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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
April 3, 2000 (March 17, 2000)
Date of Report (Date of Earliest Event Reported)
NATIONAL AUTO CREDIT, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-11601 34-1816760
(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File No.) Identification No.)
30000 AURORA ROAD, SOLON, OHIO 44139
(Address of principal executive offices and zip code)
(440) 349-1000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed from last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 17, 2000, National Auto Credit, Inc. acting through its NAC,
Inc. subsidiary (the "Company") sold to Crescent Bank & Trust substantially all
of the automobile retail installment contracts remaining in the Company's active
portfolio for a selling price of $17.9 million. In March 2000, the Company also
sold to First Southwestern Financial Services for $2.7 million certain
automobile retail installment contracts held in the Company's active portfolio
and to Ameristar Financial Servicing Company, L.L.C. for $2.2 million certain
automobile retail installment contracts held in the Company's portfolio of
charged-off accounts (representing approximately one-third of the charged-off
portfolio). The three transactions resulted in an aggregate loss of
approximately $2.1 million, which the Company will report in the quarter ending
April 30, 2000. In each of the three transactions, the buyer was an independent
party that did not have a material relationship with the Company, any affiliate
of the Company, any director or officer of the Company or any associate of any
officer or director of the Company. In each case, the selling price of the
assets was determined based upon arm's length negotiations between the parties
and was paid in cash at closing.
ITEM 5. OTHER EVENTS
Following its disposition of these automobile installment sale
contracts, the Company's assets consist principally of money market funds,
commercial paper, government securities and other short-term, highly liquid
investments. The Company's Board of Directors is assessing its strategic
business alternatives and will announce the direction it intends to take in its
business when the Board has fully weighed the available alternatives and has
reached a decision.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
Not applicable.
(b) PRO FORMA FINANCIAL INFORMATION.
Pro forma financial information follows on pages 3 to 6 of
this Report.
(c) EXHIBITS
10.1 Purchase and Sale Agreement of Contracts between Crescent
Bank & Trust and NAC, Inc. dated March 17, 2000. *
*Previously filed.
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NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
PRO FORMA FINANCIAL STATEMENTS
INTRODUCTION
As discussed elsewhere herein, on March 17, 2000, National Auto Credit,
Inc., (the "Company") acting through its NAC, Inc. subsidiary ("NAC"), sold to
Crescent Bank & Trust substantially all of the automobile retail installment
loans remaining in the Company's active portfolio for $17.9 million. In prior
transactions in March 2000, NAC had sold to First Southwestern Financial
Services, for $2.7 million, certain automobile retail installment loans held in
the Company's active portfolio and to Ameristar Financial Servicing Company,
L.L.C., for $2.2 million, certain automobile retail installment loans held in
the Company's portfolio of charged-off accounts (representing approximately
one-third of the charged-off portfolio). In each of the three transactions, the
buyer was an independent party that did not have a material relationship with
the Company, any affiliate of the Company, any director or officer of the
Company or any associate of any officer or director of the Company. In each
case, the selling price was determined based upon arm's length negotiations
between the parties and was paid in cash at closing.
The accompanying pro forma condensed consolidated financial statements
are presented to illustrate the effects of the transactions described above. The
pro forma condensed consolidated balance sheet is based on the Company's
historical consolidated balance sheet as of January 31, 2000, and assumes that
the transactions took place on that date. The pro forma condensed consolidated
statement of operations is based on the Company's historical consolidated
statement of operations for the year ended January 31, 2000, and assumes that
the transactions took place on February 1, 1999.
In accordance with the rules of the Securities and Exchange Commission,
the pro forma condensed consolidated statement of operations includes only the
results of continuing operations, and additionally excludes the loss recorded on
the sale of the loans. That loss, of approximately $2.1 million, will be
reported by the Company in its financial statements for the quarter ending April
30, 2000.
The accompanying pro forma condensed consolidated financial statements
may not be indicative of the actual results of operations or financial position
the Company will report in the future. In particular, the accompanying pro forma
condensed consolidated financial statements do not reflect (i) the effects of
the Company's investment of the cash proceeds from the sale of the loans, which
were invested in money market funds, commercial paper, government securities and
other short-term, highly liquid investments, or (ii) any possible effects of
various strategic business alternatives, including, but not limited to, the
purchase of one or more existing operating businesses or the entry into one or
more businesses, currently being considered by the Company's Board of Directors.
The accompanying pro forma condensed consolidated financial statements
should be read in connection with the Company's historical consolidated
financial statements.
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NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JANUARY 31, 2000
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
--------------- -------------- --------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 54,333 $ 5,561 (1) $ 82,939
23,045 (3)
Installment loans, net 29,306 (5,156)(1) -
856 (2)
(25,006)(3)
Property and equipment, net 7,677 7,677
Assets held for sale 6,861 6,861
Income taxes refundable 3,664 3,664
Other assets 2,121 (176)(3) 1,945
--------------- -------------- --------------
TOTAL ASSETS $ 103,962 $ (876) $ 103,086
=============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Self-insurance claims $ 4,089 $ 4,089
Accrued income taxes 2,926 2,926
Other liabilities 13,068 $ (17)(3) 13,051
--------------- -------------- --------------
20,083 (17) 20,066
STOCKHOLDERS' EQUITY
Preferred stock - -
Common stock 1,498 1,498
Additional paid-in capital 166,139 166,139
Retained deficit (69,104) 405 (1) (69,963)
856 (2)
(2,120)(3)
Treasury stock (14,654) (14,654)
--------------- -------------- --------------
83,879 (859) 83,020
--------------- -------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 103,962 $ (876) $ 103,086
=============== ============== ==============
</TABLE>
See Notes to Pro Forma Financial Statements.
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NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
PRO FORMA THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JANUARY 31, 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
--------------- -------------- ---------------
<S> <C> <C> <C>
REVENUE
Interest income $ 7,331 $ (7,331) (1) $ -
Fees and other income 145 (140) (1) 5
--------------- -------------- ---------------
Total 7,476 (7,471) 5
COSTS AND EXPENSES
Provision for credit losses (6,118) 6,118 (1) -
Operating 10,272 (8,518) (2) -
(1,754) (3)
General and administrative 4,750 1,754 (3) 6,504
Litigation and non-recurring charges 11,308 11,308
Write-down of assets held for sale 4,666 4,666
Cost related to purchase of shares 2,224 2,224
Interest (income) expense (2,284) (2,284)
--------------- -------------- ---------------
Total 24,818 (2,400) 22,418
--------------- -------------- ---------------
LOSS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES (17,342) (5,071) (22,413)
Benefit for income taxes (3,286) (3,286)
--------------- -------------- ---------------
LOSS FROM CONTINUING OPERATIONS $ (14,056) $ (5,071) $ (19,127)
=============== ============== ===============
BASIC AND DILUTED LOSS PER SHARE
Continuing operations $ (.50) $ (.18) $ (.68)
=============== ============== ===============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING (000's)
Basic and diluted 28,169 28,169 28,169
=============== ============== ===============
</TABLE>
See Notes to Pro Forma Financial Statements.
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NATIONAL AUTO CREDIT, INC. AND SUBSIDIARIES
NOTES TO PRO FORMA FINANCIAL STATEMENTS
Note A - BASIS OF PRESENTATION
Reference is made to the "Introduction" at page 3.
Note B - PRO FORMA ADJUSTMENTS
The pro forma adjustments to the condensed consolidated balance sheet
are as follows:
1) To reflect the actual cash collections on the loans for the period from
February 1, 2000 until the date of their sale.
2) To reflect activity in the allowance for loan losses for the period
from February 1, 2000 until the date of the sale of the loans.
3) To reflect the sale of the loans as described above.
The pro forma adjustments to the condensed consolidated statement of
operations are as follows:
1) To eliminate interest and fee income and the provision for credit
losses related to the loans sold as if the loans had been sold as of
the beginning of the year.
2) To eliminate operating expenses, consisting principally of payroll,
collection costs and underwriting expenses directly attributable to the
purchase and collection of loans. The amounts eliminated reflect the
expenses the Company would not have incurred as of February 1, 1999 had
it sold all of the automobile retail installment loans. Payroll and
related costs are based on the personnel reductions the Company made
during fiscal 2000 as the result of the decrease in the size of its
operations and further personnel reductions made or being made as a
result of the sale of its loans.
3) To reclassify, as general and administrative expenses, the payroll,
occupancy and other costs the Company will continue to incur after the
sale of its loans which were previously considered operating expenses.
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SIGNATURE
---------
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.
National Auto Credit, Inc.
Date: May 15, 2000 By: /s/David L. Huber
------------------ ------------------------------------
David L. Huber
Chairman and Chief Executive Officer
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