GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

MicroFinancial Inc Reports Operating Results (10-Q)

August 16, 2010 | About:
insider

10qk

18 followers
MicroFinancial Inc (MFI) filed Quarterly Report for the period ended 2010-06-30.

Microfinancial Inc has a market cap of $56.92 million; its shares were traded at around $4 with a P/E ratio of 12.9 and P/S ratio of 1.23. The dividend yield of Microfinancial Inc stocks is 5%.MFI is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Our selling, general and administrative (SG&A) expenses include costs of maintaining corporate functions including accounting, finance, collections, legal, human resources, sales and underwriting, and information systems. SG&A expenses also include service fees and other marketing costs associated with our portfolio of leases and rental contracts. SG&A expenses increased by $89,000 for the three months ended June 30, 2010, as compared to the three months ended June 30, 2009. The increase was primarily driven by increases in compensation expense of $51,000 and contracted labor of $82,000, offset by a $111,000 decrease in marketing expenses due to the elimination of certain programs. The increase in compensation related expenses is the result of an increase in the number of employees. The number of employees as of June 30, 2010 was 113 compared to 106 as of June 30, 2009.

As of March 31, 2010, we had a liability of $35,000 for unrecognized tax benefits and a liability of $12,000 for accrued interest and penalties related to various state income tax matters. As of June 30, 2010 we had a liability of $25,000 for unrecognized tax benefits and a liability of $10,000 for accrued interest and penalties. Of these amounts, approximately $23,000 would impact our effective tax rate after a $12,000 federal tax benefit for state income taxes. The decrease in the unrecognized tax benefits relates to a $2,000 decrease in accrued interest expense and a $10,000 decrease related to the completion of a state income tax audit. It is reasonably possible that the total amount of unrecognized tax benefits may change significantly within the next 12 months; however at this time we are unable to estimate the change.

vendors. Receivables due in installments, estimated residual values, net investment in service contracts and investment in rental contracts increased from $200.9 million at March 31, 2010 to $207.9 million at June 30, 2010. Net cash provided by operating activities increased by $3.7 million, or 25.6%, to $17.9 million during the three months ended June 30, 2010 as compared to the three months ended June 30, 2009.

Total revenues for the six months ended June 30, 2010 were $24.9 million, an increase of $3.0 million, or 13.4%, from the six months ended June 30, 2009. The overall increase was due to an increase of $2.7 million in income on financing leases, and a $0.8 million increase in fees and other income, partially offset by a decrease of $0.5 million in rental income, a decrease of $91,000 in service contracts and a decrease of $13,000 in interest income. The increase in income on financing leases is a result of the continued growth in new lease originations. The decline in rental income is the result of the attrition of Leasecomm rental contracts which is partially offset by TimePayment lease contracts coming to term and converting to rentals. Service contact revenue continues to decline since we have not funded any new service contracts since 2004.

Our selling, general and administrative (SG&A) expenses include costs of maintaining corporate functions including accounting, finance, collections, legal, human resources, sales and underwriting, and information systems. SG&A expenses also include service fees and other marketing costs associated with our portfolio of leases and rental contracts. SG&A expenses decreased by $253,000 for the six months ended June 30, 2010, as compared to the six months ended June 30, 2009. The decrease was primarily driven by decreases in marketing expenses of $121,000, a decrease in professional services of $83,000 and a decrease of $55,000 in collection expenses.

As of December 31, 2009, we had a liability of $32,000 for unrecognized tax benefits and a liability of $8,000 for accrued interest and penalties related to various state income tax matters. As of June 30, 2010 we had a liability of $25,000 for unrecognized tax benefits and a liability of $10,000 for accrued interest and penalties. Of these amounts, approximately $23,000 would impact our effective tax rate after a $12,000 federal tax benefit for state income taxes. The decrease in the unrecognized tax benefits relates to $2,000 in additional accrued interest expense less $10,000 related to the completion of a a state income tax audit. It is reasonably possible that

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.5/5 (2 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK
Email Hide