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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): August 26, 1996
OLYMPIC FINANCIAL LTD.
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation)
0-20526 41-1664848
Commission File Number) (I.R.S. Employer Identification No.).
78 Washington Avenue South
Minneapolis, Minnesota 55439-2435
(Address of principal executive offices)
Registrant's telephone number, including
area code: (612) 942-9880
Not Applicable
(Former name or former address, if changed since last
report.)
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Item 5 Other Events
The Registrant has announced that its Board of Directors
has received an indication of interest to buy the Registrant and that the
Registrant has engaged Donaldson Lufkin & Jenrette to assist the Board in
examining the strategic alternatives available to the Registrant.
The Registrant has announced that Warren Kantor has
been appointed Chairman of the Registrant's Executive Committee and that the
Board has accepted the resignation of Jeffrey C. Mack as President and Chief
Executive Officer of the Registrant.
Further details of these developments are contained in
the press release of the Registrant dated August 26, 1996 and attached
hereto as Exhibit 99.1 and the script prepared by the Registrant in
connection with analysts' conference call, attached hereto as Exhibit 99.2.
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Item 6 Resignation of Registrant's Directors
The Board of Directors has accepted the resignation of
Jeffrey C. Mack as Chairman and as a member of the Board of Directors.
Further details of these developments are contained in
the press release of the Registrant dated August 26, 1996 and attached
hereto as Exhibit 99.1 and the script prepared by the Registrant in
connection with analysts' conference call, attached hereto as Exhibit 99.2.
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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.
Olympic Financial Ltd.
Dated: August 26, 1996 By: /s/ John A. Witham
-----------------------
John A. Witham
Executive Vice President
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description Page
99.1 Press Release of 6
Olympic Financial Ltd.
dated August 26, 1996
99.2 Script Prepared by the 8
Registrant in Connection
with Analysts' Conference
Call
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FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
John Witham, Chief Financial Officer
(612) 942-9880
OLYMPIC FINANCIAL LTD. BOARD ANNOUNCES
RECEIPT OF POTENTIAL OFFER TO BUY COMPANY:
KANTOR APPOINTED CHAIRMAN OF EXECUTIVE COMMITTEE
MINNEAPOLIS, MINNESOTA---August 26, 1996--- The Board of Directors of Olympic
Financial Ltd. (NYSE: OLM) today announced that it has received an indication of
interest to buy the Company. In connection with this development, the Company
has engaged Donaldson, Lufkin and Jenrette to assist the Board in examining the
strategic alternatives available to the Company.
In an associated development the Board has accepted the resignation of Jeffrey
C. Mack as Chairman, President, and Chief Executive Officer and as a member of
the Board of Directors. The Company also announced the appointment of Warren
Kantor (Olympic Board member) as Chairman of the Executive Committee. Olympic
Financial Vice Chairman Scott Anderson, who has been overseeing the day-to-day
operations of the business, will continue to do so.
Mr. Kantor is an independent businessman with more than 25 years of applicable
experience in the consumer finance industry, most recently as Vice Chairman of
Advanta Corp. where he continues to serve on the Board of Directors. He has
worked closely with the management of Olympic as both a Board member and as a
Consultant since joining the Board in 1944. Mr. Kantor commented, "I am pleased
to step in as Chairman of Olympic's Executive Committee of the Board, a position
which affords me the opportunity of working even more closely with the Company's
superb management team. Collectively, they have operated the business in a
highly effective manner and I have no doubt that they will continue to do so. I
intend to dedicate my time to the Company to ensure that shareholder value is
maximized."
Scott H. Anderson, Vice Chairman, Credit Administration and Operations, stated,
"The management team is fully behind the actions of the Board which we believe
are in the best interests of the shareholders, customers and employees."
Mr. Kantor added that he expects year end 1996 results to be in line with Wall
Street estimates, strongly exceeding last year's reported $1.08 fully diluted
earnings per share. Through the six months ended June 30, 1996, Olympic earned
$0.76 and $0.85 per share on a fully diluted and primary basis, respectively.
Olympic Financial Ltd. is a Minneapolis-based consumer finance company which
purchases, sells and services prime retail
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installment contracts for new and used automobiles originated by more than 6,400
dealers nationwide. Olympic is the largest independent provider of automobile
financing. The Company, which was founded in 1940, has Regional Buying Centers
in Arizona, Northern and Southern California, Colorado, Florida, Georgia,
Massachusetts, Minnesota, Missouri, New York, North Carolina, Ohio, Tennessee,
North, South and West Texas and Washington. The Company acquires loans through
17 Regional Buying Centers and has expanded its dealer network to include
dealers in 38 states.
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CONFERENCE CALL TO ANALYSTS
AUGUST 26, 1996 3:15 P.M. CST
WARREN KANTOR SCRIPT
Good Afternoon and thank you for calling in on such short notice. I am Warren
Kantor and I am the Chairman of the Executive Committee of the Board of
Directors of Olympic Financial. Joining me today is Scott Anderson, Olympic's
Vice Chairman, and John Witham, Executive Vice President and Chief Financial
Officer.
By now you should have seen the announcement that went out earlier today
regarding the potential offer to buy Olympic and the changes in the executive
office. Let me first address the potential offer.
We have received an indication from a substantially larger company that they
have an interest in exploring the possibility of acquiring Olympic Financial. In
response to this indication, we hired Donaldson, Lufkin and Jenrette to help us
assess our strategic alternatives as to the future of Olympic. The Board
believes there is merit in considering a potential sale of the Company. It is
our duty to explore the alternatives available to the Company to maximize
shareholder value.
As further developments take place, we will keep you abreast of them. We expect
a firm offer will be presented to the Board in the next several weeks and fully
believe that other firms may take an active interest in looking at the Company
and its future potential.
In connection with a potential sale of the business, Jeff Mack determined that
it was in his best interests to resign his position as Chairman, CEO and
President and he also is no longer on the Board of Directors. Philosophical
differences regarding the future direction of Olympic caused the change in
authority.
Vice Chairman Scott Anderson and Chief Financial Officer Witham along with other
members of the senior management team have affirmed our decision and support our
actions. We will work collectively as a team to do what is in the best interests
of our shareholders.
As Chairman of the Executive Committee, it is my responsibility to reiterate the
soundness and strength of the Company and address issues of concern to our
investors. A number of questions were raised on the July 23 Second Quarter
Conference call that I believe deserve clarification.
For the six months ended June 30, 1996, Olympic reported income of $26 million,
up from $10 million in 1995. Loans serviced jumped 100% to $3.0 billion from
$1.5 billion a year earlier,
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with originations of $1.3 billion for the six month period. Delinquencies were
1.96% as of June 30, 1996 and write-offs stood at 0.84% for the six months.
A number of participants on the call and following the discussion further
questioned the loans made to new customers who purchased the cars Olympic
repossessed.
At June 30, we had $66 million in loans which financed repossessed automobiles.
At the end of July, we had $69 million. These loans had delinquencies twice the
level of our Classic II loans. That program was instituted in 1994 and ceased
early in 1996 as we refined it and introduced our new classic strategy.
Class II delinquencies are approximately 6.0%. The delinquencies on the loans to
buyers of repossessed cars are 13% and losses 3.0%. Since these loans are
written at yields to Olympic of 16%+, even after a 3.0% loss and cost of
delinquency expense, they still make money for the company.
My reason for discussing these strategies is to put to rest the analysts focus
about this minor part of our business. With $66 million of these loans on hand
and loss rates of 2 1/2%, or $2.0 million a year or $3.8 million for the
remaining life of the portfolio, it is clearly immaterial to our reserves of $67
million as stated in the June 30 financial statements. I know many analysts
described a "general reserve" over and above current assumption of losses which
are based on a static pool analysis of approximately $25 million, as part of the
$67 million.
The Company initiated a tightening of underwriting standards for these loans
made to buyers of our repossessed cars in April 1996. We are comfortable that
losses and delinquencies will mitigate over time going forward. They represent
just 2.0% of our total portfolio. I hope this discuss clarifies the issues
related to delinquencies and charge-offs for you. Our total book of business is
exceptionally strong on 98% of our loans.
As we stated in the press release, we are comfortable with analysts estimates
for the third quarter ending September 30 and for the year 1996. Olympic is a
strong and vibrant company with an excellent future.
I would be glad to answer questions you have at this time.
