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October 31, 2002 Headlines--- Pictures
from the Past: 1991-The Wild Kingdom of SIGs Correction:
regarding IDS and Summit Debra
Marshall Joins IDS as Director of Marketing Microfinancial
3rd Quarter a net loss of $19.6 million Key
Equipment Finance Names David Angel Sr. V-P
CapitalStream Corporate Take-Over
Significant Consolidation Seen in Software
Sector Swapalease.com Celebrates Two Years
of Business CIT Full Press Release on latest
Quarter and Fiscal Year Results MAEL Conference----November 7th Fed's Largess Boosting Bank
Numbers ####
Denotes Press Release Credit: Los Angeles, CA Over 15 years experience in Credit/Operations
with Small Ticket and transactions up to $500,000.00. CLP, with
excellent relationships with most major lenders. Email:jonbh123@earthlink.net Credit:
Columbia, SC Seasoned senior credit professional with 14
years experience in small ticket. Strong analytical skills, spreadsheet
proficiency, all types financials, tax returns. Looking for new
career in Southeast/Mid Atlantic Email:lrport2001@yahoo.com Credit: Hayward, CA. Versatile/ creative senior financial executive
w/extensive experience in varied areas of the commercial lending
environment. Strong written/ oral skills with a results-oriented
team-player attitude. Email: daveschultz9@aol.com Credit: Vista, CA +15 years experience structuring, underwriting,
and collecting leases to privately and publicly held companies.
Creative and results oriented. Proven ability to achieve bottom-line
results. Email:dkalitow@pacbell.net
Finance: Lyndhurst, NJ CFO w/20+ years leasing/financing. Respected
by lenders/rating agencies full & fair financial reporting.
Outstanding record restructuring debt. Adept at investor relations
and mentoring people. Email:joemcdev@aol.com Finance: Orange County, CA CFO/Controller/IT Director - 15 years experience
in leasing and ABL. Experienced in: Accounting, Finance, Systems,
Tax, Operations, Securitizations, etc.MBA, ELA member. Many accomplishments.
Email:gosween@cox.net for the full list: http://65.209.205.32/LeasingNews/JobPostings.htm Pictures from the Past 1991—The Wild Kingdom of SIGs
“Ring Master” C. Michael Baker, CLP, the April
17-21, WAEL Spring Conference Chairman, introduces the “ Wild Kingdom
of SIGs”—(Special Interest Groups) during the 1991 WAEL Spring
Conference. Baker, President of Pacific
States Leasing, Fresno, CA, was responsible for keeping three
rings going with presentations from the SIGs representing Brokers,
Funders, and Lessors during the four day event.
SIG chairmen pictured here are (l to 4) Lion---Funders
SIG-Mike Wing, President, Fleet Credit/Denrich Leasing Group;
Fox—Brokers SIG—George Davis II, President, Fortune Financial;
and Bear—Lessors SIG—Rick Wilbur, President, Charter Equipment
Leasing ----------------------------------------------------------------------------------------------------- Correction: regarding IDS
and Summit. “On behalf of Tom Quilling and myself, I would
like to submit a correction to your recent email. Tom Quilling
voluntarily resigned and I voluntarily resigned after a successful
job search. I enjoy your
newsletters but in this case there was an error.
Curious as to who your source was?
“ Joseph Franco
Address = 5421 Bryant Avenue South City = Minneapolis State = MN Zipcode = 55419 Phone = 612.822.9361 Fax = 612.824.4583` Email = joseph.franco@iqfinancial.com Cannot divulge sources. No names were mentioned
in the e-mail. In view of trying to be fair to all parties, we
have revised the story on line to, plus at your request, have
printed your e-mail above. For
readers not familiar with the story, here is the revised version:: Decision Systems. This mess started two years ago this week when
CFS Leasetek acquired IDS, then known as Decision Systems ("DSI"), at one time the
premier leasing software company for Monitor 100 companies. At
the time the merger was consummated the stock traded
at $4.80 and the market cap was $265 million! Today the stock trades at $0.09 and the market
cap is about $5 million. So they have somehow managed to blow
$260 million of their stockholders and employees(esop) funds in
two short years. There's more wrong with IDS than "soft US
markets". As Paul Harvey says, "and now the rest
of the story". In July 2001 Summit
offered to acquire IDS for $25 million cash. They laughed
at them. The Summit
investment bankers said "just wait", and they
did. In Feb
'02 Summit offered a stock exchange merger that would have given
them Board and Management control
since the management team that started with $265 million and turned
it into $5 million probably needed "tweaking". Again
they laughed. In July '02, Summit offered $15 million cash and
of course they again, brushing them off.. (The value of the employees
ESOPs has declined from about $20 million to $400,000. and that's
tragic.) The corporate investors who control the company have
lost theirs too but their loss is a drop in the bucket compared
to the hit taken by the loyal staff. This week Summit again offered
to acquire IDS, this time of course for the market cap price of $5 million. They're laughing! to keep from
crying. Trick or treat! ( Name With Held ) --Press
Release on International Decision Systems follows ------------------------------------------------------------------------------------ #########
################################################### Debra Marshall Joins IDS
as Director of Marketing International Decision Systems, Inc. (IDS) –
the global leader in lease accounting and portfolio management
software systems – announced today that Debra Marshall has joined
the company as director of marketing to head strategic planning,
brand positioning and corporate identity initiatives. According to Jim Meinen, IDS group CEO, “Debra’s
23 years of corporate, product and agency marketing management
experience will be a tremendous asset in helping implement our
new Web services strategy with the introduction of new products
that provide web-enabled front-end access and an open back-end
lease accounting engine. She has an outstanding track record for
developing marketing strategies that build brand awareness and
gain market share, as well as positioning products for specific
markets.” Ms. Marshall was most recently director of communications
with PLATO Learning, Inc. and chief marketing officer for VirtualFund,
Inc., a manufacturer of large-format printers. About International Decision Systems With nearly three decades of leasing industry-specific
expertise, International Decision Systems (IDS) is the global
market leader in developing lease accounting and portfolio management
software and services. Hundreds of independent, bank-related,
captive leasing and financial services companies worldwide use
IDS products and services, which include anchor products InfoLease,
LeaseEnterprise and FleetWare. InfoLease is the world's most stable, scalable
and robust end-to-end equipment lease accounting software, and
LeaseEnterprise is designed for small to mid size lessors who
want an easy-to-use, Windows-based lease accounting and portfolio
management solution that will accommodate their growing businesses.
FleetWare is a comprehensive full-service vehicle-leasing and
contract-management system. Companies use IDS' software to streamline,
manage and automate the entire leasing life cycle, as well as
to leverage the Internet's speed and flexibility for improved
customer service, achieving greater internal efficiencies and
closing deals faster. In addition to its product lines, IDS also has
the leasing industry's largest global consulting, implementation
and technical support organizations that provide incomparable
service from offices located in the United Kingdom, North America
(Minneapolis), Australia (Sydney) and Southeast Asia (Singapore). IDS' parent company, IDS Group plc, is publicly
traded on the London Stock Exchange (IDGL). For additional information
about International Decision Systems and IDS Group plc, visit
www.idsgrp.com ############## #################################### __________________________________________________________________ Microfinancial 3rd
Quarter a net loss of $19.6 million 29% reduction in lease and loan revenues to
$12.8 million and a 43% decline in service fee additional allowance of $35 million is warranted Past due balances greater than 31 days delinquent
at September 30, 2002 increased to 17.2% from 17.0% last quarter.
$35 million is warranted. This additional allowance
will provide for 104% coverage of our 90-day past due accounts as
compared to previous quarters which had coverage in the 50-60%
range Based upon the results for the third quarter,
the company is no longer in compliance with the terms of its revolving
credit facility. Recent stories on MicroFinancial/Leasecomm http://www.leasingnews.org/Conscious-Top%20Stories/leasecomm.htm The headlines you see in other newspapers were
supplied by the Press Release and do not reflect the full press
release, let alone the real story about insiders selling $500,000
worth of stock right before Leasecomm closed down. The facts
highlighted above are from the Microfinancial Press Release, their
spin to the events, which follows: #### ########################################################### MicroFinancial Incorporated Announces Third
Quarter 2002 Results WALTHAM, Mass.,) -- MicroFinancial Incorporated
(NYSE:MFI), a leader in Microticket leasing and finance, announced
today its financial results for the third quarter and the nine
months ended September 30, 2002. Third quarter revenue for the period ended September
30, 2002 decreased 22%, or $8.8 million to $30.5 million compared
to $39.3 million last year. Net income for the third quarter,
before an additional provision of $35 million discussed below,
was $1.4 million, or $0.11 per diluted share as compared with
$3.6 million or $0.28 per diluted share in the prior year's third
quarter. After
the additional provision, earnings were a net loss of $19.6 million,
or ($1.53) per diluted share. Besides the additional provision,
the decline in earnings for the quarter is primarily the result
of a 29% reduction in lease and loan revenues to $12.8 million
and a 43% decline in service fee and other revenues to $4.4 million
as compared with the third quarter ended September 30, 2001. Additionally,
gross lease investment was down 7.8% or $34.4 million from the
same period last year, caused in part by lower than anticipated
lease origination volumes. As part of management's ongoing analysis of
its portfolio, it has determined that an additional allowance
of $35 million is warranted. This additional allowance will provide
for 104% coverage of our 90-day past due accounts as compared
to previous quarters which had coverage in the 50-60% range. This
provision will reserve against certain dealer receivables, as
well as delinquent portfolio assets. In the past, dealer receivables
had been offset, in some instances, against the funding of new
contracts. Since we have temporarily suspended the funding of
new deals we feel that the collection of these receivables will
be more difficult. Although the company will continue to pursue
collections on these accounts, management believes that the cost
associated with the legal enforcement would outweigh the benefits
realized. Total operating expenses for the quarter before
the additional provision remained relatively flat at $28 million
compared to the same period in 2001. Interest expense declined
29% to $2.5 million as a result of lower debt balances of approximately
$9.0 million and lower interest costs of approximately 162 basis
points. Selling, General and Administrative expenses decreased
$0.6 million to $10.3 million for the third quarter ended September
30, 2002 versus $10.9 million for the same period last year. The
majority of the decreases are attributable to reductions in personnel
related expenses and collection expenses. The provision for credit
losses, before the additional provision, decreased to $9.7 million
for the quarter ended September 30, 2002 from $15.1 million for
the same period last year, while net charge offs decreased 17%
to $9.8 million. Past due balances greater than 31 days delinquent
at September 30, 2002 increased to 17.2% from 17.0% last quarter.
Revenues for the nine months ended September
30, 2002 decreased 16% to $98.8 million compared to $117.2 million
during the same period in fiscal 2001. Net income for the nine
months ending September 30, 2002 was $6.6 million before the additional
provision. Including the additional provision, the net loss for
the nine months ending September was $14.4 million versus net
income of $14.2 million for the same period last year. Fully diluted
earnings per share for the nine months was $0.51 before the provision.
Including the additional provision, fully diluted earnings per
share for the nine months was a loss of $1.12 versus a profit
of $1.10 for the same period in 2001. Based upon the results for the third quarter,
the company is no longer in compliance with the terms of its revolving
credit facility. Management is in the process of working with
its lenders to receive a waiver for the covenant violation. Management
recently announced that it is in the process of generating a plan
to revise its capital structure, and business and operating strategy
in order to streamline the business during these difficult economic
times. The revolving credit facility was converted to a three-year
term loan on September 30, 2002. MICROFINANCIAL INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, except share data) (Unaudited) December 31, September 30, 2001 2002 ----
---- ASSETS Net investment in leases and loans: Receivables due in installments $399,361 $373,756 Estimated residual value 37,114 32,115 Initial direct costs 7,090 5,597 Loans
receivable
2,248 1,911 Less: Advance
lease payments and deposits (287) (130) Unearned
income
(104,538) (77,900) Allowance
for credit losses (45,026) (75,726) -------- -------- Net investment in leases and loans $295,962 $259,623 Investment in service contracts 14,126 15,632 Cash and cash equivalents 4,429 9,916 Restricted Cash 16,216 15,362 Property and equipment, net 16,034 11,033 Other assets 14,961 12,643 -------- -------- Total
assets
$361,728 $324,209 ======== ======== LIABILITIES
AND STOCKHOLDERS' EQUITY Notes payable $203,053 $194,003 Subordinated notes payable 3,262 3,262 Capitalized lease obligations 833 593 Accounts payable 2,517 2,475 Dividends payable 642 641 Other liabilities 6,182 7,166 Income taxes payable 4,211 1,659 Deferred income taxes payable 30,472 20,131 -------- -------- Total
liabilities
251,172 229,930 --------
-------- Commitments and contingencies - - Stockholders' equity: Preferred stock, $.01 par value; 5,000,000
shares authorized; no
shares issued at 12/31/01 and
9/30/02 - - Common stock, $.01 par value; 25,000,000
shares authorized; 13,410,646
shares issued at 12/31/01
and 9/30/02 134 134 Additional paid-in capital 47,723 47,723 Retained earnings 69,110 52,800 Treasury stock (588,700 shares of
common stock at 12/31/01, 588,700
shares of common stock at
9/30/02), at cost
(6,343) (6,343) Notes
receivable from officers and
employees
(68) (35) -------- -------- Total
stockholders' equity
110,556 94,279 --------
-------- Total
liabilities and stockholders'
equity $361,728
$324,209 ======== ======== MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data) (Unaudited) For the three months For the nine months ended
ended September 30, September 30, 2001 2002 2001
2002 ---- ---- ----
---- Revenues: Income
on financing leases
and loans $18,105
$12,819 $54,897 $41,845 Income on service contracts
2,186 2,479 6,420 7,332 Rental income 9,744
9,212 28,131 28,295 Loss
and damage waiver fees
1,598 1,633 4,746 4,691 Service fees and other 7,676
4,406 23,010 16,632 ----------
---------- ---------- ---------- Total
revenues 39,309 30,549 117,204 98,795 ----------
---------- ---------- ---------- Expenses: Selling general and administrative
10,899 10,306 33,462 34,289 Provision for credit losses
15,064 44,672 37,150
66,460 Depreciation and amortization
3,618 5,713 10,700 14,203 Interest 3,445
2,458 11,307 7,823 ----------
---------- ---------- ---------- Total
expenses 33,026
63,149 92,619 122,775 ----------
---------- ---------- ---------- Income before provision for
income taxes 6,283 (32,600) 24,585 (23,980) Provision for income taxes 2,644 (13,042)
10,348 (9,593) ----------
---------- ---------- ---------- Net income $3,639 ($19,558)
$14,237 ($14,387) ==========
========== ========== ========== Net income per common share - basic $0.28
($1.53) $1.11 ($1.12) ==========
========== ========== ========== Net income per common share - diluted $0.28
($1.53) $1.10
($1.12) ==========
========== ========== ========== Weighted-average shares used
to compute: Basic
net income per
share 12,825,139 12,821,946
12,775,519 12,821,946 ----------
---------- ---------- ---------- Fully
diluted net income
per share 13,094,690
12,821,946 12,988,959
12,862,105 ----------
---------- ---------- ---------- MicroFinancial Inc. (NYSE: MFI), headquartered
in Waltham, MA, and with additional locations in Woburn, MA and
Herndon, VA, is a financial intermediary specializing in leasing
and financing for products in the $500 to $10,000 range. The company
has been in operation since 1986 and has been profitable each
year since 1987. Statements in this release that are not historical
facts 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, "
and similar expressions are intended to identify forward-looking
statements. The Company cautions that a number of important factors
could cause actual results to differ materially from those expressed
in any forward-looking statements made by or on behalf of the
Company. Readers should not place undue reliance on forward-looking
statements, which reflect the management's view only as of the
date hereof. The Company undertakes no obligation to publicly
revise these forward-looking statements to reflect subsequent
events or circumstances. The Company cannot assure that it will
be able to anticipate or respond timely to changes which could
adversely affect its operating results in one or more fiscal quarters.
Results of operations in any past period should not be considered
indicative of results to be expected in future periods. Fluctuations
in operating results may result in fluctuations in the price of
the Company's common stock. For a more complete description of
the prominent risks and uncertainties inherent in the Company's
business, see the risk factors described in documents the Company
files from time to time with the Securities and Exchange Commission.
CONTACT: MicroFinancial Incorporated |
