AMTPQ Ameritrans Capital Corporation (CE)

Ameritrans Capital Corporation (NASDAQ: AMTC, AMTCP, AMTCW) today reported financial results for the quarter ended December 31, 2005. Ameritrans reported a net loss of ($131,762) available to common shareholders for the second quarter of fiscal year 2006 or ($0.06) versus a net loss of ($411,615) or ($0.20) per basic and diluted common share for the same period of fiscal year 2005. On an operating basis, before payment of the Company's preferred stock dividends, but after provisions for income tax, the Company reported an operating loss of ($47,387) for the quarter ended December 31, 2005, compared to an operating loss of ($327,240) during the quarter ended December 31, 2004. For the Company's second fiscal quarter, total investment income was $1.356 million compared to $1.267 million during the prior comparable period. Interest income increased by $87,014 over the comparable prior period, while fees and other income decreased by $20,038. Leasing income decreased by $27,527 over the comparable period. The Company's net loan portfolio at December 31, 2005 was $50.5 million versus $51.9 million at December 31, 2004. Commenting on the results, Gary C. Granoff, Ameritrans' president said, "During the second fiscal quarter December 31, 2005, our earnings were negatively impacted by an increase in our interest expense of $144,781 compared to our interest expense for the second quarter ended December 31, 2004. However, the December 2005 quarter results show savings over the December 2004 quarter results which positively impacted our earnings in the following areas: salaries and employee benefits were reduced by $10,550; professional fees were reduced by $49,050; other administrative expenses were reduced by $70,165; and overall reductions in write off and depreciation on interest and loans receivable were reduced by $189,765. These improvements were primarily the result of an improving Chicago taxi portfolio." Granoff further stated "We are continuing to take steps to build our loan and investment portfolio. In addition, during the quarter ended December, 31, 2005 we were positively impacted by the closing of the first round of our private placement in early December, 2005, during which the Company sold 657,620 common shares and 164,405 warrants to purchase common shares for gross proceeds of $3,847,080 ($3,521,629 net of expenses). Subsequently, in January, 2006 an additional 70,000 shares and an additional 17,500 warrants were sold as part of the private placement for gross proceeds of $409,500. The new capital is temporarily being utilized by the Company to reduce Elk Associates Funding Corporation's bank debt, which will result in a short term savings in interest expense. As suitable loans and investments are located for Ameritrans, it is the Company's intention to borrow the funds back from Elk's bank lines of credit and repay the funds from Elk to Ameritrans to permit Ameritrans to complete the funding of its' proposed loans or investments. Since Ameritrans is able to make loans and investments in transactions that do not have to comply with SBA Regulations, the Company has gained an advantage of being able to make or participate in a wider range of loans and investments other than primarily making loans and investments that satisfy applicable SBA Regulations." Granoff added, "The Company's stockholders recently approved the extension of the Company's private placement to March 31, 2006." 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 December 31, 2005 (Unaudited) and June 30, 2005 ASSETS December 31, June 30, 2005 2005 ------------------------ Loans receivable $50,750,739 $52,060,254 Less: unrealized depreciation on loans receivable (225,000) (150,000) ------------------------ Loans receivable, net 50,525,739 51,910,254 Cash and cash equivalents 518,932 327,793 Accrued interest receivable, net of unrealized deprecation of $36,800 and $59,000, respectively 771,374 756,701 Assets acquired in satisfaction of loans 384,528 384,528 Receivables from debtors on sales of assets acquired in satisfaction of loans 406,850 455,184 Equity securities 858,985 908,457 Furniture, equipment and leasehold improvements, net 244,906 329,573 Medallions under lease 2,224,701 2,282,201 Prepaid expenses and other assets 386,456 531,904 ------------------------ TOTAL ASSETS $56,322,471 $57,886.595 ======================== AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2005 (Unaudited) and June 30, 2005 LIABILITIES AND STOCKHOLDERS' EQUITY December 31, June 30, 2005 2005 ---------------------------- LIABILITIES Debentures payable to SBA $12,000,000 $12,000,000 Notes payable, banks 25,125,568 29,770,652 Accrued expenses and other liabilities 492,214 604,942 Accrued interest payable 240,139 256,285 Dividends payable 84,375 84,375 ---------------------------- TOTAL LIABILITIES 37,942,296 42,716,254 ---------------------------- COMMITMENTS AND CONTINGENCIES (Notes 3,4 and 5) STOCKHOLDERS' EQUITY Preferred stock 500,000 shares authorized, none issued or outstanding 9 3/8% cumulative participating callable 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, $0.0001 par value; 5,000,000 shares authorized; 2,703,220 and 2,045,600 shares issued and 2,693,220 and 2,035,600 shares outstanding at December 31, 2005 and June 30, 2005, respectively 270 205 Additional paid-in-capital 17,391,109 13,869,545 Accumulated deficit (2,334,327) (2,127,134) Accumulated other comprehensive loss (206,877) (102,275) ---------------------------- 18,450,175 15,240,341 Less: Treasury stock, at cost, 10,000 shares of common stock (70,000) (70,000) ---------------------------- TOTAL STOCKHOLDERS' EQUITY 18,380,175 15,170,341 ---------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 56,322,471 $ 57,886,595 ============================ AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months And Six Months Ended December 31, 2005 and 2004 (Unaudited) Three Months Three Months Six Months Six Months Ended Ended Ended Ended December December 31, December December 31, 2005 2004 31, 2005 31, 2004 ------------------------------------------------ INVESTMENT INCOME Interest on loans receivable $1,241,722 $1,154,708 $2,391,505 $2,283,765 Fees and other income 68,649 88,687 150,950 189,227 Leasing income 46,269 73,796 95,737 125,333 (Loss) gain on sale of securities - (50,000) - (50,000) ------------------------------------------------ TOTAL INVESTMENT INCOME 1,356,640 1,267,191 2,638,192 2,548,325 ------------------------------------------------ OPERATING EXPENSES Interest 586,181 441,400 1,125,454 823,156 Salaries and employee benefits 282,531 293,081 558,769 555 745 Occupancy costs 46,304 46,434 101,020 95,617 Professional fees 146,684 195,734 216,496 331,298 Other administrative expenses 227,320 297,485 509,109 542,953 Loss and impairments assets acquired in satisfaction of loans, net 1,031 22,154 4,031 32,547 Foreclosure expenses 12,333 9,194 14,541 14,194 Write off and depreciation on interest and loans receivable 98,776 288,541 134,624 390,059 ------------------------------------------------ TOTAL OPERATING EXPENSES 1,401,160 1,593,623 2,664,044 2,785,569 ------------------------------------------------ OPERATING LOSS (44,520) (326,432) (25,852) (237,244) ------------------------------------------------ OTHER INCOME (EXPENSE) Gain on sale of asset acquired - 1,884 - 1,884 Loss on sale of automobiles (2,867) (2,867) Equity in loss of investee - (2,010) - (4,021) ------------------------------------------------ TOTAL OTHER EXPENSE. net (2,867) (126) (2,867) (2,137) ------------------------------------------------ LOSS BEFORE PROVISION FOR INCOME TAXES (47,387) (326,558) (28,719) (239,381) PROVISION FOR INCOME TAXES - 682 9,724 3,147 ------------------------------------------------ NET LOSS $(47,387) $(327,240) (38,443) (242,528) ------------------------------------------------ DIVIDENDS ON PREFERRED STOCK $ (84,375) $ (84,375) (168,750) (168,750) ------------------------------------------------ NET LOSS AVAILABLE TO COMMON SHAREHOLDERS $ (131,762) $ (411,615) $(207,193) (411,278) ------------------------------------------------ WEIGHTED AVERAGE SHARES OUTSTANDING - Basic 2,132,075 2,035,600 2,228,551 2,035,600 ------------------------------------------------ -Diluted 2,132,075 2,035,600 2,228,551 2,035,600 ------------------------------------------------ NET LOSS PER COMMON SHARE - Basic $(0.06) (0.20) (0.09) (0.20) - Diluted $(0.06) (0.20) (0.09) (0.20) *T