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

May 17, 2010 | About:
10qk

10qk

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Ameritrans Capital Corp. (AMTC) filed Quarterly Report for the period ended 2010-03-31.

Ameritrans Capital Corp. has a market cap of $3.23 million; its shares were traded at around $0.95 with and P/S ratio of 0.96.

Highlight of Business Operations:

Corporate Loans outstanding as of March 31, 2010, decreased by $173,585, or 1.4%, to $12,481,443, as compared with March 31, 2009. The interest rate earned on Corporate Loans increased in 2010, as compared with the prior year, primarily due to interest rate resets on Corporate Loans due to covenant defaults. The decrease in Corporate Loans outstanding was due to loan amortization totaling approximately $503,000, the sale of a loan for $869,337 and of the aggregate reduction of fair value of certain Corporate Loans of approximately $1,042,000. This was partially offset by the addition of new Corporate Loans totaling approximately $2,242,000.

Professional fees for the three months ended March 31, 2010 decreased $53,053 to $256,935, or approximately 17%, when compared to the three months ended March 31, 2009. Legal fees to non-related parties decreased approximately $44,700 to $89,262, or approximately 33.4% when compared to the three months ended March 31, 2009. Legal fees to non related parties decreased due to the smaller portfolio, and management has undertaken to review and prepare the SEC Filings internally except for final review thereby saving legal fees. Legal fees to related parties increased approximately $11,100 to $6,294 when compared to the three months ended March 31, 2009. These fees related to increased foreclosure activity in the Companys Commercial Loan portfolio. Legal fees associated with the Companys life settlement portfolio increased by $6,226. These increases were primarily due to the restructuring of the investment. Accounting fees decreased approximately $36,100 to $38,700 when compared to the three months ended March 31, 2009. Audit fees decreased approximately $32,600 to $52,518 when compared to the three months ended March 31, 2009. These decreases were due to a reduction in audit fees attributable to the Companys smaller portfolio. Offsetting these decreases was an increase in accounting fees for internal controls of $43,075 to $63,936 when compared to the three months ended March 31, 2009. This increase in our accounting fees was primarily attributable to the Companys implementation of, and compliance with, Section 404 of the Sarbanes Oxley Act of 2002, including the improvement of documentation related to our internal control over financial reporting.

Miscellaneous administrative expenses decreased $14,164, to $167,933, or approximately 8% when compared with the three months ended March 31, 2009. This decrease was due to a reduction of computer fees of approximately $7,500, website expense of approximately $4,000, line and facility fees of approximately $7,000, market data fees of approximately $7,000, audit and compliance fees of approximately $5,000, investor relations fees of approximately $4,000, and other miscellaneous fees and expenses of approximately $10,000 partially offset by an increase in recruitment fee for a new employee of approximately $14,000, insurance expenses of approximately $8,900, and SBA committee fee of approximately $7,600.

Corporate Loans outstanding as of March 31, 2010, decreased by $173,585, or 1.4%, to $12,481,443, as compared with March 31, 2009. The interest rate earned on Corporate Loans increased in 2010 as compared with the prior year, primarily due to interest rate resets on Corporate Loans due to covenant defaults. The decrease in Corporate Loans outstanding was due to the sale of a loan for $922,000, loan amortization totaling approximately $559,000 and of the aggregate reduction of fair value of certain Corporate Loans of approximately $1,042,000. This was partially offset by the addition of new Corporate Loans totaling approximately $2,294,000.

Professional fees for the nine months ended March 31, 2010 decreased $333,015 to $767,546, or approximately 30.2%, when compared to the nine months ended March 31, 2009. Legal fees to non-related parties decreased approximately $160,000 to $242,863 or approximately 40.2% when compared to the nine months ended March 31, 2009. Legal fees to related parties decreased approximately $14,600 to $10,806 when compared to the nine months ended March 31, 2009. Legal fees associated with the Companys life settlement portfolio increased by $65,401 when compared to the nine months ended 3/31/09. These increases were primarily due to the restructuring of the investment. Accounting fees decreased approximately $31,800 to $149,650 when compared to the nine months ended March 31, 2009. Audit fees decreased approximately $102,000 to $156,042 when compared to the nine months ended March 31, 2009. These decreases were due to a reduction in audit fees attributable to the Companys smaller portfolio a decrease in accounting fees related to the improvement of the Companys internal control over financial reporting of $86,832 to $142,785 when compared to the nine months ended March 31, 2009. While the Company continues to implement the requirements of Section 404 of the Sarbanes Oxley Act of 2002 during the nine months ended March 31, 2010, audit fees related to such compliance decreased in the nine months ended March 31, 2010 as compared to the comparable period of the prior year during which the Company took significant steps towards compliance with such requirements.

Net assets from operations decreased $4,610,177 for the nine months ended March 31, 2010, as compared to a decrease of $2,555,553 for the nine months ended March 31, 2009. The decrease in net assets from operations between periods was attributable primarily to a decrease in investment income of approximately $1,860,500. This decrease was due to lower interest rates and smaller investment portfolio. Unrealized losses increased by approximately $530,000 reflected the restructuring of three corporate loans of approximately $1,000,000 and one commercial real estate loan of approximately $130,000, partially offset by the reclassification of previously recorded unrealized loss on a life settlement policy of approximately $392,000 due to the loss being recognized on the sale of the life settlement policy and a unrealized gain of approximately $210,000 on a real estate equity investment. Realized losses increased by approximately $555,000 primarily due to the reclassification of a previously unrealized loss of approximately $392,000 to a realized loss related to a life settlement policy disposed during the period as noted above. The decreases were partially offset by a reduction in operating expenses of approximately $890,000 as discussed above.

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