Merchant Cash Advance and Real Estate Revenues Grow Sequentially; Company Generates Positive Operating Cash Flow
DULUTH, GA / ACCESSWIRE / May 9, 2019 / CCUR Holdings, Inc. (OTCQB: CCUR) today reported net income for the third fiscal quarter of 2019 of $1,411,000, or $0.16 per share, an improvement from the net loss of $1,093,000, or $0.11 a share for the year-ago comparable period. Revenue for the quarter nearly tripled on a sequential basis to $1,074,000 with Merchant Cash Advance (MCA) income growing to $825,000 and interest income on loans growing to $249,000. Other interest, dividend and investment income for the period totaled $1,557,000.
General and administrative expenses declined by 39% from the prior year quarter to $728,000. Total operating expenses for the quarter were $1,305,000 and included sales and marketing expenses of $181,000 to support the growth of the Company's MCA operations as well as a $343,000 provision for MCA credit losses. The Company's operating loss for the quarter declined to $231,000 as compared to an operating loss of $1,186,000 for the third quarter of fiscal 2018 and operating cash flow for the quarter was $613,000.
Net income of $1,411,000 for the third quarter reduced the net loss for the first nine months of fiscal 2019 to $122,000, or $0.01 per share. Revenue for the first nine months was $1,610,000 and the operating loss was $1,817,000. Total working capital as of March 31, 2019 was $49.6 million as compared with $50.7 million as of December 31, 2018, and $55.3 million as of June 30, 2018. Since June 30, 2018, the Company has used $1,318,000 of cash to repurchase shares under its stock repurchase program.
"By generating net income, as well as positive operating cash flow, our fiscal third quarter results begin to reflect the potential returns we believe CCUR Holdings is capable of generating for our stockholders," said Wayne Barr, President and CEO. "Our subsidiary LM Capital Solutions completed the transaction with LuxeMark Capital mid-quarter and we have completed the integration of this investment in the MCA financing space into CCUR's operations. We also grew revenue from our Recur Holdings real estate operations during the quarter and continue to explore additional real estate focused opportunities.
''The acquired LuxeMark assets and personnel provide CCUR with valuable experience in evaluating MCA originators as well as working relationships with a core group of originators that have an established track record of MCA underwriting and servicing excellence. These core differentiators provide us with the foundation on which we hope to build scalable and sustainable operations to identify and place capital with additional MCA originators adhering to the same high levels of excellence. We believe this focused approach to the MCA market began to demonstrate its potential for the Company during the third quarter ,'' continued Mr. Barr.
''At the same time, our team is continuing to search for other attractive yield -generating opportunities to complement our MCA operations, as well as other businesses and assets at attractive valuations. Our objective is to build on the returns we generated during the third quarter as well as begin to utilize our NOLs. We aim to achieve this objective while remaining keenly focused on maintaining our low operating costs,'' concluded Mr. Barr.
Stock Repurchase Program Update
On February 11, 2019, as previously announced, the Board of Directors approved a new stock repurchase program allowing the Company to repurchase up to an additional 500,000 shares of the Company's common stock, for a total of 1,500,000 authorized shares. The Company repurchased a total of 188,510 shares during the fiscal third quarter for a total of $703,000. A total of 414,607 shares under the authorized program remain available for repurchase as of March 31, 2019.
About CCUR Holdings, Inc.
CCUR Holdings, Inc. is actively pursuing business opportunities to maximize the value of its assets through evaluation of additional operating businesses or assets for acquisition and continued development of its current real estate and MCA operations through its subsidiaries Recur Holdings, LLC and LM Capital Solutions, LLC. More information on the Company is available at www.ccurholdings.com.
Forward Looking Statements
Certain statements made or incorporated by reference herein may constitute "forward-looking statements" within the meaning of federal securities laws. When used or incorporated by reference in this report, the words "believes," "expects," "estimates," "anticipates," and similar expressions are intended to identify forward-looking statements. Statements regarding future events and developments such as future financial performance or returns, as well as expectations, beliefs, plans, estimates or projections relating to the future and current assessments of business opportunities, are forward-looking statements within the meaning of these laws. These statements are based on beliefs and assumptions of CCUR's management, which are based on currently available information. Except for the historical information contained herein, the matters discussed in this communication may contain forward-looking statements that involve risks and uncertainties that may cause CCUR's actual results to be materially different from such forward-looking statements and could materially adversely affect its business, financial condition, operating results and cash flows. These risks and uncertainties include, but are not limited to, CCUR's ability to successfully negotiate, perform due diligence and consummate any additional acquisitions, expected cash and liquidity positions, expected financial performance and revenue streams, market fluctuations in or material financial or regulatory changes impacting the MCA and real estate industry and general business conditions, as well other risks listed in the Company's Form 10-K filed on September 7, 2018 and subsequent quarterly reports filed with the Securities and Exchange Commission and risk and uncertainties not presently known to CCUR or that CCUR currently deems immaterial.
CCUR wishes to caution against placing undue reliance on any forward-looking statements, which speak only as of the date on which they were made. CCUR does not undertake any obligation to update forward-looking statements, whether as a result of future events, new information or otherwise, except as required by law.
CCUR HOLDINGS, INC.
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March 31,
2019
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June 30,
2018
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ASSETS
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Current assets:
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Cash and cash equivalents
|
$ | 14,665 | $ | 32,992 | ||||
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Equity securities, fair value
|
8,616 | 6,629 | ||||||
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Fixed maturity securities, available-for-sale, fair value
|
12,533 | 13,381 | ||||||
|
Current maturities of mortgage and commercial loans receivable
|
2,212 | 700 | ||||||
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Accounts receivable
|
163 | - | ||||||
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Receivable from sale of Content Delivery business held in escrow
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- | 1,450 | ||||||
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Advances receivable, net
|
10,230 | - | ||||||
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Prepaid expenses and other current assets
|
1,750 | 1,419 | ||||||
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Total current assets
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50,169 | 56,571 | ||||||
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Property and equipment, net
|
5 | 1 | ||||||
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Deferred income taxes, net
|
475 | 975 | ||||||
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Mortgage and commercial loans receivable, net of current maturities
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5,281 | 2,305 | ||||||
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Deposit on mortgage loan receivable held in escrow
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- | 1,400 | ||||||
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Definite-lived intangibles, net
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2,677 | - | ||||||
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Goodwill
|
995 | - | ||||||
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Other long-term assets, net
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87 | 54 | ||||||
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Total assets
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$ | 59,689 | $ | 61,306 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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||||||||
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Accounts payable and accrued expenses
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$ | 564 | $ | 1,289 | ||||
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Total current liabilities
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564 | 1,289 | ||||||
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Long-term liabilities:
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||||||||
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Pension liability
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3,647 | 3,766 | ||||||
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Contingent consideration
|
1,860 | - | ||||||
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Other long-term liabilities
|
225 | 185 | ||||||
|
Total liabilities
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6,296 | 5,240 | ||||||
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Commitments and contingencies
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Stockholders' equity:
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||||||||
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Shares of common stock, par value $0.01;
14,000,000 authorized; 8,789,644 and 9,117,077 issued
and outstanding at March 31, 2019, and June 30, 2018, respectively
|
88 | 91 | ||||||
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Capital in excess of par value
|
208,902 | 210,083 | ||||||
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Non-controlling interest
|
758 | - | ||||||
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Accumulated deficit
|
(151,599 | ) | (151,795 | ) | ||||
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Accumulated other comprehensive loss
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(4,756 | ) | (2,313 | ) | ||||
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Total stockholders' equity
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53,393 | 56,066 | ||||||
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Total liabilities, non-controlling interest, and stockholders' equity
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$ | 59,689 | $ | 61,306 | ||||
CCUR HOLDINGS, INC.
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Three Months Ended March 31,
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Nine Months Ended March 31,
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2019
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2018
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2019
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2018
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Revenues:
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Merchant cash advance income
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$ | 825 | $ | - | $ | 1,045 | $ | - | ||||||||
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Interest income on loans
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249 | - | 565 | - | ||||||||||||
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Total revenues
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1,074 | - | 1,610 | - | ||||||||||||
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Operating expenses:
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Sales and marketing
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181 | - | 181 | - | ||||||||||||
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General and administrative
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728 | 1,186 | 2,355 | 6,510 | ||||||||||||
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Amortization of purchased intangibles
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53 | - | 53 | - | ||||||||||||
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Provision for credit losses on advances
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343 | - | 838 | - | ||||||||||||
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Total operating expenses
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1,305 | 1,186 | 3,427 | 6,510 | ||||||||||||
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Operating loss
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(231 | ) | (1,186 | ) | (1,817 | ) | (6,510 | ) | ||||||||
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Other interest income
|
1,053 | 225 | 2,788 | 371 | ||||||||||||
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Dividend income
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165 | - | 275 | - | ||||||||||||
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Net realized gain on investments
|
525 | - | 726 | - | ||||||||||||
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Unrealized loss on equity securities, net
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(181 | ) | - | (2,167 | ) | - | ||||||||||
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Other expense, net
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(5 | ) | (109 | ) | (10 | ) | (67 | ) | ||||||||
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Income (loss) from continuing operations before income taxes
|
1,326 | (1,070 | ) | (205 | ) | (6,206 | ) | |||||||||
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Benefit for income taxes
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(75 | ) | (222 | ) | (73 | ) | (1,140 | ) | ||||||||
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Income (loss) from continuing operations
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1,401 | (848 | ) | (132 | ) | (5,066 | ) | |||||||||
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(Loss) income from discontinued operations, net of income taxes
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- | (245 | ) | - | 22,851 | |||||||||||
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Net income (loss)
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1,401 | (1,093 | ) | (132 | ) | 17,785 | ||||||||||
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Less: Net loss attributable to non-controlling interest
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10 | - | 10 | - | ||||||||||||
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Net income (loss) attributable to CCUR Holdings, Inc. stockholders
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$ | 1,411 | $ | (1,093 | ) | $ | (122 | ) | $ | 17,785 | ||||||
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Basic and diluted earnings (loss) per share:
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Continuing operations attributable to CCUR Holdings, Inc. stockholders
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$ | 0.16 | $ | (0.09 | ) | $ | (0.01 | ) | $ | (0.53 | ) | |||||
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Discontinued operations
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- | (0.02 | ) | - | 2.39 | |||||||||||
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Net income (loss) attributable to CCUR Holdings, Inc. stockholders
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$ | 0.16 | $ | (0.11 | ) | $ | (0.01 | ) | $ | 1.86 | ||||||
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Weighted average shares outstanding - basic
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8,853,451 | 9,824,588 | 8,998,935 | 9,549,215 | ||||||||||||
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Weighted average shares outstanding - diluted
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8,864,071 | 9,824,588 | 8,998,935 | 9,549,215 | ||||||||||||
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Cash dividends declared per common share
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$ | - | $ | - | $ | - | $ | 0.24 | ||||||||
CCUR HOLDINGS, INC.
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Three Months Ended
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||||||||
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March 31,
2019
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December 31,
2018
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Revenues:
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||||||||
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Merchant cash advance income
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$ | 825 | $ | 185 | ||||
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Interest income on loans
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249 | 185 | ||||||
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Total revenues
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1,074 | 370 | ||||||
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Operating expenses:
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||||||||
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Sales and marketing
|
181 | - | ||||||
|
General and administrative
|
728 | 792 | ||||||
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Amortization of purchased intangibles
|
53 | - | ||||||
|
Provision for credit losses on advances
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343 | 495 | ||||||
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Total operating expenses
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1,305 | 1,287 | ||||||
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Operating loss
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(231 | ) | (917 | ) | ||||
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Other interest income
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1,053 | 890 | ||||||
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Dividend income
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165 | 46 | ||||||
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Net realized gain on investments
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525 | - | ||||||
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Unrealized loss on equity securities, net
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(181 | ) | (1,529 | ) | ||||
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Other expense, net
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(5 | ) | (20 | ) | ||||
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Income (loss) before income taxes
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1,326 | (1,530 | ) | |||||
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Benefit for income taxes
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(75 | ) | - | |||||
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Net income (loss)
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1,401 | (1,530 | ) | |||||
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Less: Net loss attributable to non-controlling interest
|
10 | - | ||||||
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Net income (loss) attributable to CCUR Holdings, Inc. stockholders
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$ | 1,411 | $ | (1,530 | ) | |||
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Basic and diluted earnings (loss) per share:
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Net income (loss) attributable to CCUR Holdings, Inc. stockholders
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$ | 0.16 | $ | (0.17 | ) | |||
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Weighted average shares outstanding - basic
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8,853,451 | 9,034,368 | ||||||
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Weighted average shares outstanding - diluted
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8,864,071 | 9,034,368 | ||||||
Contact:
Doug Sherk
[email protected]
(415) 652-9100
SOURCE: CCUR Holdings, Inc.