AMTCW Ameritrans Cap Corp 4/18/07 (MM)

Ameritrans Capital Corporation (NASDAQ:AMTC, AMTCP, AMTCW) today reported financial results for the quarter ended September 30, 2005. For the Company's first fiscal quarter, total investment income was flat at $1.281 million compared to $1.281 million during the prior comparable period. Interest income increased by $20,726 over the comparable prior period, while fees and other income decreased by $18,239. Leasing income decreased by $2,069 over the comparable period. Ameritrans reported a net loss of ($75,431) available to common shareholders for the first quarter of fiscal year 2006 or ($0.03) versus a net profit of $337 or $0.00 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 profit of $8,944 for the quarter ended September 30, 2005 compared to an operating profit of $84,612 during the quarter ended September 30, 2004. The Company's net loan portfolio at September 30, 2005 was $51.4 million versus $47.7 million at September 30, 2004. Commenting on the results, Gary C. Granoff, Ameritrans' president said, "During the first fiscal quarter September 30, 2005, our earnings were negatively impacted by an increase in our interest expense of $157,117 over our interest expense for the first quarter ended September 30, 2004. In addition other administrative expenses increased by $36,321 during the quarter ended September 30, 2005 as compared to the quarter ended September 30, 2004. In comparing the two quarters we were positively impacted during the quarter ended September 30, 2005 by a reduction in professional fees of $65,752, and we were positively impacted by a reduction in write off and depreciation on interest and loans receivable of $65,670." Granoff further stated "We are continuing to take measures to build our loan portfolio on a conservative but profitable basis which should have a beneficial effect by increasing our gross income as transactions are completed. Our new loans in the diversified business loan area are being done on an adjustable basis so that periodically (quarterly, semi-annually or annually, depending on the terms of the respective transactions) we will be adjusting the interest rate payable by the borrower to current market rates. Our margins have been decreased by the numerous increases in short term market rates of interest charged by our banks. To partially offset anticipated future increases in short term interest rates, the Company recently completed two separate $5,000,000 interest rate swaps to lock in rates of 6.20% for a two year period and 6.23% for a three year period starting from mid October, 2005. The interest rate swaps should assist the Company in controlling its interest costs on the floating portion of its bank debt against continued upward increases in interest rates." Granoff added: "Our Chicago taxi medallion loan portfolio has continued to improve, and the Chicago taxi industry has stabilized. Our lending operations in Chicago have continued to produce new loan activity. In addition, during the quarter ended September 30, 2005, we were able to complete closings on the sale of nineteen (19) medallions being foreclosed in our Chicago taxi medallion loan portfolio that were pending at June 30, 2005. During the quarter we were also able to execute contracts with two purchasers to sell an additional eleven (11) foreclosed Chicago medallions. Presently, we are negotiating the sale of an additional six (6) Chicago medallions being foreclosed, and we anticipate that we may be able to complete these transactions totaling sales of seventeen (17) foreclosed medallions by the end of January 2006. If we are able to complete the sale of seventeen (17) medallions then the sales of all medallions being foreclosed by the Company in Chicago at September 30, 2005 will have been completed." 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 September 30, 2005 (Unaudited) and June 30, 2005 ASSETS September 30, June 30, 2005 2005 -------------- -------------- Loans receivable $ 51,503,498 $ 52,060,254 Less: unrealized depreciation on loans receivable (150,000) (150,000) -------------- -------------- Loans receivable, net 51,353,498 51,910,254 Cash and cash equivalents 634,524 327,793 Accrued interest receivable, net of unrealized deprecation of $24,500 and $59,000, respectively 677,981 756,701 Assets acquired in satisfaction of loans 384,528 384,528 Receivables from debtors on sales of assets acquired in satisfaction of loans 414,475 455,184 Equity securities 857,364 908,457 Furniture, equipment and leasehold improvements, net 312,957 329,573 Medallions under lease 2,224,701 2,282,201 Prepaid expenses and other assets 543,462 531,904 -------------- -------------- TOTAL ASSETS $ 57,403,490 $ 57,886,595 ============== ============== AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 2005 (Unaudited) and June 30, 2005 LIABILITIES AND STOCKHOLDERS' EQUITY September 30, June 30, 2005 2005 -------------- -------------- LIABILITIES Debentures payable to SBA $ 12,000,000 $ 12,000,000 Notes payable, banks 29,650,652 29,770,652 Accrued expenses and other liabilities 497,786 604,942 Accrued interest payable 126,860 256,285 Dividends payable 84,375 84,375 -------------- -------------- TOTAL LIABILITIES 42,359,673 42,716,254 -------------- -------------- COMMITMENTS AND CONTINGENCIES (Notes 3,4 and 5) STOCKHOLDERS' EQUITY Preferred stock 500,000 shares authorized, non 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, $.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 (2,202,565) (2,127,134) Accumulated other comprehensive expenses (153,368) (102,275) -------------- -------------- 15,113,817 15,240,341 Less: Treasury stock, at cost, 10,000 shares of common stock (70,000) (70,000) -------------- -------------- TOTAL STOCKHOLDERS EQUITY 15,043,817 15,170,341 -------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 57,403,490 $ 57,886,595 ============== ============== AMERITRANS CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended September 30, 2005 and 2004 (Unaudited) Three Months Three Months Ended Ended September September 30, 30, 2005 2004 --------------- --------------- INVESTMENT INCOME Interest on loans receivable $ 1,149,783 $ 1,129,057 Fees and other income 82,301 100,540 Leasing income 49,468 51,537 --------------- --------------- TOTAL INVESTMENT INCOME 1,281,552 1,281,134 --------------- --------------- OPERATING EXPENSES Interest 539,273 382,156 Salaries and employee benefits 276,238 262,664 Occupancy costs 54,716 49,183 Professional fees 69,812 135,564 Other administrative expenses 281,789 245,468 Loss and impairments on assets acquired in satisfaction of loans, net 3,000 10,393 Foreclosure expenses 2,208 5,000 Write off and depreciation on interest and loans receivable 35,848 101,518 --------------- --------------- TOTAL OPERATING EXPENSES 1,262,884 1,191,946 --------------- --------------- OPERATING INCOME 18,668 89,188 --------------- --------------- OTHER EXPENSE Equity in loss of investee - (2,011) --------------- --------------- TOTAL OTHER EXPENSE - (2,011) --------------- --------------- INCOME BEFORE PROVISION FOR INCOME TAXES 18,668 87,177 PROVISION FOR INCOME TAXES 9,724 2,465 --------------- --------------- NET INCOME $ 8,944 $ 84,712 --------------- --------------- DIVIDENDS ON PREFERRED STOCK $ (84,375) $ (84,375) --------------- --------------- NET (LOSS) INCOME AVAILABLE TO COMMON SHAREHOLDERS $ (75,431) $ 337 --------------- --------------- WEIGHTED AVERAGE SHARES OUTSTANDING - Basic $ 2,035,600 2,035,600 --------------- --------------- - Diluted $ 2,035,600 2,035,600 --------------- --------------- NET LOSS PER COMMON SHARE - Basic $ (0.03) 0.00 - Diluted $ (0.03) 0.00 *T