SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 16, 1998
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Date of Report (Date of earliest event reported)
POINT WEST CAPITAL CORPORATION.
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(Exact name of registrant as specified in its charter)
Delaware 0-27736 94-3165263
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1700 Montgomery Street, Suite 250, San Francisco, CA 94111
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415)394-9467
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Item 5. Other Events.
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On November 16, 1998 the Company issued a press release
announcing third quarter results and financial condition.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits
99.1 Text of Press Release dated November 16, 1998.
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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.
Point West Capital
Corporation
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By: /s/Alan B. Perper
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President
Date: November 17, 1998
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EXHIBIT INDEX
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Exhibit Number Document Description Sequential
Page Number
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99.1 Text of Press Release dated
November 16, 1998 1
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FOR IMMEDIATE RELEASE
November 16, 1998
POINT WEST CAPITAL CORPORATION
ANNOUNCES THIRD QUARTER RESULTS
AND FINANCIAL CONDITION
SAN FRANCISCO-(November 16, 1998) Point West Capital Corporation
(Nasdaq Symbol: PWCC) today reported the following:
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
<S> <C> <C> <C> <C>
1998 1997 1998 1997
---------------------- ------------------- --------------------- ---------------------
Net income (loss) $ (1,884) $ (118) $ (2,049) $ 1,210
---------------------- ------------------- --------------------- ---------------------
Basic earnings
(loss) per share $ (0.58)* $ (0.04)* $ (0.63)* $ 0.33**
---------------------- ------------------- --------------------- ---------------------
Total comprehensive
income(loss) $ (5,159) $ 239 $ 355 $ 1,566
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<FN>
*Based on 3,253,324 weighted average shares of common stock outstanding.
**Based on 3,612,190 weighted average shares of common stock outstanding.
</FN>
</TABLE>
The Company also reported a book value of $6.65 per share.
The Company's results of operations for the three and nine months ended
September 30, 1998 are not comparable to the three and nine months ended
September 30, 1997, partially as a result of the volume of assets sold during
the first half of 1997, the establishment of two new businesses (Fourteen Hill
Capital, L.P. and Allegiance Capital, LLC) in the second half of 1997 and the
write-off of $1.1 million of non-marketable securities in the third quarter of
1998.
In addition, prior to the third quarter of 1998, all losses associated
with Dignity Partners Funding Corp. I ("DPFC"), a wholly owned special purpose
finance subsidiary of the Company, were charged
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against a reserve which was originally established in 1996 for the estimated
loss of Point West's equity interest in DPFC. During the third quarter of 1998
the reserve was fully depleted. In the third quarter of 1998, the total loss
realized by DPFC was $969,000, $407,000 of which was charged against the
reserve, and $562,000 of which was otherwise reflected in the Company's
consolidated statements of operations and comprehensive income (loss). At
September 30, 1998, DPFC's accumulated deficit was $562,000. Any future losses
associated with DPFC will increase the amount of the deficit. Upon the
retirement of the securitized notes issued by DPFC to fund purchases of
insurance policies, the Company will recognize a gain in an amount approximately
equal to any accumulated deficit reflected at that time on DPFC's balance sheet.
At September 30, 1998, Fourteen Hill Capital had two loans outstanding
in the aggregate principal amount of $1,045,000 and non-marketable securities
consisting of one convertible debt instrument and one convertible preferred
equity instrument for which it originally provided funds in the aggregate amount
of $3 million. In addition, Fourteen Hill Capital has investments in marketable
securities consisting of three equity investments outstanding for which it had
originally provided funds in the aggregate amount of $3.6 million. At September
30, 1998, such investments in marketable securities were carried on the balance
sheet at $8.6 million. The difference between the carrying value and the
original funds provided is reflected as "Comprehensive Income -- Net Unrealized
Investment Gains" in stockholders' equity. At September 30, 1998 such unrealized
gains were $5.0 million, compared to $2.6 million at December 31,
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1997. Any gains or losses for such investments will be recognized on the income
statement, if ever, upon the sale of such investments.
Allegiance had two loans outstanding at September 30, 1998 in the
aggregate principal amount of $5.8 million, one of which was originated in
December 1997 and bears interest at a fixed interest rate per annum of 9.4% and
the other which was originated in January 1998 and bears interest at a fixed
interest rate per annum of 9.8%. On August 19, 1998, Allegiance put in place a
structured financing which may provide up to $56.4 million to support any future
lending activities of Allegiance. It is anticipated that the financing will
provide interim floating rate financing through August 31, 1999 and ultimately
15 year fixed and floating rate financing for loans Allegiance has made in the
past and may make in the future. However, if Allegiance does not originate $30
million in loans by August 31, 1999, the term certificates may not be issued and
Allegiance would be responsible for finding an alternative financing source.
The Company continues to evaluate other strategic business
opportunities. Fourteen Hill Capital and Allegiance may or may not be indicative
of the types of business opportunities the Company intends to continue to
pursue.
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The following is summary balance sheet information as of September 30,
1998:
Cash and cash equivalents...................................$4,955,470
Restricted cash (1).........................................$3,433,699
Investment securities.......................................$9,828,672
Loans receivable, net of unearned income
of ($127,106)...................... ..................$7,018,698
Assets held for sale...........................................$66,470
Purchased life insurance policies..........................$33,993,697
Non-marketable securities...................................$3,658,478
Total assets...............................................$63,702,765
Reserve for equity interest in wholly owned
financing subsidiary...........................................$0
Long term notes payable....................................$38,528,914
Debentures payable to the Small Business
Administration........................................$3,000,000
Total liabilities..........................................$42,081,372
Comprehensive income -- net unrealized
investment gains.......................................$5,001,555
Retained deficit..........................................$(10,045,768)
Total stockholders' equity.................................$21,621,393
(1) Restricted cash is pledged by the Company's wholly owned financing
subsidiary, Dignity Partners Funding Corp. I, to secure the repayment of long
term notes payable.
(KEYWORD CALIFORNIA AND INDUSTRY KEYWORD: SPECIALTY FINANCE EARNINGS).
CONTACTS: POINT WEST CAPITAL CORPORATION, SAN FRANCISCO.
Alan B. Perper, 415/394-9467
