As filed with the Securities and Exchange Commission on December 17, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DVI, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2722773
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
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500 Hyde Park
Doylestown, Pennsylvania 18901
(215) 345-6600
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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MICHAEL A. O'HANLON
500 HYDE PARK
DOYLESTOWN, PENNSYLVANIA 18901
(215) 345-6600
(Name, address including zip code, and telephone number,
including area code, of agent for service)
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WITH A COPY TO:
JOHN A. HEALY, ESQ.
ROGERS & WELLS LLP
200 PARK AVENUE
NEW YORK, NEW YORK 10166
(212) 878-8281
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. /__/
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. /__/
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. /__/
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. /__/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum
Amount to be Offering Price Aggregate Offering Amount of
Title of Shares to be Registered Registered Per Unit Price Registration Fee
<S> <C> <C> <C> <C>
Common Stock, par value $.005 88,000 shares $17.40625 (1) $1,531,750 (1) $426 (1)
per share
</TABLE>
(1) Pursuant to Rule 457(c) under the Securities Act of 1933, the calculation
of the registration fee is based on the average of the high and low prices
of the Registrant's Common Stock reported in the consolidated reporting
system of the New York Stock Exchange on December 14, 1998.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
===============================================================================
<PAGE>
PROSPECTUS (Subject to completion; Dated December 17, 1998)
DVI, INC.
88,000 SHARES OF COMMON STOCK
----------------
Shares of the Company's common stock are traded on the New York Stock Exchange
under the symbol "DVI."
----------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 5.
Dominic A. Gugliemi is selling these shares of Common Stock. The Company will
not receive any part of the proceeds from the sale by Mr. Gugliemi.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED ON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
You should rely only on the information contained in, or incorporated by
reference into, this Prospectus. The Company has not authorized any other
person to provide you with different information. The Company is not making an
offer of these shares in any location where the offer is not permitted.
The date of this Prospectus is December __, 1998
The information in this Prospectus is not complete and may be changed. We may
not sell the securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
TABLE OF CONTENTS
WHERE YOU CAN FIND MORE INFORMATION...........................................1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE...............................1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS....................2
THE COMPANY...................................................................3
RISK FACTORS..................................................................4
USE OF PROCEEDS..............................................................12
SELLING STOCKHOLDER..........................................................12
PLAN OF DISTRIBUTION.........................................................13
EXPERTS......................................................................13
LEGAL MATTERS................................................................13
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS...........................14
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission. The Securities and
Exchange Commission is referred to in this offering memorandum as the
"Commission." You may read and copy any document that we file at the
Commission's public reference rooms located at 450 First Street, N.W.,
Judiciary Plaza, Room 1024, Washington, D.C. 20549; at regional offices of the
Commission at the Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511; and at 7 World Trade Center, New York, New
York 10048. Our filings with the Commission are also available to the public at
the Commission's web site at http://www.sec.gov. You may also read and copy
these documents at the offices of the New York Stock Exchange, 20 Broad Street,
New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this registration statement, and later information
that we file with the Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the Commission under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934, as amended, until such time as
all of the shares of Common Stock have been sold.
(i) Our Annual Report on Form 10-K for our fiscal year ended June 30,
1998;
(ii) Our Quarterly Report on Form 10-Q for the quarter ended September
30, 1998; and
(iii) The description of the Common Stock contained in our registration
statement on Form 8-A (which we filed with the Commission on March
27, 1992) and the information in our prospectus contained in our
registration statement on Form S-2 (dated May 14, 1992), together
with any other documents filed with the Commission for the purpose
of updating or otherwise amending that description after the date
of this registration statement.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
DVI, Inc.
500 Hyde Park
Doylestown, Pennsylvania 18901
Attn: Legal Department
(215) 345-6600
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CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING STATEMENTS
This prospectus includes forward-looking statements. We have based these
forward-looking statements on our current expectations and projections about
future events. Forward-looking statements are generally identifiable by use of
the words "may," "will," "should," "expect," "anticipate," "estimate,"
"believe," "intend" or "project" or the negatives of such words or variations
thereon or comparable terminology. These forward-looking statements are subject
to risks, uncertainties, and assumptions about the Company, including, among
other things:
. material adverse changes in economic conditions in the geographic
areas where we finance equipment;
. the possibility that difficulties may arise in integrating the
operations of acquired businesses and forming and operating joint
ventures;
. competition from others;
. changes in interest or currency exchange rates that limit our
ability to generate new receivables and decrease our net interest
margins;
. increases in non-performing loans and credit losses;
. our inability to access capital and financing on terms acceptable to
us;
. changes in any domestic or foreign governmental regulation affecting
our ability to declare and pay dividends or the manner in which we
conduct business;
. adverse changes, or any announcement relating to a possible or
contemplated adverse change, in the ratings obtained from any of the
independent rating agencies relating to our debt securities or other
financial instruments;
. our ability and the ability of third parties with whom we have
relationships to become year 2000 and euro compliant; and
. other risk factors set forth under "Risk Factors."
We undertake no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise. In light of these risks, uncertainties, and assumptions, the
forward-looking events discussed in this prospectus might not occur.
_______________
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THE COMPANY
GENERAL. We are an independent specialty finance company that provides
asset-based financing to healthcare service providers. Our core businesses are
medical equipment finance and medical receivables finance. We provide these
services principally in the U.S. and, to a lesser extent, in Latin America,
Europe, the U.K., Asia and Australia. As of September 30, 1998, our managed net
financed assets and shareholders' equity were $1.4 billion and $177.6 million,
respectively.
We principally serve the financing needs of middle market healthcare
service providers, such as outpatient healthcare providers, medical imaging
centers, physician group practices, integrated healthcare delivery networks
and hospitals. Many of our customers are entrepreneurial companies that
have capitalized on trends affecting the healthcare delivery systems in the
U.S. and other countries to build their businesses. As a result of these
trends, our business has grown substantially. From June 30, 1995 to September
30, 1998, our managed net financed receivables portfolio increased 183% to
approximately $1.4 billion from approximately $494.9 million.
MEDICAL EQUIPMENT FINANCE. Our medical equipment finance business operates
by:
. providing financing directly to end users of diagnostic imaging and
other sophisticated medical equipment;
. providing financing directly to end users of lower cost medical
devices;
. providing domestic and international finance programs for vendors of
diagnostic and other sophisticated medical equipment; and
. to a lesser extent, purchasing medical equipment loans and leases
originated by regional leasing companies through a wholesale loan
origination program.
Our typical equipment loans for diagnostic, patient treatment and other
sophisticated medical equipment (originated both domestically and
internationally) range from $200,000 to $3.0 million, while equipment loans for
lower cost medical devices range from $5,000 to $200,000. Virtually all of our
equipment loans are structured so that the full cost of the equipment and all
financing costs are repaid during the financing term, which typically is five
years. Because most of our equipment loans are structured as notes secured by
equipment or direct financing leases with a bargain purchase option, our
exposure to residual asset value is limited; it was $24.9 million at September
30, 1998. At September 30, 1998, our managed portfolio of equipment financing
loans was $1.2 billion.
In recent years we have expanded our international business significantly.
Internationally, we finance the purchase of diagnostic imaging and other
sophisticated medical equipment by private clinics, diagnostic centers and
hospitals. Our international business is focused on providing finance programs
for equipment manufacturers doing business in Latin America, Europe, the U.K.,
Asia and Australia. We believe our presence in these regions enhances our
relationships with certain medical equipment manufacturers and permits us to
capitalize on the growing international markets for medical equipment
financing. We view continued expansion of our relationships with medical
equipment vendors and manufacturers as an integral component of our growth
strategy and intend to continue to expand our medical equipment finance
activities outside the U.S. We also believe that by helping vendors and
manufacturers finance their customers' equipment purchases outside the U.S., we
will encourage those vendors and manufacturers to increase the financing
opportunities they refer to us within the U.S. At September 30, 1998, our
managed portfolio of international equipment loans was $171.5 million.
MEDICAL RECEIVABLES FINANCE. Our medical receivables finance business
operates by:
. providing lines of credit to a wide variety of healthcare providers;
and
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. offering an interest-only revolving line of credit to financial
intermediaries that purchase receivables from healthcare providers.
Substantially all of the lines of credit we provide are collateralized by
third party medical receivables due from Medicare, Medicaid, health maintenance
organizations, referred to as "HMOs," preferred provider organizations,
referred to as "PPOs," commercial insurance companies and, to a limited extent,
other healthcare service providers. We generally advance only 70% to 85% of our
estimate of the net collectible value of the eligible receivables from third
party payors. Clients continue to bill and collect the accounts receivable,
subject to lockbox collection and sweep arrangements established for our
benefit. We conduct extensive due diligence on our potential medical
receivables clients for all of our financing programs and follow underwriting
and credit policies in providing financing to customers. Our credit risk is
mitigated by our ownership of or security interest in all receivables, eligible
and ineligible. We also recently acquired a highly sophisticated collateral
tracking system which will allow us to improve the monitoring of medical
receivables. Our medical receivables loans are structured as floating rate
lines of credit. These lines of credit typically range in size from $1.0
million to $15.0 million; however, in certain circumstances, commitments
ranging from $20.0 million to $40.0 million are also provided to financial
intermediaries for purchasing receivables from healthcare providers. At
September 30, 1998, our portfolio of medical receivables loans was $140.0
million.
ADDITIONAL FINANCING SERVICES. As a result of management's belief that the
long-term care and assisted care markets and emerging growth companies have
been underserved by traditional financing sources, we established DVI Merchant
Funding and DVI Private Capital, divisions of DVI Financial Services Inc., and
recently acquired Third Coast Capital. Through DVI Merchant Funding, we provide
fee-based advisory services such as private placement, loan syndication,
interim real estate financing, mortgage loan placement and, to a lesser extent,
mergers and acquisitions advisory services to our customers operating in the
long-term care, assisted care and specialized hospital markets. Through DVI
Private Capital, we provide subordinated debt financing to our traditional
customer base and through Third Coast Capital, we provide asset-based
financing, including lease lines of credit, to emerging growth companies.
CREDIT UNDERWRITING. We believe the credit underwriting process we use
when originating loans is effective in managing risk. The process follows
detailed procedures and benefits from our significant experience in evaluating
the creditworthiness of potential borrowers. We also have been successful in
resolving delinquencies. Our net charge-offs as a percentage of average managed
net financed assets were 0.28%, 0.06% and 0.15% for the years ended June 30,
1996, 1997 and 1998, respectively, and were 0.29% for the period ended
September 30, 1998 (annualized). Our delinquencies (greater than a period of 30
days) as a percentage of managed net financed assets at June 30, 1996, 1997 and
1998 were 4.3%, 3.6% and 6.9%, respectively, and were 7.2% at September 30,
1998.
RISK FACTORS
THE COMMON STOCK INVOLVES A SIGNIFICANT DEGREE OF RISK. INVESTORS SHOULD
CAREFULLY CONSIDER THE RISK FACTORS DESCRIBED BELOW TOGETHER WITH ALL OF THE
INFORMATION SET FORTH OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN
DETERMINING WHETHER OR NOT TO PURCHASE ANY OF THE COMMON STOCK.
DEPENDENCE ON WAREHOUSE FINANCING AND PERMANENT FUNDING PROGRAMS
In order to sustain the growth of our financing business, we depend upon
funding from warehouse facilities until we are able to fund our equipment and
other loans permanently. The funds we obtain through warehouse facilities are
full recourse short-term borrowings secured primarily by the underlying
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equipment, medical receivables and other collateral. We typically repay these
borrowings with proceeds we receive when we permanently fund our equipment and
other loans.
At September 30, 1998, we had available an aggregate of approximately
$543.0 million under various warehouse facilities, of which approximately
$423.0 million was available for funding equipment loans and approximately
$120.0 million was available for funding medical receivables loans. We can not
give any assurance that this type of warehouse financing will continue to be
available to us on acceptable terms. If we are unable to obtain such funds on
acceptable terms, we will have to limit our equipment and other loan
originations. This would have a material adverse effect on our financial
condition and results of operations.
Our principal form of permanent funding is securitization. Securitization
is a process in which a pool of equipment loans is transferred to a special
purpose financing vehicle which issues notes to investors. Principal and
interest on the notes issued to investors by the securitization subsidiary are
paid from the cash flows produced by the loan pool, and the notes are secured
by a pledge of the assets in the loan pool as well as by other collateral.
In the securitizations we sponsor, equipment loans funded through the
securitizations must be credit enhanced to receive an investment grade credit
rating. In the securitizations we have sponsored to date, we have effectively
been required to furnish credit enhancement equal to the difference between
(i) the aggregate principal amount of the equipment loans we originated and
transferred to our special-purpose finance subsidiary and the related costs
of consummating the securitization and (ii) the net proceeds received in such
securitizations.
Our ability to complete securitizations and other structured finance
transactions depends upon a number of factors, including:
. general conditions in the credit markets;
. the size and liquidity of the market for the types of securities we
may issue or place in securitizations; and
. the overall performance of our loan portfolio.
We do not have binding commitments from financial institutions or
investment banks to provide permanent funding for our equipment or medical
receivables loans. If for any reason we were unable to access the
securitization markets, and/or obtain permanent funding for our equipment or
other loans, we can not provide any assurance that our lenders would refinance
or extend the terms of our warehouse facilities for a sufficient period of
time for us to obtain permanent funding or at all. If our lenders did not
refinance or extend the terms of our warehouse facilities, we could possibly be
required to repay such facilities, the consequence of which would have a
material adverse effect on our financial condition and results of operations.
ADVERSE EFFECT OF CUSTOMER DEFAULTS AND ASSOCIATED CREDIT RISK
Many of our customers are outpatient healthcare providers. Loans to such
customers require a high degree of credit analysis. In addition, we have
entered the long-term care and assisted care submarkets and recently, have
begun to provide asset-backed financing for emerging growth companies and
subordinated debt financing to our traditional customer base, all of which
require different types of credit analysis. Although we try to reduce our risk
of default and credit losses through our underwriting practices, loan servicing
procedures and the use of various forms of non-recourse or limited recourse
financing (in which the financing sources that permanently fund our equipment
and other loans assume some or all of the risk of default by our customers), we
remain exposed to potential losses resulting from a default by a customer.
Customers' defaults could result in the following:
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. require us to make certain payments under our warehouse
facilities;
. in permanent equipment and other funding arrangements, require us to
make payments to the extent of our remaining credit enhancement
position;
. the loss of the cash or other collateral pledged as credit
enhancement under our permanent equipment and other funding
arrangements; or
. the loss of any remaining interest we may have kept in the
underlying equipment.
During the period beginning when we initially fund an equipment or other
loan to when we fund the loan on a permanent basis, we are exposed to full
recourse liability in the event of default by the borrower. While we have
typically been able to permanently fund our equipment and other loans, we may
not be able to permanently fund many of the loans in our international
portfolio. While we are currently in the process of securing permanent funding
for our international portfolio and are exploring opportunities to
permanently fund our other financing services, with respect to such loans
and services we may be subject to credit risk for a longer period of time. In
some cases, this risk will extend for the life of the loans. In addition, the
terms of securitizations and other types of structured finance transactions
generally require us to replace or repurchase equipment and other loans in
the event they fail to conform to the representations and warranties made by
us, even in transactions otherwise designated as non-recourse or limited
recourse.
Defaults by our customers could also adversely affect our ability to
obtain additional financing in the future, including our ability to use
securitization or other forms of structured finance. The sources of such
permanent funding take into account the credit performance of the equipment and
other loans previously financed by us in deciding whether and on what terms to
make new loans. In addition, the credit rating agencies often involved in
securitizations consider prior credit performance in determining the rating to
be given to the securities issued in securitizations sponsored by us.
Under our wholesale loan origination program, we purchase equipment loans
from originators that generally do not have direct access to the securitization
market as a source of permanent funding for their loans. Our Company does not
work directly with the borrowers at the origination of these equipment loans
and therefore is not directly involved in structuring the credits. As a result,
we must independently verify credit information supplied by the originator.
Accordingly, we face a somewhat higher degree of risk when we acquire loans
under the wholesale loan origination program. During the twelve-month period
ended June 30, 1998 and the three-month period ended September 30, 1998, loans
purchased under the wholesale program constituted 13.7% and 6.5%, respectively,
of the total domestic loans originated during such periods. We can not give any
assurance that we will be able to avoid the credit risks related to wholesale
loan origination.
ADVERSE EFFECT OF FLUCTUATING INTEREST RATES
When we borrow funds through warehouse facilities, we are exposed to
certain risks caused by interest rate fluctuations. Although our equipment
loans are structured and permanently funded on a fixed interest rate basis,
we use warehouse facilities until permanent funding is obtained. Since the
funds we borrow through warehouse facilities are on a floating interest rate
basis, we use hedging techniques to protect our interest rate margins during
the period that warehouse facilities are used prior to an anticipated
securitization and sale. To manage our interest rate risk, we use derivative
financial instruments such as forward rate agreements, forward market sales or
purchases of treasury securities, and interest rate swaps and caps. We use
these derivatives to manage certain components of interest rate risk including
mismatches of the maturity of assets and liabilities on our balance sheet,
hedging anticipated loan securitizations and sales and interest rate spread
protection. However, we can not give any assurance that:
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. our hedging strategy or techniques will be effective;
. our profitability will not be adversely affected during any period
of changes in interest rates; or
. the costs of hedging will not exceed the benefits.
A substantial and sustained increase in interest rates could adversely
affect our ability to originate loans. In certain circumstances and for a
variety of reasons, we may retain for an indefinite period certain of the
equipment and other loans we originate. In such cases, our interest
rate exposure may continue for a longer period of time.
POSSIBLE ADVERSE CONSEQUENCES FROM RECENT GROWTH
In the past three years, we originated a significantly greater number of
equipment, medical receivables and other loans than we did in previous years.
As a result of this growth, our managed net financed asset portfolio grew from
$494.9 million at June 30, 1995 to $1.4 billion at September 30, 1998. In light
of this growth, the historical performance of our loan portfolio, including
rates of credit loss, may not be useful in predicting future loan portfolio
performance. Any credit or other problems associated with the large number of
equipment and other loans recently originated are not yet apparent.
Since November 1997, we have provided private placement, loan syndication,
interim real estate financing, mortgage loan placement, and, to a lesser
extent, merger and acquisition advisory services to the healthcare industry.
More recently, we have also begun to offer asset-based financing to emerging
growth companies and subordinated debt financing to our traditional customer
base. We have not provided these products and services previously. We can not
give any assurance that we will be able to market these new products and
services successfully or at all, or that if we are successful in marketing
these products and services that the returns on such products and services will
be consistent with our historical financial results.
ADVERSE EFFECT OF A HIGH CUSTOMER CONCENTRATION
At September 30, 1998, approximately 10.6% of our managed net financed
receivables were due from two of our customers and their respective affiliates,
representing 6.3% and 4.3% of managed net financed receivables, respectively.
As a result, we are subject to the risks and uncertainties of these two
businesses and their respective affiliates. Adverse conditions affecting either
of these entities could have a material adverse effect on our ability to
collect the total amount of outstanding receivables from either of these
customers. While our customer concentration has decreased as the number of our
clients has increased over time, we can not give any assurance that such
concentration will continue to decrease in the future.
RISKS OF INTERNATIONAL OPERATIONS; CURRENCY FLUCTUATIONS
The portion of our medical equipment loans originated outside the U.S. was
26.0% in the fiscal year ended June 30, 1998 and 15.2% in the three month
period ended September 30, 1998. Because of our relationships with certain
manufacturers of high-cost medical equipment who are conducting business and
expanding internationally, we anticipate that equipment loans originated
outside the U.S. will become a significant portion of our loan portfolio. With
the continuing expansion of our international business, an increasing portion
of our operations may continue to be subject to certain risks, including
currency exchange risks and exchange controls and potential adverse tax
consequences. These factors could have a material adverse effect on our
financial condition and results of operations.
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The growth of our international business is significantly dependent on
referrals from manufacturers of diagnostic imaging equipment and other
manufacturers of medical equipment we finance. In addition, these manufacturers
occasionally provide credit support for or assume first loss positions with
respect to equipment financing they refer to us. These manufacturers are not
contractually obligated to give these referrals or to provide credit support or
assume first loss positions in connection with their referrals and we can not
give any assurance that they will continue to do so. If for any reason we no
longer received the benefits of these referrals or related credit support and
assumptions of first loss positions, our international growth would be
materially adversely affected.
Our equipment loans are denominated in both U.S.dollars and foreign
currencies. If denominated in U.S. dollars, our operating results are subject
to fluctuation based upon changes in the exchange rates of certain currencies
in relation to the U.S. dollar. We engage in hedging activities with respect to
our foreign currency exposure and management is continuing to monitor our
exposure to currency fluctuations and our hedging policies. However, we can not
give any assurance that such hedging techniques will be successful.
We are also subject to the adverse impact devaluation would have on our
international customers' ability to make payments under equipment loans.
Although we try to account for the risk of devaluation when originating our
international equipment loans, we can not give any assurance that we will be
successful.
In Latin America, our equipment loans are subject to "transfer risks"
where a foreign government may block foreign currencies from leaving the
country during economic downturns. If a foreign government were to take any
action to block foreign currencies from leaving its country, overseas creditors
such as our Company would be unable to collect payments on their loans.
Since all of our Latin American equipment loans are denominated in U.S.
dollars, any transfer restrictions on foreign currencies would have a material
adverse effect on our financial condition and results of operations.
RISKS RELATED TO THE MEDICAL RECEIVABLE FINANCING BUSINESS
Our medical receivables financing business generally consists of providing
loans to healthcare providers that are secured by their receivables.
Receivables are paid by groups such as insurance companies, governmental
programs and other healthcare providers. These loans may also be secured by
other types of collateral. While we expect to focus on this business as a
significant part of our growth strategy, we can not give any assurance that we
will be able to expand this business successfully or avoid related liabilities
or losses.
The following describes the unique risks involved in the medical
receivables financing business:
. Overstatements by healthcare providers of the quality and
characteristics of their medical receivables, which we analyze in
determining the amount of the line of credit to be secured by such
receivables. After our determination has been made, healthcare
providers could change their billing and collection systems,
accounting systems or patient records in a way that could adversely
affect our ability to monitor the quality and/or performance of the
related medical receivables.
. Technical legal issues associated with creating and maintaining
perfected security interests in medical receivables, specifically
those generated by Medicaid and Medicare claims.
. Payors may make payments directly to healthcare providers that have
the effect (intentionally or otherwise) of circumventing our rights
in such payments.
. Payors may attempt to offset their payments to us against debts
owed to the payors by the healthcare providers.
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. As a lender whose position is secured by receivables, we are less
likely to collect outstanding receivables in the event of a
borrower's insolvency than a lender whose position is secured by
medical equipment that the borrower needs to operate its business.
. A borrower that defaults on obligations secured by medical
receivables may require additional loans, or modifications to the
terms of existing loans, in order to continue operations and repay
outstanding loans.
. A conflict of interest may arise when we act as servicer for an
equipment-based securitization and originate medical receivables
loans to borrowers whose equipment loans have been securitized.
. The fact that the use of structured finance transactions to fund
medical receivables is a relatively new process may impair our
efforts to develop suitable sources of funding.
Although we believe we have structured our credit policies and lending
practices to take into account these and other factors (including the recent
acquisition of a highly sophisticated collateral tracking system which will
allow us to improve the monitoring of medical receivables), we can not give any
assurance that we will not sustain credit losses in connection with our medical
receivables financing business. We also can not give assurance that the medical
receivables financing business will meet our growth expectations.
FAILURE TO COMPLY WITH GOVERNMENT REGULATIONS
Our finance business is subject to numerous federal and state laws and
regulations, which, among other things, may:
. require that we obtain and maintain certain licenses and
qualifications;
. limit the interest rates, fees and other charges that we are allowed
to collect;
. limit or prescribe certain other terms of our finance receivables
arrangements with clients; and
. subject us to certain claims, defenses and rights of offset.
Although we believe that we are currently in compliance with applicable
statutes and regulations, we can not give any assurance that we will be able to
maintain such compliance without incurring significant expense. The failure to
comply with such statutes and regulations could have a material adverse effect
upon us. Also, the adoption of additional statutes and regulations, changes in
the interpretation and enforcement of current statutes and regulations, or the
expansion of our business into jurisdictions that have adopted more stringent
regulatory requirements than those in which we currently conduct business could
have a material adverse effect upon us.
RISKS ASSOCIATED WITH THE MEDICAL EQUIPMENT MARKET
Many factors beyond our control affect the demand for our equipment
financing services. In addition, to general economic conditions and
fluctuations in supply and demand, the demand for medical equipment may also
be negatively affected by reductions in reimbursement amounts paid to
healthcare providers for their services from third-party payors such as
insurance companies, government programs and other healthcare providers and
increased use of managed healthcare plans that often restrict the use of
certain types of high technology medical equipment. For the quarter ended
September 30, 1998, financing for purchases of magnetic resonance imaging
machines, commonly referred to as "MRI machines," accounted for approximately
13% (by dollar volume) of the total loans originated by us. Any substantial
9
<PAGE>
decrease in our loan originations for the purchase of MRI machines could
have a material adverse effect on the Company.
COMPETITION
The business of financing medical equipment is highly competitive. We
compete with equipment manufacturers that sell and finance sales of their own
equipment, finance subsidiaries of national and regional commercial banks and
equipment leasing and financing companies. Many of our competitors have
significantly greater financial and marketing resources than we do. In
addition, the competition in the new markets recently targeted by our Company,
specifically the medical device financing market and medical receivables
financing market, may be greater than the levels of competition historically
experienced by us.
We believe that increased equipment loan originations during the past
three years resulted, in part, from a decrease in the number of competitors in
the higher cost medical equipment financing market and our high level of
penetration in this market. We can not give any assurance that new competitive
providers of financing will not enter the medical equipment financing market in
the future. To meet our long-term growth objectives, we must increase our
presence in our targeted markets for lower-cost medical devices and medical
receivables financing businesses. To achieve this goal we may be required to
reduce our margins to be competitive.
DEPENDENCE UPON KEY PERSONNEL
Our ability to successfully continue our existing financing business, to
expand into targeted markets and to develop our newer businesses depends upon
our ability to retain the services of key management personnel. The loss of
any of these individuals or an inability to attract and maintain additional
qualified personnel could adversely affect our Company. We can not give any
assurance that we will be able to retain existing management personnel or
attract additional qualified personnel.
ADVERSE EFFECT OF SUBSTANTIAL INDEBTEDNESS AND LEVERAGE
We have substantial outstanding indebtedness and are highly leveraged. As
of September 30, 1998, we (including our consolidated subsidiaries) had total
debt of $679.3 million, of which $414.5 million was full recourse debt and
$264.8 million was limited recourse debt. Of the $679.3 million of total debt,
$456.5 million was long-term debt and $222.8 million was short-term debt.
We have substantial debt service requirements. Our ability to repay
indebtedness will depend upon future operating performance. Future operating
performance depends upon the performance of our loan portfolio, the
success of our business strategy, prevailing economic conditions, levels of
interest rates and financial, business and other factors. Many of these
factors are beyond our control. The degree to which we are leveraged may
also impair our ability to obtain additional financing on acceptable terms.
In addition, the indenture related to our Senior Notes due 2004 restricts
our ability to obtain non-warehouse or limited recourse debt which may
also limit our ability to refinance existing indebtedness.
ABILITY TO SERVICE DEBT; NEGATIVE CASH FLOWS AND CAPITAL NEED
Although we believe that cash available from operations and financing
activities will be sufficient to enable us to make required interest payments
on our debt, we can not give any assurance that we will always be able to do
so. We may encounter liquidity problems which could affect our ability to meet
our payment obligations while attempting to withstand competitive pressures or
adverse economic conditions.
10
<PAGE>
We expect to continue to operate on a negative cash flow basis as
the volume of our loan purchases and originations increases and our
securitization program grows. Our primary cash requirements include the
funding of:
. loan originations and purchases pending their securitization and
sale;
. fees and expenses incurred in connection with the securitization of
loans;
. loan originations in connection with our new financing services, for
which permanent sources of funding are still being developed;
. credit enhancement requirements in connection with the
securitization and sale of the loans, which include cash
deposits, the funding of subordinated tranches, and/or the pledge
of additional equipment or other loans that are funded with our
capital;
. ongoing administrative and other operating expenses;
. interest and principal payments under our warehouse facilities
and other indebtedness; and
. delinquent accounts, as generally required by the terms of
securitizations.
In the future, we expect our primary sources of liquidity to be existing
cash fundings under our warehouse facilities, sales of loans through
securitizations and other permanent fundings, new sources of permanent funding
which are being developed for loan originations in connection with our
new financing services, the net proceeds from the sale of further issuances
of debt or equity.
We believe these sources will be sufficient to fund our liquidity
requirements for at least the next 12 months if our future operations
are consistent with management's current growth expectations. However,
because we expect to continue to operate on a negative cash flow basis
for the foreseeable future, we will need to effect debt or equity financings
regularly. The type, timing and terms of financing selected by us will
be dependent upon our cash needs, the availability of other financing
sources and the prevailing conditions in the financial markets. We can not
give any assurance that any of these sources will be available at any
given time or that they will be available on favorable terms.
YEAR 2000 CONCERNS
We believe, based on discussions with our current systems vendors, that
our software applications and operational programs will properly recognize
calendar dates beginning in the year 2000. We have completed an assessment
of our hardware and software systems, as well as other systems such as security
systems and elevators. Based on these assessments, the only remediation that we
have found necessary are several software packages that need to be upgraded
through "off-the-shelf" releases. The upgrades will be applied during the first
quarter of calendar 1999 and testing will be completed shortly thereafter.
Since we have no major investment in "custom" programming requiring extensive
reprogramming, we do not anticipate the need to hire year 2000 solution
providers or programmers to rewrite custom code at this time.
The software upgrades mentioned above are part of our standard
maintenance, the cost of which is already covered by our ordinary software
contracts and willnot require the incurrence of any additional expense.
At this time, we anticipate that our exposure to year 2000 compliance issues
will be minimal.
Our medical receivables finance business is dependent on the successful
receipt of receivables from third party payors such as Medicare and
Medicaid. Any failure of third party payors to become year 2000 compliant may
result in the inability to collect medical receivables in a timely manner or
at all. This could have a material adverse effect on our medical
11
<PAGE>
receivables finance business. We are currently unaware of any other
relationships with third parties which will have a material effect on our
year 2000 issues. However, we can not provide any assurance regarding a third
party's ability to become year 2000 compliant.
We have begun to identify different scenarios, including year 2000
readiness, that would cause a business interruption. Contingency plans are
being developed to resolve the most reasonably likely scenarios. Based on
current information, we believe that the year 2000 issue will not pose
significant operational problems to us.
USE OF PROCEEDS
The Company will receive no portion of the proceeds of the sale of the
shares of Common Stock offered by this prospectus.
SELLING STOCKHOLDER
Dominic A. Gugliemi, the Selling Stockholder, acquired the shares of
Common Stock offered by this prospectus (referred to as the Shares) in
connection with the Company's acquisition of MEF Corp. in January 1993. Under
the terms of the original purchase agreement, the Company acquired all the
outstanding shares of MEF Corp. from MEFC Partners L.P., a Delaware
limited partnership which was owned or controlled by, among others, Mr.
Gugliemi, for a purchase price that was payable before October 15, 1998 in
cash or Common Stock, as elected by the Company. As initially structured, the
purchase price was to be determined as a percentage of the after-tax earnings
of the division of the Company, representing the former MEF Corp., during
the sixty-six month period following the date of acquisition. However, due to
the integration of former MEF Corp. personnel and business relationships into
the Company's business, the concept of segregating the earnings of the "MEF
Corp. Division" as contemplated by the original purchase agreement became
increasingly uncertain and impractical. As a result, based on negotiations
between the Company and MEFC Partners, L.P., the purchase price of MEF Corp.
was set at 400,000 shares of the Company's Common Stock, pursuant to the
terms of an amendment to the original purchase agreement, in lieu of the
original purchase price.
The table below sets forth: (1) Mr. Gugliemi's former affiliation with
the Company, (2) the aggregate number of shares of Common Stock owned by
Mr. Gugliemi prior to the offering made by this prospectus; (3) the number
of shares of Common Stock received by Mr. Gugliemi in connection with the MEF
Corp. purchase agreement; (4) the maximum number of shares that Mr. Gugliemi
may offer and sell pursuant to this prospectus; and (5) the number of shares
(and percentage of the outstanding shares) of Common Stock owned by Mr.
Gugliemi after the offering made by this prospectus. Shares of Common Stock
described under (2) and (5) above may not be offered or sold pursuant to this
prospectus.
<TABLE>
<CAPTION>
Number of Shares
(and Percentage
of
Outstanding
Material Maximum Shares)
Relationship With Number of Shares Number of Shares Number of of Common Stock
Company of Common Stock of Common Stock Shares that to be
During Beneficially Received May Be Beneficially
Previous Owned Pursuant to the Offered Owned
Name Three Years Before Offering Agreement Hereby After Offering
- ------------------- ------------------ ---------------- ----------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Dominic A. Gugliemi Former Vice 88,000 88,000 88,000 *
President of the
Company
</TABLE>
- ----------------------
* Less than 1%.
12
<PAGE>
PLAN OF DISTRIBUTION
It is anticipated that Mr. Gugliemi will offer his shares for sale at
the prices prevailing on the New York Stock Exchange (or other principal market
on which their shares are then traded) on the date of sale. Mr. Gugliemi
also may sell his shares privately, either directly to the purchaser or
through a broker or brokers. There are no arrangements or agreements with any
brokers or dealers to act as underwriters of Mr. Gugliemi's shares as of
the date hereof. All costs, expenses and fees incurred in connection with the
registration of these shares, including, but not limited to, all registration
and filing fees, printing expenses and fees (if any) and disbursements
of the Company's counsel and accountants, are being paid by the Company, but
all selling and other expenses incurred by Mr. Gugliemi will be paid by him.
Mr. Gugliemi, and the brokers through whom the sales of his shares are
made, may be deemed to be "underwriters" within the meaning of Section 2(11) of
the Securities Act. In addition, any profits realized by Mr. Gugliemi or such
brokers on the sale of their shares may be deemed to be underwriting
commissions. The Company has agreed to indemnify Mr. Gugliemi and any
brokers through whom sales of shares are made against certain liabilities,
including liabilities under the Securities Act.
EXPERTS
The financial statements and the related financial statement schedules
included and incorporated in this Prospectus and elsewhere in the Registration
Statement by reference from the Company's Annual Report on Form 10-K for
the year ended June 30, 1998, as amended, have been audited by Deloitte &
Touche LLP, independent auditors, as stated in their report, which is
included and incorporated herein by reference, and have been so included and
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Rogers & Wells LLP, 200 Park Avenue, New York,
New York 10166.
13
<PAGE>
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Registration Fee................................... $ 426
Printing and Engraving............................. 1,000
Accounting Fees.................................... 5,000
Legal Fees and Expenses............................ 15,000
Blue Sky Fees and Expenses......................... 1,000
Miscellaneous Fees and Expenses.................... 8,000
---------
Total.............................................. $ 30,426
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of
Delaware, referred to as the "General Corporation Law," provides, in
general, that a corporation shall have power to indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of the fact that he is or was a director or
officer of the corporation. Such indemnity may be against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such action, suit or proceeding, if the
indemnitee acted in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the corporation, and with respect to
any criminal action or proceeding, the indemnitee must not have had reasonable
cause to believe his conduct was unlawful.
Section 145(b) of the General Corporation Law provides, in general,
that a corporation shall have power to indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director or
officer of the corporation against expenses (including attorney's fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation.
Section 145(g) of the General Corporation Law provides in general that
a corporation shall have power to purchase and maintain insurance on behalf of
any person who is or was a director or officer of the corporation against
any liability asserted against and incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would
have the power to indemnify him against such liability under the provisions
of the law.
The Company's By-laws require the Company to indemnify each of its
directors, officers and employees to the fullest extent permitted by law
in connection with any actual or threatened action or proceeding arising
out of his service to the Company or to other organizations at the
Company's request. The Company has agreed to indemnify the Selling Stockholder
and any brokers through whom sales of Shares are made against certain
liabilities, including liabilities under the Securities Act.
14
<PAGE>
ITEM 16. EXHIBITS
(a) Exhibits
3.1* - Certificate of Incorporation of the Company
3.2* - By-Laws of the Company
4.1* - Specimen of stock certificate for DVI's Common Stock
5.1** - Opinion of Rogers & Wells LLP
10.1*** - Stock Purchase Agreement dated as of January 6, 1993,
between DVI Health Services Corporation and MEFC Partners
L.P., referred to as the "MEFC Agreement"
10.2*** - Amendment No. 1 to the MEFC Agreement
23.1** - Consent of Rogers & Wells LLP
(included in Exhibit 5.1)
23.2** - Consent of Deloitte & Touche LLP
24.1 - Power of Attorney (see signature page)
______________
* Filed as an Exhibit to the Company's Registration Statement on Form S-3
(Registration No. 33-84604) and incorporated herein by reference.
** Filed herewith.
*** Filed as an exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-60547) and incorporated herein by reference.
(b) Financial Statements
Inapplicable.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change in the information set forth in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain at the termination of
the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial BONA FIDE offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the registrant's Certificate of Incorporation,
By-laws, or otherwise, the registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
15
<PAGE>
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Doylestown, Commonwealth of
Pennsylvania on December 16, 1998.
DVI, INC.
By: /S/ MICHAEL A. O'HANLON
---------------------------
Name: Michael A. O'Hanlon
Title: Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of DVI, Inc. hereby severally constitute Michael A. O'Hanlon
and Steven R. Garfinkel and each of them singly, our true and lawful attorneys
with full power to them, and each of them singly, to sign for us and in
our names in the capacities indicated below, the Registration Statement
filed herewith and any and all amendments to said Registration Statement
(including without limitation any amendments filed pursuant to Section 462(b)
of the Securities Act of 1933), and generally to do all such things in our
names and in our capacities as officers and directors to enable DVI, Inc.
to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission, hereby ratifying and
confirming our signature as they may be signed by our said attorneys, or any
of them, to said Registration Statement and any and all amendments thereto.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
_________ _____ ____
<S> <C> <C> <C>
/s/ MICHAEL A. O'HANLON Chief Executive Officer, December 16, 1998
______________________________ President and Director
MICHAEL A. O'HANLON
/S/ STEVEN R. GARFINKEL Senior Vice President and December 16, 1998
______________________________ Chief Financial Officer
STEVEN R. GARFINKEL (Principal Financial Officer)
/S/ JOHN P. BOYLE Vice President and Chief December 16, 1998
______________________________ Accounting Officer
JOHN P. BOYLE (Principal Accounting Officer)
______________________________ Director December __, 1998
GERALD L. COHN
/S/ WILLIAM S. GOLDBERG Director December 15, 1998
______________________________
WILLIAM S. GOLDBERG
______________________________ Director December __, 1998
JOHN E. McHUGH
/S/ NATHAN SHAPIRO Director December 15, 1998
______________________________
NATHAN SHAPIRO
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
_________ _____ ____
<S> <C> <C> <C>
/S/ HARRY T.J. ROBERTS Director December 15, 1998
______________________________
HARRY T.J. ROBERTS
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<S> <C> <C>
3.1* Certificate of Incorporation of the
Company
3.2* By-Laws of the Company
4.1* Specimen of stock certificate for
DVI's Common Stock, par value $.005
per share
5.1** Opinion of Rogers & Wells
10.1*** Stock Purchase Agreement dated as
of January 6, 1993, between DVI
Health Services Corporation and MEFC
Partners L.P., referred to as the
"MEFC Agreement"
10.2*** Amendment No. 1 to the MEFC Agreement
23.1** Consent of Rogers & Wells LLP
(included in Exhibit 5.1)
23.2** Consent of Deloitte & Touche LLP
24.1 Power of Attorney (see signature page)
</TABLE>
_____________
* Filed as an Exhibit to the Company's Registration Statement on Form S-3
(Registration No. 33-84604) and incorporated herein by reference.
** Filed herewith.
*** Filed as an exhibit to the Company's Registration Statement on Form S-1
(Registration No. 33-60547) and incorporated herein by reference.
<PAGE>
EXHIBIT 5.1
ROGERS & WELLS LLP
200 PARK AVENUE NEW YORK, NY 10166-0153
TELEPHONE 212.878.8000
FACSIMILE 212.878.8375
December 16, 1998
DVI, Inc.
500 Hyde Park
Doylestown, PA 18901
Re:Registration on Form S-3
Ladies and Gentlemen:
We have acted as special counsel for DVI, Inc., a Delaware corporation
(the "Company"), in connection with a Registration Statement on Form S-3
(the "Registration Statement"), filed by the Company with the Securities and
Exchange Commission (the "Commission") for registration under the Securities
Act of 1933, as amended (the "Securities Act"), of 88,000 shares (the
"Offered Shares") of the Company's common stock, par value $.005 per share (the
"Common Stock"), to be offered from time to time by a stockholder (the "Selling
Stockholder") of the Company.
In rendering the opinion expressed herein, we have examined the
Registration Statement in the form to be filed with the Commission on or
about the date hereof. In addition, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary,
including the Certificate of Incorporation and By-laws of the Company, and the
corporate proceedings of the Company relating to the authorization and issuance
of the Offered Shares. As to the factual matters relevant to the opinions set
forth below we have, with your permission, relied upon certificates of
officers of the Company and public officials.
Based upon the foregoing and on such examination of law as we have
deemed necessary, we are of the opinion that the Common Stock has been duly
authorized and validly issued to the Selling Stockholder by the Company and,
when issued and sold by the Selling Stockholder in the manner described in
the Registration Statement, will be validly issued, fully paid and non-
assessable.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement and to the reference to this
firm under the caption "Legal Matters" in the Prospectus contained in the
Registration Statement. In giving this consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act, or the Rules and Regulations of the Commission promulgated
thereunder.
Very truly yours,
/s/Rogers & Wells LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF DELOITTE & TOUCHE LLP
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 dated December 17, 1998, of DVI, Inc., of our report dated August 7,
1998, appearing in and incorporated by reference in the Annual Report on Form
10-K of DVI, Inc. for the year ended June 30, 1998, which is part of this
Registration Statement.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
December 16, 1998
