TAMPA, Fla., May 15, 2017 (GLOBE NEWSWIRE) --
LM Funding America, Inc. (NASDAQ:LMFA) (NASDAQ:LMFAW), a specialty finance company offering unique funding solutions to community associations, is reporting results for the first quarter ended March 31, 2017.
First Quarter 2017 Summary vs. Year-Ago Quarter
- Total revenue was $1.0 million compared to $1.6 million.
- Rental revenue increased 199% to $165,000.
- Income statement revenue per unit increased 14% to $4,800.
- Reduced operating expenses by 27% to $1.5 million.
- Acquired 147 delinquent accounts from both new and existing clients.
Subsequent Event
- Sold three REO properties, realizing net proceeds of $101,000.
- Fully resolved proposed class action lawsuit by Wilmington Savings Fund Society (Wilmington). Favorable outcome to LM Funding will reduce litigation expenses by approximately $45,000 per month going forward.
Management Commentary
“Our first quarter was highlighted by the acquisition of 147 delinquent accounts from both new and existing clients,” said Bruce Rodgers, founder and CEO of LM Funding. “This is roughly half of the delinquent accounts acquired in all of 2016, reflecting a considerable return on our investment of IPO proceeds in sales and marketing strategies.
“Despite another quarter of lower payoff occurrences due to the reduction of distressed real estate transactions in Florida, we continued to monetize our properties with a 200% increase in recurring rental income, while reducing our overhead expenses by more than 27%.
“In March and April, we monetized a portion of our REO portfolio by selling four properties for net proceeds of $128,000. We will continue to leverage our REO portfolio for rental income, while remaining opportunistic with property sales.”
“Also in April,” Rodgers continued, “we fully resolved the proposed class action by Wilmington. The favorable outcome not only validates our company’s mission to homeowners associations throughout Florida, but will also provide us with monthly litigation expense savings of approximately $45,000. We look forward to moving past this lawsuit and continuing to serve communities and homeowners associations to ensure they can rightfully collect outstanding fees.”
First Quarter 2017 Financial Results
Revenues in the first quarter of 2017 were $1.0 million compared to $1.6 million in the first quarter of 2016. The decrease in revenues was due to lower payoff occurrences resulting from changes in the overall Florida real estate market. The decrease was offset by an increase in revenue per unit.
Operating expenses in the first quarter of 2017 decreased 27% to $1.5 million compared to $2.1 million in the year-ago quarter. The decrease was driven by the company’s cost reduction initiative implemented during the third quarter of 2016.
Interest expense in the first quarter of 2017 decreased to $127,000 compared to $164,000 in the first quarter of 2016.
Net loss in the first quarter was $403,000 or $(0.12) per share, compared to a net loss of $436,000 or $(0.13) per share in the year-ago quarter.
At March 31, 2017, cash and cash equivalents totaled $1.4 million compared to $2.3 million at December 31, 2016.
Conference Call
Management will hold a conference call today at 4:30 p.m. Eastern time to discuss its first quarter 2017 results, followed by a question and answer period.
Interested parties can listen to the live presentation by dialing the number below or by clicking the webcast link available in the Investors section of the company's website at www.lmfunding.com.
Date: Monday, May 15, 2017
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (877) 793-4355
International dial-in number: (615) 247-0182
Conference ID: 14739326
Webcast: http://edge.media-server.com/m/p/ysmsek7d
Please dial in 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 949-574-3860.
A webcast replay of the call will be available after the call on the same day via the Investors section of the LM Funding website at www.lmfunding.com through July 15, 2017.
About LM Funding America
LM Funding America, Inc., together with its subsidiaries, is a specialty finance company that provides funding to nonprofit community associations (Associations) primarily located in the state of Florida, as well as in the states of Washington, Colorado and Illinois. The company offers funding to Associations by purchasing a certain portion of the associations’ rights to delinquent accounts that are selected by the Associations arising from unpaid Association assessments. It is also involved in the business of purchasing delinquent accounts on various terms tailored to suit each Association’s financial needs, including under its New Neighbor Guaranty™ program. The company was founded in 2008 and is based in Tampa, Florida. The company's common shares and warrants trade on the NASDAQ Capital Market under the symbols "LMFA" and "LMFAW”.
Forward-Looking Statements
This press release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the company’s filings with the SEC. The occurrence of any of these risks and uncertainties could have a material adverse effect on the company’s business, financial condition, and results of operations.
| LM FUNDING AMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||
| March 31, 2017 | December 31, 2016 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Cash | $ | 1,394,785 | $ | 2,268,180 | ||||
| Finance receivables: | ||||||||
| Original product | 1,002,669 | 1,035,832 | ||||||
| Special product - New Neighbor Guaranty program, net of allowance for credit losses of $103,764 and $125,000 | 444,801 | 491,597 | ||||||
| Deferred tax asset | 3,728,988 | 3,509,401 | ||||||
| Due from related party (Note 2): | 1,709,725 | 1,661,360 | ||||||
| Other Assets (Note 3): | 1,019,667 | 1,048,403 | ||||||
| Total assets | $ | 9,300,635 | $ | 10,014,773 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Notes payable (Note 4): | ||||||||
| Principal amount | $ | 5,080,274 | $ | 5,260,274 | ||||
| Less unamortized debt issuance costs | (74,756 | ) | (99,396 | ) | ||||
| Long-term debt less unamortized debt issuance costs | 5,005,518 | 5,160,878 | ||||||
| Other liabilities and obligations | 517,837 | 684,437 | ||||||
| Total liabilities | 5,523,355 | 5,845,315 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock, par value $.001; 10,000,000 shares authorized; 3,300,000 shares issued and outstanding | 3,300 | 3,300 | ||||||
| Additional paid-in capital | 6,567,427 | 6,556,704 | ||||||
| Accumulated deficit | (2,793,447 | ) | (2,390,546 | ) | ||||
| Total stockholders’ equity | 3,777,280 | 4,169,458 | ||||||
| Total liabilities and stockholders’ equity | $ | 9,300,635 | $ | 10,014,773 | ||||
| LM FUNDING AMERICA, INC. AND SUBSIDIARIES AND PREDECESSOR CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2017 | 2016 | |||||||
| Revenues: | ||||||||
| Interest on delinquent association fees | $ | 691,648 | $ | 1,182,787 | ||||
| Administrative and late fees | 78,035 | 117,535 | ||||||
| Recoveries in excess of cost - special product | 20,939 | 106,505 | ||||||
| Underwriting and other revenues | 68,729 | 114,921 | ||||||
| Rental revenue | 164,605 | 54,988 | ||||||
| Total revenues | 1,023,956 | 1,576,736 | ||||||
| Operating Expenses: | ||||||||
| Staff costs and payroll | 513,221 | 808,601 | ||||||
| Professional fees | 512,650 | 567,473 | ||||||
| Settlement cost with associations | 65,485 | 237,864 | ||||||
| Other operating expenses | 441,401 | 477,567 | ||||||
| Total operating expenses | 1,532,757 | 2,091,505 | ||||||
| Operating loss | (508,801 | ) | (514,769 | ) | ||||
| Interest expense | 126,612 | 164,248 | ||||||
| Loss before income taxes | (635,413 | ) | (679,017 | ) | ||||
| Income tax benefit | (232,512 | ) | (242,749 | ) | ||||
| Net loss | $ | (402,901 | ) | $ | (436,268 | ) | ||
| Loss per share attributable to the stockholders’ of LM Funding America, Inc. | ||||||||
| Basic | (0.12 | ) | (0.13 | ) | ||||
| Diluted | (0.12 | ) | (0.13 | ) | ||||
| Weighted average number of common shares outstanding | ||||||||
| Basic | 3,300,000 | 3,300,000 | ||||||
| Diluted | 3,300,000 | 3,300,000 | ||||||
| LM FUNDING AMERICA, INC. AND SUBSIDIARIES AND PREDECESSOR CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| Three Months Ended March 31, 2017 | Three Months Ended March 31, 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | $ | (744,734 | ) | $ | (532,380 | ) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES | 99,704 | 37,701 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | (228,365 | ) | (1,229,086 | ) | ||||
| NET DECREASE IN CASH | (873,395 | ) | (1,723,765 | ) | ||||
| CASH - BEGINNING OF PERIOD | 2,268,180 | 8,997,798 | ||||||
| CASH - END OF PERIOD | $ | 1,394,785 | $ | 7,274,033 | ||||