

Item 9.01.      Financial Statements and Exhibits.

Exhibit	Exhibit Title
Exhibit 99	Press Release dated April 25, 2007

SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

MICROFINANCIAL INCORPORATED Registrant
By:	/s/ James R. Jackson, Jr.
	James R. Jackson, Jr.
	Vice President and Chief Financial Officer

Dated: April 26, 2007

EX-99

Exhibit 99  

April 25, 2007	Contact:
4:01 PM	Richard F. Latour
	President and CEO
	Tel: 781-994-4800

MICROFINANCIAL INCORPORATED ANNOUNCES
FIRST QUARTER 2007 RESULTS

Woburn, MA — April 25, 2007 — MicroFinancial Incorporated (AMEX-MFI), a financial intermediary specializing in vendor based leasing and financing programs for microticket transactions, today announced financial results for the first quarter ended March 31, 2007.

Net income for the quarter improved 59% to $1.2 million, or $0.09 per diluted share, compared to net income of $0.8 million, or $0.05 per diluted share, in the first quarter of 2006.

Revenue for the quarter ended March 31, 2007 was $7.5 million compared to $8.9 million in the first quarter of 2006. Income on leases was $2.0 million, up $1.4 million from the same period last year and rental income was $3.9 million, down $1.8 million from March 31, 2006. Other income components contributed $1.6 million for the quarter, down $1.0 million from the same period last year.

Richard Latour, President and Chief Executive Officer said, “I am pleased with the progress we made in the first quarter with respect to our originations. In the first quarter of 2007, new contract originations dramatically improved to $10.1 million compared to $2.9 million in the first quarter of 2006. In addition, we approved 155 new vendors during the quarter, bringing our total vendor list to approximately 1,350. We also processed over 7,700 applications, an increase of over 4,800 applications as compared to the same period last year.”

Total operating expenses for the quarter declined 27.4% to $5.6 million from $7.7 million in the first quarter of 2006. Selling, general and administrative expenses of $3.6 million decreased $0.6 million compared to the same period last year, primarily due to reductions in legal and collection expenses. The first quarter provision for credit losses decreased slightly to $1.5 million from $1.6 million for the same period in 2006, while net charge-offs decreased to $1.9 million versus $2.8 million in the first quarter of 2006. Depreciation and amortization expense of $0.5 million declined 73.8% compared to the same period last year, primarily due to a decline in the number of rental and service contracts combined with a greater percentage of the applicable assets becoming fully depreciated. As a result of lower debt balances, interest expense declined 84.4% to $13,000 as compared to the first quarter of 2006.

Mr. Latour added, “As we look ahead to the rest of 2007, our management team remains focused on increasing originations through rebuilding our vendor base, as well as, looking for new portfolio and additional growth opportunities.”

Although the investment in service and rental contracts continued to decline in the first quarter of 2007, the total investment in lease receivables due in installments, estimated residuals, rentals and service contracts were up $21.5 million to $55.2 million as compared to the same period last year. In the first quarter of 2007, receivables delinquent in excess of 31 days declined $1.7 million to $5.4 million versus year end 2006.

As of March 31, 2007 cash and cash equivalents were $24.0 million. Cash received from customers for the quarter was $9.5 million compared to $12.2 million during the same period in 2006.

MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)

	December 31,			March 31,
	2006			2007
ASSETS
Cash and cash equivalents	$	28,737		$	23,970
Net investment in leases:
Receivables due in installments		40,455			49,597
Estimated residual value		3,859			4,966
Initial direct costs		302			386
Less:
Advance lease payments and deposits		(50	)		(52	)
Unearned income		(13,682	)		(17,993	)
Allowance for credit losses		(5,223	)		(4,810	)
Net investment in leases		25,661			32,094
Investment in service contracts, net		613			481
Investment in rental contracts, net		313			168
Property and equipment, net		655			653
Other assets		652			507
Deferred income taxes, net		3,090			3,090
Total assets	$	59,721		$	60,963

LIABILITIES AND STOCKHOLDERS’ EQUITY

	December 31,		March 31,
	2006		2007
Notes payable	$	5	$	24
Accounts payable		1,038		511
Dividends payable		691		695
Other liabilities		1,110		1,420
Income taxes payable		741		1,338
Total liabilities		3,585		3,988
Stockholders’ equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued at December 31, 2006 and March 31, 2007		—		—
Common stock, $.01 par value; 25,000,000 shares authorized; 13,811,442 and 13,891,596 shares issued at December 31, 2006 and March 31, 2007, respectively		138		139
Additional paid-in capital		44,136		44,452
Retained earnings		11,862		12,384
Total stockholders’ equity		56,136		56,975
Total liabilities and stockholders’ equity	$	59,721	$	60,963

MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)

	Three Months Ended
	March 31,
	2006		2007
Revenues:
Income on financing leases	$	672	$	2,033
Rental income		5,721		3,924
Income on service contracts		555		361
Loss and damage waiver fees		551		444
Service fees and other		1,103		386
Interest income		315		323
Total revenues		8,917		7,471
Expenses:
Selling general and administrative		4,207		3,568
Provision for credit losses		1,610		1,523
Depreciation and amortization		1,765		463
Interest		81		13
Total expenses		7,663		5,567
Income before provision for income taxes		1,254		1,904
Provision for income taxes		490		687
Net income	$	764	$	1,217
Net income per common share:
Basic	$	0.06	$	0.09
Diluted	$	0.05	$	0.09
Weighted-average shares:
Basic		13,762,979		13,860,534
Diluted		13,905,902		14,072,449

About The Company
MicroFinancial Inc. (AMEX: MFI), is a financial intermediary specializing in microticket leasing and financing. MicroFinancial has been operating since 1986, and is headquartered in Woburn, Massachusetts.

Statements in this release that are not historical facts, including statements about future dividends or growth plans, 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. We caution that a number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Readers should not place undue reliance on forward-looking statements, which reflect

our views only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. We cannot assure that we will be able to anticipate or respond timely to changes which could adversely affect our operating results. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results or other factors may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see the risk factors described in documents that we file from time to time with the Securities and Exchange Commission.