MicroFinancial Continues Net Loss
WOBURN, Mass.---MicroFinancial Incorporated (NYSE-MFI) announced today its financial results for the first quarter ended March 31, 2004.
First quarter revenues for the period ended March 31, 2004 were $18.0 million, compared to $25.6 million during the same period in fiscal 2003. The net loss for the quarter ending March 31, 2004 was $4.7 million, versus a net loss of $0.8 million for the same period last year. Loss per share for the year was ($0.36) on 13,179,548 shares, versus ($0.06) on 12,854,642 shares for the same period last year. The reduction in revenues is directly related to the Company's suspension of virtually all new originations beyond October 2002.
On a sequential basis, the net loss for the first quarter of 2004 improved $3.3 million from a loss of $8.0 million last quarter. This increase was primarily driven by a reduction in the provision for credit losses of $6.5 million.
The Company remains in full compliance with the terms and conditions of its securitizations and senior credit facility. The Company has made or exceeded all scheduled payments on these debt instruments in a timely manner. During the quarter, MicroFinancial was able to reduce its bank debt by $14.8 million to $40.5 million.
Net cash provided by operating activities decreased 33.5% to $17.1 million, compared to $25.7 million in the first quarter of 2003. The Company repaid debt of $17.4 million on its senior credit facility and securitizations during the quarter. Receivables due in installments, estimated residual values, loans receivable, investment in service contracts and investment in rental equipment at March 31, 2004 was $210.9 million, or a decrease of 41% from March 31, 2003.
Total operating expenses for the quarter decreased 3.7% to $25.8 million compared to $26.8 million in 2003. Interest expense declined 69.2% to $0.8 million as a result of lower average debt balances. Selling, general and administrative expenses decreased $1.9 million to $7.3 million for the quarter ended March 31, 2004, versus $9.2 million for the same period last year. The decrease was driven in part by a reduction in personnel related expenses of approximately $1.0 million, as management reduced headcount from 203 to 136, as well as a reduction of $0.7 million in rent expenses resulting from the consolidation of various office facilities. Depreciation and Amortization expense remained flat at $4.3 million for the quarter ended March 31, 2004. The provision for credit losses increased $2.6 million to $13.4 million for the quarter ended March 31, 2004 from $10.8 million for the same period last year. Gross charge-offs increased 29.9% to $21.2 million while recoveries decreased 38.5% to $1.6 million.
Richard Latour, President and Chief Executive Officer said, "I am pleased that the Company repaid debt balances on its senior credit facility and securitizations of $17.4 million in the quarter ended March 31, 2004. The Company has continued to outperform the financial expectations of our bank agreement by accelerating its required repayments."
MicroFinancial Incorporated continues to operate without the use of gain on sale accounting treatment and a balance sheet with total liabilities less subordinated debt to total equity plus subordinated debt of 0.9 to 1
MicroFinancial Inc. (NYSE:MFI), headquartered in Woburn, MA, is a financial intermediary specializing in leasing and financing for products in the $500 to $10,000 range. The company has been in operation since 1986.
CONTACT:MicroFinancial Incorporated Richard F. Latour, 781-994-4800
SOURCE: MicroFinancial Incorporated
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