BURLINGTON, Mass., July 17, 2013 (GLOBE NEWSWIRE) -- MicroFinancial Incorporated (Nasdaq:MFI), a financial intermediary specializing in vendor-based leasing and finance programs for microticket transactions, today announced financial results for the second quarter and the six months ended June 30, 2013.
Quarterly Highlights:
- Net income was $2.5 million or $0.17 per diluted share which compares to $2.6 million or $0.18 per diluted share in the same period last year;
- Cash received from customers was $32.8 million or $2.22 per diluted share which represents an increase of 9.0% as compared to the same period last year;
- Revenue increased by 6.7% to $15.7 million as compared to the same period last year;
- Net charge-offs declined 10.5% to $3.9 million as compared to the same period last year;
- The Company was able to repurchase 82,169 shares under the buyback program; and
- The Company paid a cash dividend of $0.06 per share.
Second Quarter Results:
Net income for the quarter ended June 30, 2013 was $2.5 million or $0.17 per diluted share based upon 14,773,434 shares, compared to net income of $2.6 million, or $0.18 per diluted share based upon 14,658,235 shares, for the same period last year.
Revenue for the second quarter increased 6.7% to $15.7 million compared to $14.7 million for the same period in 2012, driven primarily by growth in lease revenue and rental income during the quarter. Revenue from leases was $10.4 million, up $0.4 million from the same period last year and rental income was $2.7 million, up $0.3 million as compared to the second quarter in 2012. Other revenue components contributed $2.6 million for the current quarter, up $0.3 million from the same period last year.
Total operating expenses for the current quarter increased 12.2% to $11.6 million from $10.3 million in the second quarter of 2012. Selling, general and administrative expenses increased $0.8 million to $4.8 million due to increases in compensation related expenses due to increased headcount, increases in bank servicing fees and legal expenses. Headcount at June 30, 2013 was 156 as compared to 139 at the same date last year. The second quarter 2013 provision for credit losses increased to $4.7 million from $4.5 million for the same period in 2012 primarily to cover an increase in accounts greater than 90 days delinquent. During the second quarter, net charge-offs decreased to $3.9 million from $4.4 million in the same period in 2012. Depreciation and amortization expense increased $0.2 million to $1.3 million for the quarter due to an increase in the number of rental and service contracts currently being depreciated.
Cash received from customers in the second quarter increased 9.0% to $32.8 million compared to $30.1 million during the same period in 2012. New lease originations in the quarter remained flat at $23.9 million as compared to the same period last year.
Richard Latour, President and Chief Executive Officer said, "We are pleased with our continued improvement in our overall financial performance. Although originations in the second quarter were flat year over year, we did see an increase of 19% quarter over quarter. We also had increases of 7.0% and 13.1% in the number of applications and leases over the same period last year. The primary reason for the flat originations year over year was due to our continued focus on micro-ticket products which resulted in a decline in our average funded amount from approximately $5,500 in the second quarter of 2012 to $4,900 in the second quarter of 2013. In addition, we realized increases in revenues and cash receipts over the same period last year along with lower net charge-offs. Lastly, we signed up 289 new vendors for the quarter."
Year to Date Highlights:
- Net income was $4.7 million or $0.32 per diluted share, unchanged from last year;
- Cash received from customers was $63.9 million or $4.32 per diluted share which represents an increase of 7.8% as compared to the same period last year;
- Revenue increased by 7.0% to $31.0 million as compared to the same period last year; and
- Net charge-offs declined 15.7% to $8.1 million as compared to $9.6 million in the same period last year.
Year to Date Results:
For the six months ended June 30, 2013, net income remained unchanged at $4.7 million as compared to the same period last year. Net income per diluted share year to date was $0.32 based on 14,782,523 shares versus $0.32 based on 14,635,068 shares for the same period in 2012.
Year to date revenue for the six months ended June 30, 2013 increased 7.0% to $31.0 million compared to $28.9 million during the same period in 2012. Revenue from leases was $20.6 million, up $1.0 million from the same period last year and rental income was $5.2 million, up $0.5 million from the prior period. Other revenue components contributed $5.2 million year to date, up $0.6 million from the same period last year. New contract originations year to date were $43.9 million versus $45.5 million through the same period last year.
Total operating expenses for the six months ended June 30, 2013 increased 8.9% to $23.1 million versus $21.2 million for the same period last year. Selling, general and administrative expenses increased by 13.4% to $9.5 million primarily due to increases in compensation related expenses associated with increased headcount and bank servicing fees. The provision for credit losses increased slightly to $9.6 million for the six months ended June 30, 2013, as compared to $9.4 million for the same period last year. Year to date net charge-offs decreased 15.7% to $8.1 million as compared to $9.6 million for the same period last year. Year to date cash from customers increased by 7.8% or $4.7 million to $63.9 million as compared to $59.2 million for the same period last year.
| MICROFINANCIAL INCORPORATED | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands, except share data) | ||
| (Unaudited) | ||
| June 30, | December 31, | |
| 2013 | 2012 | |
| ASSETS | ||
| Cash and cash equivalents | $ 3,029 | $ 3,557 |
| Restricted cash | 335 | 1,213 |
| Net investment in leases: | ||
| Receivables due in installments | 215,134 | 213,466 |
| Estimated residual value | 23,720 | 24,176 |
| Initial direct costs | 1,745 | 1,751 |
| Less: | ||
| Advance lease payments and deposits | (3,082) | (3,278) |
| Unearned income | (60,820) | (62,244) |
| Allowance for credit losses | (15,576) | (14,038) |
| Net investment in leases | 161,121 | 159,833 |
| Investment in service contracts, net | 1,446 | 797 |
| Investment in rental contracts, net | 1,093 | 1,037 |
| Property and equipment, net | 1,488 | 1,534 |
| Other assets | 1,703 | 1,658 |
| Total assets | $ 170,215 | $ 169,629 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| June 30, | December 31, | |
| 2013 | 2012 | |
| Revolving line of credit | $ 71,318 | $ 70,380 |
| Accounts payable | 2,597 | 3,220 |
| Dividends payable | 46 | 40 |
| Other liabilities | 2,692 | 2,545 |
| Income taxes payable | 435 | 653 |
| Deferred income taxes | 8,127 | 10,399 |
| Total liabilities | 85,215 | 87,237 |
| Stockholders' equity: | ||
| Preferred stock, $.01 par value; 5,000,000 shares authorized; | ||
| no shares issued at June 30, 2013 and December 31, 2012 | -- | -- |
| Common stock, $.01 par value; 25,000,000 shares authorized; | ||
| 14,418,911 and 14,470,219 shares issued at June 30, 2013 | ||
| and December 31, 2012, respectively | 144 | 145 |
| Additional paid-in capital | 47,132 | 47,500 |
| Retained earnings | 37,724 | 34,747 |
| Total stockholders' equity | 85,000 | 82,392 |
| Total liabilities and stockholders' equity | $ 170,215 | $ 169,629 |
| MICROFINANCIAL INCORPORATED | |||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
| (In thousands, except share and per share data) | |||||
| (Unaudited) | |||||
| Three Months Ended | Six Months Ended | ||||
| June 30, | June 30, | ||||
| 2013 | 2012 | 2013 | 2012 | ||
| Revenues: | |||||
| Income on financing leases | $ 10,359 | $ 9,920 | $ 20,563 | $ 19,555 | |
| Rental income | 2,682 | 2,402 | 5,185 | 4,719 | |
| Income on service contracts | 214 | 85 | 390 | 170 | |
| Loss and damage waiver fees | 1,446 | 1,321 | 2,887 | 2,608 | |
| Service fees and other | 973 | 967 | 1,944 | 1,887 | |
| Total revenues | 15,674 | 14,695 | 30,969 | 28,939 | |
| Expenses: | |||||
| Selling, general and administrative | 4,841 | 4,025 | 9,503 | 8,381 | |
| Provision for credit losses | 4,743 | 4,548 | 9,624 | 9,444 | |
| Depreciation and amortization | 1,310 | 1,065 | 2,615 | 2,073 | |
| Interest | 660 | 655 | 1,330 | 1,288 | |
| Total expenses | 11,554 | 10,293 | 23,072 | 21,186 | |
| Income before provision for income taxes | 4,120 | 4,402 | 7,897 | 7,753 | |
| Provision for income taxes | 1,654 | 1,761 | 3,165 | 3,101 | |
| Net income | $ 2,466 | $ 2,641 | $ 4,732 | $ 4,652 | |
| Net income per common share: | |||||
| Basic | $0.17 | $0.18 | $0.33 | $0.33 | |
| Diluted | $0.17 | $0.18 | $0.32 | $0.32 | |
| Weighted-average shares: | |||||
| Basic | 14,478,802 | 14,297,524 | 14,487,061 | 14,290,806 | |
| Diluted | 14,773,434 | 14,658,235 | 14,782,523 | 14,635,068 | |
About the Company
MicroFinancial Inc. (Nasdaq:MFI), is a financial intermediary specializing in microticket leasing and financing. MicroFinancial has been operating since 1986, and is headquartered in Burlington, Massachusetts.
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. 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.