Newtekone, Inc. · NASDAQ:NEWT
Newtekone — Newtek Business Services — Q2 2008 Earnings Presentation
22 slides from Newtekone's earnings presentation, Aug 8, 2008
Slide 1: Newtek Business Services, Inc. Second Quarter 2008 Financial Results Conference Call
Exhibit 99.2 Newtek Business Services, Inc. NASDAQ: NEWT Second Quarter 2008 Financial Results Conference Call August 6, 2008, 4:15 PM Hosted By: Barry Sloane, CEO and Chairman Seth A. Cohen, CFO Investor Relations Contact: Jayne L. Cavuoto 212-273-8193 jcavuoto@newtekbusinessservices.com
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: Q2 2008 Conference Call Agenda
Q2 2008 Conference Call Agenda Financial Results Snapshot Momentum Continues in EPP Segment Web Hosting Initiatives Small Business Finance Initiatives Cost Reduction Measures Industry Comparison Financial Review 2008 Outlook 3
Slide 4: Q2 2008 Financial Results
Q2 2008 Financial Results Met previously stated 2008 consolidated guidance; better than pre-tax net loss guidance Q2 2008 v. Q2 2007 core operating segment revenue increased 11% Electronic Payment Processing: $15.9 million - up 22% over Q2 2007 Web Hosting: $4.5 million - up 14% over Q2 2007 Small B
Slide 5: Cash Position
Cash Position $28.0 million in cash and cash equivalents, and restricted cash Equates to $0.78 cash per share 5
Slide 6: Momentum Continues in EPP
Momentum Continues in EPP Q2 2008 EPP revenue up 22.0% over Q2 2007 EBITDA margin 10.8% for Q2 2008, consistent with Q1 2008 Have not experienced increased merchant attrition in light of challenging market; merchant attrition in line with expectations Cash flow positive business Significant operatin
Slide 7: Web Hosting Initiatives
Web Hosting Initiatives Q2 2008 Web Hosting revenue up 14.0% over Q2 2007 Continued growth despite challenging market Continue to invest in Web Hosting segment to support future growth Continue to evaluate expenditures versus productivity, particularly in marketing, in the Web Hosting segment seekin
Slide 8: Small Business Finance
Small Business Finance Q2 2008 revenue decreased by 36% to $2.1 million over Q2 2007 primarily as a result of: In Q2 2008, the average premium received on the sale of guaranteed loans decreased from Q2 2007 levels • Q2 2008 average premium of 7.63% versus Q2 2007 average premium of 9.83% Closed appr
Slide 9: Small Business Finance
Small Business Finance Reevaluation of primary loan origination sources Actively bidding on both performing and non-performing loan portfolios SBA lending expertise and in-house SBA servicing capabilities Ability to purchase SBA loan portfolios and servicing from banks exiting this area of lending a
Slide 10: Cost Reduction Measures
Cost Reduction Measures Significantly reduced expenses at Holding Company and segment levels Discontinued three service lines and associated headcount Cost reductions are expected to equate to a minimum $2.0 million of cash savings in 2009 Plan to continue to review other segments to recognize addit
Slide 11: Industry Comparisons
Industry Comparisons* December 19, 2007, Intuit Inc. (NASDAQ: INTU) signed a definitive agreement to purchase Electronic Clearing House, Inc. (NASDAQ: ECHO) Newtek Business Services, Inc. Electronic Clearing House, Inc.** Electronic Payment Processing Segment ECHO data as of fiscal year ended Newtek
Slide 12: Industry Comparisons
Industry Comparisons* June 19, 2008, Deluxe Corp. (NYSE: DLX) announced it signed a definitive agreement to purchase Hostopia.com, Inc. (TSX: H) for $121.7 million. Newtek Business Services, Inc. Hostopia.com, Inc** Web Hosting Segment Hostopia data as of fiscal year Newtek Web Hosting data as of fi
Slide 13: Financial Review
Financial Review Seth A. Cohen - CFO
Slide 14: Non-GAAP Financial Measures
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 revie
Slide 15: Q2 2008 Actual vs. Q2 2007 Actual
Q2 2008 Actual vs. Q2 2007 Actual In millions of dollars Revenue Revenue Pretax Net Pretax Net EBITDA EBITDA Q2 2008 Q2 2007 Income (Loss) Income (Loss) Q2 2008 Q2 2007 Actual Actual Q2 2008 Q2 2007 Actual Actual Actual Actual Electronic 15.939 13.070 1.167 0.948 1.726 1.390 Payment Processing Web H
Slide 16: Q2 2008 Guidance vs. Q2 2008 Actual
Q2 2008 Guidance vs. Q2 2008 Actual In millions of dollars Revenue Revenue Pretax Net Pretax Net EBITDA EBITDA Guidance Actual Income (Loss) Income (Loss) Guidance Actual Guidance Actual Electronic 15.8 – 16.0 15.939 1.0 – 1.1 1.167 1.6 – 1.7 1.726 Payment Processing Web Hosting 4.4 – 4.5 4.501 0.7
Slide 17: Going Forward: 2008
Going Forward: 2008 Barry Sloane - CEO
Slide 18: 2008 Segment Guidance
2008 Segment Guidance In millions of dollars Electronic Small Payment Web Business All Corporate Processing Hosting Finance Other Activities Low High Low High Low High Low High Low High 2008 Full Year Revenue 65.7 65.9 17.9 18.1 8.6 9.0 2.3 2.5 5.2 5.5 Pretax Net Income 4.7 4.9 2.8 3.0 (3.6) (3.2) (
Slide 19: 2008 Segment Guidance
2008 Segment Guidance In millions of dollars Total Business CAPCO Intercompany Segments Segment Eliminations Total Low High Low High Low High 2008 Full Year Revenue 99.7 100.9 6.3 6.3 (5.8) 100.2 101.5 Pretax Net Income (5.4) (3.9) (6.7) (6.7) - (12.1) (10.7) 2008 3rd Quarter Revenue 24.6 25.2 1.6 1
Slide 20: Questions & Answers
Questions & Answers
Slide 21: Addendums
EF Addendums
Slide 22: EBITDA Reconciliation
EBITDA Reconciliation EBITDA Reconciliation to Net Income (Loss) In millions of dollars For The Three Months Ended June 30, 2008 Pretax Income Interest Expense Depreciation and Q2 2008 (Loss) for Q2 2008 for Q2 2008 amortization for Q2 2008 EBITDA Electronic Payment 1.167 - 0.559 1.726 Processing We
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