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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 12b-25
Commission File Number 0-21370
NOTIFICATION OF LATE FILING
(Check One): [ ] Form 10-K [ ] Form 11-K [ ] Form 20-F [X] Form 10-Q
[ ] Form 10-N-SAR
For Period Ended: September 30, 1998
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[ ] Transition Report on Form 10-K [ ] Transition Report on Form 10-Q
[ ] Transition Report on Form 20-F [ ] Transition Report on Form N-SAR
[ ] Transition Report on Form 11-K
For the Transition Period Ended:
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Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above,
identify the Item(s) to which the notification relates:
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Part I - Registrant Information
Full Name of Registrant: LEASING SOLUTIONS, INC.
Former Name If Applicable: N/A
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Address of Principal Executive Office (Street and Number):
10 ALMADEN BOULEVARD, SUITE 1500
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City, State and Zip Code: SAN JOSE, CALIFORNIA 95113
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Part II - Rules 12b-25 (b) and (c)
If the subject report could not be filed without unreasonable effort or
expense and the registrant seeks relief pursuant to Rule 12b-25(b), the
following should be completed. (Check appropriate box)
[X] (a) The reasons described in reasonable detail in Part III of this
form could not be eliminated without unreasonable effort or
expense;
[X] (b) The subject annual report, semi-annual report, transition
report on Form 10-K, 20-F, 11-K or Form N-SAR, or portion thereof
will be filed on or before the 15th calendar day following the
prescribed due date; or the subject quarterly report of
transition report on Form 10-Q, or portion thereof will be filed
on or before the fifth calendar day following the prescribed due
date; and
[ ] (c) The accountant's statement or other exhibit required by
Rule 12b-25(c) has been attached if applicable.
Part III - Narrative
State below in reasonable detail the reasons why Form 10-K, 11-K,
20-F, 10-Q, N-SAR or the transition report portion thereof could not be
filed within the prescribed time period.
As a result of the additional time required to evaluate and
process, late in the third quarter and following the close of the
quarter, the backlog associated with an unusually large volume of
expired short term leases, and to complete adjustments of the book value
of its assets, the Registrant was forced to delay the release of its
third quarter results. The reasons for this earlier delay have
continued to delay the normal closing and preparation of the
Registrant's third quarter financial results.
Additionally, on November 9, 1998, the Registrant announced that
Mr. Steven Yeffa had resigned as Chief Financial Officer and had been
replaced by Mr. George Bragg. The change of the Chief Financial
Officer, only six days prior to the due date of the Registrant's Form
10-Q for its third quarter, did not allow adequate time, without
unreasonable effort, for the newly appointed Chief Financial Officer to
become fully familiar with the Company's financial condition and results
of operations and to be prepared to sign the Form 10-Q.
As a consequence of these circumstances, the Registrant could not
file within the prescribed time period its Form 10-Q for the third
quarter ended September 30, 1998, without unreasonable effort or
expense.
Part IV - Other Information
(1) Name and telephone number of person to contact in regard to
this notification:
Douglas Clark Neilsson, General Counsel, (408) 494-2903
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13
or 15(d) of the Securities Exchange Act of 1934 or Section 30 of the
Investment Company Act of 1940 during the preceding 12 months or for such
shorter period that the registrant was required to file such report(s) been
filed? If the answer is no, identify report(s).
[X] Yes [ ] No
(3) Is it anticipated that any significant change in results
of operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report or
portion thereof?
[X] Yes [ ] No
If so, attach an explanation of the anticipated change,
both narratively and quantitatively, and, if appropriate, state the reasons why
a reasonable estimate of the results cannot be made.
See Attachment One, the Registrant's press release with respect to
its third quarter results, released on November 9, 1998, including
summary comparative operating results
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SIGNATURE
Leasing Solutions, Inc.
(Name of Registrant as Specified in Charter)
Has caused this notification to be signed on its behalf by the
undersigned thereunto duly authorized.
By: /s/ George Bragg Date: November 16, 1998
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George Bragg
Chief Financial Officer
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ATTACHMENT ONE
TO FORM 12b-25 DATED NOVEMBER 16, 1998
FOR IMMEDIATE RELEASE CONTACT:
Leasing Solutions, Inc.
Shannon Wagner, Manager, Investor Relations
408-995-6565
LEASING SOLUTIONS RELEASES THIRD QUARTER RESULTS
SAN JOSE, CALIFORNIA, November 9, 1998.Leasing Solutions, Inc.
(NYSE: LSN), announced today that revenues for its third quarter ended
September 30, 1998, increased 32%, to $77.3 million from $58.5 million
for the comparable 1997 quarter. Net income, however, decreased from
$3.5 million in the third quarter of 1997 to a $2.9 million loss in the
recently completed quarter. Accordingly, the diluted loss per share for
the quarter was $(.35), compared to earnings per share of $.42 for the
comparable 1997 quarter. The loss was primarily due to non-cash
adjustments to the book value of assets, as described below.
The Company's revenues for the nine months ended September 30,
1998, were $220.4 million, a 37% increase from the Company's $161.3
million in revenues for its first nine months of 1997. Net income for
the nine month period was $4.9 million, a 46% decrease from the $9.0
million reported for the same period in 1997. Diluted earnings per
share were $.57 for the nine month period, compared to $1.09 for the
same period in 1997.
The Company's third quarter loss resulted from primarily non-cash
adjustments of approximately $6.3 million, after-tax, to the book value
of assets, as follows:
o Write-downs and depreciation adjustments of approximately $2.9
million, after-tax, associated with an unusually large volume of
expired short-term leases with original terms of less than 36 months,
most of which were leased by a single customer, that were processed
late in the quarter or following the close of the quarter;
o The after-tax loss of approximately $1.5 million on sale of equipment
to a specific customer, at the end of the original 36 month lease
term, that was consummated after the end of the quarter. This
equipment, given its intended use and the customer's history of
keeping similar equipment in place for a long period of time, was
depreciated, as an isolated exception, on a basis different than the
Company's normal depreciation practice. Although the entire
transaction was profitable, the use of longer term depreciation
resulted in an adjustment to book value upon the sale of the
equipment; and
o Write-downs of approximately $1.9 million, after-tax, related to
certain other specific transactions, taken after the further review
of book values of equipment in the Company's inventory.
As a result of these and other actions taken by the Company,
including the review of its existing portfolio of equipment, and based
on projected customer equipment retention rates and current equipment
market conditions, the Company believes it has made the material
adjustments to the value of its existing equipment portfolio that are
currently necessary.
It is too early in the Company's fourth quarter for it to be able
to project, with any degree of certainty, its financial performance for
the quarter. However, although no assurance can be given, the Company
presently believes that, based in part on the effect of recent changes
in its treatment of short-term leases, it will be at or about break-even
for the quarter, and it expects to be profitable for the entire year of
1998.
Leasing Solutions is a full-service global leasing company that
specializes in leasing information processing and communications
equipment, principally to large, corporate customers. Most leases written
by the Company qualify as operating leases. Leasing Solutions has
purchased over $1.5 billion of equipment, and has master lease agreements
in place with over 800 customers. With international headquarters in San
Jose, California, the Company maintains sales offices in the metropolitan
areas of Atlanta, Boston, Chicago, Dallas, Los Angeles, New York City and
San Jose, as well as in Toronto and other locations in Canada and in the
United Kingdom, Belgium, France, Germany and the Netherlands.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: The statements contained in this release which are
not historical facts may be deemed to contain forward-looking statements
with respect to events, the occurrence of which involve risks and
uncertainties, including, without limitation, demand and competition for
the Company's lease financing services and the products to be leased by
the Company, the continued availability to the Company of adequate
financing to support its global expansion and activities, risks and
uncertainties of doing business in Europe and Canada and other foreign
countries, the ability of the Company to recover its investment in
equipment through remarketing, the impact on the Company of any change
in its depreciation policies, the ability of the Company to enter into
new strategic relationships and extend existing strategic relationships,
the performance of its strategic partners, the ability of the Company to
manage its growth, both internal and through acquisitions, and other
risks and uncertainties detailed in the Company's Securities and
Exchange Commission filings.
LEASING SOLUTIONS, INC.
Summary of Operating Results
For Nine Months Ended September 30, 1998 and 1997
(Dollars in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
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1998 1997 1998 1997
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Revenues:
Operating lease revenue ... $75,632 $57,267 $215,917 $154,645
Earned lease income........ 2,440 1,024 3,423 2,466
Other revenue.............. (733) 165 1,077 4,171
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Total revenues............. 77,339 58,456 220,417 161,282
Costs and expenses:
Depreciation............... 57,429 38,803 155,026 109,365
Interest expense........... 11,018 8,210 30,183 21,851
SG&A....................... 6,288 4,998 17,436 13,415
Other expense.............. 7,427 455 9,177 1,164
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Total costs and expenses... 82,162 52,466 211,822 145,795
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Income (loss) before taxes.. (4,823) 5,990 8,595 15,487
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Net income (loss)........... ($2,890) $3,485 $4,902 $9,003
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Net income (loss) per share. ($0.35) $0.42 $0.57 $1.09
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