Newtekone, Inc. · NASDAQ:NEWT
Newtekone — Newtek Business Services — FY2005 Earnings Presentation
31 slides from Newtekone's earnings presentation, Apr 5, 2006
Slide 1: 2005 Annual Shareholder Conference Call
i *S Newtek Business Services, Inc. 2005 Annual Shareholder Conference Call April 4, 2006 Barry Sloane — CEO/Chairman Michael J. Holden - CFO —/ a = CTT =| R _,; | em
Slide 2: Safe Harbor Statement
Newtek Business Services, Inc. We do it better Safe Harbor Statement The statements in this slide presentation may contain forward-looking statements relating to such matters as anticipated future financial performance, business prospect, legislative developments and similar matters. The Private Sec
Slide 3: Newtek Business Services Financial Highlights for 2005
Newtek Business Services Financial Highlights for 2005 + Record revenues on a consolidated basis of $96 million up from $70.2 million in 2004 « Record revenues in the merchant processing segment of $33 million up from $19.1 million in 2004 + Record revenues in the webhosting segment of $10.7 million
Slide 4: Newtek Business Services Financial Strength
Newtek Business Services, Inc. We do it better Newtek Business Services Financial Strength $58 million in cash, cash equivalents, and short term treasuries and marketable securities $87 million in shareholders equity $2.51 in book value per share
Slide 5: Shareholder Equity
areholder Equity (in millions) $100 87.2 57 7A $50 40.2 $25 22.1 $10 2002 2003 2004 2005 Newtek Business Services, Inc. We do it better
Slide 6: Book Value Per Share
Book Value Per Share $3.00 3229 $2.51 $2.28 $2.00) $1.50 $1.54 $1.00 $1.07 2002 2003 2004 2005 Newtek i Business Services, Inc. We do it better
Slide 7: Newtek Business Services Consolidated Balance Sheet
Newtek Business Services Consolidated Balance Sheet See Press Release Newtek Business Services, Inc. We do it better
Slide 8: Is Newtek Over Leveraged?
Is Newtek Over Leveraged? Assets Tax Credit Receivable Small Business Loans Liabilities Interest Expense Payable GE/CIT/Signature Bank Facility Shareholder Equity Newtek $87 million Business Services, Inc. We do it better
Slide 9: What is Newtek?
at is Newtek? * It is a major play into owning a distribution company whose target is the national small to medium-sized business market place — 23 million potential clients — 51% of GDP — 9 out of 10 U.S. businesses * It is achieving its goals and quickly becoming the premier provider of business s
Slide 10: How is Newtek Accomplishing its Goal?
How is Newtek Accomplishing its Goal? + By utilizing state of the art web-based proprietary technology « 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 to make our employees and asso
Slide 11: Who Uses Our Technology? Who Has Endorsed Its Use?
Who Uses Our Technology? Who Has Endorsed Its Use? ¢ Merrill Lynch « CUNA - 9,600 credit unions « NAVY Federal Credit Union « UBS ° US WCC * Citibank ¢ National Physicians Health Care ¢ GM Auto Minority Dealers Association Newtek Business Services, Inc. We do it better i
Slide 12: New Technology Launches
New Technology Launches « New Website Launch * Our Virtual Salesforce Offering Newtek Business Services, Inc. We do it better 12
Slide 13: Who Are Our Future Users?
ho Are Our Future Users? « Independent Agents ¢ Virtual Franchise Newtek Business Services, Inc. We do it better 13
Slide 14: Operational Highlights
5 Operational Highlights + Newtek Business Services, Inc. Announces Relationships with over 90 Credit Unions + Newtek Business Services, Inc. Signs Exclusive Agreement with the U.S. Women’s Chamber of Commerce + Newtek Business Services, Inc. Reports Gain from Selling Interest in Vicarious Visions +
Slide 15: Operational Highlights Continued
5 Operational Highlights Co + Newtek Business Services, Inc. Signs Commitment Letter with GE Capital + Wilshire Texas Partners Raises $23.4 Million; Texas Capco Funding Received + Newtek Business Services Names Two New Independent Directors + Newtek Business Services Reports Restatement of First Qua
Slide 16: Key Variables for Successful Transition
Key Variables for Successful Transition + New CFO Michael Holden — 21 plus years of experience * Management focus on building core business * The business model is working + Core business lines create $11.7 million of Projected EBITDA in 2005 and $ 15.7 million of Projected EBITDA in 2006 * Company’
Slide 17: The Business Transition
The Business Transition The CAPCO business and market segment is being deemphasized... Newtek Business Services, Inc. We do it better wy
Slide 18: CAPCO is being Deemphasized
CAPCO is being Deemphasized * Lack of state Legislation — Product Creation « We have enough capital to accomplish our mission * Confusing income and balance sheet issues ¢ Greater value play in developing brand of products and services for SMB Market vs. Capital Creation (2003 Launch) « Will be full
Slide 19: Income from Tax Credits
Income from Tax Credits (in millions of dollars) 50 45 40 35 30 25 44.9 33.6 35.6 Newtek 2003 2004 2005 2006 Business Services, Inc. Projected We do it better 19
Slide 20: Revenue mix by segment and Capco revenue percentage
74.3% 88.3% Capeos & Other [BE Small Business Lending ‘Merchant Services Web Hosting 2004 Revenue $70.2" oan 14% 63% ore 51.7% AN Newtek Business Services, Inc. 23% We do it better 1 Revenues in Millions Capco Revenue as a Percentage Forecast 2002 Revenue $34.7* 2003 Revenue $60.5* 122% 2005 Revenue
Slide 21: Newtek Summary
Newtek Summary + The business model in transition is an investment opportunity + The Small to Medium Size Business Market is valuable ¢ A Direct Distributor of products and services into the SMB market — Which acquires and processes business at a low cost is and will become increasingly valuable New
Slide 22: Segment Results
05 Se nt Resu (in millions of dollars) Revenue Pretax Net EBITDA Income Merchant 32.8 2.3 3.4 Processing Web Hosting 10.7 3.6 6.0 SBA Lending 10.7 0.0 21 CAPCO 41.7 8.7 And Other Newtek #2 95.7 14.6 Business Services, Inc. We do it better 2
Slide 23: Segment Forecasts
06 Se nt Forecasts (in millions of dollars) Revenue Pretax Net EBITDA Income Merchant 45.0-47.0 3.8-4.0 5.6-5.8 Processing Web Hosting 12.5-13.0 2.0-2.4 5.3-5.7 SBA Lending 11.8-12.2 0.7-1.0 5§.0-5.3 CAPCO 16.8-17.2 (4.6)-(5.0) All Other 4.9-5.3 (1.6)-(2.0) OH 5.8-6.1 (3.4)-(3.8) Newtek Eliminates (
Slide 24: Potential Merchant Processing Acquisitions
Potential Merchant Processing Acquisitions $10 Million target acquisitions of merchant portfolios - $2.5 million purchased scheduled to close within 2 weeks - $7.5 million purchase scheduled to close within 60 days These acquisitions will: - add additional processing platforms - add 6,000 new custom
Slide 25: 2005 - 2006 EBITDA By Segment
2005 - 2006 EBITDA By Segment in millions of dollars) 2005 2006 Lending 2.1 5.0-5.3 Merchant 3.4 5.6-5.8 Processing Web Hosting 6.0 5.3-5.7 Newtek Business Services, Inc. We do it better 25
Slide 26: Break Up Value for Value
Break Up Value for Value Why is this measure more relevant than earnings per share. Newtek Business Services, Inc. We do it better 26
Slide 27: Public Financial Technology Sector Universe
Public Financial Technology Sector Universe Median Price / Earnings Multiples by FT Sector { 2006E Price / Earnings Multiples } 2007E Price / Earnings Multiples ‘arene Wty BN aber vet so 2 — ——— a: ina ans us
Slide 28: Public Financial Technology Sector Universe
Public Financial Technology Sector Universe Common Stock Comparison ~ Summary Analysis arkot Enterprise Parcentot Value Value" _Prico Earnings EV/Rovenwe™ LT Growin CY OBE Comparabi FT Industry Seaman LW High mum) _tSmm) YOKE COTE cose __cYoTe PieIG ‘lol Seca Exchange sT% srhzse srg maxx ox ax 28x A
Slide 29: Common Stock Comparison
Common Stock Comparison Payment Processing / Outsourcing and Payroll / HR / Benefits Solutions Companies Maret Enterprise Pico Percent! Value Value rice Ea LToromm cy ese 7 Secor Como sexes _UrMnign mm) __ismmy_E¥ouE__ evar Rate P/EIG wm ork sasamo supa two teskadyane Be 1x ‘om 461 a) “ re 'e te om
Slide 30: Michael J. Holden - CFO
Michael J. Holden - CFO Newtek Business Services, Inc. We do it better 30
Slide 31: Questions & Answers
Questions & Answers Newtek Business Services, Inc. We do it better 31
Newtek Business Services — FY2005 Earnings Presentation on 6ix