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CCUR Holdings Reports $8.3 Million Net Loss in 2Q FY 2021

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DULUTH, GA / ACCESSWIRE / February 18, 2021 / CCUR Holdings, Inc. (OTCQB:CCUR) ("CCUR" or the "Company") on February 16 reported a net loss attributable to its stockholders of $8,333,000, or $0.95 per diluted share, for the second quarter of fiscal year 2021. This is the first quarter the Company reported a net loss and a loss per share after seven consecutive quarters posting net income and earnings per share.

Revenue for the quarter decreased to $1,197,000 compared to $1,787,000 during the prior year period. The revenue decrease was primarily due to merchant cash advance (MCA) revenue decreasing 27% to $1,046,000 compared to $1,440,000 in the second quarter of fiscal year 2020. Fiscal year 2021 second quarter revenue from interest on loans decreased 56% to $151,000, compared to $347,000 in the second quarter of the prior year. An operating loss of $13,876,000 was reported for the second quarter of 2021 compared to operating income of $591,000 in the same quarter of 2020. This loss is primarily attributed to the Company recording a $13,760,500 provision for credit losses on aviation advances. Other interest income and realized and unrealized gains on investments, net for the period totaled $3,840,000 compared to $2,361,000 in the prior year period.

"Our performance for the quarter was materially and significantly impacted by a full write-down of our aviation deposits," commented Igor Volshteyn, President and Chief Operating Officer. "On January 12, 2021, the date a large deposit was due to be returned, the Company learned that in mid-December, the principal of Wright Brothers Aircraft Title, Inc., the escrow agent for its aviation deposits, had been arrested by law enforcement and that all the assets of Wright Brothers had been frozen. While the Company is aggressively pursuing all remedies for recovery, the amounts and timing of such recovery remain highly uncertain. As a result, the Board of Directors and management determined that the appropriate action is a full write-down of the aviation deposits."

Selling, general, and administrative expenses for the second quarter of fiscal year 2021 were $1,202,000, compared to $1,307,000 in the second quarter of the prior year.

Total working capital as of December 31, 2020 was $43,100,000 as compared with $51,000,000 as of June 30, 2020. The Company's balance sheet remains strong, and as of December 31, 2020, it had cash and cash equivalents of approximately $16,223,000.

About CCUR Holdings, Inc.

CCUR Holdings, Inc. operates MCA and other financial services and real estate business segments through its subsidiaries LM Capital Solutions, LLC, Recur Holdings LLC and CCUR Aviation Finance LLC, respectively, and actively pursues other business opportunities to maximize the value of its assets through evaluation of additional operating businesses or assets for acquisition. More information on the Company is available at www.ccurholdings.com.

Forward Looking Statements

Certain statements made or incorporated by reference herein which do not constitute statements of historical fact are "forward-looking statements" subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used or incorporated by reference in this report, the words "believes," "expects," "estimates," "anticipates," and similar expressions are intended to identify forward-looking statements. Statements regarding future events and developments such as future financial performance or returns, as well as expectations, beliefs, plans, estimates or projections relating to the future and current assessments of business opportunities, are forward-looking statements within the meaning of these laws. These statements are based on beliefs and assumptions of CCUR's management, which are based on currently available information. Except for the historical information contained herein, the matters discussed in this communication may contain forward-looking statements that involve risks and uncertainties that may cause CCUR's actual results to be materially different from such forward-looking statements and could materially adversely affect its business, financial condition, operating results and cash flows. These risks and uncertainties include, but are not limited to, the duration and impact of illness caused by COVID-19 on CCUR's business plans and expected operating results, CCUR's ability to successfully negotiate, perform due diligence and consummate any additional acquisitions, expected cash and liquidity positions, expected financial performance and revenue streams, market fluctuations in or material financial or regulatory changes impacting the MCA and real estate industry and general business conditions, as well as other risks listed in the Company's most recently filed Form 10-K filed on September 15, 2020 and subsequent quarterly reports filed with the Securities and Exchange Commission and risk and uncertainties not presently known to CCUR or that CCUR currently deems immaterial.

CCUR wishes to caution against placing undue reliance on any forward-looking statements, which speak only as of the date on which they were made. CCUR does not undertake any obligation to update forward-looking statements, whether as a result of future events, new information or otherwise, except as required by applicable law.

Contact:

IR@ccurholdings.com
(770)305-6434

CCUR HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)

December
31,
2020

June
30,
2020

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

16,223

$

9,336

Equity securities, fair value

13,269

7,372

Fixed maturity securities, available-for-sale, fair value

12,893

21,429

Current maturities of mortgage and commercial loans receivable

3,634

3,878

Advances receivable, net

111

11,436

Prepaid expenses and other current assets

599

1,204

Total current assets

46,729

54,655

Land investment

3,596

3,568

Deferred income taxes, net

7,691

6,632

Mortgage and commercial loans receivable, net of current maturities

104

1,695

Definite-lived intangibles, net

1,677

1,870

Goodwill

480

480

Equity method investment

3,850

-

Other long-term assets, net

762

950

Total assets

$

64,889

$

69,850

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable and accrued expenses

$

690

$

803

Management fee payable

2,915

2,841

Total current liabilities

3,605

3,644

Long-term liabilities:

Pension liability

4,396

4,005

Other long-term liabilities

628

912

Total liabilities

8,629

8,561

Stockholders' equity:

Shares of common stock, par value $0.01;
14,000,000 authorized; 8,839,344 and 8,797,671 issued
and outstanding at December 31, 2020 and June 30, 2020, respectively

88

88

Capital in excess of par value

209,276

209,223

Non-controlling interest

1,179

1,261

Accumulated deficit

(150,978

)

(143,077

)

Accumulated other comprehensive loss

(3,305

)

(6,206

)

Total stockholders' equity

56,260

61,289

Total liabilities, non-controlling interest, and stockholders' equity

$

64,889

$

69,850

CCUR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)

Three Months Ended December 31,

Six Months Ended December 31,

2020

2019

2020

2019

Revenues:

Merchant cash advance fees and other revenue

$

1,046

$

1,440

$

1,714

$

2,888

Interest on mortgage and commercial loans

151

347

393

630

Total revenues

1,197

1,787

2,107

3,518

Operating expenses:

Selling, general, and administrative

1,202

1,307

2,287

2,641

Amortization of purchased intangibles

96

119

193

239

Change in fair value of contingent consideration

-

(410

)

-

(400

)

Provision for credit losses on advances

13,775

180

13,827

396

Total operating expenses

15,073

1,196

16,307

2,876

Operating (loss) income

(13,876

)

591

(14,200

)

642

Other interest income

679

2,145

2,039

4,282

Realized gain on investments, net

876

843

1,408

1,919

Unrealized gain (loss) on equity securities, net

2,285

(627

)

1,240

(158

)

Other income, net

30

65

105

66

(Loss) income before income taxes and equity in net loss from equity method investment

(10,006

)

3,017

(9,408

)

6,751

Equity in net loss from equity method investment

53

-

53

-

(Benefit) provision for income taxes

(1,725

)

(17

)

(1,494

)

156

Net (loss) income

(8,334

)

3,034

(7,967

)

6,595

Less: Net loss (income) attributable to non-controlling interest

1

(297

)

23

(452

)

Net (loss) income attributable to CCUR Holdings, Inc. stockholders

$

(8,333

)

$

2,737

$

(7,944

)

$

6,143

(Loss) earnings per share attributable to CCUR Holdings, Inc. stockholders:

Basic

$

(0.95

)

$

0.31

$

(0.90

)

$

0.70

Diluted

$

(0.95

)

$

0.31

$

(0.90

)

$

0.70

Weighted average shares outstanding - basic

8,800,171

8,758,710

8,798,928

8,757,433

Weighted average shares outstanding - diluted

8,800,171

8,840,870

8,798,928

8,825,583

CCUR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(Amounts in thousands, except share and per share data)

Three Months Ended

December
31, 2020

September
30, 2020

Revenues:

Merchant cash advance fees and other revenue

$

1,046

$

668

Interest on mortgage and commercial loans

151

242

Total revenues

1,197

910

Operating expenses:

Selling, general, and administrative

1,202

1,085

Amortization of purchased intangibles

96

97

Provision for credit losses on advances

13,775

52

Total operating expenses

15,073

1,234

Operating loss

(13,876

)

(324

)

Other interest income

679

1,360

Realized gain on investments, net

876

532

Unrealized gain (loss) on equity securities, net

2,285

(1,045

)

Other income, net

30

75

(Loss) income before income taxes and equity in net loss from equity method investment

(10,006

)

598

Equity in net loss from equity method investment

53

-

(Benefit) provision for income taxes

(1,725

)

231

Net (loss) income

(8,334

)

367

Less: Net income attributable to non-controlling interest

1

22

Net (loss) income attributable to CCUR Holdings, Inc. stockholders

$

(8,333

)

$

389

(Loss) earnings per share attributable to CCUR Holdings, Inc. stockholders:

Basic

$

(0.95

)

$

0.04

Diluted

$

(0.95

)

$

0.04

Weighted average shares outstanding - basic

8,800,171

8,797,671

Weighted average shares outstanding - diluted

8,800,171

8,856,691

SOURCE: CCUR Holdings, Inc.



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