View:
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURTIES AND EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): July 22, 2004
IMPAC MORTGAGE HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
Maryland 1-14100 33-0675505
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
1401 Dove Street Newport Beach, CA 92660
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (949) 475-3600
Item 7 Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits.
Exhibit 99.1 Press Release dated July 22, 2004
Item 12. Results of Operations and Financial Condition
On July 22, 2004, Impac Mortgage Holdings, Inc. (the "Company") issued a press
release announcing corrections to previously issued financial statements for
years ending December 31, 2001, 2002 and 2003 and for the three months ended
March 31, 2003 and March 31, 2004. The Company also announced certain
preliminary unaudited 2004 results for the period ended June 30, 2004. A copy of
the press release is attached hereto as Exhibit 99.1, and is incorporated herein
by reference.
The information in this Current Report (including the information attached as an
exhibit) is being furnished and shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
subject to the liabilities of that Section. The information in this Current
Report shall not be deemed incorporated by reference in any filing under the
Securities Act of 1933, as amended, except as shall be expressly set forth by
specific reference in such a filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.
IMPAC MORTGAGE HOLDINGS, INC.
Date: July 22, 2004
By: /s/ Richard J. Johnson
---------------------------------
Name: Richard J. Johnson
Title: Executive Vice President
and Chief Financial Officer
Exhibit Index
Exhibit Number Description of Exhibits
Exhibit 99.1 Press Release dated July 22, 2004
Impac Mortgage Holdings, Inc. Announces Corrections to previously issued
financial statements to Reallocate GAAP Net Earnings; corrections have no effect
on Estimated Taxable Earnings or Dividends Paid
- --------------------------------------------------------------------------------
Preliminary Un-audited Second Quarter 2004 results in record Acquisitions and
Originations; and Balance Sheet growth
NEWPORT BEACH, California, July 22, 2004--Impac Mortgage Holdings, Inc. (NYSE:
IMH or the Company), said today that it will correct and restate certain of its
previously issued financial statements for the years ended December 31, 2001,
2002 and 2003, included and filed on Form 10-K, and the Company's unaudited
financial statements for the three months ended March 31, 2003 and 2004 as filed
on Form 10-Q. The correction will change the Company's revenue recognition
policy with respect to the sale of mortgage loans from Impac Funding Corporation
("IFC"), IMH's wholly-owned subsidiary, to IMH and the subsequent cash sale of
the associated mortgage loan servicing rights to unrelated third parties. While
previously the Company recognized these cash gains in the period in which the
mortgage servicing rights were sold and cash proceeds were received, the Company
will now amortize these gains over the life of the related mortgage loans
retained by IMH. This correction does not constitute a write-off of previous
earnings, but is rather a timing difference, which results in a redistribution
of cash gains over the life of the related mortgage loans (generally on average
2-3 years). While this change affects Net Earnings in accordance with Generally
Accepted Accounting Principles ("GAAP"),
It has no effect on past or future Estimated Taxable Income;
It has no effect on past or future Cash Flows; and
It has no effect on the past Dividends Paid or future Dividends.
The Company's estimate as to the cumulative amount of net earnings that will be
redistributed from Gain on Sale of Loans (included in Equity in Net Earnings of
IFC prior to July 1, 2003) and amortized back into GAAP Net Earnings over the
remaining life of the related mortgage loans (generally on average 2-3 years) as
a result of this correction is estimated for each of the years ended December
31, 2001, 2002, 2003, to be $7.3 million (GAAP Net Earnings changes from $33.2
million to $ 25.9 million), $14.3 million ( GAAP Net Earnings changes from $74.9
million to $60.6 million), $14.2 million (GAAP Net Earnings changes from $127.2
million to $113.0 million) and for the three months ended March 31, 2003 and
2004 to be $4.3 million (GAAP Net Earnings changes from $25.5 million to $21.2
million) and $12.1 million (GAAP Net Earnings
changes from $46.0 million to $33.9 million), respectively. Taking these
corrections into account, the cumulative reduction to Total Stockholders' Equity
is estimated to be $48.1 million at March 31, 2004 (Total Stockholder's Equity
changes to $560.7 million as compared to $608.8 million). As of March 31, 2004,
the Company increased the balance of its deferred gains with respect to loans
previously sold from IFC to IMH by approximately $83.1 million (pre-tax). The
difference between the correction to Stockholders' Equity of $48.1 million as of
March 31, 2004 and the increase in deferred gain is comprised of deferred taxes
for GAAP financial purposes only. Again, this has no effect on the calculation
of Taxable Income. The deferred gain associated with these loan sales will be
amortized into income over the expected remaining life of the related loans for
GAAP financial purposes (generally on average 2-3 years). These amounts remain
subject to audit.
The Company will also modify its classification of Hedging Expenses as an
increase in CMO borrowings interest expense as opposed to a reduction of
interest income on Mortgage Assets. While the prior presentation was in
accordance with GAAP, the change in presentation is voluntary and deemed by the
Company to be a preferred method of reporting. The reclassification of these
expenses has no effect on Net Earnings or Estimated Taxable Income.
Mr. Joseph R. Tomkinson, Chairman and CEO of Impac Mortgage Holdings, Inc.
stated, "the correction to the Company's financial statements, which results in
the redistribution of previously reported GAAP Net Earnings is strictly a timing
issue and has no effect on the inherent strength of the Company and its ability
to produce consistent, reliable Taxable Earnings and subsequent dividends." Mr.
Tomkinson further commented, "it is important to understand that nothing
fundamental has changed in our business strategy. Furthermore, the Company
continues to perform well above our original expectations set at the beginning
of the year and as a result, the Company subsequently increased its quarterly
dividend, currently set at an annualized dividend rate of $3.00 per common
share. The current dividend rate represents approximately a 13.5% annualized
yield, based on the July 22, 2004 closing stock price of $22.18."
Preliminary Un-audited Second Quarter 2004 results in record Acquisitions and
Originations; and Balance Sheet growth
During the second quarter 2004, driven by record loan acquisitions and
originations of $5.5 billion, and record on-balance sheet CMO securitizations of
$4.9 billion, the Company's balance sheet increased to over $17.0 billion in
total assets. Furthermore, rate locks which are an indication of future loan
acquisitions and originations, increased to a new record of $3.2 billion at June
30, 2004. Based upon the Company's preliminary review of the second quarter
results, the Company expects that second quarter estimated Taxable Earnings per
diluted share to be greater than the first quarter amount reported in the
Company's March 31, 2004 Form 10-Q. The Company reiterates that it remains
confident with the current dividend policy, and its operating strategy, which
emphasizes flexibility on the sale of mortgage loans for cash gains or retention
at IMH for long-term
investment. Furthermore, management remains comfortable with its current
dividend policy.
The Company expects to issue its corrected and restated financial statements and
amended 2003 Form 10-K/A and March 31, 2004 Form 10-Q/A with the Securities and
Exchange Commission as soon as possible but no later than August 15, 2004, and
file its second quarter 2004 results on Form 10-Q on a timely basis. As a
result, the audited financial statements as of December 31, 2003 and 2002 and
for each of the years in the three-year period ended December 31, 2003, and the
auditors' report there on, and the unaudited financial statements as of March
31, 2004 and for the three-month periods ended March 31, 2004 and 2003, should
not be relied upon until the corrected and restated financials are filed with
the Securities and Exchange Commission.
The Company has scheduled a conference call and live web cast on Friday, July
23, 2004, at 9:00 a.m. PT (12:00 p.m. ET). Mr. Tomkinson will provide a brief
commentary. The conference call will be open to all interested parties with the
exception of the question and answer session, which will be limited to buyside
and sellside analysts.
- --------------------------------------------------------------------------------
To participate in the call, please dial in up to fifteen minutes prior to the
scheduled start time. You may access the call live via:
The dial-in number is (800) 350-9149, conference ID number: 8984897
Internet Webcast Access:http://www.impaccompanies.com and link to Investor
Relations / Presentations
The conference call will be archived approximately 2 hours following the call,
listeners may participate by via:
the Impac Mortgage Holdings, Inc. Web Site at www.impaccompanies.com, by linking
to Investor Relations / Presentations/ Archived Presentations or:
the dial-in-number for replay is (800) 642 1687, conference ID number: 8984897.
Dial in by replay will be available through Tuesday, July 27, 2004.
Impac Mortgage Holdings, Inc. is a mortgage REIT that operates three core
businesses: (1) the Long-Term Investment Operations, (2) the Mortgage
Operations, and (3) the Warehouse Lending Operations. The Long-Term Investment
Operations invests primarily in Alt-A mortgage loans. The Mortgage Operations
acquires, originates, sells and securitizes primarily Alt-A mortgage loans and
the Warehouse Lending Operations provides short-term financing to mortgage loan
originators. The Company is organized as a REIT for tax purposes, which
generally allows it to pass through earnings to stockholders without federal
income tax at the corporate level.
Safe Harbor
Note: Safe Harbor "Statement under the Private Securities Litigation Reform Act
of 1995." This release contains forward-looking statements including statements
relating to the change of the Company's revenue recognition policy; estimates of
the cumulative amount of net earnings that will be redistributed from Gain on
Sale of Loans and cumulative reduction to Total Stockholders' Equity; net
earnings and balance of deferred gains for the quarter, and at, March 31, 2004,
respectively; expectations of the estimated remaining life of loans; the
annualized dividend rate; expectation of estimated taxable earnings per share;
the issuance of corrected financial statements and timely filing of amended SEC
reports. The forward-looking statements are based on current management
expectations. Actual results may differ materially as a result of several
factors, including, among other things, the risk of possible changes in the
scope and nature of, and the time required to complete, the issuance of audit
opinions on the Company's prior year financial statements; risks related to the
restatement process and the impact on operating results; risks that the
estimated numbers set forth in this release may materially change as a result of
the restatement process; risks that the Company and/or its auditors may identify
additional items that materially and adversely affect the Company's financial
results; risks of not filing on a timely basis the Company's Form 10-Q for the
quarter ended June 30, 2004; risks of delays in raising, or the inability to
raise, additional capital, either through equity offerings, lines of credit or
otherwise, as a result of issuing corrected financial statements or not filing
SEC reports on a timely basis; risks that the Company may not effectuate its
current operating strategy as a result of financial restatements, including the
inability to originate, acquire, or securitize mortgage loans; risks of negative
reactions from the Company's stockholders, creditors or others that do business
with the Company as a result of the issuance of corrected financial statements,
and other factors described in this press release and under "Risk Factors" in
our Form 10K for the year end December 31, 2003. Caution must be exercised in
relying on these and other forward-looking statements. Due to known and unknown
risks and other factors not presently identified, the Company's results may
differ materially from its expectations and projections. We will update and
revise our estimates based on actual conditions experienced, however, it is not
practicable to publish all revisions and as a result, no one should assume that
results projected in or contemplated by the forward-looking statements included
above may continue to be accurate in the future.
For additional information, questions or comments, please call Tania Jernigan,
VP of Investor Relations at (949) 475-3722 or email tjernigan@impaccompanies.
com. Web site: www.impaccompanies.com