<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: August 8, 1995
THE FOOTHILL GROUP, INC.
------------------------
(Exact name of registrant as specified in charter)
Delaware 0-5467 94-1663353
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(State of Incorporation) (Commission (IRS Employer
File Number) Identification No.)
11111 Santa Monica Boulevard
Los Angeles, California 90025
(Address of principal executive office)
Registrant's telephone number: (310) 996-7000
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Item 7: Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit 28 - Additional Exhibits
Press release announcing second quarter results.
Press release announcing an increase in quarterly dividend.
Press release announcing nomination of Don L. Gevirtz as ambassador
Press release announcing an increase in the commercial paper program and bank
credit facilities.
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, hereunto duly authorized.
Dated: August 8, 1995
THE FOOTHILL GROUP, INC.
By: /S/HENRY K. JORDAN
-----------------------
Henry K. Jordan
Vice President and
Chief Financial Officer
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Contact: HENRY K. JORDAN THE FOOTHILL GROUP, INC.
Senior Vice President 11111 Santa Monica Boulevard
& Chief Financial Los Angeles, California 90025
Officer [FOOTHILL LETTERHEAD]
310-996-7000
NEWS
THE FOOTHILL GROUP, INC. REPORTS
STRONG SECOND QUARTER RESULTS
LOS ANGELES, CALIFORNIA, July 17, 1995 . . . The Foothill Group, Inc.
(NYSE-FGI) today reported net income for the second quarter ended June 30, 1995
of $9,494,000, or 54 cents per fully diluted share, compared with net income of
$6,604,000, or 37 cents per fully diluted share, for the quarter ended June 30,
1994. For the six months ended June 30, 1995, net income was $17,888,000, or
$1.02 per fully diluted share, compared with net income of $18,045,000, or $1.02
per fully diluted share, for the same period in 1994. The six month results for
1994 include previously reported substantial gains, principally from the sale of
the Company's debt and equity positions in G. Heileman Brewing Company, Inc.
Henry K. Jordan, Senior Vice President and Chief Financial Officer,
said, "Second quarter results reflect strong profitability of our asset-based
lending operations and continued robust growth of the asset-based loan
portfolio. Finance receivables reached $916,507,000 as of June 30, 1995, up 78%
on an annualized basis from $659,356,000 as of December 31, 1994. Foothill
Capital continues to deepen its national market penetration and continues to
benefit from a lower than expected level of portfolio runoff. Based on this
exceptional portfolio growth, the Company grew its allowance for credit losses
during the 1995 second quarter by $4,190,000. This allowance now totals
$23,150,000 or 2.5% of finance receivables and repossessed assets, as compared
to $17,260,000 as of December 31, 1994. As portfolio growth moderates, the
Company's level of provision for credit losses should also moderate, resulting
in additional earnings.
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"We are especially pleased that interest margins remained strong
during the second quarter ended June 30, 1995. Net interest revenue, as a
percent of average assets, expanded to 9.31% for the 1995 second quarter,
compared with 8.99% for the second quarter ended June 30, 1994. Volatility in
the interest rate environment has minimal impact on the Company's margins due to
its policy of matching interest sensitive assets and liabilities. The credit
quality of the Company's asset-based loan portfolio remains strong as June 30,
1995 repossessed and sixty day contractually delinquent accounts totaled
$4,405,000, or approximately 0.5% of the loan portfolio.
"Equity and purchased bank debt positions owned by the Company have
unrealized gains totaling $27,657,000 as of June 30, 1995, down slightly from
$28,107,000 as of December 31, 1994. In addition, investments of Foothill's
managed partnerships show substantial unrealized gains which, if realized, will
contribute to future earnings.
"Book value per common share was $11.22 as of June 30, 1995, up from
$10.32 as of December 31, 1994. Total stockholders' equity increased in the 1995
second quarter to a record $190 million."
The Foothill Group, Inc. is a specialized financial services company
which operates two tightly linked businesses: commercial lending and money
management. Foothill Capital Corporation, its wholly-owned subsidiary, provides
asset-based financing to businesses throughout the United States. The parent
company's money management operation conducts business through institutional
limited partnerships, seeking above average returns by investing in debt
instruments of companies in reorganization or in the process of restructuring.
As of June 30, 1995, Foothill had total assets owned or under management of more
than $1.4 billion. On May 15, 1995, Norwest Corporation and The Foothill Group,
Inc. signed a definitive agreement for the merger of The Foothill Group, Inc.
with Norwest. The merger is expected to close in the fourth quarter of 1995.
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THE FOOTHILL GROUP, INC.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
(Dollars in thousands)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
JUNE 30, DECEMBER 31,
1995 1994
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 3,545 $ 33,584
Equity, debt and partnership investments 35,411 38,301
Finance receivables:
Revolving loans 670,256 481,063
Term loans 246,251 178,293
----------------------------------------------------------------------------------------------------------
Finance receivables 916,507 659,356
Allowance for credit losses 23,150 17,260
----------------------------------------------------------------------------------------------------------
Finance receivables, net 893,357 642,096
Repossessed assets, net 556 556
Prepaid income taxes 17,727 10,463
Deferred fund and debt issuance costs, net 7,664 7,598
Property and equipment, at cost less accumulated depreciation and
amortization ($2,366 at June 30, 1995; $2,438 at December 31, 1994) 2,528 2,387
Other assets (principally monies due from loan participants) 9,191 3,205
----------------------------------------------------------------------------------------------------------
$969,979 $738,190
==========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Commercial paper $414,223 $214,897
Other short term borrowings 15,000 10,000
Senior notes payable 273,300 268,829
Accounts payable and accrued liabilities 28,371 21,504
Subordinated notes 48,650 50,550
----------------------------------------------------------------------------------------------------------
Total liabilities 779,544 565,780
----------------------------------------------------------------------------------------------------------
Stockholders' equity:
Convertible preferred stock, $1.00 par value, $30.00 per share liquidation
preference, 9% cumulative, 100,000 shares issued and outstanding 2,900 2,900
Class A common stock, no par value, 16,708,958 shares
issued and outstanding (16,420,410 at December 31, 1994) 99,328 99,048
Unrealized gains, net of tax, on marketable debt and equity securities 14,858 15,001
Retained earnings 73,349 55,461
----------------------------------------------------------------------------------------------------------
Total stockholders' equity 190,435 172,410
----------------------------------------------------------------------------------------------------------
$969,979 $738,190
==========================================================================================================
</TABLE>
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THE FOOTHILL GROUP, INC.
SELECTED FINANCIAL DATA
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
-------------------------------------- --------------------------------------
1995 1994 1995 1994
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA*:
Interest and fees earned $32,100 14.80% $19,177 13.06% $58,958 14.52% $37,033 12.78%
Interest expense 11,906 5.49% 5,973 4.07% 21,853 5.38% 11,150 3.85%
------------------------------------------------------------------------------------------------------------------------------------
Net interest revenue 20,194 9.31% 13,204 8.99% 37,105 9.14% 25,883 8.93%
Asset management fees 1,252 0.58% 1,316 0.90% 2,503 0.62% 2,855 0.99%
Gains from asset sales and managed partnerships 7,850 3.62% 5,650 3.85% 14,168 3.49% 20,510 7.08%
Provision for credit losses 6,287 2.90% 2,513 1.71% 9,825 2.42% 4,928 1.70%
General and administrative expenses 6,353 2.93% 6,072 4.14% 12,569 3.10% 12,662 4.37%
------------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 16,656 7.68% 11,585 7.89% 31,382 7.73% 31,658 10.93%
Provision for income taxes 7,162 3.30% 4,981 3.39% 13,494 3.32% 13,613 4.70%
------------------------------------------------------------------------------------------------------------------------------------
Net income $ 9,494 4.38% $ 6,604 4.50% $17,888 4.41% $18,045 6.23%
====================================================================================================================================
</TABLE>
*Percentages are computed using average assets (excluding unrealized gains on
investments) and have been annualized.
Per share data (shares in thousands):
<TABLE>
<S> <C> <C> <C> <C>
Primary earnings per share $ 0.55 $ 0.39 $ 1.05 $ 1.06
==================================================================================================
Fully diluted earnings per share $ 0.54 $ 0.37 $ 1.02 $ 1.02
==================================================================================================
Number of shares used in per share computations
Primary 16,956 16,946 16,864 16,954
==================================================================================================
Fully diluted 17,632 17,614 17,542 17,621
==================================================================================================
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA:
Total assets $969,979 $665,013 $969,979 $665,013
Average assets** 867,618 587,200 812,087 579,618
Average stockholders' equity** 172,784 146,456 167,553 143,178
Finance receivables 916,507 582,994 916,507 582,994
Average finance receivables** 826,486 538,621 759,866 531,010
==================================================================================================
Sources of funds employed:
Commercial paper $414,223 $201,111 $414,223 $201,111
Other short term borrowings 15,000 - 15,000 -
Senior notes 273,300 226,042 273,300 226,042
Subordinated notes 48,650 52,075 48,650 52,075
Stockholders' equity 190,435 167,293 190,435 167,293
--------------------------------------------------------------------------------------------------
Total funds employed $941,608 $646,521 $941,608 $646,521
==================================================================================================
</TABLE>
** Averages are for the three and six months ended, respectively. Average
assets and average equity exclude unrealized gains on marketable debt and
equity securities.
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THE FOOTHILL GROUP, INC.
SELECTED FINANCIAL DATA FOR FOOTHILL CAPITAL CORPORATION
(Dollars in thousands)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
-------------------------------------- --------------------------------------
1995 1994 1995 1994
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA*:
Interest and fees earned $31,882 15.35% $18,861 13.67% $58,621 15.10% $36,388 13.34%
Interest expense 12,128 5.84% 6,218 4.51% 22,294 5.74% 11,643 4.27%
---------------------------------------------------------------------------------------------------------------------------
Net interest revenue 19,754 9.51% 12,643 9.16% 36,327 9.36% 24,745 9.07%
Gains from asset sales 6,167 2.97% 3,647 2.64% 10,795 2.78% 13,250 4.86%
Provision for credit losses 6,287 3.03% 2,513 1.82% 9,825 2.53% 4,928 1.81%
General and administrative expenses 5,535 2.67% 5,257 3.81% 10,886 2.80% 10,737 3.94%
---------------------------------------------------------------------------------------------------------------------------
Income before income taxes 14,099 6.78% 8,520 6.17% 26,411 6.81% 22,330 8.18%
Provision for income taxes 6,063 2.92% 3,664 2.66% 11,357 2.93% 9,602 3.52%
---------------------------------------------------------------------------------------------------------------------------
Net income $ 8,036 3.86% $ 4,856 3.51% $15,054 3.88% $12,728 4.66%
===========================================================================================================================
</TABLE>
* Percentages are computed using average assets (excluding unrealized gains
on investments) and have been annualized.
<TABLE>
<S> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA:
Total assets $928,979 $625,954 $928,979 $625,954
Average assets** 830,716 551,780 776,476 545,509
Finance receivables 907,841 566,660 907,841 566,660
Average finance receivables** 817,332 530,229 751,713 523,000
=====================================================================================
Sources of funds employed:
Commercial paper $414,223 $201,111 $414,223 $201,111
Other short term borrowings 15,000 - 15,000 -
Senior notes 273,300 223,650 273,300 223,650
Subordinated notes and debentures 56,400 61,575 56,400 61,575
Stockholders' equity 145,779 124,466 145,779 124,466
-------------------------------------------------------------------------------------
Total funds employed $904,702 $610,802 $904,702 $610,802
=====================================================================================
</TABLE>
** Averages are for the three and six months ended, respectively. Average
assets exclude unrealized gains on marketable debt and equity securities.
<TABLE>
<S> <C> <C> <C> <C>
SELECTED BALANCE SHEET DATA:
Nonperforming finance receivables
and repossessed assets*** $ 4,405 $14,072 $ 4,405 $14,072
Allowance for credit losses $22,847 $15,356 $22,847 $15,356
Actual writeoffs during the period $ 2,098 $ 1,613 $ 3,936 $ 3,428
Number of employees 144 112 144 112
================================================================================
</TABLE>
*** Includes repossessed assets and loans that have contractual installments
more than sixty days past due.
<PAGE> 8
Contact: HENRY K. JORDAN THE FOOTHILL GROUP, INC.
Senior Vice President 11111 Santa Monica Boulevard
& Chief Financial Los Angeles, California 90025
Officer [FOOTHILL LETTERHEAD]
310-996-7000
NEWS
THE FOOTHILL GROUP, INC. INCREASES
QUARTERLY DIVIDEND
LOS ANGELES, CALIFORNIA, August 2, 1995 . . . The Foothill Group,
Inc. (NYSE-FGI) Board of Directors today declared a $.10 quarterly cash dividend
on its Class A common stock. This represents a 25% increase from the previous
$.08 quarterly cash dividend. The dividend is payable on October 20, 1995, to
shareholders of record on September 20, 1995.
The Foothill Group, Inc. is a specialized financial services company
which operates two tightly linked businesses: commercial lending and money
management. Foothill Capital Corporation, its wholly owned subsidiary, provides
asset-based financing to businesses throughout the United States. The parent
company's money management operation conducts business through institutional
limited partnerships, seeking above average returns by investing in debt
instruments of companies in reorganization or in the process of restructuring.
At June 30, 1995, Foothill had total assets owned or under management of more
than $1.4 billion. On May 15, 1995, Norwest Corporation and The Foothill Group,
Inc. signed a definitive agreement for the merger of The Foothill Group, Inc.
and Norwest. The merger is expected to close in the fourth quarter of 1995.
<PAGE> 9
Contact: HENRY K. JORDAN THE FOOTHILL GROUP, INC.
Senior Vice President 11111 Santa Monica Boulevard
& Chief Financial Los Angeles, California 90025
Officer [FOOTHILL LETTERHEAD]
310-996-7000
NEWS
THE FOOTHILL GROUP, INC. ANNOUNCES NOMINATION
OF DON L. GEVIRTZ AS AMBASSADOR
LOS ANGELES, CALIFORNIA, July 27, 1995 . . . The Foothill Group, Inc.
(NYSE-FGI) today announced that President Clinton has nominated Don L. Gevirtz
as Ambassador to the Republic of Fiji, the Republic of Nauru, the Kingdom of
Tonga, and Tuvalu. Mr. Gevirtz has been the Chief Executive Officer and Chairman
of the Board of The Foothill Group, Inc. for the last 25 years and intends to
remain with the Company until October 1, 1995. Mr. Gevirtz stated that "Over the
past 25 years, I have enjoyed my participation in building Foothill into a
successful and innovative company and I will miss my colleagues, particularly
co-founder and co-CEO John Nickoll, who will continue to lead Foothill as its
Chief Executive Officer." The nomination is subject to confirmation by the U.S.
Senate.
The Foothill Group, Inc. is a specialized financial services company
which operates two tightly linked businesses: commercial lending and money
management. Foothill Capital Corporation, its wholly-owned subsidiary, provides
asset-based financing to businesses throughout the United States. The parent
company's money management operation conducts business through institutional
limited partnerships, seeking above average returns by investing in debt
instruments of companies in reorganization or in the process of restructuring.
As of June 30, 1995, Foothill had total assets owned or under management of more
than $1.4 billion. On May 15, 1995, Norwest Corporation and The Foothill Group,
Inc. signed a definitive agreement for the merger of The Foothill Group, Inc.
with Norwest. The merger is expected to close in the fourth quarter of 1995.
<PAGE> 10
Contact: HENRY K. JORDAN THE FOOTHILL GROUP, INC.
Senior Vice President 11111 Santa Monica Boulevard
& Chief Financial Los Angeles, California 90025
Officer [FOOTHILL LETTERHEAD]
310-996-7000
NEWS
FOOTHILL GROUP SUBSIDIARY INCREASES
COMMERCIAL PAPER PROGRAM AND BANK CREDIT FACILITIES
TO $500 MILLION
LOS ANGELES, CALIFORNIA, August 1, 1995 . . . The Foothill Group,
Inc. (NYSE-FGI) announced today that its subsidiary, Foothill Capital
Corporation, has increased its commercial paper program and its bank credit
facilities to $500 million from their present level of $460 million. Foothill
Capital's commercial paper is rated "A-2" by Standard & Poor's Ratings Group,
"D-2" by Duff & Phelps Credit Rating Company and "F-2" by Fitch Investor's
Service, Inc. The bank credit facilities, with 26 banks, are used primarily to
support Foothill Capital's outstanding commercial paper.
Kent W. Dahl, Senior Vice President and Treasurer of Foothill
Capital, stated, "Foothill Capital is pleased to announce the increases to our
commercial paper program and bank credit facilities which will be used to fund
the continued growth of our asset-based lending business. We continue to have
strong support from the banking and investment communities for our business
strategy."
The Foothill Group, Inc. is a specialty financial services company
which operates two tightly linked businesses: commercial lending and money
management. Foothill Capital Corporation, its wholly-owned subsidiary, provides
asset-based financing to businesses throughout the United States. The parent
company's money management operation conducts business through institutional
limited partnerships, seeking above average returns by investing in the debt
instruments of companies in reorganization or in the process of restructuring.
At June 30, 1995, Foothill had total assets owned or under management of over
$1.4 billion. On May 15, 1995, Norwest Corporation and The Foothill Group, Inc.
signed a definitive agreement for the merger of The Foothill Group, Inc. and
Norwest. The merger is expected to close in the fourth quarter of 1995.
