HomeGold, Financial, Inc. Reports Year 2000 Results; Company Anticipates Operating Profit in the Second Half of 2001

Apr 17, 2001, 01:00 ET from HomeGold Financial, Inc.

    GREENVILLE, S.C., April 17 /PRNewswire/ --
     HomeGold Financial, Inc. (OTC Bulletin Board:   HGFN) today reported
 financial results for fourth quarter and year-end 2000, while projecting an
 operating profit in the second half of 2001.
     Chief Executive Officer Ronald J. Sheppard stated, "We are encouraged by
 some of the progress and key strategic initiatives completed during the second
 half of last year.  While we anticipated financial difficulties during a turn-
 around year, we are not pleased with the final financial figures experienced
 due to the restructuring of our company in 2000.  When my company, HomeSense
 Financial Corporation, merged with HomeGold in May of 2000, I knew that there
 was a great deal of work to do in order to obtain profitability.  Subsequent
 to the merger we focused on the retail business and from December 2000 to
 March 2001 we saw a 64.5% increase in production coupled with a 27% decrease
 in advertising expense as related to production.  Our plans have focused on
 rebuilding our business and redirecting our focus with an eye toward 2001 and
 laying a solid foundation for the future years.  Rebuilding contributed to our
 losses in 2000, but at the same time focused our company and set us on the
 proper course for the future.  We are strategically and tactically on target
 to have profitable months in the second half of 2001, which is our short-term
 goal."
     "As a company," Sheppard continued, "we have outlined specific plans in
 order to maximize revenue and profit.  First, we began geographic expansion.
 For example, we opened a new location in Cincinnati, Ohio in September of
 2000.  In Cincinnati we saw profitable revenue after the second month of
 operation.  We used this business model in our Phoenix regional production
 center, which began operation at the end of March 2001.  The Phoenix location
 allows us to serve more customers due to the time zone difference, which
 enables us to increase our hours of operation.
     "Secondly, in the middle of January 2001 we opened a conforming lending
 division within our company in order to capture a larger market share.  Our
 initial month's funded volume was $764,160 as compared to March 2001's volume
 of over $6.8 million.
     "Thirdly, while we are continuing to decrease expenses, we have already
 reduced operating costs for the company by more than $800,000 per month.
 Simultaneously, total delinquencies have been cut in half, from $50.8 million
 (12.4% of serviced loans) in 1999 to $25.3 (7.5%) in 2000, and our net charge-
 offs have decreased from $3.7 million in 1999 to $2.0 million in 2000.
     "Finally, in order to obtain a true picture and see our vision for 2001
 one must realize how far we have come following the merger.  Since January 1,
 2001 we have significantly increased our number of production related
 employees and created new jobs.  We have also implemented an intensive
 recruiting and training program, which will help us to increase production
 volume with our new Loan Officers."  Sheppard stressed, "We are ramping up our
 retail production, increasing the income that we receive on our loans and
 reducing our expenses. This is allowing us to narrow the gap toward
 profitability."
     Sheppard added, "Based on our recent loan volume trend, which has been
 very positive, we are projecting good news in the second half of 2001.
 Profitability has been a long time coming for our shareholders.  We can only
 leave the past behind and strive toward profitable months in the second half
 of 2001. I am both expectant and confident that our team will continue on
 course and make every effort to achieve our goals.  As CEO, I am committed to
 obtain the profitability we desire."
     For the year ended December 31, 2000, the company reported a loss before
 extraordinary items of $28.0 million, net of restructuring costs, compared
 with a 1999 loss before extraordinary items of $27.7 million.  In 2000, the
 net loss of $29.8 million included an extraordinary gain on the extinguishment
 of debt of $0.6 million, $2.4 million in non-recurring restructuring costs
 related to the merger and the closure of the wholesale division, and a
 $10 million deferred tax benefit.  The 1999 net income of $1.8 million
 included an extraordinary gain on the extinguishment of debt of $29.5 million
 and a $7.8 million deferred tax benefit.
     HomeGold, Inc. is licensed in 44 states across the US, and currently
 operates Regional Production Centers in Greenville, SC, Lexington, SC,
 Cincinnati, OH, Phoenix, AZ and two branch offices in the Southeast US.
 HomeGold currently has approximately 970 employees.
     Except for historical information contained herein, the matters set forth
 in this document are forward-looking statements that involve certain risks and
 uncertainties that could cause actual results to differ materially from those
 in the forward-looking statements.  For more complete information concerning
 factors which could affect the Company's financial results, reference is made
 to the Company's registration statements, reports and other documents filed
 with the U.S. Securities and Exchange Commission.
     "Safe Harbor" statement under the Private Securities Litigation Reform Act
 of 1995: From Time to time the company may publish forward-looking statements
 relating to such matters as anticipated financial performance, business
 prospects and similar matters. The Private Securities Litigation Reform Act of
 1995 provides a safe harbor for forward-looking statements.  In order to
 comply with the terms of the safe harbor, the Company notes that a variety of
 factors could cause the Company's actual results and experience to differ
 materially from the anticipated results or other expectations expressed in the
 company's forward looking statements.  The risks and uncertainties that may
 affect the operations, performance and results of the Company's business
 include the following: lower origination volume due to market conditions;
 inability to achieve desired efficiency levels; higher losses due to economic
 downturn or lower real estate values; loss of key employees; negative cash
 flows and capital needs; delinquencies and losses in securitization trusts;
 right to terminate mortgage servicing and related negative impact on cash
 flow; adverse consequences of changes in the interest rate environment;
 prepayment risk; credit changes in the secondary market for mortgage loans;
 dependence on funding sources; dependence on the broker network; competition;
 timing of loan sales; economic conditions; contingent risks; government
 regulation; adverse impact of lawsuits; losses due to the breach of
 representation or warranties under previous agreements; and lower than
 anticipated loan origination fees. For more complete information concerning
 factors, which could affect the Company's financial results, reference is made
 to the Company's registration statements, reports and other documents filed
 with the U.S. Securities and Exchange Commission.
 
 

SOURCE HomeGold Financial, Inc.
    GREENVILLE, S.C., April 17 /PRNewswire/ --
     HomeGold Financial, Inc. (OTC Bulletin Board:   HGFN) today reported
 financial results for fourth quarter and year-end 2000, while projecting an
 operating profit in the second half of 2001.
     Chief Executive Officer Ronald J. Sheppard stated, "We are encouraged by
 some of the progress and key strategic initiatives completed during the second
 half of last year.  While we anticipated financial difficulties during a turn-
 around year, we are not pleased with the final financial figures experienced
 due to the restructuring of our company in 2000.  When my company, HomeSense
 Financial Corporation, merged with HomeGold in May of 2000, I knew that there
 was a great deal of work to do in order to obtain profitability.  Subsequent
 to the merger we focused on the retail business and from December 2000 to
 March 2001 we saw a 64.5% increase in production coupled with a 27% decrease
 in advertising expense as related to production.  Our plans have focused on
 rebuilding our business and redirecting our focus with an eye toward 2001 and
 laying a solid foundation for the future years.  Rebuilding contributed to our
 losses in 2000, but at the same time focused our company and set us on the
 proper course for the future.  We are strategically and tactically on target
 to have profitable months in the second half of 2001, which is our short-term
 goal."
     "As a company," Sheppard continued, "we have outlined specific plans in
 order to maximize revenue and profit.  First, we began geographic expansion.
 For example, we opened a new location in Cincinnati, Ohio in September of
 2000.  In Cincinnati we saw profitable revenue after the second month of
 operation.  We used this business model in our Phoenix regional production
 center, which began operation at the end of March 2001.  The Phoenix location
 allows us to serve more customers due to the time zone difference, which
 enables us to increase our hours of operation.
     "Secondly, in the middle of January 2001 we opened a conforming lending
 division within our company in order to capture a larger market share.  Our
 initial month's funded volume was $764,160 as compared to March 2001's volume
 of over $6.8 million.
     "Thirdly, while we are continuing to decrease expenses, we have already
 reduced operating costs for the company by more than $800,000 per month.
 Simultaneously, total delinquencies have been cut in half, from $50.8 million
 (12.4% of serviced loans) in 1999 to $25.3 (7.5%) in 2000, and our net charge-
 offs have decreased from $3.7 million in 1999 to $2.0 million in 2000.
     "Finally, in order to obtain a true picture and see our vision for 2001
 one must realize how far we have come following the merger.  Since January 1,
 2001 we have significantly increased our number of production related
 employees and created new jobs.  We have also implemented an intensive
 recruiting and training program, which will help us to increase production
 volume with our new Loan Officers."  Sheppard stressed, "We are ramping up our
 retail production, increasing the income that we receive on our loans and
 reducing our expenses. This is allowing us to narrow the gap toward
 profitability."
     Sheppard added, "Based on our recent loan volume trend, which has been
 very positive, we are projecting good news in the second half of 2001.
 Profitability has been a long time coming for our shareholders.  We can only
 leave the past behind and strive toward profitable months in the second half
 of 2001. I am both expectant and confident that our team will continue on
 course and make every effort to achieve our goals.  As CEO, I am committed to
 obtain the profitability we desire."
     For the year ended December 31, 2000, the company reported a loss before
 extraordinary items of $28.0 million, net of restructuring costs, compared
 with a 1999 loss before extraordinary items of $27.7 million.  In 2000, the
 net loss of $29.8 million included an extraordinary gain on the extinguishment
 of debt of $0.6 million, $2.4 million in non-recurring restructuring costs
 related to the merger and the closure of the wholesale division, and a
 $10 million deferred tax benefit.  The 1999 net income of $1.8 million
 included an extraordinary gain on the extinguishment of debt of $29.5 million
 and a $7.8 million deferred tax benefit.
     HomeGold, Inc. is licensed in 44 states across the US, and currently
 operates Regional Production Centers in Greenville, SC, Lexington, SC,
 Cincinnati, OH, Phoenix, AZ and two branch offices in the Southeast US.
 HomeGold currently has approximately 970 employees.
     Except for historical information contained herein, the matters set forth
 in this document are forward-looking statements that involve certain risks and
 uncertainties that could cause actual results to differ materially from those
 in the forward-looking statements.  For more complete information concerning
 factors which could affect the Company's financial results, reference is made
 to the Company's registration statements, reports and other documents filed
 with the U.S. Securities and Exchange Commission.
     "Safe Harbor" statement under the Private Securities Litigation Reform Act
 of 1995: From Time to time the company may publish forward-looking statements
 relating to such matters as anticipated financial performance, business
 prospects and similar matters. The Private Securities Litigation Reform Act of
 1995 provides a safe harbor for forward-looking statements.  In order to
 comply with the terms of the safe harbor, the Company notes that a variety of
 factors could cause the Company's actual results and experience to differ
 materially from the anticipated results or other expectations expressed in the
 company's forward looking statements.  The risks and uncertainties that may
 affect the operations, performance and results of the Company's business
 include the following: lower origination volume due to market conditions;
 inability to achieve desired efficiency levels; higher losses due to economic
 downturn or lower real estate values; loss of key employees; negative cash
 flows and capital needs; delinquencies and losses in securitization trusts;
 right to terminate mortgage servicing and related negative impact on cash
 flow; adverse consequences of changes in the interest rate environment;
 prepayment risk; credit changes in the secondary market for mortgage loans;
 dependence on funding sources; dependence on the broker network; competition;
 timing of loan sales; economic conditions; contingent risks; government
 regulation; adverse impact of lawsuits; losses due to the breach of
 representation or warranties under previous agreements; and lower than
 anticipated loan origination fees. For more complete information concerning
 factors, which could affect the Company's financial results, reference is made
 to the Company's registration statements, reports and other documents filed
 with the U.S. Securities and Exchange Commission.
 
 SOURCE  HomeGold Financial, Inc.