Brooke Corporation Reports Second Quarter Earnings
August 08 2007 - 5:00PM
PR Newswire (US)
OVERLAND PARK, Kan., Aug. 8 /PRNewswire-FirstCall/ -- Brooke
Corporation (NASDAQ:BXXX) today reported its second quarter
financial results. Net earnings for the six months ended June 30,
2007, totaled $9,515,000, or 63 cents per diluted share, on
revenues of $120,619,000, compared to net earnings of $6,443,000,
or 50 cents per diluted share, on revenues of $86,751,000 for the
same period in the prior year. For this six-month period, total
earnings increased 48 percent and total revenues increased 39
percent. Total earnings increased primarily as the result of
increased revenues from gain on loan sales. Net earnings for the
three months ended June 30, 2007, totaled $2,706,000, or 15 cents
per diluted share, on revenues of $56,595,000, compared to net
earnings of $2,911,000, or 22 cents per diluted share, on revenues
of $45,565,000 for the same period in the prior year. For this
three-month period, total earnings decreased 7 percent and total
revenues increased 24 percent. Total earnings decreased primarily
as the result of decreased revenues from initial franchise fees.
Separate discussions of segment revenues and selected data follow.
Lending Segment During the second quarter of 2007, the lending
segment recorded before tax income of $5,673,000, compared to
before tax income of $2,641,000 in the second quarter of 2006. This
segment's performance remains consistent with the earn-out
benchmarks of the July 18 merger between Oakmont and Brooke Credit.
The lending segment's loan portfolio increased to $593,400,000 on
June 30, 2007. Mick Lowry, president and chief executive officer of
Brooke Credit Corporation stated, "I am pleased with Brooke
Credit's results during the second quarter. This solid earnings
quarter for Brooke Credit resulted in large part from strong loan
origination activities. Second quarter loan originations totaled
approximately $102 million, compared to $86 million in the
comparable quarter in 2006, or a 19 percent increase." Franchise
Segment During the second quarter of 2007, the franchise segment
recorded before tax loss of $727,000, compared to before tax income
of $2,081,000 in the second quarter of 2006. The number of
franchise locations increased to 828 on June 30, 2007. Kyle Garst,
chairman and chief executive officer of Brooke Franchise
Corporation stated, "Franchise recruitment is a 'lumpy' activity.
Our second quarter results reflected decreased revenues from
initial franchise fees resulting primarily from granting fewer
start up franchises. We believe this to be temporary and a result
of more rigorous franchise underwriting and transitioning of
marketing to include a sales seminar approach." 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 Brooke Capital
Corporation. The financial services segment includes activities
associated with the sale of banking services by Brooke Savings
Bank, the sale of life insurance policies by First Life America
Corporation and the brokering of loans to insurance-related
businesses by Brooke Capital Advisors. During the second quarter of
2007, the financial services segment recorded before tax income of
$1,946,000 primarily as the result of consulting fees generated by
Brooke Capital Advisors. Mike Hess, president and chief executive
officer of Brooke Capital Advisors stated, "Demand for managing
general agency loans increased in the second quarter partially from
an emphasis on marketing activities and partially as the result of
industry circumstances." Brokerage Segment During the second
quarter of 2007, the brokerage segment recorded a before tax loss
of $301,000, compared to before tax income of $201,000 in the
second quarter of 2006. 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.
Corporate Corporate revenues primarily result from shared services
fees paid by Brooke Corporation's subsidiaries for legal,
accounting, human resources and information technology services
provided by the parent company. Brooke Corporation received shared
services fees of $1,785,000 in the second quarter of 2007, compared
to $2,100,000 in the second 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. CST (5 p.m. EST) 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,
Chairman and Chief Executive Officer of Brooke Franchise
Corporation, Kyle Garst, 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.brookeagent.com/corporation. 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". Brooke Corporation is a holding
company with two primary operating subsidiaries. Its wholly owned
subsidiary, Brooke Franchise Corporation, distributes insurance and
banking services through a network of more than 800 franchise
locations and was named country's No. 37 top franchise opportunity
by Entrepreneur magazine (2007). Brooke Corporation also owns a
controlling interest in Brooke Credit Corporation, listed on the
OTC Bulletin Board under the symbol "BRCR". Brooke Credit
originates loans to insurance agencies and related businesses.
Brooke Credit's loan portfolio balances totaled approximately
$593.4 million on June 30, 2007. 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/ http://www.brookeagent.com/corporation
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