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, 1997
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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, 1997 (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, 1997
1
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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 17, 1997 by /s/ Bruno A. Marszowski
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Bruno A. Marszowski, Senior Vice President,
Chief Financial Officer
Principal Financial Officer/Authorized Officer
2
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 APRIL 15, 1997
FINOVA Capital Corporation
Announces 23% Increase in Earnings From Continuing Operations
For First Quarter of 1997
Managed Assets Up 16%
Interest Margins Earned Increase 21%
PHOENIX, Ariz., April 17, 1997 -- FINOVA Capital Corporation today reported
income from continuing operations and net income of $32.8 million for the first
quarter of 1997, compared to income from continuing operations of $26.8 million
in the first quarter of 1996, an increase of 23% in income from continuing
operations.
"The company's earnings were driven by the 16% growth in managed assets
over the last 12 months and higher interest margins," said FINOVA Chairman and
CEO Sam Eichenfield. "FINOVA also managed to avoid some of the portfolio quality
issues that other lenders have experienced as evidenced by our continuing low
nonearning percentage of 2.0% of managed assets and our record reserve coverage
of 96% of nonearnings."
Interest margins earned when compared to the first quarter of 1996
increased 21% to $103.5 million from $85.2 million and as a percentage of
average earning assets increased to 5.9% from 5.7%. Interest margins earned for
the quarter reflected the growth in managed assets, including increased new
business and fee-based volume of $1.43 billion in the first quarter of 1997,
compared to $1.34 billion in 1996. "The increase in the interest margin
percentage to 5.9%, during a period of rising interest rates, demonstrates that
the company's margins generally are not affected by changes in interest rates,"
Eichenfield noted. "In
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addition to solid new business in the first quarter, the company increased its
backlog to a record $1.54 billion at the end of the period."
Selling, general and other operating expenses included increased costs
related to new business added, as well as incentive compensation tied to a
higher average stock price during the quarter. However, as a percentage of
interest margins earned, these expenses remained comparable to the prior year's
first quarter at 44.3% in 1997 compared to 44.1% in 1996.
Income taxes for the first quarter of 1997 were higher than in 1996
primarily due to the increase in pre-tax income and certain foreign tax effects.
FINOVA Capital Corporation is a Phoenix-based major domestic commercial
finance company providing a broad range of secured financing and leasing
products from $500,000 to $35 million to midsize business.
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
March 31,
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1997 1996
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<S> <C> <C>
Interest earned from financing transactions $ 191,112 $ 167,679
Operating lease income 25,965 22,973
Interest expense (97,172) (88,224)
Operating lease depreciation (16,449) (17,278)
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Interest margins earned 103,456 85,150
Provision for possible credit losses (8,000) (11,624)
Gains on sale of assets 3,233 6,730
Selling, administrative and other operating expenses (45,878) (37,587)
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Income before income taxes 52,811 42,669
Income taxes (19,998) (15,913)
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Income from continuing operations 32,813 26,756
Income from discontinued operations ---- 365
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Net Income $ 32,813 $ 27,121
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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>
As of
As of March 31 December 31
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FINANCIAL POSITION: 1997 1996 1996
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<S> <C> <C> <C>
Ending funds employed (EFE) (2) $ 7,479,373 $ 6,442,945 $ 7,298,759
Securitizations and participations sold (3) 380,994 342,663 364,546
----------------- ---------------- ----------------
Total managed assets (2) 7,860,367 6,785,608 7,663,305
Reserve for possible credit losses (2) 152,545 133,403 148,693
Nonaccruing assets (2) 158,255 145,132 155,505
Nonaccruing assets as % of managed assets (5) 2.0% 2.2% 2.0%
Reserve for possible credit losses as a % of:
Ending managed assets (5) 2.0% 2.0% 2.0%
Nonaccruing assets 96.4% 91.9% 95.6%
Total debt $ 6,010,987 $ 5,736,159 $ 5,850,223
Stockholder's equity 1,093,677 875,493 1,069,043
Total Debt to Equity 5.50x 6.55x 5.47x
Backlog 1,544,051 1,078,232 1,477,239
</TABLE>
<TABLE>
<CAPTION>
For the Year
For the Quarter Ended Ended
March 31, December 31,
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PERFORMANCE HIGHLIGHTS: 1997 1996 1996
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<S> <C> <C> <C>
Average managed assets (2) $ 7,735,154 $ 6,660,262 $ 7,041,708
Average earning assets (4) (2) 6,957,488 6,016,735 6,324,545
New business (2) 611,634 649,406 2,740,353
Fee-based volume 815,251 694,093 2,937,311
Write-offs (2) 5,300 7,858 32,017
Write-offs (annualized) as a % of
average managed assets (5) 0.28% 0.47% 0.46%
Interest margins earned
(annualized) as a % of average
earning assets 5.9% 5.7% 5.8%
Selling, administrative and other
operating expenses as a % of
interest margins earned 44.3% 44.1% 41.9%
</TABLE>
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(1) Averages for the periods presented are based on month-end balances.
(2) Excludes discontinued operations disposed of during 1996.
(3) Securitizations are assets sold under securitization agreements and
managed by the Company.
(4) Average earning assets equal average funds employed less average
deferred taxes on leveraged leases and average nonaccruing assets.
(5) Excludes participations sold in which the Company has transferred
credit risk.
