MRU Holdings Announces Results for First 9 Months of Fiscal Year 2008
15 Maggio 2008 - 11:00PM
PR Newswire (US)
Student Loan Originations Increase 92% to Approximately $230
Million for the First 9 Months of FY 2008 vs. Increase of 13% in
Core Operating Costs, Demonstrating Growing Scale of Business Model
NEW YORK, May 15 /PRNewswire-FirstCall/ -- MRU Holdings, Inc.
(NASDAQ:UNCL), a specialty finance company that provides federal
and private student loans through its consumer brand MyRichUncle(R)
and its relationships with private label partners, today announced
results for the first 9 months of its fiscal year 2008, whereby it
increased student loan originations to $230.2 million versus $119.8
million for the same period in the prior year, an increase of 92%.
In the same 9 month period, the operating expenses for the
Company's student loan origination business grew to $30.5 million,
an increase of 13% versus the same period last year, indicating
markedly increased scale and efficiency of the Company's business
model. For the third quarter of FY 2008, the company originated
$42.8 million of loans. The third quarter is normally a slow
quarter as students have limited needs for additional borrowing
during this period and borrowing during this quarter tends to come
from consumers with out of season needs who traditionally have
lower quality credit profiles than those borrowing during the peak
season and, as such, a lower percentage of the applicants meet the
Company's stringent underwriting criteria. MRU Holdings, since its
inception, has had a very conservative underwriting policy with a
strong focus on long term factors such as income and repayment
capacity post graduation in addition to the traditional credit
metrics utilized by its competitors. The benefits of this approach
have manifested themselves in the Company's portfolio performance,
which is significantly better than its major competitors and the
industry averages in terms of delinquencies and forbearance. This
has allowed the Company to maintain its liquidity and capacity to
lend in a market where many larger competitors have ceased
operations due to either a lack of liquidity or heavy credit
losses. The Company believes that this strategy will allow the
Company to go to market with the highest quality portfolio of loans
as it seeks to complete a private loan securitization, subject to
market conditions, during the current quarter. "Our goal this
quarter was to generate highly securitizable loans at a yield that
reflected the new market environment in terms of cost of funds. We
believe that we are one of the few private student loan originators
that currently have liquidity to lend during the upcoming peak
season and as we get a securitization or sale of our existing
portfolio completed, we believe we will have a significant
competitive advantage in originating new private student loans.
That will be the appropriate time to ramp up marketing," said
Vishal Garg, Chief Financial Officer, MRU Holdings. From a cost of
customer acquisition perspective, the Company's core cost of
acquisition in the first nine months of the year has declined over
50% versus the prior fiscal year to less than 5% of private loan
originations. "Our other major goal was to continue to increase
efficiencies in marketing and origination costs, which we believe
today are comparable if not better than those of our much larger
competitors even though we believe our underwriting criteria is
much more conservative," said Raza Khan, President, MRU Holdings.
About MRU Holdings, Inc. MRU Holdings, Inc. (NASDAQ:UNCL) is a
publicly traded specialty finance company that provides students
with funds for higher education using a blend of current market
credit practices as well as its own proprietary analytic models and
decision tools. The Company has a renowned brand name
"MyRichUncle(TM)" and highly scalable origination infrastructure.
The Company utilizes these assets to provide private and federal
loans to students. MRU distinguishes itself from the competition as
it does not take a "one-size fits all" approach to designing
student loan products, allowing itself and its marketing partners
to create a student loan offering that directly addresses their
specific customer needs. Additional information concerning the
Company is available at http://www.mruholdings.com/. About
MyRichUncle From its inception in 2000, MyRichUncle has been at the
forefront of innovation for education finance, most recently
focusing on the growth market of student loans. Since the launch of
its student loan program in the summer of 2005, MyRichUncle has
originated over $400 million in private and federal student loans
using its breakthrough underwriting platforms and innovative
technology to deliver competitively priced products and services to
borrowers. In May 2006, the Company launched Preprime(TM), the
first and only student loan that allows students to qualify for
loans based on individual merit, rather than credit history alone.
In June 2006, MyRichUncle launched its Federal student loans with
upfront interest rate reductions at repayment. Dedicated to
reshaping the student loan industry to function in the best
interests of the students, founders Vishal Garg and Raza Khan and
their team are committed to delivering the most innovative
solutions for their customers. The Company and its founders have
been recognized by Fast Company's Fast 50 (2006) and listed among
BusinessWeek.com's Tech's Best Young Entrepreneurs (2006). For more
information, visit http://www.myrichuncle.com/. Safe Harbor
Statement The information provided herein contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Such forward-looking statements involve risks
and uncertainties that, if realized, could materially impair the
Company's results of operations and/or its financial condition.
These forward-looking statements may be affected by the risks and
uncertainties inherent in the educational finance market and in the
Company's business, as disclosed by the risk factors contained in
the Company's annual report on Form 10-KSB for the fiscal year
ended June 30, 2007 and subsequent quarterly reports on Form 10-Q.
The Company cautions that certain important factors may have
affected and could in the future affect the Company's beliefs and
expectations, and could cause actual results to differ materially
from those expressed in any forward-looking statements made by or
on behalf of the Company. The forward-looking statements contained
herein are made as of the date hereof and the Company does not
assume any obligation to update or supplement forward-looking
statements that become untrue because of subsequent events or
circumstances. UNCLF MRU HOLDINGS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS
ENDED MARCH 31, 2008 AND 2007 (unaudited) (Dollars in thousands -
except per share data) Three Months Ended Nine Months Ended March
31, March 31, 2008 2007 2008 2007 (Restated) (Restated) Interest
Income: Loan portfolio interest income - private student loans
$2,295 $2,242 $4,666 $5,124 Loan portfolio interest income -
federal student loans 444 41 870 104 Origination fee revenue -
private loans 178 32 218 78 Interest Income - Residual Interest 343
- 1,105 - Other Interest income 225 78 591 375 Total interest
income 3,485 2,393 7,450 5,681 Interest Expense: Facility interest
and origination bank costs 2,108 1,754 4,989 4,139 Other Interest
expense 375 4 744 7 Total interest expense 2,483 1,758 5,733 4,146
Net Interest Income 1,002 635 1,717 1,535 Valuation reserve
provision - private student loans 815 283 3,643 2,449 Net interest
income after valuation provision 187 352 (1,926) (914) Non-interest
income Securitization income (loss), net (2,270) - 1,795 -
Subscription and service revenue 1,501 709 4,275 722 Origination
processing fees 140 111 680 353 Master Oversight Fee 28 - 79 -
Other non-interest income - 10 - 11 Total non-interest income (601)
830 6,829 1,086 Non-interest expense: Corporate general and
administrative expenses 4,236 3,376 12,284 7,128 Sales and
marketing expenses 2,299 2,582 9,541 8,023 Operations expenses
1,219 1,242 5,380 3,751 Technology development 902 691 2,817 2,151
Referral marketing costs - private student loans 382 224 1,521 725
Consulting and hosting 103 58 209 80 Cost of subscription and
service revenue 336 - 1,379 - Servicing and custodial costs 181 119
378 256 Legal expenses 610 397 1,425 860 Other operating expenses
396 366 927 564 Depreciation and amortization 1,620 959 2,476 4,035
Total non-interest expense 12,284 10,014 38,337 27,573 (Loss)
before provision for income taxes (12,698) (8,832) (33,434)
(27,401) Provision for income taxes - - - - Net (Loss) $(12,698)
$(8,832) $(33,434) $(27,401) Preferred Stock Dividends (484) (776)
(1,687) (2,093) Net (loss) applicable to common shares $(13,182)
$(9,608) $(35,121) $(29,494) Net (Loss) per basic and diluted
shares $(0.42) $(0.47) $(1.22) $(1.60) Weighted average number of
common shares outstanding 31,669 20,658 28,880 18,401 The
accompanying notes are an integral part of these condensed
consolidated financial statements DATASOURCE: MRU Holdings, Inc.
CONTACT: Karin Pellmann, Vice President Public Relations,
+1-212-444-7541,
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