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
Date of report (Date of earliest event reported): August 24, 1999
Commission File Number: 0-19822
LITCHFIELD FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-3023928
State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
430 MAIN STREET, WILLIAMSTOWN, MA 01267
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (413) 458-1000
(Former name, former address and former fiscal year,
if changed since last report)
Item 5: Other Events:
Attached is the press release issued by the company on August 24, 1999
WILLIAMSTOWN, Massachusetts (August 24, 1999) - Litchfield Financial
Corporation (NASDAQ/LTCH) announced today that it has acquired 53% of the
outstanding shares of privately held American Growth Finance, Inc, a
factoring company headquartered in Dallas, Texas with offices in Nashville,
Tennessee and Orlando and Tampa, Florida. AGF provides accounts receivable
factoring services to small businesses serving mostly Fortune 1000
companies. Terms of the transaction were not disclosed.
Randy Stratton, President and CEO of Litchfield commented, "Our investment in
AGF reflects our business strategy of identifying and lending money to
smaller finance companies in niche markets that best fit our business model,
as we have done in the past. In particular, we are looking to lend to small
and medium-sized businesses in niche markets that fit nicely with our
existing land, timeshare and tax lien businesses. Factoring will help us to
further diversify our $545 million serviced portfolio. In addition, this
business will provide us with an asset type that is counter-cyclical."
John Stieber, Sr. will continue to serve in his present position as Chairman
of AGF. Mr. Stieber has over 20 years of experience in accounts receivable
factoring. Previously, he was professor of finance and economics at the
School of Business, Southern Methodist University.
Mr. Stratton noted, "According to the Small Business Administration, small
businesses account for over 50% of the gross domestic product. As they
continue to spur the economy, we intend to have an active role in providing
financing for their growth. By providing working capital financing, AGF
helps growing companies meet their entrepreneurial goals. Since banks are
not likely to make loans secured by accounts receivable, the value of these
services has gone up in the eyes of small business owners."
Mr. Stratton added, "As with our recent successful acquisition of Ironwood
Acceptance Company - which purchases, services and liquidates tax liens - we
view transactions of this nature as an opportunity to further reduce the
portion of our revenues derived from the gain on sale of loans. So while this
transaction would be accretive in the year 2000, we'll take the opportunity to
further reduce our gain on sale as a percentage of our revenues, instead."
Litchfield has rights to acquire additional shares of AGF through 2003.
Mr. Stratton commented, "We continue to pursue our strategy of providing
liquidity to under-served but growing markets. In these markets, we can
obtain better margins and create more secure loan structures, giving us solid
credit performance. For Litchfield's own liquidity, we continue to grow our
diversified money sources, primarily with term facilities at fixed spreads.
We are continually evaluating our interest rate sensitivity, looking for a
neutral or near neutral matching on an aggregate basis."
Litchfield is a diversified finance company that provides financing to
creditworthy borrowers for assets not typically financed by banks. The
Company provides such financing by purchasing consumer loans and by making
loans to businesses secured by consumer receivables or other assets.
Litchfield Financial Corporation is traded on the Nasdaq Stock Market's
National Market system under the ticker symbol "LTCH". For more information
about Litchfield, visit the company's website at www.ltchfld.com.
***
Except for the historical information contained or incorporated by reference
in this press release, the matters discussed or incorporated by reference
herein are forward-looking statements. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of the Company, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the risk factors set forth
under "Risk Factors", as listed in the 1998 Annual Report on Form 10-K, as
well as the following: general economic and business conditions; industry
trends; changes in business strategy or development plans; availability and
quality of management; and availability, terms and deployment of capital.
Special attention should be paid to such forward-looking statements
including, but not limited to, statements relating to (i) the Company's
ability to execute its growth strategies and to realize its growth objectives
and (ii) the Company's ability to obtain sufficient resources to finance its
working capital needs and provide for its known obligations.
Contact: Ronald E. Rabidou, Chief Financial Officer
Telephone: 413-458-1000 x 160 Fax: 413-458-1020 E-Mail
[email protected]
