<PAGE>
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: April 19, 2000
(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 April 19, 2000, Heller Financial, Inc. (the "Registrant") issued a press
release announcing its earnings for the quarter ending March 31, 2000. A copy
of the press release is attached.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
99 Heller Financial, Inc. - Press Release
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: April 21, 2000
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HELLER FINANCIAL, INC.
By: /s/ Lauralee E. Martin
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Lauralee E. Martin
Title: Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
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Number
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99 Heller Financial, Inc. - Press Release
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[HELLER FINANCIAL LOGO]
Heller Financial Inc.
500 West Monroe Street
Chicago, Illinois 60661
312/441-7000
- --------------------------------------------------------------------------------
For Further Information Contact
Dan Murphy/Investor Relations News Release
312/441-7642
Peter Duckler or Pamela Flores
HLB Communications, Inc.
312/649-0371
Heller Financial Reports First Quarter Net Income Up 32 Percent;
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EPS Up 27 Percent
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Chicago--(April 19, 2000)--Heller Financial, Inc. (NYSE: HF) today reported net
income of $75 million for the first quarter of 2000, an increase of 32 percent
over first quarter 1999. Net income applicable to common stock was $68 million,
an increase of 36 percent over the prior year period. Diluted earnings per share
were $.70 for the quarter, an increase of 27 percent over the first quarter of
1999.
Earnings growth for the quarter was driven by strong new business volume,
increased operating revenues, improved operating efficiency and continued strong
performance in the credit quality of Heller's portfolio. Earnings for the
quarter included a net gain of $7 million, or $.07 per share, from the sale of
one international investment and the liquidation of another.
"This quarter was a phenomenal start to 2000," said Chairman and Chief
Executive Officer Richard J. Almeida. "Heller's leadership positions in growth
markets continue to generate momentum and drive performance. These positions,
coupled with our continued commitment to maintain our credit standards and
operate more efficiently, have us very excited about the future."
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<PAGE>
Highlights included:
Heller's new business volume totaled $1.8 billion for the quarter,
increasing 45 percent over the prior year period, with particular strength in
leasing services, health care and real estate. Total lending assets and
investments grew to $17.4 billion.
Operating revenues for the quarter were $261 million, a 17 percent increase
over first quarter 1999. Heller's multiple revenue sources continued to drive
the growth in operating revenues, as both interest and non-interest income
increased. Net interest income increased 29 percent over the prior year period,
due to growth in the Company's portfolio of lending assets. Excluding factoring
commissions, which fell due to the 1999 sale of the domestic factoring business,
non-interest income grew 20 percent on strong performance in Heller's investment
portfolios.
Heller's operating margin was 6.6 percent for the quarter. Net interest
margin was 3.7 percent for the quarter, down modestly from the prior year period
due to continued growth in operating leases and investments.
Credit quality in Heller's portfolio remained strong. Net writedowns
totaled $23 million during the quarter, 0.6 percent of average lending assets.
Heller's nonearning assets were 1.6 percent of total lending assets versus 1.5
percent at December 31, 1999, favorable to Heller's target range of two to four
percent. The Company's loan loss reserve of 2.1 percent of receivables remains
in excess of 100 percent of nonearning receivables.
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Operating expenses totaled $117 million for the first quarter, an increase
of 8 percent over the first quarter of 1999. Heller's efficiency ratio improved
to 45 percent for the quarter from 48 percent for the first quarter and full
year in 1999.
"Our business fundamentals are strong, our pipelines are solid and we feel
confident that we can continue to deliver on our commitments to our
shareholders," said Almeida.
Heller Financial, Inc., is a worldwide commercial finance company providing
a broad range of financing solutions to middle-market and small business
clients. With nearly $19 billion in total assets, Heller offers equipment
financing and leasing, sales finance programs, collateral and cash flow-based
financing, financing for healthcare companies and financing for commercial real
estate. The company also offers trade finance, factoring, asset-based lending,
leasing and vendor finance products and programs to clients in Europe, Asia,
Australia and Latin America. Heller's common stock is listed as ``HF'' on the
New York and Chicago Stock Exchanges. Heller can be found on the World Wide Web
at http://www.hellerfinancial.com.
The statements made by the Company in this news release may include certain
forward-looking statements that reflect the Company's current expectations
regarding its future growth, results and performance. These forward-looking
statements are subject to a variety of risks and uncertainties, which could
cause the Company's future growth, results and performance to differ materially
from those expressed in, or implied by, these statements. Information
concerning these risks and uncertainties is contained in the quarterly and
annual reports that the Company files with the Securities and Exchange
Commission.
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HELLER FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in millions)
<TABLE>
<CAPTION>
ASSETS
March 31, December 31,
2000 1999
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(unaudited) (audited)
<S> <C> <C>
Cash and cash equivalents......................... $ 514 516
Receivables....................................... 15,010 14,795
Less: Allowance for losses of receivables...... 321 316
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Net receivables............................ 14,689 14,479
Investments....................................... 1,367 1,286
Operating leases.................................. 794 508
Investments in international joint ventures....... 200 219
Other assets...................................... 1,012 965
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Total assets............................... $18,576 $17,973
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LIABILITIES AND STOCKHOLDERS' EQUITY
Senior debt
Commercial paper and short-term borrowings........ $ 4,921 $ 5,202
Notes and debentures.............................. 9,578 8,630
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Total senior debt............................. 14,499 13,832
Credit balances of factoring clients................. 875 993
Other payables and accruals.......................... 803 790
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Total liabilities............................. 16,177 15,615
Minority interest.................................... 11 11
Stockholders' equity
Preferred stock................................... 400 400
Common stockholders' equity....................... 1,988 1,947
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Total stockholders' equity.................... 2,388 2,347
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Total liabilities and stockholders' equity.... $18,576 $17,973
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</TABLE>
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<PAGE>
HELLER FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in millions, except per share information)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
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2000 1999
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(unaudited) (unaudited)
<S> <C> <C>
Interest Income....................................... $ 361 $ 262
Interest Expense...................................... 215 149
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Net interest income................................. 146 113
Fees and other income................................. 88 74
Factoring commissions................................. 17 28
Income of international joint ventures.............. 10 8
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Operating revenues................................... 261 223
Operating expenses.................................... 117 108
Provision for losses.................................. 30 29
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Income before income taxes and minority interest.... 114 86
Income tax provision.................................. 38 29
Minority interest..................................... 1 -
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Net income.......................................... $ 75 $ 57
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Dividends on preferred stock.......................... $ 7 $ 7
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Net income applicable to common stock............... $ 68 $ 50
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Basic net income applicable to common stock per
share (1)......................................... $0.70 $0.56
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Diluted net income applicable to common stock per
share (1)......................................... $0.70 $0.56
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</TABLE>
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HELLER FINANCIAL, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(unaudited)
<TABLE>
<CAPTION>
SELECTED DATA AND RATIOS Three Months Ended
(dollars in millions) March 31,
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<S> <C> <C>
2000 1999
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Profitability:
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Net income applicable to common stock per share (1):
Basic................................................. $0.70 $0.56
Diluted............................................... 0.70 0.55
Return on average common stockholders' equity (2)............ 13.9% 12.9%
Return on AFE (3)............................................ 1.9 1.9
Net interest income as a percentage of AFE (3)............... 3.7 3.8
Non-interest operating revenues as a percentage of AFE (3)... 2.9 3.7
Total operating revenues as a percentage of AFE (3).......... 6.6 7.5
Operating expenses as a percentage of AFE (3)................ 3.0 3.6
Operating expenses to operating revenues..................... 44.8 48.4
Operating expenses to AMA (4)................................ 2.7 3.2
Gross writedowns............................................. $ 26 $ 27
Gross recoveries............................................. $ 3 $ 5
</TABLE>
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<TABLE>
<CAPTION>
March 31, December 31, March 31,
2000 1999 1999
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<S> <C> <C> <C>
Credit Quality:
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Ratio of earning loans delinquent 60 days or more
to receivables 1.6% 1.5% 1.1%
Ratio of total nonearning assets to total lending
assets 1.6% 1.5% 1.8%
Ratio of net writedowns to average lending assets 0.6% 0.7% 0.7%
Ratio of allowance for losses of receivables to
receivables 2.1% 2.1% 2.3%
Ratio of allowance for losses of receivables to
nonearning receivables 151% 155% 129%
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
March 31, December 31, March 31,
2000 1999 1999
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<S> <C> <C> <C>
Leverage:
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Ratio of debt (net of short-term investments) to
total stockholders' equity 5.9x 5.8x 5.3x
Ratio of commercial paper and short-term
borrowings to total debt 34% 38% 35%
Other: (dollars in millions)
Total lending assets and investments $17,397 $16,832 $13,711
Total lending assets 15,036 14,819 12,085
Average lending assets 14,928 14,712 11,971
Total common stockholders' equity 1,988 1,947 1,586
Average common stockholders' equity 1,968 1,904 1,574
Funds employed (3) 16,522 15,839 12,351
Average funds employed (3) 15,862 15,832 12,128
Managed assets (4) 17,986 17,202 13,977
Average managed assets (4) 17,254 16,684 13,641
</TABLE>
(1) Based on 96.7 million basic and 96.8 million diluted weighted average
shares of common stock outstanding for the quarter ended March 31, 2000.
The diluted weighted average shares as of March 31, 2000, include the
effect of 4.2 million stock options issued to management of the Company.
(2) Return on average common stockholders' equity is computed as net income
less preferred stock dividends paid, divided by average total common
stockholders' equity.
(3) Funds employed include lending assets and investments, less credit balances
of factoring clients.
(4) Managed assets include funds employed plus receivables previously
securitized or sold and currently managed by the Company.
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<PAGE>
LENDING ASSETS AND INVESTMENTS
<TABLE>
<CAPTION>
March 31, December 31, March 31,
BY BUSINESS SEGMENT 2000 1999 1999
(dollars in millions) ---- ---- ----
<S> <C> <C> <C>
Domestic Commercial Finance Segment
Corporate Finance $ 5,361 $ 4,937 $ 4,083
Leasing Services 3,827 3,428 2,950
Real Estate Finance 2,461 2,626 2,099
Small Business Finance 1,392 1,312 1,024
Healthcare Finance 1,107 971 -
Commercial Services* - - 524
Other 492 518 569
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Total Domestic Commercial Finance Segment $14,640 $13,792 $11,249
International Factoring and Asset Based
Finance Segment 2,757 3,040 2,462
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Total lending assets and investments $17,397 $16,832 $13,711
======= ======= =======
</TABLE>
* On November 30, 1999, we sold the assets of our Commercial Services unit.
<TABLE>
<CAPTION>
FEES AND OTHER INCOME
(dollars in millions) Three Months Ended
March 31,
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2000 1999
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<S> <C> <C>
Factoring commissions $ 17 $ 28
Income of international joint ventures 10 8
Fees and other income:
Investment and asset sale income** 64 48
Fee income and other 24 26
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Total fees and other income $ 88 $ 74
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Total non-interest income $ 115 $ 110
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</TABLE>
**Includes gains on securitizations, syndications and loans sales, net
investment income and gains, equipment residual gains and participation
income.
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