SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C, 20549
--------------------
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 15, 1997
- --------------------------------------------------------------------------------
FINOVA CAPITAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-11011 94-1278569
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1850 NORTH CENTRAL AVENUE, P. O. BOX 2209, PHOENIX, ARIZONA 85004-2209
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/207-6900
-----------------------------
<PAGE>
Item 5. Other Events.
FINOVA Capital Corporation announced revenues, net income and selected
financial data and ratios for the third quarter ended September 30,
1997 (unaudited).
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
Exhibits Title
------------ -------------------------------------------
28 Press Release of FINOVA Capital Corporation
dated October 15, 1997
1
<PAGE>
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 17, 1997 By /s/ Bruno A. Marszowski
----------------------------------------------
Bruno A. Marszowski, Senior Vice President,
Chief Financial Officer and Controller
Principal Financial Officer/Authorized Officer
2
EXHIBIT 28C
Contact: 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 OCTOBER 14, 1997
FINOVA Capital Corporation
Announces Record Net Income for the Third Quarter -
A 21% Increase
PHOENIX, Ariz., Oct. 15, 1997 - FINOVA Capital Corporation today reported record
net income of $35.9 million for the third quarter of 1997 compared to $29.8
million in 1996, an increase of 21%.
Net income for the first nine months of 1997 was $103.4 million
representing a 22% increase over net income of $85.0 million for the first nine
months of 1996.
Sam Eichenfield, chairman and chief executive officer of FINOVA, said
he "was gratified with FINOVA's record performance thus far in 1997 and
especially pleased with the continued increase in return to The FINOVA Group
Inc.'s shareholders."
"In the third quarter of 1997, interest margins earned as a percentage
of average earning assets were 6.1%, reflecting the contribution of the record
fee-based volume during the quarter," added Eichenfield. Fee-based volume for
the third quarter of 1997 was $994 million, an increase of 27% over 1996. New
business was $748 million in the third quarter of 1997 compared to $632 million
in 1996, and backlog at Sept. 30, 1997 was at a record $1.6 billion compared to
$1.4 billion one year ago.
"FINOVA continues to broaden its product lines by expanding its capital
markets initiative," continued Eichenfield. Adding to FINOVA's capital markets
activities will be Belgravia Capital Corporation, one of the largest and
fastest-growing commercial mortgage banking organizations in the U.S. which the
company acquired on Oct. 8, 1997.
<PAGE>
"Portfolio quality is still quite high as demonstrated by the
continuing low level of non-earning accounts, although higher write-offs were
experienced in the quarter," noted Eichenfield. Non-earning assets as a
percentage of managed assets were 2.1% at both Sept. 30, 1997 and Sept. 30,
1996, and FINOVA's reserve for possible credit losses was at an all-time high of
97% of non-earning assets.
FINOVA's reserve was bolstered by $22.0 million of loss provisions
during the third quarter of 1997, which exceeded write-offs by 53% and were
almost twice the $11.7 million provided in the comparable quarter of 1996. Gains
on sale of assets totaled $8.7 million for the third quarter of 1997; selling,
administrative and other operating expenses were 39.3% of interest margins
earned for both the third quarter of 1997 and 1996 and were running at 42.0% for
the first nine months of 1997.
FINOVA Capital Corporation is a Phoenix-based major commercial finance
company providing a broad range of financing and capital market products to
midsize business.
For more information about FINOVA, visit the company's Website at
www.finova.com.
###
<PAGE>
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,
------------ ------------ ------------ ------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest earned from financing transactions $ 207,103 $ 181,616 $ 597,756 $ 516,888
Operating lease income 30,253 23,356 85,164 71,371
Interest expense (105,592) (91,629) (304,647) (269,571)
Operating lease depreciation (17,727) (15,247) (51,786) (47,150)
------------ ------------ ------------ ------------
Interest margins earned 114,037 98,096 326,487 271,538
Provision for possible credit losses (22,000) (11,664) (48,300) (31,164)
Gains on sale of assets 8,706 397 22,407 8,442
Selling, administrative and other operating
expenses (44,773) (38,569) (137,263) (110,644)
------------ ------------ ------------ ------------
Income before income taxes 55,970 48,260 163,331 138,172
Income taxes (20,103) (17,771) (59,954) (52,075)
------------ ------------ ------------ ------------
Income from continuing operations 35,867 30,489 103,377 86,097
Loss from discontinued operations -- (726) -- (1,092)
------------ ------------ ------------ ------------
Net Income $ 35,867 $ 29,763 $ 103,377 $ 85,005
============ ============ ============ ============
</TABLE>
<PAGE>
FINOVA Capital Corporation
Selected Consolidated Financial Data and Ratios (Unaudited) (1)
(Dollars in Thousands)
<TABLE>
<CAPTION>
As of
As of September 30, December 31
------------------------ -------------
FINANCIAL POSITION: 1997 1996 1996
---------- ---------- ----------
<S> <C> <C> <C> <C>
Ending funds employed (EFE) (2) $8,075,600 $7,058,306 $7,298,759
Securitizations and participations sold (3) 373,737 336,964 364,546
---------- ---------- ----------
Total managed assets (2) 8,449,337 7,395,270 7,663,305
Reserve for possible credit losses (2) 167,754 144,293 148,693
Nonaccruing assets (2) 173,390 151,798 155,505
Nonaccruing assets as % of managed assets (4) 2.1% 2.1% 2.0%
Reserve for possible credit losses as a % of:
Ending managed assets (4) 2.0% 2.0% 2.0%
Nonaccruing assets 96.7% 95.1% 95.6%
Total debt $6,502,512 $6,350,043 $5,850,223
Stockholder's equity 1,150,478 922,451 1,069,043
Total debt to equity 5.65x 6.88x 5.47x
Backlog 1,601,334 1,441,663 1,477,239
For the Nine Months
For the Quarter Ended Ended
September 30, September 30,
------------------------ --------------------------
PERFORMANCE HIGHLIGHTS: 1997 1996 1997 1996
---------- ---------- ---------- ----------
Average managed assets (2) $8,234,743 $7,136,747 $7,989,202 $6,886,824
Average earning assets (5) (2) 7,456,595 6,393,240 7,208,380 6,184,909
New business (2) 747,852 632,347 2,310,722 1,866,694
Fee-based volume 994,235 785,510 2,671,908 2,118,018
Write-offs (2) 14,405 8,778 31,263 24,018
Write-offs (annualized) as a % of
average managed assets (4) 0.71% 0.50% 0.53% 0.47%
Interest margins earned
(annualized) as a % of average
earning assets 6.1% 6.1% 6.0% 5.9%
Selling, administrative and other
operating expenses as a % of
interest margins earned 39.3% 39.3% 42.0% 40.7%
</TABLE>
----------
(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) Excludes participations sold in which the Company has transferred credit
risk.
(5) Average earning assets equal average funds employed less average deferred
taxes on leveraged leases and average nonaccruing assets.
