CCUR - CCUR Holdings Builds MCA Operations Momentum; Reports Earnings Per Share of $0.31 for Fiscal Year 2020 Second Quarter & Operating Cash Flow of $1.5 Million
DULUTH, GA / ACCESSWIRE / February 5, 2020 / CCUR Holdings, Inc. (OTCQB:CCUR) today reported net income attributable to its stockholders of $2,737,000, or $0.31 per share, for the second quarter of fiscal year 2020. During the prior fiscal year period, the Company reported a net loss of $1,530,000, or $0.17 per share.
Revenue for the quarter increased to $1,787,000 compared to $370,000 during the prior fiscal year period. The revenue increase is primarily due to Merchant Cash Advance (MCA) revenue of $1,440,000 compared to $185,000 in the second quarter of fiscal year 2019. Revenue from interest on loans increased 88% to $347,000. Other interest, dividend and investment income for the period totaled $2,361,000 compared to a loss of $639,000 in the prior fiscal year second quarter.
"We had another strong quarter and have now generated net income for four consecutive quarters," said Wayne Barr, President and CEO. "Our initial MCA business segment strategy is now fully deployed, and I believe our marketing efforts and the organizational infrastructure are catalysts for building on our current success. As we enter the second half of fiscal year 2020, the results from our business plan are enabling our Board to continue to evaluate capital allocation alternatives, which, as previously disclosed, could potentially include a limited return of capital to stockholders through a special distribution, while we continue to execute our growth strategy."
Selling, General and Administrative expenses for the second quarter of fiscal year 2020 increased to $1,307,000 compared to $792,000. The increase in these operating expenses reflects the investments the Company made to execute on its MCA operations segment strategy and focus on business development. As a result of these investments, management believes it has put in place the team and resources to meet its growth objectives. Total operating expenses for the second quarter of fiscal year 2020 were $1,196,000 and included a $180,000 provision for MCA losses. Operating cash flow for the second quarter of fiscal year 2020 was $1,543,000.
The Company's operating income for the second quarter of fiscal year 2020 was $591,000 as compared to an operating loss of $917,000 for the second quarter of fiscal year 2019. Total working capital as of December 31, 2019 was $50.2 million as compared with $48.8 million as of June 30, 2019.
Six Month Results
Revenue for the six months ended December 31, 2019 was $3,518,000 compared to $536,000 for the six months ended December 31, 2018. The revenue increase reflects the growth of the Company's MCA business, which was $2,888,000 compared to $316,000 for the prior fiscal year six-month period. Revenue from interest on loans was $630,000 for the first six months of fiscal year 2020, compared to $220,000 for the first six months of fiscal year 2019. Other interest income, realized and unrealized gains on investments, net for the first six-months of fiscal year 2020 totaled $6,043,000 compared to a $50,000 loss in the comparable prior fiscal year period. The Company reported net income attributable to its stockholders of $6,143,000, or $0.70 per share, for the first six months of fiscal year 2020, compared to a net loss of $1,533,000, or $0.17 per share, for the comparable prior fiscal year period. The Company generated operating cash flow of $2,080,000 for the first six months of fiscal year 2020.
On December 10, 2019, the Company announced that its Board of Directors initiated a review of capital allocation alternatives to maximize stockholder value, including a potential limited return of capital to stockholders through a special distribution. This review is continuing and there can be no assurances given regarding the outcome and timing of the review process.
About CCUR Holdings, Inc.
CCUR Holdings, Inc. ("CCUR") operates MCA and real estate business segments through its subsidiaries Recur Holdings LLC and LM Capital Solutions, LLC and actively pursues other business opportunities to maximize the value of its assets through evaluation of additional operating businesses or assets for acquisition. 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 as other risks listed in the Company's Form 10-K filed on August 28, 2019 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.
(Tables to follow)
CCUR HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Amounts in thousands, except share and per share data)
| December 31, 2019 |
| June 30, 2019 |
ASSETS |
Current assets: |
Cash and cash equivalents |
| $ |
| 12,043 |
| $ |
| 8,083 |
Equity securities, fair value |
| 5,639 |
| 7,405 |
Fixed maturity securities, available-for-sale, fair value |
| 22,776 |
| 20,393 |
Current maturities of mortgage and commercial loans receivable |
| 637 |
| 3,184 |
Advances receivable, net |
| 9,353 |
| 9,389 |
Prepaid expenses and other current assets |
| 2,202 |
| 1,779 |
Total current assets |
| 52,650 |
| 50,233 |
Land investment |
| 3,546 |
| 3,265 |
Deferred income taxes, net |
| 237 |
| 475 |
Mortgage and commercial loans receivable, net of current maturities |
| 6,490 |
| 3,680 |
Definite-lived intangibles, net |
| 2,671 |
| 2,910 |
Goodwill |
| 1,260 |
| 1,260 |
Other long-term assets, net |
| 580 |
| 651 |
Total assets |
| $ |
| 67,434 |
| $ |
| 62,474 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
Current liabilities: |
Accounts payable and accrued expenses |
| $ |
| 886 |
| $ |
| 660 |
Notes payable, current |
| 1,600 |
| - |
Contingent consideration, current |
| - |
| 750 |
Total current liabilities |
| 2,486 |
| 1,410 |
Long-term liabilities: |
Pension liability |
| 4,086 |
| 4,136 |
Contingent consideration, long-term |
| 2,690 |
| 2,340 |
Long-term debt |
| - |
| 1,600 |
Other long-term liabilities |
| 535 |
| 632 |
Total liabilities |
| 9,797 |
| 10,118 |
Stockholders' equity: |
Shares of common stock, par value $0.01; 14,000,000 authorized; 8,761,156 and 8,756,156 issued and outstanding at December 31, 2019, and June 30, 2019, respectively |
| 87 |
| 87 |
Capital in excess of par value |
| 209,076 |
| 208,881 |
Non-controlling interest |
| 1,214 |
| 762 |
Accumulated deficit |
| (144,652 |
| ) |
| (150,795 |
| ) |
Accumulated other comprehensive loss |
| (8,088 |
| ) |
| (6,579 |
| ) |
Total stockholders' equity |
| 57,637 |
| 52,356 |
Total liabilities, non-controlling interest, and stockholders' equity |
| $ |
| 67,434 |
| $ |
| 62,474 |
CCUR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)
| Three Months Ended December 31, |
| Six Months Ended December 31, |
| 2019 |
| 2018 |
| 2019 |
| 2018 |
Revenues: |
Merchant cash advance fees and other revenue |
| $ |
| 1,440 |
| $ |
| 185 |
| $ |
| 2,888 |
| $ |
| 316 |
Interest on mortgage and commercial loans |
| 347 |
| 185 |
| 630 |
| 220 |
Total revenues |
| 1,787 |
| 370 |
| 3,518 |
| 536 |
Operating expenses: |
Selling, general and administrative expense |
| 1,307 |
| 792 |
| 2,641 |
| 1,627 |
Change in fair value of contingent consideration |
| (410 |
| ) |
| - |
| (400 |
| ) |
| - |
Amortization of purchased intangibles |
| 119 |
| - |
| 239 |
| - |
Provision for credit losses on advances |
| 180 |
| 495 |
| 396 |
| 495 |
Total operating expenses |
| 1,196 |
| 1,287 |
| 2,876 |
| 2,122 |
Operating income (loss) |
| 591 |
| (917 |
| ) |
| 642 |
| (1,586 |
| ) |
Other interest income |
| 2,145 |
| 890 |
| 4,282 |
| 1,735 |
Realized gain on investments, net |
| 843 |
| - |
| 1,919 |
| 201 |
Unrealized loss on equity securities, net |
| (627 |
| ) |
| (1,529 |
| ) |
| (158 |
| ) |
| (1,986 |
| ) |
Other income, net |
| 65 |
| 26 |
| 66 |
| 105 |
Income (loss) before income taxes |
| 3,017 |
| (1,530 |
| ) |
| 6,751 |
| (1,531 |
| ) |
(Benefit) Provision for income taxes |
| (17 |
| ) |
| - |
| 156 |
| 2 |
Net income (loss) |
| 3,034 |
| (1,530 |
| ) |
| 6,595 |
| (1,533 |
| ) |
Less: Net income attributable to non-controlling interest |
| (297 |
| ) |
| - |
| (452 |
| ) |
| - |
Net income (loss) attributable to CCUR Holdings, Inc. stockholders |
| $ |
| 2,737 |
| $ |
| (1,530 |
| ) |
| $ |
| 6,143 |
| $ |
| (1,533 |
| ) |
Earnings (loss) per share attributable to CCUR Holdings, Inc. stockholders |
Basic |
| $ |
| 0.31 |
| $ |
| (0.17 |
| ) |
| $ |
| 0.70 |
| $ |
| (0.17 |
| ) |
Diluted |
| $ |
| 0.31 |
| $ |
| (0.17 |
| ) |
| $ |
| 0.70 |
| $ |
| (0.17 |
| ) |
Weighted average shares outstanding - basic |
| 8,758,710 |
| 9,034,368 |
| 8,757,433 |
| 9,069,947 |
Weighted average shares outstanding - diluted |
| 8,840,870 |
| 9,034,368 |
| 8,825,583 |
| 9,069,947 |
CCUR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)
| Three Months Ended |
| December 31, 2019 |
| September 30, 2019 |
Revenues: |
Merchant cash advance fees and other revenue |
| $ |
| 1,440 |
| $ |
| 1,448 |
Interest on mortgage and commercial loans |
| 347 |
| 283 |
Total revenues |
| 1,787 |
| 1,731 |
Operating expenses: |
Selling, general and administrative expense |
| 1,307 |
| 1,334 |
Change in fair value of contingent consideration |
| (410 |
| ) |
| 10 |
Amortization of purchased intangibles |
| 119 |
| 120 |
Provision for credit losses on advances |
| 180 |
| 216 |
Total operating expenses |
| 1,196 |
| 1,680 |
Operating income |
| 591 |
| 51 |
Other interest income |
| 2,145 |
| 2,137 |
Realized gain on investments, net |
| 843 |
| 1,076 |
Unrealized (loss) gain on equity securities, net |
| (627 |
| ) |
| 469 |
Other income, net |
| 65 |
| 1 |
Income before income taxes |
| 3,017 |
| 3,734 |
(Benefit) Provision for income taxes |
| (17 |
| ) |
| 173 |
Net income |
| 3,034 |
| 3,561 |
Less: Net income attributable to non-controlling interest |
| (297 |
| ) |
| (155 |
| ) |
Net income attributable to CCUR Holdings, Inc. stockholders |
| $ |
| 2,737 |
| $ |
| 3,406 |
Earnings per share attributable to CCUR Holdings, Inc. stockholders |
Basic |
| $ |
| 0.31 |
| $ |
| 0.39 |
Diluted |
| $ |
| 0.31 |
| $ |
| 0.39 |
Weighted average shares outstanding - basic |
| 8,758,710 |
| 8,756,156 |
Weighted average shares outstanding - diluted |
| 8,840,870 |
| 8,809,572 |
Contact:
Michael Polyviou
mpolyviou@evcgroup.com
732-933-2755
SOURCE: CCUR Holdings, Inc.
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