BOSTON, MA--(Marketwire -05/02/12)- The First Marblehead Corporation (FMD - News) today announced its financial and operating results for the third quarter of fiscal 2012 and the nine month period ended March 31, 2012. Results for the quarter reflect the sale of the Company's legacy trust administrator, First Marblehead Data Services, Inc. (FMDS) on March 2, 2012 for $13.7 million in cash as well as the deconsolidation of the GATE Trusts effective March 30, 2012. The deconsolidation of the GATE Trusts completes the removal of the variable interest entities originally consolidated by the Company upon the adoption of ASU 2009-17 on July 1, 2010.
For the third quarter of fiscal 2012, the Company recorded net income of $9.9 million, or $0.09 per common share on a fully diluted basis, compared to a net loss for the third quarter of fiscal 2011 of $39.3 million, or ($0.39) per fully diluted share. The improvement in earnings of $49.2 million was largely driven by a $26.4 million decrease in the loss from operations combined with an increase of $23.4 million in other income. The lower overall loss from operations was principally due to the exclusion of the deconsolidated NCSLT Trusts for the third quarter of fiscal 2012, which had the impact of increasing net interest income after provision for loan losses by $11.3 million and decreasing general and administrative expenses by $9.1 million. The increase of $23.4 million in other income was due to the $12.5 million gain from the sale of FMDS and a $10.9 million non-cash gain from the deconsolidation of the GATE Trusts.
For the nine months ended March 31, 2012, the Company reported net income of $1.12 billion, or $10.10 per common share on a fully diluted basis, compared to a net loss of $137.7 million, or ($1.37) per fully diluted share, for the nine months ended March 31, 2011. The net income of $1.12 billion for the nine months ended March 31, 2012 includes $1.25 billion in non-cash gains as a result of the deconsolidations of the NCSLT Trusts and the GATE Trusts.
"During the quarter, we continued to originate high quality student loans and achieved remarkable results from our school sales team. These efforts support our brand investment and position us well for the upcoming peak lending season," said Daniel Meyers, Chairman and Chief Executive Officer. "We believe the positive results at Union Federal and TMS coupled with the execution of various expense reduction initiatives demonstrates our continued progress towards a return to profitability," added Mr. Meyers.
The Company presents two distinct reporting segments: Education Financing and Securitization Trusts. The Education Financing segment includes the services the Company performs in designing, implementing, and originating various private education loan programs as well as other services, including tuition payment processing, portfolio management, and retail banking.
Education Financing Segment Results
The net income (loss) for the Education Financing segment for the three months ended March 31, 2012 improved by $43.4 million to $1.7 million, or $0.02 per fully diluted common share, from ($41.7) million, or ($0.41) per fully diluted share, for the three months ended March 31, 2011. The improvement over the third quarter 2011 was principally due to an increase of $29.8 million in revenues primarily as a result of recording a non-cash loss on the valuation of the Company's service revenue receivables of $26.4 million for the quarter ended March 31, 2011 and an increase of $12.5 million in other income for the gain on the sale of FMDS.
The net loss for the Education Financing segment for the nine months ended March 31, 2012 improved by $41.9 million to $20.0 million, or ($0.18) per fully diluted share, from $61.9 million, or ($0.61) per fully diluted share, for the nine months ended March 31, 2011. The improvement was principally a result of a $21.0 million decrease in non-cash losses recorded on the valuation of the Company's service revenue receivables compared to the prior year's nine month period, an increase in other income of $5.9 million primarily resulting from the gain on the sale of FMDS, and a higher income tax benefit of $12.8 million as a result of the Massachusetts Appellate Tax Board's decision in the prior quarter.
During the first nine months of the fiscal year, the Company has booked approximately $53 million in Monogram-based loans, including approximately $33 million on behalf of Union Federal Savings Bank.
Securitization Trusts Segment Results
Effective March 30, 2012, the Company was no longer considered the primary beneficiary of the three GATE Trusts, and as a result, deconsolidated those trusts. As such, the Company deconsolidated $258.4 million of assets and $260.1 million of liabilities and recognized a non-cash gain of $1.7 million in the Securitization Trust segment. Effective March 30, 2012, the Company has deconsolidated all of the securitization trusts previously required to be consolidated and does not expect to utilize the Securitization Trusts segment on a prospective basis.
Net income was $2.3 million for each of the three month periods ended March 31, 2012 and 2011. The net income (loss) for the nine months ended March 31, 2012 and 2011 were $1.13 billion, or $10.23 per fully diluted common share, and ($75.4) million, or ($0.75) per fully diluted share, respectively. The improvement in the loss was attributable to the $1.24 billion non-cash gain recorded upon the deconsolidation of the NCSLT Trusts.
Company Liquidity
As of March 31, 2012, the Company had $210.5 million in cash, cash equivalents and short-term investments compared to $267.4 million at June 30, 2011. The decrease of $56.9 million resulted primarily from the purchases of $62.6 million in mortgage-backed securities, the funding of $31.7 million of Monogram-based loans at Union Federal, and $41.6 million used to fund operations, which were partially offset by $26.7 million in proceeds from the sales of certain service revenue receivables and FMDS, and $53.3 million in deposit growth at Union Federal, including $40.0 million from TMS.
Net operating cash usage* was $12.5 million for the quarter ended March 31, 2012, down from the prior quarter's $13.4 million.
*See below under the heading "Use of Non-GAAP Financial Measures."
Quarterly Conference Call
First Marblehead will host a conference call on May 2, 2012 at 5:00 p.m. Eastern time to discuss its operating results. Investors and other interested parties are invited to listen to the conference call via a simultaneous internet broadcast on the Company's website at www.firstmarblehead.com, under For Investors, or by dialing (866) 783-2144 in the United States or (857) 350-1603 from abroad and entering the pass code 56535383.
A replay will be available approximately two hours after completion of the call on First Marblehead's website or by dialing (888) 286-8010 from the U.S. or (617) 801-6888 from abroad, and entering the pass code 77852372. The replay will be available for two weeks.
About The First Marblehead Corporation First Marblehead helps meet the need for education financing by offering national and regional financial institutions and educational institutions the Monogram® platform, an integrated suite of design, implementation and credit risk management services for private label, customizable private education loan programs. For more information, please see www.firstmarblehead.com. First Marblehead supports responsible lending and is a strong proponent of the smart borrowing principle, which encourages students to access scholarships, grants and federally-guaranteed loans before considering private education loans; please see www.SmartBorrowing.org. Through its subsidiary, Union Federal Savings Bank, First Marblehead offers private education loans, residential and commercial mortgage loans, and retail savings, money market and time deposit products. For more information, please see www.unionfsb.com. First Marblehead also offers outsourced tuition planning, billing, payment technology services, and refund management services through its subsidiary Tuition Management Systems LLC. For more information, please see www.afford.com.
Statements in this press release, including the financial tables, regarding First Marblehead's future financial and operating results and liquidity, including the characteristics, pricing or performance of future Monogram-based private education loan portfolios, as well as any other statements that are not purely historical, constitute forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our historical performance, the historical performance of certain of the securitization trusts that we have facilitated (the "GATE Trusts") and on our plans, estimates and expectations as of May 2, 2012. The inclusion of this forward-looking information should not be regarded as a representation by us or any other person that the future results, plans, estimates, intentions or expectations expressed or implied by us will be achieved. You are cautioned that matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause our actual financial or operating results, including the performance of the GATE Trusts and resulting cash flows, facilitated loan volumes and resulting cash flows or financing-related revenues, or the timing of events, to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: market acceptance of, and demand for, our Monogram platform and fee-based service offerings, including our success in negotiating loan program agreements with additional clients; the successful sales and marketing of Monogram-based loan offerings, including the volume of loan applications and the extent to which loan applications ultimately result in disbursed loans; the volume, timing and performance of disbursed loans; the size and structure of any credit enhancement provided by First Marblehead in connection with the Monogram platform; our success in designing, implementing and commercializing private education loan programs through Union Federal Savings Bank, including receipt of and compliance with regulatory approvals and conditions with respect to such programs; capital markets conditions and our ability to structure securitizations or alternative financings; the size, structure and timing of any such securitizations or alternative financings; any investigation, audit, claim, regulatory action or suit relating to the transfer of the trust certificate of NC Residuals Owners Trust or the asset services agreement between the purchaser and First Marblehead, including any challenge to tax refunds previously received as a result of the audit being conducted by the Internal Revenue Service; resolution of litigation and regulatory proceedings pertaining to our Massachusetts state income tax returns; the estimates and assumptions we make in preparing our financial statements, including quantitative and qualitative factors used to calculate our allowance for loan losses and related provision and the estimate of the fair value of service revenue receivables; and the other factors set forth under the caption "Part II- Item 1A. Risk Factors" in First Marblehead's quarterly report on Form 10-Q filed with the Securities and Exchange Commission on February 9, 2012. Important factors that could cause or contribute to future adjustments to the estimates and assumptions we make in preparing our financial statements include: actual transactions or market observations relating to asset-backed securities, loan portfolios or corporate debt securities; variance between our performance assumptions and the actual performance of the loan portfolios held by the GATE Trusts, Union Federal or First Marblehead's clients (the "Portfolios"); economic, legislative, regulatory, competitive and other factors affecting discount, default, recovery and prepayment rates on the Portfolios, including general economic conditions, the consumer credit environment and unemployment rates; management's determination of which qualitative and quantitative factors should be weighed in our estimates, and the weight to be given to such factors; capital markets receptivity to securities backed by private education loans; and interest rate trends. We specifically disclaim any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, even if our estimates change, and you should not rely on those statements as representing our views as of any date subsequent to the date of this press release.
The First Marblehead Corporation and Subsidiaries
Consolidated Statements of Operations By Reporting Segment
For the Three Months Ended March 31, 2012 and 2011
(Unaudited)
(dollars and shares in thousands, except per share amounts)
2012
---------------------------------------------------
Education Securitization Total
Financing Trusts Eliminations
--------- -------------- ------------ ----------
Revenues:
Net interest income 741 1,940 -- 2,681
Provision for loan
losses 222 (303) -- (81)
--------- -------------- ------------ ----------
Net interest income
(loss) after provision
for loan losses 963 1,637 -- 2,600
Non-interest revenues:
Tuition payment
processing fees 7,697 -- -- 7,697
Additional structural
advisory fees, asset
servicing fees and
residuals trust
updates 2,454 -- (4,043) (1,589)
Other administrative
fees 4,072 7 (117) 3,962
--------- -------------- ------------ ----------
Total non-interest
revenues 14,223 7 (4,160) 10,070
--------- -------------- ------------ ----------
Total revenues 15,186 1,644 (4,160) 12,670
Non-interest expenses:
Compensation and
benefits 11,645 -- -- 11,645
General and
administrative 13,864 1,078 (855) 14,087
--------- -------------- ------------ ----------
Total non-interest
expenses 25,509 1,078 (855) 25,732
--------- -------------- ------------ ----------
Income (loss) from
operations (10,323) 566 (3,305) (13,062)
Other income:
Gain from
deconsolidations of
trusts -- 1,709 9,156 10,865
Gain on sale of trust
administrator 12,571 -- -- 12,571
Proceeds from TERI
settlement -- -- -- --
--------- -------------- ------------ ----------
Total other income 12,571 1,709 9,156 23,436
Income (loss) before
income taxes 2,248 2,275 5,851 10,374
Income tax expense
(benefit) 516 -- -- 516
--------- -------------- ------------ ----------
Net income (loss) $ 1,732 $ 2,275 $ 5,851 $ 9,858
========= ============== ============ ==========
Net income (loss) per
common share:
Basic $ 0.02 $ 0.02 $ 0.05 $ 0.09
Diluted 0.02 0.02 0.05 0.09
Weighted-average common
shares outstanding:
Basic 101,554
Diluted 110,573
2011
---------------------------------------------------
Education Securitization Total
Financing Trusts Eliminations
--------- -------------- ------------ ----------
Revenues:
Net interest income 351 64,442 9 64,802
Provision for loan
losses (10) (73,745) -- (73,755)
--------- -------------- ------------ ----------
Net interest income
(loss) after provision
for loan losses 341 (9,303) 9 (8,953)
Non-interest revenues:
Tuition payment
processing fees 7,055 -- -- 7,055
Additional structural
advisory fees, asset
servicing fees and
residuals trust
updates (26,372) -- 21,646 (4,726)
Other administrative
fees 4,359 1,818 (2,368) 3,809
--------- -------------- ------------ ----------
Total non-interest
revenues (14,958) 1,818 19,278 6,138
--------- -------------- ------------ ----------
Total revenues (14,617) (7,485) 19,287 (2,815)
Non-interest expenses:
Compensation and
benefits 11,615 -- -- 11,615
General and
administrative 15,563 (9,724) 19,157 24,996
--------- -------------- ------------ ----------
Total non-interest
expenses 27,178 (9,724) 19,157 36,611
--------- -------------- ------------ ----------
Income (loss) from
operations (41,795) 2,239 130 (39,426)
Other income:
Gain from
deconsolidations of
trusts -- -- -- --
Gain on sale of trust
administrator -- -- -- --
Proceeds from TERI
settlement -- 18 -- 18
--------- -------------- ------------ ----------
Total other income -- 18 -- 18
Income (loss) before
income taxes (41,795) 2,257 130 (39,408)
Income tax expense
(benefit) (82) -- -- (82)
--------- -------------- ------------ ----------
Net income (loss) $ (41,713) $ 2,257 $ 130 $ (39,326)
========= ============== ============ ==========
Net income (loss) per
common share:
Basic $ (0.41) $ 0.02 $ -- $ (0.39)
Diluted (0.41) 0.02 -- (0.39)
Weighted-average common
shares outstanding:
Basic 100,834
Diluted 100,834
The First Marblehead Corporation and Subsidiaries
Consolidated Statements of Operations By Reporting Segment
For the Nine Months Ended March 31, 2012 and 2011
(Unaudited)
(dollars and shares in thousands, except per share amounts)
2012
---------------------------------------------------
Education Securitization
Financing Trusts Eliminations Total
--------- -------------- ------------ ----------
Revenues:
Net interest income 1,551 92,019 18 93,588
Provision for loan
losses 476 (189,232) -- (188,756)
--------- -------------- ------------ ----------
Net interest income
(loss) after provision
for loan losses 2,027 (97,213) 18 (95,168)
Non-interest revenues:
Tuition payment
processing fees 22,172 -- -- 22,172
Additional structural
advisory fees, asset
servicing fees and
residuals trust
updates 202 -- (4,956) (4,754)
Other administrative
fees 11,373 578 (3,436) 8,515
--------- -------------- ------------ ----------
Total non-interest
revenues 33,747 578 (8,392) 25,933
--------- -------------- ------------ ----------
Total revenues 35,774 (96,635) (8,374) (69,235)
Non-interest expenses:
Compensation and
benefits 33,321 -- -- 33,321
General and
administrative 47,275 19,092 (4,757) 61,610
--------- -------------- ------------ ----------
Total non-interest
expenses 80,596 19,092 (4,757) 94,931
--------- -------------- ------------ ----------
Income (loss) from
operations (44,822) (115,727) (3,617) (164,166)
Other income:
Gain from
deconsolidations of
trusts -- 1,239,068 9,514 1,248,582
Gain on sale of trust
administrator 12,571 -- -- 12,571
Proceeds from TERI
settlement 1,405 6,885 -- 8,290
--------- -------------- ------------ ----------
Total other income 13,976 1,245,953 9,514 1,269,443
Income (loss) before
income taxes (30,846) 1,130,226 5,897 1,105,277
Income tax expense
(benefit) (10,891) -- -- (10,891)
--------- -------------- ------------ ----------
Net income (loss) $ (19,955) $ 1,130,226 $ 5,897 $1,116,168
========= ============== ============ ==========
Net income (loss) per
common share:
Basic $ (0.18) $ 10.25 $ 0.05 $ 10.12
Diluted (0.18) 10.23 0.05 10.10
Weighted-average common
shares outstanding:
Basic 101,459
Diluted 110,499
2011
---------------------------------------------------
Education Securitization
Financing Trusts Eliminations Total
--------- -------------- ------------ ----------
Revenues:
Net interest income 655 202,372 29 203,056
Provision for loan
losses (277) (305,679) -- (305,956)
--------- -------------- ------------ ----------
Net interest income
(loss) after provision
for loan losses 378 (103,307) 29 (102,900)
Non-interest revenues:
Tuition payment
processing fees 7,055 -- -- 7,055
Additional structural
advisory fees, asset
servicing fees and
residuals trust
updates (20,890) -- 16,552 (4,338)
Other administrative
fees 13,144 2,393 (7,478) 8,059
--------- -------------- ------------ ----------
Total non-interest
revenues (691) 2,393 9,074 10,776
--------- -------------- ------------ ----------
Total revenues (313) (100,914) 9,103 (92,124)
Non-interest expenses:
Compensation and
benefits 27,640 -- -- 27,640
General and
administrative 40,088 17,083 9,538 66,709
--------- -------------- ------------ ----------
Total non-interest
expenses 67,728 17,083 9,538 94,349
--------- -------------- ------------ ----------
Income (loss) from
operations (68,041) (117,997) (435) (186,473)
Other income:
Gain from
deconsolidations of
trusts -- -- -- --
Gain on sale of trust
administrator -- -- -- --
Proceeds from TERI
settlement 8,112 42,587 -- 50,699
--------- -------------- ------------ ----------
Total other income 8,112 42,587 -- 50,699
Income (loss) before
income taxes (59,929) (75,410) (435) (135,774)
Income tax expense
(benefit) 1,957 -- -- 1,957
--------- -------------- ------------ ----------
Net income (loss) $ (61,886) $ (75,410) $ (435) $ (137,731)
========= ============== ============ ==========
Net income (loss) per
common share:
Basic $ (0.61) $ (0.75) $ (0.01) $ (1.37)
Diluted (0.61) (0.75) (0.01) (1.37)
Weighted-average common
shares outstanding:
Basic 100,809
Diluted 100,809
The First Marblehead Corporation and Subsidiaries
Consolidated Balance Sheets
As of March 31, 2012 and June 30, 2011
(Unaudited)
(Dollars in thousands)
March 31, June 30,
2012 2011
----------- -----------
Assets
Cash and cash equivalents $ 140,525 $ 217,367
Short-term investments, at cost 70,000 50,000
Restricted cash and investments, at cost 45,955 252,396
Investments available for sale, at fair value 70,841 11,019
Education loans held to maturity, net of allowance
of $1,276 and $450,150 31,054 6,946,169
Mortgage loans held to maturity, net of allowance
of $814 and $882 7,955 6,417
Interest receivable 621 66,104
Deposits for participation interest accounts, at
fair value 3,726 8,512
Service revenue receivables, at fair value 16,238 8,192
Goodwill 19,548 19,548
Intangible assets, net 21,454 23,040
Other assets 13,370 44,018
----------- -----------
Total assets (1) $ 441,287 $ 7,652,782
=========== ===========
Liabilities and Stockholders' Equity (Deficit)
Liabilities:
Deposits $ 73,783 $ 60,492
Restricted funds due to clients 85,357 121,888
Accounts payable, accrued expenses and other
liabilities 17,451 36,391
Income taxes payable 23,703 39,979
Net deferred tax liability 1,039 831
Long-term borrowings - 8,273,140
----------- -----------
Total liabilities (1) 201,333 8,532,721
Commitments and contingencies:
Stockholders' equity (deficit):
Preferred stock, par value $0.01 per share; 20,000
shares authorized; 133 shares issued and
outstanding 1 1
Common stock, par value $0.01 per share; 250,000
shares authorized; 110,018 and 109,717 shares
issued; 101,558 and 101,318 shares outstanding 1,100 1,097
Additional paid-in capital 451,689 448,088
Accumulated deficit (26,687) (1,142,855)
Treasury stock, 8,460 and 8,399 shares held, at
cost (186,629) (186,551)
Accumulated other comprehensive income 480 281
----------- -----------
Total stockholders' equity (deficit) 239,954 (879,939)
----------- -----------
Total liabilities and stockholders' equity
(deficit) $ 441,287 $ 7,652,782
=========== ===========
(1) Our consolidated assets at June 30, 2011 include total assets of
$7,168,168 of certain variable interest entities (VIEs) that can only be
used to settle the liabilities of those VIEs. These assets include
restricted cash and guaranteed investment contracts of $127,709, education
loans held to maturity, net of allowance for loan losses, of $6,946,169,
interest receivable of $66,031, and other assets of $28,709. Our
consolidated liabilities at June 30, 2011 include liabilities of certain
VIEs for which the VIE creditors do not have recourse to FMD. These
liabilities include long-term borrowings of $8,273,140 and accounts payable
and accrued expenses of $11,682.
The First Marblehead Corporation and Subsidiaries
Loan Volume Data
For the Nine Months Ended March 31, 2012
(Unaudited)
Booked Loans
-------------------------
Loan
Application Booked Weighted Weighted Disbursed
Applications Volume Loans Average FICO Average Rate Loans
----------------------------------------------------------------------------
----------------------------------------------------------------------------
66,008 $654,660,842 $52,889,723 759 6.55% $52,255,191
============================================================================
Use of Non-GAAP Financial Measures
In addition to providing financial measurements based on U.S. generally accepted accounting principles ("GAAP"), the Company has included in this press release an additional financial metric that we refer to as "net operating cash usage" and that was not prepared in accordance with GAAP. We define "net operating cash usage" to mean approximate cash required to fund our operations. "Net operating cash usage" is not directly comparable to our consolidated statement of cash flows prepared in accordance with GAAP. Legislative and regulatory guidance discourages the use of, and emphasis on, non-GAAP financial metrics and requires companies to explain why a non-GAAP financial metric is relevant to management and investors.
The Company's management and its board of directors use this non-GAAP financial metric, in addition to GAAP financial measures, as a basis for measuring and forecasting our core operating performance and comparing such performance to that of prior periods. The non-GAAP financial measure is also used by us in our financial and operational decision-making.
We believe that the inclusion of this non-GAAP financial metric helps investors to gain a better understanding of our quarterly and annual results, including our non-interest expenses and quarter-end liquidity position, particularly in light of dislocations in the private education loan industry and the capital markets that have affected us. In addition, our presentation of this non-GAAP financial measure is consistent with how we expect that analysts may calculate their estimates of our financial results in their research reports and with how clients, investors, analysts and financial news media may evaluate our financial results.
There are limitations associated with reliance on any non-GAAP financial measure because any such measure is specific to our operations and financial performance, which makes comparisons with other companies' financial results more challenging. Nevertheless, by providing both GAAP and non-GAAP financial measures, we believe that investors are able to compare our GAAP results to those of other companies, while also gaining a better understanding of our operating performance, consistent with management's evaluation.
"Net operating cash usage" should be considered in addition to, and not as a substitute for, or superior to, financial information prepared in accordance with GAAP. "Net operating cash usage" relates solely to the Education Financing segment, and excludes the effects of income taxes, acquisitions or divestitures, participation interest account net fundings and changes in other assets and other liabilities that are solely related to short-term timing of cash payments or receipts.
In accordance with the requirements of Regulation G promulgated by the Securities and Exchange Commission, the table below presents the most directly comparable GAAP financial measure, income (loss) before income taxes, for the three months and nine months ended March 31, 2012 and 2011 and reconciles the GAAP measure to the comparable non-GAAP financial metric:
The First Marblehead Corporation and Subsidiaries
Net Operating Cash Usage, a non-GAAP Financial Measure
For the Three and Nine Months Ended March 31, 2012 and 2011
(Unaudited)
(Dollars in thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------ ------------------------
2012 2011 2012 2011
----------- ----------- ----------- -----------
(dollars in thousands)
Income (loss) before
income taxes $ 10,374 $ (39,408) $ 1,105,277 $ (135,774)
(Income) loss and
related eliminations
attributable to:
NCSLT Trusts -- (597) (1,125,036) 80,316
GATE Trusts (2,275) (1,660) (5,190) (4,906)
Eliminations (5,851) (130) (5,897) 435
----------- ----------- ----------- -----------
Income (loss) before
income taxes--Education
Financing 2,248 (41,795) (30,846) (59,929)
Adjustments to income
(loss) before income
taxes--Education
Financing:
Trust update (income)
losses--additional
structural advisory
fees and residuals:
Securitization
Trusts segment (4,043) 21,646 (4,956) 16,552
Off-balance sheet
VIEs 1,589 (233) 4,486 102
Asset servicing fees -- 4,959 268 4,236
Non-cash gains from
TERI settlements -- -- -- (5,021)
Gain on sale of trust
administrator (12,571) -- (12,571) --
Depreciation and
amortization 1,138 2,126 3,635 6,573
Stock-based
compensation expense 1,081 1,275 3,603 3,526
TMS deferred revenue (1,601) 558 (3,694) 558
Cash receipts from
education loans, net
of interest income
accruals 146 118 568 413
Cash receipts from
trust distributions 520 32 575 460
Other (1,031) (1,778) (2,669) (4,511)
----------- ----------- ----------- -----------
Non-GAAP net
operating cash
usage $ (12,524) $ (13,092) $ (41,601) $ (37,041)
=========== =========== =========== ===========
Gary Santo
Investor Relations
First Marblehead
800 Boylston Street, 34th FL
Boston, MA 02199
617.638.2065
