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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): April 17, 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 today announced revenues, net income and
selected financial data and ratios for the first quarter ended March 31,
1996 (unaudited).
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
Exhibits Title
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28 Press Release of FINOVA Capital Corporation
dated April 17, 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: April 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 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 APRIL 16, 1996
FINOVA CAPITAL CORPORATION
ANNOUNCES 21% INCREASE IN NET INCOME
FOR FIRST QUARTER OF 1996
PHOENIX, Ariz., Apr. 17, 1996 -- FINOVA Capital Corporation today reported net
income of $27.1 million for the first quarter of 1996 compared to $22.4 million
for the first quarter of 1995, a 21% increase in net income.
Sam Eichenfield, chairman and chief executive officer of FINOVA Capital,
said he was pleased with the company's first quarter performance which included
stable interest margins at the 5.8% level, improved portfolio quality, a record
level of new business for a first quarter and an increase in return on equity to
13%. During the first quarter of 1996, FINOVA generated $1.4 billion in new
business and factoring volume, which included additions from substantially all
the lines of business and represented an increase of 65% over the first quarter
of 1995. This new business volume was achieved while maintaining the backlog of
new business at $1.1 billion (the level at Dec. 31, 1995) and resulted in
managed assets reaching a record level of $7.3 billion at March 31, 1996.
Eichenfield stated that "the growth rate for the quarter was an
annualized 11% and would have been higher except for an extraordinary amount of
prepayments which were due in part to initial public offerings by our borrowers
and, in some cases, included the early termination of lower-yielding assets."
Portfolio quality continued to improve during the quarter as nonaccruing
assets as a percentage of managed assets declined to 2.3% at the end of the
first quarter compared to 2.8% one year ago. Write-offs for the quarter were
$10.4 million or 0.58% (annualized) of average managed assets, while reserves
for possible credit losses at March 31, 1996 represented 2.0% of managed assets
and improved to 86.4% of nonaccruing assets (compared to 70.9% at March 31,
1995).
Selling, administrative and other operating expenses included increased
incentive accruals related to the higher volume of new business and continuing
improved performance and, as a percent of interest margins earned, were 46.0%
for the first quarter of 1996, down from 47.2% for the first quarter of 1995.
Income taxes were higher due to the increase in income before income taxes,
which more than offset the effects of a lower effective income tax rate (37.3%)
attributable to increased tax exempt municipal income and lower state taxes.
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 midsize 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>
Three Months Ended
March 31,
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1996 1995
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<S> <C> <C>
Interest earned from financing transactions $ 208,556 $ 174,757
Interest expense (97,056) (84,524)
Depreciation (17,278) (12,743)
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Interest margins earned 94,222 77,490
Provision for possible credit losses (14,250) (6,400)
Gains on sale of assets 6,657 2,980
Selling, administrative and other operating
expenses (43,350) (36,575)
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Income before income taxes 43,279 37,495
Income taxes (16,158) (15,127)
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Net Income $ 27,121 $ 22,368
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</TABLE>
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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 March 31 December 31,
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1996 1995 1995
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<S> <C> <C> <C>
FINANCIAL POSITION:
Ending funds employed (EFE) $6,944,914 $5,989,461 $6,819,057
Securitizations (2) 374,386 210,448 303,304
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Total managed assets 7,319,300 6,199,909 7,122,361
Reserve for possible credit losses 144,754 122,953 140,333
Nonaccruing assets 167,454 173,493 167,872
Nonaccruing assets as a % of managed assets 2.3% 2.8% 2.4%
Reserve for possible credit losses as a % of:
Ending managed assets 2.0% 2.0% 2.0%
Nonaccruing assets 86.4% 70.9% 83.6%
Total debt $5,736,159 $4,847,273 $5,649,368
Stockholder's equity 875,493 800,697 855,579
Total debt to equity 6.55x 6.05x 6.60x
Backlog $1,078,232 $ 955,656 $1,070,573
For the Year
For The Quarter Ended Ended
March 31 December 31,
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1996 1995 1995
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PERFORMANCE HIGHLIGHTS:
Average funds employed (AFE) and
securitizations $7,194,525 $6,060,470 $6,401,368
Average earning assets (3) 6,478,515 5,430,923 5,815,455
New business 723,187 477,791 2,570,993
Factoring volume/floor planning 694,093 381,294 1,951,310
Write-offs 10,410 8,885 35,533
Write-offs (annualized) as a % of AFE and
average securitizations 0.58% 0.59% 0.56%
Interest margins earned (annualized) as a
% of average earning assets 5.8% 5.7% 5.8%
Selling, administrative and other
operating expenses as a % of interest margins earned 46.0% 47.2% 45.6%
</TABLE>
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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 AFE less average deferred taxes on leveraged
leases and average nonaccruing assets.
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