<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
National Auto Credit, Inc.
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(Exact name of registrant as specified in its charter)
Date of Report (Date of earliest event reported): March 11, 1997
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<TABLE>
<S> <C> <C>
Delaware 1-11601 34-1816760
-------- ------- ----------
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
</TABLE>
30000 Aurora Road, Solon, Ohio 44139
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (216) 349-1000
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Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
National Auto Credit, Inc. (the Company) has restated its fiscal 1994
through fiscal 1996 results of operations relating to overstated gains
recognized in such prior periods on the disposal of retired rental vehicles. The
impact on continuing and discontinued operations, net income and earnings per
share is as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Income (Loss) Income (Loss)
As Previously Reported As Restated
---------------------- -----------
Continuing Discontinued Net Income Continuing Discontinued Net Income
----------- ------------ ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Fiscal 1994 $ 1,059 $17,179 $18,238 $ 1,059 $14,736 $15,795
Fiscal 1995 $ 9,006 $13,397 $22,403 $ 9,006 $ 9,548 $18,554
Fiscal 1996 $18,289 $(1,321) $16,968 $18,289 $(3,433) $14,856
Earnings (Loss) Per Share Earning (Loss) Per Share
As Previously Reported As Restated
---------------------- -----------
Continuing Discontinued Net Income Continuing Discontinued Net Income
----------- ------------ ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
Fiscal 1994 $ .04 $ .61 $ .65 $ .04 $ .52 $ .56
Fiscal 1995 $ .32 $ .47 $ .79 $ .32 $ .33 $ .65
Fiscal 1996 $ .64 $ (.05) $ .59 $ .64 $ (.12) $ .52
</TABLE>
ITEM 7. EXHIBITS
99 The Company's press release dated March 11, 1997, announcing
fourth quarter and annual earnings for fiscal 1997 and
accompanying financial statements and schedules.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
National Auto Credit, Inc.
Date: March 14, 1997 By: /s/Robert J. Bronchetti
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Robert J. Bronchetti
President and Chief Executive
Office and Director
/s/Davida S. Howard
------------------------
Davida S. Howard
Vice-President-Finance and Controller
(Principal Financial and Accounting
Officer)
<PAGE> 1
EXHIBIT 99
FOR IMMEDIATE RELEASE:
MARCH 11, 1997
CONTACT: Marie D. Regula
Investor Relations
(216) 349-1000 ext. 4495
NATIONAL AUTO CREDIT REPORTS
RECORD REVENUES
FISCAL 1997 YEAR END RESULTS
SOLON, OH - MARCH 11, 1997 - National Auto Credit, Inc. (NYSE:NAK), a leading
provider of automotive financing for the used car industry, announced today a 43
percent increase in earnings from continuing operations for the fiscal year
ended January 31, 1997.
Income from continuing operations for the fiscal year ended January 31, 1997 was
$26.2 million, or $.92 per share, compared to $18.3 million, or $.64 per share,
for the same period in fiscal 1996. Income from continuing operations for the
fourth quarter was $6.7 million, or $.24 per share, versus $5.9 million, or $.21
per share, reported for the fourth quarter of fiscal 1996.
Revenues from the Company's financing operation reached a record $63.9 million
in fiscal 1997, an increase of 46.9% from $43.5 million in 1996. This is
attributable to an increase in the servicing portfolio from $350 million to
approximately $500 million. New loan originations during the year totalled over
$375 million, up from $300 million in the prior year.
Sam J. Frankino, Chairman of the Company, said that he is extremely pleased with
the results of the financing business which ended the year with close to $500
million in receivables and 3,100 dealers enrolled in its financing program.
Mr. Frankino continued, "Our strong balance sheet, significant revenue position
and historically low leverage position gives us confidence in our ability to
meet our growth expectations as a sub-prime auto loan servicer."
There were no after-tax losses for discontinued operations in the fourth
quarter. For the full year, the Company reported ($6.9) million after tax for
discontinued operations. These losses consist primarily of additional expenses
indicated by an actuarial analysis performed in the fourth quarter of the
Company's liability for self-insurance claims, legal settlements and fees
incurred during the year related to the discontinued businesses, losses on the
disposition of the remaining rental fleet, and a timing adjustment to reduce
gains recognized in prior periods related to the disposal of retired rental
vehicles, offset by income tax benefits.
National Auto Credit, Inc. is a leading provider of cash advances to used car
dealers who make funds available to customers with limited access to traditional
sources of consumer credit.
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National Auto Credit, Inc. and Subsidiaries
Consolidated Balance Sheets
(Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
January 31,
----------------------
1997 1996
---------- ---------
(Restated)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 1,756 $ 1,665
Installment notes receivable, net 417,419 297,601
Property and equipment, net of
accumulated depreciation of
$6,264 and $4,959, respectively 9,224 9,175
Other assets 10,808 9,780
Deferred income taxes 11,641 --
Assets related to discontinued
operations 933 24,902
-------- --------
$451,781 $343,123
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Dealer holdbacks, net $101,371 $ 72,803
Self-insurance claims 13,787 12,712
Notes payable 13,354 13,354
Operating debt 66,846 3,546
Income taxes payable 6,777 6,823
Deferred income taxes -- 6,032
Other liabilities 20,098 18,594
-------- --------
222,233 133,864
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Commitments and Contingencies -- --
Stockholders' Equity
Preferred stock - $.05 par value,
authorized 2,000,000 shares,
none issued -- --
Common stock - $.05 par value,
authorized 40,000,000 and 30,000,000
shares, issued 29,845,673 and
27,183,217 shares, respectively 1,492 1,359
Additional paid-in capital 165,605 128,133
Retained earnings, including cumulative
foreign currency translation loss
of $1,070 and $1,349, respectively 74,073 97,681
Prior period adjustment -- (6,292)
Treasury stock, at cost, 1,298,568
shares (11,622) (11,622)
-------- --------
229,548 209,259
-------- --------
$451,781 $343,123
======== ========
</TABLE>
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National Auto Credit, Inc. and Subsidiaries
Consolidated Statements of Income
(Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
January 31, January 31,
---------------------- ----------------------
1997 1996 1997 1996
--------- -------- ------- --------
(Restated) (Restated)
<S> <C> <C> <C> <C>
REVENUE
Interest income $ 15,374 $ 11,789 $ 56,747 $ 38,944
Fee and other income 2,030 1,756 7,125 4,567
-------- -------- -------- --------
Total 17,404 13,545 63,872 43,511
COSTS AND EXPENSES
Provision for credit losses 3,974 1,426 11,005 3,802
Operating 1,350 1,376 5,501 4,913
General and administrative 899 1,030 4,436 4,952
Interest 1,097 235 2,713 981
-------- -------- -------- --------
Total 7,320 4,067 23,655 14,648
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 10,084 9,478 40,217 28,863
Provision for income taxes 3,371 3,563 14,008 10,574
-------- -------- -------- --------
INCOME FROM CONTINUING OPERATIONS 6,713 5,915 26,209 18,289
DISCONTINUED OPERATIONS:
Income (loss) as previously reported,
net of taxes of ($11,698),($1,346),
($15,263), and $3,717, respectively 9 (2,372) (6,908) (1,321)
Prior period adjustment, net of taxes of
($93) and ($1,137), respectively -- (173) -- (2,112)
-------- -------- -------- --------
9 (2,545) (6,908) (3,433)
-------- -------- -------- --------
NET INCOME $ 6,722 $ 3,370 $ 19,301 $ 14,856
======== ======== ======== ========
EARNINGS (LOSS) PER SHARE
Continuing operations $ .24 $ .21 $ .92 $ .64
Discontinued operations:
As previously reported -- (.08) (.24) (.05)
Prior period adjustment -- (.01) -- (.07)
-------- -------- -------- --------
-- (.09) (.24) (.12)
-------- -------- -------- --------
Total $ .24 $ .12 $ .68 $ .52
======== ======== ======== ========
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING (000's) 28,534 28,443 28,501 28,361
======== ======== ======== ========
</TABLE>
<PAGE> 4
National Auto Credit, Inc. and Subsidiaries
(Thousands of Dollars)
(Unaudited)
INSTALLMENT NOTES RECEIVABLE
a) Period End Balances:
<TABLE>
<CAPTION>
January 31, January 31,
1997 1996
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<S> <C> <C>
Gross installment notes receivable $ 496,947 $ 354,012
Unearned income (72,475) (53,833)
Allowance for credit losses (7,053) (2,578)
---------- ---------
Installment notes receivable, net $ 417,419 $ 297,601
========== =========
</TABLE>
b) Changes in Gross Installment Notes Receivable:
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
January 31, January 31,
----------------------- ------------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance, beginning of period $ 459,229 $ 320,214 $ 354,012 $ 196,156
Contracts accepted 103,833 76,661 377,846 306,001
Cash collected (45,721) (34,764) (169,913) (121,542)
Charge-offs against:
Dealer holdback (15,868) (5,852) (49,595) (18,209)
Unearned income/allowance (4,526) (2,247) (15,403) (8,394)
--------- --------- --------- ---------
Balance, end of period $ 496,947 $ 354,012 $ 496,947 $ 354,012
========= ========= ========= =========
</TABLE>
c) Changes in Allowance for Credit Losses:
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
January 31, January 31,
-------------------- -------------------
1997 1996 1997 1996
------- ------- -------- --------
<S> <C> <C> <C> <C>
Balance, beginning of period $ 4,311 $ 1,955 $ 2,578 $ 1,107
Provision for credit losses 3,844 1,039 7,929 2,790
Net charge-offs (1,102) (416) (3,454) (1,319)
------- ------- ------- -------
Balance, end of period $ 7,053 $ 2,578 $ 7,053 $ 2,578
======= ======= ======= =======
</TABLE>
PERFORMANCE RATIOS
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
January 31, January 31,
------------------- -------------------
1997 1996 1997 1996
---- ----- ------ -----
<S> <C> <C> <C> <C>
Return on average equity 11.9% 11.4% 11.9% 9.1%
==== ==== ==== ====
</TABLE>
