NewtekOne, Inc. · NASDAQ:NEWT
NewtekOne — Newtek Business Services — Q1 2007 Earnings Presentation
28 slides from NewtekOne's earnings presentation, May 10, 2007
Slide 1: Conference Call
Conference Call May 9, 2007 4:15pm Barry Sloane – CEO/Chairman Michael J. Holden - CFO 2007 First Quarter Shareholder Exhibit 99.2
Slide 2: Safe Harbor Statement
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 the Private Securities Litigation Reform Act of
Slide 3: Mission Statement
Mission Statement • Newtek is quickly becoming the premier distributor of business services and financial products to the small and medium sized business market • In excess of 78,000 business accounts at 3/31/07 • Adding 3,000 new clients per quarter net of attrition • Newtek TM is a one stop shop
Slide 4: Mission Statement
Mission Statement We want the SMB market to view NEWTEK TM as “THE Company” to go to for all their business services needs. IMPLICATION IMPLICATION
Slide 5: Product, Process, Customer and/or Market
PRODUCT PROCESS CUSTOMER and/or MARKET CONTINUAL ASSESMENT and CORRECTION NEWTEK CAN START AT ANY POINT Product & Process are Linked
Slide 6: Today's Presentation and Format
Today’s Presentation and Format • Avoid repeating the Annual Presentation format given 45 days ago • Newtek Website – Shareholder’s Letter from Chairman/CEO – First Quarter Shareholder Conference Call May 9, 2007 (PowerPoint currently presenting) • Focus On: – Financial Highlights – Execution of Str
Slide 7: Newtek First Quarter Highlights
Newtek First Quarter 07 Highlights • Growing revenues in EPP, Web Hosting and Small Business Lending: – EPP segment revenue increased by 33% Q1 ’07 over Q1 ‘06 – Web Hosting segment revenue increased by 22% Q1 ’07 over Q1 ‘06 – SBA Lending segment revenue increased by 10% Q1 ’07 over Q1 ’06 • Growin
Slide 8: Newtek Business Services Financial Strength
Newtek Business Services Financial Strength As of March 31, 2007 • $43 million in cash and cash equivalents, restricted cash, and U.S. Treasuries • $85 million in shareholders equity • $2.44 in book value per share
Slide 9: Newtek First Quarter Results
Newtek First Quarter Results 11% $0.5 $(4.6) $(4.1) Pretax Net Loss 27% $4.7 $17.1 $21.8 Revenues % Change $ Change Q1 ‘06 Q1 ‘07 In millions of dollars
Slide 10: Three Key Segments First Quarter Results
Three Key Segments First Quarter Results In millions of dollars 15% $0.5 $3.4 $3.9 EBITDA 38% $0.5 $1.3 $1.8 Pretax Net Income 27% $ 4.0 $14.8 $18.8 Revenues % Change $ Change Q1 ‘06 Q1 ‘07
Slide 11: 2007 Annual Segment Guidance
2007 Annual Segment Guidance (17.2) - (15.8) (18.8) - (17.1) 93.2 - 94.9 90.5 - 92.5 Total (4.5) – (4.5) (4.4) – (4.4) Interco Eliminations (6.5) - (6.5) (6.0) – (6.0) 4.7- 4.7 4.8 - 4.9 Corporate Activities (2.9) - (2.6) (3.4) –(3.0) 4.8-5.1 4.2 - 4.6 All Others (15.5) - (15.5) (16.0) – (16.0) 6.4-
Slide 12: Operational Focus for 2007
Operational Focus for 2007 I. Operational Structure II. Business Services Management III. Human Resources IV. IT Advances and Directives V. Why Do We Acquire Clients Inexpensively VI. Why Do We Process Business Inexpensively VII. Alliance Partners & Marketing VIII. Financial Focus IX. Why is Newtek
Slide 13: Operational Structure
Operational Structure Level Three Sales And Marketing Personnel Add Referrals To System Business Services Specialists Close and Board Transactions Within Each Division Customer Service Representatives Handle Post-closing Customer Service, Cross Service and Cross Selling
Slide 14: Business Service Specialists Management
Business Service Specialists Management Lending Carmen Mouchacca Electronic Payment Processing Steve Hauler Web Hosting Derek Curtis and TBA Insurance Pamela Gay
Slide 15: Human Resources
Human Resources Judi Chompre, Vice President Hiring / Training / Recruiting Brownsville, Texas Operations Center
Slide 16: IT Advances and Directives
IT Advances and Directives I. Update, refine and broaden NewTracker II. Master Central Database Development III. Utilize technology for quality control, financial and management reporting
Slide 17: Why Do We Acquire Clients Inexpensively
Why Do We Acquire Clients Inexpensively 1. Wide net catches alliance partners for many offerings 2. Wide net catches business clientele for multiple offerings post close or bundled offering 3. NewTracker™ uses Merrill, Morgan Stanley, UBS, Navy Federal, AIG for brand name recognition in lieu of: a.
Slide 18: Why Do We Acquire Clients Inexpensively
Why Do We Acquire Clients Inexpensively 4. Technology makes referrals easy 5. Building our own brand
Slide 19: Why Do We Process Business Inexpensively
Why Do We Process Business Inexpensively 1. Remote production plants in Milwaukee, Phoenix and Brownsville. 2. Business gets boarded electronically through telephonic interview on strength of alliance partner. 3. Data can be shared for multiple products, services and applications. 4. Minimize commis
Slide 20: Alliance Partners and Marketing
Alliance Partners and Marketing 1. Portfolio Navy Federal CU, AIG, Morgan Stanley, UBS, PSCU, CUNA, others 2. Major Business Services and Financial Institution technology provider 3. Major Clearing Broker Dealer 4. Major Brokerage firm 5. Trade Associations
Slide 21: Financial Focus
Financial Focus 1. Grow cash flow from business services 2. Deploy operational leverage 3. Value business components 4. Reduce financial effect of CAPCO business 5. Opportunistically acquire businesses within the footprint 6. Simplify financial reporting and structure
Slide 22: Why Is Newtek Well Positioned
Why Is Newtek Well Positioned 1. Growing small business market with big appetite for services 2. High quality product offerings 3. We know of no other comparable offerings 4. Business clients prefer few providers 5. Low cost provider 6. SMB Market is coveted 7. We started with a white board 8. We ha
Slide 23: Newtek
Newtek Business Services, Inc. We do it better
Slide 24: 2007 Q1 Guidance vs. Actual Results
2007 Q1 Guidance vs. Actual Results 0.8 1.8 1.3 EBITDA Actual (4.1) (2.0) (0.4) (3.5) (0.0) 1.0 0.8 Pretax Net Income Actual 21.8 (1.2) 1.1 1.5 1.6 2.3 3.9 12.6 Revenue Actual (5.4) –(5.0) 20.3 -20.8 Total (1.1) –(1.1) Interco Eliminations (1.5) – (1.5) 1.2 -1.2 Corporate Activities (0.9) –(0.8) 0.9
Slide 25: 2007 Q1 Actual vs. 2006 Q1 Actual
2007 Q1 Actual vs. 2006 Q1 Actual 0.8 1.8 1.3 EBITDA Q1 ‘07 Actual (4.1) (2.0) (0.4) (3.5) 0.0 1.0 0.8 Pretax Net Income Q1 ‘07 Actual 21.8 (1.2) 1.1 1.5 1.6 2.3 3.9 12.6 Revenue Q 1 ’07 Actual (4.6) 17.1 Total (1.4) Interco Eliminations (1.0) 1.3 Corporate Activities (0.8) 0.9 All Others (4.1) 1.6
Slide 26: Cash Flows from Operating Activities by Segment for the First Quarter of 2007
Cash Flows from Operating Activities by Segment for the First Quarter of 2007 (in thousands of dollars) (2,694) (205) - - (2,174) - (520) (205) Income (loss) before discontinued operations Discontinued operations, net of tax (1,260) - (318) (205) - - (7) - $(4,135) $- $ (1,793) $(2,342) Net cash pro
Slide 27: 2007 Annual Segment Guidance
2007 Annual Segment Guidance (17.2) - (15.8) (18.8) - (17.1) 93.2 - 94.9 90.5 - 92.5 Total (4.5) – (4.5) (4.4) – (4.4) Interco Eliminations (6.5) - (6.5) (6.0) – (6.0) 4.7- 4.7 4.8 - 4.9 Corporate Activities (2.9) - (2.6) (3.4) –(3.0) 4.8-5.1 4.2 - 4.6 All Others (15.5) - (15.5) (16.0) – (16.0) 6.4-
Slide 28: Newtek
Newtek Business Services, Inc. We do it better
Newtek Business Services — Q1 2007 Earnings Presentation on 6ix