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Newtek Business Services, Inc. Reports 67% Increase In Diluted Earnings Per Share (“EPS”) To $0.05

Newtek-headerNewtek Business Services, Inc. reported today its financial results for the three and nine months ended September 30, 2013.

2013 Financial Highlights:

  • For the third quarter of 2013, diluted earnings per share (“EPS”) were $0.05; an increase of 66.7% over $0.03 in the third quarter of 2012.
  • For the nine months ended September 30, 2013, EPS was $0.14; an increase of 40.0% over $0.10 for the nine months ended September 30, 2012.
  • For the third quarter of 2013, operating revenues were $34.8 million; an increase of 3.9% over $33.5 million in the third quarter of 2012.
  • For the nine months ended September 30, 2013, operating revenues were $105.9 million; a 9.7% increase over $96.5 for the nine months ended September 30, 2012.
  • For the nine months ended September 30, 2013, net income attributable to Newtek Business Services, Inc. was $5.1 million; an increase of 43.2% over $3.6 million for the nine months ended September 30, 2012.
  • For the nine months ended September 30, 2013, pretax income was $7.0 million; a 12.8% increase of $6.2 million for the nine months ended September 30, 2012.
  • Reaffirmed 2013 consolidated guidance:
    • EPS midpoint forecast at $0.18 per share, with a range of $0.17 and $0.19, which represents an increase of 20.0% over 2012 diluted EPS.
    • Revenue midpoint forecast at $148.2 million, with a range of $145.1 million and $151.2 million, which represents an increase of 13.0% over 2012 revenue.
    • Pretax income midpoint forecast at $11.5 million, with a range of $10.0 million and $13.0 million, which represents an increase of 22.3% over 2012 pretax income
    • Adjusted EBITDA midpoint forecast at $20.9 million, with a range of $19.3 million and $22.4 million, which represents an increase of 25.1% over 2012 Adjusted EBITDA.
  • The Company expects to fund $175 million of SBA 7(a) loans in 2013.
  • Issued 2014 consolidated guidance:
    • EPS midpoint forecast at $0.23 per share, with a range of $0.20 and $0.26, which represents an increase of 27.8% over 2013 diluted EPS midpoint guidance of $0.18.
    • Revenue midpoint forecast at $164.0 million, with a range of $157.0 million and $171.0 million, which represents an increase of 10.7% over 2013 revenue midpoint guidance of $148.2 million.
    • Pretax income midpoint forecast at $14.6 million, with a range of $11.8 million and $17.9 million, which represents an increase of 27.0% over 2013 pretax income midpoint guidance of $11.5 million.
    • Adjusted EBITDA midpoint forecast at $27.4 million, with a range of $24.4 million and $30.2 million, which represents an increase of 31.1% over 2013 Adjusted EBITDA midpoint guidance of $20.9 million.

2013 Operational Highlights:

  • For the nine months ended September 30, 2013, the Company funded $120.0 million in loans; an increase of 66.3% over $72.1 million for the same period in 2012.
  • The Company funded approximately $17.0 million in loans in October 2013.
  • Newtek Small Business Finance, Inc. (“NSBF”) was selected to service a $400 million portfolio of SBA 7(a) loans for a large institutional client bringing the Company’s total loan servicing portfolio to over $1.0 billion.
  • NSBF signed a letter of commitment for a new revolving financing facility, totaling $75 million, with Goldman Sachs Bank USA.

Barry Sloane, Chairman, President and Chief Executive Officer said “We are well-positioned to achieve our 2013 earnings target of $0.17 to $0.19 per diluted share, as well as establish an earnings target for 2014 of $0.20 to $0.26 per diluted share. Our loan servicing portfolio now exceeds $1.0 billion for the first time in the Company’s history. In addition, we are pleased to announce the signing of a commitment letter with Goldman Sachs Bank USA for a $75 million financing facility, which facilitates our achievement of our lending growth objectives for this year and next. Finally, key additions to staff in both production and compliance areas should enable us to continue to grow and effectively manage risk allowing for an uninterrupted flow of business going forward.”

Mr. Sloane continued, “Despite a challenging third quarter, we are proud of our overall performance thus far in 2013. We look forward to reaccelerating stronger growth in our business services segments which we have been able to do on a historical basis. We are well positioned to deliver strong year-over-year growth comparisons in the fourth quarter, which will allow us to achieve our previously stated goals and meet market expectations. We fully anticipate attaining a 20% growth in diluted earnings per share.”

“With many of our product strategies, in particular with our Cloud computing and our EMV (Europay, MasterCard and Visa) strategies, we are in an exceptional position to capitalize on the rapid changes occurring in the markets in which we operate. This strategic direction, coupled with our position as ‘The Authority’ on technological and financial product offerings and solutions for small- to medium-sized businesses, provides an excellent opportunity for Newtek and its shareholders,” concluded Mr. Sloane.

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