- Net asset value ("NAV") of $250.2 million, or $14.36 per share, at June 30, 2017; an increase of 22.4% and 19.7%, respectively, over NAV at June 30, 2016, and December 31, 2016.
- Net investment loss of $(1.7) million, or $(0.10) per share, for the three months ended June 30, 2017, compared to a net investment loss of $(4.1) million, or $(0.28) per share, for the three months ended June 30, 2016.
- Adjusted Net Investment Income ("ANII") 1 of $7.2 million, or $0.41 per share, for the three months ended June 30, 2017; an increase of 44.9% over ANII of $4.9 million, or $0.34 per share, for the three months ended June 30, 2016.
- Total investment income of $9.9 million for the three months ended June 30, 2017; an increase of 37.1% over total investment income of $7.2 million for the three months ended June 30, 2016.
- Debt-to-equity ratio of 81.4% at June 30, 2017.
- Total investment portfolio increased by 13.6% to $392.3 million at June 30, 2017, from $345.2 million at December 31, 2016.
- Net investment loss of $(3.8) million, or $(0.22) per share for the six months ended June 30, 2017, compared to a net investment loss of $(5.5) million, or $(0.38) per share, for the six months ended June 30, 2016.
- ANII of $13.7 million, or $0.81 per share, for the six months ended June 30, 2017; an increase of 38.6% over ANII of $9.8 million, or $0.68 per share, for the six months ended June 30, 2016.
- Total investment income of $18.9 million for the six months ended June 30, 2017; an increase of 34.8% over total investment income of $14.0 million for the six months ended June 30, 2016.
- The Company closed its investment in a new wholly owned controlled portfolio company, IPM, an information technology consulting company.
- Certain of Newtek's wholly owned controlled portfolio companies increased the aggregate principal amount of the term loan facility with Goldman Sachs Bank USA to $50.0 million from $38.0 million and received a reduction in the interest rate of between 1.0% and 2.0%.
- Newtek Small Business Finance, LLC ("NSBF") increased its existing revolving credit facility through Capital One, National Association, by $50.0 million to $100.0 million and received a reduction in the interest rate of 1.125% to fund the unguaranteed portion of SBA 7(a) loans and 1.25% to fund the guaranteed portion of SBA 7(a) loans.
- S&P Global Ratings raised its rating on the Company's SBA 7(a) loan securitization Class A Notes issued by Newtek Small Business Loan Trust 2014-1, from A to A+.
- NSBF's servicing portfolio was approximately $1.1 billion at June 30, 2017, an increase of 24.8% over the same period one year ago.
- The Company launched its newly redesigned website, www.newtekone.com, with enhanced user experience, expanded content, new features and improved navigation.
- NSBF originated $159.2 million of SBA 7(a) loans during the six months ended June 30, 2017; an increase of 20.7% compared to $131.9 million for the six months ended June 30, 2016.
- Newtek Business Credit Solutions ("NBC"), a controlled portfolio company, originated $4.8 million of SBA 504 loans for the six months ended June 30, 2017.
- Increased 2017 SBA loan origination guidance to approximately $415.0 million in SBA 7(a) loans (by NSBF) and SBA 504 loans (by NBC), which would represent an approximate 31% increase in total SBA loan originations over 2016.
- Paid a second quarter 2017 cash dividend of $0.40 per share on June 30, 2017 to shareholders of record as of May 31, 2017.
- Forecast paying an annual cash dividend of $1.57 2 per share in 2017.
Mr. Sloane concluded, "It remains our goal to grow our company organically as well through strategic investments within the business services footprint in order to capitalize on the tremendous opportunities the market has to offer. Specifically, our recent investment in our new wholly owned controlled portfolio company IPM ( www.ipm.com), an information technology consulting company, positions Newtek's portfolio companies to offer end-to-end technology solutions to small- and medium-sized businesses, commercial business and larger institutional clients. We will outline our portfolio company strategy for growth in the technology space on our conference call tomorrow morning as well as discuss our current investment pipeline."Investor Conference Call and Webcast A conference call to discuss second quarter 2017 results will be hosted by Barry Sloane, Chairman and Chief Executive Officer, and Jennifer Eddelson, Executive Vice President and Chief Accounting Officer, tomorrow, Thursday, August 3, 2017 at 8:30 a.m. ET. The live conference call can be accessed by dialing (877) 303-6993 or (760) 666-3611. In addition, a live audio webcast of the call with the corresponding presentation will be available in the 'Events & Presentations' section of the Investor Relations portion of Newtek's website at http://investor.newtekbusinessservices.com/events.cfm. A replay of the webcast with the corresponding presentation will be available on Newtek's website shortly following the live presentation and will remain available for 90 days following the live presentation. 1 Use of Non-GAAP Financial Measures - Newtek Business Services Corp. and Subsidiaries In evaluating its business, Newtek considers and uses ANII as a measure of its operating performance. ANII includes short-term capital gains from the sale of the guaranteed portions of SBA 7(a) loans, and beginning in 2016, capital gain distributions from controlled portfolio companies, which are reoccurring events. The Company defines ANII as Net investment income (loss) plus Net realized gains recognized from the sale of guaranteed portions of SBA 7(a) loan investments less realized losses on non-affiliate investments, plus or minus loss on lease adjustment, plus the net realized gains on controlled investments.
The term ANII is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. ANII has limitations as an analytical tool and, when assessing the Company's operating performance, investors should not consider ANII in isolation, or as a substitute for net investment income, or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, ANII does not reflect the Company's actual cash expenditures. Other companies may calculate similar measures differently than Newtek, limiting their usefulness as comparative tools. The Company compensates for these limitations by relying primarily on its GAAP results supplemented by ANII.2 Note Regarding Dividend Payments Amount and timing of dividends, if any, remain subject to the discretion of the Company's Board of Directors. The Company's Board of Directors expects to maintain a dividend policy with the objective of making quarterly distributions in an amount that approximates 90 - 100% of the Company's annual taxable income. The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year. About Newtek Business Services Corp. Newtek Business Services Corp., Your Business Solutions Company ® , is an internally managed BDC, which along with its controlled portfolio companies, provides a wide range of business services and financial products under the Newtek ® brand to the small- and medium-sized business ("SMB") market. Since 1999, Newtek has provided state-of-the-art, cost-efficient products and services and efficient business strategies to SMB accounts across all 50 states to help them grow their sales, control their expenses and reduce their risk. Newtek's and its portfolio companies' products and services include: Business Lending, SBA Lending Solutions, Electronic Payment Processing, Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing, The Secure Gateway , The Newtek Advantage ™ , Insurance Solutions, Web Services, and Payroll and Benefits Solutions. Newtek ® and Your Business Solutions Company ® are registered trademarks of Newtek Business Services Corp. Note Regarding Forward Looking Statements This press release contains certain forward-looking statements. Words such as "believes," "intends," "expects," "projects," "anticipates," "forecasts," and "future" or similar expressions are intended to identify forward-looking statements. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, intensified competition, operating problems and their impact on revenues and profit margins, anticipated future business strategies and financial performance, anticipated future number of customers, business prospects, legislative developments and similar matters. Risk factors, cautionary statements and other conditions, which could cause Newtek's actual results to differ from management's current expectations, are contained in Newtek's filings with the Securities and Exchange Commission and available through http://www.sec.gov/ . Newtek cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements.
|NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (In Thousands, except for Per Share Data)|
|June 30, 2017||December 31, 2016|
|Investments, at fair value|
|SBA unguaranteed non-affiliate investments (cost of $246,728 and $219,784, respectively; includes $181,568 and $197,927, respectively, related to securitization trusts)||$||239,757||$||211,471|
|SBA guaranteed non-affiliate investments (cost of $10,925 and $10,262, respectively)||12,224||11,512|
|Controlled investments (cost of $58,447 and $41,001, respectively)||137,005||121,302|
|Non-control/non-affiliate investments (cost of $3,255 and $904, respectively)||3,255||904|
|Investments in money market funds (cost of $35 and $35, respectively)||35||35|
|Total investments at fair value||392,276||345,224|
|Cash and cash equivalents||3,550||2,051|
|Due from related parties||3,345||3,748|
|Servicing assets, at fair value||18,124||16,246|
|LIABILITIES AND NET ASSETS|
|Bank notes payable||$||40,045||$||5,100|
|Notes due 2022||7,895||7,853|
|Notes due 2021||38,939||38,767|
|Notes payable - Securitization trusts||101,108||118,122|
|Notes payable - related parties||15,741||1,400|
|Due to related parties||275||1,227|
|Deferred tax liabilities||5,575||5,983|
|Accounts payable, accrued expenses and other liabilities||15,073||13,904|
|Commitments and contingencies|
|Preferred stock (par value $0.02 per share; authorized 1,000 shares, no shares issued and outstanding)||—||—|
|Common stock (par value $0.02 per share; authorized 200,000 shares, 17,432 and 14,624 issued and outstanding, respectively)||349||293|
|Additional paid-in capital||229,891||188,472|
|(Distributions in excess of)/undistributed net investment income||(1,877||)||8,092|
|Net unrealized appreciation, net of deferred taxes||12,017||13,008|
|Net realized gains/(losses)||9,864||(771||)|
|Total net assets||250,244||209,094|
|Total liabilities and net assets||$||474,895||$||401,450|
|Net asset value per common share||$||14.36||$||14.30|
|NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)|
|(In Thousands, except for Per Share Data)|
|Three Months Ended June 30, 2017||Three Months Ended June 30, 2016||Six Months Ended June 30, 2017||Six Months Ended June 30, 2016|
|From non-affiliate investments:|
|Total investment income from non-affiliate investments||7,254||4,653||13,800||9,072|
|From controlled investments:|
|Total investment income from controlled investments||2,650||2,570||5,097||4,945|
|Total investment income||9,904||7,223||18,897||14,017|
|Salaries and benefits||4,980||3,629||9,631||6,973|
|Depreciation and amortization||96||85||185||125|
|Origination and servicing||1,269||1,392||2,653||2,653|
|Other general and administrative costs||2,020||3,269||3,605||4,552|
|Net investment loss||(1,680||)||(4,081||)||(3,773||)||(5,461||)|
|Net realized and unrealized gains (losses):|
|Net realized gain on non-affiliate investments||8,914||7,534||17,599||13,820|
|Net unrealized (depreciation) appreciation on SBA guaranteed non-affiliate investments||(63||)||706||50||768|
|Net unrealized appreciation (depreciation) on SBA unguaranteed non-affiliate investments||1,817||478||1,261||(549||)|
|Net unrealized (depreciation) appreciation on controlled investments||(2,674||)||2,034||(1,743||)||5,724|
|Provision for deferred taxes on unrealized appreciation on controlled investments||976||(833||)||410||(2,441||)|
|Net unrealized depreciation on non-control/non-affiliate investments||—||(27||)||—||(43||)|
|Net unrealized depreciation on servicing assets||(360||)||(438||)||(969||)||(841||)|
|Net unrealized depreciation on credits in lieu of cash and notes payable in credits in lieu of cash||—||(1||)||—||(1||)|
|Net realized and unrealized gains||8,610||9,453||16,608||16,437|
|Net increase in net assets||$||6,930||$||5,372||$||12,835||$||10,976|
|Net increase in net assets per share||$||0.40||$||0.37||$||0.76||$||0.76|
|Net investment loss per share||$||(0.10||)||$||(0.28||)||$||(0.22||)||$||(0.38||)|
|Dividends declared per common share||$||0.40||$||0.35||$||0.76||$||0.70|
|Weighted average shares outstanding||17,345||14,481||16,867||14,495|
|NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES|
|ADJUSTED NET INVESTMENT INCOME RECONCILIATION:|
|(in thousands, except per share amounts)||Three months ended June 30, 2017||Per share||Three months ended June 30, 2016||Per share|
|Net investment loss||$||(1,680||)||$||(0.10||)||$||(4,081||)||$||(0.28||)|
|Net realized gain on non-affiliate debt investments||8,914||0.51||7,534||0.52|
|Loss on lease||(74||)||(0.00||)||1,487||0.10|
|Adjusted Net investment income||$||7,160||$||0.41||$||4,940||$||0.34|
|(in thousands, except per share amounts)||Six months ended June 30, 2017||Per share||Six months ended June 30, 2016||Per share|
|Net investment loss||$||(3,773||)||$||(0.22||)||$||(5,461||)||$||(0.38||)|
|Net realized gain on non-affiliate debt investments||17,599||1.04||13,820||0.95|
|Loss on lease||(175||)||(0.01||)||1,487||0.10|
|Adjusted Net investment income||$||13,651||$||0.81||$||9,846||$||0.68|
|Note: Amounts may not foot due to rounding|
Investor Relations & Public RelationsContact: Jayne Cavuoto Telephone: (212) 273-8179 / firstname.lastname@example.org