<PAGE> 1
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): May 18, 1999
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.)
10302 Deerwood Park Boulevard, Suite 100
Jacksonville, Florida 32256
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(Address of Principal Executive Offices) (Zip Code)
(904) 996-2500
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
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 May 18,
1999, announcing the Company's 1998 AND first quarter 1999 results.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Exhibits.
(99) Press Release, dated May 18, 1999.
<PAGE> 3
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 hereto duly authorized.
Date: May 18, 1999.
NATIONAL AUTO FINANCE COMPANY, INC.
By: /s/ Stephen R. Veth
Name: Stephen R. Veth
Title: Vice President, Secretary and
General Counsel
<PAGE> 4
NATIONAL AUTO FINANCE COMPANY, INC.
FORM 8-K
CURRENT REPORT
Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description Page
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<S> <C> <C>
(99) Press Release,
dated May 18, 1999
</TABLE>
<PAGE> 1
[NAFI LOGO]
Contact: Stephen Veth
Vice President, Secretary and
General Counsel
(904) 996-2500
NATIONAL AUTO FINANCE COMPANY, INC.
ANNOUNCES 1998 AND FIRST QUARTER 1999 RESULTS
JACKSONVILLE, Fla. (May 18, 1999) - National Auto Finance Company, Inc.
(OTC/BB:NAFI) today announced that it filed its 1998 Annual Report on Form 10-K
yesterday, which reflects a loss of $33.7 million or $(3.73) per share for the
year ended December 31, 1998, as compared to a loss of $18.6 million or $(2.62)
per share for the year ended December 31, 1997.
The operating loss for 1998 was primarily due to the following reasons. During
much of 1998, the Company curtailed its loan originations in order to preserve
its cash while undertaking a comprehensive financial restructuring, which closed
on April 7, 1999. Securitization related income associated with overall loan
origination volume was $9.6 million, a decrease of $11.6 million or 54% for the
year ended December 31, 1998 as compared to $21.2 million for the year ended
December 31, 1997. The Company recorded a writedown of Retained Interest in
Securitizations of $23.1 million for the year ended December 31, 1998. Finally,
interest expense for the year ending December 31, 1998 was $7.9 million,
representing a $6.3 million increase over interest expense of $1.6 million for
the year ending December 31, 1997, associated primarily with the payment of
interest on the Company's Senior Subordinated Notes in 1998. In the audited
financial statements included in the Form 10-K, the Company's auditor, BDO
Seidman LLP, qualified its audit opinion by raising an issue about the Company's
ability to continue as a going concern.
The Company also filed its Quarterly Report on Form 10-Q yesterday for the
quarter ended March 31, 1999, which reflects a loss of $1.8 million or $(0.20)
per share for the quarter as compared to a loss of $5.2 million or $(0.57) per
share for the quarter ended March 31, 1998. The 1999 first quarter loss was
primarily due to decreased revenues resulting from the continued curtailment of
origination volume in the quarter.
<PAGE> 2
NAFI Announces 1998 and First Quarter 1999 Results
Page 2
May 18, 1999
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Commenting on the announcement, Keith B. Stein, Chief Executive Officer, said,
"We are disappointed with the results of operations for 1998, however they were
not unexpected. Our recently completed financial restructuring positions us to
execute on our business plan and turn around the business to once again produce
positive results. Although we also experienced an operating loss in the first
quarter of 1999, it was less than the losses experienced in several prior
quarterly periods, indicating that we are heading in the right direction."
National Auto Finance is a specialized consumer finance company engaged in the
purchase, securitization and servicing of automobile loans primarily originated
by manufacturer-franchised 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. The Company has active contractual relationships with approximately 775
dealers in 35 states.
Except for the historical information contained herein, 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 ability 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, 1998, and in certain other reports filed by the Company with the
Securities and Exchange Commission.
<PAGE> 3
NAFI Announces 1998 and First Quarter 1999 Results
Page 3
May 18, 1999
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NATIONAL AUTO FINANCE COMPANY, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
REVENUE:
Securitization related income (loss) $(13,531) $ (323) $ 13,564
Servicing income 6,424 3,437 866
Interest income 2,399 817 258
Other income 377 214 103
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Total revenue (4,331) 4,145 14,791
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EXPENSES:
Servicing expenses 6,262 5,944 1,291
Interest expense 8,417 1,638 1,204
Salaries and employee benefits 7,705 6,346 3,634
Direct loan acquisition expenses 1,520 3,591 1,924
Depreciation expense 802 743 492
Other operating expenses 4,544 3,602 1,755
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Total expenses 29,250 21,864 10,300
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Income (loss) before income taxes and extraordinary item (33,581) (17,719) 4,491
Income taxes -- -- --
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Income (loss) before extraordinary item (33,581) (17,719) 4,491
Extraordinary loss due to early extinguishment of debt -- (720) --
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Net income (loss) before preferred stock dividends (33,581) (18,439) 4,491
Preferred stock dividends (160) (148) --
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Net income (loss) available for Common Stockholders $(33,741) $(18,587) $ 4,491
======== ======== ========
PER SHARE DATA:
Loss per common share before extraordinary item - basic and
diluted $ (3.73) $ (2.52) $ --
Extraordinary loss -- (0.10) $ --
-------- -------- --------
Loss per common share- basic and diluted $ (3.73) $ (2.62) --
======== ======== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted 9,031 7,087 --
======== ======== ========
</TABLE>
<PAGE> 4
NAFI Announces 1998 and First Quarter 1999 Results
Page 4
May 18, 1999
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NATIONAL AUTO FINANCE COMPANY, INC.
BALANCE SHEETS
DECEMBER 31, 1998 AND DECEMBER 31, 1997
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ASSETS: 1998 1997
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<S> <C> <C>
Cash and cash equivalents $ 9,540 $ 26,467
Retained interest in securitizations, at estimated fair value 34,117 31,569
Furniture, fixtures and equipment, net of accumulated
depreciation of $1,065 and $403 3,277 2,262
Deferred financing costs 2,759 2,539
Other assets 1,039 2,038
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Total assets $ 50,732 $ 64,875
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LIABILITIES:
Accounts payable and accrued expenses $ 2,444 $ 3,260
Accrued interest payable-related parties 117 39
Accrued interest payable-Senior Subordinated Notes -- 132
Accrued interest payable-notes -- 50
Junior Subordinated Notes-related parties 1,940 1,940
Senior Subordinated Notes 53,578 34,546
Notes payable 1,017 1,614
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Total liabilities 59,096 41,581
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COMMITMENTS AND CONTINGENCIES
MANDATORILY REDEEMABLE PREFERRED STOCK series A-$0.01 par value; $1,000 stated
value; 1,000,000 shares authorized; 2,295 shares
outstanding; redeemable in January 2005, stated at
redemption value 2,415 2,336
STOCKHOLDERS' EQUITY (CAPITAL DEFICIT):
Common Stock -$0.01 par value; 20,000,000 shares authorized;
9,031 shares outstanding 90 90
Paid-in-capital 36,261 34,417
Accumulated deficit (47,130) (13,549)
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Total stockholders' equity (capital deficit) (10,779) 20,958
-------- --------
Total liabilities, mandatorily redeemable preferred stock and
stockholders' equity (capital deficit) $ 50,732 $ 64,875
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</TABLE>
<PAGE> 5
NAFI Announces 1998 and First Quarter 1999 Results
Page 5
May 18, 1999
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NATIONAL AUTO FINANCE COMPANY, INC.
Statements of Operations (unaudited)
For the Three Months Ended March 31, 1999 and 1998
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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1999 1998
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<S> <C> <C>
REVENUE:
Securitization related income $ 1,469 $ 74
Servicing income 1,449 1,272
Interest income 442 696
Other income 362 78
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Total revenue 3,722 2,120
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EXPENSES:
Servicing expenses 857 2,304
Interest expense 2,234 1,530
Salaries and employee benefits 1,206 1,643
Direct loan acquisition expenses 217 651
Depreciation expense 219 187
Other operating expenses 736 937
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Total expenses 5,469 7,252
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Loss before income taxes (1,747) (5,132)
Income taxes -- --
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Net loss (1,747) (5,132)
Preferred stock dividends 40 40
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Loss attributed to common shareholders $(1,787) $(5,172)
======= =======
PER SHARE DATA:
Loss per common share - basic and diluted $ (0.20) $ (0.57)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic and diluted 9,031 9,031
</TABLE>
<PAGE> 6
NAFI Announces 1998 and First Quarter 1999 Results
Page 6
May 18, 1999
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NATIONAL AUTO FINANCE COMPANY, INC.
BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31,
1999 December 31,
ASSETS: (unaudited) 1998
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<S> <C> <C>
Cash and cash equivalents $ 3,045 $ 9,540
Retained interest in securitizations, at estimated fair value 38,430 34,117
Furniture, fixtures and equipment, net 3,218 3,277
Deferred financing costs 2,613 2,759
Other assets 1,293 1,039
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TOTAL ASSETS $ 48,599 $ 50,732
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LIABILITIES:
Accounts payable and accrued expenses $ 1,885 $ 2,444
Accrued interest payable-related parties 155 117
Junior Subordinated Notes-related parties 1,940 1,940
Senior Subordinated Notes 53,845 53,578
Notes payable 884 1,017
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TOTAL LIABILITIES $ 58,709 $ 59,096
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COMMITMENTS AND CONTINGENCIES
MANDATORY REDEEMABLE PREFERRED STOCK series A-$0.01 par value; $1,000 stated
value; 1,000,000 shares authorized; 2,295 shares
outstanding; redeemable in January 2005, stated at redemption 2,456 2,415
value
STOCKHOLDERS' EQUITY (CAPITAL DEFICIT):
Common Stock -$0.01 par value; 20,000,000 shares authorized;
9,031 shares outstanding 90 90
Paid-in-capital 36,221 36,261
Accumulated deficit (48,877) (47,130)
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Total stockholders' equity (capital deficit) (12,566) (10,779)
-------- --------
Total liabilities, mandatory redeemable preferred stock and
stockholders' equity (capital deficit) $ 48,599 $ 50,732
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</TABLE>
-END-
