Item 2.02 Results of Operations and Financial Condition

As reported in an 8-K filed on January 26, 2021, CCUR Holdings, Inc. and one of its subsidiaries (collectively "CCUR" or the "Company") have been unable to recover approximately $14mm of fully refundable deposits related to certain aircraft finance transactions ("aviation deposits").

Based on an examination of all information currently available to CCUR, it has determined that it is probable a loss has occurred related to its aviation deposits. Due to the limited information available and uncertainty related to the specific sources of recovery and their timing, CCUR is unable to make the determination that a specific amount of recovery is probable. As a result, the Company's Board of Directors determined on February 6, 2021 that the appropriate action is a full write-down of its aviation deposits. As of December 31, 2020, these aviation deposits had a carrying value of $13.8mm.

The Company expects to aggressively pursue all remedies for recovery, including those related to insurance and actions against all parties that may have contributed to the loss of the aviation deposits.

As a result of the decision to take a full write-down of the aviation deposits, CCUR is also announcing preliminary results for its fiscal Q2 ended December 31, 2020.

Preliminary results for Fiscal Q2 are as follows:

· Net loss attributable to its stockholders of $8.3mm or $0.95 per share;

excluding the write-down of the aviation deposits, adjusted net income

attributable to its stockholders was $1.5mm or $0.16 per share

· Revenue for the quarter was $1.2mm

· Other interest income and realized and unrealized gains on investment, net,


   totaled $3.9mm

The Company reported net loss attributable to its stockholders of $8,333,000, or $0.95 per diluted share, for the second quarter of fiscal year 2021. The Company reported net income attributable to its stockholders of $2,737,000, or $0.31 per diluted share, for the second quarter of fiscal year 2020.

Revenue for the quarter decreased to $1,197,000 compared to $1,787,000 during the prior fiscal year period. The revenue decrease was due to merchant cash advance (MCA) revenue decreasing 27% to $1,046,000 compared to $1,440,000 in the second quarter of fiscal year 2020, and fiscal year 2021 second quarter revenue from interest on loans decreasing 57% to $151,000 compared to $374,000 in the fourth quarter of the prior year. Other interest income and realized and unrealized gains (losses) on investments, net, for the period totaled $3,840,000 compared to $2,361,000 in the prior fiscal year second quarter.

Total working capital as of December 31, 2020 was $43,124,000 as compared with $51,011,000 as of June 30, 2020. The Company's balance sheet remains strong, and as of December 31, 2020, it had cash and cash equivalents of approximately $16,223,000.

Additional details about the financial results and aviation deposits will be available in the Company's quarterly report on Form 10-Q for the fiscal quarter ended December 31, 2020, which the Company expects to file on or before February 16, 2021.

A full summary of the unaudited preliminary Fiscal Q2 balance sheet and income statement are shown below.

Non-Generally Accepted Accounting Principles (GAAP) Financial Measures

Management evaluates financial performance in part based on a non-GAAP financial measure, adjusted net income. Adjusted net income represents income from continuing operations, adjusted for the special, one-time write-down of the aviation deposits, which management believes is not indicative of CCUR's ongoing performance.

We believe that this non-GAAP financial measure, when coupled with the GAAP result and the reconciliation to the corresponding GAAP financial measure (net loss), provides a more complete understanding of the Company's results of operations for this period. We believe that this enables investors to perform an additional comparison of our operating results, to assess our liquidity and capital position and to analyze financial performance excluding the effect of this one-time write-down, which may obscure trends in CCUR's underlying performance. This information also enables investors to compare financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to a key metric used by management. This non-GAAP financial measure is provided in addition to, and not as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.

Item 2.06 Material Impairment

The information provided in the second paragraph of Item 2.02 of Current Report on Form 8-K is incorporated by reference into this Item 2.06.

© Edgar Online, source Glimpses