18.9% Increase in Revenues and 23.7% Increase in Net Income
GREAT NECK, N.Y., Oct. 18, 2018 (GLOBE NEWSWIRE) -- Manhattan Bridge Capital, Inc. (NASDAQ: LOAN) announced today that total revenue for the three month period ended September 30, 2018 was approximately $1,891,000 compared to approximately $1,591,000 for the three month period ended September 30, 2017, an increase of $300,000, or 18.9%. The increase in revenue is the result of an increase in lending operations. For the three month periods ended September 30, 2018 and 2017, approximately $1,617,000 and $1,352,000, respectively, of our revenues were attributable to interest income on the secured commercial loans that we offer to small businesses, and approximately $275,000 and $240,000, respectively, of the Company’s revenues were attributable to origination fees on such loans.
Net income for the three month period ended September 30, 2018 was approximately $1,189,000 or $0.13 per basic and diluted share (based on approximately 9.3 million weighted-average outstanding common shares), versus net income of approximately $961,000 or $0.12 per basic and diluted share (based on approximately 8.1 million weighted-average outstanding common shares) for the three month period ended September 30, 2017, an increase of $228,000, or 23.7%. This increase is primarily attributable to the increase in revenue, offset by an increase in interest expense.
Total revenue for the nine month period ended September 30, 2018 was approximately $5,224,000 compared to approximately $4,322,000 for the nine month period ended September 30, 2017, an increase of $902,000, or 20.9%. The increase in revenue is the result of an increase in lending operations. For the nine month periods ended September 30, 2018 and 2017, revenues of approximately $4,469,000 and $3,647,000, respectively, were attributable to interest income on the secured commercial loans that we offer to small businesses, and approximately $755,000 and $675,000, respectively, were attributable to origination fees on such loans.
Net income for the nine month period ended September 30, 2018 was approximately $3,119,000 or $0.37 per basic and diluted share (based on approximately 8.5 million weighted-average outstanding common shares), versus net income of approximately $2,592,000 or $0.32 per basic and diluted share (based on approximately 8.1 million weighted-average outstanding common shares) for the same period in 2017, an increase of $527,000, or 20.3%. This increase is primarily attributable to the increase in revenue, offset by an increase in interest expense.
As of September 30, 2018, total shareholders' equity was approximately $33,360,000 compared to approximately $22,247,000 as of December 31, 2017, an increase of $11,113,000, or 50.0%.
As previously announced, effective July 11, 2018, the Company amended its existing credit line agreement with Webster Business Credit Corporation and Flushing Bank to, among other things, increase its credit line from $20 million to $25 million.
Also as previously announced, on July 24, 2018, the Company completed a public offering of 1,428,572 common shares at a public offering price of $7.00 per share. The total gross proceeds raised by the Company from the offering were approximately $10,821,000 (including approximately $821,000 from the sale of 117,214 additional common shares upon the partial exercise of the over-allotment option by the underwriter on August 1, 2018), before deducting underwriting discounts and commissions and other offering expenses. The total net proceeds from the offering were approximately $9,883,000.
Assaf Ran, Chairman of the Board and CEO stated, “The third quarter results demonstrate once again steady, responsible and measured growth. The recent increase of the line of credit together with the recent follow-on stock offering provide additional funds that we believe will help us to continue that pattern. At this point, we operate in an uncertain market; therefore, in order to continue the impressive track record of no defaults we have set our diligence and underwriting standards to an even higher level.”
About Manhattan Bridge Capital, Inc.
Manhattan Bridge Capital, Inc. offers short-term secured, non–banking loans (sometimes referred to as ‘‘hard money’’ loans) to real estate investors to fund their acquisition, renovation, rehabilitation or improvement of properties located in the New York metropolitan area. We operate the web site: https://www.manhattanbridgecapital.com.
Forward Looking Statements
This press release and the statements of our representatives related thereto contain or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “plan,” “project,” “potential,” “seek,” “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue” are intended to identify forward-looking statements. For example, when we discuss our ability to continue steady, responsible and measured growth and to continue our track record of no defaults we are using forward-looking statements. Readers are cautioned that certain important factors may affect the Company’s actual results and could cause such results to differ materially from any forward-looking statements that may be made in this news release. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those projected, expressed or implied in the forward-looking statements as a result of various factors, including but not limited to the following: (i) our loan origination activities, revenues and profits are limited by available funds; (ii) we operate in a highly competitive market and competition may limit our ability to originate loans with favorable interest rates; (iii) our Chief Executive Officer is critical to our business and our future success may depend on our ability to retain him; (iv) if we overestimate the yields on our loans or incorrectly value the collateral securing the loan, we may experience losses; (v) we may be subject to “lender liability” claims; (vi) our due diligence may not uncover all of a borrower’s liabilities or other risks to its business; (vii) borrower concentration could lead to significant losses; and (viii) we may choose to make distributions in our own stock, in which case you may be required to pay income taxes in excess of the cash dividends you receive. The risk factors contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission identify important factors that could cause such differences. These forward-looking statements speak only as of the date of this press release, and we caution potential investors not to place undue reliance on such statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
| September 30, 2018 | December 31, 2017 | ||||||
| (unaudited) | (audited) | ||||||
| Assets | |||||||
| Loans receivable | $ | 58,511,236 | $ | 45,124,000 | |||
| Interest receivable on loans | 642,133 | 535,045 | |||||
| Cash | 140,716 | 136,441 | |||||
| Cash - restricted | 1,719,542 | --- | |||||
| Deferred financing costs | 46,891 | 45,269 | |||||
| Other assets | 100,705 | 55,941 | |||||
| Total assets | $ | 61,161,223 | $ | 45,896,696 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Liabilities: | |||||||
| Line of credit | $ | 21,717,346 | $ | 16,914,594 | |||
| Senior secured notes (net of deferred financing costs of $566,270 and $622,584) | 5,433,730 | 5,377,416 | |||||
| Deferred origination fees | 497,852 | 298,471 | |||||
| Accounts payable and accrued expenses | 152,394 | 167,559 | |||||
| Dividends payable | --- | 891,983 | |||||
| Total liabilities | 27,801,322 | 23,650,023 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Preferred shares - $.01 par value; 5,000,000 shares authorized; none issued | --- | --- | |||||
| Common shares - $.001 par value; 25,000,000 shares authorized; 9,873,703 and 8,319,036 issued, respectively; 9,663,601 and 8,108,934 outstanding, respectively | 9,874 | 8,319 | |||||
| Additional paid-in capital | 33,107,269 | 23,167,511 | |||||
| Treasury stock, at cost - 210,102 shares | (541,491 | ) | (541,491 | ) | |||
| Retained earnings (accumulated deficit) | 784,249 | (387,666 | ) | ||||
| Total stockholders’ equity | 33,359,901 | 22,246,673 | |||||
| Total liabilities and stockholders’ equity | $ | 61,161,223 | $ | 45,896,696 | |||
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Interest income from loans | $ | 1,616,518 | $ | 1,351,788 | $ | 4,469,118 | $ | 3,646,535 | ||||
| Origination fees | 274,936 | 239,675 | 754,510 | 675,434 | ||||||||
| Total revenue | 1,891,454 | 1,591,463 | 5,223,628 | 4,321,969 | ||||||||
| Operating costs and expenses: | ||||||||||||
| Interest and amortization of debt service costs | 429,421 | 352,359 | 1,240,199 | 861,591 | ||||||||
| Referral fees | 250 | 750 | 667 | 2,951 | ||||||||
| General and administrative expenses | 272,321 | 266,534 | 862,994 | 842,520 | ||||||||
| Total operating costs and expenses | 701,992 | 619,643 | 2,103,860 | 1,707,062 | ||||||||
| Income from operations | 1,189,462 | 971,820 | 3,119,768 | 2,614,907 | ||||||||
| Loss on write-down of investment in privately held company | --- | (10,000 | ) | --- | (20,000 | ) | ||||||
| Income before income tax expense | 1,189,462 | 961,820 | 3,119,768 | 2,594,907 | ||||||||
| Income tax expense | (642 | ) | (1,099 | ) | (642 | ) | (2,971 | ) | ||||
| Net income | $ | 1,188,820 | $ | 960,721 | $ | 3,119,126 | $ | 2,591,936 | ||||
| Basic and diluted net income per common share outstanding: | ||||||||||||
| --Basic | $ | 0.13 | $ | 0.12 | $ | 0.37 | $ | 0.32 | ||||
| --Diluted | $ | 0.13 | $ | 0.12 | $ | 0.37 | $ | 0.32 | ||||
| Weighted average number of common shares outstanding | ||||||||||||
| --Basic | 9,266,962 | 8,106,499 | 8,499,967 | 8,120,091 | ||||||||
| --Diluted | 9,274,822 | 8,117,151 | 8,507,724 | 8,131,400 | ||||||||
MANHATTAN BRIDGE CAPITAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Nine Months Ended September 30, | ||||||||
| 2018 | 2017 | |||||||
| Cash flows from operating activities: | ||||||||
| Net Income | $ | 3,119,126 | $ | 2,591,936 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities - | ||||||||
| Amortization of deferred financing costs | 75,073 | 95,378 | ||||||
| Depreciation | 3,287 | 3,398 | ||||||
| Non cash compensation expense | 9,798 | 9,798 | ||||||
| Loss on write-down of investment in privately held company | --- | 20,000 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Interest receivable on loans | (107,088 | ) | (161,823 | ) | ||||
| Other assets | (48,052 | ) | (15,922 | ) | ||||
| Accounts payable and accrued expenses | (15,166 | ) | 24,730 | |||||
| Deferred origination fees | 199,381 | 75,332 | ||||||
| Net cash provided by operating activities | 3,236,359 | 2,642,827 | ||||||
| Cash flows from investing activities: | ||||||||
| Issuance of short term loans | (42,417,500 | ) | (30,314,500 | ) | ||||
| Collections received from loans | 29,030,264 | 20,649,870 | ||||||
| Purchase of fixed assets | --- | (1,666 | ) | |||||
| Net cash used in investing activities | (13,387,236 | ) | (9,666,296 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from line of credit, net | 4,802,752 | 9,691,647 | ||||||
| Proceeds from public offering, net | 9,882,780 | --- | ||||||
| Proceeds from exercise of stock options and warrants | 48,735 | 20,440 | ||||||
| Dividends paid | (2,839,193 | ) | (2,457,455 | ) | ||||
| Cash restricted for reduction of line of credit | (1,719,542 | ) | --- | |||||
| Deferred financing costs | (20,380 | ) | (43,122 | ) | ||||
| Purchase of treasury shares | --- | (172,156 | ) | |||||
| Net cash provided by financing activities | 10,155,152 | 7,039,354 | ||||||
| Net increase in cash | 4,275 | 15,885 | ||||||
| Cash, beginning of period | 136,441 | 96,299 | ||||||
| Cash, end of period | $ | 140,716 | $ | 112,184 | ||||
| Supplemental Cash Flow Information: | ||||||||
| Taxes paid during the period | $ | 642 | $ | 2,971 | ||||
| Interest paid during the period | $ | 1,142,341 | $ | 713,428 | ||||
SOURCE: Manhattan Bridge Capital, Inc.