Newtekone, Inc. · NASDAQ:NEWT
Newtekone — Newtek Business Services — Q1 2012 Earnings Presentation
45 slides from Newtekone's earnings presentation, May 10, 2012
Slide 1: First Quarter 2012 Financial Results Conference Call
Newtek Business Services, Inc. NASDAQ: NEWT First Quarter 2012 Financial Results Conference Call May 8, 2012 4:15 PM Hosted By: Barry Sloane, CEO and Chairman Jennifer C. Eddelson, CAO Investor Relations Public Relations Rubenstein Investor Relations, Inc. Rubenstein Public Relations, Inc. Timothy C
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: First Quarter Key Performance Statistics
First Quarter Key Performance Statistics
Slide 4: First Quarter Key Performance Statistics
First Quarter Key Performance Statistics
Slide 5: First Quarter 2012 Conference Call Agenda
First Quarter 2012 Conference Call Agenda Q1 2012 Financial Performance, Cash Position, Balance Sheet Commentary, Developments and Business Trends Focus on Revenue Growth New Financing Arrangement with Summit Partners 2012 Guidance
Slide 6: First Quarter 2012 Financial Results
First Quarter 2012 Financial Results Q1 2012 vs. Q1 2011 core operating segment revenue: Electronic Payment Processing: $20.6 million – up 3% from Q1 (revenue up 10% excluding impact of Durbin Amendment) Managed Technology Solutions: $4.7 million – down 3% from Q1 2011 Small Business Finance: $4.8 m
Slide 7: Cash Position
Cash Position $22.6 million in cash and cash equivalents and restricted cash at March 31, 2012, down from $25.4 million at December 31, 2011 Equates to $0.42 cash per share, Equates to $0.63 cash per share when including restricted cash
Slide 8: Selected Balance Sheet Items
Selected Balance Sheet Items In thousands of dollars Major changes in Assets and Liabilities Increase of $9.0 million in Broker receivable Increase of $4.7 million in SBA loans held for investment Increase of $8.0 million in Bank notes payable Decrease of $2.5 million in Credits and Notes Payable in
Slide 9: Reduced Effect of Capco on Consolidated Results
Reduced Effect of Capco on Consolidated Results Balance sheet illusionary leverage $14.5 million – Credits in lieu of cash $14.5 million – Notes payable in credits in lieu of cash Management time Accounting cost Other miscellaneous costs
Slide 10: Future Year End Balance of Tax Credits
Future Year End Balance of Tax Credits $ in millions
Slide 11: Developments in EPP
Developments in EPP Q1 2012 EPP revenue up $530 thousand, or 3% compared with year ago period; excluding impact of Durbin Amendment, revenue increased by 10% Q1 2012 EPP pretax income of $2.1 million, a 72% increase compared with Q1 2011 Cash flow positive business Significant operating leverage EPP
Slide 12: Managed Technology Solutions Initiatives
Managed Technology Solutions Initiatives Q1 2012 Web hosting and design revenue down 3% compared to year ago quarter Q1 2012 MTS pretax income decreased by 10% over prior year Decrease in web hosting due to decline in monthly plans Increase in average revenue per plan resulting from increase in numb
Slide 13: Developments in Small Business Finance
Developments in Small Business Finance Q1 2012 SBF revenue, after adjusting for fair value accounting adjustment related to timing of recognition of premium income included in prior quarter, increased 36% over year ago period Q1 2012 SBF pretax income $1.5 million, a 15% increase compared with prior
Slide 14: Small Business Finance
Small Business Finance Servicing Portfolio (in thousands): Q1 2012 Q1 2011 Increase Servicing for our loans $ 295,900 $ 231,400 $ 64,500 Servicing for others $ 135,900 $ 76,200 $ 59,700 Total servicing portfolio $ 431,800 $ 307,600 $124,200 From March 31, 2011 to March 31, 2012, our servicing portfo
Slide 15: Newtek Payroll Services
Newtek Payroll Services Payroll management, payment and reporting service Competitively priced and ideal for small and medium sized businesses Currently servicing customers in 33 states Compliments existing Newtek Products Insurance WC Pay-go “Payroll in the Cloud”
Slide 16: Growth Strategy
Growth Strategy The Small Business Authority brand through www.thesba.com Emphasize cross-selling and cross-marketing into the customer base Continue to grow alliance channels as outsourcing of our services is attractive to banks, credit unions and other affinity groups Outbound campaign with direct
Slide 17: Our Strategy & Mission
Our Strategy & Mission We are a thought leader and destination for independent owner operators of small businesses. The Small Business Authority provides products, services, and data to small and medium size businesses across the United States to grow their sales, reduce their expenses, reduce their
Slide 18: Total Referrals
Total Referrals Total referrals received increased over 20% as compared with the year ago quarter as a result of our new initiatives
Slide 19: Visitors
63% of visitors are unique to www.thesba.com compared to repeat visitors
Slide 20: 54% increase in total unique visitors for Q1 2012
54% increase in total unique visitors for Q1 2012 compared to Q1
Slide 21: Current General Statistics
Current General Statistics Our Alexa traffic ranking is 74,036 with 688 sites linking in 63% Bounce Rate; average time on site is 2 minutes: 23 seconds An average of approximately 1,100 unique visitors per day
Slide 22: Small Business Authority Branding Achievements
Small Business Authority Branding Achievements Forbes publishes The Small Business Authority Blog daily which can be viewed at http://blogs.forbes.com/thesba/ Our introductory post which explains what our blog will do can be viewed at http://blogs.forbes.com/thesba/2011/06/15/your-authority-on-small
Slide 23: Current Marketing Strategy - WABC Radio
Current Marketing Strategy - 77 WABC Radio “Reporting Live from The Small Business Authority Studios” over 400 mentions per month Over 250 sixty second radio commercials per month. Hear our spots on www.thesba.com click on community , then click on radio spots to hear our personalities, like Imus, H
Slide 24: WABC Radio Overview
WABC Radio Overview “The Imus in the Morning Show” – broadcast Monday through Friday, 6am EST to 9:20am EST on 77 WABC and Fox Business News SBAS – Small Business Authority Studios See Warner Wolf broadcast sports from the SBAS several times each morning Backdrop Microphone flags See Bernard McGirk
Slide 25: SB Authority Index
SB Authority Index Financial barometer for small business economy Made up of eight primary business and economic components of the small business economy SB Authority Index released at beginning of every month Available in our newsletter with approximately 60,000 in distribution Available on our web
Slide 26: July 2012 Advertising & Media Plan
July 2012 Advertising & Media Plan National versus regional Television, digital, and other media added to regional radio Increased budget by 50%
Slide 27: SB Authority Market Sentiment Survey
SB Authority Market Sentiment Survey On a monthly basis, delivers the pulse of the small business economy by polling our client base on topical issues like health care, the lending environment and other important issues affecting small businesses Usually poll in excess of 1,200 respondents Released
Slide 28: The Small Business Authority
SO ee THE SMALL BUSINESS
Slide 29: Strategic Alliance Partner Channel
Strategic Alliance Partner Channel Hired new SVP of National Sales, Hyonwoo Shin Mr. Shin’s expertise includes Investment Banking, Management of Distressed Private Finance, and Raising Capital He is also a graduate of the US Military Academy, West Point, served in the US Army as st Lieutenant, and r
Slide 30: Direct channel referrals produced 13.9% of total referrals
With the launch of our new website and The Small Business Authority brand, direct channel referrals produced 13.9% of our total referrals in Q1 2012 compared with 7.1% in the year ago quarter Percent of Referrals from Direct Channel
Slide 31: Cross sell referrals increased by 10%
For the quarter ended March 31, 2012, cross sell referrals increased by 10% over the year ago quarter Cross Sell Referrals
Slide 32: Small Business Authority Channel
Small Business Authority Channel Grow internet web based direct business through search through branding on TV, radio, print and public relations Grow as the destination spot for independent owner/operator businesses Increase recognition as being “The Authority” in business issues for small business
Slide 33: The Small Business Authority
SO ee THE SMALL BUSINESS
Slide 34: Annual Pretax Income Trend
Annual Pretax Income Trend Pretax income (loss), in millions -$18 -$12 -$6 $0 $6 $12 Actual Actual Actual Actual Actual Forecast Midpoint $(17.5) $(13.1) $(4.0) $0.9 $2.3 $7.5
Slide 35: Revised Segment Guidance
Revised Segment Guidance *Note: totals may not add due to rounding In millions of dollars Electronic Managed Small Total Payment Technology Business All Corporate Business CAPCO Intercompany Processing Solutions Finance Other Activities Segments Segment Eliminations Total Low High Low High Low High
Slide 36: Financial Review
Financial Review Jennifer C. Eddelson – CAO
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures In evaluating its business, Newtek considers and uses modified EBITDA as a supplemental measure of its operating performance. The Company defines modified EBITDA as earnings excluding income from tax credits, net change in fair value of credits in lieu of cash and notes p
Slide 38: Q1 2012 Actual vs. Q1 2011 Actual
Q1 2012 Actual vs. Q1 2011 Actual In millions of dollars Revenue For The Quarter Ended March 31, 2012 Actual Revenue For The Quarter Ended March 31, 2011 Actual Pretax Income (Loss) For The Quarter Ended March 31, 2012 Actual Pretax Income (Loss) For The Quarter Ended March 31, 2011 Actual MODIFIED
Slide 39: Revised Segment Guidance
Revised Segment Guidance *Note: totals may not add due to rounding In millions of dollars Electronic Managed Small Total Payment Technology Business All Corporate Business CAPCO Intercompany Processing Solutions Finance Other Activities Segments Segment Eliminations Total Low High Low High Low High
Slide 40: Previous Segment Guidance
Previous Segment Guidance *Note: totals may not add due to rounding In millions of dollars Electronic Managed Small Total Payment Technology Business All Corporate Business CAPCO Intercompany Processing Solutions Finance Other Activities Segments Segment Eliminations Total Low High Low High Low High
Slide 41: Going Forward: 2012
Going Forward: 2012 Barry Sloane - CEO
Slide 42: The Small Business Authority
SO ee THE SMALL BUSINESS
Slide 43: The Small Business Authority
SO ee THE SMALL BUSINESS
Slide 44: Modified EBITDA Reconciliation Q1 2012
Pretax Income (Loss) Income from Tax Credits Net Change in Fair Value of Credits in Lieu of Cash and Notes Payable in Credits in Lieu of Cash Deferred Comp Expense Lease restructuring charges Interest Expense Depreciation and amortization Q1 2012 Modified EBITDA Electronic Payment Processing 2.066 -
Slide 45: Modified EBITDA Reconciliation Q1 2011
Pretax Income (Loss) Income from Tax Credits Net Change in Fair Value of Credits in Lieu of Cash and Notes Payable in Credits in Lieu of Cash Deferred Comp Expense Interest Expense Depreciation and amortization Q1 2011 Modified EBITDA Electronic Payment Processing 1.204 - - 0.003 - 0.381 1.588 Manag
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