Shareholders approve consolidation of insurance activities into
Brooke Capital OVERLAND PARK, Kan., Nov. 6 /PRNewswire-FirstCall/
-- Brooke Capital Corporation (AMEX:BCP) today reported its third
quarter financial results for the quarter ended September 30, 2007.
The company also announced that Brooke Capital's shareholders
approved a proposal on November 5, 2007 that provides for the
merger of Brooke Corporation's (NASDAQ:BXXX) wholly owned insurance
agency subsidiary, Brooke Franchise Corporation, into Brooke
Capital and the acquisition of Brooke Corporation's wholly owned
non-standard auto insurance company subsidiary, Delta Holdings
Plus, Inc, by Brooke Capital. These transactions will be
consummated as soon as all other closing conditions have been met,
including regulatory approvals. "We are pleased to become a part of
Brooke Capital," said Kyle Garst, chief executive officer of Brooke
Franchise Corporation. "Transferring our insurance activities into
a separate company that focuses exclusively on insurance is a
catalyst to energize franchise management and its employees and
provide a platform for growth." Michael Hess, vice chairman of
Brooke Capital Corporation, stated, "We believe that having a
separate entity focused solely on our insurance constituents is the
right organizational structure to help our franchisees achieve
maximum success. Additionally, we believe the new organizational
structure provides investors with greater clarity into our
day-to-day operations and should enable them to better evaluate and
measure our performance." The following includes net earnings and
revenue information as reported for the three- and nine-month
periods ended September 30, 2007. However, to provide investors
with a clearer picture of Brooke Capital's financial results after
consummation of the proposed merger and acquisition, certain pro
forma financial information is provided to illustrate how Brooke
Capital's results of operations would have been reported if they
had included the results of operations for Brooke Franchise and
Delta Holdings for the periods presented. Reported Results of
Operations Net earnings reported for the nine months ended
September 30, 2007, totaled $2,502,000, or 80 cents per diluted
share, on reported revenues of $11,675,000, compared to a reported
net loss of $210,000, or 15 cents per diluted share, on reported
revenues of $3,731,000 for the same period in the prior year. For
this nine-month period, reported revenues increased 213 percent.
Reported net earnings for the three months ended September 30,
2007, totaled $770,000, or 24 cents per diluted share, on reported
revenues of $4,632,000, compared to a reported net loss of $86,000,
or 6 cents per diluted share, on reported revenues of $1,215,000
for the same period in the prior year. For this three-month period,
total reported revenues increased 281 percent. Pro Forma Financial
Results As indicated above, pro forma net earnings for the nine
months ended September 30, 2007, totaled $5,514,000, or 64 cents
per diluted share, on adjusted revenues of $142,669,000, compared
to pro forma net earnings of $2,376,000, or 34 cents per diluted
share, on pro forma revenues of $124,006,000 for the same period in
the prior year. For this nine-month period, total pro forma
earnings increased 132 percent and total pro forma revenues
increased 15 percent. Pro forma net earnings for the three months
ended September 30, 2007, totaled $1,337,000, or 15 cents per
diluted share, on pro forma revenues of $42,783,000, compared to a
pro forma net loss of $1,497,000, or 22 cents per diluted share, on
pro forma revenues of $40,056,000 for the same period in the prior
year. For this three-month period, total pro forma revenues
increased 7 percent. The following provides additional pro forma
information by segment -- Insurance Companies; Insurance Franchise
and Corporate -- as if Brooke Capital, Brooke Franchise and Delta
Plus had been operating together in these segments since January 1,
2006. Insurance Companies Segment On a pro forma basis, First Life
America Corporation and Delta Plus Holdings, Inc. had total
revenues of $4,381,000 and $15,113,000 during the three- and
nine-month periods ended September 30, 2007. Comparatively, the
Insurance Companies' total revenues were $5,180,000 and $15,435,000
during the three- and nine-month periods ended September 30, 2006.
These companies' income before tax was $1,194,000 and $1,426,000
during the three- and nine-month periods ended September 30, 2007.
Comparatively, the Insurance Companies' loss before income taxes
was $619,000 during the three-month period ended September 30, 2006
and income before tax was $368,000 for the nine-month period ended
September 30, 2006. Insurance Franchise Segment On a pro forma
basis, Brooke Capital Corporation and Brooke Capital Advisors had
total revenues from franchise activity and consulting of
$38,381,000 and $127,446,000 during the three- and nine-month
periods ended September 30, 2007. Comparatively, total revenues
from franchise and consulting activities totaled $34,877,000 and
$108,491,000 during the three- and nine-month periods ended
September 30, 2006. Income before tax from these activities was
$1,630,000 and $8,349,000 for the three- and nine-month periods
ended September 30, 2007. Comparatively, franchise and consulting
experienced a loss before taxes of $1,577,000 during the
three-month period ended September 30, 2006 and income before taxes
of $4,084,000 during the nine-month period ended September 30,
2006. Corporate Segment Revenues for Brooke Capital parent
company-only are not significant. On a pro forma basis, the parent
company-only incurred losses before income taxes of $806,000 and
$1,342,000 during the three- and nine-month periods ended September
30, 2007. Comparatively, the parent incurred losses of $126,000 and
$420,000 during the three- and nine-month periods ended September
30, 2006. Additional information is provided in the quarterly
report on Form 10-Q filed with the Securities and Exchange
Commission by Brooke Capital Corporation and Brooke Corporation.
Earnings Conference Call Brooke Franchise Corporation's chief
executive officer, Kyle Garst, and chief operating officer, Dane
Devlin, along with Brooke Capital Corporation's Chairman, Robert D.
Orr, and Vice Chairman, Michael Hess, will host an investor and
analyst conference call on Wednesday, Nov. 7, at 10 a.m. CST/11
a.m. EST to discuss its financial and operating results for the
third quarter of 2007. To join the call, please dial 1-866-356-4281
in the United States and Canada, or 1-617-597-5395 if calling
internationally. The conference ID number is 20099154. A live
broadcast of the call will be available on the Investor Relations
section of Brooke's Web site at http://invest.brookecorp.com/.
About Brooke Capital Corporation ... Brooke Capital Corporation
(AMEX:BCP) is an Overland Park, Kansas-based insurance organization
founded in 1997. Brooke Capital is the parent company of First Life
America Corporation, a life insurance company, and Brooke Capital
Advisors, Inc., a loan broker and consultant for general insurance
agencies specializing in the sale of hard-to-place and niche
insurance policies. About Brooke Franchise Corporation ... Brooke
Franchise Corporation is a subsidiary of Brooke Corporation
(NASDAQ:BXXX) that distributes insurance and banking services
through a network of approximately 900 franchise and company owned
locations. Brooke Franchise was named the country's No. 37 top
franchise 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, the risk that all closing
conditions may not be met and the proposed merger of Brooke
Franchise into Brooke Capital may not close 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
Capital Corporation CONTACT: investors, Karen Haus of Market Street
Partners, +1-415-445-3238, , for Brooke Capital Corporation Web
site: http://www.brookecorp.com/ http://www.brookeagent.com/
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