UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number 0-14888
PRIME CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3347311
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification no.)
10275 West Higgins Road, Suite 200, Rosemont, Illinois 60018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 294-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
As of June 30, 1999, there were 4,467,840 shares of common stock outstanding.
PRIME CAPITAL CORPORATION AND SUBSIDIARIES
INDEX
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations --
Three and Six Months Ended
June 30, 1999 and 1998 3
Consolidated Balance Sheets --
June 30, 1999 and December 31, 1998 4
Consolidated Statements of Cash Flows --
Six Months Ended June 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7-10
PART II. OTHER INFORMATION 10
SIGNATURES 11
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE> PRIME CAPITAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<CAPTION> Three Months Ended June 30, Six Months Ended June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues:
Fee income 2,393,665 1,501,217 4,626,438 2,432,953
Direct financing leases
and loans 227,649 486,929 715,234 1,272,954
Rentals on operating leases 870,308 1,003,688 1,727,030 1,304,124
Interest income 456,944 258,232 898,133 481,537
Other income 228,893 587,018 402,254 2,084,778
--------- --------- --------- ---------
Total revenues 4,177,459 3,837,084 8,369,089 7,576,346
Expenses:
Depreciation on leased
equipment 681,170 858,355 1,331,030 1,050,670
Interest 723,308 928,861 1,542,377 1,523,437
Provision for credit losses 50,000 150,000 100,000 150,000
Selling, general and
administrative 2,436,352 2,356,896 4,848,906 4,569,363
--------- --------- --------- ---------
Total expenses 3,890,830 4,294,112 7,822,313 7,293,470
Income (loss) before income
taxes 286,629 (457,028) 546,776 282,876
Income taxes - - - -
-------- --------- --------- ---------
Net Income 286,629 (457,028) 546,776 282,876
========= ========= ========= =========
Basic earnings per share $ 0.05 (0.12) 0.10 0.04
========= ========= ========= ========
Dilutive earnings per share $ 0.05 (0.12) 0.09 0.03
========= ========= ========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE> PRIME CAPITAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
<CAPTION> June 30, December 31,
ASSETS 1999 1998
(Unaudited) (Audited)
<S> <C> <C>
Cash and cash equivalents $ 1,837,640 2,265,780
Receivables:
Operating lease rentals 67,009 143,371
Inventory finance receivables 8,786,795 5,659,700
Other 4,570,266 4,386,922
Net investment in direct financing
leases and loans 4,191,178 26,712,504
Investment in securitized receivables,
including restricted cash 17,374,578 12,388,932
Leased equipment, net of accumulated depreciation 10,012,979 10,217,831
Deposits on equipment 0 91,082
Equipment and furniture, net of accumulated
depreciation 574,357 715,326
Other assets 1,747,946 1,554,105
---------- ----------
Total assets $49,162,748 64,135,553
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $19,262,742 27,645,329
Accounts payable for equipment 8,637,411 16,106,095
Accrued expenses and other liabilities 11,623,407 11,586,839
Deposits and advances 2,829,937 2,455,803
Subordinated debt 4,539,502 5,000,000
--------- ----------
Total liabilities 46,892,999 62,794,066
---------- ----------
Stockholders' equity
Preferred stock, $100 par value:
authorized 250,000 shares, issued 25,000
shares 2,500,000 2,500,000
Common stock, $0.05 par value:
authorized 10,000,000 shares; issued
4,467,840 and 4,434,598 shares in
1999 and 1998, respectively 223,392 223,392
Additional paid-in capital 10,012,967 9,518,356
Accumulated deficit (10,166,810) (10,600,461)
Treasury stock, at cost, 94,200 shares
at June 30, 1999 and 1998 (299,800) (299,800)
---------- ----------
Total stockholders' equity 2,269,749 1,341,487
---------- ----------
Total liabilities and stockholders' equity $49,162,748 64,135,553
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<TABLE> PRIME CAPITAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION> Six Months Ended June 30,
1999 1998
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 546,776 282,876
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation of leased equipment 1,331,031 1,050,670
Other depreciation and amortization 372,761 125,379
Amortization of debt financing fees 60,781 60,782
Non-cash gain on securitization of receivables (908,319) (1,165,196)
Provision for credit losses 100,000 150,000
Changes in assets and liabilities:
Other receivables (4,184,309) 2,156,621
Other assets (401,275) 98,218
Accrued expenses and other liabilities 1,456,922 (4,458,951)
---------- ---------
Net cash provided by (used in) operating activities (1,625,632) (1,699,601)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cost of equipment acquired for lease (96,173,558) (81,275,937)
Customer deposits and payments on direct
finance leases and loans 4,859,728 5,530,307
Purchase of equipment and furniture (1,026) (128,777)
Investment in inventory finance receivables (3,127,095) (2,563,317)
Proceeds from sales of finance receivables 105,817,465 69,790,892
----------- ----------
Net cash provided by (used in) investing activities 11,375,514 (8,646,832)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options 0 7,687
Preferred stock dividends (113,126) (113,125)
Other liabilities (1,682,309) (929,592)
Net increase (decrease) in notes payable (8,382,587) 7,620,600
----------- ---------
Net cash provided by (used in) financing activities (10,178,022) 6,585,570
Decrease in cash and cash equivalents (428,140) (2,831,271)
Cash and cash equivalents:
Beginning of period 2,265,780 3,572,553
---------- ---------
End of period $ 1,837,640 741,282
========== =========
Cash paid during the year for interest $ 1,601,582 1,454,889
========== =========
</TABLE>
See accompanying notes to consolidated financial statements.
PRIME CAPITAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Basis of Presentation
The interim financial statements have been prepared by Prime Capital
Corporation ("the Company" or "Prime Capital"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission
applicable to quarterly reports on Form 10-QSB. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations. In the opinion of
management, all adjustments which are of a normal recurring nature and are
necessary for a fair presentation have been included. However, results for
interim periods are not necessarily indicative of the results that may be
expected for a full year. It is suggested that these financial statements be
read in conjunction with the consolidated financial statements and related
notes and schedules included in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1998.
Certain reclassifications have been made to the 1998 financial statements to
conform to the classifications used in the June 30, 1999 financial
statements. These reclassifications had no effect on net income or
stockholders' equity as previously reported.
Item 2. Management's Discussion and Analysis of Financial Condition and
===============================================================
Results of Operations
=====================
Prime Capital Corporation is a diversified specialty finance company that
originates, aggregates and services loans, installment purchase agreements and
leases ("Financial Contracts") primarily in the software, specialty vehicle,
communications and medical industries. Prime Capital Corporation principally
operates through its wholly-owned subsidiary, Prime Leasing, Inc. and has
several wholly-owned subsidiaries including special purpose bankruptcy remote
corporations that have been organized in order to complete the sale of certain
asset-backed securities (collectively referred to as "Prime" or the "Company").
Prime develops new business through formal vendor finance programs with
equipment manufacturers, dealers and distributors and, to a lesser degree,
directly with end users. Prime seeks to become an effective business partner
with its clients by creating comprehensive programs and structures to develop,
promote and administer customer financing programs. Prime funds its loan and
lease receivables primarily by issuing asset-backed securities to institutional
investors.
Headquartered in Rosemont, Illinois, Prime's target markets are those which are
underserved and underdeveloped, with the objective of developing niche markets
that combine high growth potential with credit and collateral characteristics
consistent with Prime's underwriting standards. Currently, management believes
that the specialty vehicle and communications industries offer strong
opportunity for accelerated growth.
Prime originates business through formal alliances with major vendors,
distributors and others. As part of a re-engineering program that was initiated
in 1997, Prime strengthened its operating platform processes by implementing
a Time Based Response ("TBR") strategy that allows Prime to provide rapid and
efficient execution of transactions. Also in 1997, Prime began its Inventory
Floorplan and Leasing Programs for the specialty vehicle industry, with a
division known as Capital Alliance Financial Services ("Capital Alliance").
The specialty vehicle industry includes hearses, limousines, and shuttle buses,
among other commercial vehicles.
Prime differentiates itself through its sales culture, which continues to focus
more on relationships rather than transactions. Salespeople are continually
involved in assessing the needs of their clients, and the structuring of
flexible financing options to promote the sale of its vendor's product.
The operating results of Prime Capital are primarily affected by the following
factors: (1) the volume of Financial Contract activations, (2) the amount and
timing of Financial Contract sales, (3) the level of operating expenditures
required to originate and service the volume of Financial Contract activations
and sales, and (4) credit losses.
Sales and Securitizations of Finance Receivables During the Six Months
- ----------------------------------------------------------------------
Ended June 30, 1999 and 1998
- ----------------------------
The following table summarizes the sale and securitization of Financial
Contracts completed during the six months ended June 30, 1999 and 1998.
<TABLE>
<CAPTION> Six Months Ended June 30,
(Amounts in thousands)
Description Date 1999 1998
<S> <C> <C> <C>
- --------------------- --------------- --------- ---------
True Sale Facility Various $ 59,731 19,255
Prime Finance
Corporations 1999-A-1 May, 1999
and 1999-A-2 12,014 0
Prime Finance
Corporations 1998-A-1 March, 1998
and 1998-A-2 0 38,937
------- -------
Subtotal 71,745 58,192
Other sale transactions 37,054 15,767
------- -------
Total $108,799 73,959
======= =======
</TABLE>
In May 1999, the Company completed the sale of Financial Contracts by issuing
asset-backed notes. The notes were issued through the Company's wholly-
owned subsidiaries, Prime Finance Corporation 1999-A-1 and Prime Finance
Corporation 1999-A-2.
The initial principal amount of the notes issued by PFC 1999A totaled $74.0
million, which included $57.9 million of receivables related to Financial
Contracts previously sold through the Company's true sale facility and
$4.1 million of proceeds from the assignment of rentals and residual values
of operating leases. Proceeds attributable to operating lease contracts
are reported as debt in the Company's financial statements.
In March 1998, equipment lease-receivables backed pay through notes were
jointly issued by Prime Finance Corporation 1998-A-1 and Prime Finance
Corporation 1998-A-2 (collectively referred as "PFC-1998A"), both wholly
owned subsidiaries of the Company.
The initial principal amount of the notes issued by PFC 1998A totaled $106.1
million, which included $62.2 million of receivables related to the
consolidation of certain securitizations completed in prior years, $5.0
million that represents the pre-funding of finance receivables that are to be
sold at a later date, and $1.8 million of proceeds from the assignment of
rentals and residual values of operating leases. Proceeds attributable to
operating lease contracts are reported as debt in the Company's financial
statements.
Results of Operations For The Six Months Ended June 30, 1999 and 1998
=====================================================================
The Company activated financial contracts totaling $87.2 million in 1999, an
increase from the $77.8 million in 1998.
Fee income increased $2.2 million, or 90.2%, to $4.6 million in 1999
from $2.4 million in 1998. Fee income includes gain from the sale and
securitization of financial contracts totaling $3.6 million in 1999 and $1.7
million in 1998. The 1998 gain from sale of contracts has been reduced by a
$745,000 loss attributable to the $62.2 million of receivables related to the
consolidation of certain securitizations completed in prior years, and excludes
any gain or loss attributable to the $5.0 million of prefunded receivables.
Direct financing lease income decreased $0.6 million, or 43.8%, to $0.7
million in 1999 from $1.3 million in 1998. The decrease is due to shorter
holding period of financial contracts and lower average contract balances held
in the warehouse.
Rentals on leased equipment increased $0.4 million, or 32.4%, to $1.7
million in 1999 from $1.3 million in 1998. Depreciation of leased equipment
increased $0.2 million, to $1.3 million in 1999 from $1.1 million in 1998.
Interest income increased $416,000, or 86.5%, to $898,000 in 1999 from
$482,000 in 1998. The increase primarily relates to higher average investment
in securitized receivables.
Other income decreased $1.6 million, or 80.7%, to $0.4 million in 1999 from
$2.0 million in 1998. Other income for March 1998, includes a $1.9 million
gain from the sale of warrants that were received by the Company in connection
with originating a lease transaction.
Interest expense remained constant at $1.5 million in 1999 as compared to 1998.
Provision for credit losses was $100,000 and $150,000 in 1999 and 1998,
respectively. (See "Credit Losses").
Selling, general and administrative expenses increased $0.3 million, or
6.1%, to $4.9 million in 1999 from $4.6 million in 1998. Employee compensation
and related costs, including commissions, accounted for 67.6% and 61.7% of total
selling, general and administrative expenses in 1999 and 1998, respectively.
The Company had 74 and 71 employees at June 30, 1999 and 1998, respectively.
Selling, general and administrative expenses have increased primarily due to
the hiring of additional employees and the increase in the serviced financial
contract portfolio.
Results of Operations For The Three Months Ended June 30, 1999 and 1998
=======================================================================
The Company activated financial contracts totaling $37.5 million in 1999,
a decrease of 18.7% from the $44.5 million activated in 1998.
Fee income increased $0.9 million, to $2.4 million in 1999 from $1.5
million in 1998. Fee income includes gain from the sale and securitization of
financial contracts totaling $1.8 million in 1999 and $1.1 million in 1998.
Direct financing lease income decreased $259,000, or 53.2%, to $228,000
in 1999 from $487,000 in 1998. The decrease is due to shorter holding period
of financial contracts and lower average contract balances held in the
warehouse.
Rentals on leased equipment decreased $0.1 million, to $0.9 million in
1999 from $1.0 million in 1998. Depreciation of leased equipment decreased
$177,000, to $681,000 in 1999 from $858,000 in 1998.
Interest income increased $199,000, or 77.0%, to $457,000 in 1999 from
$258,000 in 1998. The increase primarily relates to higher average
investment in securitized receivables.
Other income decreased $358,000, or 61.0%, to $229,000 in 1999 from
$587,000 in 1998. Other income for June 1998, includes a $503,000 gain
from the sale of warrants that were received by the Company in connection
with originating a lease transaction.
Interest expense decreased $206,000, or 22.1%, to $723,000 in 1999 from
$929,000 in 1998, primarily due to lower average borrowings under the
Company's warehouse credit facilities.
Provision for credit losses was $50,000 and $150,000 in 1999 and 1998,
respectively. (See "Credit Losses").
Selling, general and administrative expenses remained constant at $2.4 million
in 1999 as compared to 1998. Employee compensation and related costs,
including commissions, accounted for 66.7% and 63.8% of total selling,
general and administrative expenses in 1999 and 1998, respectively.
The Company had 74 and 71 employees at June 30, 1999 and 1998, respectively.
Credit Losses
- -------------
An allowance for credit losses is initially established when Financial
Contracts are sold or securitized in transactions where the Company retains
recourse for losses, partial or otherwise. This initial estimate of future
losses reduces the gain recorded at the time sale. If necessary, a provision
for credit losses is charged against earnings to maintain the allowance for
credit losses at an amount management believes necessary to absorb potential
losses in the finance contract portfolio.
Management evaluates the adequacy of the allowance for credit losses by
reviewing credit loss experience, delinquencies, the value of the underlying
collateral, including third party guarantees or insurance recoveries, the
level of finance contract portfolio, as well as, general economic conditions.
The Company has incurred charge-offs totaling $2,675,000 and $8,178,000
during the years ended December 31, 1998 and 1997, respectively. During 1997,
the charge-offs were caused by a small number of customers that represented
a relatively significant investment in the Company's various pools of
securitized receivables. During 1998, the charge-offs predominately
stemmed from contracts that had been originated by third-party broker-business
originated between May 1996 through May 1997.
When recording charge-offs, legal fees and other costs reduce estimated
recoveries. However, salaries paid to employees directly associated
with pursuing recoveries are expensed as incurred.
The Company has recorded additional provisions for credit losses totaling
$4,300,000 and $7,000,000 during the years ended December 31, 1998 and 1997,
respectively. These provisions were recorded to replenish the allowance for
credit losses, and are exclusive of the Company's policy to record provisions
against current period new business originations. The allowance for credit
losses totaled $5.4 million and $5.7 million at June 30, 1999 and December 31,
1998, respectively
Liquidity and Capital Resources
- -------------------------------
Prime conducts its business in a manner designed to conserve its working
capital and minimize its credit exposure. The Company does not purchase
equipment or disburse funds until: (1) it has received an executed lease
or loan agreement from its customer, and (2) it has determined that the
lease or loan agreement (a) can be discounted with a bank or financial
institution on a non-recourse basis, or (b) meets the origination standards
established for a securitized pool.
At December 31, 1998, the Company had credit available totaling $188.0 million
under four credit facilities which are used to fund Financial Contracts that
arise during the normal course of business. During the first and second
calendar quarters of 1999, $78.0 million of these facilities expired. The
Company plans to negotiate the renewal of these facilities in the second
half of 1999.
On May 4, 1999, the Company completed the sale of Financial Contracts by issuing
asset-backed notes. The notes were issued through the Company's wholly-owned
subsidiaries, Prime Finance Corporation 1999-A-1 and Prime Finance Corporation
1999-A-2. The initial aggregate principal amount of the notes was $74.0
million. Proceeds from the issuance of the notes were used to reduce borrowings
under several of the Company's warehouse credit facilities and to increase
working capital.
During May 1999, the Company amended certain terms and conditions of its 1996
subordinated debt agreement. One of the amended terms adjusted the exercise
price of the warrants issued in connection with the subordinated debt. The
Company agreed to change the exercise price of the warrants to purchase 499,606
shares of common stock from $1.00 per share to $0.01 per share. As a result
of this amendment, $494,610 has been credited to additional paid-in capital
and a corresponding charge for deferred interest has reduced subordinated
debt. The deferred interest is being amortized over the remaining term of
the subordinated debt.
Management believes that in order to meet its ongoing liquidity needs, the
Company will require additional capital resources to supplement the expected
cash flows of its operating activities and anticipated borrowings under its
warehouse financing facilities. The Company expects to complete one or more
sales of securitizations of financial contracts before the end of the year.
The Company is also exploring other sources of liquidity to satisfy its
need for additional capital resources.
Year 2000 Compliance
- --------------------
Year 2000 compliance refers to the ability of computer hardware and software
to respond to the problems posed by the fact that computer programs have
traditionally been written using two digits rather than four to define the
applicable year. As a consequence, unless modified, computer systems will not
be able to differentiate between the year 2000 and 1999. Failure to address
this problem could result in system failures and the generation of erroneous
data.
The Company believes that its information technology ("IT") systems are year
2000 compliant. The Company also has several non-IT systems, including voice
mail and phone systems, which use dates electronically that are being
reviewed for compliance. The Company expects to have all systems year 2000
compliant by the end of the third quarter of 1999 and plans to complete
comprehensive, full system testing in the third quarter of 1999. The Company
believes that significant third parties in which the Company conducts
business with, including parties to the Company's credit facilities, are or
will be year 2000 compliant by January 1, 2000.
The Company has not prepared estimates of costs for the correction of year 2000
issues. Based on information available at this time, including the year 2000
compliance status of information technology systems as well as the anticipated
replacement costs for non-compliant systems, the Company does not believe that
the cost will have a material adverse effect on the Company's results of
operations or financial condition. However, there can be no assurance of
unforeseen problems in its own computer systems or computer systems of third
parties with which the Company conducts business. Such problems, depending on
the extent and nature, could materially and adversely effect the Company's
operations and financial condition. For each primary counterparty upon which
the Company relies, there are alternate providers of such services in the
marketplace. Based on its assessment of the year 2000 issue to date, the
Company has not developed a contingency plan. However, the Company continues
to evaluate the impact of year 2000 issues and will create a contingency plan
if considered warranted.
Forward-Looking Statements
- --------------------------
This Form 10-QSB contains certain forward-looking statements that involve
substantial risks and uncertainties. When used in this Form 10-QSB, the
words and phrases "expects", "intends", "believes", "will seek", and
"will realize" and similar expressions as they relate to the Company
or its management are intended to identify such forward-looking statements.
The Company's actual results, performance or achievements could differ
materially from the results, performance or achievements expressed in,
or implied by, these forward-looking statements.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of Prime Capital's shareholders was held on July 21, 1999
and was re-convened until July 30, 1999. The following items were voted
upon and ratified:
The following members of the board of directors were elected to hold office
until the next Annual Meeting: James A. Friedman, William D. Smithburg,
John R. Walter, Robert R. Youngquist and Mark P. Bischoff. Each director
received at least 4,355,109 shares cast in favor of the motion, no shares
were cast against the motion and 16,750 shares abstained.
The proposal regarding amending the 1997 Stock Option Plan was authorized.
3,077,809 shares were cast in favor of the motion, 114,037 shares were cast
against the motion and 18,100 shares abstained.
The election of the accounting firm of KPMG LLP as auditors of the
Company for the current fiscal year was voted upon and ratified. 4,364,409
shares were cast in favor of the motion, 450 shares were cast against the
motion and 7,000 shares abstained.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibit Index
Exhibit No. Description
11 Statement Regarding Computation of Per Share Earnings
27 Financial Data Schedule
b) Reports on Form 8-K
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRIME CAPITAL CORPORATION
(Registrant)
August 4, 1999 /s/ Vern Landeck__________________
Vern Landeck, Chief Financial Officer
Vern Landeck is the Principal Financial
and Accounting Officer and has been duly
authorized to sign on behalf of the Registrant
August 4, 1999 /s/ James A. Friedman
James A. Friedman, Chief Executive Officer
EXHIBIT 11
<TABLE>
PRIME CAPITAL CORPORATION
Computation of Earnings Per Share
(Unaudited)
<CAPTION> Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
------------------------ ---------------------
<S> <C> <C> <C> <C>
Numerator:
Net income $ 286,629 (457,028) 546,776 282,876
Preferred dividends (56,875) (56,875) (113,125) (113,125)
--------- --------- -------- --------
Numerator for basic
and diluted earnings
per share-income
(loss) available to
common shareholders $ 229,754 (513,903) 433,651 169,751
========= ========= ========= ========
Denominator:
Denominator for basic
earnings per share-
weighted average shares 4,326,108 4,340,287 4,349,878 4,336,722
Effect of dilutive securities:
Options and warrants 585,848 604,170 509,756 612,668
--------- --------- --------- ---------
Denominator for diluted
earnings per share-
adjusted weighted
average shares and
assumed conversions 4,911,956 4,944,457 4,859,634 4,949,390
========= ========= ========= =========
Basic earnings per share $ 0.05 (0.12) 0.10 0.04
========= ========= ========= =========
Diluted earnings per share $ 0.05 (0.12) 0.09 0.03
========= ========== ========= =========
</TABLE>
Options to purchase an average of 120,100 shares of common stock at prices
between $1.67 and $6.00 per share in 1999 were outstanding but were not
included in the computation of diluted earnings per share because the
options' exercise price was greater than the average market price of the
common shares and, therefore, the effect would be antidilutive. Options to
purchase an average of 167,500 shares of common stock at prices between
$4.94 and $6.00 per share in 1998 were outstanding but were not included in
the computation of diluted earnings per share because the options' exercise
price was greater than the average market price of the common shares and,
therefore, the effect would be antidilutive.
This schedule contains summary financial information extracted from SEC
Form 10QSB and is qualified in its entirety by reference to such financial
statements. Individual data items on this schedule may not add up due to
rounding.
[ARTICLE]5
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] JUN-30-1999
[CASH] 1,837,640
[SECURITIES] 0
[RECEIVABLES] 39,249,169
[ALLOWANCES] (5,434,538)
[INVENTORY] 0
[CURRENT-ASSETS] 0
[PP&E] 2,303,659
[DEPRECIATION] (1,729,301)
[TOTAL-ASSETS] 49,162,748
[CURRENT-LIABILITIES] 0
[BONDS] 4,539,502
[PREFERRED-MANDATORY] 0
[PREFERRED] 2,500,000
[COMMON] 223,392
[OTHER-SE] (453,643)
[TOTAL-LIABILITY-AND-EQUITY] 49,162,748
[SALES] 0
[TOTAL-REVENUES] 8,369,089
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 6,179,936
[LOSS-PROVISION] 100,000
[INTEREST-EXPENSE] 1,542,377
[INCOME-PRETAX] 546,776
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 546,776
[EPS-BASIC] 0.05
[EPS-DILUTED] 0.05
