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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): January 24, 1996
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FINOVA CAPITAL CORPORATION
(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 (formerly known as Greyhound Financial
Corporation) today announced revenues, net income and selected financial
data and ratios for the fourth quarter ended December 31, 1996 (unaudited).
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
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Exhibits Title
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28 Press Release of FINOVA Capital Corporation
dated January 24, 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
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(Registrant)
Dated: January 25, 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 Immediate Release
602/ 207-5759
FINOVA CAPITAL CORPORATION
ANNOUNCES RECORD RESULTS FOR THE FOURTH QUARTER OF 1995
AND 31% INCREASE IN NET INCOME FOR THE YEAR
PHOENIX, Ariz., Jan. 24, 1995 -- FINOVA Capital Corporation today reported a 31%
increase in net income, record new business levels and a 20% growth in managed
assets for the year ended Dec. 31, 1995 to over $7.1 billion.
Net income for 1995 was $97.6 million compared to $74.3 million for
1994, a 31% increase. For the fourth quarter of 1995 net income was $26.5
million up from $23.1 million for the comparable period in 1994, a 14% increase.
Sam Eichenfield, chairman and chief executive officer of FINOVA, said
that "1995 was an outstanding year for FINOVA with key performance factors
showing continuing significant improvement over the prior year." Leading the
performance was the record volume of new business added, which consisted of $2.6
billion of term loan and leasing business and $2.0 billion of factoring and
floor planning volume. This new business generated the 20% growth in managed
assets (funds employed and securitizations) and strong margins, which averaged
6.0% for the fourth quarter of 1995 and 5.8% for the year. Importantly, backlog
remained strong at approximately $1.1 billion and portfolio quality showed
continued improvement with nonearnings declining to 2.4% of managed assets at
year-end 1995, down from 2.9% at Dec. 31, 1994. Eichenfield noted that "managed
assets grew at an annualized rate of 23% (third quarter to fourth
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quarter) and since a substantial portion of the new business booked was toward
the end of the quarter, it did not contribute to the quarter's profitability.
The contribution from the new business, as well as the other positive trends,
should continue into 1996."
Eichenfield went on to say, "I am pleased to see that G&A expenses,
measured as a percentage of interest margins earned, declined to 45.6% in 1995
from 46.1% in 1994 and, more importantly, declined to 44.7% for the fourth
quarter of 1995."
The increases in the amount of interest margins earned, both for the
fourth quarter and the year 1995, combined with higher gains on sale of assets,
more than offset the significant increases in provisions for possible credit
losses and higher selling, administrative and other operating expenses ("G&A
expenses"). Loss provisions, which exceeded 1994 by $12.2 million for the fourth
quarter and $30.6 million for the year 1995, were due primarily to portfolio
growth. Reserve coverage remained at 2.0% of ending funds employed and
securitizations, and improved to 83.6% of nonaccruing assets. G&A expenses for
the fourth 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.
Income taxes were higher in 1995 due to an increase in income before
income taxes, partially offset by a lower effective income tax rate attributable
to 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)
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Quarter Ended Twelve Months Ended
December 31, December 31,
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1995 1994 1995 1994
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Interest earned from
financing transactions $210,118 $159,850 $761,855 $503,351
Interest expense 98,965 69,538 366,822 222,929
Depreciation 16,327 15,111 55,218 36,737
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Interest margins earned 94,826 75,201 339,815 243,685
Provision for possible
credit losses 18,500 6,317 47,300 16,670
Gains on sale of assets 8,027 3,373 19,726 9,045
Selling, administrative and
other operating expenses 42,423 34,509 155,001 112,305
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Income before income
taxes 41,930 37,748 157,240 123,755
Income taxes 15,448 14,604 59,611 49,442
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Net Income $ 26,482 $ 23,144 $ 97,629 $ 74,313
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FINOVA Capital Corporation
Selected Consolidated Financial Data and Ratios (Unaudited) (1)
(dollars in thousands)
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As of December 31,
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1995 1994
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FINANCIAL POSITION:
Ending funds employed (EFE) $6,819,057 $5,667,644
Securitizations (2) 303,304 253,386
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Total managed assets 7,122,361 5,921,030
Reserve for possible credit losses (3) 140,333 122,233
Nonaccruing assets 167,872 168,761
Nonaccruing assets as a % of EFE and securitizations 2.4% 2.9%
Reserve for possible credit losses as a % of:
Ending funds employed and securitizations 2.0% 2.1%
Nonaccruing assets 83.6% 72.4%
Total debt $5,649,368 $4,573,354
Stockholder's equity 855,579 781,986
Backlog 1,070,573 764,326
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For the Quarter Ended For the Year Ended
December 31, December 31,
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1995 1994 1995 1994
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PERFORMANCE HIGHLIGHTS:
Average funds employed (AFE) and
securitizations $6,882,219 $5,723,009 $6,401,368 $4,629,578
Average earning assets (4) 6,314,476 5,034,805 5,815,455 4,064,971
New business 881,054 678,404 2,570,993 1,799,331
Factored volume/floor planning 613,401 355,567 1,951,310 1,129,936
Write-offs 12,665 16,118 35,533 35,127
Write-offs (annualized) as a % of AFE and
average securitizations 0.7% 1.1% 0.6% 0.8%
Interest margins earned (annualized) as a %
of average earning assets 6.0% 6.0% 5.8% 6.0%
Selling, administrative and other operating
expenses as a % of interest margins earned 44.7% 45.9% 45.6% 46.1%
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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) The reserve for possible credit losses includes $16 million and $13 million
at December 31, 1995 and 1994, respectively, of reserves applicable to
securitizations previously classified as accrued liabilities.
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(4) Average earning assets equal AFE less average deferred taxes on leveraged
leases and average nonaccruing assets.
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