Regional Management Corp
) expects its fourth-quarter 2013 earnings will be lowered by 3
cents per share due to franchise taxes. Concurrently, it also
announced the launch of secondary offering of 2.04 million common
The common shares will be offered by Palladium Equity Partners
III, L.P. and Parallel 2005 Equity Fund, LP. Both these
entities are current stakeholders of Regional Management and
affiliates of Palladium Equity Partners and Parallel Investment
Additionally, entities affiliated with Richard A. Godley, a
director, existing stockholder and founder of Regional
Management, and C. Glynn Quattlebaum, President and Chief
Operating Officer, an existing stockholder and founder of the
company, are also offering the shares. The underwriters are given
an option for 30 days to purchase up to an additional 0.3 million
Regional Management stated it will not sell any shares or receive
any proceeds from the offering. As a result this issuance will
not have any effect on the bottom line of the company.
With respect to internal control implementation work, Regional
Management noted that non-income based franchise taxes in certain
states were not appropriately expensed when incurred. Thus,
Regional Management expects to record $0.6 million in its
operating expense in connection with the franchise taxes that in
turn will lower its fourth-quarter earnings by 3 cents per
About $0.3 million of the operating expense pertains to last
two years, while the remainder relates to the current year. The
Zacks Consensus estimate for the fourth quarter, currently pegged
at 71 cents, is expected to see a downturn as analysts adjust
CAPITAL ONE FIN (COF): Free Stock Analysis
DISCOVER FIN SV (DFS): Free Stock Analysis
GLOBAL PAYMENTS (GPN): Free Stock Analysis
REGIONAL MANAGE (RM): Free Stock Analysis
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Nonetheless, a diversified product suite, branch expansions and
convenience check campaigns continue to fuel finance receivables
growth. Total finance receivables were $528.9 million, up 3.3%
from total finance receivables of $512.1 million as of Sep 30,
Regional Management, after a dry spell of four quarters, finally
managed to deliver positive surprise in the last reported
quarter. We wait to see if the company, riding on its strengths,
can deliver another quarter of positive surprise.
Regional Management presently carries a Zacks Rank #4 (Sell).
Better-ranked stocks in the finance sector include
Capital One Financial Corp
Discover Financial Services
Global Payments Inc.
). All these stocks carry a Zacks Rank #2 (Buy).