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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
Date of Report (Date of earliest event reported) October 16, 1997
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SEARCH FINANCIAL SERVICES INC.
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(Exact name of registrant as specified in charter)
DELAWARE 0-9539 41-1356819
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
600 N. PEARL STREET
SUITE 2500
DALLAS, TEXAS 75201-2899
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (214) 965-6000
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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.
On October 16, 1997, Registrant announced that, as part of an overall
program to reduce overhead expenses, Anthony J. Dellavechia had stepped down as
Registrant's President and Chief Operating Officer and that certain other
executives had left the company along with other administrative personnel.
Search's Chairman and Chief Executive Officer, George Evans, will reassume the
position of President.
In making the announcement, Registrant also announced that (1) total
personnel cuts, including those resulting from the closing of MS Financial,
Inc.'s Mobile, Alabama and Jackson, Mississippi facilities, are expected to
result in overhead savings of approximately $3.5 million to $4 million per year
and (2) Registrant currently anticipates that results for the three-month
period ended September 30, 1997 will approximate the possible loss of $0.35 per
share referenced in the most recent analyst report published by Principal
Financial Securities.
The press release issued by Registrant with respect to the foregoing
is filed herewith as Exhibit 99.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) EXHIBITS.
Exhibit No. Description
99 Press Release dated October 16, 1997
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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.
SEARCH FINANCIAL SERVICES INC.
By: /s/ Ellis A. Regenbogen
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Ellis A. Regenbogen
Executive Vice President
Dated: October 21, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
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99 Press Release dated October 16, 1997
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EXHIBIT 99
Contact: James F. Leary
Vice Chairman, Finance
(214) 965-6011
or
Robert D. Idzi
Senior Executive VP & CFO
(214) 965-6002
FOR IMMEDIATE RELEASE: October 16, 1997
SEARCH FINANCIAL REPORTS MANAGEMENT CHANGES AND OVERHEAD REDUCTIONS
DALLAS, Texas -- Search Financial Services Inc. today announced that, as part
of an overall program to reduce ongoing overhead expenses, Anthony J.
Dellavechia has stepped down as president and COO of Search. In addition, Andy
Tenney, 66, executive vice president - operations, retired, and Joe Dorman,
formerly senior vice president, marketing, left the company, along with other
administrative personnel. Also, Search had planned to maintain a regional
center in the prior MS headquarters in Jackson, Mississippi, plus a collection
center in Mobile. In an effort to further reduce overhead, these two centers
are being closed and their operations transferred to Dallas, where there
currently exists an infrastructure to service the assets. Total personnel cuts
including Jackson, Mobile, and Dallas headquarters approximate 83 personnel at
a cost savings of approximately $3.5 to $4 million per year. Search's chairman
and CEO, George C. Evans, will assume the position of president, which he
formerly held.
In making the announcement, Mr. Evans noted that president and COO was a new
position in the company's organizational structure created earlier this year in
anticipation of Search's acquisition of MS Financial, Inc. ("MS") and other
anticipated large acquisitions. However, unexpected regulatory delays in the
completion of the MS acquisition prevented Search from pursuing additional
acquisition opportunities that had been projected to produce revenues to offset
Search's overhead expenses that had been built up in expectation of a more
rapid expansion/growth pace.
"By the time the MS acquisition was finalized, MS' servicing portfolio was
considerably smaller than we originally contemplated it would be at closing and
we had missed several other significant acquisition opportunities. These
significant reductions in overhead will bring our expense structure more in
line with the size of our asset base." Evans said.
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Since the closing of the MS acquisition on July 31, 1997, Search has been
reducing operating expenses by eliminating staff and facility redundancies
created by the merger. Evans stated that during August and September, Search
had successfully reduced MS' overhead by approximately 70%. The benefit of the
newly implemented expense reductions will not be reflected in earnings reports
until future periods and Search currently anticipates that results for the
three-month period ended September 30, 1997 will approximate the possible loss
of $0.35 per share referenced in the most recent analyst report published by
Principal Financial Securities.
Search Financial Services Inc. is a specialized financial services
company engaged in the purchasing, financing, and servicing of nonprime
automobile installment loans originated by franchised and independent
automobile dealers. Search also engages in direct lending consumer finance
operations through its 21 branch offices in seven states and Puerto Rico.
Search common shares and its 9%/7% convertible preferred shares are traded on
the NASDAQ National Market under the symbols "SFSI" and "SFSIP", respectively.
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