WHITE PLAINS, N.Y.--(BUSINESS WIRE)--WCAP--
Winfield Capital Corp. (WCAP:OTCBB) announced today a
net gain of $1,136,649 or a basic net gain per share of $0.21 for the
fiscal year ended March 31, 2004 versus a net loss of $5,994,571 or a
basic net loss per share of $1.12 for the fiscal year ended March 31,
2003. The net gain in fiscal year 2004 included a net investment loss
of $1,317,216 for the fiscal year ended March 31, 2004 compared with a
net investment loss of $3,356,288 for the fiscal year ended March 31,
2003. The fiscal 2004 net gain was attributable in part to a realized
net capital gain of $1,191,185 which reflected long-term capital gains
on the sale of equity securities, the disposition of loans and
recoveries totaling $1,556,857 partially offset by a long-term capital
loss on the sale of an equity security and a write-off on an asset
acquired in liquidation totaling $365,672. There was a realized net
gain of $16,407 for the year ended March 31, 2003. The fiscal 2004 net
gain was also attributable in part to an unrealized appreciation on
loans and investments of $1,262,680 for the year ended March 31, 2004
(principally reflecting the increased market price of investments in
four publicly traded portfolio companies and the increased fair value
of an investment in one privately held company partially offset by the
decreased fair value of investments in two privately held portfolio
companies). There was an unrealized depreciation on loans and
investments of $2,654,690 (or $2,692,012 excluding an unrealized
appreciation on short-term marketable securities) for the year ended
March 31, 2003.
The Company's investment income increased by $821,050 or an
increase of 112.5%, from $729,897 for the year ended March 31, 2003 to
$1,550,947 for the year ended March 31, 2004. This reflected
principally an increase in interest from small business concerns of
$1,031,061 as a result of the Company's increased investments in loans
in the last two quarters of fiscal 2003. Interest from temporarily
invested funds decreased by $209,209 as a result of a decrease in
invested idle funds as well as a decrease in interest rates. Other
income decreased by $802. Interest expense decreased by $213,074 to
$1,665,409 for the year ended March 31, 2004 from $1,878,483 for the
year ended March 31, 2003. This decrease resulted from repayments of
$5,113,340 of debentures to the SBA. Operating expenses decreased from
$2,207,702 for the year ended March 31, 2003 to $1,202,754 for the
year ended March 31, 2004. This was due primarily to a decrease in
amortization expense of $574,428 which related to fully expensing
previously paid debenture fees after the acceleration of the maturity
of the U.S. Small Business Administration (the "SBA") debentures and a
decrease in payroll and payroll-related expenses of $217,536 due to
the resignation of an executive officer effective December 31, 2002
and the termination of a Secretary effective December 31, 2003.
Professional fees decreased by $66,756, shareholder relations and
other financial expenses decreased by $48,623, insurance expense
decreased by $37,009 and directors fees decreased by $23,725. There
were other miscellaneous decreases which totaled $36,871.
As previously disclosed in the Company's public filings and in
press releases, according to the SBA Regulations, the Company is
required to be in compliance with the capital impairment rules, as
defined by regulation 107.1830 of the SBA Regulations. The Company was
notified by the SBA on April 30, 2003 that the Company was no longer
in compliance with the SBA's capital impairment requirements and that
the SBA had accelerated the maturity date of the Company's debentures.
The aggregate principal, interest and fees due under the debentures
totaled approximately $25.6 million as of April 30, 2003, including
interest and fees due through the next semi-annual payment date. As a
result of subsequent repayments by the Company, the aggregate
principal, interest and fees due under the debentures totaled
approximately $21.1 million as of March 31, 2004, including interest
and fees due through the next semi-annual payment date. The SBA has
transferred Winfield Capital's account to liquidation status where any
new investments and material expenses are subject to prior SBA
approval. Based on discussions and meetings that the Company has had
with the SBA to date, the SBA will not afford the Company the
flexibility of a self-managed liquidation to repay its indebtedness.
As a result, the Company anticipates that it will be required to repay
all or substantially all of the principal and interest owing to the
SBA on a schedule acceptable to the SBA. No definitive agreement has
been reached with the SBA and the SBA maintains the ability to pursue
any remedies they deem appropriate under the law or the instruments
evidencing the Company's indebtedness, including, without limitation,
initiating proceedings for the appointment of the SBA or its designee
as receiver. If the SBA were to require the Company to immediately pay
back the entire indebtedness including accrued interest, certain
private security investments may need to be disposed of in a forced
sale which may result in proceeds less than their carrying value at
March 31, 2004. As such, this impairment could have a material adverse
effect on the Company's financial position, results of operations and
cash flows which raises substantial doubt about the Company's ability
to continue as a going concern. The Company continues to explore
various strategic alternatives, including a third party equity
infusion, although there can be no assurance that it will be
successful in its ability to consummate or implement these or any
other strategic alternatives.
Winfield Capital is a small business investment company that makes
loans and equity investments pursuant to funding programs sponsored by
the SBA and is a non-diversified, closed-end investment company that
is a business development company under the Investment Company Act of
1940. The Company's common stock is traded on the Over the Counter
Bulletin Board ("OTCBB") under the symbol "WCAP". For more
information, visit Winfield Capital's website at: http://www.winfieldcapital.com/.
This press release may contain forward-looking statements. For
this purpose, any statements contained in this press release that are
not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, words such as "may,"
"will," "expect," "could," "would," "should," "believe," "anticipate,"
"estimate," "continue," "provided," or comparable terminology are
intended to identify forward-looking statements. These statements by
their nature involve substantial risks and uncertainties, and actual
results may differ materially depending on a variety of factors.
Winfield Capital assumes no obligation to update the information
contained in this press release.

SELECTED FINANCIAL INFORMATION
-0-
*T
For The Fiscal Year Ended Mar. 31,
2004 2003
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Total Investment Income $ 1,550,947 $ 729,897
Net Gain (Loss) $ 1,136,649 $(5,994,571)
Net Gain (Loss) Per Share
Basic $ 0.21 $ (1.12)
Diluted $ 0.21 $ (1.12)
Weighted Average Number
of Shares Outstanding &
Common Stock Equivalents 5,346,084 5,346,084
Total Assets $23,918,679 $26,656,254
Cash & Cash Equivalents $ 5,473,063 $ 4,396,206
Short-term Marketable Securities $ - $ 3,454,226
Total Shareholders' Equity $ 2,627,744 $ 1,491,095
*T

KEYWORD: NEW YORK
INDUSTRY KEYWORD: BANKING BANKING EARNINGS
SOURCE: Winfield Capital Corp.

CONTACT INFORMATION:
Winfield Capital Corp., White Plains, New York
Paul A. Perlin, 914-949-2600