<PAGE>
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES ACT OF 1934
For Quarter Ended: December 31, 1998
Commission File Number: 2-95465-S
WESTAR FINANCIAL SERVICES INCORPORATED
successor to
REPUBLIC LEASING INCORPORATED
(Exact name of registrant as specified in its charter)
Washington 91-1715252
(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or organization)
The Republic Building; Olympia, WA 98501
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (360) 754-6227
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days.
Yes: X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date:
Common Stock 2,187,300
Class Number of Shares Issued at January 31, 1998
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Westar Financial Services Incorporated and Subsidiaries
Consolidated Balance Sheet
as of December 31, 1998 and March 31, 1998
<TABLE>
<CAPTION>
December 31 March 31
(Unaudited)
------------ -----------
<S> <C> <C>
Cash $ 1,391,614 $ 475,275
Accounts receivable, net of allowance
for credit losses 286,628 147,092
Credit enhancement receivable, net of
allowance for credit losses 886,486 855,848
Net investment in direct finance leases, net of
allowance for credit losses 97,357 18,533,096
Operating leases held for sale, net of allowance 11,630
Deferred tax asset 3,271,414 2,936,206
Less: valuation allowance (3,271,414) (2,936,206)
Other assets 673,556 484,066
------------ -----------
$ 3,347,271 $20,495,377
------------ -----------
------------ -----------
Accounts payable $ 1,315,851 $ 692,126
Notes payable - bank 803,941 19,057,701
Notes payable - other 6,468,188 2,756,635
Other liabilities 1,120,398 722,401
------------ -----------
9,708,378 23,228,863
------------ -----------
Redeemable preferred stock 1,548,000 4,073,000
------------ -----------
Common stock, no par value 3,239,795 3,239,795
Paid in capital - stock warrants 371,495 371,495
Accumulated deficit (11,520,397) (10,417,776)
------------ -----------
(7,909,107) (6,806,486)
------------ -----------
$ 3,347,271 $20,495,377
------------ -----------
------------ -----------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Westar Financial Services Incorporated and Subsidiaries
Consolidated Statement of Operations
For the three months and year to date December 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Year to Date Ended
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Revenues:
Earned income-direct financing
leases $6,474 $300,794 $629,509 $783,086
Revenues from assets sales and
securitizations 25,464,480 163,812 53,720,095 458,014
Revenues from operating lease 436,590 633,951
Administrative fee income 258,624 20,493 554,636 109,793
Service fee income 39,510 27,528 90,323 75,821
Other income 10,559 5,074 66,608 15,013
---------- --------- ----------- ----------
Gross revenues 26,216,237 517,701 55,695,122 1,441,727
---------- --------- ----------- ----------
Direct Costs:
Interest 144,782 378,021 947,622 898,522
Costs related to sales and
securitizations 24,484,960 175,119 52,431,776 446,282
Provision for credit losses 15,000 56,300 55,000
Depr. expense-operating leases 290,571 416,216
Other 125,704 24,335 304,139 93,677
---------- --------- ----------- -----------
Total direct costs 25,046,017 592,475 54,156,053 1,493,481
---------- --------- ----------- -----------
Operating revenue 1,170,220 (74,774) 1,539,069 (51,754)
General and
administrative expenses 924,011 581,479 2,524,977 1,643,092
---------- --------- ----------- -----------
Operating income before other
expense and income tax
benefit 246,209 (656,253) (985,908) (1,694,846)
Non-cash interest expense 30,450 371,496
---------- --------- ----------- -----------
Income(loss) before FIT benefit 246,209 (686,703) (985,908) (2,066,342)
Income tax benefit (83,712) 233,479 335,208 702,556
Less: valuation allowance 83,712 (335,208)
---------- --------- ----------- -----------
Net income(loss) 246,209 (453,224) (985,908) (1,363,786)
Dividends on redeemable
preferred stock (35,797) (97,864) (116,713) (294,334)
---------- --------- ----------- -----------
Net income(loss) applicable to
common stock $210,412 $(551,088)$(1,102,621) $(1,658,120)
---------- --------- ----------- -----------
---------- --------- ----------- -----------
Net Income(loss) per common share $.09 $(.31) $(.50) $(.93)
----- ------ ------ -----
----- ------ ------ -----
Weighted average number
of shares 2,187,300 1,797,300 2,187,300 1,773,522
---------- --------- ----------- -----------
---------- --------- ----------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Westar Financial Services Incorporated and Subsidiaries
Consolidated Statement of Cash Flows
For the year to date ended December 31, 1998 and 1997
(Unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Net cash used in operating activities $ 18,463,220 $(9,573,471)
---------- ----------
Cash flows from investing activities:
Other (144,518) (38,541)
---------- ----------
Net cash provided by (used in)
investing activities (144,518) (38,541)
---------- ----------
Cash flows from financing activities:
Proceeds from(redemption of) redeemable
preferred stock (2,525,000) (100,000)
Proceeds from issuance of common stock 216,000
Additions to notes payable to banks 32,194,313 10,863,558
Payments on notes payable to banks (50,448,073) (2,274,252)
Additions to notes payable - other 6,749,494 1,768,738
Payments on notes payable - other (3,159,473) (542,362)
Dividends paid on preferred stock (115,793) (198,958)
Origination costs (97,831)
---------- ----------
Net cash provided by financing activities (17,402,363) 9,732,724
---------- ----------
Net increase in cash 916,339 197,794
Cash:
Beginning of period 475,275 191,380
---------- ----------
End of period $ 1,391,614 $ 389,174
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The Company's consolidated annual financial statements presented in the 1998
Annual Report on Form 10-K of the Company includes a summary of significant
accounting policies and should be read in conjunction with this Form 10-Q.
The consolidated financial statements include the accounts of Westar Auto
Holding Co., Inc. ("WestAH"), a 100%-owned subsidiary of the Company, Westar
Auto Finance L.L.C. ("WestAF"), a limited liability company owned 99% by the
Company and 1% by WestAH, and Westar Lease Origination Trust, a Washington
Massachusetts business trust beneficially owned by WestAF. The statements for
the three months and nine months ended December 31, 1998 and 1997, are
unaudited, condensed and do not contain all information required by generally
accepted accounting principles to be included in a full set of annual
financial statements. In the opinion of Management, all adjustments
(consisting only of normal recurring adjustments) necessary to present fairly
the results of operations for such periods are included. All significant
inter-company balances and transactions have been eliminated. The results of
operations for the three and nine months ended December 31, 1998, are not
necessarily indicative of the results of operations for the entire year. This
information included in this Form 10-Q should be read in conjunction with
Management's Discussion and Analysis and financial statements and notes
thereto included in Westar Financial Services Incorporated's 1998 Annual
Report on Form 10-K.
Interest Paid
The Company paid cash for interest of $226,269 and $3,133 for the three months
and $1,453,146 and $355,954 for the nine months ended December 31, 1998 and
1997, respectively. The increase is due to increased warehouse financing costs,
which is a result of increased lease origination volume.
Earnings Per Share
Earnings (loss) per share is computed using the weighted-average number of
common shares outstanding for the three months and nine months ended December
31, 1998 and 1997, respectively. Net loss used in the computation of earnings
per share has been increased to include the redeemable preferred stock
dividends. The outstanding shares used in the earnings per share calculation
have been adjusted for the 2-for-1 stock split paid in June 1996. Earnings
per share does not include common stock warrants or common stock options as
the effect is anti-dilutive.
Federal Income Tax
The Company recorded a 100% valuation allowance against its deferred tax asset
in the fourth quarter of fiscal 1998. Recording the valuation allowance resulted
in (non-cash) net income tax expense in that year as compared to tax benefits
recorded in prior years. The deferred tax asset is available for an average
of 12 years to offset future reported tax liabilities.
Preferred Stock Redemption
In May 1998, the Company announced that preferred shareholders accepted the
<PAGE>
Company's offer to redeem or exchange their shares of Series 1, Series 2 and
Series 3 Preferred at face value. Originally, the 2,823 shares of Series 1, 2
and 3 Preferred Stock were to be redeemed by December 31, 2000. The Company
redeemed 1,088, 231 and 631 shares for Series 1, 2 and 3, respectively at par
value in the amount of $1,950,000 using the proceeds from the issuance of
subordinated convertible debt in May 1998. As part of the redemption, the
preferred shareholders exercised their warrants to purchase Westar's common
stock.
In May 1998, the Company entered into an agreement with an officer to redeem
his Series 3 Preferred Stock with a par value of $500,000 for a note payable
in the amount of $500,000. The note bears interest at the rate of 9.25% which
is paid quarterly. The note matures on April 1, 1999. As part of the
redemption, the preferred shareholder exercised its warrants to purchase
Westar's common stock
Subordinated Debt Issuance
In April 1998, the Company entered into an agreement with PLMC, LLC, which is
owned by two directors and unrelated parties, to borrow $400,000 in the form
of subordinated debt. The note was to be repaid no later than June 30, 1998
with interest at the rate of 9%. This note was repaid in full on May 13, 1998.
In May 1998, the Company issued $4,000,000 in subordinated convertible
notes to PLMC, LLC, which is owned by two directors and unrelated parties.
The note is due May 2003 and bears interest at the rate of 10.5% per annum.
The note is convertible into 20% of the Company's common stock.
Warehouse Facility
In July 1998, agreements were reached with Bank One which set the warehouse
line at $15,000,000 and for Bank One to purchase $25 million of Westar's
leases in a securitized transaction.
Securitization Transactions
In August 1998, the Company's origination/issuer/titling securitization
structure, Westar Lease Origination Trust, completed its third securitization
of $27.5 million of automobile lease-backed securities in a private-placement
offering. The Company's proceeds from the securitization were reduced by a
cash reserve in the amount of $273,000, which is anticipated to be received
out of future cash flows from the pool of contracts sold. The Company
continues to service the leases securitized. Because the leases sold in the
August transaction were finance leases, they are accounted for in accordance
with SFAS 125.
In November 1998, the Company's origination/issuer/titling securitization
structure, Westar Lease Origination Trust, completed its fourth
securitization of $14.4 million of automobile lease-backed securities in a
private-placement offering. The Company's proceeds from the securitization
were reduced by a cash reserve in the amount of $94,000, which is to be
received in 60 monthly payments in the amount of $1,572. The Company
continues to service the leases securitized. Because the leases sold in the
November
<PAGE>
transaction were operating leases, they are accounted for in accordance with
SFAS 13.
In December 1998, the Company's origination/issuer/titling securitization
structure, Westar Lease Origination Trust, completed its fifth and sixth
securitization of $5.2 and $5.9 million, respectively of automobile
lease-backed securities in private-placement offerings. The Company's
proceeds from the securitization were reduced by cash reserves in the amount
of $34,000 and $39,400, respectively, which will be received in 60 monthly
payments in the amount of $563 and $656, respectively. The Company continues
to service the leases securitized. Because the leases sold in the December
transaction were operating leases, they are accounted for in accordance with
SFAS 13.
Repurchase Credit Facility
In July 1998, the Company agreed with T&W Financial Corporation, a related
entity, to establish a $2 million non-recourse lease repurchase credit
facility. In July, the company sold $1.6 million of leases into the facility
at an average interest rate of 9.5% per year. The Company repurchased the
$1.6 million of leases in August 1998.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS AND CHANGES IN FINANCIAL POSITION
Nine months ended December 31, 1998 compared to nine months ended
December 31, 1997
- -----------------------------------------------------------------------------
Westar Financial Services Incorporated and its Subsidiaries provide prime
credit quality consumer automobile lease financing through franchised
automobile dealers in the Northwest and Southwest Regions of the United
States. Westar has designed and developed a number of financing, lease
servicing and risk management innovations. The Company has invested
significant personnel, time and resources its Dealer Direct Retail Leasing
("DDRL") program. While the Company's statement of operations reports a net
income (loss) of approximately $246,000 and $(453,000) for the three months
and a net loss of $986,000 and $1,364,000 for the nine months ended December
31, 1998 and 1997, respectively, it is management's opinion that DDRL is one
of the most sophisticated and marketable retail leasing programs currently
available and a valuable investment in the Company's future.
Volumes of lease originations increased for the 5th consecutive quarter, from
65 leases costing $1.7 million in the prior year to 568 leases costing $11.2
million in the current period. The credit quality of originated leases
improved, with average FICO scores of 689 in the prior period compared to 697
in the current period. Lease originations for the nine months increased from
343 costing $9.8 million in the prior year to 1,260 costing $35.4 million in
the current period. The face value of leases serviced increased $33 million,
from $35 million to $68 million at December 31, 1998 and 1997, respectively.
<PAGE>
Gross revenues increased $25,698,000, from $518,000 the comparable period of
the prior year to $28,216,000 in the third quarter. On a year-to-date basis,
revenues increased $54,253,000, from $1,442,000 the prior fiscal year to
$55,695,000.
The increase in gross revenues during the quarter is primarily caused by
securitizations of leases held for sale of $25,445,000, an increase in
revenues from operating leases of $436,000, an increase in administrative
fees of $238,000, and an increase in service fee income of $18,000, partially
offset by a decrease in earned income from direct financing leases of
$294,000 and a decrease from the sale of vehicles at lease termination of
$145,000.
The year-to-date increase in gross revenues is primarily caused by
securitizations of leases held for sale of $53,204,000, an increase in
operating lease revenues of $634,000, an increase in administrative fees of
$445,000, an increase from the sale of vehicles at lease termination of
$94,000, and an increase in other income of $52,000, partially offset by a
decrease in earned income from direct financing leases of $154,000.
The Company completed three securitizations of leases during the third
quarter. The Company began recording leases held for sale as operating leases
rather than direct finance leases during the second quarter, which increased
revenues from operating leases and decreased earned income from direct
financing leases. During the nine month period operating lease revenues,
administrative fees and other income increased due to greater volumes of
lease originations.
Direct costs increased $24,454,000 in the third quarter, from $592,000 the
comparable quarter of fiscal 1998 to $25,046,000. On a year-to-date basis,
direct costs increased $52,656,000, from $1,493,000 the prior fiscal year to
$54,156,000. The increase in direct costs during the quarter is primarily
caused by three securitizations of leases held for sale with a cost of
$24,413,000, an increase in depreciation expense of $291,000, an increase in
other costs of $101,000, and an increase in interest expense of $49,000. The
increase in direct costs during the current year-to-date is primarily caused
by securitizations of leases held for sale with a cost of $51,839,000, an
increase in depreciation expense of $416,000, an increase in other costs of
$210,462 and an increase in securitization costs of $95,000.
The increase in direct costs reflects three securitizations in the third
quarter and increased volumes of operating leases originated and warehoused
during the period. Since depreciation is a cost component of operating
leases, as opposed to direct financing leases, the increased origination
volume resulted in an increase in depreciation.
Operating revenue increased $1,245,000 the third quarter of fiscal 1999, from
$(75,000) the prior year to $1,170,000. For the nine months, operating
revenue increased $1,591,000, from $(52,000) the prior fiscal year to
$1,539,000. The increase in operating revenue is a result of greater lease
origination volumes and the securitization of those leases. Each of Westar's
sales and securitizations in fiscal 1999 produced positive cash flow.
General and administrative expense increased $343,000 in the third quarter,
from $581,000 the comparable quarter of fiscal 1998 to $924,000. For the
<PAGE>
quarter, the increase in general and administrative expense is a result of
increases in interest expense of $129,000, personnel expense of $119,000,
travel expense of $29,000, and depreciation expense of $21,000. On a
year-to-date basis, general and administrative expense increased $882,000,
from $1,643,000 the prior fiscal year to $2,525,000. For the nine months, the
increase is a result of increases in interest expense of $346,000, personnel
expense of $274,000, travel expense of $60,000, consulting expense of
$58,000, accounting expense of $44,000, and insurance of $35,000.
The increase in interest expense reflects the issuance of $4 million of
subordinated debt. The increase in personnel costs is the result of increased
personnel in Risk Management, Finance and Operations recruited in
anticipation of greater lease origination volumes and geographic expansion of
the Company's operations outside the Nothwestern ("NWR") and Southwestern
("SWR") Regions. The increase in accounting expense increased corporate
finance and tax activity and the difference in timing of receipt of audit
billings. The increase in consulting expense reflects enhancements to the
Company's proprietary LASIR system. The increase in travel expense is a
result of new personnel temporarily located away from Olympia, an increase in
the number of personnel travelling and the distance traveled, and the opening
of a new market area, the Southwestern Region ("SWR"), with an office in
Phoenix. The other increases reflect costs associated with greater volumes of
lease originations in the period.
The reduction in non-cash interest expense is caused by original issuance
interest discount expense related to a subordinated debt issuance the prior
year.
The reduction in dividends on preferred stock reflects the redemption of
preferred stock.
LIQUIDITY AND CAPITAL RESOURCES
The Company requires substantial cash to implement its business strategy.
Cash is used to: (i) acquire leases and the underlying vehicles; (ii) pay
operating expenses; (iii) satisfy working capital requirements; (iv) pay debt
service; (v) pay sales and securitization costs, including amounts required
for credit enhancement, if any; and (vi) pay preferred stock dividends. Many
of these cash requirements increase as the Company's volumes of lease
origination increase. A substantial portion of the Company's revenues in any
period might represent revenues from sales or securitizations of leases, if
any, but a portion of the cash underlying such revenues is generally received
over the life of the leases. The Company retains the servicing of securitized
leases and receives the related servicing income for the securitized pools.
The Company has historically been successful in meeting its liquidity needs,
principally through borrowings from financial institutions under its
warehouse line, securitizations and whole lease sales, portfolio sales and
sales of equity and debt securities.
Westar was the third company in the nation to structure a free standing lease
securitization, an accomplishment of a limited number of companies.
<PAGE>
The Company was the first to originate multiple securitizations from within a
single special purpose entity and to originate a tax benefit transfer from
within a securitization. The Company believes that its unique bankruptcy
remote structure, its "Carlson Trust," is more efficient and cost effective
than alternative structures in use by others.
The Company plans to continue to sell leases as they are produced, either
through securitizations in the institutional capital markets, through
private placements on a "whole lease" basis with commercial banks or
other sophisticated investors or on a flow basis with commercial banks.
The revolving credit facility provided by Bank One is the primary source of
cash to finance the acquisition of vehicle leases until they are sold. Westar
and Bank One have agreed to a warehouse facility of $15 million on a
non-recourse basis as well as a "whole lease" purchase facility of $25
million (in November, 1998), both in addition to the $28 million
securitization completed in August. After repayment of borrowings from Bank
One under the warehouse line, the net proceeds from securitizations or sales
provide a source of cash for future acquisition of vehicle leases and general
and administrative expenses. Each of Westar's sales and securitizations in
fiscal 1999 produced positive cash flows.
Though there can be no assurance of their success, the Company is currently
in negotiations to obtain additional financings to provide for planned growth
over the next several years.
It is the opinion of management that, as of December 31, 1998, the liquidity
sources discussed above are sufficient to meet the Company's immediate cash
flow needs in the normal course of business.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Index to Exhibits
2. Plan of acquisition, reorganization, arrangement, liquidation
or succession
2.1 Plan and Agreement of Merger between Westar Financial
Services Incorporated and Republic Leasing Incorporated
incorporated by reference to the Exhibit to Form 10-K
dated June 11, 1996.
3. Articles of Incorporation and Bylaws
3.1 The Articles of Incorporation of Westar Financial
Services Incorporated filed on February 13, 1996
incorporated by reference to the Exhibit to Form 10-K
dated June 11, 1996.
3.2 The Bylaws of Westar Financial Services Incorporated
adopted on February 21, 1996 incorporated by reference to
the Exhibit to Form 10-K dated June 11, 1996.
4. Instruments defining the rights of security holders, including
indentures.
4.1 Designation of Rights and Preferences of Republic Leasing
Incorporated Series 1 Preferred Stock incorporated by
reference to the Exhibit to Form 10-K dated
June 11, 1996.
4.2 Designation of Rights and Preferences of Republic Leasing
Incorporated Series 2 Preferred Stock incorporated by
reference to the Exhibit to Form 10-K dated
June 11, 1996.
4.3 Designation of Rights and Preferences of Republic Leasing
Incorporated Series 3 Preferred Stock incorporated by
reference to the Exhibit to Form 10-K dated
June 11, 1996.
4.4 Designation of Rights and Preferences of Republic Leasing
Incorporated Series 4 Preferred Stock incorporated by
reference to the Exhibit to Form 10-K dated
June 11, 1996.
10. Material Contracts.
10.1 Republic Leasing Incorporated 1994 Stock Option Plan
incorporated by reference to the Exhibit to Form 10-K
dated June 11, 1996.
10.2 The Letter Agreement between Republic Leasing
<PAGE>
Incorporated and The Industrial Bank of Japan, Limited
dated March 3, 1995 incorporated by reference to the
Exhibit to Form 10-K dated June 11, 1996.
10.3 Revolving Credit Agreement among Westar Auto Finance,
L.L.C. as Borrower, Republic Leasing Incorporated as
Guarantor and Bank One, Columbus, N.A., as Lender dated
July 12, 1995 incorporated by reference to the Exhibit
to Form 10-K dated June 11, 1996.
10.4 Amendment, dated February 15, 1996, to the Revolving
Credit Agreement with Bank One, Columbus, N.A., dated
July 12, 1995 incorporated by reference to the Exhibit
to Form 10-K dated June 11, 1996.
10.5 The Promissory Note between Westar Financial Services
Incorporated and Mud Bay Holdings Ltd., as a lender
dated January 15, 1997 incorporated by reference to the
Exhibit to Form 10-K dated September 9, 1997.
10.6 The Promissory Note between Westar Financial Services
Incorporated and & Capital Inc., as the lender dated
April 15, 1997 incorporated by reference to the Exhibit
to Form 10-Q dated September 22, 1997.
10.7 The Amended and Restated Revolving Credit Loan agreement
between Westar Financial Services Incorporated and Bank
One, as the lender dated July 22, 1997 incorporated by
reference to the Exhibit to Form 10-Q dated November
13, 1997.
10.8 The Amended agreement between Westar Financial Services
Incorporated and & Capital, Partners, L.P., as the
lender dated October 20, 1997 incorporated by reference
to the Exhibit to Form 10-Q dated November 13, 1997.
10.9 The Amended agreement between Westar Financial Services
Incorporated and & Capital, Partners, L.P., as the
lender dated February 9, 1998 incorporated by reference
to the Exhibit to Form 10-Q dated February 17, 1998.
10.10 The Amended agreement between Westar Financial Services
Incorporated and Bank One as the lender dated
October 27, 1997 incorporated by reference to the
Exhibit to Form 10-Q dated February 17, 1998.
10.11 The Amended agreement between Westar Financial Services
Incorporated and Bank One, as the lender dated March
31, 1998 incorporated by reference to the Exhibit to
Form 10-K dated February 17, 1999.
10.12 The Amended agreement between Westar Financial Services
Incorporated and Mud Bay, as the lender dated August 31,
1998 incorporated by reference to the Exhibit to Form
<PAGE>
10-K dated February 17, 1999.
10.13 The Amended agreement between Westar Financial Services
Incorporated and Cathy Carlson, as the lender dated
April 30, 1998 incorporated by reference to the Exhibit
to Form 10-K dated February 17, 1999.
10.14 The Amended agreement between Westar Financial Services
Incorporated and & Capital Inc., as the lender dated
August 31, 1998 incorporated by reference to the Exhibit
to Form 10-K dated February 17, 1999.
10.15 The Amended agreement between Westar Financial Services
Incorporated and & Capital Inc., as the lender dated
August 31, 1998 incorporated by reference to the Exhibit
to Form 10-K dated February 17, 1999.
10.16 The promissory note between Westar Financial Services
Incorporated and Summit Capital as a lender dated
May 1, 1998 incorporated by reference to the Exhibit to
Form 10-K dated February 17, 1999.
10.17 The promissory note between Westar Financial Services
Incorporated and PLMC, LLC, as a lender dated April 30,
1998 incorporated by reference to the Exhibit to Form
10-Q dated March 1, 1999.
10.18 The promissory note between Westar Financial Services
Incorporated and PLMC, LLC as a lender dated May 11,
1998 incorporated by reference to the Exhibit to Form
10-Q dated March 1, 1999
10.19 The Amended agreement between Westar Financial Services
Incorporated and Bank One, as the lender dated June 25,
1998 incorporated by reference to the Exhibit to Form
10-Q dated March 1, 1999.
10.20 The Second Amended agreement between Westar Financial
Services Incorporated and Bank One, as the lender dated
July 22, 1998 incorporated by reference to the Exhibit
to Form 10-Q dated March 1, 1999.
10.21 The purchase/repurchase agreement between Westar
Financial Services Incorporated and T&W Financial
Services, dated July 23, 1998 incorporated by
reference to the Exhibit to Form 10-Q dated March 1,
1999.
27. Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the Regi-
strant has duly caused this Report to be signed on its behalf by the under-
signed, thereunto duly authorized.
WESTAR FINANCIAL SERVICES INCORPORATED
March 1, 1998 R. W. Christensen, Jr., President
(Date) (Signature)
March 1, 1998 Warren Kornfeld, Senior Vice President, Finance
(Date) (Signature)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> DEC-31-1998
<CASH> 1,391,614
<SECURITIES> 0
<RECEIVABLES> 1,173,114
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,347,271
<CURRENT-LIABILITIES> 5,708,378<F1>
<BONDS> 0
3,239,795
1,548,000
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,347,271
<SALES> 0
<TOTAL-REVENUES> 26,216,237
<CGS> 0
<TOTAL-COSTS> 25,046,017
<OTHER-EXPENSES> 924,011
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 246,209
<INCOME-TAX> 0
<INCOME-CONTINUING> 246,209
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 210,412
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
<FN>
<F1>Unclassified balance sheet
</FN>
</TABLE>
