<PAGE> 1
United States
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-------------------------
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED] FOR THE FISCAL YEAR ENDED JUNE 30, 1999
OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________________to____________________
Commission file number 333-16233
DVI RECEIVABLES CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 33-0608442
(State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.)
organization)
</TABLE>
500 Hyde Park
Doylestown, Pennsylvania 18901
(Address of principal executive offices)
Registrant's telephone number, including area code: (215) 345-6600
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12 (g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
requirements for the past 90 days. YES [ ] NO [X]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be contained
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. Not applicable.
Aggregate market value of voting stock held by non-affiliates of the
Registrant as of June 30, 1999. Not applicable.
Number of shares of common stock outstanding as of June 30, 1999.
Not applicable.
DOCUMENTS INCORPORATED BY REFERENCE
<PAGE> 2
PART I
ITEM 1. BUSINESS
This Annual Report on Form 10-K relates to DVI Receivables Corp., a
limited purpose corporation organized under the laws of the State of Delaware on
January 21, 1994 ("DVI"), and its wholly owned subsidiary, DVI Business Trust
1998-2, a business trust organized under the laws of the State of Delaware on
December 1, 1998 (the "Trust," and collectively with DVI, the "Company"). The
Company does not intend to engage in any business or investment activities other
than acquiring, owning, leasing, transferring, receiving or pledging the assets
transferred to the Company pursuant to a Contribution Agreement or Pooling and
Trust Agreement. DVI's articles of incorporation limit the Company's business
and investment activities to the above purposes and to any activities necessary,
suitable or convenient to accomplish the foregoing or incidental thereto.
Accordingly, there is no relevant information to report in response to Item 101
of Regulation S-K.
ITEM 2. PROPERTIES
The Company does not have any physical properties. Accordingly, this
item is inapplicable.
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings involving the
Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No votes or consents of Securityholders were solicited during the
preceding fiscal year for any purpose.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established public trading market for the Securities.
As of June 30, 1999, there was one registered Securityholder.
The Company pays no dividends with respect to the Securities and the
information required by Item 201 of Regulation S-K regarding dividends is
inapplicable.
ITEM 6. SELECTED FINANCIAL DATA
The regular monthly report form, which the Trustee is required to
include with each monthly distribution of company assets to Securityholders (the
"Monthly Reports"), sets forth for the prior calendar month, as well as
cumulatively, all of the relevant financial information required by the Trust
Agreement to be reportable to Securityholders.
The Monthly Reports for the months ending December 31, 1998 through
June 30, 1999 are incorporated herein by reference.
1
<PAGE> 3
The foregoing presents all relevant financial information relating
to the Company. Because of the limited business activity of the Company, the
Selected Financial Data specified in Item 301 of Regulation S-K would not
provide meaningful additional information.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Because of the limited business activity of the Company, the
presentation of Management's Discussion and Analysis of Financial Condition and
Results of Operations, as otherwise required by Item 303 of Regulation S-K,
would not be meaningful. All relevant information is contained in the Monthly
Reports (filed under Current Reports on Form 8-K) as described above.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Because of the limited business activity of the Company, the
presentation of Quantitative and Qualitative Disclosures About Market Risk, as
required by Item 305 of Regulation S-K, would not be meaningful. All relevant
information is contained in the Monthly Reports (filed under Current Reports on
Form 8-K) as described above.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
As discussed above, furnishing the traditional financial information
required by Item 8 of Form 10-K would not add relevant information to that
provided by the foregoing statements. Because the Securities are essentially
"passthrough" securities, the Company will have "income" only in the limited
sense of collecting payments on the receivables. The only material items of
"expense" for the Company will be the amounts paid as servicing compensation and
potentially certain payments relating to any credit enhancement facility. The
Monthly Reports contained in the Current Reports on Form 8-K provide complete
information on the amounts of the "income" and "expenses" of the Company.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
DIRECTORS
- ---------
NAME: AGE: POSITION:
- ----- ---- ---------
<S> <C> <C>
John P. Boyle........................... 49 Director since 1998
Peter H. Sorensen..................... 39 Director since 1998
Frank B. Bilotta........................ 39 Director since 1998
Lisa J. Cruikshank..................... 40 Director since 1998
Melvin C. Breaux..................... 58 Director since 1998
</TABLE>
2
<PAGE> 4
<TABLE>
<CAPTION>
Executive Officers
NAME: AGE: POSITION:
- ----- ---- ---------
<S> <C> <C>
Steven R. Garfinkel.................. 56 Executive Vice President and CFO
Lisa J. Cruikshank.................... 40 Vice President
John P. Boyle......................... 49 Vice President
Melvin C. Breaux.................... 58 Secretary
</TABLE>
John P. Boyle is a director and a vice president of DVI. He is vice
president and chief accounting officer of DVI, Inc. His primary responsibility
is managing the accounting, tax and financial reporting functions. Mr. Boyle is
a General Securities Principal and a CPA with twenty years of experience in the
financial services industry. Mr. Boyle spent five years of his career with Peat
Marwick Mitchell & Co. in Philadelphia. Beyond his accounting background, he has
extensive experience in credit and corporate finance matters. Mr. Boyle received
his Bachelor of Arts degree from Temple University.
Peter H. Sorensen is a director of DVI and president and chief
executive officer of Lord Securities Corporation. His primary responsibility is
managing a group of professionals responsible for the operations of special
purpose companies established to facilitate structured finance programs. Mr.
Sorensen has thirteen years of experience with Lord Securities Corporation. Mr.
Sorensen received his Bachelor of Business Administration/Finance degree from
Barrington College.
Frank B. Bilotta is a director of DVI and a senior vice president
at Lord Securities Corporation. His primary responsibilities at Lord Securities
include administration and consultative structuring of bankruptcy-remote,
off-balance-sheet special purpose vehicle programs. Mr. Bilotta has been
employed with Lord Securities since 1997. Mr. Bilotta is a member of New York
and New Jersey bars and is a certified public accountant. Mr. Bilotta received
his Bachelor of Science degree from Stockton State College and his Juris Doctor
from Seton Hall University School of Law.
Lisa J. Cruikshank is a director and vice president of DVI and a
vice president of DVI Financial Services Inc. Her primary responsibility is
managing the Company's treasury functions including securitization. Before
joining the company, Ms. Cruikshank was an assistant vice president in
management reporting and planning at CoreStates Bank, N.A. Previously, she was
vice president and assistant controller at Independence Bancorp. Ms. Cruikshank
received her Bachelor of Science degree from Cedar Crest College and her Master
of Business Administration degree from LaSalle University.
Melvin C. Breaux is a director and Secretary of DVI and a vice
president and general counsel for DVI, Inc. Prior to joining the company, Mr.
Breaux was a partner in the Philadelphia law firm of Drinker, Biddle & Reath. As
a member of that firm's banking and finance department, he specialized in
secured and unsecured commercial lending transactions, a wide variety of other
financing transactions and the general practice of business law.
Steven R. Garfinkel is executive vice president and chief financial
officer of DVI and DVI, Inc. His responsibilities include corporate finance,
loan funding, balance sheet management, treasury, accounting and financial
reporting, internal control, financial and strategic planning, and human
resources. Mr. Garfinkel has extensive experience in developing and managing
corporate finance relationships, money market funding, derivative hedging,
financial planning and management information
3
<PAGE> 5
systems. Prior to joining DVI, Mr. Garfinkel spent twenty-nine years with two
large bank holding companies: CoreStates Financial Corp. and First Pennsylvania
Corporation. For twenty years he was either controller or treasurer of those
organizations. Mr. Garfinkel received his Master of Business Administration
degree from Drexel University and his Bachelor of Arts degree from Temple
University.
ITEM 11. EXECUTIVE COMPENSATION
Peter H. Sorensen and Frank B. Bilotta, the independent directors,
are each paid $5,000.00 annually.
There is no compensation for executives and the remaining directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
None
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(3) Exhibits
<TABLE>
<CAPTION>
Regulation S-K Exhibit Reference to prior filing or
Number Document Exhibit number attached hereto
- ------------------------- -------------------------------------------------------------------- ------------------------------
<S> <C> <C>
3.1 Certificate of Incorporation of DVI *
3.2 Bylaws of DVI *
4.1 Contribution and Servicing Agreement between DVI and DVI Financial **
Services Inc.
4.2 Pooling and Trust Agreement between DVI and Wilmington Trust Company **
4.3 Form of Indenture between DVI Business Trust 1998-2 and U.S. Bank **
Trust National Association
99.1 Independent Accountants' Report 99.1
</TABLE>
- -------------------------
* Previously filed as an exhibit to the Registrant's Registration Statement
on Form S-3 (File No. 33-74446).
** Previously filed as an exhibit to the Registrant's Current Report on Form
8-K dated December 11, 1998.
4
<PAGE> 6
(b) Current Reports on Form 8-K
Current Reports on Form 8-K were filed on December 11, 1998, April
26 1999, May 18, 1999, June 22, 1999 and August 27, 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on behalf of DVI Receivables Corp. by the undersigned thereunto duly
authorized.
DVI Receivables Corp.
By: /s/ Lisa J. Cruikshank
-------------------------------
Name: Lisa J. Cruikshank
Title: Vice President
Dated: September 28, 1999
5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<S> <C>
Exhibit No. Document
--------------- --------------------------------------
99.1 Independent Accountants' Report
</TABLE>
6
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
<PAGE> 1
Exhibit 99.1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
Board of Directors
U.S. Bank Trust National Association, Trustee
We have examined the accompanying Management Assertions pertaining
to DVI Receivables Corp. and its wholly owned subsidiary, DVI Business Trust
1998-2, regarding management's compliance with the minimum requirements
identified in the Contribution and Servicing Agreement dated December 1, 1998
(the Agreement), as of June 30, 1999 between DVI Receivables Corp. and DVI
Financial Services Inc. and for the period December 1, 1998 to June 30, 1999.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
such procedures as we considered necessary in the circumstances.
In our opinion, the Management Assertions referred to above complied
with the minimum requirements as of June 30, 1999, and for the period from
December 1, 1998 to June 30, 1999, in conformity with the Agreement.
GRANT THORNTON LLP
/s/GRANT THORNTON LLP
Philadelphia, Pennsylvania
September 27, 1999
7
<PAGE> 2
MANAGEMENT ASSERTIONS
---------------------
September 23, 1999
Grant Thornton LLP
Two Commerce Square
Suite 3100
2001 Market Street
Philadelphia, PA 19103
Dear Sir or Madam:
As of June 30, 1999 and for the period from December 1, 1998 to June
30, 1999, DVI Financial Services Inc., as Servicer, has complied in all material
respects with the minimum requirements set forth in the Contribution and
Servicing Agreement dated December 1, 1998 between DVI Financial Services Inc.,
as Contributor and Servicer, and DVI Receivables Corp., as reassigned to U.S.
Bank Trust National Association, as Trustee (the "Agreement").
The following minimum requirements are applicable to the Agreement.
1. The Servicer shall maintain with respect to each Contract and each item of
Equipment, and with respect to each payment by each Obligor and compliance
by each Obligor with the provisions of each Contract, complete and
accurate records in such manner and to the same extent as the Servicer
does with respect to similar contracts held for its own account.
2. The Servicer shall remit or cause each Lock-box Bank to remit all payments
received by it on or in respect of any Contract or Equipment during such
Collection Period into the Collection Account.
3. The Servicer will file the UCC financing statements required in the
Agreement within the time frames set forth therein and thereafter will
file such additional UCC financing statements and continuation statements
and assignments in accordance with the provisions of any Contract and item
of Equipment or otherwise so that the security interest in favor of the
Trustee in each of the Contracts and the related Equipment will be
perfected by such filings with the appropriate UCC filing offices.
4. The Servicer will cause the Contributor to maintain a general liability
insurance policy in the aggregate amount of $1,000,000 and an excess
liability policy in umbrella form in the aggregate amount of $3,000,000
for a total of $4,000,000 of liability insurance.
5. The Servicer will require and monitor that each Obligor maintains
insurance covering damage to, destruction or theft of the Equipment.
6. The Servicer shall prepare the Monthly Servicer Report.
7. The Servicer shall cause a firm of independent certified public
accountants to deliver to the Trustee, within 90 days following the end
of each fiscal year of the Servicer, a written statement to the effect
that such firm has examined in accordance with generally accepted
practices samples of the accounts, records, and computer systems of the
Servicer for the fiscal year ended on the previous June 30 relating to
the Contracts, that such firm has compared the
8
<PAGE> 3
information contained in the Servicer's reports delivered in the relevant
period, and that, on the basis of such examination and comparison, such
firm is of the opinion that the Servicer has, during the relevant period,
serviced the Contracts in compliance with such servicing procedures,
manuals, and guides and in the same manner as it services comparable
leases for itself or others, and that such certificates, accounts,
records, and computer systems have been properly prepared and maintained
in all material respects.
/s/Lisa J. Cruikshank
---------------------
Lisa J. Cruikshank
Vice President
DVI Financial Services Inc.
Doylestown, Pennsylvania
September 23, 1999
/s/Lisa J. Cruikshank
---------------------
Lisa J. Cruikshank
Vice President
DVI Receivables Corp.
Doylestown, Pennsylvania
September 23, 1999
9
