UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 5, 2020 (November 4, 2020)
Date of Report (date of Earliest Event Reported)
NEWTEK BUSINESS SERVICES CORP.
(Exact Name of Company as Specified in its Charter)
| MARYLAND | 814-01035 | 46-3755188 | ||||||
| (State or Other Jurisdiction of Incorporation or Organization) | (Commission File No.) | (I.R.S. Employer Identification No.) | ||||||
4800 T-Rex Avenue, Suite 120, Boca Raton, FL 33431
(Address of principal executive offices and zip code)
(212) 356-9500
(Company’s telephone number, including area code)
(Former name or former address, if changed from last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Common Stock, par value $0.02 per share | NEWT | Nasdaq Global Market LLC | ||||||||||||
| 6.25% Notes due 2023 | NEWTI | Nasdaq Global Market LLC | ||||||||||||
| 5.75% Notes due 2024 | NEWTL | Nasdaq Global Market LLC | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Forward-Looking Statements
Statements in this Current Report on Form 8-K (including the exhibits), including statements regarding Newtek Business Services Corp.’s (“Newtek” or the “Company”) beliefs, expectations, intentions or strategies for the future, may be forward-looking statements. 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. Newtek undertakes no obligation to update any forward-looking statement to reflect events or circumstances that may arise after the date of this filing.
Item 2.02. Results of Operations and Financial Condition.
On November 4, 2020, Newtek Business Services Corp. issued a press release entitled “Newtek Business Services Corp. Reports Third Quarter 2020 Financial Results” (the “Press Release”). A copy of the Press Release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The information in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number | Description | |||||||
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NEWTEK BUSINESS SERVICES CORP. | ||||||||
| Date: November 5, 2020 | By: | /S/ BARRY SLOANE | ||||||
| Barry Sloane | ||||||||
| Chief Executive Officer, President and Chairman of the Board | ||||||||
EXHIBIT INDEX
| Exhibit Number | Description | |||||||
Exhibit 99.1
 | |||||
Newtek Business Services Corp. Reports Third Quarter 2020 Financial Results
Boca Raton, FL – November 4, 2020 - Newtek Business Services Corp. (“Newtek” or the “Company”) (Nasdaq: NEWT), an internally managed business development company (“BDC”), announced today its financial and operating results for the three and nine months ended September 30, 2020.
Third Quarter 2020 Highlights
•Net investment income of $1.7 million, or $0.08 per share, for the three months ended September 30, 2020 compared to net investment loss of $(0.53) million, or $(0.03) per share, for the three months ended September 30, 2019.
•Adjusted net investment income (“ANII”)1 of $0.95 million, or $0.04 per share, for the three months ended September 30, 2020.
•Net asset value (“NAV”) of $324.4 million, or $15.13 per share, at September 30, 2020; a decrease of 3.6%, on a per share basis, compared to NAV of $15.70 per share at December 31, 2019.
•Debt-to-equity ratio of 1.21x at September 30, 2020.
•Total investment income of $14.9 million for the three months ended September 30, 2020; a decrease of 6.9% compared to total investment income of $16.0 million for the three months ended September 30, 2019.
•Total investment portfolio increased by 4.4% to $637.6 million at September 30, 2020, from $610.9 million at September 30, 2019.
Financial Highlights - Nine Months Ended September 30, 2020
•Net investment income of $31.1 million, or $1.49 per share, for the nine months ended September 30, 2020, compared to net investment loss of $(2.6) million, or $(0.14) per share, for the nine months ended September 30, 2019.
•ANII of $33.8 million, or $1.61 per share, for the nine months ended September 30, 2020; a decrease of 2.4% on a per share basis compared to ANII of $31.5 million, or $1.65 per share, for the nine months ended September 30, 2019.
•Total investment income of $77.4 million for the nine months ended September 30, 2020; an increase of 76.2% over total investment income of $43.9 million for the nine months ended September 30, 2019.
1
Exhibit 99.1
2020 Dividend Payments and 2021 Dividend Guidance
•The Company paid a third quarter 2020 cash dividend of $0.58 per share on September 30, 2020 to shareholders of record as of September 21, 2020.
•The Company revised its 2020 annual dividend forecast to a range of $1.90 per share to $2.20 per share, tightened from the previous range of $1.80 per share to $2.30 per share2. The Company paid a 2019 annual dividend of $2.15 per share.
•The Company forecasts paying an annual cash dividend between $2.00 per share and $2.502 per share in 2021.
•The revised dividend forecast for 2020 and the dividend forecast for 2021 do not include any potential impact of any possible future authorization of the U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP").
Lending Highlights
•Newtek Small Business Finance, LLC (“NSBF”) funded $82.5 million of PPP loans during the three months ended September 30, 2020, for a total of $1.19 billion of PPP loans for the nine months ended September 30, 2020.
•NSBF funded $13.0 million of SBA 7(a) loans during the three months ended September 30, 2020; a decrease over $114.3 million of SBA 7(a) loans funded for the three months ended September 30, 2019.
•NSBF forecasts fourth quarter 2020 SBA 7(a) loan fundings of $135 million.
•Newtek Business Lending (“NBL”), Newtek’s wholly owned portfolio company which originates SBA 504 loans, forecasts full year 2020 SBA 504 loan closings of approximately $100 million.
•The Company forecasts that NBL could contribute between $1.0 million and $3.0 million in dividend income to the Company in 2020.
•The Company is currently negotiating term sheets with prospective joint venture partners that could create up to $150.0 million of additional third-party capital to originate up to $1.0 billion of non-conforming conventional loans and restart this program which was curtailed due to the pandemic.
For the three months ended September 30, 2020, the Company reported net investment income of $1.7 million, or $0.08 per share, compared to net investment loss of $(0.53) million, or $(0.03) per share, for the same period last year. The significant increase in net investment income for the third quarter of 2020 compared to the third quarter of 2019, was primarily due to the funding of $82.5 million of PPP loans during the third quarter of 2020. For the three months ended September 30, 2020, the Company reported ANII of $0.95 million, or $0.04 per share, compared to ANII of $12.2 million, or $0.63 per share, for the same period last year. The decline in ANII in the third quarter 2020 compared to the third quarter of 2019, was due to the suspension of lending activities of the Company’s SBA 7(a) loan program from March 2020 through June 2020 while it focused on funding PPP loans as a result of the pandemic, as well as re-establishing a post-pandemic credit thesis.
Barry Sloane, Chairman, President and Chief Executive Officer said, “We are extremely pleased with our stellar performance through an extremely elongated period of economic volatility due to the pandemic. The government shutdowns and resulting drastically altered economic landscape has created a roller-coaster effect for our client base of independent business owners across the U.S. We are proud that our company and management team has been able to navigate these changes in the operating environment and to quickly adapt its business model to offer PPP loans to independent business owners in need. We believe this is a true testament to what superior management teams are able to do under adverse economic headwinds where immediate changes in a company’s operations, products and solutions are required. As a result, on a year-to-date basis we have been able to generate income and dividends on par with 2019 levels. This is something the Company is proud of and believes should be highlighted.”
Mr. Sloane continued, “Management made the decision to suspend its lending activities in our SBA 7(a) loan program from March 2020 through June 2020, and shift lending operations to the PPP, funding approximately $1.2 billion of PPP loans to 10,500 borrowers through the nine months ended September 30, 2020. We are hopeful the Administration and Congress will provide a new stimulus package to enable our customer base to
2
Exhibit 99.1
access additional financing through the PPP. We are revising our dividend guidance range for 2020 to $1.90 to $2.20 per share, which is narrowed from the previous guidance range of $1.80 to $2.30 per share. It is important to note that the Company’s revised 2020 dividend forecast does not include any potential additional income or credit benefit from any possible new economic government stimulus package. Should the government provide a new stimulus package during the fourth quarter, we believe it could give our dividend forecast upside, and in turn we may be able to provide a greater return to our shareholders. Without the benefit of a renewed PPP, the Company is forecasting a 2021 cash dividend in the range of $2.00 to $2.50 per share.”
“Looking to our portfolio companies, we are pleased to report many positive developments. Newtek Business Lending (“NBL”), our portfolio company which originates and funds SBA 504 loans, is forecasting funding and/or closing approximately $100 million in SBA 504 loans for the full year 2020. We estimate that NBL could contribute between $1.0 million and $3.0 million in dividend income to the Company in 2020, contingent on loan closings and gain-on-sale levels during 2020. SBA 504 lending is a fixed-rate alternative to businesses that occupy commercial real estate and is clearly an attractive choice in a low interest rate environment. In addition, the Company has been in discussions to create additional joint ventures with partners to grow its non-conforming conventional loan program. The Company is currently negotiating term sheets with potential joint venture partners that could create up to $150 million of capital to originate up to $1.0 billion of non-conforming conventional loans. The Company’s and its portfolio companies’ loan programs, including SBA 7(a), SBA 504, secured lines of credit and non-conforming conventional term loans, give Newtek, as a brand, a very robust menu of financial solutions for independent business owners in all 50 states seeking financing for loan sizes of $5,000 to $15.0 million,” continued Mr. Sloane.
Mr. Sloane further commented, “Our payment processing portfolio company, Newtek Merchant Solutions (“NMS”), has begun to rebound from pandemic-related lower processing volumes. NMS has materially improved its run rate of EBITDA and cash flows as seen in the third quarter of 2020, and we expect to see this continued improvement in the fourth quarter of 2020 and in 2021. We will elaborate more on this topic during our conference call tomorrow morning, as well as give projections for the remainder of 2020 and a forecast for 2021.”
Highlighting positive developments in Newtek’s managed technology portfolio companies, Mr. Sloane said, “We are further enhancing our technology offering under the Newtek brand by merging two of our technology portfolio companies, IPM, which was acquired in 2017, and Newtek Technology Solutions (“NTS”), our core managed technology portfolio company, which we have developed and owned since 2004. The combination of these two portfolio companies should eliminate between $1.0 to $2.0 million of operating expense as well as present one Newtek branded solution to our core customer base under the stewardship Phil Alberta, President of NTS, and Jared Mills, Chief Operating Officer of NTS. We welcome you to visit our portfolio company website at https://www.newtekone.com and view its very robust offerings of technology solutions. We will discuss potential benefits and enhanced projections under this new combined enterprise during our conference call. We are excited about meeting the challenge of our clients’ technology needs in the post-pandemic environment, by providing solutions for all of their hardware and software needs. The combination of our managed technology portfolio companies into one defined company, with projected pro forma 2020 annual revenue of between $45 to $50 million, and a pro forma growing and profitable EBITDA history and projection, we believe can add significant value to all Newtek stakeholders and shareholders.”
Continuing to discuss Newtek’s portfolio companies, Mr. Sloane commented, “In our payroll and insurance agency portfolio companies, Newtek Payroll Solutions and Newtek Insurance Solutions, we have made many changes including enhancing the management teams and positioning these two portfolio companies for growth under the Newtek brand. Rick Carpenter, Director of Property & Casualty Insurance, and Kathryn Ingram, Senior Vice President, Property and Casualty Insurance – Commercial Lines Specialist, have joined Newtek Insurance Agency as part of the core management team for their expertise in the property and casualty arena. In addition, Samantha Razon, Director of Payroll Operations, has joined Shannon Vestal, Senior Vice President of Newtek Payroll Solutions, to enhance, grow and develop our state-of-the-art payroll, health and benefits offerings.”
3
Exhibit 99.1
Mr. Sloane concluded, “Newtek is the company that is able to provide a broad array of financial and business solutions through its strategic partner distribution channels, being able to remotely board business without the use of brokers, branches, bankers or business development officers. Our referral volume continues to grow and our cross-selling efforts are finally being realized as we have integrated our sales and marketing efforts as well as began to invest in training of Newtek’s and its portfolio companies’ solutions providers. We are extremely appreciative of the efforts of the federal government as well as state governments that have provided support to assist with the health and well-being of individuals and businesses. Despite the overhang of the pandemic on the economy and our customers, we believe we can continue to persevere in the current challenging economic environment, and we feel positive about a brighter future ahead for Newtek and its client base.”
Investor Conference Call and Webcast
A conference call to discuss third quarter 2020 results will be hosted by Barry Sloane, President, Chairman and Chief Executive Officer, and Christopher Towers, Chief Accounting Officer, tomorrow, Thursday, November 5, 2020 at 8:30 a.m. ET. The live conference call can be accessed by dialing (877) 303-6993 or (760) 666-3611.
In addition, a live audio webcast of the call with the corresponding presentation will be available in the ‘Events & Presentations’ section of the Investor Relations portion of Newtek’s website at http://investor.newtekbusinessservices.com/events-and-presentations. A replay of the webcast with the corresponding presentation will be available on Newtek’s website shortly following the live presentation and will remain available for 90 days.
1Use of Non-GAAP Financial Measures - Newtek Business Services Corp. and Subsidiaries
In evaluating its business, Newtek considers and uses ANII as a measure of its operating performance. ANII includes short-term capital gains from the sale of the guaranteed portions of SBA 7(a) loans and conventional loans, and beginning in 2016, capital gain distributions from controlled portfolio companies, which are reoccurring events. The Company defines ANII as Net investment income (loss) plus Net realized gains recognized from the sale of guaranteed portions of SBA 7(a) loan investments, less realized losses on non-affiliate investments, plus or minus loss on lease adjustment, plus the net realized gains on controlled investments, plus or minus the change in fair value of contingent consideration liabilities, plus loss on extinguishment of debt.
The term ANII is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. ANII has limitations as an analytical tool and, when assessing the Company’s operating performance, investors should not consider ANII in isolation, or as a substitute for net investment income, or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, ANII does not reflect the Company’s actual cash expenditures. Other companies may calculate similar measures differently than Newtek, limiting their usefulness as comparative tools. The Company compensates for these limitations by relying primarily on its GAAP results supplemented by ANII.
2 Note Regarding Dividend Payments
Amount and timing of dividends, if any, remain subject to the discretion of the Company's Board of Directors. The Company's Board of Directors expects to maintain a dividend policy with the objective of making quarterly distributions in an amount that approximates 90 - 100% of the Company's annual taxable income. The determination of the tax attributes of the Company's distributions is made annually as of the end of the Company's fiscal year based upon its taxable income for the full year and distributions paid for the full year.
4
Exhibit 99.1
Newtek Business Services Corp., Your Business Solutions Company®, is an internally managed BDC, which along with its controlled portfolio companies, provides a wide range of business and financial solutions under the Newtek® brand to the small- and medium-sized business (“SMB”) market. Since 1999, Newtek has provided state-of-the-art, cost-efficient products and services and efficient business strategies to SMB relationships across all 50 states to help them grow their sales, control their expenses and reduce their risk.
Newtek’s and its portfolio companies’ products and services include: Business Lending, SBA Lending Solutions, Electronic Payment Processing, Technology Solutions (Cloud Computing, Data Backup, Storage and Retrieval, IT Consulting), eCommerce, Accounts Receivable Financing & Inventory Financing, Insurance Solutions, Web Services, and Payroll and Benefits Solutions.
Newtek® and Your Business Solutions Company®, are registered trademarks of Newtek Business Services Corp.
Note Regarding Forward Looking Statements
This press release contains certain forward-looking statements. Words such as “believes,” “intends,” “expects,” “projects,” “anticipates,” “forecasts,” “goal” and “future” or similar expressions are intended to identify forward-looking statements. 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 cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements.
SOURCE: Newtek Business Services Corp.
Investor Relations & Public Relations
Contact: Jayne Cavuoto
Telephone: (212) 273-8179 / jcavuoto@newtekone.com
5
Exhibit 99.1
| NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (In Thousands, except for Per Share Data) | |||||||||||
| September 30, 2020 | December 31, 2019 | ||||||||||
| ASSETS | (Unaudited) | ||||||||||
| Investments, at fair value | |||||||||||
| SBA unguaranteed non-affiliate investments (cost of $411,777 and $429,697, respectively; includes $329,855 and $364,063, respectively, related to securitization trusts) | $ | 393,290 | $ | 417,223 | |||||||
| SBA guaranteed non-affiliate investments (cost of $17,632 and $23,345, respectively) | 18,796 | 25,004 | |||||||||
| Controlled investments (cost of $123,705 and $107,300, respectively) | 209,251 | 215,817 | |||||||||
| Non-control investments (cost of $16,279 and $1,000, respectively) | 16,279 | 1,000 | |||||||||
| Total investments at fair value | 637,616 | 659,044 | |||||||||
| Cash | 5,966 | 1,762 | |||||||||
| Restricted cash | 40,511 | 31,445 | |||||||||
| Broker receivable | 8,646 | 51,173 | |||||||||
| Due from related parties | 6,397 | 2,972 | |||||||||
| Servicing assets, at fair value | 24,557 | 24,411 | |||||||||
| Right of use assets | 7,192 | 7,990 | |||||||||
| Other assets | 21,081 | 18,614 | |||||||||
| Total assets | $ | 751,966 | $ | 797,411 | |||||||
| LIABILITIES AND NET ASSETS | |||||||||||
| Liabilities: | |||||||||||
| Bank notes payable | $ | 25,183 | $ | 30,000 | |||||||
| Notes due 2023 (par: $57,500 as of September 30, 2020 and December 31, 2019) | 56,387 | 56,035 | |||||||||
| Notes due 2024 (par: $63,250 as of September 30, 2020 and December 31, 2019) | 61,668 | 61,354 | |||||||||
| Notes payable - Securitization trusts (par: $235,675 and $276,637 as of September 30, 2020 and December 31, 2019) | 232,045 | 272,376 | |||||||||
| Notes payable - related parties | 11,550 | 12,163 | |||||||||
| Due to related parties | 1,142 | 131 | |||||||||
| Lease liabilities | 8,999 | 9,897 | |||||||||
| Deferred tax liabilities | 9,395 | 12,405 | |||||||||
| Accounts payable, accrued expenses and other liabilities | 21,206 | 20,824 | |||||||||
| Total liabilities | 427,575 | 475,185 | |||||||||
| Commitment and contingencies | |||||||||||
| Net assets: | |||||||||||
| 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 200,000 shares, 21,435 and 20,530 issued and outstanding, respectively) | 429 | 411 | |||||||||
| Additional paid-in capital | 307,626 | 289,963 | |||||||||
| Accumulated undistributed earnings | 16,336 | 31,852 | |||||||||
| Total net assets | 324,391 | 322,226 | |||||||||
| Total liabilities and net assets | $ | 751,966 | $ | 797,411 | |||||||
| Net asset value per common share | $ | 15.13 | $ | 15.70 | |||||||
6
Exhibit 99.1
| NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES | |||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||||||||||
| (In Thousands, except for Per Share Data) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| From non-affiliate investments: | |||||||||||||||||||||||
| Interest income - PPP loans | $ | 3,085 | $ | — | $ | 37,742 | $ | — | |||||||||||||||
| Interest income - SBA 7(a) loans | 5,871 | 7,468 | 19,382 | 21,519 | |||||||||||||||||||
| Servicing income | 2,875 | 2,542 | 8,367 | 7,473 | |||||||||||||||||||
| Other income | 240 | 1,233 | 1,449 | 3,720 | |||||||||||||||||||
| Total investment income from non-affiliate investments | 12,071 | 11,243 | 66,940 | 32,712 | |||||||||||||||||||
| From non-control investments: | |||||||||||||||||||||||
| Interest income | 107 | — | 107 | — | |||||||||||||||||||
| Dividend income | 31 | 27 | 71 | 86 | |||||||||||||||||||
| Total investment income from non-control investments | 138 | 27 | 178 | 86 | |||||||||||||||||||
| From controlled investments: | |||||||||||||||||||||||
| Interest income | 486 | 223 | 1,423 | 658 | |||||||||||||||||||
| Dividend income | 2,234 | 4,528 | 8,884 | 10,478 | |||||||||||||||||||
| Total investment income from controlled investments | 2,720 | 4,751 | 10,307 | 11,136 | |||||||||||||||||||
| Total investment income | 14,929 | 16,021 | 77,425 | 43,934 | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Salaries and benefits | 3,669 | 3,587 | 10,856 | 10,659 | |||||||||||||||||||
| Interest | 3,939 | 5,476 | 13,727 | 14,923 | |||||||||||||||||||
| Depreciation and amortization | 93 | 125 | 312 | 378 | |||||||||||||||||||
| Professional fees | 651 | 1,215 | 2,822 | 2,842 | |||||||||||||||||||
| Origination and loan processing | 1,120 | 2,134 | 5,666 | 5,915 | |||||||||||||||||||
| Origination and loan processing - related party | 2,705 | 2,060 | 8,438 | 6,719 | |||||||||||||||||||
| Change in fair value of contingent consideration liabilities | — | 9 | 54 | 64 | |||||||||||||||||||
| Loss on extinguishment of debt | — | 251 | — | 251 | |||||||||||||||||||
| Other general and administrative costs | 1,082 | 1,697 | 4,415 | 4,782 | |||||||||||||||||||
| Total expenses | 13,259 | 16,554 | 46,290 | 46,532 | |||||||||||||||||||
| Net investment income (loss) | 1,670 | (533) | 31,135 | (2,598) | |||||||||||||||||||
| Net realized and unrealized gains (losses): | |||||||||||||||||||||||
| Net realized gain (loss) on non-affiliate investments - SBA 7(a) loans | (722) | 10,865 | 2,577 | 32,260 | |||||||||||||||||||
| Net realized gain on controlled investments | — | 1,600 | — | 1,600 | |||||||||||||||||||
| Net unrealized depreciation on SBA guaranteed non-affiliate investments | (111) | (209) | (494) | (521) | |||||||||||||||||||
| Net unrealized (depreciation) appreciation on SBA unguaranteed non-affiliate investments | 132 | (14) | (6,012) | (1,957) | |||||||||||||||||||
| Net unrealized (depreciation) appreciation on controlled investments | (285) | 957 | (11,156) | 3,874 | |||||||||||||||||||
| Change in deferred taxes | 70 | (27) | 3,010 | (792) | |||||||||||||||||||
| Net unrealized depreciation on servicing assets | (1,207) | (2,002) | (1,299) | (3,469) | |||||||||||||||||||
| Net realized and unrealized gains (losses) | $ | (2,123) | $ | 11,170 | $ | (13,374) | $ | 30,996 | |||||||||||||||
| Net increase in net assets resulting from operations | $ | (453) | $ | 10,637 | $ | 17,761 | $ | 28,398 | |||||||||||||||
7
Exhibit 99.1
| NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES | |||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||||||||||
| Net increase (decrease) in net assets resulting from operations per share | $ | (0.02) | $ | 0.55 | $ | 0.85 | $ | 1.49 | |||||||||||||||
| Net investment income (loss) per share | $ | 0.08 | $ | (0.03) | $ | 1.49 | $ | (0.14) | |||||||||||||||
| Dividends and distributions declared per common share | $ | 0.58 | $ | 0.58 | $ | 1.58 | $ | 1.44 | |||||||||||||||
| Weighted average number of shares outstanding | 21,192 | 19,228 | 20,942 | 19,115 | |||||||||||||||||||
8
Exhibit 99.1
NEWTEK BUSINESS SERVICES CORP. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES-
ADJUSTED NET INVESTMENT INCOME RECONCILIATION:
| Three months ended | Three months ended | |||||||||||||||||||||||||
(in thousands, except per share amounts) | September 30, 2020 | Per share | September 30, 2019 | Per share | ||||||||||||||||||||||
| Net investment income (loss) | 1,670 | 0.08 | (533) | (0.03) | ||||||||||||||||||||||
| Net realized gain (loss) on non-affiliate investments - SBA 7(a) loans | (722) | (0.03) | 10,865 | 0.57 | ||||||||||||||||||||||
| Net realized gain on controlled investments | — | — | 1,600 | 0.08 | ||||||||||||||||||||||
| Change in fair value of contingent consideration liabilities | — | — | 9 | 0.00 | ||||||||||||||||||||||
| Loss on debt extinguishment | — | — | 251 | 0.01 | ||||||||||||||||||||||
| Adjusted Net investment income | $ | 948 | $ | 0.04 | $ | 12,192 | $ | 0.63 | ||||||||||||||||||
| Nine months ended | Nine months ended | |||||||||||||||||||||||||
(in thousands, except per share amounts) | September 30, 2020 | Per share | September 30, 2019 | Per share | ||||||||||||||||||||||
| Net investment income (loss) | $ | 31,135 | $ | 1.49 | $ | (2,598) | $ | (0.14) | ||||||||||||||||||
| Net realized gain on non-affiliate investments - SBA 7(a) loans | 2,577 | 0.12 | 32,260 | 1.69 | ||||||||||||||||||||||
| Net realized gain on controlled investments | — | — | 1,600 | 0.08 | ||||||||||||||||||||||
| Loss on lease | — | — | (105) | (0.01) | ||||||||||||||||||||||
| Change in fair value of contingent consideration liabilities | 54 | 0.00 | 64 | 0.00 | ||||||||||||||||||||||
| Loss on debt extinguishment | — | — | 251 | 0.01 | ||||||||||||||||||||||
| Adjusted Net investment income | $ | 33,766 | $ | 1.61 | $ | 31,472 | $ | 1.65 | ||||||||||||||||||
Note: Amounts may not foot due to rounding
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