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Ameritrans Capital Corp. Reports Operating Results (10-Q)

May 16, 2011 | About:
10qk

10qk

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Ameritrans Capital Corp. (AMTC) filed Quarterly Report for the period ended 2011-03-11.

Ameritrans Capital Corp. has a market cap of $4.24 million; its shares were traded at around $1.2499 with and P/S ratio of 2.56.

Highlight of Business Operations:

Commercial Loans outstanding as of March 31, 2011 decreased by $2,668,729, or 30%, to $6,195,992, as compared with $8,864,721 at March 31, 2010. The decrease in Commercial Loans was due, primarily, to loan amortization and paid off loans of approximately $1,793,000, foreclosure on two loans that had been carried at an aggregate of $1,047,000, fair value adjustments of approximately $75,000 and a realized loss on a foreclosed loan of $100,000, partially offset by new loans aggregating $341,000.

Corporate Loans outstanding as of March 31, 2011 increased by $3,084,909, or 25%, to $15,566,352, as compared with $12,481,443 outstanding at March 31, 2010. This increase was primarily attributable to new loans of approximately $17,281,000, partially offset by payoffs of approximately $13,241,000 and the reduction of the fair value of certain loans of approximately $955,000.

Professional fees for the three months ended March 31, 2011 increased $735,970 to $992,905, or approximately 286%, when compared with $256,935 for the three months ended March 31, 2010. This increase is primarily attributable to legal fees incurred in connection with a financing transaction entered into subsequent to March 31, 2011. Included in professional fees are accounting fees relating to the Companys internal controls; consulting fees in connection with the Companys chief financial officer; legal fees to non-related parties; general legal fees to both related and non-related parties; legal fees related to the Companys life settlement portfolio; fees for accounting services and audit fees. Accounting fees for internal controls decreased approximately $48,000 to $16,000 when compared to the three months ended March 31, 2010. In 2010, documentation with regard to controls was being improved. Therefore, more fees were spent on implementation in the 2010 quarter with no corresponding activity in the 2011 quarter. General accounting fees increased approximately $10,000 to $49,000 when compared with the three months ended March 31, 2010. Audit fees increased approximately $20,000 to $73,000 when compared with the three months ended March 31, 2010. Consulting fees related to the Companys chief financial officer, who started in July 2010, were $56,000 in the 2011 quarter as compared with $0 in the comparable 2010 period. Legal fees to non-related parties increased approximately $708,000 to $798,000 when compared to the three months ended March 31, 2010.This increase is almost entirely a result of increased legal activity related to the Companys issuance of a $1.5 million Senior Secured Note in January 2011 and fees in connection with a Stock Purrchase Agreement entered into in April 2011.

Professional fees for the nine months ended March 31, 2011 increased $842,392 to $1,609,938, or approximately 110%, when compared with $767,546 for the nine months ended March 31, 2010. Accounting fees for internal controls decreased approximately $65,000 when compared to the nine months ended March 31, 2010. General accounting fees were relatively flat, going from $150,000 in the 2010 nine-month period to $161,000 in the 2011 nine-month period. Audit fees increased approximately $2,000 to $158,000, when compared with $156,000 for the nine months ended March 31, 2010. Consulting fees related to the Companys chief financial officer, who started in July 2010, was $143,000 in the 2011 nine-month period and $0 in the comparable 2010 period. Legal fees to non-related parties increased approximately $827,000 to $1,070,000 in the 2011 period when compared with $243,000 for the nine months ended March 31, 2010 and were related, primarily, to the Companys issuance of a $1.5 million Senior Secured Note in January 2011 and fees in connection with a Stock Purrchase Agreement entered into in April 2011 and, to a lesser extent, to fees in connection with SEC compliance, foreclosures and office lease issues. Legal fees associated with the Companys life settlement portfolio decreased to $1,830 during the nine months ended March 31, 2011 from approximately $65,000 in the comparable prior period because of the activity relating to resolution of issues during the earlier period.

The decrease in net assets resulting from operations decreased $743,864, or 16% to $3,866,313for the nine months ended March 31, 2011 from $4,610,177 for the nine months ended March 31, 2010. This change in net assets from operations between periods was attributable primarily to a net increase in investment loss of approximately $577,000 (primarily attributable to an increase in interest income resulting from the larger investment portfolio of approximately $481,000, as offset by an increase in expenses of approximately $1,060,000), an increase in net realized loss from investments of approximately $960,000 and a change from unrealized depreciation on investments in the 2010 period to unrealized appreciation on investments in 2010 aggregating approximately $362,000.

Total assets decreased approximately $2,766,000 to $31,143,000 at March 31, 2011 as compared with total assets of $33,909,000 at June 30, 2010. This net decrease was primarily due to a decrease in cash and equivalents of approximately $3,400,000 less a net decrease in the loan portfolio of $375,000; an increase in assets acquired in satisfaction of loans of $1,050,000 and a net decrease in other assets aggregating approximately $50,000. Total liabilities had an increase of approximately $1,353,000 between periods with a total of approximately $26,886,000 at March 31, 2011 as compared with $25,533,000 at June 30, 2010. This increase was substantially attributable to the increase in notes payable, other of $1.5 million in January 2011, as partially offset by the payoff of bank debt of $370,000 in July 2010.

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