FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of a Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month(s) of: February, 1998
NEWCOURT CREDIT GROUP INC.
BCE Place, 181 Bay Street
Suite 3500, P.O. Box 827
Toronto, Ontario
Canada, M5J 2T3
[Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.]
Form 20-F / / Form 40-F /X/
[Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the
information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.]
Yes / / No /X/
[If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b)]
82-
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.
Date: February 4, 1998 NEWCOURT CREDIT GROUP INC.
By: John P. Stevenson
Corporate Secretary
<PAGE>
For immediate release
Trading Symbol: NCT Contact: John Sadler
Senior Vice President
Exchange Listings: Toronto Corporate Affairs
Montreal (416) 594-2400
New York
Newcourt caps 1997 with 86% growth in operating income
TORONTO, February 4, 1998 -- Newcourt Credit Group today reported
operating income before restructuring charges and taxes of $119.1
million (US$86.1 million) for the year ended December 31, 1997,
representing an 86% increase over the $64.2 million in operating income
reported last year.
On January 12, 1998, Newcourt completed its acquisition of AT&T Capital
Corporation. A charge of $55 million ($0.43 per share) covering severance
packages, office relocations and system costs was applied against fourth
quarter earnings. As a result, net income for the year ended December 31,
1997 was $36.4 million (US$26.3 million) as compared with the $50.7
million reported for the previous year.
Based on an average of 70,219,175 shares outstanding during the year, the
Company's earnings per share before the restructuring charges were $1.33
(US$0.96) as compared with $0.96 (US$0.70) for last year. The
restructuring charges reduced the basic and fully diluted earnings per
share to $0.52 (US$0.38).
At a meeting of the Board of Directors held February 4, 1998, a
quarterly dividend of $0.04 per share (US$0.03) was approved for
payment on February 27, 1998 to the common shareholders of record as
at the close of business on February 19, 1998. As well, the Board
approved the appointments of David Sharpless as Newcourt's Deputy
Chairman and David Banks, former AT&T Capital CEO, as Chairman of the
Board. Guy Hands, Managing Director of Nomura International's
Principal Finance Group, representing Hercules Holdings, was also
appointed to the Board and to the Company's Investment Committee.
As of December 31, 1997, Newcourt's owned and managed loans totaled $11.4
billion (US$8.0 billion). The Company grew its portfolio by 73% this year
from the $6.6 billion reported at the end of 1996. The owned portion of
financial assets accounted for $3.7 billion versus $2.0 billion in 1996.
- - more -
<PAGE>
Through its commercial and corporate finance businesses, Newcourt
Financial and Newcourt Capital, the Company more than doubled its
production of new asset-based financings during the year to $8.9 billion,
a 54% increase over last year's $5.8 billion. Of the $8.9 billion,
Newcourt Financial generated $5.3 billion (60%) in new loans, while
Newcourt Capital originated the remaining $3.6 billion. The U.S. and
Canadian markets each accounted for 47.5% of this volume with the
remaining 5% attributed to international markets.
Revenue, as measured by total asset finance income, rose 86% to $318.4
million for 1997 from $171.6 million last year. Fee-based income
represented nearly three quarters of the Company's revenue mix,
accounting for $234.1 million (74%) of total asset finance income as
compared with $119.2 million (70%) for the same period in 1996. Net
finance income increased 61% to total $84.3 million as compared to last
year's $52.4 million.
Asset quality remains strong with credit losses as a percentage of
investment in finance assets for the year of 0.36%. This compares with
the Company's credit loss experience for the previous year of 0.29% of
owned finance assets.
"1997 was the year that confirmed the value of Newcourt's unique business
model," noted Steven K. Hudson, Newcourt's Chief Executive Officer.
"During the year, Newcourt established firm footing on the global stage
with expanded origination and processing capabilities and greater
utilization of international financial markets. It was also the year we
refined our successful vendor-based origination model to maximize the
services we bring to our vendors through value-added, long-term joint
ventures. The relationship we developed with global computer manufacturer
Dell Computer Corporation last April demonstrates our ability to deliver
customized solutions to meet the needs of these clients."
"Our fourth quarter agreement to acquire AT&T Capital is a key component
in our global growth strategy," Hudson continued. "Thanks to outstanding
technological capabilities and the global platform from which we are now
serving our North American-based customers, we anticipate increasing our
new business volumes by up to 40% to $25 billion (US$17 billion) in 1998.
Continued earnings growth will be achieved in 1998 by meeting these
origination targets and capturing significant cost savings through the
early integration of our combined operations."
Newcourt is making swift progress on its integration plan. Paul Currie,
as head of a six-person senior management team, is leading a group of 60
employees on 12 task forces to review operations and implement changes.
Projects that will consolidate and rationalize the world-wide origination
and operations platforms are well under way. Immediate cost savings
measures have been enacted, including the cessation of discretionary
expenditures and a freeze on hiring. Full integration is expected to be
completed within the next eighteen months.
- - more -
<PAGE>
The combination of Newcourt Credit Group and AT&T Capital creates one of
the world's leading sources of asset-based financing serving the
corporate, commercial and institutional markets with owned and managed
assets of $31.2 billion (US$21.8 billion) and a global distribution
capability in 24 countries.
<TABLE>
<CAPTION>
Financial Highlights
Three Months Ended Twelve Months Ended
(C$, millions, except share data) December 31 December 31
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Total asset finance income 126.2 56.5 318.4 171.6
Operating income before taxes &
one time restructuring charges 43.8 22.2 119.1 64.2
Net income <fn1> 3.3 17.6 36.4 50.7
Earnings per share
Basic 0.02 0.31 0.52 0.96
Fully diluted 0.02 0.31 0.52 0.96
Dividends per share 0.04 0.035 .15 0.13
Total new asset financings 2,899 1,375 8,912 5,803
As at As at
December 31, 1997 December 31, 1996
<S> <C> <C>
Total owned and managed assets $11.4 billion $6.6 billion
Common shares outstanding 83,070,958 60,182,688
Subscription rights outstanding 38,500,000 0
<fn1>Inclusive of total one-time restructuring charges
</fn1>
</TABLE>
