Brooke Corporation Reports Earnings Increase in First Quarter
April 25 2007 - 5:56PM
PR Newswire (US)
OVERLAND PARK, Kan., April 25 /PRNewswire-FirstCall/ -- Brooke
Corporation (NASDAQ:BXXX) today reported its first quarter
financial results. Net earnings for the three months ended March
31, 2007, totaled $6,809,000, or 48 cents per diluted share, on
revenues of $64,024,000, compared to net earnings of $3,532,000, or
27 cents per diluted share, on revenues of $41,186,000 for the same
period in the prior year. For this three-month period, total
earnings increased 93 percent and total revenues increased 55
percent. Total earnings increased primarily as the result of
increased initial franchise fee revenue from opening more franchise
locations, and increased revenues from the sale of loans. Separate
discussions of segment revenues and selected data follow. Lending
Segment During the first quarter of 2007, the lending segment
recorded before tax income of $7,950,000, compared to before tax
income of $1,507,000 in the first quarter of 2006. This segment's
performance is consistent with the earn-out benchmarks announced in
connection with the pending merger between Oakmont and Brooke
Credit. The lending segment's loan portfolio increased to
$512,700,000 on March 31, 2007. Robert D. Orr, chairman and chief
executive officer of Brooke Corporation stated, "Brooke Credit
Corporation recently initiated a $150,000,000 off-balance sheet
facility with Fifth Third Bank that significantly increased its
revenues from gain on loan sales and resulted in a substantial
increase in quarterly profits." Franchise Segment During the first
quarter of 2007, the franchise segment recorded before tax income
of $4,514,000, compared to before tax income of $3,586,000 in the
first quarter of 2006. The number of franchise locations increased
to 810 on March 31, 2007. Orr stated, "Brooke Franchise Corporation
added 90 insurance franchise locations in the first quarter of 2007
which is nearly double the number of franchises granted in the
first quarter of 2006. Interest in our franchise program remains
strong despite the challenges of starting and growing an insurance
agency." Brokerage Segment During the first quarter of 2007, the
brokerage segment recorded a before tax loss of $272,000, compared
to before tax income of $952,000 in the first quarter of 2006. Orr
stated, "The loan brokerage activities previously in the brokerage
segment are now a part of the financial services segment and the
brokerage segment now focuses exclusively on brokerage of
hard-to-place and niche property and casualty insurance policies.
The segment's quarterly revenues and profits were adversely
affected by the elimination of loan brokerage fees and the impact
of the soft insurance market on commissions." Financial Services
Segment The financial services segment was added during the first
quarter of 2007 as a result of the recent acquisitions of Brooke
Savings Bank and a controlling interest in First American Capital
Corporation. The financial services segment includes activities
associated with the sale of banking services, life insurance
policies and the brokering of loans to insurance related
businesses. During the first quarter of 2007, the financial
services segment recorded before tax income of $105,000. Corporate
Corporate revenues primarily result from shared services fees paid
by Brooke Corporation's subsidiaries for legal, accounting, human
resources, information technology and facilities management
services provided by the parent company. Brooke Corporation
received shared services fees of $1,785,000 in the first quarter of
2007, compared to $2,100,000 in the first quarter of 2006.
Consolidating entries are excluded from segment financial data.
Additional information is provided in the quarterly report on Form
10-Q filed with the Securities and Exchange Commission. Earnings
Conference Call Brooke Corporation will host a conference call for
analysts and investors at 4 p.m. CDT (5 p.m. EDT) today. Company
representatives participating in the conference call include
Chairman and Chief Executive Officer, Robert Orr, President and
Chief Operating Officer, Anita Larson, Chief Financial Officer,
Leland Orr, President and Chief Executive Officer of Brooke
Franchise Corporation, Shawn Lowry, and President and Chief
Executive Officer of Brooke Credit Corporation, Mick Lowry. The
public and media are invited to listen to the call, which will be
broadcast live via the Internet. The call is being webcast by
Thomson/CCBN and can be accessed at Brooke Corporation's Web site,
http://www.brookecorp.com/ . A replay of the call will be available
on the Web site for the next 12 months. About Brooke Corporation
... Brooke Corporation is listed on the Nasdaq Global Market under
the symbol "BXXX". Its wholly owned subsidiary, Brooke Franchise
Corporation, distributes insurance and banking services through a
network of more than 800 franchise locations. Brooke Franchise was
named the 22nd largest U.S. insurance agency by Business Insurance
magazine (2006) and the country's No. 37 top franchise opportunity
by Entrepreneur magazine (2007). For more information, visit
http://www.brookeagent.com/. This press release contains
forward-looking statements. All forward-looking statements involve
risks and uncertainties, and several factors could cause actual
results to differ materially from those in the forward-looking
statements. The following factors, among others, could cause actual
results to differ from those indicated in the forward-looking
statements: the uncertainty that the Company will achieve its
short-term and long-term profitability and growth goals,
uncertainties associated with market acceptance of and demand for
the Company's products and services, the impact of competitive
products and pricing, the dependence on third-party suppliers and
their pricing, the ability to meet product demand, the availability
of funding sources, the exposure to market risks, uncertainties
associated with the development of technology, changes in the law
and in economic, political and regulatory environments, changes in
management, the dependence on intellectual property rights, the
effectiveness of internal controls, and risks and factors described
from time to time in reports and registration statements filed by
Brooke Corporation with the Securities and Exchange Commission. A
more complete description of Brooke's business is provided in
Brooke Corporation's most recent annual, quarterly and current
reports, which are available from Brooke Corporation without charge
or at http://www.sec.gov/. DATASOURCE: Brooke Corporation CONTACT:
Anita Larson of Brooke Corporation, +1-913-661-0123, Web site:
http://www.brookecorp.com/
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