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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): October 17, 1995
________________________________________________________________________________
THE FINOVA GROUP INC.
(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.)
1850 NORTH CENTRAL AVENUE, PHOENIX, ARIZONA 85004
________________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 602/207-6900
_____________________________
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Item 5. Other Events.
The FINOVA Group Inc. (formerly known as GFC Financial Corporation)
today announced revenues, net income and selected financial data and
ratios for the third quarter ended September 30, 1995 (unaudited).
Item 7. Financial Statements and Exhibits.
(c) Exhibits:
Exhibits Title
-------- -------------------------------------
28 Press Release of The FINOVA Group Inc.
dated October 17, 1995
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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 thereunto duly authorized.
THE FINOVA GROUP INC.
(Registrant)
Dated: October 17, 1995 By /s/ Bruno A. Marszowski
_____________________________
Bruno A. Marszowski, Senior Vice President,
Chief Financial Officer and Controller
Principal Financial Officer/Authorized Officer
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EXHIBIT 28
Robert J. Fitzsimmons Embargo until
602/ 207-5759 8:00 a.m. (E.D.T.)
THE FINOVA GROUP INC.
ANNOUNCES RECORD RESULTS FOR THE THIRD QUARTER OF 1995
EARNINGS PER SHARE UP 17% TO $0.91
PHOENIX, Ariz., Oct. 17, 1995 -- The FINOVA Group Inc. today reported record
results and a 29% (annualized) growth in the portfolio for the third quarter
ended Sept. 30, 1995.
Net income for the nine months of 1995 was $71.1 million ($2.56 per
common share) compared to $51.0 million ($2.10 per common share) for the nine
months of 1994, a 22% increase in earnings per common share (with 15% more
average shares outstanding) and a 40% increase in net income.
For the third quarter of 1995 net income was $25.2 million ($0.91 per
common share) up from $22.3 million ($0.78 per common share) for the comparable
period in 1994, an increase of 17% in earnings per common share and a 13%
increase in net income. Sam Eichenfield, Chairman and Chief Executive Officer of
FINOVA, said he was quite pleased with the strong third quarter results,
particularly in view of the increased expenses (including $8.6 million in
additional reserve provisions) incurred in connection with the robust portfolio
growth. Eichenfield noted that, "FINOVA's ability to generate a substantial
amount of new, high quality loans and maintain margins is indicative of the role
it is playing in the middle market." Eichenfield went on to say that "a
substantial portion of the third quarter's new business was added toward the end
of the quarter, and, as a result, did not contribute to the current period's
profitability but will contribute in subsequent periods."
--more--
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Portfolio quality and interest margins continued to be sustained with
nonperformings as a percent of managed assets declining to 2.5% at the end of
the third quarter from 2.6% at the end of the prior quarter and interest margins
holding at 5.8%, which is consistent with the prior quarters of 1995.
The increase in the amount of interest margins earned more than offset
the significant increase in provisions for possible credit losses and higher
selling, administrative and other operating expenses ("G&A expenses"). Loss
provisions, which increased by $8.6 million over the third quarter of 1994, were
due primarily to the growth of the portfolio. Reserve coverage, which includes
the reserve for possible credit losses and $12 million of accrued liabilities
established as reserves applicable to securitized transactions, was 2.0% of
ending funds employed and securitizations and 77.8% of nonaccruing assets. G&A
expenses for the third quarter of 1995 were higher than the comparable 1994
period principally due to higher incentive accruals related to improved results
and the higher volume of new business added during the year. These increases
were partially offset by lower problem account costs.
Income taxes were higher in the third quarter of 1995 due to an
increase in income before income taxes which more than offset the effects of
certain tax credits.
The FINOVA Group Inc. is a Phoenix-based major domestic commercial
finance company providing secured financing and leasing products from $500,000
to $35 million to medium-sized businesses. FINOVA also offers inventory and
sales financing programs to manufacturers, distributors and dealers nationwide.
####
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The FINOVA Group Inc.
and Consolidated Subsidiaries
Summary of Consolidated Income
(Unaudited)
(dollars in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
---------------------------------- ----------------------------------
1995 1994 1995 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Interest earned from
financing transactions $ 192,287 $ 147,649 $ 551,737 $ 343,501
Interest expense 93,136 65,881 267,857 152,662
Depreciation 12,980 11,345 38,891 21,626
------------- ------------- ------------- -------------
Interest margins earned 86,171 70,423 244,989 169,213
Provision for possible
credit losses 10,800 2,215 28,800 10,353
Gains on sale of assets 4,646 1,169 11,699 5,672
Selling, administrative and
other operating expenses 39,583 32,253 112,578 78,870
------------- ------------- ------------- -------------
Income before income
taxes 40,434 37,124 115,310 85,662
Income taxes 15,284 14,867 44,163 34,711
------------- ------------- ------------- -------------
Net Income $ 25,150 $ 22,257 $ 71,147 $ 50,951
============= ============= ============= =============
Earnings per common
and equivalent share $ 0.91 $ 0.78 $ 2.56 $ 2.10
============= ============= ============= =============
Dividends declared per
common share $ 0.22 $ 0.18 $ 0.62 $ 0.54
============= ============= ============= =============
Average outstanding
common and equivalent
shares 27,771,000 28,620,000 27,845,000 24,284,000
============= ============= ============= =============
</TABLE>
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The FINOVA Group Inc.
Selected Consolidated Financial Data and Ratios (Unaudited) (1)
(dollars in thousands)
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
or at or at
September 30, December 31,
-------------------------------- --------------
FINANCIAL DATA: 1995 1994 1994
------------ ------------ --------------
<S> <C> <C> <C>
Average funds employed (AFE) and securitizations (2) $ 6,243,118 $ 4,289,404 $ 4,629,578
Ending funds employed (EFE) 6,609,220 5,294,099 5,667,644
Securitizations (2) 133,051 307,459 253,386
Average earning assets (3):
Quarter 5,934,645 4,769,513
Year-to-date 5,655,656 3,759,107 4,064,971
Reserve and accrued liabilities (4) for possible credit
losses 131,564 130,727 122,233
Nonaccruing assets 169,180 186,016 168,761
Total debt 5,403,323 4,162,286 4,573,354
Stockholders' equity 805,313 771,643 770,252
New business 1,689,939 1,120,927 1,799,331
Backlog (includes lines of credit) 1,127,717 818,958 764,326
Factored volume/floor planning 1,337,909 594,132 1,129,936
Write-offs:
Quarter 7,001 7,098
Year-to-date 22,868 19,009 35,127
RATIOS:
Write-offs (annualized) as a % of AFE and average
securitizations (2) 0.5% 0.6% 0.8%
Nonaccruing assets as a % of EFE and securitizations (2) 2.5% 3.3% 2.9%
Reserve and accrued liabilities (4) for possible credit
losses as a % of:
Ending funds employed and securitizations (2) 2.0% 2.3% 2.1%
Nonaccruing assets 77.8% 70.3% 72.4%
Interest margins earned (annualized) as a % of average earning
assets:
Quarter 5.8% 5.9%
Year-to-date 5.8% 6.0% 6.0%
Selling, administrative and other operating expenses as
a % of interest margins earned:
Quarter 45.9% 45.8%
Year-to-date 46.0% 46.6% 46.2%
- ------------
</TABLE>
(1) Includes financial results from Ambassador Factors and TriCon Capital
subsequent to their acquisitions on February 14, 1994 and April 30, 1994,
respectively. Averages for the periods presented are based on month-end
balances.
(2) Securitizations are assets sold under securitization agreements and
managed by the company.
(3) Average earning assets equal AFE less average deferred taxes on leveraged
leases and average nonaccruing assets.
(4) Accrued liabilities of $12 million, $15 million and $13 million at
September 30, 1995 and 1994 and December 31, 1994, respectively, represent
an allowance for estimated losses under certain recourse provisions of
securitizations.
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