Opteum Inc. Files Form 10-Q; Reports Second Quarter 2007 Results; Results Consistent with Earlier Guidance
14 Agosto 2007 - 3:19PM
Business Wire
Opteum Inc. (NYSE:OPX) (�Opteum� or the �Company�), a real estate
investment trust (�REIT�), today announced that it has filed its
Quarterly Report on Form�10-Q for the period ended June 30, 2007,
with the Securities and Exchange Commission. The Company today also
announced its second quarter results of operations and Book Value
Per Share at June�30,�2007. Book Value Per Share The Company�s Book
Value Per Share at June 30, 2007, was $1.17 compared with $4.80 as
of March�31, 2007. Book Value Per Share is regularly used as a
valuation metric by various equity analysts that follow the Company
and may be deemed a non-GAAP financial measure pursuant to
Regulation G. The Company computes Book Value Per Share by dividing
total stockholders� equity by the total number of shares
outstanding of the Company�s Class A Common Stock. Details of
Second Quarter Results of Operations Consistent with the Company�s
earlier guidance, the Company today reported a consolidated net
loss of $162.5 million, or $(6.53) per Class A Common Share for the
three month period ended June�30, 2007, compared to a consolidated
net loss of $1.4 million, or $(0.06) per Class A Common Share, for
the comparable prior year period. For the six month period ended
June�30, 2007, the Company today reported a consolidated net loss
of $240.5 million, or $(9.67) per Class A Common Share, compared to
a consolidated net loss of $9.4 million, or $(0.38) per Class A
Common Share, for the comparable prior year period. The Company�s
second quarter results were significantly impacted by the
discontinuation of operations at the Company�s majority-owned
subsidiary, Orchid Island TRS, LLC (�OITRS�), a loss on the sale of
mortgage-backed securities (�MBS�), an other-than-temporary
impairment charge on MBS previously held in an unrealized loss
position and a negative fair value adjustment to the Company�s
retained interests in securitizations. The Company�s second quarter
consolidated results include a loss from continuing operations of
$82.0 million and losses from discontinued operations, net of tax,
of $80.5�million. Second Quarter Results of Continuing Operations
Included in the Company�s second quarter loss from continuing
operations are net interest expense of $6.1 million, a realized
loss on the sale of MBS of $18.6 million, an other-than-temporary
impairment on MBS of $55.3 million and $2.1 million in operating,
general and administrative expenses. In accordance with U.S.
generally accepted accounting principles (�GAAP�), the Company
previously reported the unrealized losses on MBS that were held as
available for sale securities as accumulated other comprehensive
loss (�AOCI�) on the Company�s consolidated balance sheet. During
the second quarter, the Company sold MBS with a market value at the
time of sale of approximately $782 million, resulting in the
realized loss on the sale of MBS of $18.6 million. These sales were
undertaken to preserve and protect the Company�s liquidity during a
period of substantially increased market distress in the secondary
market for mortgage loans and to give comfort to the Company�s
lenders that the Company could meet its margin calls, all of which
have been satisfied. Under GAAP, the $18.6 million realized loss on
the sale of MBS is required to be reported in current period
earnings and reduces AOCI. In addition, as a result of these sales,
the Company is no longer able to assert its ability and intent to
hold the remaining unsold MBS to maturity. Accordingly, GAAP
requires the elimination of the AOCI associated with these
remaining unsold assets, and this has resulted in the Company
recognizing a $55.3 million other-than-temporary impairment charge
to earnings during the second quarter. As a result of the
recognition of this other-than-temporary impairment charge, the
Company�s net interest margin on its MBS portfolio increased to a
positive 86 basis points as of June�30, 2007. Further, the
recognition of the other-than-temporary impairment charge in the
Company�s second quarter results and the corresponding elimination
of the AOCI balance did not result in any material incremental
reduction in the Company�s consolidated stockholders� equity at
June�30, 2007, because the AOCI balance was previously included as
a deduction in arriving at consolidated stockholders� equity in
prior periods. The Company�s consolidated stockholders� equity was
$28.8 million at June 30, 2007. Second Quarter Results of
Discontinued Operations Included in the Company�s second quarter
losses from discontinued operations are $70.0�million in losses
from discontinued operations, net of tax, and a $10.5 million loss
on the sale and disposal of assets of discontinued operations, net
of tax. The $70.0 million in losses from discontinued operations
includes a $26.2 million negative fair value adjustment to the
Company�s retained interests in securitizations, $17.6 million in
losses from sales of mortgages held for sale and a net servicing
loss of $6.0 million (inclusive of run-off). Management Commentary
Commenting on the Company�s second quarter results, Jeffrey J.
Zimmer, Chairman, President and Chief Executive Officer, said, �Our
second quarter results announced today are in-line with the
guidance that we provided late last week. Reiterating my earlier
comments, we are optimistic about our prospects going forward for
several reasons notwithstanding our recent past performance. First,
a positive net interest margin on our MBS portfolio has been
re-established. At June 30, our MBS portfolio�s net interest margin
was a positive 86 basis points and the portfolio was valued at
approximately $1.8 billion. Second, our MBS portfolio is 100%
invested in Fannie Mae, Freddie Mac and Ginnie Mae agency MBS
rather than private-label MBS. Third, because we own various
interest-rate-sensitive assets, we stand to benefit if the economic
data begin to show compelling evidence that inflation is under
control and the Federal Reserve eases monetary policy. Fourth, by
the end of the third quarter, we expect that we will have monetized
substantially all of the value associated with our mortgage
servicing rights portfolio, will have fully repaid the debt secured
by this asset and will have further enhanced our liquidity. Fifth,
we have over $100 million in trust preferred debt capital that does
not mature until 2035. Sixth, and perhaps most importantly, the
mortgage origination business albatross is no longer around our
necks and we will no longer incur the substantial operating losses
associated with this business that we have experienced over the
course of the last several quarters. In summary, we believe that
our future is bright.� The Company has scheduled an online Web
simulcast and conference call to discuss these announcements that
will begin at 5:30�p.m. E.T. today, Tuesday, August 14, 2007. An
online replay will be available approximately two hours following
the conclusion of the live broadcast and will continue for four
days. A link to these events will be available at the Company's
website www.opteum.com. Those persons without Internet access may
listen to the live call by dialing (800) 240-8926 or (303)
205-0066, confirmation code: 11095359. About Opteum Opteum Inc. is
a REIT that invests primarily in, but is not limited to,
residential mortgage-related securities issued by the Federal
National Mortgage Association (Fannie Mae), the Federal Home Loan
Mortgage Corporation (Freddie Mac) and the Government National
Mortgage Association (Ginnie Mae). Its objective is to earn returns
on the spread between the yield on its assets and its costs,
including the interest expense on the funds it borrows. Statements
herein relating to matters that are not historical facts are
forward-looking statements as defined in the Private Securities
Litigation Reform Act of 1995. The reader is cautioned that such
forward-looking statements are based on information available at
the time and on management's good faith belief with respect to
future events, and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from
those expressed in such forward-looking statements. Important
factors that could cause such differences are described in Opteum
Inc.'s filings with the Securities and Exchange Commission,
including Opteum Inc.'s most recent Annual Report on Form 10-K or
Quarterly Report on Form 10-Q. Opteum Inc. assumes no obligation to
update forward-looking statements to reflect subsequent results,
changes in assumptions or changes in other factors affecting
forward-looking statements.
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