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
Date of Report (Date of earliest event reported) April 23, 1997
Mercury Finance Company
(Exact name of registrant as specified in charter)
Delaware 1-10176 36-3627010
(State of other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 Field Drive, Lake Forest, Illinois 60045
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 295-8600
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On April 23, 1997, the registrant issued a press release, a copy of which
is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description of Document
99.1 Press release dated April 23, 1997 issued by the
registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
Mercury Finance Company
Date: April 24, 1997 By: /s/ Bradley Vallem
Its: AVP & Treasurer
FOR IMMEDIATE RELEASE Contact:
Joe Kopec or Jim Fitzpatrick
The Dilenschneider Group
312-553-0700
MERCURY FINANCE COMPANY UPDATES FINANCIAL MATTERS
CHICAGO, April 23--Mercury Finance Company (NYSE:MFN) today announced an
estimated net loss for the year ended December 31, 1996 in the range of $48 to
$55 million, or $0.28 to $0.32 per share. This announcement is an update of
Mercury's January 29 estimate of a $56.7 million, $0.33 per share profit for
1996. Shareholder's equity as of December 31, 1996, is estimated to be between
$138 million and $145 million, down from the $263 million estimated on
January 29.
The change in estimated earnings is due primarily to additional loss
provisions of $125 million and the establishment of a $25 million reserve for
the loss on the pending sale of Lyndon Insurance Company. Management believes
that the methodology employed to compute the loss reserves, which has the
support of Arthur Andersen LLP, the company's independent accounting firm, to be
as conservative as any utilized in the industry.
All these amounts continue to be preliminary and subject to further
revision. Arthur Andersen LLP continues its audit examination and expects to
have its audit opinion on 1996 available by the end of May. The company expects
that the auditor's formal opinion will raise doubts about the company's ability
to continue as a going concern, primarily because the company continues to be in
default of its debt agreements.
William A. Brandt, Jr., president and chief executive officer, said that a
substantial portion of the additional loss provision relates to retail
installment contracts and loans originated in 1995 and prior years and that the
1996 loss provision is not indicative of future expected loss rates. Steps have
been taken by the company to improve the quality of newly acquired loans and
retail installment contracts, as well as to increase efforts to collect
outstanding balances.
Mercury has a $50 million credit facility with BankAmerica Business Credit
of which $40 million is available to borrow. This facility, combined with daily
cash flows, continues to provide more than sufficient working capital to operate
the business and pay interest on its debt obligations. The company continues to
work with its lenders concerning the amounts owed in order to provide for a
long-term solution to its capital requirements.
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