Highlights - Jon Hayes joins Company as Senior Vice President of Marketing
and Sales
Financial Summary Table
(in 000's, except per share data)
Quarter Ended
11/30/99 11/30/98
Gain on sale of loans $4,241 $172
Net unrealized (loss) gain on mortgage
related securities (624) 270
Loan servicing income, net 96 240
Interest income 3,176 1,602
Less: Interest expense (3,227) (1,764)
Net revenues 3,662 520
Net (loss) (2,491) (2,494)
Net (loss)/share (0.66) (.82)
Basic weighted-average number of
common shares outstanding 3,801,875 3,056,666
ATLANTA, Jan. 14 /PRNewswire/ -- Altiva Financial Corporation
(Nasdaq: ATVA) today reported its financial results for the first quarter of
fiscal 2000 ended November 30, 1999. The Company also announced the hiring of
a Senior Vice President of Sales and Marketing.
The net loss for the quarter ended November 30, 1999, was $ 2.5 million
($0.66 per share), compared to a net loss of $2.5 million ($0.82 per share)
for the quarter ended November 30, 1998. Loss per share was based on 3.8
million and 3.1 million weighted-average shares of common stock on November
30, 1999 and 1998, respectively. Stockholders' equity at November 30, 1999
was $ 18.6 million, down 11 % from $21.1 million at August 31, 1999. At
November 30, 1999, Altiva Financial had $ 11.3 million in unrestricted cash
compared to $10.5 million in unrestricted cash at August 31, 1999, although
$9.1 million at November 30, 1999 was cash in transit from loan sales and was
used for required payments on the warehouse lines of credit immediately after
the period ended November 30, 1999.
The loss for the quarter ended November 30, 1999 was caused principally by
the reduction of Altiva's loan sales and production and related income when
compared to the general and administrative expenses associated with Altiva's
continuing efforts to implement its strategic initiatives. During the last
three quarters of the fiscal year ending August 31, 1999, the Company acquired
the assets of a retail production facility in Las Vegas, Nevada and 100% of
the stock of The Money Centre, Inc., located in Charlotte, North Carolina.
The reported operating results and financial condition include those
operations and consequently, the Company does not believe that its results for
the three months ended November 30, 1999 are comparable to the Company's
results for the three months ended November 30, 1998.
The Company's loan production of Home Equity Loans was 100% of total loan
production of $100.5 million for the quarter ended November 30, 1999, compared
to 70.3% of total loan production of $16.5 million for the quarter ended
November 30, 1998.
The sale of loans continues to be affected through whole loan sales rather
than through securitizations. The Company sold $96.9 million of loans in the
quarter ended November 30, 1999 compared to $13.0 million in the quarter ended
November 30 1998. Gain on sale of loans was $4.2 million and $172,000 for the
quarters ended November 30, 1999 and 1998 respectively.
Total general and administrative expenses increased $3.0 million, from
$4.2 million in the quarter ended November 30, 1998 to $7.2 million in the
first quarter of fiscal 2000 quarter ended November 30, 1999. The increase is
due principally to the integration of Altiva's new production platforms.
Champ Meyercord, Altiva's Chairman and Chief Executive Officer said,
"Although we are disappointed in the Company's performance for the first
quarter, several actions cause us to be more positive about our future.
First, our senior management team has been noticeably strengthened in the last
90 days, with the addition of several experienced managers with demonstrated
track records of business building in our industry. Second, with the
installation of our new software operating systems in Atlanta and Charlotte,
we expect to achieve productivity gains in each platform as well as employing
sophisticated asset management strategies. These operating improvements,
combined with the completion of Altiva's previously announced recapitalization
should result in a much stronger company, with significantly improved capital
structure and cash flow characteristics, which should result in more positive
operating results in the quarters ahead."
Recapitalization Status
As previously reported, the Company has been experiencing a liquidity
crisis. In order to improve its liquidity situation, the Company has obtained
commitments from the holders of approximately $28 million principal amount of
its outstanding 12-1/2% Subordinated Notes due 2001 ("Subordinated
Debentures") to exchange such outstanding Subordinated Debentures for
approximately $12.0 million principal amount of 12% Secured Convertible Notes
due 2006 ("New Exchange Notes") and for the equivalent of 22-1/2% of the
Company's outstanding common stock based on the number of fully-diluted shares
of common stock (excluding out-of-the money options). In addition,
the holders of such Subordinated Debentures have agreed to waive the payment
of approximately $2.0 million of accrued interest payable to them in December
1999 under the terms of the Indenture governing the Subordinated Debentures.
Under the terms of the Exchange Notes, no interest will be payable to the
noteholders by the Company until June 15, 2001, although interest will accrue
from the date of issuance. Completion of the exchange is contingent on the
finalization of documentation related to the exchange, and the issuance of
Common Stock to the current holder of Subordinated Debentures may require the
approval of the Company's stockholders under the rules of the Nasdaq Stock
Market. The Company expects that the discount in the principal amount of
notes outstanding and the waiver of the interest payment will result in the
reduction of the Company's projected cash expenditure by $3.4 million over the
next 12 months.
In addition, the Company received a commitment from Value Partners to
purchase $7.0 million principal amount of 12% Secured Convertible Notes due
2006 ("Secured Notes"), in addition to the $7.0 million principal amount of
Secured Notes purchased by Value Partners in August 1999. To date,
$2.0 million principal amount of these Secured Notes have already been sold.
Consummation of the sale the additional $5.0 million of Secured Notes is
subject to the execution of mutually agreed upon amendments to the Secured
Note Purchase Agreement between the parties and other related agreements.
Senior Vice President of Sales and Marketing Hired
The Company also announced today that Jon Hayes, 39, has joined Altiva
Financial as its Senior Vice President of Sales and Marketing. Mr. Hayes was
formerly with ContiMortgage as the director of Eastern Correspondent Sales
which generated $3.3 billion in annual loan acquisitions. Previously, Mr.
Hayes has held senior management positions with EquiCredit and Fleet Finance,
a subsidiary of Fleet Bank with responsibilities for both wholesale and
correspondent production. Mr. Hayes holds a Bachelor of Science degree in
Marketing from Ohio State University.
Champ Meyercord, the Company's Chairman and Chief Executive Officer said,
"I am genuinely pleased to announce the addition of Jon to our senior
management team. He brings a wealth of experience in sales, marketing, and
general management of high growth sub prime lending businesses and adds
another proven sub prime loan professional to our ranks. Jon will make an
immediate impact on our loan production, assisting each of our platforms in
achieving production forecasts."
Altiva Financial Corporation is a specialty financial services company
that originates, purchases, sells sub-prime home equity loans, conventional
home improvement loans, as well as debt consolidation loans and FHA Title I
loans. The Company is headquartered in Atlanta, Georgia and maintains
20 branch offices nationwide.
To receive Altiva Financial's latest news release and other corporate
documents via FAX -- no cost -- please dial 1-800-PRO-INFO. Use Company Code
ATVA or visit Altiva Financial's pages at http://www.frbinc.com .
This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known risks, uncertainties or other
factors, which may cause actual results, performances or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. For
more complete information concerning factors, which could affect the Company's
results, reference is made to various disclosures in the Company's periodic
reports, including reports on Forms 10-K, 10-Q and 8-K, as well as other
documents filed with the Securities and Exchange Commission, including risks
disclosed under the caption and management's discussion and analysis of
results of operation and financial condition - forward looking statements
contained in the Form S-1 filed with the Securities and Exchange Commission on
December 15, 1998, as such form may be amended from time to time.
ALTIVA FINANCIAL CORPORATION
CONDENSED STATEMENTS OF FINANCIAL CONDITION
August 30, November
1999 1999
(thousands of dollars, except
Per share amounts)
ASSETS
Cash and cash equivalents $10,475 $11,341
Cash deposits, restricted 3,004 3,309
Loans held for sale, net of
valuation allowance of $3,462
at August 31, 1999 and $1,841
at November 30, 1999 54,844 53,166
Mortgage related securities, at fair value 31,757 31,827
Other receivables 5, 260 1,711
Property and equipment, net of
accumulated depreciation of
$1,793 and $2,021 3,068 2,865
Prepaid debt expense 2,207 1,979
Deferred federal and state income
tax asset 12,282 13,799
Goodwill 11,463 11,256
Other assets 1,026 1,355
TOTAL ASSETS $135,386 $132,608
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Liabilities:
Warehouse lines of credit $61,513 $61,533
Secured revolving credit lines 1,685
Notes and contracts payable 12,292 12,120
Accounts payable and accrued
liabilities 8,054 9,630
Subordinated debt 30,724 30,698
TOTAL LIABILITIES 114,268 113,981
Stockholders' equity (deficit):
Preferred Stock, $.01 par value
per share (Authorized-5,000,000
shares) 1 1
Common Stock, $.01 par value per share
(Authorized-50,000,000 shares;
Issued and outstanding- 3,656,426 at
August 31, 1999 and 3,970,447 at
November 30, 1999 37 40
Additional paid-in capital 125,412 125,409
Accumulated deficit (104,332) (106,823)
Total stockholders' equity 21,118 $18,627
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $135,386 $132,608
SOURCE Altiva Financial Corporation
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Related links:
http://www.frbinc.com
CONTACT:
Champ Meyercord, Chairman & CEO, or J.
Richard Walker, EVP & CFO, both of Altiva Financial Corporation,
800-550-6346; or General Information, Paula Schwartz, Analyst
Information, Ellen Mendez-Penate, or Media Information, David
Closs, all of The Financial Relations Board, 212-661-8030
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