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| 8-K - FORM 8-K - NEWTEK BUSINESS SERVICES, INC. | d254278d8k.htm |
 Newtek Business Services, Inc.
NASDAQ: NEWT
Third Quarter 2011
Financial Results Conference Call
November 9, 2011 4:15 PM
Hosted By:
Barry Sloane, CEO and Chairman
Jennifer C. Eddelson, CAO
Public Relations Contact:
Liz Petrova
Rubenstein Public Relations, Inc.
(212) 843-9335
lpetrova@rubensteinpr.com
EXHIBIT 99.1 |
 Safe Harbor
Statement The statements in this slide presentation including statements regarding anticipated
future financial performance, Newtek's beliefs, expectations, intentions or strategies for the
future, may be "forward-looking statements" under the Private Securities Litigation
Reform Act of 1995. All forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially from the plans, intentions
and expectations reflected in or suggested by the forward-looking statements. Such risks
and uncertainties include, among others, intensified competition,
operating
problems
and
their
impact
on
revenues
and
profit
margins,
anticipated
future business strategies and financial performance, anticipated future number of customers,
business prospects, legislative developments and similar matters. Risk factors, cautionary
statements and other conditions which could cause Newtek’s actual results to differ from
management's current expectations are contained in Newtek’s filings with the Securities and
Exchange
Commission
and
available
through
http://www.sec.gov
Our Capcos
operate
under
a
different
set
of
rules
in
each
of
the
7
jurisdictions
and
these place
varying requirements on the structure of our investments. In some cases, particularly in Louisiana
or in certain situations in New York, we do not control the equity or management of a qualified
business, but that cannot always be presented orally or in written presentations.
2 |
 Third Quarter 2011 Highlights
Announce consolidated pretax income of $335 thousand for the quarter ended September 30,
2011
Versus consolidated pretax income of $248 thousand for the quarter ended September 30,
2010
Announce
consolidated
pretax
income
of
$1.3
million
for
the
nine
months
ended
September
30,
2011
Versus consolidated pretax loss of $(112) thousand for the nine months ended September
30, 2010
Announce consolidated net income of $880 thousand for the quarter ended September 30, 2011
Versus consolidated net loss of $(318) thousand for the quarter ended September 30, 2010
•
The increase to net income for the third quarter of 2011 was mainly due to $502
thousand income tax benefit versus a $590 thousand income tax provision in the third
quarter of 2010
Announce consolidated net income of $1.1 million for the nine months ended September 30, 2011
Versus consolidated net income of $146 thousand for the nine months ended September 30,
2010
3 |
 Third Quarter 2011 Highlights
Revised 2011 annual guidance range of:
$122.0 million to $124.8 million for consolidated revenue range
$1.25 million to $2.0 million for consolidated pretax income range
$8.8 million to $9.6 million for consolidated Modified EBITDA range
•
Relocation of 1440 Broadway, New York, NY office to smaller spaces in NYC and West
Hempstead, NY effective November 1, 2011 resulted in an approximate $1.1 million
lease loss expense on the sublease rental to be recognized in the fourth quarter of
2011.
Cash flow benefit of the relocation over the next four years will be approximately
$1.4 million
Annual rent expense reduction due to the relocation will be approximately $625
thousand per year over the three year period beginning in 2012
Announce 2012 annual guidance range of:
$121.9 million to $125.0 million for consolidated revenue range
$3.0 million to $6.0 million for consolidated pretax income range
Midpoint consolidated pretax income of $4.5 million
$9.3 million to $12.3 million for consolidated Modified EBITDA range
4 |
 Third Quarter 2011 Highlights
Announce Q3 2011 consolidated revenue of $30.7 million
5% growth vs. Q3 2010 of $29.2 million
Q3 2011 revenue in EPP and Managed Technology Solutions exceed Q3
2010
Combined EPP and Managed Technology Solutions revenue for Q3 2011 is
$25.5 million
•
Versus Q3 2010 of $25.3 million
•
1% growth
Small
Business
Finance
segment
posts
revenue
of
$4.6
million
for
Q3
2011
vs. $3.0 million for Q3 2010
Small Business Finance segment posts pretax income of $874 thousand
for Q3 2011 vs. pretax income of $404 thousand for Q3 2010
5 |
 Balance Sheet Shrinks
6
(in thousands)
September 30, 2011
December 31, 2010
Total Assets
$ 125,997
$ 165,015
Total Liabilities
$ 69,193
$ 109,421
Total Equity
$ 56,804
$ 55,594 |
 Third Quarter 2011 Conference Call Agenda
Q3 2011 financial performance, cash position, balance sheet,
commentary, business trends, 2011 and 2012 guidance
Strategic mission as The Small Business Authority
New
website
launched:
www.thesba.com
(January
2011)
7 |
 Third Quarter 2011
Financial Results
Q3 2011 vs. Q3 2010 core operating segment revenue:
Electronic Payment Processing:
$20.7 million -
up 1% from Q3 2010
Managed Technology Solutions:
$4.8 million –
flat from Q3 2010
Small Business Finance:
$4.6 million –
up 53% from Q3 2010
Q3 2011 vs. Q3 2010 core operating segment pretax income:
Electronic Payment Processing:
$1.2 million -
down 8% from Q3 2010
Managed Technology Solutions:
$1.3 million -
flat from Q3 2010
Small Business Finance:
$874 thousand -
up 116% from Q3 2010
8 |
 Cash Position
$31.3 million in cash and cash equivalents, restricted cash, and
broker
receivable at September 30, 2011, down from $33.2 million at December
31, 2010.
Equates to $0.38 cash per share.
Equates to $0.88 cash per share when including restricted cash and the
broker receivable, which we received in October 2011.
$6.8 million of net cash provided by operating activities for the nine
months ended September 30, 2011 versus $1.2 million of net cash
used in operating activities for the nine months ended
September 30, 2010. •
Primarily reflects the operations of the SBA lender in 2011.
9 |
 Developments in EPP
Q3 2011 versus Q3 2010:
Revenue up 1%
Pretax income down 8%
Modified EBITDA down 7%
Nine months September 30, 2011 versus nine months September 30,
2010: Revenue up 3%
Pretax income flat
Modified EBITDA down 1%
Cash flow positive business
Significant operating leverage
EPP segment does not have any debt
eCommerce : Single most important corporate initiative and
identifier NewtPay
“Meet or Beat”
campaign launch
10 |
 Managed Technology
Solutions Initiatives Q3 2011 versus Q3 2010:
Revenue flat
Pretax income flat
Modified EBITDA down 7%
Nine months September 30, 2011 versus nine months September 30,
2010: Revenue flat
Pretax income up 3%
Modified EBITDA down 5%
Continue to evaluate expenditures versus productivity, particularly in
marketing, seeking additional cost savings where
applicable Continue to invest in segment to support future
growth Currently above 50% real estate capacity in our data
center Great marketing
channel
to
target
IT
partners
and
web
developers
–
TechExec
Ultra-competitive at lower-end of the market
Business mix is changing particularly in shared hosting
Dedicated hosting price pressure
Cloud is a significant player into our future
11 |
 Cloud
Computing
What is it?
Outsourcing of hardware, software, personnel, storage, data security
and responsibility and accountability for IT in whole or in
part. Why is it relevant?
Cost containment and efficiencies
Better service and management of resources
More security
More functionality
12 |
 Cloud
Computing
Competition
Amazon
Microsoft
Other hosting companies and IT providers like Rackspace Hosting
(RAX)
Thesba has real U.S. based cloud authority personnel to service and
talk to the customer
Thesba has a pay for what you use at the Cloud Authority
Bandwith
Storage
CPU
13 |
 Cloud
Computing
Why is this market important and why are we good
at it?
14 |
 Cloud
Pricing and Margin
Shifting our energies to driving cloud sales
The market is focused on the cloud
Driving shared growth is not as beneficial
•
Average monthly cloud instance revenue is $173 vs. our most popular
shared site plan of $5.95
•
Gross
margin
as
a
percentage
on
a
cloud
instance
is
almost
three
times our
most popular shared site plan
•
Gross margin in dollars on a cloud instance equates to almost
eighty-seven times that of our most popular shared site
plan 15 |
 Cloud
Computing
16
# of
instances
-10
-11
-11
-11
-11
-11
-11
-11
-11
-11
0
50
100
150
200
250
300
350
400
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Cumulative Cloud VPS Instances Sold |
 Small Business
Finance We have very good lending infrastructure (origination,
underwriting, funding, servicing, and collection)
This infrastructure is valuable more so today
This sector offers the best opportunity for Newtek shareholders
110 to 114 pricing on governments
FDIC contract
We are an S&P rated commercial servicer
Closed S&P AA rated securitization for note issuance of $16
million in December 2010 Closed Capital One Bank $27 million
line of credit to fund portions of loans guaranteed by the
SBA (December 2010 and June 2011)
Closed a $10 million line with Sterling National Bank to fund accounts
receivable finance business in February 2011
17 |
 18
Small Business Finance
Servicing Portfolio (in thousands):
We expect future growth in this business area.
9/30/11
6/30/11
3/31/11
12/31/10
Servicing for loans we
originated
$ 270,258
$ 254,741
$ 236,363
$ 223,049
Servicing for others
95,739
75,087
75,365
73,062
Total servicing portfolio
$ 365,997
$ 329,828
$ 311,728
$ 296,111 |
 Reduced Effect of Capco
on Consolidated Results
Balance sheet illusionary leverage
Management time
Accounting cost
Other miscellaneous costs
19 |
 Balance Sheet Items to Discuss
20
(in millions of dollars)
9/30/2011
6/30/2011
3/31/2011
12/31/2010
SBA loans transferred, subject to premium recourse
1.4
1.4
16.9
31.2
Credits in lieu of cash
19.2
25.1
29.0
35.5
Total assets
126.0
129.4
144.2
165.0
Liability on SBA loan transferred, subject to premium
recourse
1.4
1.4
16.5
30.8
Notes payable in credits in lieu of cash
19.2
25.1
29.0
35.5
Total liabilities
69.2
73.6
88.2
109.4 |
 Future Year End Balance of Tax Credits
21 |
 What is our Growth Strategy Going Forward?
The
Small
Business
Authority
brand
through
www.thesba.com
(launched January
2011)
Emphasize cross-selling and cross-marketing into the customer
base which we are now doing
Continue to grow alliance channels as outsourcing of our services is
attractive to banks, credit unions and other affinity
groups Outbound campaign with direct focus on small businesses
through television and radio
Grow our presence as a business service provider with all of our
business
applications hosted in the cloud
22 |
 Our Strategy & Mission
We are a thought leader and destination for independent owner
operators
of
small
businesses.
The
Small
Business
Authority provides
products, services, and data to small and medium size businesses
across
the
United
States
to
grow
their
sales,
reduce
their
expenses, reduce
their risk and offer state of the art efficient business strategies,
structures, and content to run their businesses.
23 |
 Traffic Statistics for www.thesba.com
24 |
 Traffic Statistics for www.thesba.com
25
Dec-10 Jan-11 Feb-11
Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11
9,000
13,000
17,000
21,000
25,000
Unique Visitors for TheSBA
Total Visitors for TheSBA
Unique VS Total Visitors |
 Site Statistics
for thesba.com
26
Overall Grade:
Blog Grade:
Indexed Pages:
Linking Domains:
Tweet Grade:
Twitter Followers:
Facebook Fans:
RSS Feed:
Conversion Form:
Traffic Rank
99
95
70,800
1,066
91
638
136
Yes
Yes
0.26% |
 Current General Statistics
750 absolute unique visitors per day
Average time on site is 3 minutes and 30
seconds 54% Bounce Rate
27 |
 Small Business Authority
Branding Achievements
Forbes
publishes
The
Small
Business
Authority
Blog
daily
which can
be viewed at
http://blogs.forbes.com/thesba/ Our
introductory post which explains what our blog will do can be viewed at
http://blogs.forbes.com/thesba/2011/06/15/your-authority-on-small-business/
The
Small
Business
Authority
Index
is
published
by
Bloomberg
Newswire monthly
The
Small
Business
Authority
Market
Sentiment
Survey
is
published
on CNBC, NYDailyNews, Small Business Trends etc.
28 |
 Small Business Authority
Branding Achievements
Small Business Authority Hour
All of the following shows podcast on thesba.com and
wabcradio.com: 2/5/11 –
Business Entrepreneurship
3/5/11 –
Healthcare and Health Insurance effects on small businesses
4/2/11 –
Small Business Lending
5/7/11 –
eCommerce
6/4/11 –
Cloud Computing
7/2/11 –
Cloud Computing
8/6/11 –
Tax issues affecting small businesses
9/3/11 –
Business issues affecting independent business owners
10/1/11 –
Cyber security
11/5/11 –
No radio show, this spot was pre-reserved
29 |
 77 WABC Radio
“Reporting Live from The Small Business Authority
Studios” over 400 mentions per month
Over
250
sixty
second
radio
commercials
per
month.
Hear
our spots
on www.thesba.com
click on community, then click on radio spots to hear
our personalities, like Imus, Hannity, Levin, Kudlow, Batchelor
and McIntyre broadcast our spots The Small Business Authority
Hour The first Saturday of every month on 77 WABC and
WABCradio.com (click listen live)
Our show for independent business owners and operators
Go to our
website
www.thesba.com,
click
on
community
and
then
radio spots
to
listen to the podcasts
30 |
 WABC Radio
“The Imus in the Morning Show”
–
broadcast Monday through Friday,
6am EST to 9:20am EST on 77 WABC and Fox Business News
See Warner Wolf broadcast sports from the SBAS several times each
morning
Backdrop
Microphone flags
See Bernard
McGirk
broadcast
his
“Bernie
Briefing”
from
the SBAS
several times each morning
Backdrop
Microphone flags
Testing for future growth for Thesba brand and
direct-to-market distribution
SBAS –
Small Business Authority Studios
31 |
 SB Authority Index
Financial barometer for small business economy
Made up of eight primary business and economic components of the
small business economy
SB Authority Index released at beginning of every month
Available in our newsletter with over 55,000 in distribution
Available on our website now at
www.thesba.com 32
|
 SB Authority Market Sentiment Survey
On a monthly basis, delivers the pulse of the small business economy
by polling our client base on topical issues like health care,
the lending environment and other important issues affecting
small businesses Usually poll in excess of 1,200
respondents Released once per month
Results are available in our newsletter with over 55,000 in
distribution Available to all to participate and view results on
our website at www.thesba.com
33 |
 Small Business Authority Hour
Live radio for small business on the first Saturday of every month
broadcasting from The Small Business Authority Studios on 77
WABC or nationally at WABCRadio.com
Produced and directed by Newtek for independent business owners
and operators
Discussing key small business issues like health care and the business
lending environment
Special guests, small business news and call-ins each and every
month 34 |
 Marketing Focus |
 Strategic Alliance Partner Channel
Still our workhorse for distribution, clientele and
relationships Driven by Newtracker
™
which has a patent pending
Referral volume continues to grow on a consolidated basis
CUNA
Latino Coalition
Pershing
Morgan Stanley Smith Barney
Chartis
New York Community Bank
The Company Corporation
Humana Insurance Company
36 |
 Small Business Authority Channel
Grow
internet
web
based
direct
business
through
search
through
branding
on
TV,
radio,
print
and
public
relations
Increased
recognition
as
the
authority
on
business
issues
for
small
businesses
Grow
as
the
destination
spot
for
independent
owner/operator
businesses
Become
recognized
as
best
of
breed
in
each
area
of:
Lending
Electronic
payment
processing
Insurance
brokerage
Outsourced
technology
managed
services
Business
information
Payroll
Data
storage
37
Health
insurance |
 In Conclusion
38 |
 Annual Pretax Income Trend
39
Pretax Income
(Loss)
$(17.5)
$(13.1)
$(4.0)
$0.9
in millions
-$18
-$12
-$6
$0
$6
2007
Actual
2008
Actual
2009
Actual
2010
Actual
2011
Forecast
Midpoint
2012
Forecast
Midpoint
$1.6
$4.5 |
 2011 Revised Segment
Guidance 40
*Note: totals may not add due to rounding
In millions of dollars
Electronic
Managed
Small
Total
Payment
Technology
Business
All
Corporate
Business
CAPCO
Intercompany
Processing
Solutions
Finance
Other
Activities
Segments
Segment
Eliminations
Total
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
2011 Full Year
Revenue
80.5
81.5
19.2
19.6
20.1
21.1
1.4
1.6
1.0
1.0
122.2
124.8
1.5
1.7
(1.7)
122.0
124.8
Pretax Income (Loss)
5.9
6.3
4.6
4.8
3.8
4.2
(1.3)
(1.3)
(9.7)
(9.7)
3.4
4.1
(2.1)
(2.1)
-
1.2
2.0
Modified EBITDA
adjustments:
Income from tax credits
-
-
-
-
-
-
-
-
-
-
-
-
(1.5)
(1.5)
-
(1.5)
(1.5)
Net change in fair value of
credits in lieu of cash and
notes payable in credits in lieu
of cash
-
-
-
-
-
-
-
-
-
-
-
-
0.1
0.1
-
0.1
0.1
Deferred compensation
expense
-
-
-
-
-
-
-
-
0.4
0.4
0.4
0.4
-
-
-
0.4
0.4
Loss on lease restructure
1.0
1.0
1.0
1.0
1.0
1.0
Interest Expense
-
-
0.1
0.1
1.9
1.9
-
-
-
-
2.0
2.0
1.5
1.5
-
3.5
3.5
Depreciation and
Amortization
1.4
1.4
1.5
1.5
0.9
0.9
0.1
0.1
0.2
0.2
4.1
4.1
-
-
-
4.1
4.1
Modified EBITDA
7.3
7.7
6.2
6.4
6.6
7.0
(1.2)
(1.2)
(8.1)
(8.1)
10.6
11.6
(2.0)
(2.0)
-
8.8
9.6 |
 2012 Segment
Guidance 41
*Note: totals may not add due to rounding
In millions of dollars
Electronic
Managed
Small
Total
Payment
Technology
Business
All
Corporate
Business
CAPCO
Intercompany
Processing
Solutions
Finance
Other
Activities
Segments
Segment
Eliminations
Total
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
2012 Full Year
Revenue
78.7
79.2
19.9
20.4
21.9
23.4
1.5
2.0
0.5
0.5
122.4
125.5
0.7
0.7
(1.2)
121.9
125.0
Pretax Income (Loss)
6.5
7.0
4.9
5.3
4.2
5.8
(1.5)
(1.3)
(9.0)
(8.9)
5.0
7.9
(2.0)
(1.9)
-
3.0
6.0
Modified EBITDA
adjustments:
Income from tax credits
-
-
-
-
-
-
-
-
-
-
-
-
(0.8)
(0.8)
-
(0.8)
(0.8)
Net change in fair value of
credits in lieu of cash and
notes payable in credits in lieu
of cash
-
-
-
-
-
-
-
-
-
-
-
-
0.1
0.1
-
0.1
0.1
Deferred compensation
expense
-
-
-
-
-
-
-
-
0.4
0.4
0.4
0.4
-
-
-
0.4
0.4
Lease loss amortization
-
-
-
-
-
-
-
-
(0.3)
(0.3)
(0.3)
(0.3)
-
-
-
(0.3)
(0.3)
Interest Expense
-
-
0.1
0.1
2.1
2.1
-
-
-
-
2.2
2.2
0.7
0.7
-
2.9
2.9
Depreciation and
Amortization
0.7
0.7
1.5
1.5
1.6
1.6
-
-
0.2
0.2
4.0
4.0
-
-
-
4.0
4.0
Modified EBITDA
7.2
7.7
6.5
6.9
7.9
9.5
(1.5)
(1.3)
(8.7)
(8.6)
11.3
14.2
(2.0)
(1.9)
-
9.3
12.3 |
 Consolidated Annual Pretax Income (Loss)
Year
Amount (in millions)
2007
$(17.5)
2008
$(13.1)
2009
$(4.0)
2010
$0.9
2011 (Forecast range midpoint)
$1.6
2012 (Forecast range midpoint)
$4.5
42 |
 Financial Review
Jennifer C. Eddelson –
CAO |
 44
Non-GAAP Financial Measures
In evaluating
its
business,
Newtek
considers
and
uses
EBITDA
and
Modified
EBITDA
as
a
supplemental
measure of its operating performance. The Company defines EBITDA as earnings before interest
expense, taxes, depreciation and amortization and Modified EBITDA as earnings excluding income
from tax credits, net change in fair value of credits in lieu of cash and notes payable in
credits in lieu of cash, other than temporary decline in value of investments, interest
expense, deferred compensation expense, lease loss expense, taxes, depreciation and
amortization. Newtek uses EBITDA and Modified EBITDA as supplemental measures to review
and assess its operating performance. The Company also presents EBITDA and Modified EBITDA
because it believes it is frequently used by securities analysts, investors and other interested
parties as a measure of financial performance.
The terms EBITDA and Modified EBITDA are not defined under U.S. generally accepted accounting
principles, or U.S. GAAP, and is not a measure of operating income(loss), operating performance
or liquidity presented in accordance with U.S. GAAP. EBITDA and Modified EBITDA have
limitations as a analytical tool and, when assessing the
Company’s
operating
performance,
investors
should
not
consider
EBITDA
or
Modified
EBITDA
in isolation, or as a substitute for net income (loss) or other consolidated income statement data
prepared in accordance with U.S. GAAP. Among other things, EBITDA and Modified EBITDA do
not reflect the Company’s actual cash expenditures. Other companies may calculate
similar measures differently than Newtek, limiting their usefulness as comparative tools.
Newtek compensates for these limitations by relying primarily on its GAAP results and using
EBITDA and Modified EBITDA only supplementally. |
 45
Selected Balance Sheet Items
Balance at
September 30, 2011
Balance at
December 31, 2010
Cash and cash equivalents
$13,678
$10,382
Restricted cash
6,979
10,747
Broker receivable
10,666
12,058
SBA loans held for sale, at fair value
938
1,014
Total short term liquidity
$32,261
$34,201
Notes payable (excludes $13,260 and $15,104,
respectively, related to securitization trust VIE)
$19,727
$12,949
In thousands of dollars |
 46
Q3 2011 Actual vs. Q3 2010 Actual
In millions of dollars
Revenue For
The Quarter
Ended
September 30,
2011 Actual
Revenue For The
Quarter Ended
September 30,
2010 Actual
Pretax Income
(Loss) For The
Quarter Ended
September 30,
2011 Actual
Pretax Income
(Loss) For The
Quarter Ended
September 30,
2010 Actual
Modified EBITDA
For The Quarter
Ended
September 30,
2011 Actual
Modified EBITDA
For The Quarter
Ended
September 30, 2010
Actual
Electronic
Payment
Processing
20.707
20.518
1.240
1.347
1.628
1.745
Managed
Technology
Solutions
4.787
4.800
1.279
1.277
1.647
1.763
Small
Business
Finance
4.621
3.024
0.874
0.404
1.576
0.998
All Other
0.358
0.342
(0.304)
(0.194)
(0.276)
(0.162)
Corporate
Activities
0.251
0.453
(2.138)
(1.786)
(2.003)
(1.708)
CAPCO
0.330
0.647
(0.616)
(0.800)
(0.606)
(0.728)
Interco
Eliminations
(0.397)
(0.582)
Total
30.657
29.202
0.335
0.248
1.966
1.908 |
 47
2011 Revised Segment Guidance
*Note: totals may not add due to rounding
In millions of dollars
Electronic
Managed
Small
Total
Payment
Technology
Business
All
Corporate
Business
CAPCO
Intercompany
Processing
Solutions
Finance
Other
Activities
Segments
Segment
Eliminations
Total
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
2011 Full Year
Revenue
80.5
81.5
19.2
19.6
20.1
21.1
1.4
1.6
1.0
1.0
122.2
124.8
1.5
1.7
(1.7)
122.0
124.8
Pretax Income (Loss)
5.9
6.3
4.6
4.8
3.8
4.2
(1.3)
(1.3)
(9.7)
(9.7)
3.4
4.1
(2.1)
(2.1)
-
1.2
2.0
Modified EBITDA
adjustments:
Income from tax credits
-
-
-
-
-
-
-
-
-
-
-
-
(1.5)
(1.5)
-
(1.5)
(1.5)
Net change in fair value of
credits in lieu of cash and
notes payable in credits in lieu
of cash
-
-
-
-
-
-
-
-
-
-
-
-
0.1
0.1
-
0.1
0.1
Deferred compensation
expense
-
-
-
-
-
-
-
-
0.4
0.4
0.4
0.4
-
-
-
0.4
0.4
Loss on lease restructure
1.0
1.0
1.0
1.0
1.0
1.0
Interest Expense
-
-
0.1
0.1
1.9
1.9
-
-
-
-
2.0
2.0
1.5
1.5
-
3.5
3.5
Depreciation and
Amortization
1.4
1.4
1.5
1.5
0.9
0.9
0.1
0.1
0.2
0.2
4.1
4.1
-
-
-
4.1
4.1
Modified EBITDA
7.3
7.7
6.2
6.4
6.6
7.0
(1.2)
(1.2)
(8.1)
(8.1)
10.6
11.6
(2.0)
(2.0)
-
8.8
9.6 |
 48
2011 Previous Segment Guidance
*Note: totals may not add due to rounding
In millions of dollars
Electronic
Managed
Small
Payment
Technology
Business
All
Corporate
Processing
Solutions
Finance
Other
Activities
Low
High
Low
High
Low
High
Low
High
Low
High
2011 Full Year
Revenue
80.5
81.5
19.2
19.6
20.1
21.1
1.4
1.6
1.0
1.0
Pretax Income (Loss)
5.9
6.3
4.6
5.0
3.8
4.7
(1.5)
(1.2)
(8.9)
(8.5)
Interest Expense
-
-
0.1
0.1
1.9
2.1
-
-
-
-
Depreciation and Amortization
1.4
1.4
1.5
1.5
0.9
0.9
0.1
0.1
0.2
0.2
EBITDA
7.3
7.7
6.2
6.6
6.6
7.7
(1.4)
(1.1)
(8.7)
(8.3)
Total
Business
CAPCO
Intercompany
Segments
Segment
Eliminations
Total
Low
High
Low
High
Low
High
2011 Full Year
Revenue
122.2
124.8
1.5
1.7
(1.7)
122.0
124.8
Pretax Income (Loss)
3.9
6.3
(2.4)
(2.2)
-
1.5
4.0 |
 49
2012 Segment Guidance
*Note: totals may not add due to rounding
In millions of dollars
Electronic
Managed
Small
Total
Payment
Technology
Business
All
Corporate
Business
CAPCO
Intercompany
Processing
Solutions
Finance
Other
Activities
Segments
Segment
Eliminations
Total
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
2012 Full Year
Revenue
78.7
79.2
19.9
20.4
21.9
23.4
1.5
2.0
0.5
0.5
122.4
125.5
0.7
0.7
(1.2)
121.9
125.0
Pretax Income (Loss)
6.5
7.0
4.9
5.3
4.2
5.8
(1.5)
(1.3)
(9.0)
(8.9)
5.0
7.9
(2.0)
(1.9)
-
3.0
6.0
Modified EBITDA
adjustments:
Income from tax credits
-
-
-
-
-
-
-
-
-
-
-
-
(0.8)
(0.8)
-
(0.8)
(0.8)
Net change in fair value of
credits in lieu of cash and
notes payable in credits in lieu
of cash
-
-
-
-
-
-
-
-
-
-
-
-
0.1
0.1
-
0.1
0.1
Deferred compensation
expense
-
-
-
-
-
-
-
-
0.4
0.4
0.4
0.4
-
-
-
0.4
0.4
Lease loss amortization
-
-
-
-
-
-
-
-
(0.3)
(0.3)
(0.3)
(0.3)
-
-
-
(0.3)
(0.3)
Interest Expense
-
-
0.1
0.1
2.1
2.1
-
-
-
-
2.2
2.2
0.7
0.7
-
2.9
2.9
Depreciation and
Amortization
0.7
0.7
1.5
1.5
1.6
1.6
-
-
0.2
0.2
4.0
4.0
-
-
-
4.0
4.0
Modified EBITDA
7.2
7.7
6.5
6.9
7.9
9.5
(1.5)
(1.3)
(8.7)
(8.6)
11.3
14.2
(2.0)
(1.9)
-
9.3
12.3 |
 50
2012 Previous Segment Guidance
*Note: totals may not add due to rounding
In millions of dollars
Electronic
Managed
Small
Total
Payment
Technology
Business
All
Corporate
Business
CAPCO
Intercompany
Processing
Solutions
Finance
Other
Activities
Segments
Segment
Eliminations
Total
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
2012 Full Year
Revenue
78.7
79.2
19.9
20.4
21.9
23.4
1.5
2.0
0.5
0.5
122.4
125.5
0.7
0.7
(1.2)
121.9
125.0
Pretax Income (Loss)
6.5
7.0
4.9
5.3
4.2
5.8
(1.5)
(1.3)
(9.1)
(8.9)
4.8
8.0
(2.0)
(1.9)
-
2.8
6.1
Interest Expense
-
-
0.1
0.1
2.1
2.1
-
-
-
-
Depreciation and
Amortization
0.7
0.7
1.5
1.5
1.6
1.6
-
-
0.2
0.2
EBITDA
7.2
7.7
6.4
6.9
7.9
9.5
(1.5)
(1.1)
(9.0)
(8.7) |
 Going Forward: 2011
Barry Sloane -
CEO |
 Questions & Answers |
 Addendum |
 54
Pretax
Income
(Loss)
Income
from Tax
Credits
Net Change in Fair
Value of Credits in
Lieu of Cash and
Notes Payable in
Credits in Lieu of
Cash
Deferred
Compensation
Expense
Other than
Temporary
Decline in
Value of
Investments
Interest
Expense
Depreciation
and
amortization
Q3 2011
Modified
EBITDA
Electronic Payment Processing
1.240
-
-
0.009
-
-
0.379
1.628
Managed Technology Solutions
1.279
-
-
0.008
-
0.025
0.335
1.647
Small Business Finance
0.874
-
-
0.010
-
0.438
0.254
1.576
All Other
(0.304)
-
-
0.008
-
-
0.020
(0.276)
Corporate Activities
(2.138)
-
-
0.105
-
-
0.030
(2.003)
CAPCO
(0.616)
(0.324)
0.046
-
-
0.285
0.003
(0.606)
Total
0.335
(0.324)
0.046
0.140
-
0.747
1.021
1.966
Modified EBITDA Reconciliation
Modified EBITDA Reconciliation from Pretax Income (Loss)
For the three months ended September 30, 2011
In millions of dollars
*Note: totals may not add due to rounding |
 55
Pretax
Income
(Loss)
Income
from Tax
Credits
Net Change in Fair
Value of Credits in
Lieu of Cash and
Notes Payable in
Credits in Lieu of
Cash
Deferred
Compensation
Expense
Other than
Temporary
Decline in
Value of
Investments
Interest
Expense
Depreciation
and
amortization
Q3 2010
Modified
EBITDA
Electronic Payment Processing
1.347
-
-
-
-
0.002
0.396
1.745
Managed Technology Solutions
1.277
-
-
-
-
0.031
0.455
1.763
Small Business Finance
0.404
-
-
-
-
0.403
0.191
0.998
All Other
(0.194)
-
-
-
-
-
0.032
(0.162)
Corporate Activities
(1.786)
-
-
-
-
-
0.078
(1.708)
CAPCO
(0.800)
(0.621)
0.044
-
0.060
0.586
0.003
(0.728)
Total
0.248
(0.621)
0.044
-
0.060
1.022
1.155
1.908
Modified EBITDA Reconciliation
Modified EBITDA Reconciliation from Pretax Income (Loss)
For the three months ended September 30, 2010
In millions of dollars
*Note: totals may not add due to rounding |
 Pretax
Income
(Loss)
Income
from
Tax
Credits
Net Change in Fair
Value of Credits in Lieu
of Cash and Notes
Payable in Credits in
Lieu of Cash
Deferred
Compensation
Expense
Other than
Temporary
Decline in
Value of
Investments
Interest
Expense
Depreciation
and
amortization
Q3 YTD
2011
Modified
EBITDA
Electronic Payment Processing
3.788
-
-
0.024
-
-
1.140
4.952
Managed Technology Solutions
3.506
-
-
0.019
-
0.080
1.065
4.670
Small Business Finance
3.182
-
-
0.025
-
1.520
0.670
5.397
All Other
(0.942)
-
-
0.019
-
-
0.061
(0.862)
Corporate Activities
(6.517)
-
-
0.248
-
-
0.135
(6.134)
CAPCO
(1.713)
(0.954)
(0.030)
-
(0.051)
1.009
0.009
(1.730)
Total
1.304
(0.954)
(0.030)
0.335
(0.051)
2.609
3.080
6.293
Modified EBITDA Reconciliation
Modified EBITDA Reconciliation from Pretax Income (Loss)
For the nine months ended September 30, 2011
In millions of dollars
*Note: totals may not add due to rounding
56 |
 57
Pretax
Income
(Loss)
Income
from
Tax
Credits
Net Change in Fair
Value of Credits in
Lieu of Cash and
Notes Payable in
Credits in Lieu of
Cash
Deferred
Compensation
Expense
Other than
Temporary
Decline in
Value of
Investments
Interest
Expense
Depreciation
and
amortization
Q3 YTD 2010
Modified
EBITDA
Electronic Payment Processing
3.799
-
-
-
-
0.002
1.209
5.010
Managed Technology Solutions
3.402
-
-
-
-
0.077
1.412
4.891
Small Business Finance
0.851
-
-
-
-
1.149
0.597
2.597
All Other
(0.757)
-
-
-
0.010
-
0.110
(0.637)
Corporate Activities
(5.041)
-
-
-
-
-
0.249
(4.792)
CAPCO
(2.366)
(1.923)
(0.130)
-
0.065
2.078
0.009
(2.267)
Total
(0.112)
(1.923)
(0.130)
-
0.075
3.306
3.586
4.802
Modified EBITDA Reconciliation
Modified EBITDA Reconciliation from Pretax Income (Loss)
For the nine months ended September 30, 2010
In millions of dollars
*Note: totals may not add due to rounding |