UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 23, 2005
0-17771
(Commission File Number)
______________________________
FRANKLIN CREDIT MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware
(State of Incorporation)
75-2243266
(IRS Employer Identification Number)
Six Harrison Street, New York, NY 10013
(Address of registrant's principal executive office)
(212) 925-8745
(Registrant's telephone number)
______________________________
Section 8 - Other Events
Item 8.01. Other Events
On March 29, 2005 Franklin Credit Management Corporation ("the Company"),
issued a press release entitled "Franklin Credit Management Reports Revene and
Earnings for 2004." A copy of the Company's press release is attached as Exhibit
99.1
Item 9.01 Exhibits
Exhibit No Description
99.1 Press Release, dated March 29, 2005, entitled "Franklin Credit
Management Corporation Reports Revenue and Earnings for 2004"
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FRANKLIN CREDIT MANAGEMENT CORPORATION
By:_/s/ Jeffrey R. Johnson
Name: Jeffrey R. Johnson
Title: Chief Executive Officer
Date: March 29, 2005
Exhibit 99.1
For Immediate Release
Contact: Alan Joseph, CFO
Franklin Credit Management Corporation
(212) 925-8745 ext. 169
ajoseph@franklincredit.com
FRANKLIN CREDIT MANAGEMENT REPORT
REVENUE AND EARNINGS FOR 2004
FOURTH QUARTER DILUTED E.P.S. RISE 63% TO $0.49 VS. $0.30 IN
PRIOR-YEAR PERIOD
NEW YORK, New York (March 29, 2005) - Franklin Credit Management Corporation
(OTC BB: FCSC), a specialty consumer finance company primarily engaged in the
acquisition, origination, servicing and resolution of performing, subperforming
and nonperforming residential mortgage loans, today announced increased revenues
and earnings for 2004.
For the three months ended December 31, 2004, revenues increased 77% to $27.7
million, compared with $15.6 million in the fourth quarter of 2003. Net Income
increased 70% to $3,314,212, or $0.49 per diluted share, compared with
$1,953,412, or $0.30 per diluted share, in the quarter ended December 31, 2003.
For the twelve months ended December 31, 2004, the Company reported revenues of
$80.5 million, which represented an increase of 40% when compared with 2003
revenues of $57.6 million. Net income increased 42% to a record $9,506,310, or
$1.43 per diluted share in 2004, versus net income of $6,685,457, or $1.02 per
diluted share, in the year ended December 31, 2003.
"We are very pleased to report substantially higher revenue and earnings for the
quarter and year ended December 31, 2004," commented Jeffrey Johnson, Chief
Executive Officer of Franklin Credit Management Corporation.
"Large portfolio acquisitions during the second half of the year, primarily
related to bulk purchases of subprime mortgage loans from Bank One and Master
Financial, allowed us to increase our notes receivable portfolio by more than
74% to $811.9 million (face value) during 2004."
About Franklin Credit Management Corporation
Franklin Credit Management Corporation (together with its wholly-owned
subsidiaries, the "Company") is a specialty consumer finance company primarily
engaged in the acquisition, origination, servicing and resolution of performing,
subperforming and nonperforming residential mortgage loans. The Company acquires
mortgage loans, generally in pools at discounts from their aggregate contractual
balances, from a variety of mortgage bankers, banks, and other specialty finance
companies, and, through its wholly-owned subsidiary, Tribeca Lending Corp., also
originates subprime mortgage loans. Real estate is acquired in foreclosure or
otherwise and is also generally acquired at a discount relative to the appraised
value of the asset. The Company conducts its business from its executive and
main office in New York City and through its website www.franklincredit.com. Its
common stock trades on the OTC Bulletin Board under the symbol "FCSC".
Statements contained herein that are not historical fact may be 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,
that are subject to a variety of risks and uncertainties. There are a number of
important factors that could cause actual results to differ materially from
those projected or suggested in forward-looking statements made by the Company.
These factors include, but are not limited to: (i) unanticipated changes in the
U.S. economy, including changes in business conditions such as interest rates,
and changes in the level of growth in the finance and housing markets; (ii) the
status of relations between the Company and its sole Senior Debt Lender and the
Senior Debt Lender's willingness to extend additional credit to the Company;
(iii) the availability for purchases of additional loans; (iv) the availability
of sub-prime borrowers for the origination of additional loans; and (v) other
risks detailed from time to time in the Company's SEC reports. Additional
factors that would cause actual results to differ materially from those
projected or suggested or suggested in any forward-looking statements are
contained in the Company's filings with the Securities and Exchange Commission,
including, but not limited to, those factors discussed under the caption "Real
Estate Risk" in the Company's Annual Report on Form 10-K and Quarterly Reports
on Form 10-Q, which the Company urges investors to consider. The Company
undertakes no obligation to publicly release the revisions to such
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrences of unanticipated events,
except as other wise required by securities and other applicable laws. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no obligation to
release publicly the results on any events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
For further information, please contact:
Alan Joseph, CFO of Franklin Credit Management Corporation
at 212-925-8745 (Ext. 169)
Financial Highlights to Follow
FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------------
Three Months ended For the Years Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
REVENUES:
Interest income $20,862,689 $10,977,942 $59,481,422 $42,699,710
Purchase discount
earned 3,195,894 1,787,926 9,234,896 5,154,601
Gain on sale of
notes receivable 626,372 485,134 1,701,113 1,118,239
Gain on sale of loans
held for sale 517,814 933,797 3,689,616 3,236,616
Gain on sale of other
real estate owned 314,651 99,285 542,202 1,027,130
Rental income 8,625 9,582 42,300 113,255
Prepayment penalties
and other income 2,146,584 1,317,988 5,793,466 4,217,008
---------- ---------- ---------- ----------
27,672,629 15,611,654 80,485,015 57,566,559
---------- ---------- ---------- ----------
OPERATING EXPENSES:
Interest expense 12,061,839 5,570,976 32,795,347 21,672,993
Collection, general
and administrative 7,153,902 4,869,059 23,321,659 17,864,786
Recovery of a special
charge -
Provision for loan losses 1,268,570 795,804 3,705,333 3,164,103
Amortization of deferred
financing costs 1,023,434 622,333 2,761,476 1,979,208
Depreciation 126,676 177,270 494,890 505,012
---------- ---------- ---------- ----------
21,634,421 12,035,442 63,078,705 45,186,102
---------- ---------- ---------- ----------
INCOME BEFORE PROVISION
FOR INCOME TAXES 6,038,208 3,576,212 17,406,310 12,380,457
---------- --------- ---------- ----------
PROVISION FOR
INCOME TAXES 2,723,996 1,622,800 7,900,000 5,695,000
----------- ---------- ---------- ----------
NET INCOME $ 3,314,212 $1,953,412 $9,506,310 $6,685,457
=========== ========== ========== ==========
NET INCOME PER
COMMON SHARE:
Basic $ 0.56 $ 0.33 $ 1.60 $ 1.13
=========== ========== ========== =========
Diluted $ 0.49 $ 0.30 $ 1.43 $ 1.02
=========== ========== ========== =========
WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING, BASIC 5,941,462 5,916,527 5,941,462 5,916,527
========= ========= ========= =========
OUTSTANDING, DILUTED 6,726,259 6,573,879 6,648,381 6,536,639
========= ========= ========= =========
FRANKLIN CREDIT MANAGEMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2004 AND 2003
-------------------------------------------------------------------------------
ASSETS 2004 2003
CASH AND CASH EQUIVALENTS $ 19,519,659 $ 14,418,876
RESTRICTED CASH 128,612 413,443
NOTES RECEIVABLE:
Principal 811,885,856 465,553,870
Purchase discount (32,293,669) (25,678,165)
Allowance for loan losses (89,628,299) (46,247,230)
----------- -----------
Net notes receivable 689,963,888 393,628,475
ORIGINATED LOANS HELD FOR SALE 16,851,041 27,372,779
ORIGINATED LOANS HELD FOR INVESTMENT 110,496,274 9,536,669
ACCRUED INTEREST RECEIVABLE 8,506,252 4,332,419
OTHER REAL ESTATE OWNED 20,626,156 13,981,665
OTHER RECEIVABLES 5,366,500 2,893,735
DEFERRED TAX ASSET 583,644 681,398
OTHER ASSETS 10,577,344 3,922,234
BUILDING, FURNITURE AND EQUIPMENT - Net 1,290,442 1,252,711
DEFERRED FINANCING COSTS - Net 7,600,942 4,298,942
------------- -------------
TOTAL ASSETS $ 891,510,754 $ 476,733,346
============= =============
LIABILITIES AND STOCKHOLDERS" EQUITY
LIABILITIES:
Accounts payable and
accrued expenses $ 11,572,764 $ 4,979,806
Financing agreements 39,540,205 23,315,301
Notes payable 807,718,038 427,447,844
Tax Liability:
Deferred 3,123,865 1,311,089
------------ -----------
Total liabilities 861,954,872 457,054,040
------------ -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER" EQUITY
Preferred stock, $.01 par value;
authorized 3,000,000 issued-none
Common stock, $.01 par value,
22,000,000 authorized shares; issued
and outstanding: 6,062,295 in 2004
and 5,916,527 in 2003 60,623 59,167
Additional paid-in capital 7,354,778 6,985,968
Retained earnings 22,140,481 12,634,171
----------- -----------
Total stockholders' equity 29,555,882 19,679,306
----------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 891,510,754 $ 476,733,346
============= =============
See notes to consolidated financial statements