Transnational Financial Network Reports Fiscal 2004 Results
Transnational Financial Network, Inc. (AMEX: TFN), in its latest 10-KSB filing of July 29th for the year ended April 30, 2004, announced mixed financial results with declines in overall volume and two major non-cash write-downs, while still managing to post earnings per diluted share of $0.03 and a significantly higher available working capital balance.
SAN FRANCISCO, CA (PRWEB) August 5, 2004
Transnational Financial Network, Inc. (AMEX: TFN), in its latest 10-KSB filing of July 29th for the year ended April 30, 2004, announced mixed financial results with declines in overall volume and two major non-cash write-downs, while still managing to post earnings per diluted share of $0.03 and a significantly higher available working capital balance. Highlights of the fiscal year include the following:
-- Operating activities provided cash flows of $2,587,875 for the year ended April 30, 2004.
-- Total loan production volume was $1,239,639,734, down 28% from the prior year as a result of the decline in refinance volume.
-- Net earnings were $191,308, down 87% from the prior year results, primarily due to a reduction in retail production revenue, a non-cash goodwill impairment charge of $1,049,760 and a non-cash derivative valuation charge of $384,300.
-- Earnings per diluted share were $0.03, down 88% compared to $0.25 earnings per diluted share in the prior year.
-- Working capital as of April 30, 2004 was $2,095,894, higher by 165% due to the reduction in the restricted cash balance in the amount of $650,000 and the decrease of $987,450 in the settlement payable.
Joseph Kristul, Chairman and CEO, commented:
"Fiscal 2004 was a volatile time for us, and yet we still managed to improve our financial position and maintain profitability. I attribute our success to the changes that we made in our wholesale product offerings that resulted in a 2% increase in our gain on sale revenues despite an 8% decrease in wholesale production volume.
We will continue to emphasize higher yielding loan products in order to maintain or increase our current gain on sale levels in the face of predicted declines in demand for real estate loans. I also attribute our success to the intense focus on reducing costs over the last 2 years. We have reduced the costs associated with our warehouse facilities and have managed to reduce other variable costs as production decreased.
During the year, we determined that the goodwill related to the acquisition of LRS, Inc had experienced impairment in the amount of $1,049,760, and so we took a charge to current year's earnings in that amount. Also, we recorded a reduction in the fair value of financial derivatives in the amount of $384,300 as a result of a new SEC accounting rule. Since these were non-cash charges, overall our tangible net worth improved by over $1.5 million and our balance sheet is healthier for it.
Operating income improved as well if you exclude the non-cash goodwill impairment charge. Excluding such charge, our operating income increased by 12% to $1,861,515. Without the effects of the non-cash goodwill and derivatives charges, our diluted earnings per share would have been $0.23.
We remain optimistic about the outlook for Transnational and the changes that we are making to our business strategy. Since the end of our fiscal year, we managed to obtain a lower cost warehouse line and to reduce other costs. Also, as indicated in our 10-KSB, we have engaged an investment banking firm to assist us with our objective to raise additional capital to immediately reduce our warehouse costs, to increase the gain on sale revenues, and to possibly grow through external means when we find opportunities to acquire other firms at reasonable prices."
Transnational Financial Network, Inc. is a wholesale and retail mortgage banker that originates, funds and sells mortgage loans secured by one to four family residential properties. Through its strong sales and broker service programs, the Company has built a foundation for growth and expansion, principally in the markets of Northern California, Southern California and Phoenix, Arizona.
This News Release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove correct.
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SOURCE: Transnational Financial Network, Inc.
CONTACT: Joseph Kristul, CEO of Transnational Financial Network, Inc., +1-415-242-8840 (CEO)
URL: http://www. transnational. com (http://www. transnational. com)
CONTACT: Dawn Van Zant, ECON Investor Relations, Inc., 1-866-730-1152 dvanzant@investorideas. com
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