SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): July 22, 1997
National Auto Finance Company, Inc.
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-22067 65-0688619
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(Commission File Number) (I.R.S. Employer
Identification No.)
621 N.W. 53rd Street, Suite 200
Boca Raton, Florida 33487
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(Address of Principal Executive Offices) (Zip Code)
(561) 997-2747
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
Filed herewith and incorporated herein by reference is a copy of the
National Auto Finance Company, Inc. (the "Company") Press Release, dated July
22, 1997, announcing its financial results for the second quarter and six months
ended June 30, 1997. The nature of the Company's business is such that the
results for any interim period are not necessarily indicative of the results for
a full year.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Business Acquired:
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
(99) Press Release, dated July 22, 1997.
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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 hereto duly authorized.
Date: July 31, 1997
NATIONAL AUTO FINANCE COMPANY, INC.
By: /s/ Kevin Adams
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Name: Kevin Adams
Title: Chief Financial Officer
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NATIONAL AUTO FINANCE COMPANY, INC.
FORM 8-K
CURRENT REPORT
Exhibit Index
Exhibit No. Description Page
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(99) Press Release,
dated July 22, 1997
EXHIBIT (99)
[National Auto Finance Company, Inc. Logo]
Contact: Roy E. Tipton Keith B. Stein
President Vice Chairman
(800) 999-7535 (800) 533-8573
NATIONAL AUTO FINANCE COMPANY, INC.
REPORTS SECOND QUARTER RESULTS
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REVENUES INCREASE 116%
BOCA RATON, Fla. (July 22, 1997) - National Auto Finance Company, Inc.
(Nasdaq/NM:NAFI) today announced financial results for the second quarter and
six months ended June 30, 1997.
For the three months ended June 30, 1997, total revenues increased 116% to
$6.6 million compared with $3.0 million for the second quarter of 1996. Net
income rose to $1.0 million, or $.15 per share, for the second quarter of 1997
compared with pro forma net income of $0.5 million, or $.08 per share, for the
year-earlier period.
For the six months ended June 30, 1997, total revenues increased 116% to
$12.2 million compared with $5.6 million for the same period in 1996. Net income
(before the effects of a one-time, non-cash, deferred income tax charge to
earnings of $4.5 million to reflect a deferred income tax liability arising from
the reorganization of the Company's business from a partnership form to a
taxable corporate form in connection with the Company's initial public offering
in January 1997) rose to $2.1 million, or $.29 per share, for the first half of
1997 compared with pro forma net income of $1.0 million, or $.15 per share, for
the year-earlier period.
Management believes that net income before such charge is the appropriate
evaluation of the Company's operating performance because of the consistency of
such presentation. Including the one-time deferred tax charge, National Auto
Finance reported a net loss of $2.5 million, or $.36 per share, for the first
six months of 1997.
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EXHIBIT (99)
NAFI Reports Second Quarter Results
Page 2
July 22, 1997
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Delinquencies increased during the quarter, relative to the quarter ended
March 31, 1997. Loans which were 31 days of more delinquent as of June 30, 1997,
were 10.45% of contracts owned and serviced by NAFI, up from 8.00% as of March
31, 1997. The ratio of loans which were 61 days or more delinquent was 3.68%, up
from 2.65% as of March 31, 1997.
Annualized net charge-offs for the five-month period ended May 31, 1997,
were 5.52% of the outstanding balance of contracts owned and serviced by NAFI.
The charge-off performance during that period was down from an annualized
charge-off rate of $5.87% for the period ended March 31, 1997. Static pool loss
results on a vintage basis for the period ended March 31, 1997, using data
through May 31, 1997, was 3.61% of the aggregate principal balance of loans
purchased. The Company has not yet received from its outside servicer complete
loss-related information for the full month of June 1997 and, therefore, has
presented this data only through May 31, 1997.
The Company reported that purchases of motor vehicle retail installment
sales contracts from automobile dealers totaled $43.8 million for the quarter
ended June 30, 1997, an increase of 139% over loan purchase volume of $18.3
million for the prior-year period. Through the first half of 1997, purchases of
motor vehicle retail installment sales contracts from automobile dealers totaled
$79.5 million, an increase of 141% over loan purchase volume of $33.0 million
for the prior-year period.
Commenting on the results, Roy E. Tipton, president of National Auto
Finance Company, said, "We are very pleased with results through the first half
of the year. We expect continued growth in loan volume and revenues through the
expansion of our marketing channels and, with the opening of our new in-house
servicing and collections division, we expect to make a meaningful improvement
in our delinquency and charge-off experience. We are optimistic about the
outlook for the remainder of 1997."
NAFI also announced that on July 17, 1997, it completed the public offering
of $73.5 million of asset-backed securities issued by the National Auto Finance
1997-1 Trust, an owners' trust formed specifically for the purpose of completing
the offering.
The transaction included $66.9 million of senior securities rated AAA by
Standard & Poor's Rating Services and Aaa by Moody's Investors Service Inc., and
$6.6 million of seller-retained
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EXHIBIT (99)
NAFI Reports Second Quarter Results
Page 3
July 22, 1997
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certificates. Financial Security Assurance Inc. issued a financial guaranty
insurance policy insuring payment of the senior certificates, and First Union
Capital Markets Corp. acted as the underwriter.
The securities priced at 59 basis points above comparable Treasury
certificates. The offering was well over-subscribed and was the most
aggressively priced securitization completed by the Company thus far.
In a further development, NAFI announced that it anticipates closing by the
end of this month a three-year, $10 million revolving warehouse facility with
BancBoston, N.A., secured by motor vehicle installment contracts.
Keith B. Stein, NAFI's vice chairman and treasurer, observed, "The 1997-1
transaction is our third and largest asset-backed securitization to date and we
are very pleased with the results. The pricing, in our view, reflects the
increasing confidence and support that investors have in NAFI's operational
performance and future prospects. We even attracted several investors who have
not previously participated in this asset class. The BancBoston facility gives
us added flexibility in our financing strategies and establishes a new blue-chip
relationship for the Company. We are particularly gratified by the bank's
endorsement and look forward to expanding that relationship over time."
National Auto Finance is a specialized consumer finance company engaged in
the purchase, securitization and servicing of car loans originated by automobile
dealers for non-prime consumers. The Company markets its products and services
to dealers through the efforts of its direct sales force and through strategic
referral and marketing alliances with financial and other institutions that have
established relationships with dealers.
This news release contains statements that are forward-looking statements
within the meaning of applicable federal securities laws and are based upon the
Company's current expectations and assumptions which are subject to a number of
risks and uncertainties which could cause actual results to differ materially
from those anticipated. Primary factors that could cause actual results to
differ include the availability of financing on terms and conditions acceptable
to the Company, the availability of the Company to securitize its finance
contracts in the asset-backed securities market on terms and conditions
acceptable to the Company, and changes in the quality or composition of the
serviced loan receivable portfolio. Certain of these as well as other factors
are described in more detail in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
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EXHIBIT (99)
NAFI Reports Second Quarter Results
Page 4
July 22, 1997
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NATIONAL AUTO FINANCE COMPANY, INC.
Unaudited Condensed Consolidated Statements of Income
(In thousands, except earnings per share data)
Three Months Ended Six Months Ended
June 30, June 30,
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Revenue: 1997 1996 1997 1996
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Gain on sales of loans $ 5,293 $ 2,531 $ 9,835 $ 4,628
Finance charges earned 77 -- 96 --
Other income 1,192 513 2,220 1,007
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6,562 3,044 12,151 5,635
Total expenses 4,845 2,178 8,804 3,967
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Income before income taxes 1,717 866 3,347 1,668
Income taxes 658 327 1,288 628(1)
Income taxes from
reorganization of
partnership -- -- 4,500(2) --
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Net income (loss) $ 1,059 $ 539 $(2,441) $ 1,040
Less preferred stock
dividends 41 -- 68 --
Net income (loss) available
for common shareholders $ 1,018 $ 539 $(2,509) $ 1,040
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Earnings (loss) per share $ 0.15 -- $ (0.36)(2) --
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Pro forma earnings per share $ 0.15 $ 0.08 $ (0.29)(3)$ 0.15
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Weighted average shares and
share equivalents
outstanding 6,976 -- 6,976 --
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Pro forma shares outstanding -- 6,726 -- 6,726
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(1) Pro forma income taxes for the six-month period ended June 30, 1996,
calculated as if the Company had operated as a "C" Corporation.
(2) Includes the effects of a one-time, non-cash charge for deferred income
taxes arising from the reorganization of the Company from a partnership
form to a taxable corporate form in connection with the Company's initial
public offering in January 1997.
(3) Excludes the effects of the charge noted in footnote 2.
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EXHIBIT (99)
NAFI Reports Second Quarter Results
Page 5
July 22, 1997
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NATIONAL AUTO FINANCE COMPANY, INC.
Unaudited Condensed Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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<S> <C> <C>
ASSETS
Assets:
Cash and cash equivalents $ 2,847 $ 5,066
Finance receivables, net 4,228 --
Excess spread receivable 35,922 23,404
Fixed assets, net 690 515
Other assets 2,215 2,216
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Total assets $ 45,902 $ 31,201
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LIABILITIES AND OWNERSHIP EQUITY
Liabilities:
Subordinated debt $ 14,251 $ 19,701
Other liabilities 7,601 1,949
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Total liabilities 21,852 21,650
Ownership and Stockholders' Equity:
Stockholders (partners) equity(1) 24,050 9,551
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Total Liabilities and Ownership Equity $ 45,902 $ 31,201
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<FN>
(1) Equity for December 31, 1996, reflects partners capital of National Auto
Finance Company, L.P.
</FN>
</TABLE>
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