NEW YORK, May 13, 2009 (GlobeNewswire via COMTEX News Network) -- Newtek Business Services, Inc. (Nasdaq:NEWT) (www.newtekbusinessservices.com), a provider of business services and financial products to the small- and medium-sized business market, reports today its financial results for the three months ended March 31, 2009.

First Quarter 2009 Overview

 * Loss before benefit for income taxes decreased by $2.0 million
   or 49% to $(2.1) million for the first quarter of 2009 from
   $(4.0) million for the first quarter of 2008 due to our cost
   cutting efforts and increased revenues.
 * Total revenue for the Electronic payment processing segment in
   the first quarter of 2009 increased by 4% over the first quarter
   of 2008.
 * Total revenue for the Web hosting segment in the first quarter
   of 2009 increased by 9% over the first quarter of 2008.
 * The Company continued cost-cutting measures in the first quarter
   of 2009, which are expected to result in a minimum of $4.0
   million of cash savings for 2009.
 * Cash and cash equivalents, and restricted cash totaled $25.9
   million, or $0.73 per share, as of March 31, 2009.
 * The net decrease in cash and cash equivalents was $(361) thousand
   for the first quarter of 2009 as compared to a decrease of
   $(5.1) million for the first quarter of 2008.

Barry Sloane, Chairman and Chief Executive Officer of Newtek Business Services, Inc. said, "We are very pleased with the Company's first quarter performance. Our management team has succeeded at cutting expenses, reducing our quarter over quarter loss, maintaining our cash balances and still managed to grow total revenues in our Electronic payment processing and Web hosting segments. An improvement of $4.8 million period over period in our quarterly cash flow is quite an accomplishment given the current economic backdrop."

First Quarter 2009 Financial Results

For the three months ended March 31, 2009, the Company reported a loss before benefit for income taxes of $(2.1) million, compared to a loss before benefit for income taxes of $(4.0) million, for the same period last year. The Company reported a net loss of $(976) thousand, or $(0.03) per share, in the first quarter of 2009, compared to a net loss of $(2.7) million, or $(0.08) per share, in the first quarter of 2008.

For the three months ended March 31, 2009, total revenue increased by $601 thousand, or 3%, to $24.1 million compared to $23.5 million one year ago. Total revenue from the three core business services segments (electronic payment processing, web hosting and small business finance) increased to $22.3 million, or 4.4%, in the first quarter of 2009 compared with $21.4 million in the first quarter 2008. These three segments represented approximately 92% and 91% of total revenue in 2009 and 2008, respectively.

Outlook for 2009

The Company reaffirms 2009 consolidated revenues to be between $95.3 million and $101.2 million, and a loss before benefit for income taxes of between ($7.4) million and ($5.2) million. Annual guidance by segment for revenue, loss before benefit for income taxes, and EBITDA will be provided in the full year conference call presentation today Wednesday, May 13, 2009 at 4:15 p.m. ET and will be available in the 'Events & Presentation' section of the Investor Relations portion of Newtek's website at www.newtekbusinessservices.com.

Cautionary Statement

2009 Guidance information contained in this press release is based on management's current expectations. These statements are forward looking and actual results may differ materially. See "Note Regarding Forward Looking Statements" below.

Use of Non-GAAP Financial Measures

In evaluating its business, Newtek considers and uses EBITDA as a supplemental measure of its operating performance. The Company defines EBITDA as earnings before interest expense, taxes, depreciation and amortization. Newtek uses EBITDA as a supplemental measure to review and assess its operating performance. The Company also presents EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance.

The term EBITDA is 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 has limitations as an analytical tool and, when assessing the Company's operating performance, investors should not consider 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 does 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 supplemented by EBITDA.

First Quarter 2009 Conference Call and Webcast

A conference call to discuss these results will be hosted by Barry Sloane, Chairman and Chief Executive Officer, and Seth Cohen, Chief Financial Officer, today Wednesday, May 13, 2009 at 4:15 p.m. ET. The live conference call can be accessed by dialing (877) 419-6597 (domestic) or (719) 325-4930 (international).

A live audio webcast of the call and the corresponding presentation will be available in the 'Events & Presentation' section of the Investor Relations portion of Newtek's website at www.newtekbusinessservices.com. A replay of the webcast with the corresponding presentation will be available on Newtek's website shortly following the live presentation. The telephone replay can be accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international), and using the replay passcode 5498526. Both web-based and telephonic replays will be available for 90 days following the live presentation.

About Newtek Business Services, Inc.

Newtek Business Services, Inc. is a direct distributor of a wide range of business services and financial products to the small- and medium-sized business market under the Newtek(tm) brand. Since 1999, Newtek has helped small- and medium-sized business owners realize their potential by providing them with the essential tools needed to manage and grow their businesses and to compete effectively in today's marketplace. Newtek provides one or more of its services to over 91,000 business accounts and has positioned the Newtek(tm) brand as a one-stop-shop provider of such business services. According to the U.S. Small Business Administration, there are over 26.8 million small businesses in the United States, which in total represent 99.7% of all employer firms.

Newtek's business service lines include:

 * Electronic Payment Processing: Electronic solutions to accept
   non-cash payments, including credit and debit cards, check
   conversion, remote deposit capture, ACH processing, and
   electronic gift and loyalty card programs.

 * Web Hosting: Full-service web host which offers shared and
   dedicated web hosting and related services including domain
   registration and online shopping cart tools.

 * Business Lending: Broad array of lending products including
   SBA 7(a), conventional commercial real estate and SBA 504
   loans, business lines of credit, and business credit cards.

 * Insurance Services: Commercial and personal lines of insurance,
   including health and employee benefits in all 50 states, working
   with over 40 insurance carriers.

 * Web Services: Customized web design and development services.

 * Data Backup, Storage and Retrieval: Fast, secure, off-site
   data backup, storage and retrieval designed to meet the
   specific regulatory and compliance needs of any business.

 * Accounts Receivable Financing: Receivable purchasing and
   financing services.

 * Payroll: Complete payroll management and processing services.

Note Regarding Forward Looking Statements

Statements in this press release including statements regarding 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.

           NEWTEK BUSINESS SERVICES, INC. AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
          FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008
               (In Thousands, except for Per Share Data)

                                                  2009         2008
                                               ----------   ----------
 Operating revenues                            $  24,121    $  23,520
                                               ----------   ----------

 Operating expenses:
   Electronic payment processing costs            12,944       12,225
   Salaries and benefits                           4,810        6,579
   Interest                                        2,517        2,290
   Depreciation and amortization                   1,649        1,809
   Provision for loan losses                         424          439
   Other general and administrative costs          4,392        4,213
                                               ----------   ----------
     Total operating expenses                     26,736       27,555
                                               ----------   ----------

 Operating loss before fair market value
  adjustment and benefit for income taxes         (2,615)      (4,035)
 Net change in fair market value of credits in
  lieu of cash and notes payable in credits
  in lieu of cash                                    537           --
                                               ----------   ----------
 Loss before benefit for income taxes             (2,078)      (4,035)
 Benefit for income taxes                          1,014        1,238
                                               ----------   ----------
 Net loss                                         (1,064)      (2,797)
 Net loss attributable to
  noncontrolling interests                            88          102
                                               ----------   ----------
 Net loss                                      $    (976)   $  (2,695)
                                               ==========   ==========

 Weighted average common shares outstanding -
  basic and diluted                               35,625       35,869
                                               ----------   ----------
 Loss per share - basic and diluted            $   (0.03)   $   (0.08)
                                               ==========   ==========

          NEWTEK BUSINESS SERVICES, INC. AND SUBSIDIARIES
               CONDENSED CONSOLIDATED BALANCE SHEETS
               MARCH 31, 2009 AND DECEMBER 31, 2008
             (In Thousands, except for Per Share Data)

                                               March 31,     Dec. 31,
                                                  2009         2008
                                               ----------   ----------

               ASSETS

 Cash and cash equivalents                     $  16,491    $  16,852
 Restricted cash                                   9,382        8,366
 Credits in lieu of cash                          46,260       70,559
 SBA loans held for investment (net of reserve
  for loan losses of $3,592 and $3,420,
  respectively)                                   25,861       26,912
 Accounts receivable (net of allowance of
  $269 and $192, respectively)                     4,674        5,175
 SBA loans held for sale                              --        6,133
 Prepaid expenses and other assets (net of
  accumulated amortization of deferred
  financing costs of $2,238 and $2,122,
  respectively)                                    8,194        9,998
 Servicing asset (net of accumulated
  amortization and allowances of
  $3,948 and $3,756, respectively)                 2,770        2,282
 Fixed assets (net of accumulated depreciation
  and amortization of $10,229 and $9,477,
  respectively)                                    4,655        5,062
 Intangible assets (net of accumulated
  amortization of $12,786 and $12,113,
  respectively)                                    5,546        6,096
 Goodwill                                         12,092       12,092
                                               ----------   ----------
     Total assets                              $ 135,925    $ 169,527
                                               ==========   ==========

          LIABILITIES AND EQUITY

 Liabilities:
   Accounts payable and accrued expenses       $   8,082    $   9,344
   Notes payable                                  20,141       25,998
   Deferred revenue                                2,119        2,203
   Notes payable in credits in lieu of cash       46,260       70,559
   Deferred tax liability                          4,275        5,344
                                               ----------   ----------
      Total liabilities                           80,877      113,448
                                               ----------   ----------

 Commitments and contingencies

 Equity:
   Newtek Business Services, Inc.
    stockholders' equity:
   Preferred stock (par value $0.02 per share;
    authorized 1,000 shares, no shares issued
    and outstanding)                                  --           --
   Common stock (par value $0.02 per share;
    authorized 54,000 shares, issued and
    outstanding 36,650 and 36,667,
    respectively, not including 97 and
    394 shares held in escrow, respectively)         733          733
   Additional paid-in capital                     58,267       58,232
   Deficit                                        (5,521)      (4,545)
   Treasury stock, at cost (1,026 shares)           (649)        (649)
                                               ----------   ----------
   Total Newtek Business Services, Inc.
    stockholders' equity                          52,830       53,771

   Noncontrolling interests                        2,218        2,308
                                               ----------   ----------
      Total equity                                55,048       56,079
                                               ----------   ----------
      Total liabilities and equity             $ 135,925    $ 169,527
                                               ==========   ==========

This news release was distributed by GlobeNewswire, www.globenewswire.com

SOURCE: Newtek Business Services Inc.

Newtek Business Services, Inc.
          Barry Sloane, Chairman and CEO
          212-356-9500
          bsloane@newtekbusinessservices.com

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