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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): July 18, 1996
FINOVA CAPITAL CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 1-7543 94-1278569
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1850 NORTH CENTRAL AVENUE, PHOENIX, ARIZONA 85004-2209
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(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 today announced revenues, net income and
selected financial data and ratios for the second quarter ended June
30, 1996 (unaudited).
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
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<CAPTION>
Exhibits Title
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<S> <C>
28 Press Release of FINOVA Capital Corporation
dated July 18, 1996
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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: July 18, 1996 By /s/ Bruno A. Marszowski
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Bruno A. Marszowski, Senior Vice President,
Chief Financial Officer
Principal Financial Officer/Authorized Officer
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EXHIBIT 28
Robert J. Fitzsimmons For Immediate Release
602/ 207-5759
THESE ARE THE EARNINGS FOR FINOVA CAPITAL CORPORATION
THE PRINCIPAL SUBSIDIARY OF THE FINOVA GROUP INC.
WHOSE EARNINGS WERE RELEASED JULY 16, 1996
FINOVA CAPITAL CORPORATION
ANNOUNCES 19% INCREASE IN EARNINGS
FOR SECOND QUARTER OF 1996
PHOENIX, Ariz., July 18, 1996 -- FINOVA Capital Corporation today reported net
income of $28.1 million for the second quarter of 1996 compared to $23.6 million
for the second quarter of 1995, a 19% increase in net income.
Net income for the first six months of 1996 was $55.2 million compared
to $46.0 million for the first six months of 1995, an increase of 20% in net
income.
Sam Eichenfield, chairman and chief executive officer of FINOVA
Capital, said, "FINOVA's second quarter performance continues to exhibit our
traditionally strong performance characteristics. Managed assets grew at an
annualized rate of 15.1%, up from the first quarter level of 11.1%, and were
driven by new business and factoring volume of $1.3 billion, a 37% increase over
the second quarter of 1995; interest margins, stable at 5.82% in 1996, improved
from the second quarter of 1995; and portfolio quality was maintained, with
non-earning assets continuing at 2.3% of managed assets. Despite strong
portfolio growth, FINOVA's backlog grew 13%, to $1.213 billion, from the end of
the first quarter." Operating efficiencies also contributed to the improved
performance with selling, administrative and other operating expenses ("G & A
expenses") declining to 42.5% of interest margins earned, down
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from 44.8% for the second quarter of 1995. G & A expenses for the second quarter
of 1996 were $41.0 million compared to $36.4 million for the comparable 1995
quarter. The higher expenses were primarily due to increased incentive accruals
related to higher new business volumes and improved results.
Eichenfield went on to say, "the result of these operating improvements
was a further increase in FINOVA Capital's annualized return on equity to 12.7%
for the quarter, up from the 11.7% return achieved in the second quarter of
1995, demonstrating FINOVA's commitment to improving ROE."
Write-offs for the first half of 1996 were $20.0 million or .55%
(annualized) of average managed assets compared to $15.9 million or .52%
(annualized) for the same period in 1995. Reserves for possible credit losses at
June 30, 1996 remained at 2.0% of managed assets but increased to 85.0% of
nonaccruing assets from 77.8% at June 30, 1995.
Income taxes were higher primarily due to higher income before income
taxes and a higher effective tax rate when compared to the 1995 period. The tax
rate in 1995 was lower due to state tax adjustments recorded in the second
quarter of 1995.
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 mid-size businesses. FINOVA also offers inventory and sales
financing programs to manufacturers, distributors and dealers nationwide.
For more information about FINOVA Capital Corporation, visit the
company's Website at www.finova.com.
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FINOVA Capital Corporation
and Consolidated Subsidiaries
Summary of Consolidated Income
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
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1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Interest earned from
financing transactions $ 185,510 $ 163,816 $ 371,093 $ 318,331
Operating lease income 25,042 20,877 48,015 41,119
Interest expense (99,244) (90,197) (196,300) (174,721)
Depreciation (14,625) (13,168) (31,903) (25,911)
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Interest margins earned 96,683 81,328 190,905 158,818
Provision for possible
credit losses (10,500) (11,600) (24,750) (18,000)
Gains on sale of assets 882 4,073 7,539 7,053
Selling, administrative and
other operating expenses (41,044) (36,420) (84,394) (72,995)
--------- --------- --------- ---------
Income before income
taxes 46,021 37,381 89,300 74,876
Income taxes (17,900) (13,752) (34,058) (28,879)
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Net Income $ 28,121 $ 23,629 $ 55,242 $ 45,997
========= ========= ========= =========
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FINOVA Capital Corporation
Selected Consolidated Financial Data and Ratios (Unaudited) (1)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Year Ended
or at
As of June 30, Dec. 31,
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FINANCIAL POSITION: 1996 1995 1995
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<S> <C> <C> <C>
Ending funds employed (EFE) $7,241,892 $6,159,394 $6,819,057
Securitizations (2) 353,308 168,059 303,304
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Total managed assets 7,595,200 6,327,453 7,122,361
Reserve for possible credit losses 148,695 127,737 140,333
Nonaccruing assets 174,859 164,271 167,872
Nonaccruing assets as % of managed assets 2.3% 2.6% 2.4%
Reserve for possible credit losses as a % of:
Ending managed assets 2.0% 2.0% 2.0%
Nonaccruing assets 85.0% 77.8% 83.6%
Total debt $5,970,459 $5,044,834 $5,649,368
Stockholder's equity 898,830 817,881 855,579
Total debt to equity 6.64x 6.17x 6.60x
Backlog $1,213,286 $1,003,263 $1,070,573
<CAPTION>
For the Quarter Ended For the Six Months Ended
June 30, June 30,
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PERFORMANCE HIGHLIGHTS: 1996 1995 1996 1995
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<S> <C> <C> <C> <C>
Average managed assets $7,416,271 $6,263,682 $7,303,412 $6,124,242
Average earning assets (3) 6,645,786 5,679,032 6,564,620 5,520,877
New business 668,667 526,825 1,391,854 1,004,616
Factoring volume/floor planning 638,415 428,475 1,332,508 809,769
Write-offs 9,614 6,982 20,024 15,867
Write-offs (annualized) as a % of
average managed assets 0.52% 0.45% 0.55% 0.52%
Interest margins earned
(annualized) as a % of
average earning assets 5.8% 5.7% 5.8% 5.8%
Selling, administrative and other
operating expenses as a % of
interest margins earned 42.5% 44.8% 44.2% 46.0%
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(1) 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 average funds employed less (average
deferred taxes on leveraged leases and average nonaccruing assets).
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