-----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, Wqd7sTpiA4Ytv3pxET9GG5WtNTq6TNEUYnKZKmZO/c6aXpmch9ohXemcE29MlIox Cvcx/f9IsHEqOqyO6AtlVw== 0000914760-97-000161.txt : 19970912 0000914760-97-000161.hdr.sgml : 19970912 ACCESSION NUMBER: 0000914760-97-000161 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970829 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19970903 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCURY FINANCE CO CENTRAL INDEX KEY: 0000846378 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 363627010 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10176 FILM NUMBER: 97674856 BUSINESS ADDRESS: STREET 1: 100 FIELD DR STE 340 STREET 2: STE 200 CITY: LAKE FOREST STATE: IL ZIP: 60045 BUSINESS PHONE: 7085643720 MAIL ADDRESS: STREET 1: 100 FIELD DRIVE STREET 2: SUITE 340 CITY: LAKE FOREST STATE: IL ZIP: 60045 8-K 1 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) August 29, 1997 Mercury Finance Company (Exact name of registrant as specified in charter) Delaware 1-10176 36-3627010 (State of other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 100 Field Drive, Lake Forest, Illinois 60045 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (847) 295-8600 N/A (Former name or former address, if changed since last report) Item 5. Other Events. On August 29, 1997, the Registrant issued a press release, a copy of which is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits. Exhibit No. Description of Document 99.1 Press release dated August 29, 1997 issued by the Registrant. 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 hereunto duly authorized. Mercury Finance Company Date: September 2, 1997 By: /s/ Patrick O'Malley Its: Assitant Secretary EX-99.1 2 Exhibit 99.1 MERCURY FINANCE REPORTS SECOND QUARTER RESULTS Mercury Finance Company (NYSE: MFN) today reported a net loss of $8,369,000 or $0.05 per share for the second quarter of 1997, which ended June 30. Non- operating expenses for the quarter were $5,453,000 on a pre-tax basis. "Our year-to-date results are consistent with the targets and expectations we developed soon after the initial management changes were implemented earlier this year. At that time we envisioned the first quarter as a period in which our efforts would be primarily devoted to stabilizing the situation," said William A. Brandt, Jr., president and chief executive officer of Mercury. "We believed the time afforded us in the second quarter would be ours to begin the cleanup of the Company's problem areas. We are pleased to report that during the second quarter, we took tough measures aimed at rebuilding the Company and returning it to a solid operating foundation. Competitive pressures on Mercury continue to be fierce and, as well, market conditions are challenging the industry as a whole. An obvious indication of these conditions is reflected in the latest government report showing record second quarter personal bankruptcies. "To respond to these conditions," Brandt said, "Mercury management has moved vigorously to re-enforce adherence to existing policies, as well as to introduce additional and more sophisticated internal control mechanisms during the second quarter. However, the Company's financial results continue to be measurably affected by the recording of interest expense, pursuant to the Forbearance Agreement with its creditors, at default rates averaging over 9 percent per annum." Management expects to issue complete second quarter financial statements, accompanied by a review report from Arthur Andersen LLP, in the next two weeks. Management does not expect these financial statements to differ materially from information released today. In line with the Company's earlier disclosures, Arthur Andersen LLP's review report will contain a going concern exception. The company reported the following achievements since the end of the first quarter: -- The Company continues to pay interest on all of its indebtedness. -- Cash flow is positive and the Company anticipates no need for further borrowing to fund operations in the near future. -- The Company closed on the sale of the Lyndon Insurance Group. A portion of the proceeds were used to make a $70 million payment on the principal of its outstanding debt. Additional principal payments aggregating $21 million were made out of the Company's excess cash balances. -- The Company received a continuation of waivers from its creditors allowing the Company to pledge assets if needed to collateralize a line of credit from the Bank of America. The waivers next come up for renewal on September 30. -- A $50 million line of credit from the Bank of America was renewed. No funds are currently outstanding against this line. -- As part of a comprehensive program to improve operational effectiveness, the Company consolidated operations and closed 30 branches during the second quarter. -- The Company has instituted new credit rating protocols designed to better evaluate credit risks and reduce credit losses. -- The Company has made managerial and organizational changes to focus more resources on the collection and recovery of delinquent debts. The non-operating expenses of $5,453,000 for the second quarter included a $325,000 charge for the closing of 30 branch locations and $5,127,000 for a variety of professional activities including the investigation into the previously disclosed accounting irregularities, fees related to negotiations with creditors, a portion of fees for the crisis management team hired to assist in the turnaround of the business and the cost of re-examining and restating previous financial statements. MERCURY FINANCE COMPANY Consolidated Statements of Income (dollars in thousands except per share amounts)
3 months ended 6 months ended June 30, 1997 June 30, 1997 Finance charges, fees and other interest $62,505 $129,285 Interest expense (23,549) (44,265) Net interest income 38,956 85,020 Provision for finance credit losses (24,544) (55,006) Net interest income after provision for finance credit losses 14,412 30,014 Other operating income 12,939 39,662 Other operating expenses 32,684 75,685 Operating income (loss) (5,333) (6,009) Non-operating expenses (5,453) (10,582) Loss on sale of Lyndon -- (29,528) Income from Lyndon due to buyer (2,025) (2,025) Income (loss) before income taxes (12,811) (48,144) Applicable income taxes (benefit) (4,442) (6,607) Net income (loss) $(8,369) $(41,537) Net income (loss) per share $(0.05) $(0.24)
MERCURY FINANCE COMPANY Consolidated Balance Sheet (dollars in thousands) June 30, 1997
Assets Cash and Investments $130,909 Finance receivables 1,095,779 Less: allowance for Credit losses (123,604) Less: nonrefundable dealer reserves (71,365) Finance receivables, net 900,810 Other assets 149,063 Total Assets $1,180,782 Liabilities and Shareholders' Equity Senior debt, commercial paper and notes $493,619 Senior debt, term notes 488,625 Subordinated debt 22,500 Accounts payable and other liabilities 60,682 Total Liabilities 1,065,426 Shareholders' Equity 115,356 Total Liabilities and Shareholders' Equity $1,180,782
CONTACT: Joe Kopec or Jim Fitzpatrick of The Dilenschneider Group, 312-553-0700, for Mercury Finance Company -----END PRIVACY-ENHANCED MESSAGE-----