AMTPQ Ameritrans Capital Corporation (CE)

Ameritrans Capital Corporation (NASDAQ: AMTC, AMTCP) today reported financial results for the fiscal year and quarter ended June 30, 2005. For the quarter ended June 30, 2005, investment income was $2.19 million compared to $1.34 million during the prior comparable period. Investment income for the quarter ended June 30, 2005 included interest income, fee income and leasing income totaling $1,451,111 and net gain on sale of securities of $738,874 totaling to $2.19 million. For the fiscal year ended June 30, 2005, Ameritrans reported investment income of $6.13 million as compared to $5.63 million for the prior year. The increase in reported investment income for fiscal year ending June 30, 2005 is attributable primarily to the result of an increase in the net gain on the sale of securities of $688,874 for the fiscal year. Interest income, fee income and leasing income totaled $5,443,192 during fiscal year ended June 30, 2005 as compared to $5,633,827 for fiscal year ended June 30, 2004. The reduction in interest income, fee income and leasing income was primarily due to a reduction in interest income of $423,787 due to the impact of lower average interest rates charged on new and modified loans, partially offset by an increase in other fees of $141,039 and leasing income of $92,113. Ameritrans reported a net income available to common shareholders for the quarter ended June 30, 2005 of $200,627, or $0.09 per basic and diluted common share, versus a net loss of ($87,721), or ($0.04) per basic and diluted common share, in the fourth quarter of fiscal 2004. The increase in the net income for the year ended June 30, 2005 was attributable primarily to a gain on the sale of securities of $688,874. For the fiscal year ended June 30, 2005, Ameritrans reported a net loss to common shareholders of ($224,726), or ($0.11) per basic and diluted common share, versus net loss of ($704,683) or ($0.35) per basic and diluted common share for fiscal year 2004. The net loss to common shareholders in fiscal years ended June 30, 2005 and June 30, 2004 was calculated after taking into account payment of preferred dividends to preferred shareholders of $337,500 in each fiscal year. Operating income in the fourth quarter of fiscal year ended June 30, 2005 was $285,289 as compared to operating income in the fourth quarter of fiscal year ended June 30, 2004 of $2,647. The Company's loan portfolio at June 30, 2005 was $51.9 million versus $49.4 million at June 30, 2004. President of Ameritrans, Gary C. Granoff stated, "Financial results during 2005 were positively impacted by the gain on sale of securities during the fourth quarter of 2005. During the first six months of fiscal year ending June 30, 2005, the Company's operating income (loss) was $87,177 for the first fiscal quarter and ($326,432) for the second fiscal quarter. For the second half of the fiscal year, the Company's third fiscal quarter operating income was $41,808 and its fourth fiscal quarter operating income was $285,289. The improvement in operating income primarily resulted from reductions in write off and depreciation on interest receivable of $ 295,535, as well as a reduction in foreclosure expenses of $275,176 added to net gain on sale of securities of $688,874 and increase of fee income of $141,039 partially offset by reductions in interest income of $423,787 and increases in interest expense of $394,217." Granoff went on to say: "During the fiscal year we made substantial progress in our Chicago taxi portfolio by selling 13 foreclosed medallions and executing contracts of sale to sell 5 of our leased medallions, and 20 additional foreclosed medallions. Closings on 20 of the medallions under contract of sale at June 30, 2005 took place on August 31, 2005. The number of foreclosed medallions in Chicago has stabilized and at the present time we have approximately 15 additional foreclosed medallions to sell, with active discussions taking place at this time with potential buyers. We believe that the Chicago taxi market and the local economy have improved which in turn has improved our current business and prospects for future business in that market. At August 31, 2005, the balance of our medallion loans in New York, Boston and Miami are operating without any loans being in excess of 90 days delinquent and without any foreclosures in any of those markets. Our commercial loan portfolio is also performing well at the present time and we are continuing to build that portfolio with all new loans being made with adjustable interest rate terms. We also will continue to seek favorable equity investment transactions to augment our loan activity. During the fiscal year ended June 30, 2005 the equity investment in a hotel in Arlington, Virginia was liquidated, resulting in a positive impact on our financial results for the year." Ameritrans Capital Corporation is a specialty finance company engaged in making loans to and investments in small businesses. Ameritrans' wholly owned subsidiary Elk Associates Funding Corporation was licensed by the United States Small Business Administration as a Small Business Investment Company (SBIC) in 1980. The company maintains its offices at 747 Third Avenue; 4th Floor; New York, NY 10017. This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those presently anticipated or projected. Ameritrans Capital Corporation cautions investors not to place undue reliance on forward-looking statements, which speak only as to management's expectations on this date. -0- *T AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES ---------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS June 30, 2005 and 2004 ---------------------------------------------------------------------- 2005 2004 ------------ ------------ Assets ------ Loans receivable $52,060,254 $49,900,989 Less unrealized depreciation on loans receivable (150,000) (509,770) ------------ ------------ Loans receivable, net 51,910,254 49,391,219 Cash and cash equivalents 327,793 416,600 Accrued interest receivable, net of unrealized depreciation of $59,000 in 2005 and $30,500 in 2004 756,701 969,912 Assets acquired in satisfaction of loans 384,528 1,421,723 Receivables from debtors on sales of assets acquired in satisfaction of loan 455,184 422,158 Equity securities 908,457 1,038,617 Furniture, equipment and leasehold improvements, net 329,573 439,262 Medallions under lease 2,282,201 2,382,201 Prepaid expenses and other assets 531,904 610,214 ------------ ------------ Total assets (Note 8) $57,886,595 $57,091,906 ============ ============ *T -0- *T AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES ---------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS (Continued) June 30, 2005 and 2004 ---------------------------------------------------------------------- 2005 2004 ------------ ------------ Liabilities and Stockholders' Equity ------------------------------------ Liabilities: Debentures payable to SBA $12,000,000 $12,000,000 Notes payable, bank 29,770,652 28,908,652 Accrued expenses and other liabilities 604,942 578,790 Accrued interest payable 256,285 271,630 Dividends payable 84,375 84,375 ------------ ------------ Total liabilities 42,716,254 41,843,447 ------------ ------------ Commitments and contingencies Stockholders' equity: Preferred stock 500,000 shares authorized, none issued or outstanding - - 9-3/8% cumulative participating redeemable preferred stock $.01 par value, $12.00 face value, 500,000 shares authorized; 300,000 shares issued and outstanding 3,600,000 3,600,000 Common stock, $.0001 par value; 5,000,000 shares authorized, 2,045,600 shares issued, 2,035,600 outstanding 205 205 Additional paid-in capital 13,869,545 13,869,545 Accumulated deficit (2,127,134) (1,902,408) Accumulated other comprehensive loss (102,275) (248,883) ------------ ------------ Total 15,240,341 15,318,459 Less: Treasury stock, at cost, 10,000 shares of common stock (70,000) (70,000) ------------ ------------ Total stockholders' equity 15,170,341 15,248,459 ------------ ------------ Total liabilities and stockholders' equity $57,886,595 $57,091,906 ============ ============ *T -0- *T AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES ---------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended June 30, 2005, 2004 and 2003 ---------------------------------------------------------------------- 2005 2004 2003 ----------- ----------- ----------- Investment income: Interest on loans receivable $4,771,954 $5,195,741 $6,072,399 Gain on sale of equity securities, net (Note 4) 688,874 5,665 2,976 Fees and other income 459,598 318,559 209,680 Leasing income 211,640 119,527 - ----------- ----------- ----------- Total investment income 6,132,066 5,639,492 6,285,055 ----------- ----------- ----------- Operating expenses: Interest 1,837,633 1,443,416 2,076,861 Salaries and employee benefits 1,128,963 1,022,964 879,074 Occupancy costs 188,466 207,079 144,279 Professional fees 675,399 605,168 575,022 Other administrative expenses 1,162,457 1,250,435 963,175 Loss and impairments on both medallions under lease and assets acquired in satisfaction of loans, net 198,177 44,362 77,343 Foreclosure expenses 87,695 362,871 313,678 Write off and depreciation on interest and loans receivable 728,710 1,024,245 852,512 ----------- ----------- ----------- Total operating expenses 6,007,500 5,960,540 5,881,944 ----------- ----------- ----------- Operating income (loss) 124,566 (321,048) 403,111 ----------- ----------- ----------- Other expense: Equity in loss of investee (4,021) (29,634) - Loss on sale of automobile (60) - - ----------- ----------- ----------- Total other expense (4,081) (29,634) - ----------- ----------- ----------- Income (loss) before income taxes 120,485 (350,682) 403,111 Income taxes 7,711 16,501 7,897 ----------- ----------- ----------- Net income (loss) 112,774 (367,183) 395,214 Dividends on preferred stock (337,500) (337,500) (337,500) ----------- ----------- ----------- Net income (loss) available to common shareholders $(224,726) $(704,683) $57,714 =========== =========== =========== Weighted Average Number of Common Shares Outstanding: Basic 2,035,600 2,035,600 2,035,600 =========== =========== =========== Diluted 2,035,600 2,035,600 2,035,600 =========== =========== =========== Net Income (Loss) Per Common Share: Basic $(0.11) $(0.35) $0.03 =========== =========== =========== Diluted $(0.11) $(0.35) $0.03 =========== =========== =========== 2005 2004 2003 ----------- ----------- ----------- Net income (loss) $112,774 $(367,183) $395,214 Other comprehensive income (loss): Unrealized gain (loss) on equity securities arising during the period 46,583 (13,338) (200,338) Reclassification adjustment for (gain) loss included in net income (loss) 100,025 (5,665) - ----------- ----------- ----------- Total comprehensive income (loss) $259,382 $(386,186) $194,876 =========== =========== =========== *T