Velocity Asset Management, Inc. (AMEX: JVI) ("Velocity"), which
collects delinquent consumer receivables using an outsourced
litigation model, today announced operating results for the three-
and nine-month periods ended September 30, 2008.
Velocity reported Q3 '08 operating income increased 23.4% to
$1.84 million and income from continuing operations rose 91.4% to
$1,005,000, versus Q3 2007. Velocity reported net income of
$724,000 compared to net income of $384,600 in Q3 2007, an 88.3%
increase. After payment of $345,000 in preferred dividends,
Velocity reported Q3 net income attributable to common shareholders
of $379,000, or $0.02 per diluted share, compared to net income of
$39,600, or $0.01 per diluted share, in the prior year period.
Velocity's Q3 2008 revenue decreased by 3.1% percent due to a
decrease in acquisitions of consumer portfolios, which was offset
by a 22.2% decrease in operating expenses and a 40.6% decrease in
interest expense. Velocity reported a $280,700 loss in discontinued
operations as a result of an additional impairment charge on a
Florida investment property.
"In the face of challenging capital markets and concern about
the consumer economy, we were extremely pleased with Velocity's
performance during the 2008 third quarter," stated Velocity
President and CEO Jack Kleinert. "We believe that the current
market conditions have created a very attractive environment for
acquiring charged-off consumer receivables for companies with a
disciplined pricing methodology and a long-term legal approach to
collections."
As of September 30, 2008, the Company's Velocity Investments
subsidiary had $9.8 million outstanding, and $12.7 million in
availability on its $22.5 million senior credit facility with Wells
Fargo Foothill, Inc. Velocity continues to wind-down the
discontinued operations of its J. Holder and VOM subsidiaries and
expects to complete this process in the next 12 months. These
divestitures will allow management to focus exclusively on its
core, consumer receivables business, Velocity Investments.
About Velocity Asset Management, Inc.
Velocity Asset Management, Inc., through its wholly owned
subsidiary, Velocity Investments, LLC, is focused on the purchase
and collection of distressed consumer receivables, principally
through an outsourced litigation model. The Company purchases
consumer receivable portfolios that are of "litigation quality." By
focusing on the quality of the portfolio prior to purchase,
Velocity aims to diminish its risk and improve its overall
collection rate as a percentage of principal balance. For more
information, visit www.velocitycollect.com.
This Press Release contains or may contain forward-looking
statements and information that are based upon beliefs of and
information currently available to the Company's management as well
as estimates and assumptions made by the Company's management. When
used herein the words ''anticipate," "believe," "estimate,"
"expect," "future," "intend," "plan" and similar expressions as
they relate to the Company or the Company's management identify
forward-looking statements. Such statements reflect the current
view of the Company with respect to future events and are subject
to risks, uncertainties and assumptions relating to the Company's
operations and results of operations and any businesses that may be
acquired by the Company, including future collections, increased
revenue, increased operating income and consumer receivables under
management at the Company's Velocity Investments subsidiary. Should
one or more of these risks or uncertainties materialize, or should
the underlying assumptions prove incorrect, actual results may
differ significantly from those anticipated, believed, estimated,
intended or planned.
VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2008 2007
------------ ------------
(Unaudited)
ASSETS
Cash and cash equivalents $ 33,992 $ 162,180
Consumer receivables, net 46,152,417 46,971,014
Property and equipment, net of accumulated
depreciation 47,347 64,420
Deferred income tax asset, net 83,600 98,600
Security deposits 30,224 30,224
Other assets (including $0 and $115,146
employee loan to a related party at
September 30, 2008 and December 31, 2007,
respectively) 351,035 487,071
Assets of discontinued operations 5,730,328 6,793,319
------------ ------------
Total assets $ 52,428,943 $ 54,606,828
============ ============
LIABILITIES AND STOCKHOLDERS? EQUITY
LIABILITIES
Accounts payable and accrued expenses $ 477,590 $ 552,269
Estimated court and media costs 5,742,939 7,374,212
Line of credit 9,792,567 14,429,138
Notes payable 400,000 ?
Notes payable to related parties 740,000 200,000
Convertible subordinated notes 2,350,000 2,350,000
Income taxes payable 1,605,919 820,222
Liabilities from discontinued operations
(including notes payable to related
parties of $2,300,000) 5,490,675 4,374,441
------------ ------------
Total liabilities 26,599,690 30,100,282
------------ ------------
STOCKHOLDERS? EQUITY
Series A 10% convertible preferred stock,
$0.001 par value, 10,000,000 shares
authorized, 1,380,000 shares issued and
outstanding (liquidation preference of
$13,800,000) 1,380 1,380
Common stock, $0.001 par value, 40,000,000
shares authorized, 17,875,987 and
17,066,821 shares issued and outstanding,
respectively 17,875 17,066
Additional paid-in-capital 25,921,639 25,243,944
Accumulated deficit (111,641) (755,844)
------------ ------------
Total stockholders? equity 25,829,253 24,506,546
------------ ------------
Total liabilities and stockholders?
equity $ 52,428,943 $ 54,606,828
============ ============
VELOCITY ASSET MANAGEMENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------------------ ------------------------
2008 2007 2008 2007
----------- ----------- ----------- -----------
REVENUES
Income on consumer
receivables $ 3,447,831 $ 3,554,441 $10,942,757 $ 9,901,507
Other income 138 3,153 3,334 27,176
----------- ----------- ----------- -----------
Total revenues 3,447,969 3,557,594 10,946,091 9,928,683
----------- ----------- ----------- -----------
OPERATING EXPENSES
Professional fees
(including fees paid
to related parties
of $197,436 and
$257,311 and $634,081
and $868,761 for
the three and nine
month periods
ended September 30,
2008 and 2007,
respectively) 1,246,701 1,313,876 3,817,408 3,438,740
General and
administrative
expenses 358,969 751,108 1,557,351 2,156,741
----------- ----------- ----------- -----------
Total operating
expenses 1,605,670 2,064,984 5,374,759 5,595,481
----------- ----------- ----------- -----------
Income from
operations 1,842,299 1,492,610 5,571,332 4,333,202
Interest expense
(including interest
incurred to related
parties of $21,435 and
$3,500 and $28,435 and
$10,500 for the three
and nine month periods
ended September 30,
2008 and 2007,
respectively) (271,286) (456,678) (880,064) (1,196,045)
----------- ----------- ----------- -----------
Income from continuing
operations before
provision for income
taxes 1,571,013 1,035,932 4,691,268 3,137,157
Provision for income
taxes 566,210 510,945 1,888,038 1,307,720
----------- ----------- ----------- -----------
Income from continuing
operations 1,004,803 524,987 2,803,230 1,829,437
Loss from discontinued
operations (including
fees paid and interest
incurred to related
parties of $-0- and
$4,531 and $-0- and
$4,723 and $58,778 and
$58,956 and $175,056
and $164,559 for the
three and nine months
ended September 30, 2008
and 2007, respectively
and net of tax benefit
of $146,876 and $101,166
and $442,430 and $195,330
for the three and nine
months ended September
30, 2008 and 2007 (280,730) (140,378) (1,124,027) (269,288)
----------- ----------- ----------- -----------
Net income 724,073 384,609 1,679,203 1,560,149
Preferred dividends (345,000) (345,000) (1,035,000) (1,035,000)
----------- ----------- ----------- -----------
Net income attributable
to common
stockholders $ 379,073 $ 39,609 $ 644,203 $ 525,149
=========== =========== =========== ===========
Earnings (loss) per
common share:
Income from continuing
operations:
Basic $ 0.04 $ 0.01 $ 0.10 $ 0.05
Diluted $ 0.04 $ 0.01 $ 0.10 $ 0.04
Discontinued
operations:
Basic $ (0.02) $ (0.01) $ (0.06) $ (0.02)
Diluted $ (0.02) $ (0.01) $ (0.06) $ (0.02)
Net income:
Basic $ 0.02 $ ? $ 0.04 $ 0.03
Diluted $ 0.02 $ ? $ 0.04 $ 0.03
Average common shares
- basic 17,875,987 16,225,517 17,472,117 16,176,207
Average common shares
- diluted 17,875,987 18,001,859 17,530,210 17,869,236
CONTACT: Jim Mastriani CFO Velocity Asset Management, Inc.
732/556-9090 Email Contact
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