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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: January 26, 1998
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(Date of earliest event reported)
HELLER FINANCIAL, INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-6157 36-1208070
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(Commission File Number) (IRS Employer Identification Number)
500 West Monroe Street, Chicago, Illinois 60661
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(Address of principal executive offices) (Zip Code)
(312) 441-7000
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(Registrant's telephone number, including area code)
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Item 5. Other Events
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On January 26, 1998, Heller Financial, Inc. (the "Registrant") issued a Press
Release announcing its earnings for the year ended December 31, 1997.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
99 Heller Financial, Inc. - Report of 1997 Net Income, dated January 26, 1998
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: January 28, 1998
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HELLER FINANCIAL, INC.
By: Lauralee E. Martin
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Lauralee E. Martin
Title: Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Sequentially
Number Numbered Pages
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99 Heller Financial, Inc. - Report of 1997 Net 4 - 7
Income, dated January 26, 1998
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HELLER FINANCIAL, INC.
REPORTS RECORD NET INCOME,
OPERATING REVENUES AND ORIGINATIONS AS WELL AS
OUTSTANDING PORTFOLIO QUALITY FOR FULL-YEAR 1997
Chicago--(January 26, 1998)--Heller Financial, Inc. today reported record levels
of net income, operating revenues and originations for full-year 1997 along with
outstanding portfolio quality as evidenced by the lowest level of nonearnings in
more than 10 years, said Richard J. Almeida, Chairman and Chief Executive
Officer.
Highlights of the company's 1997 full-year and fourth quarter results versus the
prior year periods include:
. Net income of $158 million for full-year 1997 and $35 million for the fourth
quarter was 19 percent and 21 percent higher than the respective 1996
periods. The record earnings were driven by a 41 percent increase in
operating revenues for the year and a 48 percent jump for the fourth quarter.
Virtually all components of operating revenues contributed to growth. Net
interest income increased 15 percent for both the year and fourth quarter.
Fees and other income increased 161 percent for the full-year and 147 percent
for the quarter and reflects the continued strong income of the company's
real estate business as well as higher investment income.
. As reported earlier this year, Heller increased its ownership in Paris-based
Factofrance to essentially 100 percent. With Factofrance's results now
accounted for on a consolidated basis, Heller's operating revenues increased
$94 million and operating expenses grew $59 million for the full-year. This
acquisition had a modest favorable impact on the company's net income as the
increased share of Factofrance's earnings was offset by the costs of the
transaction.
. Total lending assets and investments increased $2.3 billion during 1997,
largely due to record new business originations and the Factofrance
consolidation. For full-year 1997, Heller's new business volume grew 47
percent over the prior year period. This record growth was the result of
strong market franchise positions in substantially all business groups,
especially in the asset-based, corporate finance and real estate sectors. The
portfolio continued to exhibit strong liquidity due to higher levels of
paydowns, loan sales, syndications and securitizations.
. Operating expenses, excluding the impact of the Factofrance acquisition,
increased 21 percent over the prior year. This increase was largely
attributable to the continued investment being made to build franchises in
the asset-based businesses, expand the origination and loan closings
resources in the commercial mortgage loan area, and invest in technology
initiatives.
. The provision for losses increased $61 million year to year, primarily due to
higher provisions for growth in lending assets and lower levels of recoveries
in the current year. A lower level of recoveries and slightly higher level of
gross writedowns
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resulted in an increase in net writedowns--$146 million in 1997 versus $108
million in 1996. Net writedowns in the post-1990 portfolio totaled 64 basis
points of lending assets. In addition, the allowance for losses, at 2.4 percent
of receivables, is also significantly in excess of 100 percent of nonearning
impaired receivables.
. The company also achieved an increasingly strong credit profile as evidenced
by nonearning assets of $155 million, or 1.4 percent of lending assets, at
year-end 1997. This is $123 million less than a year earlier when nonearnings
were 3.3 percent of lending assets. The significant decrease in nonearnings
reflects the strong credit performance of the post-1990 portfolio combined
with a substantial reduction of the pre-1990 portfolio. This portfolio now
comprises only four percent of the company's total portfolio and its impact in
1998 is expected to be insignificant.
"We reached a number of significant milestones in 1997. Our net income for the
year represented our fifth consecutive year of record earnings, originations
activity was at an all-time high and our portfolio is demonstrating excellent
credit quality," said Almeida. "We also further strengthened our competitive
position by completing the Factofrance acquisition and adding our new President
and Chief Operating Officer, Rick Wolfert, to the Heller management team. With
this year's results, we believe we have successfully delivered on all aspects of
the plan we formulated and communicated starting some five years ago. Today,
Heller is at its strongest position in many years and we plan to build on this
momentum to stake out our claim as the leading lender to middle and emerging
market companies."
Heller Financial, Inc. is a worldwide commercial financial services organization
which is a wholly-owned subsidiary of The Fuji Bank, Limited, one of the world's
largest banks. Heller Financial provides U.S.-based clients with equipment
financing and leasing, factoring and working capital loans, collateral-based
financing, cashflow financing, real estate financing, small business lending,
and project financing investments. The company also operates through joint
venture and wholly-owned companies located in 19 countries in Europe, Asia,
Australia and Latin America. These companies specialize in factoring,
collateral-based financing, acquisition financing, leasing, vendor financing and
trade finance.
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Heller Financial, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(in millions)
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<CAPTION>
Assets Dec. 31,1997 Dec. 31,1996
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(unaudited) (audited)
<S> <C> <C>
Cash and cash equivalents $ 821 $ 296
Receivables 10,722 8,529
Less: Allowance for losses of receivables 261 225
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Net receivables 10,461 8,304
Investments 994 805
Investments in international joint ventures 198 272
Other assets 387 249
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$12,861 $9,926
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Liabilities and Stockholders' Equity
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Senior debt
Commercial paper and short-term borrowings $ 3,432 $2,745
Notes and debentures 6,004 4,761
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Total debt 9,436 7,506
Credit balances of factoring clients 1,255 590
Other payables and accruals 405 306
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Total liabilities 11,096 8,402
Minority interest in equity of Heller International
Group, Inc. 87 57
Stockholders' equity
Cumulative Perpetual Senior Preferred
Stock, Series A 125 125
Noncumulative Perpetual Senior Preferred Stock, 150 -
Series B
Cumulative Convertible Preferred
Stock, Series D - 25
Common stock, additional paid-in
capital and retained earnings 1,403 1,317
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Total stockholders' equity 1,678 1,467
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$12,861 $9,926
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Heller Financial, Inc. and Subsidiaries
Consolidated Condensed Statements of Income
(in millions)
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<CAPTION>
For the Three Months For the Full-Year
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Ended December 31 Ended December 31
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1997 1996 1997 1996
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(unaudited) (unaudited) (audited)
<S> <C> <C> <C> <C>
Interest income $ 245 $ 209 $ 924 $ 807
Interest expense 140 118 516 452
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Net interest income 105 91 408 355
Fees and other income 74 30 206 79
Factoring commissions 33 15 104 55
Income of international joint ventures 9 13 36 44
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Operating revenues 221 149 754 533
Operating expenses 114 70 357 247
Provision for losses 60 42 164 103
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Income before taxes
and minority interest 47 37 233 183
Income tax provision 9 5 66 43
Minority interest in income of Heller 3 3 9 7
International Group, Inc. ----- ----- ----- -----
Net income $ 35 $ 29 $ 158 $ 133
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