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October 17, 2002
Headlines--- Pictures
from the Past--Ted Pritchard, CLP Sunrise
Int. Strong 3/4 Results MAEL
Conference----November 7th NAELB
Conference--November 9-10th AGL&F
Conference-November 20-22 Amtrak
Proposed Trust Fund for Survival Be
Careful Out There—Mortgage Rates Declines Transition
of Colonial Pacific Leasing Accounts Adm.to Cedar Rapids, IA New
layoffs loom; eyes on Sun, AMD Judge
extends cooling-off period; shipping lines seek relief Cat
Financial Reports QIII Results Down $9M ### Denotes Press Release Special:
ELT San Francisco Final Day ELA Conference Report "I
used to tell the younger people, 'You've never seen bad times.'
Now they have," James Merrilees, , First Portland Corporation,
Portland, Oregon, ------------------------------------------------------------------------------------------------------------ 2000
Ted Pritchard,
CLP Smokey Mountain
Funding, Inc. Hunt Valley,
Maryland ------------------------------------------------------------------------------------------------------------- SUNRISE INTERNATIONAL LEASING CORP. REPORTS
STRONG THIRD-QUARTER AND NINE-MONTH RESULTS GOLDEN VALLEY, Minn- Sunrise International Leasing Corporation (SILC), a wholly owned subsidiary of privately
held King Capital Corp., today announced financial results for the third quarter
and nine months ended September 30, 2002. For the third quarter, net income increased to $4.5 million,
up 50 percent from $3.0 million for the comparable 2001 period. As expected, revenue decreased 36 percent to $28.8 million, compared to $45.0 million
for the prior-year period. For the nine months ended June 30, 2002, net income increased
10 percent to $10.6 million, from $9.6 million for the year-ago period.
The company reported revenue of $96.4 million, down 35 percent from $148.3
million for the year-ago period. SILC has paid down nearly $87.5 million in debt in the current
year, and is now virtually debt free. Additionally,
the company continues to benefit from a significant improvement in its credit loss experience.
This improvement is due to the seasoning of the SILC's lease portfolio,
as well as management's ability to make well-informed credit decisions
based on information captured by the company's sophisticated asset management information systems. SILC is experiencing lower demand for new leases during the
current year, a common trend in the high-tech equipment leasing industry.
This trend has caused a reduction in leasing revenues in the current quarter
and year-to-date period. However,
the company experienced record sales of used off-lease equipment in the current quarter through its remarketing subsidiary, Redirect Tech, which helped mitigate a reduction
in lease revenues. Outlook For the full year, SILC expects to experience substantially
reduced revenues compared to last year, but it will achieve record-setting levels
of net income for the reasons cited earlier. The company is actively negotiating the purchase of several
lease portfolios in order to offset the volume reduction from its traditional
vendor program partners. SILC also
is searching for a long-term partner that can broaden its scope, which will in turn benefit from the company's unique
business model and sophisticated systems and servicing platform. SILC
believes its strong balance sheet provides the basis for future growth via
current and newly developed vendor programs, as well as through the acquisition
of lease portfolios and other leasing companies that fit with the company's
business profiles. The company
currently is exploring all options for continuing growth. About Sunrise International Leasing Corp SILC's business consists primarily of the development of market-oriented, customized lease and rental programs for vendors of high technology
and other types of equipment.
SILC is also a major national reseller of high-quality, Sun and Cisco used equipment. About King Capital Corporation King Capital Corporation, established in 1975 and based in
Golden Valley, Minn., offers a wide range of leasing options to manufacturers,
distributors and resellers through its primary subsidiary, Sunrise International
Leasing Corporation. SUNRISE INTERNATIONAL LEASING CORPORATION CONDENSED STATEMENTS OF INCOME
Three Months Ended
Nine Months Ended
September 30, September 30,
2002 2001 2002 2001 Revenues $28,765,000 $45,013,000 $96,378,000 $148,278,000 Cost, expenses, and other 20,292,000
39,432,000 76,377,000 130,085,000 Income before provision for income taxes 8,473,000
5,581,000 20,001,000 18,193,000
Provision for
income taxes
3,982,000 2,623,000 9,399,000 8,551,000
Net Income $4,491,000 $2,958,000 $10,602,000 $9,642,000 FROM: King Capital Corp. 5500 Wayzata Boulevard, Suite 725 Golden Valley, Minnesota 55416 Peter J. King (763) 593-0051 # # # ########################## MAEL Conference----November 7th Register Now!!! Plan To Be In Chicago November 7th,
2002 To Attend The 20th Annual Dinner Meeting of the MidAmerica Association of Equipment Lessors (MAEL) you won't want to miss SPECIAL GUEST SPEAKER: WGN Radio personality
Wes Bleed The MidAmerica Association
of Equipment Lessors ("MAEL"), ELA s largest regional
affiliate, will be hosting its 20th Annual Dinner Meeting
at the Westin Hotel @ O'Hare in Rosemont, Illinois. Pricing for
the meeting is as follows: Registration Level Special Benefits On-line Registration by mail, fax
or telephone MAEL Members $100.00 $125.00 Non-Members $145.00
$175.00 Event Sponsor Table for eight Full
Page Advertisement in Program $1,500.00 $1,500.00 Register on-line or complete & fax the attached registration
form to 312-541-1275. If you need further information or assistance,
please e-mail events@mael.org or call Melissa @ 312-541-6000. or go here: http://www.leasingnews.org/PDFFiles/MAEL_Meeting.pdf ------------------------------------------------------------------------------------------------------------ National Association of Equipment Leasing
Brokers Regional Meeting should be on the meeting list November 8-9, 2002 Marina del Rey Hotel & Marina Marina del Rey, California http://www.leasingnews.org/PDFFiles/ShowLetter.pdf Rich Wilbur is the conference chair. The price is rated a “Best
Buy!!!” for what is offered. If
you did not attend the UAEL or ELA, this is a must. And if you did, this is still a “must,” if you are a broker or discounter. November 20-21st Association
of Government Leasing and Finance LAST CHANCE FOR THE DISCOUNTED RATES FOR REGISTRATION AND HOTEL
ROOMS!!!! The Annual Fall Conference is right around the corner! On behalf of Conference Co-Chairs John Merchant and Debra Saunders, I cordially
invite you to the 2002 Fall Annual Conference of the Association
for Governmental Leasing and Finance (AGL&F). AGL&F 2002 ANNUAL MEETING - AVAILABLE AT www.aglf.org November 20-22 Disney's Yacht & Beach Club Resorts Orlando, Florida The AGL&F Annual Fall Conference remains the premiere business
conference for our industry's leaders. Of course, our social
functions create the perfect setting for networking or making
new friends and business contacts. We have two great evening events planned on the 20th and 21st
of November. The Thursday
night banquet is included in the registration fee; however, the Cirque du Soleil - La Nouba tickets are an
additional cost ($35.00), but that is 50% of the regular cost
per ticket. All evening
events are suitable for children of all ages. We are at Disney, so everyone should have a great time! I would also like to remind everyone, that the 2002 Fifty State
Survey will be released at the conference and we will dedicate
one of the sessions to a review and discussion of the changes since
2000, the date of the Survey's last release. The Annual Conference brochure and registration form is available
at www.aglf.org - Please fax your registration to AGL&F Headquarters
at 202-833.3636 no later than October 21 for the Early-Bird discounted
registration rate. Please
make your hotel reservations immediately to avoid any inconvenience.
Thank you. In the meantime, please feel free to call me or AGL&F Executive
Assistant Brian Mandrier, if you have any questions (202.742.AGLF)
or need additional information. We look forward to seeing you at Disney! Cordially, Graham Hauck Executive Director Attachment P.S.: Sponsorship Opportunities
are still available. Please
call AGL&F Headquarters for more information and to confirm
your sponsorship. -- Graham Hauck Executive Director Association for Governmental Leasing and Finance 1255 23rd Street, NW Washington, DC 20037 202.742.AGLF (2453) fax: 202.833.3636 email: gsh@aglf.org http://www.aglf.org _______________________________________________________________________ Amtrak Proposed Trust Fund for Survival By Don Phillips Washington Post Staff Writer Amtrak President David L. Gunn yesterday proposed the creation
of a federal trust fund for passenger rail similar to those that
help build roads and airports, and he said states must eventually
cover operating losses on all state and regional trains for those
services to survive. Gunn, who has spent much of his five-month tenure trying to
keep Amtrak alive and to stabilize it, told a meeting of rail officials
and consultants that those goals have been accomplished for the
time being and the time has come to start preparing for the future. "Of course, stability at Amtrak would be chaos anywhere
else," Gunn said in a speech to the annual Passenger Trains
on Freight Railroads Conference, sponsored by Railway Age magazine. For the first time, Gunn outlined publicly some of his ideas
for the future of the passenger train. He said that federal and
state governments must pay for capital costs such as tracks, locomotives
and passenger cars and that state governments must pay for the cost
of operations not covered by ticket revenue. If no one is interested
in paying those costs, he said, the trains will disappear. Even with those measures, Gunn said, no American alive today
will see a costly network of trains running at 180 mph or faster
lacing the country on newly constructed high-speed tracks, like
the French TGV or the Japanese Shinkansen. Anyone who thinks so
is "smoking funny cigarettes," he said. Instead, he said, the United States can do quite well with
an "incremental" approach concentrating on trains going
perhaps 90 to 110 mph, on upgraded tracks, with frequent service
between urban centers. Gunn acknowledged that he does not know how a trust fund would
be financed, although he said it could take the same form as the
current transit section of the highway trust fund, which provides
$4 for each $1 the states provide. But the highway trust fund is financed through gasoline taxes,
and other participants in the conference said there is no way Congress
would put the trust fund in jeopardy for Amtrak. Gunn did not even
mention highway gasoline taxes as a possible source. He noted that
freight railroads now pay 4.3 cents per gallon in fuel taxes --
a total of about $170 million a year -- that go directly to the
Treasury. He said that could become the seed money for a trust fund.
Freight railroads, led by Union Pacific Corp., strongly oppose use
of the fuel tax for a trust fund and want it repealed so they can
use that money for their own capital projects. Gunn called on the freight railroads to join him in seeking
more-stable funding for Amtrak, which he said would provide the
freight lines with badly needed capital improvements that they cannot
now finance privately. He said he sees signs that the freight railroad industry is
deteriorating operationally under a burden of heavy traffic that
still has not produced adequate revenue. He said money spent on
tracks and facilities for passenger trains would also provide badly
needed freight capacity. "They're having a lot of fun playing with trains, but
they're not earning much for it," he said. "More tonnage
and less money. It doesn't work." Gunn said that freight railroads often do a poor job of running
Amtrak trains and that some railroads consistently run them hours
late. But he said they don't deliberately run Amtrak trains poorly;
many of their freight trains can't run on schedule, either. "We're
all in the same leaky boat," he said. Gunn said the freight railroads should view Amtrak's problems
-- the railroad has lost money for 31 consecutive years and nearly
ran out of money this past summer -- just as miners used to look
at canaries lowered into mines to test for deadly gases. "We're flopping around in the bottom of our cage,"
he said. Be
Careful Out There—Mortgage Rates Declines WASHINGTON, (Bloomberg News) — An index of applications for
mortgages fell last week from the highest level in more than a decade
of record-keeping as refinancing and purchase orders slipped. The Mortgage Bankers Association of America's mortgage applications
index declined 2.2 percent in the week that ended Friday to 1,288.4,
the second- highest level since the group began keeping records
in 1990. In the prior week, the index rose to a record 1,317. A gauge of refinancing fell 1.9 percent, to 6,793.8, also the
second-highest reading ever. The group's purchase applications index fell 3 percent, to
341.9, the lowest since mid-April and a sign that home sales may
be slowing. The level is still higher than the average 304.8 for
all of 2001 and leaves intact projections that 2002 will be the
best year ever for home sales, surpassing the record 6.21 million
homes sold in 2001. ------------------------------------------------------------------------------------------------------------ Transition of Colonial Pacific Leasing
Accounts Administration to Cedar Rapids, IA “It’s official. As of Monday, October 21st, 2002,
all functions of Portfolio Services on existing accounts will be
transitioned to our Cedar Rapids office. Below, please find a list of up-dated service contact numbers provided for
your convenience: Hours of Operation: 7:00am-6:00pm CST Customer Service:” 800-876-4775 Fax: 319-841-6324 Payoff Request: 800-876-4774 Fax: 319-841-6328 Correspondence Address: P.O. Box 3083 Cedar Rapids, IA 52406-3083 Remittance Address: P.O.
Box 642752 Pittsburgh, PA 15264-2752 Thank you for your business. GE Capital-Express Financial Solutions.” ---------------------------------------------------------------------------------- "I used to tell the younger people, 'You've never seen
bad times.' Now they have," James Merrilees, , First Portland Corporation, Portland, Oregon, ******************************** ELT E-Leasing Newsletter - Special Convention Edition 10/16/02 ******************************** NOTE: This is the second of two special E-Leasing Newsletters
coming to you from the ELA 41st Annual Convention in San Francisco. There
will be no regular newsletter on Thursday. The Equipment Leasing Today E-Leasing Newsletter is published
every Thursday and is sponsored by the Equipment Leasing Association and its
co-sponsor. To get Full-Text Stories, go to the web page associated with the
story you wish to read. The links to news stories require an ELA MEMBERS-ONLY
NAME AND PASSWORD. To receive a password, please go to http://www.elaonline.com/memberDir/Profile/IndivForm.cfm NOTE: Address change/unsubscribe instructions and contact information
can be found at the end of this e-mail. If you received this e-mail
(but it was NOT forwarded to you by someone else) you are ALREADY subscribed. ************** The E-Leasing Newsletter is SPONSORED by: *************** NASSAU
ASSET MANAGEMENT Recovery
and Remarketing Specialists 1(800)462-7728
or 1(800)4-NASSAU GO HERE>>>>>>
http://www.nasset.com WE GET RESULTS!!!!!!!!! Servicing
The Leasing Industry for more than 25 years!!!!! *Covering all 50 states and Canada *Fastest turn around *24
hour reporting via Web *Highest resale prices Call Nassau now for
a complete assessment of your needs!!! http://www.nasset.com ******************************************************************** ****************************** Table of Contents ****************************** 1. An Economic Mystery
Tour? 2. Convention Photos
On-Line! 3. Back to Basics... 4. Changes to ELA
Membership, Shifts in Industry Make-up 5. Overheard at the
Convention 6. ELA Legal Committee
Donates to Foundation's Wong Memorial Fund 7. New Industry Studies
Released 8. Foundation Welcomes
New Chairman, Trustees 9. October Quick
Poll 10. ELA Calendar of
Events **************** The E-Leasing Newsletter is SPONSORED by:
*********** Southfork Asset Management Corp. Recovery & Remarketing Specialists Nationwide Coverage * Immediate Turnaround * High Resale Value Lease and Loan Default * End-of-Lease Return "Bringing Asset Management To The Next Level!" (877) 99-ASSET * (877) 992-7738 * Click Here >> http://www.southforkasset.com An Equipment Leasing & Finance Foundation Founder ********************************************************************** ****************************** 1. An Economic
Mystery Tour? ****************************** Addressing the ELA Convention Tuesday General Session, David
Hale, well-known chief global economist for Zurich Financial Services
Group, shared his thoughts on the future of the economy, highlighting
both the positive and negative trends emerging. More than 1,000 attendees
heard Hale's analysis of U.S. economic performance today: "Lucky." "We are experiencing modest economic growth following
a modest recession," Hale said. "We've been successful in reversing the downturn."
Echoing comments made yesterday by ELA Chairman Joe Lane, he blamed
the telecommunications boom for "the greatest misallocation
of capital in the U.S. ever." He noted that between 1996 and 2000, $100
billion was spent installing fiber optic cable. "Yet today, less than 2% is being utilized," he noted. Hale also cited the Internet bust as contributing
to the downturn. Interestingly, he said, for the "first time ever we had
a downturn led by business investment and capital spending." Hale said, "We
are on an economic mystery tour. All we know is that more federal spending will occur. Recovery is still fragile with
consumer confidence shaken by accounting scandals and a coming war in
Iraq." "My own concern,"
he said, "is that pending
legislation will make corporate management risk averse. They won't want to do anything,
which will inhibit capital spending when it is already weak." Other
Hale predictions: --He doesn't see the U.S. economy returning to recession, but
it might slow down due to the Iraq war. --He notes that 4Q 2002 will be sluggish, but that it will
turn up in 2nd Q 2003. --Hale is 80-90% sure we will go to war with Iraq this winter.
The war will last just a few weeks. "My defense contacts tell me that
our weapons are 100 times more effective than they were in 1992 during Desert Storm.
We could take out the Iraqi forces within weeks." --After the war is over, we will "first have to pass through
3-4 months of uncertainty in order for things to get better." --He noted that Goldman Sachs has said that, by the end of
the year, we will see a federal rate of just one percent, which will trigger
another surge of refinancing and housing starts. --Once the U.S. gets past the excesses of the last two to three
years, Hale said, we will see respectable growth of 3-4% in late 2003 and
definitely by 2004, but "we won't have clear visibility on that for
another six months." --Federal Reserve chairman Alan Greenspan will likely not be
replaced. "There is a 50 percent chance he will still be Federal
Reserve Chair in 2006. He likes the job." --Global shifts will have a big impact on U.S. business, said
Hale, including: 1. The Japanese financial czar is saying he's finally cleaning
up the Japanese banking system, which Hale said is causing institutions
to write off hundreds of millions of dollars in bad debt. This will
increase their unemployment to 7 or 8 percent, which is nearly unheard of
in Japan. 2. China is going to be an important player in the global economy
as it undergoes a shift from being a primary exporter for textiles
and toys to an exporter of electronics. 3. Korea has more credit cards per capita than the U.S., with
the average Korean holding three cards. 4. The possible election of a left-wing leader to Brazil could
be "a disaster to its economy," said Hale. This would cause
Brazil to default on debts, which would "shock the global financial system."
Citibank and Bank of Boston, for instance, have "huge exposure," he noted. ************* The E-Leasing Newsletter is sponsored by: **************** Asset Control Doing more for your bottom line. Providing expert individual attention that allows you to preserve
the value of your portfolio. Recovery, Collections, Remarketing, Appraisals, Inspections,
Auctions & Storage 1-888-227-0444 email: info@assetcontrol.com VISIT OUR WEBSITE >>>>> http://www.assetcontrol.com ********************************************************************* ****************************** 2. New Convention
Photos On-Line! ****************************** If you can't be in San Francisco, you can see what you're missing.
New photos were added today and there are more to come... http://www.elaonline.com/events/2002/annconv/photos/ ****************************** 3. Back to Basics... ****************************** Among the most prevalent themes emerging from this year's Convention
is "Back to basics." Speaker after speaker has stressed
- and attendees seem to agree - that discipline and adherence to fundamental business
principles are the keys to getting through rough times. Consider the remedy James Merrilees, First Portland Corporation, Portland, Oregon, suggests for the general damage done by recent
accounting scandals and pessimistic viewpoints: people. "Right now,
everyone is trying to prove they are doing the right thing," he said. "You need to do this through people. Let's take a reality check and rebuild alliances.
This business happens between people." Thus, he said creditors
and customers need to have better access to leasing personnel. "We need to
learn our customers' business, establish common goals, share risk and success,"
he said. Another area where "the basics" are receiving new
consideration is leasing company growth. We've all heard that part of the spectacular
public company failures of the last few years was an unreasonable emphasis
on growth in order to increase value for shareholders. CEOs were pressured
to make decisions in favor of growth and at the expense of sound business principles. Public or private, growth is no longer the Holy Grail for leasing
companies, according to several ELA Convention presentations. "Perhaps
we should realize that just being in the game is just being in it and
not necessarily being the leader," said William Henak, TCF Leasing, Inc.,
Minnetonka, Minnesota, during breakfast on Monday. The presenters at a
Convention session on growth and whether or not it is a strategy probably
would have agreed. "Growing is the easiest thing to do in our business,
but doing it profitably is something else," said Paul Menzel, Santa
Barbara Bank & Trust, Goleta, California. "You don't want to set goals that
stray from your disciplines. Reach for growth in areas where you are comfortable."
He added, "Be disciplined, be realistic and be prepared." John Deane, The Alta
Group, Glenbrook, Nevada, said, "control should be emphasized before growth. You can have too many strategies
and do too many things. This will lead to failure," he said. "The challenge in the leasing industry is not finding opportunities, but choosing from among
those you do find." As Menzel noted," If you don't know what you
are really getting into, then stay away. Discipline is the most important part of the
leasing business." One of the most crucial disciplines for leasing companies is,
of course, credit. PWC's Anthony Anderson, in Monday's State of the Industry
breakout session, said the boom of the 1990s "overshadowed solid
credit policies. Those policies were always there," he said, "but
we can see in retrospect that bad decisions were made." No more. "Everyone's
backing off, not being as aggressive. You can't do transactions with low-quality credits
anymore." ****************************** 4. Changes to ELA
Membership, Shifts in Industry Make-up ****************************** A few years ago, 60% of ELA members were independent leasing
companies. Today, it's just one third. Ninety-eight bank members currently
belong to ELA, compared to a high of 225 bank members four years ago. "The shrinkage of independents and the consolidation of
banks show a real change in the leasing business," said ELA President Michael
Fleming during his annual State of the Association presentation on Tuesday.
Big changes for the industry mean big changes for the association. Fleming
noted that currently 150-200 leasing company members fit the description
of being "very active participants" of ELA, a number Fleming hopes will
increase after the association's current repositioning. In the future ELA will
be serving the most active members - "those who actively contribute to
the betterment of the industry and participate in ELA," as Fleming characterized
them - and urge more member company personnel to get involved in association
activities. For more information on ELA's repositioning initiative, see
the "Take Note" section of the current ELT Magazine, October 2002. ****************************** 5. Overheard at
the Convention ****************************** "We're coming
out of paralysis." ~ Jon Haas describing the current mood given the recent economic downturn. "The downturn has weeded out the stupid money and the
stupid ideas. We're now refocused on fundamentals." James Merrilees, First
Portland Corporation, Portland. "Since we've joined with a bank, we've become much better
portfolio managers. We now call the customer on the first of the month
if the payment is late. We then have 29 days to collect versus 20. You need
to attack problems right away," said Matt Shieman, The Matsco Companies,
Emeryville, California. |
