<PAGE> 1
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 14, 1994
____________________________________________________________________________
GFC FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-11011 86-0695381
____________________________________________________________________________
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
DIAL CORPORATE CENTER, PHOENIX, ARIZONA 85077
____________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/207-6900
________________________
<PAGE> 2
Item 5. Other Events.
GFC Financial Corporation announced on April 14, 1994 revenues, net
income and selected financial data and ratios for the first quarter of
1994 (unaudited).
A copy of the press release issued by GFC Financial Corporation is
attached as Exhibit 28 to this report.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit Title
-------------- --------------------------------------------
<S> <C>
28 Press Release of GFC Financial Corporation
dated April 14, 1994
</TABLE>
1
<PAGE> 3
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 thereunto duly authorized.
GFC FINANCIAL CORPORATION
(Registrant)
Dated: April 14, 1994 By /s/ BRUNO A. MARSZOWSKI
------------------------------------------------
Bruno A. Marszowski, Vice President - Controller
Principal Financial Officer/Authorized Officer
2
<PAGE> 1
EXHIBIT 28
Nancy Archer Embargo until
602/ 207-2821 8:00 a.m. (E.D.T.)
4/14/94
GFC FINANCIAL CORPORATION
REPORTS 33% INCREASE IN INCOME
FROM CONTINUING OPERATIONS
FOR THE FIRST QUARTER
PHOENIX, Arizona, April 14, 1994 -- GFC Financial Corporation (NYSE:GFC)
today reported a 33% increase in income from continuing operations for the
quarter ended March 31, 1994 compared to the first quarter of 1993.
Income from continuing operations was $11.4 million ($0.56 per common
share) compared to $8.6 million ($0.39 per common share) for the first quarter
of 1993. Earnings per common share for the first quarter of 1993 is net of
preferred dividends equivalent to $0.03 per common share. The 1994 results
include income from Ambassador Factors, the factoring and asset based lending
company acquired from Fleet Financial Group, Inc. on February 14, 1994.
Net income for the first quarter of 1994 was $11.4 million ($0.56 per
common share) compared with $9.9 million ($0.45 per common share) for the
comparable period in 1993. The 1993 results included $1.3 million of income
($0.06 per common share) from Verex Assurance, Inc., the company's discontinued
mortgage insurance subsidiary, which was sold in July 1993.
Sam Eichenfield, Chairman and Chief Executive Officer of GFC, said,
"The acquisition of the Asset Based Finance group in the first quarter of 1993
and the acquisition of Ambassador Factors in the first quarter of 1994
complement the company's core operations and have
3
<PAGE> 2
contributed to the growth in funds employed and the resulting improved
performance. The pending acquisition of TriCon Capital Corporation ("TriCon"),
which was announced on March 4, 1994, will further diversify GFC's asset base
and expand our focus on value-added products and services." TriCon is a $1.8
billion niche-oriented provider of commercial and equipment financing products.
Eichenfield added that portfolio quality remains consistent with
nonearning assets at 3.8% of funds employed after adding Ambassador, which
typically has a higher nonearning asset level (4.2% of its funds employed at
March 31, 1994), up slightly from 3.6% reported at year end.
Interest earned from financing transactions increased to $72.0 million
for the first quarter of 1994 from $58.3 million in the first quarter of 1993,
an increase of 24%. This rise in revenue was driven by a 29% increase in funds
employed during the twelve months ended March 31, 1994 resulting from $1.1
billion of new business being added by the core finance operations during that
period, and the acquisition of Ambassador Factors.
The improvement in earnings for the 1994 quarter primarily was due to
the increase in interest margins earned which advanced to $38.9 million for the
first quarter of 1994 from $27.7 million in the first quarter of 1993, a 40%
improvement. The higher interest margins, which equate to a 5.7% annualized
return on average earning assets compared to 5.1% for the first quarter of
1993, were attributable to the growth of the portfolio, a lower effective cost
of debt in 1994 and higher fee income principally generated by Ambassador
Factors.
The strong improvement in interest margins was more than enough to
offset the $2 million reduction in gains on sale of assets, higher provisions
for possible credit losses and the higher selling, administrative and other
operating ("operating") expenses.
The higher operating expenses primarily consisted of higher personnel
costs attributable in part to the acquisitions of the Asset Based Finance group
in February 1993 and Ambassador Factors in February 1994, and to expenses that
are no longer allocated to discontinued operations.
Income taxes were higher due to higher tax rates in effect during the
first quarter of 1994 and to higher income before taxes.
GFC Financial Corporation is a major domestic commercial finance
company that extends secured financing in selected markets: corporate finance,
transportation, communications, commercial real estate and resort finance. GFC
Financial also provides asset based lending, consumer rediscounting and
factoring.
####
4
<PAGE> 3
GFC FINANCIAL CORPORATION
AND CONSOLIDATED SUBSIDIARIES
SUMMARY OF CONSOLIDATED INCOME
(UNAUDITED)
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------------
1994 1993
--------------------------------
<S> <C> <C>
Interest earned from financing transactions $ 72,004 $ 58,262
Interest expense 33,133 30,568
-------------- --------------
Interest margins earned 38,871 27,694
Provision for possible credit losses 3,250 2,701
Gains on sale of assets 3 2,061
Selling, administrative and other operating expenses 17,303 13,638
-------------- --------------
Income before income taxes 18,321 13,416
Income taxes 6,932 4,871
-------------- --------------
Income from continuing operations 11,389 8,545
Income from discontinued operations 1,338
-------------- --------------
Net Income $ 11,389 $ 9,883
============== ==============
Earnings per common share:
Income from continuing operations before preferred
dividends $ 0.56 $ 0.42
Preferred dividends 0.03
-------------- --------------
Earnings from continuing operations 0.56 0.39
Discontinued operations 0.06
-------------- --------------
Earnings per common share $ 0.56 $ 0.45
============== ==============
Dividends declared per common share $ 0.18 $ 0.16
============== ==============
Average outstanding common and equivalent shares 20,362,000 20,498,00
============== ============
</TABLE>
5
<PAGE> 4
GFC FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA AND RATIOS (UNAUDITED)
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
or at or at
March 31, December 31,
----------------------- ------------
1994 (1) 1993 1993
----------------------- ------------
<S> <C> <C> <C>
FINANCIAL DATA:
Average funds employed (AFE) $3,059,227 $2,483,672 $2,637,547
Ending funds employed (EFE) 3,271,882 2,538,820 2,846,571
Average earning assets (2) 2,723,183 2,176,475 2,321,359
Nonaccruing assets 122,707 100,568 102,607
Reserve for possible credit losses 73,057 70,272 64,280
Total debt 2,513,631 2,016,846 2,082,350
Stockholders' equity 511,451 491,421 503,300
New business 254,701 173,935 1,007,794
Write-offs 5,106 2,937 12,575
RATIOS:
Write-offs (annualized) as a % of AFE 0.7% 0.5% 0.5%
Nonaccruing assets as a % of EFE 3.8% 4.0% 3.6%
Reserve for possible credit losses
as a % of:
Ending funds employed 2.2% 2.8% 2.3%
Nonaccruing assets 59.5% 69.9% 62.6%
Interest margins earned (annualized) as a %
of average earning assets (2) 5.7% 5.1% 5.4%
Selling, administrative and other operating
expenses as a % of interest margins earned 44.5% 49.2% 46.6%
Total debt to equity 4.9 4.1 4.1
</TABLE>
____________
(1) Includes financial data from Ambassador for the first quarter ended and
at March 31, 1994.
(2) Average earning assets are net of average deferred taxes on leveraged
leases and average nonaccruing assets for the periods presented.
6
