Newtekone, Inc. · NASDAQ:NEWT
Newtekone — Newtek Business Services — Red Chip Conference (October 2006)
39 slides from Newtekone's conference presentation, Oct 31, 2006
Slide 1: Red Chip Conference
Newtek Business Services, Inc. Red Chip Conference October 31, 2006 Barry Sloane — CEO/Chairman Newtekbusinessservices.com NEWT: NASDAQ Global
Slide 2: Safe Harbor Statement
Newtek Business Services, Inc. We do it better Safe Harbor Statement The statements in this slide presentation including statements regarding anticipated future financial performance, Newtek's beliefs, expectations, intentions or strategies for the future may be “forward-looking statements" under th
Slide 3: Mission Statement
Mission Statement Newtek is quickly becoming the Premier distributor of Business Services and Financial Services To The Small and Medium Sized Business Market Newtek Business Services, Inc. We do it better
Slide 4: Mission Statement Implication
IMPLICATION | Mission Statement We want the SMB market to view NEWTEK™ as “THE Company” to go to for all their business services needs. Newtek Business Services, Inc. We do it better
Slide 5: Newtek Business Services Suite
wtek Business Services Suit + Business Lending — Business loans to start up, acquire or expand a business + Electronic Payment Processing: Credit card, debit card, check conversion, and ACH solutions + Insurance Services: Nationwide commercial and personal lines of insurance + Outsourced Digital Boo
Slide 6: Business Services Financial Strength
Newtek Business Services Financial Strength * As of 6/30/06 $48 million in cash, cash equivalents, and short term treasuries * As of 6/30/06 $83 million in shareholders equity * As of 6/30/06 $2.39 in book value per share Newtek Business Services, Inc. We do it better
Slide 7: What is Newtek?
Newtek Business Services, Inc. We do it better is tek? It is a major play into owning a distribution company whose target is the national small to medium-sized business market place — 24.7 million potential clients — 51% of GDP — 9 out of 10 U.S. businesses It is achieving its goals and quickly beco
Slide 8: Business Services Second Quarter Highlights
Newtek Business Services Second Quarter 06 tela) + Web Hosting revenue increased by 32% during the first 6 months ended 6/30/06 * Electronic Payment Processing revenue increased by 38% during the first 6 months ended 6/30/06 + Web Hosting EBITDA increased 22% during the first 6 months ended 6/30/06
Slide 9: How is Newtek Accomplishing its Goal?
How is Newtek Accomplishing its Goal? * By utilizing state-of-the-art web-based proprietary technology * Newtracker™ — Patent Pending * Web-based Referral Systems — Allow referrals from alliance partners giving them a window into our back office operation * Web-based applications as an in-house tool
Slide 10: Who Uses Our Technology? Who Has Endorsed Its Use?
Who Uses Our Technology? Who Has Endorsed Its Use? ¢ Merrill Lynch — 15,500 Financial Advisors ¢ Morgan Stanley ¢ CUNA — 8,300 credit unions « NAVY Federal Credit Union ¢« UBS « US WCC « National Physicians Health Care « GM Auto Minority Dealers Newtek Business Services, Inc. Asso c i a tio n We do
Slide 11: Number of Referrals Submitted by Month
Number of Referrals Submitted by Month Newtek Business Services, Inc. We do it better
Slide 12: New Technology Launches
New Technology Launches ¢ New Website Launch Establish Newtek Direct Establish V-Rep Concept Establish Further Penetration into Alliance Relationships Utilize Same Technology Platform for 3 distribution channels creates nice operating leverage Newtek Business Services, Inc. We do it better
Slide 13: BusinessServices.COM
Newtek Business Services. COM Newtek Business Services, Inc. We do it better
Slide 14: Providing You With The Tools You Need To Manage And Grow Your Business
Newtek Business Services, Inc. We do it better Providing You With The Tools You Need To Manage And Grow Your Business AtNewisk you have a dedicated relationship wih an @»perienced agent who wi work with you to understand your businss and achieve your goals and objectives. Your agent wil work with yo
Slide 15: BizPro Resources
Newtek BizPro Resources Please login to access agent resources (login should be same as NRS account login) (After login) On the right side of the page Downloads Newtek Resources Letterhead Click here to download stationary Company Logos ick here to download Newtek Business Services, Inc. Logo Presen
Slide 16: Introducing Newtek
Introducing Newt Newtek Business Services, Inc. We do it better 16
Slide 17: Comparisons
Newtek Comparisons ¢« We are a difficult company for industry comparisons. « Wal-mart - one stop shop « Progressive — centralized processing off of web-based software. « Amazon — Unique distribution We @ == channel in basic service industry. Business Services, Inc. We do it better
Slide 18: Revenue by Division by Year
Newtek Business Services, Inc. We do it better nue by Division Year $1,000,000 $10,000,000. $8,000,000 Hosting Lending @ Insurance Lending Hosting 1 Processing Y Processing Revenue
Slide 19: Number of Lending Customers by Year
Number of Lending Customers by Year ie # of Customers 200 m ° 2008 204 200s 206 Year Newtek Business Services, Inc. We do it better 19
Slide 20: Number of Ins. Customers by Year
Number of Ins. Customers by Year Hot Customers sat Newtek . i Year Business Services, Inc. We do it better 20
Slide 21: Number of EPP Customers by Year - Organic Growth
Number of EPP Customers by Year — Organic | Growth (Ex. Acquisitions) 2004 2008 2008 Newtek situa 00 Business Services, Inc. We do it better
Slide 22: Number of Hosting Customers by Year
Number of Hosting Customers by Year #of Customers fs 2003 roe 2005 2008" Newtek oes te Business Services, Inc. Estimated 2006 We do it better
Slide 23: Revenue per FTE by Division
Newtek Business Services, Inc. We do it better 00.004 Newtek Divisions ers per FTE by Division woog
Slide 24: Dollars per FTE by Division
r FTE by Division se00000 Dollars $400,000 Newtek Divisions Newtek Business Services, Inc. We do it better 24
Slide 25: Shareholders' Equity per Share by Year
Shareholders’ Equity per Share by Year Newtek Business Services, Inc. We do it better
Slide 26: Operations Cash Flow
Operations Cash Flow « Positive cash flow from operations forecasted for 2006 * CAPCO is a Non-Contributor and a drain on earnings per share Newtek Business Services, Inc. We do it better 26
Slide 27: Capco Impact On Earnings For First Half
Newtek Business Services, Inc. We do it better Non- Cash Income from tax credits Non-Cash Interest accretion expense Non-Cash Insurance Expense Amortization Pretax contribution to Earnings non-cash Pretax loss to earnings non-cash ‘ag On Earnings For First 1st Half ’05 $11.4 million $6.1million $1.2
Slide 28: Web Hosting EBITDA
Web Hosting 2006 In Millions of Dollars % Growth = 21.96 B 6/30/2005 B 6/30/2006 Newtek Business Services, Inc. EBITDA We do it better
Slide 29: Web Hosting Income Before Taxes
Web Hosting-Income Before Taxes for first 6 ionths ‘06 In Millions of Dollars % Growth = 10.22 6/30/2005 B 6/30/2006 Newtek Business Services, Inc. Net Income We do it better
Slide 30: EPP Revenue for first six months of '06
EPP Revenue for first 6 m s of ‘06 In Millions of Dollars % Growth = 37.0 20.0 B 6/30/2005 i 6/30/2006 Newtek Business Services, Inc. We do it better 30
Slide 31: EPP Pretax Net Income for first six months '06
Newtek Business Services, Inc. We do it better EPP Pretax Net Income for first 6 m 06 In millions of Dollars % Growth = 375 Pretax Net Income *Excludes one time gain of .90* @ 6/30/2005 @ 6/30/2006 31
Slide 32: Lending Highlights
Lending Highlights * Originations are down but break even rate is lower « Average loan size is down and company is more efficient at processing ¢ Referrals are up and the lender is more selective ¢ Great operating leverage exists * Cost of capital needs to improve Newtek Business Services, Inc. We d
Slide 33: Highlights
Newtek Highlights * New Hires * Transition to cash flow positive operating model * Great technology creates low cost producer *« Expanding customer base 70,000 current clients « High growth business 1,600 new clients net of attrition ¢ Simplify balance sheet and income statement * Centralize operati
Slide 34: Newtek Summary
Newtek Business Services, Inc. We do it better Newtek Summary ¢ The business model in transition is an investment opportunity ¢« The small to medium-sized business market is valuable ¢ A Direct Distributor of products and services into the SMB market ¢ Stable business model and scaleable * Low cost
Slide 35: Segment Actual Second Quarter Results
6 Segment Actual Sec Quarter Results (in millions of dollars) Revenue Pretax Net Income EBITDA Electronic 10.6 7 14 Payment Processing Web Hosting 3.3 1.0 1.8 SBA Lending 24 (A) 9 CAPCO 24 (3.2) All Other 13 (.6) Corporate 12 (1.2) Activities Newtek Interos (1.2) - Ieee Eliminations We do it better
Slide 36: 2006 Segment Guidance Third Quarter
2006 Segment Guidance Third Quarter (in millions of dollars) Revenue Pretax Net Income EBITDA Merchant 11.6 -12.0 1.0-1.1 1.7-1.8 Processing Web Hosting 3.2-3.4 7-8 1.5-1.6 SBA Lending 3:3+ 3.5 -0-.1 AA-1.2 CAPCO 3.8 (1.7) - (4.6) All Other 1.0 (.6) - (.5) Corporate 1.5) (1.0) - (.9) Activities N we
Slide 37: Segment Guidance Fourth Quarter
6 Segment Guidance Fo Quarter (in millions of dollars) Revenue Pretax Net Income EBITDA Merchant 12.9-13.3 1.3-1.4 2.0-2.1 Processing Wed Hosting 3.3-3.5 6-.8 1.5-1.6 SBA Lending 2.3-2.5 3-4 1.3-1.4 CAPCO 95 4.0-4.0 All Other 1.0 (.5)-(.4) Corporate 1.5 (1.0)-(.9) Activities Interco (1.2) Newtek Eli
Slide 38: Annual Guidance
t Guidance (in millions of dollars) nual Revenue Pretax Net Income EBITDA Merchant 43.9-45.5 3.4-3.8 5.4-5.8 Processing Web Hosting 12.7-13.5 2.8-3.4 6.1-6.5 SBA Lending 9.9-10.7 0.2-0.6 4.3-4.7 CAPCO 17.0 (5.0)-(4.6) All Other 45 (2.0)-(1.6) Corporate 6.0 (3.8)-(3.4) Activities Interco (4.8) k Newt
Slide 39: Questions & Answers
Questions & Answers Newtek Business Services, Inc. We do it better 39
Newtek Business Services — Red Chip Conference (October 2006) on 6ix