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LM Funding Reports First Quarter 2017 Results

TAMPA, Fla., May 15, 2017 (GLOBE NEWSWIRE) --

LM Funding America, Inc. (NASDAQ:LMFA) (NASDAQ:LMFAW), a specialty finance company offering unique funding solutions to community associations, is reporting results for the first quarter ended March 31, 2017.

 

First Quarter 2017 Summary vs. Year-Ago Quarter

 

  • Total revenue was $1.0 million compared to $1.6 million.
  • Rental revenue increased 199% to $165,000.
  • Income statement revenue per unit increased 14% to $4,800.
  • Reduced operating expenses by 27% to $1.5 million.
  • Acquired 147 delinquent accounts from both new and existing clients.

 

Subsequent Event

 

  • Sold three REO properties, realizing net proceeds of $101,000.
  • Fully resolved proposed class action lawsuit by Wilmington Savings Fund Society (Wilmington). Favorable outcome to LM Funding will reduce litigation expenses by approximately $45,000 per month going forward.

 

Management Commentary

 

“Our first quarter was highlighted by the acquisition of 147 delinquent accounts from both new and existing clients,” said Bruce Rodgers, founder and CEO of LM Funding. “This is roughly half of the delinquent accounts acquired in all of 2016, reflecting a considerable return on our investment of IPO proceeds in sales and marketing strategies.

 

“Despite another quarter of lower payoff occurrences due to the reduction of distressed real estate transactions in Florida, we continued to monetize our properties with a 200% increase in recurring rental income, while reducing our overhead expenses by more than 27%.

 

“In March and April, we monetized a portion of our REO portfolio by selling four properties for net proceeds of $128,000. We will continue to leverage our REO portfolio for rental income, while remaining opportunistic with property sales.”

 

“Also in April,” Rodgers continued, “we fully resolved the proposed class action by Wilmington. The favorable outcome not only validates our company’s mission to homeowners associations throughout Florida, but will also provide us with monthly litigation expense savings of approximately $45,000. We look forward to moving past this lawsuit and continuing to serve communities and homeowners associations to ensure they can rightfully collect outstanding fees.”

 

First Quarter 2017 Financial Results

 

Revenues in the first quarter of 2017 were $1.0 million compared to $1.6 million in the first quarter of 2016. The decrease in revenues was due to lower payoff occurrences resulting from changes in the overall Florida real estate market. The decrease was offset by an increase in revenue per unit.

 

Operating expenses in the first quarter of 2017 decreased 27% to $1.5 million compared to $2.1 million in the year-ago quarter. The decrease was driven by the company’s cost reduction initiative implemented during the third quarter of 2016.

 

Interest expense in the first quarter of 2017 decreased to $127,000 compared to $164,000 in the first quarter of 2016.

 

Net loss in the first quarter was $403,000 or $(0.12) per share, compared to a net loss of $436,000 or $(0.13) per share in the year-ago quarter.

 

At March 31, 2017, cash and cash equivalents totaled $1.4 million compared to $2.3 million at December 31, 2016.

 

Conference Call

 

Management will hold a conference call today at 4:30 p.m. Eastern time to discuss its first quarter 2017 results, followed by a question and answer period.

 

Interested parties can listen to the live presentation by dialing the number below or by clicking the webcast link available in the Investors section of the company's website at www.lmfunding.com.

 

Date: Monday, May 15, 2017
Time: 4:30 p.m. Eastern time
Toll-free dial-in number: (877) 793-4355
International dial-in number: (615) 247-0182
Conference ID: 14739326
Webcast: http://edge.media-server.com/m/p/ysmsek7d

 

Please dial in 10 minutes before the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios at 949-574-3860.

 

A webcast replay of the call will be available after the call on the same day via the Investors section of the LM Funding website at www.lmfunding.com through July 15, 2017.

 

About LM Funding America

 

LM Funding America, Inc., together with its subsidiaries, is a specialty finance company that provides funding to nonprofit community associations (Associations) primarily located in the state of Florida, as well as in the states of Washington, Colorado and Illinois. The company offers funding to Associations by purchasing a certain portion of the associations’ rights to delinquent accounts that are selected by the Associations arising from unpaid Association assessments. It is also involved in the business of purchasing delinquent accounts on various terms tailored to suit each Association’s financial needs, including under its New Neighbor Guaranty™ program. The company was founded in 2008 and is based in Tampa, Florida. The company's common shares and warrants trade on the NASDAQ Capital Market under the symbols "LMFA" and "LMFAW”.

 

Forward-Looking Statements

 

This press release may contain forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995.  Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” and “project” and other similar words and expressions are intended to signify forward-looking statements.  Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties.  Some of these risks and uncertainties are identified in the company’s filings with the SEC.  The occurrence of any of these risks and uncertainties could have a material adverse effect on the company’s business, financial condition, and results of operations. 

 

 

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
    March 31, 2017   December 31, 2016
    (Unaudited)    
ASSETS        
Cash   $   1,394,785     $   2,268,180  
Finance receivables:        
Original product       1,002,669         1,035,832  
Special product - New Neighbor Guaranty program, net of allowance for credit losses of $103,764 and $125,000       444,801         491,597  
Deferred tax asset       3,728,988         3,509,401  
Due from related party (Note 2):       1,709,725         1,661,360  
Other Assets (Note 3):       1,019,667         1,048,403  
Total assets   $   9,300,635     $   10,014,773  
LIABILITIES AND STOCKHOLDERS' EQUITY        
Notes payable (Note 4):        
Principal amount   $   5,080,274     $   5,260,274  
Less unamortized debt issuance costs       (74,756 )       (99,396 )
Long-term debt less unamortized debt issuance costs       5,005,518         5,160,878  
Other liabilities and obligations       517,837         684,437  
Total liabilities       5,523,355         5,845,315  
Stockholders’ equity:        
Common stock, par value $.001; 10,000,000 shares authorized; 3,300,000 shares
  issued and outstanding
      3,300         3,300  
Additional paid-in capital       6,567,427         6,556,704  
Accumulated deficit       (2,793,447 )       (2,390,546 )
Total stockholders’ equity       3,777,280         4,169,458  
Total liabilities and stockholders’ equity   $   9,300,635     $   10,014,773  
         

 

 

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES AND PREDECESSOR
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
     
    Three Months Ended
    March 31, 
      2017       2016  
Revenues:        
Interest on delinquent association fees   $   691,648     $   1,182,787  
Administrative and late fees       78,035         117,535  
Recoveries in excess of cost - special product       20,939         106,505  
Underwriting and other revenues       68,729         114,921  
Rental revenue       164,605         54,988  
Total revenues       1,023,956         1,576,736  
Operating Expenses:        
Staff costs and payroll       513,221         808,601  
Professional fees       512,650         567,473  
Settlement cost with associations       65,485         237,864  
Other operating expenses       441,401         477,567  
Total operating expenses       1,532,757         2,091,505  
Operating loss       (508,801 )       (514,769 )
Interest expense       126,612         164,248  
Loss before income taxes       (635,413 )       (679,017 )
Income tax benefit       (232,512 )       (242,749 )
Net loss   $   (402,901 )   $   (436,268 )
Loss per share attributable to the stockholders’ of LM Funding America, Inc.        
Basic       (0.12 )       (0.13 )
Diluted       (0.12 )       (0.13 )
Weighted average number of common shares outstanding        
Basic       3,300,000         3,300,000  
Diluted       3,300,000         3,300,000  

 

 

 

LM FUNDING AMERICA, INC. AND SUBSIDIARIES AND PREDECESSOR
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
    Three Months
Ended
March 31, 2017 
  Three Months
Ended
March 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES   $   (744,734 )   $   (532,380 )
CASH FLOWS FROM INVESTING ACTIVITIES       99,704         37,701  
CASH FLOWS FROM FINANCING ACTIVITIES       (228,365 )       (1,229,086 )
NET DECREASE IN CASH       (873,395 )       (1,723,765 )
CASH - BEGINNING OF PERIOD       2,268,180         8,997,798  
CASH - END OF PERIOD   $   1,394,785     $   7,274,033  
         

 

 

 

 

Company Contact:
Bruce Rodgers
Chairman and CEO
LM Funding America, Inc.
(813) 222-8996
investors@lmfunding.com

Investor Relations Contact:
Sean MansouriLiolios Group, Inc.
(949) 574-3860
LMFA@liolios.com

Primary Logo

 

LM Funding America, Inc.