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ACA Capital Reports Financial and Economic Results for the First Quarter Ended March 31, 2007
· First quarter net economic income rose 41% to $15.7 million, compared to first quarter 2006
· First quarter base economic income rose 41% to $15.4 million, compared to first quarter 2006
NEW YORK May 9, 2007 ACA Capital Holdings, Inc. (NYSE: ACA) today announced first quarter 2007 net income of $11.4 million, or $0.31 per diluted share. This represents a 19% decrease from first quarter 2006 net income of $14.1 million, and a 34% decrease from first quarter 2006 earnings per diluted share of $0.47. The decrease in net income was primarily a result of net unrealized mark-to-market losses on the Companys portfolio of Structured Credit transactions.
Net income and net income per diluted share are computed in accordance with accounting principles generally accepted in the United States of America (GAAP). Additionally, to assist investors in their understanding of the Companys quarterly results and their measurement of the Companys growth and profitability, ACA Capital provides other non-GAAP information, including net economic income and base economic income.
Net economic income for the first quarter of 2007 was $15.7 million, or $0.42 per diluted share. This represents a 41% increase from first quarter 2006 net economic income of $11.1 million, and a 14% increase from first quarter 2006 net economic income per diluted share of $0.37.
Base economic income for the first quarter of 2007 was $15.4 million, or $0.42 per diluted share. This represents a 41% increase from first quarter 2006 base economic income of $10.9 million, and a 17% increase from first quarter 2006 base economic income per diluted share of $0.36.
ACA Capitals economic results for the first quarter underscore our ability to produce significant growth throughout changing market conditions said President and Chief Executive Officer Alan S. Roseman. Our Structured Credit business revenue growth continues to exceed even our ambitious objectives. In addition, we added $1.6 billion of new CDO assets under management despite the uncertainties in the asset-backed CDO market, and we can already see positive results from renewed efforts in our Public Finance business. Given these successes, we remain very optimistic and excited for the balance of 2007.
Net Economic Income
In managing its business and measuring growth and profitability from a strategic and financial planning perspective, in addition to GAAP net income results, ACA Capitals management and Board of Directors consider a supplemental measurement, net economic income. Net economic income excludes the net income impact of:
1. Unrealized gains (losses) on derivatives included in:
The following information was filed by Aca Capital Holdings Inc on Thursday, May 10, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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