Quarterly Highlights:

Cash received from customers increased by 27% to $19.5 million, or $1.36 per diluted share, with net cash from operations increasing by 32% to $14.8 million, or $1.03 per diluted share, as compared to the same period last year.

Total revenues increased by 19% to $12.0 million as compared to the same period last year

Net income for the quarter was $1.2 million or $0.09 per diluted share

Leverage continues to be conservative at 0.85 times total liabilities to stockholder equity

Lease originations increased by 29% to over $20 million as compared to the same period last year.

Third Quarter Results:

Net income for the third quarter ended September 30, 2009 was $1.2 million or $0.09 per diluted share based upon 14,328,613 shares, compared to net income of $1.6 million, or $0.11 per diluted share based upon 14,179,080 shares for the same period last year.

Revenue for the third quarter of 2009 increased 18.7% to $12.0 million compared to $10.1 million in the third quarter of 2008 driven by growth in lease revenues for the quarter which were slightly offset by expected declines in rental and service contracts income. Revenue from leases was $7.6 million, up $1.6 million from the same period last year and rental income was $2.1 million, down $0.2 million from September 30, 2008. Other revenue components contributed $2.3 million for the current quarter, up $0.5 million from the same period last year.

Total operating expenses for the current quarter increased 31.3% to $10.0 million from $7.6 million in the third quarter of 2008. The third quarter 2009 provision for credit losses increased by $1.7 million to $5.4 million compared to the third quarter of 2008 due to an increase in receivables due in installments, higher delinquencies and higher charge-off levels. Third quarter net charge-offs increased to $5.1 million from $2.9 million in the comparable period of 2008. Selling, General and Administrative expenses increased $0.1 million to $3.4 million from $3.3 million as compared to the third quarter of last year primarily due to increases in employee related expenses associated with increased headcount. Headcount as of September 30, 2009 was 101 as compared to 94 at the same period in 2008. Depreciation and amortization expense increased by $0.2 million to $0.4 million for the quarter, due to an increase in the number of rental contracts being depreciated. Interest expense increased $0.4 million to $0.8 million as a result of an increase in borrowings under our revolving line of credit.

Cash received from customers in the third quarter increased 27.1% to $19.5 million compared to $15.3 million during the same period in 2008. New originations in the quarter increased by 29.0% to $20.7 million for the third quarter of 2009 as compared to the third quarter 2008.

Richard Latour, President and Chief Executive Officer said, "The current economic environment continues to present many challenges to the financial services industry. In order to manage through these difficult times, we will continue to focus our efforts on maintaining a disciplined credit approach, ensuring we have ample liquidity under our line of credit, and providing premium customer service to our dealer base. With this approach we have increased our total cash received from customers and our new lease originations while at the same time we have continued to grow our portfolio with a conservative leverage ratio. During the third quarter of 2009, we processed over 13,800 applications and approved an additional 304 vendors bringing the total vendor count to approximately 4,500."

Year to Date Results:

For the nine months ended September 30, 2009, net income was $2.8 million versus net income of $5.0 million for the same period last year. Net income per diluted share year to date was $0.20 based on 14,242,420 shares versus $0.35 based on 14,174,576 shares for the same period in 2008.

Year to date revenues for the nine months ended September 30, 2009 increased 17.2% to $34.0 million compared to $29.0 million during the same period in 2008. Revenue from leases was $21.5 million, up $5.0 million from the same period last year and rental income was $6.5 million, down $1.1 million from September 30, 2008. Other revenue components contributed $6.0 million, up $1.2 million from the same period last year. New contract originations year to date September 30, 2009 were $57.4 million versus $51.4 million through the same period last year.

Total operating expenses for the nine months ended September 30, 2009 increased 38.0% to $29.4 million versus $21.3 million for the same period last year. The provision for credit losses increased to $15.9 million for the nine months ended September 30, 2009, as compared to $10.2 million for the same period last year due to an increase in receivables due in installments, higher delinquencies and higher charge-off levels. Year to date net charge-offs increased to $13.7 million as compared to $5.5 million for the same period last year. Selling, General and Administrative expenses increased $0.7 million to $10.4 million primarily due to increases in employee related expenses associated with increased headcount. Interest expense increased by $1.2 million to $1.9 million as a result of higher outstanding debt balances on our line of credit. Year to date cash from customers increased 28.4% to $55.4 million as compared to $43.2 million for the same period last year.

 MICROFINANCIAL INCORPORATED                                                                                                                                                                                
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME                                                                                                                                                                
 (In thousands, except share and per share data)                                                                                                                                                            
 (Unaudited)                                                                                                                                                                                                
                                                                                                                                                                                                            
                                                                                                                                                                   September 30,    December 31,            
                                                                                                                                                                   2009             2008                    
 ASSETS                                                                                                                                                                                                     
                                                                                                                                                                                                            
 Cash and cash equivalents                                                                                                                                         $  540           $  5,047                
 Restricted cash                                                                                                                                                      722              528                  
 Net investment in leases:                                                                                                                                                                                  
 Receivables due in installments                                                                                                                                      169,934          142,881              
 Estimated residual value                                                                                                                                             18,216           15,257               
 Initial direct costs                                                                                                                                                 1,472            1,211                
 Less:                                                                                                                                                                                                      
 Advance lease payments and deposits                                                                                                                                  (2,028   )       (982     )           
 Unearned income                                                                                                                                                      (55,071  )       (49,384  )           
 Allowance for credit losses                                                                                                                                          (13,876  )       (11,722  )           
 Net investment in leases                                                                                                                                             118,647          97,261               
 Investment in service contracts, net                                                                                                                                 0                32                   
 Investment in rental contracts, net                                                                                                                                  448              240                  
 Property and equipment, net                                                                                                                                          695              759                  
 Other assets                                                                                                                                                         1,009            983                  
 Total assets                                                                                                                                                      $  122,061       $  104,850              
                                                                                                                                                                                                            
                                                                                                                                                                                                            
 LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                                                                       
                                                                                                                                                                                                            
                                                                                                                                                                   September 30,    December 31,            
                                                                                                                                                                   2009             2008                    
 Revolving Line of Credit                                                                                                                                          $  47,207        $  33,325               
 Capital lease obligation                                                                                                                                             109              125                  
 Accounts payable                                                                                                                                                     2,067            1,648                
 Dividends payable                                                                                                                                                    -                702                  
 Other liabilities                                                                                                                                                    1,797            1,308                
 Income taxes payable                                                                                                                                                 753              8                    
 Deferred income taxes                                                                                                                                                3,995            3,396                
 Total liabilities                                                                                                                                                    55,928           40,512               
                                                                                                                                                                                                            
 Stockholders' equity:                                                                                                                                                                                      
 Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued at September 30, 2009 and December 31, 2008                                           -                -                    
 Common stock, $.01 par value; 25,000,000 shares authorized; 14,173,076 and 14,038,257 shares issued at September 30, 2009 and December 31, 2008, respectively        142              140                  
 Additional paid-in capital                                                                                                                                           46,170           45,774               
 Retained earnings                                                                                                                                                    19,821           18,424               
 Total stockholders' equity                                                                                                                                           66,133           64,338               
 Total liabilities and stockholders' equity                                                                                                                        $  122,061       $  104,850              


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 MICROFINANCIAL INCORPORATED                                                                                   
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME                                                                   
 (In thousands, except share and per share data)                                                               
 (Unaudited)                                                                                                   
                                                                                                               
                                              Three Months Ended                Nine Months Ended              
                                              September 30,                     September 30,                  
                                              2009             2008             2009             2008          
                                                                                                               
 Revenues:                                                                                                     
 Income on financing leases                   $  7,635         $  6,030         $  21,522        $  16,566     
 Rental income                                   2,124            2,330            6,471            7,566      
 Income on service contracts                     162              221              526              720        
 Loss and damage waiver fees                     1,048            849              3,052            2,305      
 Service fees and other                          1,001            632              2,371            1,712      
 Interest income                                 0                23               14               110        
 Total revenues                                  11,970           10,085           33,956           28,979     
                                                                                                               
 Expenses:                                                                                                     
 Selling, general and administrative             3,349            3,260            10,413           9,697      
 Provision for credit losses                     5,437            3,782            15,883           10,199     
 Depreciation and amortization                   440              245              1,158            705        
 Interest                                        751              310              1,928            696        
 Total expenses                                  9,977            7,597            29,382           21,297     
                                                                                                               
 Income before provision for income taxes        1,993            2,488            4,574            7,682      
 Provision for income taxes                      767              905              1,761            2,670      
                                                                                                               
 Net income                                   $  1,226         $  1,583         $  2,813         $  5,012      
                                                                                                               
 Net income per common share:                                                                                  
 Basic                                        $  0.09          $  0.11          $  0.20          $  0.36       
 Diluted                                      $  0.09          $  0.11          $  0.20          $  0.35       
 Weighted-average shares:                                                                                      
 Basic                                           14,170,079       14,016,167       14,138,374       13,992,951 
 Diluted                                         14,328,613       14,179,080       14,242,420       14,174,576 


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About The Company

MicroFinancial Inc. (NASDAQ: MFI), is a financial intermediary specializing in microticket leasing and financing. MicroFinancial has been operating since 1986, and is headquartered in Woburn, Massachusetts.

Statements in this release that are not historical facts, including statements about future dividends or growth plans, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes," "anticipates," "expects," "views," "will" and similar expressions are intended to identify forward-looking statements. We caution that a number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Readers should not place undue reliance on forward-looking statements, which reflect our views only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. We cannot assure that we will be able to anticipate or respond timely to changes which could adversely affect our operating results. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results or other factors may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see the risk factors described in documents that we file from time to time with the Securities and Exchange Commission.

A service of YellowBrix, Inc.