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 (Date of earliest event reported): January 21, 1994
GREYHOUND FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7543 94-1278569
(State or Other Jurisdiction (Commission (I.R.S. Employer
Incorporation) File Number)Identification No.)
DIAL TOWER, PHOENIX, ARIZONA 85077
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/207-6900
Item 5. Other Events.
Greyhound Financial Corporation, the principal operating
subsidiary of GFC Financial Corporation, announced on January 21,
1994, revenues, net income and selected financial data and ratios
for the fourth quarter and year ended December 31, 1993
(unaudited).
A copy of the press release issued by Greyhound Financial
Corporation is attached as Exhibit 28 to this report.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
No. Title
------- --------------------------------
28 Press Release of Greyhound
Financial Corporation dated
January 21, 1994.
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.
GREYHOUND FINANCIAL CORPORATION
(Registrant)
Dated: January 24, 1994 By/s/ Bruno A. Marszowski
-------------------------------------------
Bruno A. Marszowski, Vice President-Controller
Principal Financial Officer/Authorized Officer
EXHIBIT 28
Nancy Archer 1/21/94
602/ 207-2821
THESE ARE THE EARNINGS FOR GREYHOUND FINANCIAL CORPORATION
THE PRINCIPAL SUBSIDIARY OF GFC FINANCIAL CORPORATION
WHOSE EARNINGS WERE RELEASED JANUARY 18, 1994
GREYHOUND FINANCIAL CORPORATION
ANNOUNCES 1993 RESULTS FOR THE
FOURTH QUARTER AND YEAR TO DATE
PHOENIX, Arizona, January 21, 1994 -- Greyhound Financial Corporation (the
"company") today reported results for the fourth quarter and year ended
December 31, 1993.
Net income for the fourth quarter of 1993 was $10.8 million compared to
$10.5 million for the fourth quarter of 1992. The fourth quarter of 1993
included $1.0 million ($0.6 million after-tax) of interest on a loan from
its parent, GFC Financial Corporation ('GFCFC"), of the proceeds received on
the sale of GFCFC's discontinued operation ("Verex"). Additionally, $0.9
million ($0.6 million after-tax) of general and administrative expenses that
would have been allocated to Verex were absorbed by GFC. Excluding these
amounts, net income for the fourth quarter of 1993 would have been $12.0
million, an improvement of 14% over the fourth quarter of 1992.
Net income for the year 1993 was $36.4 million compared to $36.8
million in 1992. The 1993 results included a $4.9 million adjustment in the
third quarter for deferred taxes applicable to leveraged leases and $1.6
million (pre-tax) of expenses previously allocated to Verex. Excluding
these amounts, net income for 1993 was $42.3 million, an increase of 15%
over 1992.
The $4.9 million third quarter adjustment to income taxes represents
the effects of recent increases in federal and state income tax rates as
they apply to deferred income taxes generated by the company's leveraged
lease portfolio. In addition, income taxes for the fourth quarter of 1992
were reduced by $3.1 million representing tax adjustments related to the
refinancing of the company's debt upon spin-off from The Dial Corp in March
1992.
Sam Eichenfield, Chairman and Chief Executive Officer of the company,
said that "1993 was an outstanding year for the company because it had a
record year, both in terms of operating earnings, before the one-time tax
adjustment, and in new business volume, which reached $1 billion.
Additionally, funds employed grew by 15% with margins and the quality of
assets continuing to meet or exceed expectations." Nonaccruing assets,
including those in the European portfolio, declined as a percentage of funds
employed to 3.6% at year end 1993 from 4.0% at year end 1992.
Eichenfield went on to say that he was pleased with the significant
goals that the company achieved in 1993. "With capital potentially
available to the company arising from the successful sale of Verex by the
company's parent, along with the acquisition of the Asset Based Finance
operations, the start up of the Consumer Rediscount business and the pending
purchase of Ambassador Factors, we have enhanced our foundation for the
future. With these endeavors, the company is positioned to expand its
financial service operations into three new niche-businesses."
As announced on November 29, 1993, GFCFC and Fleet Financial Group,
Inc. reached an agreement in principle for the company to acquire Fleet
Financial's factoring and asset-based lending subsidiary, Fleet Factors
Corp., operating under the trade name Ambassador Factors.
Interest earned from financing transactions, increased to $64.6 million
for the fourth quarter of 1993 from $59.6 million for the fourth quarter of
1992 and to $248.7 million for the year 1993 from $240.8 million in 1992.
These increases primarily were driven by the growth in funds employed,
partially offset by the runoff of high yielding assets in the European
portfolio and the effects of foreign exchange gains and other items recorded
in 1992.
Interest margins earned increased by 18% to $32.2 million (after
adjusting for the $1.0 million interest charge) in the fourth quarter of
1993 from $27.3 million for the fourth quarter of 1992 and by 17% to $122.5
million for 1993 from $104.7 million in 1992. These margins were helped
significantly by more favorable debt costs in 1993 when compared to 1992
(approximately a 1.0% reduction in the aggregate cost of debt). Also
contributing to the improved margins were the growth of the portfolio and
higher prepayment fees.
Provisions for possible credit losses were lower in 1993 primarily due
to lower write-offs. Reserve coverage (reserves for possible credit losses
divided by nonaccruing assets) still remains strong at approximately 63% of
nonaccruing assets and five times 1993 write-offs of $12.6 million.
Also contributing to the improved results were higher gains on sale of
assets in 1993, both for the fourth quarter and the year, primarily due to
the amount and type of assets sold.
Selling, administrative and other operating expenses were higher by
15%, both for the quarter and year ended December 31, 1993, due to the
addition of the Asset Based Finance operations (purchased in February 1993),
expenses that would have been charged to Verex and legal expenses incurred
in connection with certain problem accounts.
Income taxes, excluding the $4.9 million adjustment, were higher in
1993 and more in the range of an ongoing effective tax rate for the company,
both for the fourth quarter and the year.
Greyhound Financial Corporation is a major domestic commercial finance
company that provides secured financing of selected commercial and real
estate activities.
GREYHOUND FINANCIAL CORPORATION
AND CONSOLIDATED SUBSIDIARIES
SUMMARY OF CONSOLIDATED INCOME
(UNAUDITED)
(Dollars in Thousands)
Quarter Ended Year Ended
December 31, December 31,
--------------------------------------
1993 1992 1993 1992
--------------------------------------
Interest earned from financing
transactions $ 64,632 $ 59,645 $248,700 $240,806
Interest expense 33,373 32,368 126,152 136,107
-------- -------- -------- --------
Interest margins earned 31,259 27,277 122,548 104,699
Provision for possible credit
losses 2,000 3,890 5,706 6,740
Gains on sale of assets 3,199 1,549 5,439 3,362
Selling, administrative and
other operating expenses 16,114 14,024 58,158 50,728
-------- -------- -------- --------
Income before income taxes 16,344 10,912 64,123 50,593
Income taxes:
Current 5,521 403 22,825 13,843
Adjustment to deferred taxes
(Note 1) 4,857
-------- -------- -------- --------
Net Income $ 10,823 $ 10,509 $ 36,441 $ 36,750
======== ======== ======== ========
Note 1: The results of operations for the year ended December 31, 1993
include a one time adjustment of $4,857,000 representing the
effect of recent federal and state income tax increases applicable
to deferred income taxes generated by the company's leveraged
lease portfolio.
<PAGE>
GREYHOUND FINANCIAL CORPORATION
AND CONSOLIDATED SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL DATA AND RATIOS
UNAUDITED
(Dollars in Thousands)
Year Ended
or as of
December 31,
------------------------
FINANCIAL DATA: 1993 1992
------------------------
Funds employed $ 2,846,571 $ 2,485,844
Nonaccruing assets 102,607 100,422
Reserve for possible credit losses 64,280 69,291
Debt 2,082,350 1,898,773
Preferred stock 25,000 25,000
Stockholder's equity 345,291 325,788
New business 1,007,794 682,369
Write-offs 12,575 23,661
RATIOS:
Spread percentage (Note 1) 5.28% 5.09%
Nonaccruals/funds employed 3.6% 4.0%
Reserves/funds employed 2.3% 2.8%
Reserves/nonaccruals 62.6% 69.0%
Write-offs/average funds employed 0.5% 1.0%
Expenses/average funds employed 2.2% 2.1%
Expenses/interest margins earned 47.5% 48.5%
Debt & preferred stock/equity 6.1x 5.9x
Note 1: Spread percentages represent interest margins earned as a
percentage of earning assets, net of deferred taxes applicable to
leveraged leases.
