Earlier, on November 11, Centerline's American Mortgage Acceptance Company or AMAC unit was de-listed from the exchange, a result of negative impacts that the company said were due to AMAC's suspension of investment activity beginning in late 2007.
On Friday, Centerline reported a Q3 net loss of $157.3 million or $3.03 a share compared to last year's profit of $9.45 million or $.16 a share during the same period. In light of the current NYSE shot across the bow, Centerline CEO and president Marc Schnitzer said the company was outlining a plan for compliance.
During the Friday conference call, Schnitzer cautioned that the company's stock price is not indicative of Centerline's overall business performance. Still, he acknowledged that the concerns raised by the Q3 loss and recent stock exchange actions are "serious." Regarding the rules from the stock exchange, he said, "We plan to comply."
In its third quarter company press release, Centerline said operating results were "impacted negatively by non-cash asset impairment charges." Further, the company said that recent market conditions--including the decline in its market capitalization, as well as the federal government conservatorship of Freddie Mac and Freddie Mae--had led it to conclude that there was the indication of goodwill impairment.
Regarding Freddie and Fannie, in September, the company had said it supported the government's takeover--a move that Schnitzer said he believed could have a "steadying impact on confidence in the mortgage financing markets."
But on Friday, Schnitzer said he'd never seen a decline like the current storms impacting the markets. As part of its efforts to weather the winds ahead, he pointed out company actions, like the 20% reduction in its job force reduction that Centerline announced on November 4.
He also said that the company is exploring options with its bank group into 2010 noting that the company has $29 million of total liquidity on its balance sheet at this point. Schnitzer said the company's goal is to de-lever that balance sheet.
"In the subsequent months since the overall market downturn, its been very difficult to obtain outside financing for the B-pieces," said Schnitzer, adding that a financing--or sale of the B-pieces--was intended to cover the company's term loan payments but he said the company was granted an extension by its bank group to meet an $18.8-million term loan obligation.
"Presently, we are in advanced discussions to implement a longer term debt financing package for Centerline," and "provide our lenders with an adequate security package in return," said Schnitzer.
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