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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
Date of Report (Date of earliest event reported): October 18, 1995
FINOVA CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7543 94-1278569
________________________________________________________________________________
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1850 NORTH CENTRAL AVENUE, PHOENIX, ARIZONA 85004-2209
________________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/207-6900
_____________________________
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Item 5. Other Events.
FINOVA Capital Corporation (formerly known as Greyhound Financial
Corporation) today announced revenues, net income and selected
financial data and ratios for the third quarter ended September 30,
1995 (unaudited).
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
Exhibits Title
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28 Press Release of FINOVA Capital Corporation
dated October 18, 1995
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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.
FINOVA CAPITAL CORPORATION
(Registrant)
Dated: October 18, 1995 By /s/ Bruno A. Marszowski
__________________________
Bruno A. Marszowski,
Senior Vice President,
Chief Financial Officer
Principal Financial Officer/
Authorized Officer
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Robert J. Fitzsimmons Immediate Release
602/ 207-5759
FINOVA CAPITAL CORPORATION
ANNOUNCES RECORD RESULTS FOR THE THIRD QUARTER OF 1995
PHOENIX, Ariz., Oct. 18, 1995 -- FINOVA Capital Corporation today reported
record results and a 29% (annualized) growth in the portfolio for the third
quarter ended Sept. 30, 1995.
Net income for the nine months of 1995 was $71.1 million compared to
$51.2 million for the nine months of 1994, a 39% increase in net income.
For the third quarter of 1995 net income was $25.2 million up from
$22.1 million for the comparable period in 1994, a 14% increase in net income.
Sam Eichenfield, chairman and chief executive officer of FINOVA, said he was
quite pleased with the strong third quarter results, particularly in view of the
increased expenses (including $8.6 million in additional reserve provisions)
incurred in connection with the robust portfolio growth. Eichenfield noted that,
"FINOVA's ability to generate a substantial amount of new, high quality loans
and maintain margins is indicative of the role it is playing in the middle
market." Eichenfield went on to say that "a substantial portion of the third
quarter's new business was added toward the end of the quarter, and, as a
result, did not contribute to the current period's profitability but will
contribute in subsequent periods."
Portfolio quality and interest margins continued to be sustained with
nonperformings as a percent of managed assets declining to 2.5% at the end of
the third quarter from 2.6% at the end of the prior quarter and interest margins
holding at 5.8%, which is consistent with the prior quarters of 1995.
--more--
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The increase in the amount of interest margins earned more than offset
the significant increase in provisions for possible credit losses and higher
selling, administrative and other operating expenses ("G&A expenses"). Loss
provisions, which increased by $8.6 million over the third quarter of 1994, were
due primarily to the growth of the portfolio. Reserve coverage, which includes
the reserve for possible credit losses and $12 million of accrued liabilities
established as reserves applicable to securitized transactions, was 2.0% of
ending funds employed and securitizations and 77.8% of nonaccruing assets. G&A
expenses for the third quarter of 1995 were higher than the comparable 1994
period principally due to higher incentive accruals related to improved results
and the higher volume of new business added during the year. These increases
were partially offset by lower problem account costs.
Income taxes were higher in the third quarter of 1995 due to an
increase in income before income taxes which more than offset the effects of
certain tax credits.
FINOVA Capital Corporation is a Phoenix-based major domestic commercial
finance company providing secured financing and leasing products from $500,000
to $35 million to medium-sized businesses. FINOVA also offers inventory and
sales financing programs to manufacturers, distributors and dealers nationwide.
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FINOVA Capital Corporation
and Consolidated Subsidiaries
Summary of Consolidated Income
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
---------------------------------- ----------------------------------
1995 1994 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Interest earned from
financing transactions $ 192,287 $ 147,649 $ 551,737 $ 343,501
Interest expense 93,136 65,881 267,857 153,391
Depreciation 12,980 11,345 38,891 21,626
------------- ------------- ------------- -------------
Interest margins earned 86,171 70,423 244,989 168,484
Provision for possible
credit losses 10,800 2,215 28,800 10,353
Gains on sale of assets 4,646 1,169 11,699 5,672
Selling, administrative and
other operating expenses 39,583 32,591 112,578 77,796
------------- ------------- ------------- -------------
Income before income
taxes 40,434 36,786 115,310 86,007
Income taxes 15,284 14,730 44,163 34,838
------------- ------------- ------------- -------------
Net Income $ 25,150 $ 22,056 $ 71,147 $ 51,169
============= ============= ============= =============
</TABLE>
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FINOVA Capital Corporation
Selected Consolidated Financial Data and Ratios (Unaudited) (1)
(dollars in thousands)
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
or at or at
September 30, December 31,
-------------------------------- --------------
FINANCIAL DATA: 1995 1994 1994
------------ ------------ --------------
<S> <C> <C> <C>
Average funds employed (AFE) and securitizations (2) $ 6,243,118 $ 4,289,404 $ 4,629,578
Ending funds employed (EFE) 6,609,220 5,294,099 5,667,644
Securitizations (2) 133,051 307,459 253,386
Average earning assets (3):
Quarter 5,934,645 4,769,513
Year-to-date 5,655,656 3,759,107 4,064,971
Reserve and accrued liabilities (4) for possible credit
losses 131,564 130,727 122,233
Nonaccruing assets 169,180 186,016 168,761
Total debt 5,403,323 4,162,286 4,573,354
Stockholder's equity 836,415 765,037 781,986
New business 1,689,939 1,120,927 1,799,331
Backlog (includes lines of credit) 1,127,717 818,958 764,326
Factored volume/floor planning 1,337,909 594,132 1,129,936
Write-offs:
Quarter 7,001 7,098
Year-to-date 22,868 19,009 35,127
RATIOS:
Write-offs (annualized) as a % of AFE and average
securitizations (2) 0.5% 0.6% 0.8%
Nonaccruing assets as a % of EFE and securitizations (2) 2.5% 3.3% 2.9%
Reserve and accrued liabilities (4) for possible credit
losses as a % of:
Ending funds employed and securitizations (2) 2.0% 2.3% 2.1%
Nonaccruing assets 77.8% 70.3% 72.4%
Interest margins earned (annualized) as a % of average earning assets:
Quarter 5.8% 5.9%
Year-to-date 5.8% 6.0% 6.0%
Selling, administrative and other operating expenses as
a % of interest margins earned:
Quarter 45.9% 46.3%
Year-to-date 46.0% 46.2% 46.1%
Total debt to equity 6.46x 5.40x 5.85x
</TABLE>
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(1) Includes financial results from Ambassador Factors and TriCon Capital
subsequent to their acquisitions on February 14, 1994 and April 30,
1994, respectively. Averages for the periods presented are based on
month-end balances.
(2) Securitizations are assets sold under securitization agreements and
managed by the company.
(3) Average earning assets equal AFE less average deferred taxes on
leveraged leases and average nonaccruing assets.
(4) Accrued liabilities of $12 million, $15 million and $13 million at
September 30, 1995 and 1994 and December 31, 1994, respectively,
represent an allowance for estimated losses under certain recourse
provisions of securitizations.
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