-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F6R1kOXU464FNVIM3edBb0kWNijYhXZDzEJekVZYRlC922SLTOK1Rg1YCLYnlzhB lU6kpe2IJ49DRswiD6layA== 0000950147-98-000574.txt : 19980803 0000950147-98-000574.hdr.sgml : 19980803 ACCESSION NUMBER: 0000950147-98-000574 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980730 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980731 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINOVA CAPITAL CORP CENTRAL INDEX KEY: 0000043960 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 941278569 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-07543 FILM NUMBER: 98675130 BUSINESS ADDRESS: STREET 1: 1850 N CENTRAL AVE STREET 2: PO BOX 2209 CITY: PHOENIX STATE: AZ ZIP: 85004-2209 BUSINESS PHONE: 6022074900 MAIL ADDRESS: STREET 1: 1850 N. CENTRAL AVENUE STREET 2: P.O. BOX 2209 CITY: PHOENIX STATE: AZ ZIP: 85002-2209 FORMER COMPANY: FORMER CONFORMED NAME: GREYHOUND FINANCIAL CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: GREYHOUND LEASING & FINANCIAL CORP DATE OF NAME CHANGE: 19870330 8-K 1 CURRENT REPORT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C, 20549 -------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): July 30, 1998 - -------------------------------------------------------------------------------- FINOVA CAPITAL CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 1-11011 94-1278569 - ------------------------------------------------------------------------------------------------------- (State or Other Jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.)
1850 NORTH CENTRAL AVENUE, P. O. BOX 2209, PHOENIX, ARIZONA 85004-2209 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 602/207-6900 ----------------------------- Item 5. Other Events. FINOVA Capital Corporation announced revenues, net income and selected financial data and ratios for the second quarter ended June 30, 1998 (unaudited). Item 7. Financial Statements and Exhibits. (c) Exhibits: Exhibits Title ------------- ------------------------------------------- 28 Press Release of FINOVA Capital Corporation dated July 30, 1998 1 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FINOVA CAPITAL CORPORATION (Registrant) Dated: July 31, 1998 By /s/ Bruno A. Marszowski ----------------------------------------------- Bruno A. Marszowski, Senior Vice President, Chief Financial Officer and Controller Principal Financial Officer/Authorized Officer 2 EXHIBIT 28 Meilee Smythe Embargo until Senior Vice President - Treasurer 8:00 a.m. (E.D.T.) 602/ 207-2664 THESE ARE THE EARNINGS FOR FINOVA CAPITAL CORPORATION THE PRINCIPAL SUBSIDIARY OF THE FINOVA GROUP INC. WHOSE EARNINGS WERE RELEASED JULY 28, 1998 FINOVA CAPITAL CORPORATION Announces Record Second Quarter Net Income 21% Increase PHOENIX, Ariz., July 30, 1998 -- FINOVA Capital Corporation, the principal subsidiary of The FINOVA Group, Inc., today announced record net income of $42.0 million for the second quarter of 1998, a 21% increase over net income of $34.7 million a year ago. Net income for the first six months of 1998 increased to $82.0 million, also up 21% from 1997. "FINOVA continues to increase its profitability as the company develops new programs to meet the needs of its dynamic middle market customers," commented FINOVA Chairman and CEO Sam Eichenfield. Annualized operating margins as a percentage of average earning assets widened to 6.5% for the three months ended June 30, 1998 from 6.0% in the comparable 1997 quarter as the interest margin component remained relatively constant and volume-based fees more than doubled to $19.1 million compared to $8.6 million one year ago. In addition to the 15% growth in managed assets from a year ago, backlog surged to $2.3 billion at June 30, 1998 from $1.4 billion at the end of the second quarter of 1997 (and $1.8 billion at March 31, 1998). New business and fee-based volume totaled $2.7 billion and $5.2 billion for the three and six months ended June 30, 1998, respectively, and were significantly greater than the $1.8 billion and $3.2 billion for the comparable periods. "FINOVA continues to maintain portfolio quality," Eichenfield added. Non-accruing assets were 2.1% of managed assets at June 30, 1998 compared to 2.1% at year-end 1997 and 2.0% at June 30, 1997. The provision for credit losses for the second quarter of 1998 was $16.0 million, compared to $18.3 million in 1997, and represented 115% of net write-offs for the period. "The addition to FINOVA's national marketing force of over 80 business development officers from the FINOVA Realty Capital acquisition is already beginning to pay off, not only in commercial mortgage banking, but also in cross-selling results," continued Eichenfield. "Even with the addition of these business development officers and their support staff, operating expenses remain in check." For the quarter ended June 30, 1998, operating expenses were 43.4% of operating margins compared to 42.8% one year ago, and for the six months ended June 30, 1998, the operating expense ratio remained constant with the prior year at 43.5%. Excluding the acquisition of the former Belgravia Capital Corp., FINOVA's operating expense ratio would have been 41.2% and 41.6% for the three and six months ended June 30, 1998, respectively. Income taxes were higher for the second quarter of 1998 than the same period a year ago due to the increase in pre-tax income and certain tax credits which were realized in 1997. FINOVA Capital Corporation is one of the nation's leading financial services companies focused on providing a broad range of capital solutions primarily to midsize business. FINOVA is headquartered in Phoenix with business development offices throughout the U.S. and in London, U.K., and Toronto, Canada. ### FINOVA Capital Corporation and Consolidated Subsidiaries Summary of Consolidated Income (Unaudited) (Dollars in Thousands)
Quarter Ended Six Months Ended June 30, June 30, ------------------------------------ ----------------------------------- 1998 1997 1998 1997 ---------------- --------------- ---------------- --------------- Interest earned from financing transactions $ 218,199 $ 190,958 $ 421,935 $ 374,286 Operating lease income 31,425 28,946 64,088 54,911 Interest expense (114,987) (101,883) (225,559) (199,055) Operating lease depreciation (20,495) (17,610) (37,665) (34,059) ---------------- --------------- ---------------- --------------- Interest margins earned 114,142 100,411 222,799 196,083 Volume-based fee income 19,103 8,583 41,259 16,367 ---------------- --------------- ---------------- --------------- Operating margin 133,245 108,994 264,058 212,450 Provision for credit losses (16,000) (18,300) (25,500) (26,300) Gains on disposal of assets 9,582 10,468 10,805 13,701 Selling, administrative and other operating expenses (57,779) (46,612) (114,737) (92,490) ---------------- --------------- ---------------- --------------- Income before income taxes 69,048 54,550 134,626 107,361 Income taxes (27,068) (19,853) (52,623) (39,851) ---------------- --------------- ---------------- --------------- Net Income $ 41,980 $ 34,697 $ 82,003 $ 67,510 ================ =============== ================ ===============
FINOVA Capital Corporation Selected Consolidated Financial Data and Ratios (Unaudited) (1) (Dollars in Thousands)
As of As of June 30 December 31 --------------------------------------------------------------- FINANCIAL POSITION: 1998 1997 1997 ------------------- ------------------- ----------------- Ending funds employed (EFE) $ 8,928,644 $ 7,826,196 $ 8,399,456 Securitizations and participations sold (2) 502,032 394,025 457,967 ------------------- ------------------- ----------------- Total managed assets 9,430,676 8,220,221 8,857,423 Reserve for credit losses 178,070 159,747 177,088 Nonaccruing assets 196,824 165,885 187,356 Nonaccruing assets as % of managed assets (4) 2.1% 2.0% 2.1% Reserve for credit losses as a % of: Ending managed assets (4) (5) 2.0% 2.0% 2.0% Nonaccruing assets 90.5% 96.3% 94.5% Total debt $ 7,345,194 $ 6,338,122 $ 6,764,581 Shareowner's equity 1,326,597 1,122,162 1,260,068 Total debt to equity 5.54x 5.65x 5.37x Backlog 2,263,504 1,440,831 1,601,218 For the Quarter Ended For the Six Months Ended June 30, June 30, -------------------------------------- ---------------------------------------- PERFORMANCE HIGHLIGHTS: 1998 1997 1998 1997 ---------------- ---------------- ----------------- ---------------- Average managed assets $ 9,192,567 $ 8,023,255 $ 9,034,792 $ 7,881,895 Average earning assets (3) 8,252,855 7,235,636 8,113,431 7,099,386 New business 753,733 951,236 1,445,813 1,562,870 Fee-based volume 1,960,182 862,442 3,764,614 1,677,673 Net write-offs 13,881 11,135 26,987 15,224 Net write-offs (annualized) as a % of average managed assets (4) 0.61% 0.56% 0.61% 0.39% Operating margin (annualized) as a % of average earning assets 6.5% 6.0% 6.5% 6.0% Interest margins earned (annualized) as a % of average earning assets 5.5% 5.6% 5.5% 5.5% Selling, administrative and other operating expenses as a % of operating margin 43.4% 42.8% 43.5% 43.5%
- ------------------------------------------ (1) Averages for the periods presented are based on month-end balances. (2) Securitizations are assets sold under securitization agreements and managed by the Company. (3) Average earning assets equal average funds employed less average deferred taxes on leveraged leases and average nonaccruing assets. (4) Excludes participations sold in which the Company has transferred credit risk. (5) Excludes financing contracts held for sale. -----END PRIVACY-ENHANCED MESSAGE-----