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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K405
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended APRIL 30, 1995 Commission file number 33-23211
EQUIPMENT LEASING CORPORATION OF AMERICA
(Exact name of registrant as specified in its charter)
DELAWARE 23-2408914
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
501 SILVERSIDE ROAD, STE. 76, WILMINGTON, DE 19809
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (302) 798-2335
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes / X / No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / X /
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within 60 days
prior to the date of filing:
No voting stock is held by non-affiliates of the Registrant.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
As of June 30, 1995, there were 1,000 shares of the Registrant's common stock,
$1.00 par value, outstanding. The Registrant has no other classes of common
stock.
DOCUMENTS INCORPORATED BY REFERENCE - NONE
REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J 1(a) AND
(b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT.
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PART I
ITEM 1. BUSINESS
Equipment Leasing Corporation of America ("ELCOA" or the "Company") was
incorporated in Delaware on May 6, 1986. The Company was organized primarily
to acquire general commercial and industrial equipment for lease throughout the
United States. The leases have durations of one to five years. As of April
30, 1995, the Company had 7,964 direct finance leases outstanding which have an
average initial term of approximately 35 months, and an average remaining lease
balance of approximately $2,080.
On May 23, 1986, ELCOA commenced operations through the issuance of all of
its outstanding common stock in exchange for approximately $1,000,000 of
equipment and related leases with its parent, Walnut Equipment Leasing Co.,
Inc. ("Walnut"). The Company has a right of first refusal to purchase new
equipment and related leases which Walnut wishes to sell under an Option
Agreement, dated May 23, 1986. The Option Agreement also provides that the
Company will pay Walnut an amount equal to 4% of the initial equipment cost as
a fee, and reimburse any commissions paid to outside independent brokers.
This fee was 3% from March 1, 1992 through May 31, 1992. See Footnote 1 to the
Financial Statements. Walnut will reduce the purchase price by the amount of
any funds received through advance rentals, prepayments, or security deposits
received from the lessee of the equipment prior to the assignment of the lease
and transfer of title to the Company. ELCOA's primary business purpose differs
from Walnut in that ELCOA was formed to finance a portfolio of lease contracts
and equipment while Walnut is primarily engaged in the business of originating,
selling, and servicing equipment lease contracts.
Under a Servicing Agreement dated May 23, 1986, (the "Agreement"), Walnut
performs all invoicing, collection, processing and other administrative
functions relating to all rentals received on the Company's behalf. In
consideration for these services, the Company pays Walnut a monthly servicing
fee of $6.50 for each lease account administered which is outstanding at the
end of each calendar month. Walnut also retains any late charges collected
under terms of the leases to reimburse it for its legal costs associated with
collecting delinquent lease balances. Walnut does not guarantee, either
conditionally or unconditionally, the collectibility of rentals due from the
lessees. In addition, the Company pays Walnut $500 weekly to perform all
routine bookkeeping and accounting functions. Management believes these
transactions are on terms at least as favorable as those that the Company would
receive from unrelated parties.
ITEM 2. PROPERTIES
ELCOA leases office space and conference room facilities at 501 Silverside
Road, Wilmington, Delaware. The lease for this space terminates on August 31,
1995, and may be extended beyond that date on a month to month basis with 60
days notice by either landlord or tenant required to terminate it.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not required in accordance with General Instruction J to Form 10-K.
1
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
None.
ITEM 6. SELECTED FINANCIAL DATA
Not required in accordance with General Instruction J to Form 10-K.
ITEM 7. MANAGEMENT'S NARRATIVE DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE YEARS ENDED APRIL 30, 1995
Management's discussion and analysis of financial condition and results of
operations should be read in conjunction with ELCOA's financial statements and
notes thereto appearing elsewhere herein. As regards transactions with
affiliates, see Note 8 to the Financial Statements.
ELCOA began operations on May 23, 1986 by the assignment of approximately
$1,000,000 in equipment and related leases from Walnut in exchange for all of
ELCOA's outstanding common stock. During the fiscal years ended April 30,
1995, 1994, and 1993, new equipment purchases for lease were $7,321,620,
$6,680,452, and $8,212,927, with earned revenues recognized from direct
finance leases totaling $2,945,151, $3,009,864, and $3,057,645, respectively.
Revenues decreased during the fiscal year ended April 30, 1995 and 1994 as a
result of the decrease in new leases generated during the year or reduction in
the amount of leases outstanding in comparison to the prior year. During the
three fiscal years ended April 30, 1995 the Company's cost of operations were
funded from rentals collected. Net proceeds from the sale of debt securities
were used exclusively for the purchase of equipment for lease during the
fiscal year ended April 30, 1993. The increase in cash during the fiscal year
ended April 30, 1994 was attributed to an increase in cash received from lease
collections and a decrease in new equipment purchases. Cash increased during
fiscal 1995 as a result of increased sales of debt securities with the
resulting investment of excess funds in U.S. Treasury bills while awaiting
investment in new leases.
Lease origination expenses, which represent fees incurred in the
acquisition of new lease receivables from Walnut, are 4% of the equipment
costs acquired by ELCOA from Walnut, plus any commissions paid to vendors and
outside leasing brokers. During the period between March 1, 1992, and May 31,
1992, these costs were 3% of the equipment cost. Such expenses were
capitalized during the fiscal years ended April 30, 1995, 1994 and 1993,
respectively. See Footnote 1 to the Financial Statements for a discussion of
Financial Accounting Standards Board Statement No. 91 and its impact on
operations, and for a discussion regarding the expenditures for lease
origination expenses for the years ended April 30, 1995, 1994 and 1993.
For the fiscal years ended April 30, 1995, 1994, and 1993, ELCOA incurred
$1,054,460, $1,031,825, and $1,011,186 in general and administrative expenses,
respectively. Monthly servicing and bookkeeping fees paid to Walnut in the
amounts of $676,228, $704,522, and $654,732, respectively, were a primary
2
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component of general and administrative expenses. Also included in the
general and administrative expenses were $247,561 $188,209, and $185,138,
respectively, of amortization of the deferred debt registration and
solicitation expenses, including commissions paid on account of sales of
Demand and Fixed Rate, Certificates (the "Debentures" or "Certificates").
Fees paid to Financial Data, Inc., a registered transfer agent and affiliate
of the Company, for transfer agent services rendered in connection with the
Demand, Fixed Rate, and previously issued Money Market Thrift Certificates,
were $99,595, $105,334, and $116,994 for the fiscal years ended April 30,
1995, 1994, and 1993, respectively. These expenses decreased since fiscal
1993, as a result of Financial Data, Inc. passing through its cost savings in
providing these services to ELCOA. Overall general and adminstrative costs
increased 2.2% comensurate with an increase in recognized commission expenses
associated with the sale of Certificates. See also Footnote 8 to the
Financial Statements appearing herein. In the event that Walnut should cease
operations or be unable to fulfill its obligations in originating and
servicing of ELCOA's leases, ELCOA's costs to perform these services from
unaffiliated parties might increase, reducing profitability.
An allowance for doubtful direct finance lease receivables is maintained
at a level management considers adequate to provide for estimated losses that
will be incurred in the collection of these receivables. The allowance is
increased by provisions charged to operating expenses and reduced by
chargeoffs. ELCOA recorded provisions for doubtful lease receivables of
$1,229,845, $707,162, and $566,570 for the fiscal years ended April 30, 1995,
1994, and 1993, respectively, resulting from increases in the aggregate amount
of lease receivables, equipment on lease, and delinquent accounts during these
fiscal years. During the nine month period ended January 31, 1995, ELCOA
conducted an extensive review of the collectibility of all past due accounts,
and increased the amount of write-offs in those situations where further legal
costs in pursuit of collection were considered to be unwarranted. ELCOA
believes that its loss experience and delinquency rate are reasonable for its
operations. ELCOA's rates charged on its leases tend to be higher than
industry averages due to the relative lack of competition in small-ticket
leasing. The higher rates are intended to offset the increased credit risks
and processing costs associated with small-ticket leases. Although ELCOA's
loss experience over the past five years measured as a percentage of net
charge-offs to average lease receivables outstanding is consistent with
industry averages, its delinquency rate is higher than industry averages
because of its market, i.e. primarily small to medium sized businesses. In
addition, delinquent receivable balances appear higher than industry average
because of the ELCOA's decision to pursue delinquent lessees until all
collection efforts have been completely exhausted.
During the fiscal years ended April 30, 1995, 1994, and 1993, ELCOA
incurred $2,056,162, $1,937,063, and $1,574,513, in interest expense,
respectively, on average debt (including accrued interest thereon) of
$25,258,751, $22,287,797 and $16,934,395, respectively, based upon the amounts
of debt outstanding computed on a quarterly basis. Average interest rates on
average outstanding debt, including accrued interest, but excluding income
from interest on excess funds in the amounts of $741,671, $374,025, and
$253,967, respectively, were 8.1%, 8.6%, and 9.3%, respectively, during these
periods. Overall market interest rates in general decreased during fiscal
1995 and 1994. Management attributes the decrease in net income during fiscal
3
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1994 in large part to the differential in rates it paid on its excess cash
balances in relation to interest income earned from these funds while awaiting
investment in new leases. During fiscal 1995, excess funds were invested in
short-term U.S. Treasury bills with maturities of six months or less, yielding
higher returns than those previously invested at bank money-market rates.
Rates on Certificate sales during fiscal 1995 decreased in an effort to
minimize the creation of additional excess cash. As new lease volume
increases, ELCOA will utilize excess cash to fund new equipment purchases.
Total debt includes all of the outstanding Demand, Fixed Rate, and Money
Market Thrift Certificates issued by ELCOA, and accrued interest thereon.
During the fiscal years ended April 30, 1995, 1994, and 1993, ELCOA
recognized provisions for state income taxes in the amounts of $360, $0, and
$928, respectively, on its net income (loss). No provisions for federal
income taxes were necessary, as a result of the benefit of Walnut's net
operating loss carryforwards.
ELCOA's revenue is set at the time a given lease contract is executed.
Consequently, inflation is not expected to impact revenue subsequent to the
inception of any given lease. In addition, inflation does not have a material
effect on ELCOA's operating expenses as they are fixed based upon the
Agreement with Walnut.
As noted in the Statements of Cash Flows on pages 11 and 12, sales of
Demand and fixed Rate Certificates have increased over the three fiscal years
ended April 30, 1995, along with a corresponding increase in the redemption of
these securities at their respective maturities. In the event that future
redemptions of Certificates exceed future sales of the Certificates to be
offered, ELCOA may utilize its excess cash to repay such borrowings. ELCOA
believes that it has sufficient cash resources to meet its normal operating
requirements during the fiscal year ending April 30, 1996.
To the extent that ELCOA is able to obtain funds either through future
sales of Certificates or from other sources at fixed interest rates, inflation
will have no impact over the term of any given borrowing. However, to the
extent that the borrowings would be at variable interest rates, inflation may
have a significant adverse impact on ELCOA's operations through increased
costs of borrowing. The increased reliance on variable rate borrowings
resulting from sales of the Certificates subjects ELCOA to increased exposure
to inflation because of the risk of increased interest rates.
4
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<TABLE>
<CAPTION>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements. Page
----
<S> <C>
Independent Auditor's Report. 6
Balance Sheets as of April 30, 1995 and 1994. 7-8
Statements of Operations for the years ended April 30, 9
1995, 1994 and 1993.
Statement of Changes in Shareholder's Equity for the years 10
ended April 30, 1995, 1994 and 1993.
Statements of Cash Flows for the years ended April 11-12
30, 1995 and 1994, and 1993.
Notes to Financial Statements 13
</TABLE>
See Item 14 on page 20 for Index of Financial Statement Schedules
5
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<PAGE>7
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholder
of Equipment Leasing Corporation of America
We have audited the accompanying balance sheets of Equipment Leasing
Corporation of America (a wholly-owned subsidiary of Walnut Equipment Leasing
Co., Inc.) as of April 30, 1995, and 1994 and the related statements of
operations, changes in shareholder's equity and cash flows for each of the
three years in the period ended April 30, 1995. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
The accompanying financial statements have been prepared from the separate
records maintained by Equipment Leasing Corporation of America. However,
these may not necessarily be indicative of the financial condition that would
have existed or the results of operations if the Company had been operated as
an unaffiliated entity. As discussed in Note 8 to the financial statements,
certain expenses represent allocations made from or transactions with related
parties. Further, our opinion dated July 7, 1995 on the consolidated
financial statements of Walnut Equipment Leasing Co., Inc. and subsidiaries
contained an explanatory paragraph which discussed the substantial doubt about
Walnut Equipment Leasing Co., Inc.'s ability to continue as a going concern.
We conducted our audits in accordance with generally accepted auditing
standards. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Equipment Leasing Corporation
of America as of April 30, 1995, and 1994 and the results of its operations
and its cash flows for each of the three years in the period ended April 30,
1995 in conformity with generally accepted accounting principles.
/s/ Cogen Sklar LLP
COGEN SKLAR LLP
(formerly, Cogen Sklar Levick)
Bala Cynwyd, Pennsylvania
July 7, 1995
6
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<TABLE>
EQUIPMENT LEASING CORPORATION OF AMERICA
(a Wholly-Owned Subsidiary of
Walnut Equipment Leasing Co., Inc.)
BALANCE SHEETS
-----------------
<CAPTION>
As of April 30,
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Direct finance leases:
Aggregate future amounts
receivable under lease
contracts $17,267,612 $17,966,429
Estimated residual value
of equipment 1,831,613 1,905,976
Less:
Unearned income under
lease contracts ( 3,172,713) ( 3,413,082)
----------- -----------
15,926,512 16,459,323
Advance payments ( 528,314) ( 498,884)
----------- -----------
15,398,198 15,960,439
Allowance for doubtful
lease receivables ( 974,667) ( 1,001,880)
----------- -----------
14,423,531 14,958,559
Due from parent 3,991,986 2,500,816
Cash and cash equivalents 8,908,798 7,587,864
Other assets(includes $331,180 and
$341,601 paid to related parties) 423,511 438,150
----------- -----------
TOTAL ASSETS $27,747,826 $25,485,389
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES
7
<PAGE>
<PAGE>9
<TABLE>
EQUIPMENT LEASING CORPORATION OF AMERICA
(a Wholly-Owned Subsidiary of
Walnut Equipment Leasing Co., Inc.)
BALANCE SHEETS - (continued)
-----------------
<CAPTION>
As of April 30,
1995 1994
----------- -----------
<S> <C> <C>
LIABILITIES
Amounts payable to
equipment suppliers $ 8,749 $ 8,749
Accrued expenses and
security deposits 63,888 90,708
State income taxes payable 8,401 8,401
Demand, Fixed Rate, and
Money Market Thrift
Certificates(includes $181,266
and $167,617 held by
related parties) 24,521,875 21,810,991
Accrued interest payable 2,326,708 2,094,330
----------- -----------
26,929,621 24,013,179
SHAREHOLDER'S EQUITY
Common Stock $1 par value,
1,000 shares authorized,
issued and outstanding 1,000 1,000
Additional paid - in capital 999,000 999,000
Retained earnings (Deficit) ( 181,795) 472,210
----------- -----------
818,205 1,472,210
----------- -----------
TOTAL LIABILITIES AND
SHAREHOLDER'S EQUITY $27,747,826 $25,485,389
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES
8
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<PAGE>10
<TABLE>
EQUIPMENT LEASING CORPORATION OF AMERICA
(A Wholly-Owned Subsidiary of
Walnut Equipment Leasing Co., Inc.)
STATEMENTS OF OPERATIONS
--------------------------------
<CAPTION>
For the Years Ended April 30,
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Revenue:
Income earned under
direct finance lease
contracts $2,945,151 $3,009,864 $3,057,645
---------- ---------- ----------
Costs and expenses:
Interest expense, net of
interest income of $741,671,
$374,025 and $253,967,
respectively 1,314,491 1,563,038 1,320,546
General and administrative
expenses (includes
$946,465, $934,695 and $896,864,
respectively, paid to related
parties) 1,054,460 1,031,825 1,011,186
Provision for doubtful
lease receivables 1,229,845 707,162 566,570
---------- ---------- ----------
Total costs and expenses 3,598,796 3,302,025 2,898,302
---------- ---------- ----------
Income (loss) before provision
for state income taxes (653,645) (292,161) 159,343
Provision for state income taxes 360 --- 928
---------- ---------- ----------
Net income (Loss) ($ 654,005) ($ 292,161) $ 158,415
========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES
9
<PAGE>
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<TABLE>
EQUIPMENT LEASING CORPORATION OF AMERICA
(A Wholly-Owned Subsidiary of
Walnut Equipment Leasing Co., Inc.)
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
<CAPTION>
Common Stock
($1.00 Par Value)
1,000 shares
Authorized Additional Total
No. of shares Paid-In Retained Shareholder's
Issued Amount Capital Earnings Equity
---------------- ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance,
April 30,
1992 1,000 $1,000 $999,000 $1,205,956 $2,205,956
Net Income for
the year ended
April 30, 1993 --- --- --- 158,415 158,415
Cash Distributions
Paid on Common
Stock --- --- --- (600,000) (600,000)
----- ------ -------- ----------- ----------
Balance,
April 30,
1993 1,000 1,000 999,000 764,371 1,764,371
Loss for the
year ended
April 30, 1994 --- --- --- (292,161) (292,161)
----- ------ -------- --------- ---------
Balance,
April 30,
1994 1,000 1,000 999,000 472,210 1,472,210
Loss for
the year ended
April 30, 1995 --- --- --- (654,005) (654,005)
------ ------ -------- --------- ---------
Balance,
April 30,
1995 1,000 $1,000 $999,000 ($181,795) $818,205
===== ====== ======== ========== ========
</TABLE>
SEE ACCOMPANYING NOTES
10
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<TABLE>
EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO., INC.)
STATEMENTS OF CASH FLOWS
-------------------
<CAPTION>
For the Years Ended April 30,
1995 1994 1993
---------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income (Loss) ($654,005) ($292,161) $ 158,415
Adjustments to reconcile
net income (loss) to net cash
provided by operating activites:
Depreciation --- --- 51
Amortization of
deferred debt expenses 247,561 188,209 185,138
Provision for doubtful
lease receivables 1,229,845 707,162 566,570
Effects of Changes
in other operating items:
Accrued expenses (26,820) (22,691) 40,223
Accrued interest 232,378 422,646 494,348
Other assets (net) (232,922) (252,895) (191,175)
---------- ----------- -----------
Net cash provided by
operating activities 796,037 750,270 1,253,570
---------- ----------- -----------
INVESTING ACTIVITIES
Excess of cash received
over lease income recorded 6,447,111 6,207,106 5,083,786
Increase in
advance payments 179,692 119,765 119,872
Purchase of equipment
for direct finance leases (7,321,620) (6,680,452) (8,212,927)
---------- ----------- -----------
Net cash used in
investing activities (694,817) (353,581) (3,009,269)
---------- ----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES
11
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<TABLE>
EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO., INC.)
STATEMENTS OF CASH FLOWS - (continued)
-------------------
<CAPTION>
For the Years Ended April 30,
1995 1994 1993
---------- ----------- -----------
<S> <C> <C> <C>
FINANCING ACTIVITIES
Proceeds from issuance
of Demand and Fixed Rate
Certificates 10,983,417 9,267,808 9,350,863
Net Proceeds (repayments) from
borrowings from Walnut (1,491,170) (840,810) 280,367
Redemption of Demand, Fixed
Rate, and Money Market
Thrift Certificates (8,272,533) (5,498,321) (4,177,037)
Distributions Paid on
Common Stock --- --- (600,000)
Net cash provided by ---------- ---------- -----------
financing activities 1,219,714 2,928,677 4,054,193
---------- ---------- -----------
Increase (Decrease) in
Cash and Cash Equivalents 1,320,934 3,325,366 3,098,494
Cash and Cash Equivalents,
Beginning of Year 7,587,864 4,262,498 1,164,004
Cash and Cash Equivalents, ---------- ---------- -----------
End of Year $8,908,798 $7,587,864 $ 4,262,498
========== ========== ===========
</TABLE>
SEE ACCOMPANYING NOTES
12
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EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO., INC.)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION:
Equipment Leasing Corporation of America ("ELCOA") was incorporated as a
Delaware corporation on May 6, 1986 and commenced operations on May 23, 1986.
ELCOA is a wholly-owned subsidiary of Walnut Equipment Leasing Co., Inc.
("WALNUT"), a Delaware corporation. ELCOA was formed primarily to purchase
general commercial equipment for lease, utilizing the proceeds of sale of
certain debentures referred to as "Demand, Fixed Rate, or Money Market Thrift
Certificates." See Note 6.
LEASE ACCOUNTING:
ELCOA is in the business of leasing commercial equipment which is
specifically acquired for each lease. For financial reporting purposes, ELCOA
primarily uses the direct financing method and records at the inception of the
lease (a) the estimated unguaranteed residual value of the leased equipment
and the aggregate amount of rentals due under the lease as the gross
investment in the lease and (b) the unearned income arising from the lease,
represented by the excess of (a) over the cost of the leased equipment. The
unearned income is recognized as income over the term of the lease on the
effective (or interest) method in accordance with the requirements of
Statement of Financial Accounting Standards No. 91 "Accounting for Non
Refundable Fees and Costs Associated with Originating or Acquiring Loans and
Initial Direct Costs of Leases" ("SFAS 91"). In addition, under this method
a portion of the initial direct costs as defined by SFAS 91 ($281,531,
$256,940 and $308,077 for the years ended April 30, 1995, 1994 and 1993
respectively) are accounted for as part of the Investment in Direct Financing
Leases. These expenses increased to 4% of the original equipment cost
subsequent to May 1, 1992, but were 3% prior and subsequent thereto through
May 31, 1992. The rate was adjusted to account for the calculation of initial
direct costs under SFAS 91. Unearned income is earned and initial direct
costs are amortized to reduce income using the effective method over the terms
of each respective lease.
ESTIMATED RESIDUAL VALUES OF EQUIPMENT UNDER DIRECT FINANCE LEASES:
ELCOA generally offers an option to purchase the leased equipment upon
expiration of the lease term at its then fair market value (usually not less
than 10% of the original equipment cost). Residual value of this equipment is
generally established at the purchase option price offered.
ALLOWANCE FOR DOUBTFUL LEASE RECEIVABLES:
An allowance for doubtful direct finance lease receivables is maintained
at a level considered adequate to provide for estimated losses that will be
incurred in the collection of delinquent lease receivables. The allowance is
increased by provisions charged to operating expense and reduced by
charge-offs based upon a periodic evaluation, performed at least quarterly, of
delinquent finance lease receivables. Charge-offs totaled $1,257,058,
$496,088 and $348,916 for the years ended April 30, 1995, 1994 and 1993,
respectively.
13
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<PAGE>15
EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO., INC.)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
INCOME TAXES:
ELCOA computes and records income taxes currently payable based upon the
determination of taxable income using the "operating method" for all leases,
which is different from the method used for financial statement purposes (as
described above). Under the "operating method", ELCOA reports as income the
amount of rentals received and deducts the appropriate amount of depreciation
of the equipment over its estimated useful life.
Effective May 1, 1993, the Company adopted Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes" (SFAS 109), which
require an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and tax bases of
assets and liabilities that will result in taxable or deductible amounts in
the future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to the
amount expected to be realized. Income tax expense is the tax payable or
refundable for the period plus or minus the change during the period in
deferred tax assets and liabilities.
The net deferred tax asset as of April 30, 1995 and 1994 includes deferred
tax assets (liabilities) attributable to the following temporary deductible
(taxable) differences:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Operating lease method vs.
direct financing method $1,576,000 $1,507,000
Provisions for doubtful
lease receivables 341,000 391,000
Other (34,000) (25,000)
---------- ----------
Net deferred tax asset 1,883,000 1,873,000
Valuation allowance (1,883,000) (1,873,000)
---------- ----------
Net deferred tax asset
after valuation allowance $ --- $ ---
========== ==========
</TABLE>
A valuation allowance was considered necessary since it is more likely
than not that the Company will not realize the tax benefits of the deductible
differences. There was no cumulative effect on income for prior years upon
the adoption of SFAS 109, for the year ended April 30, 1994 since there was no
existing deferred tax asset as of May 1, 1993.
14
<PAGE>
<PAGE>16
EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO. INC.)
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
The Company will be included in the consolidated federal income tax return
of its parent, Walnut Equipment Leasing Co., Inc.. Based on a tax allocation
agreement, current federal taxes otherwise refundable (payable) under a
separate company computation will be received from (paid to) its parent.
For the fiscal years ended April 30, 1995 and 1994, there was no provision
for either current or deferred federal income taxes.
CASH FLOW STATEMENTS:
The Company considers cash invested in short-term, highly liquid
investments with original maturities of three months or less to be cash
equivalents. At April 30, 1995, cash equivalents consisting of U.S.
Government Securities amounted to $6,349,693. The Company had no cash
equivalents at April 30, 1994. Amounts paid for interest for the fiscal years
ended April 30, 1995, 1994 and 1993 were $1,898,734, $1,549,217, and
$1,113,348, respectively. Amounts paid for income taxes for the fiscal years
ended April 30, 1995, 1994, and 1993 were $0, $411, and $4,194, respectively.
CONCENTRATION OF CREDIT RISK:
The concentration of credit risk is limited since the Company's small
ticket lease portfolio varies widely as to the diversity of equipment types,
lessees, and geographic location.
2. AGGREGATE FUTURE AMOUNTS RECEIVABLE UNDER LEASE CONTRACTS:
Receivables under direct finance lease contracts at April 30, 1995 are due as
follows:
<TABLE>
<CAPTION>
Years ending
April 30, Amount
------------ -----------
<S> <C>
1996 $ 9,420,395
1997 5,072,886
1998 2,164,555
1999 456,460
2000 & beyond 153,316
-----------
$17,267,612
===========
</TABLE>
3. OTHER ASSETS AND LIABILITIES:
Other assets of $423,511 and $438,150 at April 30, 1995 and 1994,
respectively, include $423,223 and $437,812 in deferred expenses, net of
15
<PAGE>
<PAGE>17
EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO., INC.)
NOTES TO FINANCIAL STATEMENTS
3. OTHER ASSETS AND LIABILITIES: (Continued)
amortization, representing costs directly related to ELCOA's registration and
sale of Demand, Fixed Rate, and Money Market Thrift Certificates. Such
expenses are being amortized on a straight-line basis over the estimated
average lives of the debt issued, and to be issued under the registration
statement. Amortization of deferred expenses charged to income during the
years ended April 30, 1995, 1994 and 1993, were $247,561, $188,209, and
$185,138, respectively, which includes commissions paid for sale of these
certificates.
4. AMOUNTS PAYABLE TO EQUIPMENT SUPPLIERS
Amounts payable to equipment suppliers in the amount of $8,749 as of April
30, 1995 and 1994 represents holdbacks from suppliers of equipment as
additional security for performance by the underlying lessee on the related
lease contract, and are payable at the termination of the contracts based upon
the lessee's compliance with terms of the lease contract.
5. INCOME TAXES
ELCOA will file a consolidated Federal income tax return with its parent,
Walnut. ELCOA has made no provision for Federal income tax expense for the
years ended April 30, 1995, 1994 and 1993 due to the benefit of Walnut's net
operating loss carryforwards.
ELCOA has provided for $360, $0 and $928 in state income tax expense for
the fiscal years ended April 30, 1995, 1994, and 1993, respectively.
6. DEMAND, FIXED RATE, AND MONEY MARKET THRIFT CERTIFICATES
The Demand, Fixed Rate, and Money Market Thrift Certificates outstanding at
April 30, 1995 bear interest at rates ranging from 7.0% to 12.75%, and are due
as follows:
<TABLE>
<CAPTION>
Years ending
April 30, Amount
------------ -----------
<S> <C>
1996 $14,697,989
1997 3,138,288
1998 1,146,431
1999 2,156,743
2000 & beyond 3,382,424
-----------
$24,521,875
===========
</TABLE>
Included in the amounts due in the year ended April 30, 1996 are $2,135,337
of certificates payable on demand. The accrued interest of $2,326,708 at April
30, 1995 is payable upon demand.
16
<PAGE>
<PAGE>18
EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO., INC.)
NOTES TO FINANCIAL STATEMENTS
7. CAPITALIZATION
On May 23, 1986, ELCOA issued all of its authorized shares of common stock
(1,000 shares, $1.00 par value per share) in exchange for certain lease assets
from Walnut. These shares are fully paid and nonassessable. ELCOA has also
authorized the issuance of 50,000 shares of preferred stock, $1.00 par value.
At April 30, 1995, no shares of preferred stock have been issued.
8. TRANSACTIONS WITH RELATED PARTIES
Welco Securities, Inc. ("Welco"), a registered broker/dealer and affiliate
of ELCOA, has been engaged as underwriter to sell certain debt securities to
the public. Under the terms of the agreement with Welco, ELCOA pays a
commission to Welco of between 0.2% and 8.0% of the sale price of securities
sold by Welco on ELCOA's behalf, depending upon the term of each cerificate
sold. ELCOA also reimburses Welco for its out-of-pocket costs associated with
the offering of these securities. ELCOA amortizes the commissions paid to
Welco over the term of the certificates. Reimbursements for costs and
commissions paid to Welco for the years ended April 30, 1995, 1994 and 1993,
were $170,642, $165,581, and $143,611, respectively.
Outstanding Demand, Fixed Rate, and Money Market Thrift Certificates held
by the President, members of his family or companies in which he is the
majority shareholder were $181,266 and $167,617 at April 30, 1995 and 1994,
respectively.
During the fiscal year ended April 30, 1993, ELCOA's Board of Directors
authorized and paid cash distributions to Walnut aggregating $600,000 in the
form of a common stock dividend.
Walnut, ELCOA's parent, has been engaged to perform certain lease
origination functions (i.e. marketing, credit investigation, and documentation
processing) on behalf of ELCOA, for which it will be paid an amount equal to
four percent (4%) of the gross equipment purchased by ELCOA for lease. During
the period from March 1, 1992 through May 31, 1992, these costs were 3% of the
equipment cost. See Footnote 1 to the Financial Statements. During the fiscal
years ended April 30, 1995, 1994, and 1993 these origination costs totaled
$281,531, $256,940 and $308,077, respectively, which includes reimbursement for
commissions paid to outside lease brokers. During the years ended April 30,
1995, 1994, and 1993, these costs were capitalized in accordance with SFAS No.
91. In addition, Walnut receives $6.50 per month per outstanding lease for
performing certain administrative functions for ELCOA, mainly, invoicing of
monthly rentals, collection of lease receivables and residual values,
management guidance, personnel, financing, and the furnishing of office and
computer facilities. Walnut also retains any late charges assessed delinquent
lessees as reimbursement for the legal costs of collection. ELCOA also pays
Walnut $500 per week for routine bookkeeping functions performed on ELCOA's
behalf. Servicing fees and bookeeping charges paid Walnut for the years ended
April 30, 1995, 1994 and 1993, were $676,228, $704,522 and $654,732,
17
<PAGE>
<PAGE>19
EQUIPMENT LEASING CORPORATION OF AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
WALNUT EQUIPMENT LEASING CO., INC.)
NOTES TO FINANCIAL STATEMENTS
8. TRANSACTIONS WITH RELATED PARTIES: (Continued)
respectively. As of April 30, 1995, the amount due ELCOA by Walnut of
$3,991,986 represents funds previously advanced mainly intended for the
purchase of equipment for lease subsequent to April 30, 1995. Commencing
January 1, 1991, Walnut agreed to pay interest on these outstanding advances,
at the prime rate of interest plus 2%, which amounted to $365,438, $207,231 and
$197,807 for the fiscal years ended April 30, 1995, 1994 and 1993,
respectively.
The independent auditor's reports for Walnut for each of the three years in
the period ended April 30, 1995 contain an explanatory paragraph. Walnut has
suffered recurring losses from operations and has a shareholder's deficit that
raise substantial doubt about that entity's ability to continue as a going
concern. Walnut's financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
A law firm owned by the beneficial owner of ELCOA has been engaged to
collect overdue delinquent receivables 90 days or longer in arrears, on a
contingency basis. No expenses were incurred by ELCOA during the fiscal years
ended April 30, 1995, 1994, and 1993. Walnut retained late charges in the
approximate amounts of $390,000, $368,000 and $274,000, for the three fiscal
years ended April 30, 1995, 1994 and 1993, respectively, to offset Walnut's
collection and litigation costs paid or incurred on ELCOA's behalf.
Financial Data, Inc., a registered transfer agent and affiliate of ELCOA,
performs all transfer agent duties and disburses all interest payments on
behalf of ELCOA. Financial Data, Inc., is paid monthly, pursuant to its
agreement with ELCOA, an amount equal to $2.00 per certificate holder per
month, along with $1.00 per each certificate issued or redeemed during the
month, or a minimum monthly charge of $1,000, whichever is greater. Prior to
January 1, 1994, the charges were $2.50 monthly per account, and $2.00 per
certificate issued or redeemed. For the years ended April 30, 1995, 1994 and
1993, these expenses totaled $99,595, $105,334, and $116,994, respectively.
18
<PAGE>
<PAGE>20
Part II (continued)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Not required in accordance with General Instruction J to Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Not required in accordance with General Instruction J to Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Not required in accordance with General Instruction J to Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Not required in accordance with General Instruction J to Form 10-K.
19
<PAGE>
<PAGE>21
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 10-K
a) 1. FINANCIAL STATEMENTS
<TABLE>
Included in Part II of this report:
<CAPTION>
Page
----
<S> <C>
Independent Auditor's Reports 6
Balance Sheets 7-8
Statements of Operations 9
Statement of Changes in Shareholder's Equity 10
Statements of Cash Flows 11-12
Notes to Financial Statements 13
2. FINANCIAL STATEMENT SCHEDULE
(a) Report on Schedule. 24
(b) Schedule VIII - Valuation and Qualifying Accounts. 25
</TABLE>
All other schedules for which provisions are made in the applicable
regulation of the Securities and Exchange Commission have been omitted because
they are not required under the related instructions or are inapplicable.
b) Reports on Form 8-K
(1) There were no reports filed on Form 8-K during the three months ended
April 30, 1995.
3. EXHIBITS
3.1 - Articles of Incorporation, incorporated by reference to Exhibit 3.1
to Form 10-K filed by the registrant for the period ended April 30,
1987 (File No. 33-6259, Filed On July 28, 1987.)
3.2 - By-Laws, as amended, incorporated by reference to Exhibit 3.2 to
Registrant's Registration Statement on Form S-1. (File No. 33-6259,
Filed on June 6, 1986.)
20
<PAGE>
<PAGE>22
4.1 - Specimen of Variable Rate Money Market Demand Thrift Certificate,
incorporated by reference to Exhibit 4.1 to Registrant's
Registration Statement on Form S-1. (File No. 33-6259; Filed on
September 26, 1986).
4.2 - Specimen of Fixed Term Money Market Thrift Certificate, incorporated
by reference to Exhibit 4.2 to Registrant's Registration Statement
on Form S-1. (File No. 33-6259; Filed on September 26, 1986).
4.3 - Trust Indenture between Registrant and First Valley Bank, Trustee,
dated as of August 5, 1986 incorporated by reference to Exhibit 4.3
to Registrant's Registration Statement on Form S-1. (File No.
33-6259; Filed August 8, 1986).
4.4 - Specimen of Variable Rate Cumulative Preferred Stock, Series A
Certificate, incorporated by reference to Exhibit 4.4 to
Registrant's Registration Statement on Form S-1. (File No. 33-6259;
Filed June 6, 1986).
4.5 - Certificate of Designation, Relative Rights, Preferences and
Limitations of Variable Rate Cumulative Preferred Stock, Series A,
incorporated by reference to Exhibit 4.5 of Registrant's
Registration Statement on Form S-1. (File No. 33-6259; Filed June
6, 1986).
4.6 - First Supplemental Trust Indenture dated as of September 19, 1986
between Registrant and First Valley Bank, Trustee, incorporated by
reference to Exhibit 4.6 to Registrant's Registration Statement on
Form S-1. (File No. 33-6259; Filed September 26, 1986).
4.7 - Specimen of Variable Rate Money Market Demand Thrift Certificate,
incorporated by reference to Exhibit 4.5 to Registrant's
Registration Statement on Form S-1. (File No. 33-23211; Filed on
July 21, 1988).
4.8 - Specimen of Fixed Term Money Market Thrift Certificate incorporated
by reference to Exhibit 4.6 to Registrant's Registration Statement
on Form S-1. (File No. 33-23211; Filed on July 21, 1988.)
4.9 - Second Supplement Trust Indenture dated September 20, 1988 between
Registrant and First Valley Bank, Trustee, incorporated by reference
to Exhibit 4.5 to Registrant's Registration Statement on Form S-1.
(File No. 33-23211 Filed July 21, 1988.)
4.10 - Specimen of Variable Rate Money Market Demand Thrift Certificate
incorporated by reference to Exhibit 4.9 to Registrant's
Registration Statement on Form S-1. (File No. 33-29703; Filed July
10, 1989.)
4.11 - Specimen of Fixed Term Money Market Thrift Certificate, incorporated
by reference to Exhibit 4.16 to Registrant's Registration Statement
on Form S-1 (File No. 33-29703; Filed July 10, 1989.)
4.12 - Third Supplemental Trust Indenture dated as of September 13, 1989
between Registrant and First Valley Bank, Trustee, incorporated by
reference to Exhibit 4.8 to Registrant's Registration Statement on
Form S-1. (File No. 33-29703; Filed July 10, 1989).
21
<PAGE>
<PAGE>23
4.13 - Fourth Supplemental Trust Indenture dated as of August 17, 1990
between Registrant and First Valley Bank, Trustee, incorporated by
reference to Exhibit 4.11 to Registrant's Registration Statement on
Form S-2. (File No. 33-35664; Filed July 3, 1990).
4.14 - Specimen of Demand Certificate (File No. 33-35664; Filed July 3,
1990).
4.15 - Specimen of Fixed Rate Certificate (File No. 33-35664; Filed July 3,
1990).
4.16 - Fifth Supplemental Trust Indenture dated as of August 18, 1993
between Registrant and First Valley Bank, Bethlehem, Pennsylvania,
Trustee, incorporated by reference to Exhibit 4.14 to Registrant's
Registration Statement on Form S-2. (File No. 33-65814; Filed
August 25, 1993.)
4.17 - Form of Specimen of Demand Certificate; Incorporated by reference to
Exhibit 4.15 to Registrant's Registration Statement on Form S-2.
(File No. 33-65814; Filed July 9, 1993.)
4.18 - Form of Specimen of Fixed Rate Certificate; Incorporated by
reference to Exhibit 4.16 to Registrant's Registration Statement on
Form S-2. (File No. 33-65814; Filed July 9, 1993).
9. None.
10.1 - Specimen equipment lease agreement incorporated by reference to
Exhibit 10.1 to Registrant's Registration Statement on Form S-1.
(File No. 33-6259; Filed June 6, 1986).
10.2 - Specimen certificate of acceptance from lessee to registrant
incorporated by reference to Exhibit 10.2 to Registrant's
Registration Statement on Form S-1. (File No. 33-6259; Filed June
6, 1986).
10.3 - Specimen form of lessee guarantee incorporated by reference to
Exhibit 10.3 to Registrant's Registration Statement to Form S-1.
(File No. 33-6259; Filed June 6, 1986).
10.4 - Specimen form of Bill of Sale, and assignment for certain equipment
and leases to be purchased by registrant incorporated by reference
to Exhibit 10.4 to Registrant's Registration Statement on Form S-1.
(File No. 33-6259; Filed June 6, 1986).
10.5 - Service Contract dated May 23, 1986 between Walnut Equipment Leasing
Co., Inc. and Registrant incorporated by reference to Exhibit 10.5
to Registrant's Registration Statement on Form S-1. (File No.
33-6259; Filed June 6, 1986).
10.6 - Escrow agreement between Registrant and Walnut Equipment Leasing
Co., Inc. re: Segregation of Funds for the Company's benefit,
incorporated by reference to Exhibit 10.6 to Registrant's
Registration Statement on Form S-1. (File No. 33-6259; Filed June
6, 1986).
22
<PAGE>
<PAGE>24
10.7 - Option Agreement between Registrant and Walnut Equipment Leasing
Co., Inc. re: right of first refusal for future purchases of
equipment and related leases, incorporated by reference to Exhibit
10.8 to Registrant's Registration Statement on Form S-1. (File No.
33-6259; Filed June 6, 1986).
11. - Inapplicable.
12. - Inapplicable.
13. - Inapplicable.
18. - None.
19. - None.
22. - Inapplicable. See General Instruction J to Form 10K.
23. - None.
24. - Inapplicable.
25. - None.
*27.1 - Financial Data Schedule.
28. - None.
29. - Inapplicable.
* Filed with this Form 10-K.
23
<PAGE>
<PAGE>25
INDEPENDENT AUDITOR'S
REPORT ON FINANCIAL STATEMENT SCHEDULE
In connection with our audits of the financial statements of Equipment
Leasing Corporation of America at April 30, 1995 and 1994 and for each of the
three years in the period ended April 30, 1995, we have also audited the
financial statement schedule included in the Form 10-K as listed in Item
14(a)(2).
In our opinion, the financial statement schedule mentioned above present
fairly the information required to be stated therein.
/s/ Cogen Sklar LLP
Cogen Sklar LLP
(formerly, Cogen Sklar Levick)
Bala Cynwyd, Pennsylvania
July 7, 1995
24
<PAGE>
<PAGE>26
Schedule VIII
<TABLE>
EQUIPMENT LEASING CORPORATION OF AMERICA
VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
Balance, Additions
Beginning Charged Amounts
of Against Written Balance,
Period Income Off End of Period
--------- --------- ------- -------------
Allowance for Doubtful Lease
Receivables
- -----------
<S> <C> <C> <C> <C>
For the Fiscal Year Ended
April 30, 1993 $573,152 $566,570 $348,916 $ 790,806
For the Fiscal
Year Ended April
30, 1994 $790,806 $707,162 $496,088 $1,001,880
For the Fiscal
Year Ended April
30, 1995 $1,001,880 $1,229,845 $1,257,058 $ 974,667
</TABLE>
25
<PAGE>
<PAGE>27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report as amended to
be duly signed on its behalf by the undersigned, thereunto duly authorized.
/s/ William Shapiro
----------------------------------------
William Shapiro, President
EQUIPMENT LEASING CORPORATION OF AMERICA
Date: July 24, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the dates indicated.
Name Title
/s/ William Shapiro
- ----------------------- President, Chief Executive,
William Shapiro Financial and Accounting Officer
Date: July 24, 1995
/s/ Kenneth S. Shapiro
- ----------------------- Vice-President
Kenneth S. Shapiro
Date: July 24, 1995
/s/ Lester D. Shapiro
- ----------------------- Secretary, Treasurer
Lester D. Shapiro and Director
Date: July 24, 1995
/s/ Nathan Tattar
- ----------------------- Director
Nathan Tattar
Date: July 24, 1995
/s/ John B. Orr
- ----------------------- Director
John B. Orr
Date: July 24, 1995
/s/ Adam Varrenti, Jr.
- ----------------------- Director
Adam Varrenti, Jr.
Date: July 24, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ART. 5 FDS FOR 10-K
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<CASH> 8,909
<SECURITIES> 0
<RECEIVABLES> 17,268
<ALLOWANCES> 975
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 27,748
<CURRENT-LIABILITIES> 0
<BONDS> 24,522
<COMMON> 1,000
0
0
<OTHER-SE> (182)
<TOTAL-LIABILITY-AND-EQUITY> 27,747
<SALES> 2,945
<TOTAL-REVENUES> 2,945
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,054
<LOSS-PROVISION> 1,230
<INTEREST-EXPENSE> 1,314
<INCOME-PRETAX> (654)
<INCOME-TAX> 0
<INCOME-CONTINUING> (654)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (654)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
