UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
December 31, 1997
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(Date of earliest event reported)
Commission File Number: 0-18201
EQUIVEST FINANCE, INC.
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(Exact name of Registrant as specified in its charter)
Florida 59-2346270
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or organization)
2 CLINTON SQUARE, SYRACUSE, NEW YORK 13202
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (315) 422-9088
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Item 5. Other Events
PRESS RELEASE
Equivest Finance, Inc. Announces
Record 1997 Earnings
Syracuse, New York, February 19, 1998. Equivest Finance, Inc.
(NASD-EQUI) today announced record 1997 net income. Income before taxes for the
full year-ended December 31, 1997, rose 103% to $3.42 million, from $1.69
million in 1996. Net income after taxes for 1997 was $3.23 million, up 95% over
$1.66 million for 1996. Diluted earnings per share rose 114% to $0.15 in 1997,
compared with $0.07 in 1996. At December 31, 1997, total reported net worth was
$32.3 million, up almost 700% since year-end 1996.
Fourth quarter income before taxes increased 117% to $1.01 million
compared with $.47 million for the same period in 1996. Net income after tax for
the quarter rose to $1.0 million, an increase of 76% over $.57 million in the
same period for the previous year. Diluted earnings per share for the fourth
quarter increased 100% to $0.04 from $0.02.
As previously announced, during the fourth quarter the company completed a
major recapitalization by exchanging approximately $25 million in debt for
newly-issued common stock. This transaction, which was effective as of October
31, 1997, will reduce annual interest costs by approximately $1.9 million.
Richard C. Breeden, Chairman and C.E.O. of Equivest, commented: "1997 was
a watershed year for our shareholders. The company more than doubled diluted
earnings per share while increasing net worth nearly seven fold. After tax net
income jumped nearly 100%, while the company simultaneously bolstered its
reserves. This reflects the company's commitment to the overall strength of its
balance sheet."
Total revenues for the year-ended December 31, 1997, increased 12% to $16
million, compared with $14.3 million for the comparable period in 1996. Total
expenses for 1997 fell .2% compared with 1996. Fourth quarter revenues increased
18% to $4.4 million compared with the year-earlier period, while expenses
increased 4% to $3.4 million. Originations rose 37% to $72 million for the year,
compared with $52 million in 1996.
Breeden also noted that: "The strong growth in the company's timeshare
originations in 1997 reflects many factors, including financing facilities that
enabled Resort Funding Inc., Equivest's wholly-owned subsidiary, to offer larger
commitments and more flexible terms to our customers. This strong growth in new
business, sharply reduced overall debt levels and reduced interest rates all
contributed to the vigorous growth in earnings for our shareholders. Through
Resort Funding, the company enjoys a prominent role in financing the timeshare
industry."
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Equivest Finance, Inc. Annual and Fourth Quarter Results
Comparative Statement of Income
(All numbers in 000's except number of shares and per share data)
<TABLE>
<CAPTION>
Three months ended Year ended
December 31, December 31,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues:
Interest $ 4,102 $ 3,543 $ 15,109 $ 12,998
Gain on sale of contracts - 39 30 422
Other income 328 183 825 843
---------------- ---------------- ---------------- ---------------
Total revenues 4,430 3,765 15,964 14,263
Expenses:
Provision for doubtful accounts 700 16 925 178
Interest 1,775 2,294 8,077 8,271
Debt related costs 294 305 1,063 904
Selling, general, administrative 649 684 2,475 3,221
---------------- ---------------- ---------------- ---------------
Total expenses 3,418 3,299 12,540 12,574
---------------- ---------------- ---------------- ---------------
Income before taxes 1,012 466 3,424 1,689
Provision for income taxes 13 (103) 193 29
---------------- ---------------- ---------------- ---------------
Net income 999 569 3,231 1,660
Preferred stock dividends 170 150 731 527
---------------- ---------------- ---------------- ---------------
Net income after dividends $ 829 $ 419 $ 2,500 $ 1,133
================ ================ ================ ===============
Basic earnings per share $ 0.05 $ 0.04 $ 0.22 $ 0.12
Basic weighted average shares 17,807,401 9,484,847 11,582,587 9,484,847
Diluted earnings per share $ 0.04 $ 0.02 $ 0.15 $ 0.07
Diluted weighted average shares 20,622,181 17,012,708 17,913,902 17,012,708
</TABLE>
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Consolidated Balance Sheet
December 31 December 31
1997 1996
---- ----
Assets:
Cash $ 4,621 $ 4,037
Receivables 122,250 102,772
Deferred financing costs 4,126 3,860
Cash - restricted 855 1,129
Deferred taxes 1,142 825
Other assets 511 580
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Total Assets $133,505 $113,203
======== ========
Liabilities & Stockholder's Equity:
Accounts payable and other liabilities $ 1,462 $ 2,391
Recourse notes payable 90,216 37,926
Non-recourse notes payable 6,154 41,500
Notes payable 3,403 3,516
Notes payable - related party -- 23,803
Stockholder's Equity 32,270 4,067
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Total Liabilities & Equity $133,505 $113,203
======== ========
Through its wholly-owned subsidiary Resort Funding, Inc., the company
specializes in financing the development of destination resorts in the timeshare
industry, as well as the purchase of vacation ownership intervals purchased by
consumers in timeshare resorts. The company currently finances approximately 35
different resorts in the United States, the Caribbean and Europe, with
approximately $120 million of outstanding loans in the timeshare field.
Contact: Ben Cesare of Shandwick USA at (212) 420-8100 x 233
NOTE TO INVESTORS: Certain statements in this press release are
forward-looking. These may be identified by the use of forward-looking words or
phrases such as "believe," "expect," "anticipate," "should," "planned,"
"estimated," and "potential." These forward-looking statements are based on the
Company's current expectations. The Private Securities Litigation Reform Act of
1995 provides a "safe harbor" for such forward-looking statements. In order to
comply with the terms of the safe harbor, the Company notes that a variety of
factors could cause actual results and experience to differ materially from the
anticipated results or other expectations expressed in such forward-looking
statements. The risks and uncertainties that may affect the operations,
performance, development, and results of the Company's businesses include a
downturn in the real estate cycle or other factors which result in lower sales
of vacation ownership interests, possible financial difficulties of one or more
of the developers with whom the Company does business, including the risk of
carrying non-performing assets or losses if defaulted loans prove to have
insufficient collateral backing, fluctuations in interest rates, prepayments by
consumers of indebtedness, prepayments by developers, inability of developers to
honor replacement obligations for defaulted consumer notes, and competition from
organizations with greater financial resources.
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