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
APRIL 28, 1998
Date of Report (Date of Earliest Event Reported)
EAGLE FINANCE CORP.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction
of incorporation)
0-24286 36-2464365
(Commission (IRS Employer
File Number) Identification No.)
1425 TRI-STATE PARKWAY, SUITE 140
GURNEE, ILLINOIS 60031
(Address of principal executive offices)(Zip Code)
(847) 855-7150
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
On April 28, 1998, Eagle Finance Corp., a Delaware corporation (the
"Company"), announced that it had a net loss of $12.7 million for the year
ended December 31, 1997 and that it intends to suspend payments on its
outstanding Rising Interest Subordinated Redeemable Securities. The press
release issued on April 28, 1998 by the Company is attached hereto as
Exhibit 1.
On April 29, 1998, the Company announced that it was notified by the NASD
that the NASD will delist the Company's common stock from the Nasdaq
National Market effective the opening of business on May 4, 1998. The
press release issued on April 29, 1998 by the Company is attached hereto as
Exhibit 2.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS.
99.1 Press release issued by the Company on April 28, 1998
announcing earnings for the year ended December 31, 1997 and
the suspension of payments on its outstanding Rising
Interest Subordinated Redeemable Securities.
99.2 Press release issued by the Company on April 29, 1998
announcing the delisting of its common stock.
<PAGE>
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.
EAGLE FINANCE CORP.,
a Delaware corporation
By: /S/ ROBERT J. BRAASCH
Date:April 29, 1998 Robert J. Braasch
Chief Financial Officer and
Senior Vice President
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EXHIBIT 99.1
<PAGE>
Robert J. Braasch Van Negris
Eagle Finance Corp. Kehoe, White, Savage & Co., Inc.
(847) 855-7150 (212) 888-1616
FOR IMMEDIATE RELEASE
EAGLE FINANCE CORP. REPORTS 1997 OPERATING RESULTS AND ANNOUNCES INTENT TO
SUSPEND PAYMENTS
ON OUTSTANDING SUBORDINATED DEBT
Gurnee, Illinois - April 28, 1998 - Eagle Finance Corp. (NASDAQ:EFCW) today
reported a net loss for 1997 of $12.7 million, or $3.02 per common share, on a
fully diluted basis, compared to a net loss of $5.3 million or $1.28 per common
share for 1996.
As previously reported, the Company has been advised by its independent
accountants that their audit opinion will include an explanatory paragraph
regarding going concern issues that arise due to the Company's significant
operating losses in 1997 and 1996 (which have resulted in the Company having
negative net worth at December 31, 1997) and non-compliance with net income and
net worth covenants under its loan sales facility and subordinated notes.
Due to its current financial condition, the Company announced that it intends
to suspend payments on its outstanding Rising Interest Subordinated Redeemable
Securities.
As was announced during March 1998, under current NASD rules, it is
anticipated that the NASD will delist the Company's common stock from the
NASDAQ National Market. Based on recent discussions with the NASD, it is
currently expected that the delisting will occur in early June 1998. After the
delisting occurs, regular quotations for the Company's common stock may not be
available and persons desiring to purchase or sell shares of the Company's
common stock will be required to seek interested counterparties through "pink
sheet" listings.
As was also announced during March 1998, the Company is exploring opportunities
for a merger, sale or recapitalization.
The Company has not yet filed its Annual Report on Form 10-K for 1997. The
delay is due to a detailed analysis of the proper treatment, for financial
reporting purposes, of the Company's sales during 1997 of finance receivables,
with servicing retained, in light of SFAS No. 125, which became effective
January 1, 1997. The Company reported these transactions in its quarterly
financial statements for the second and third quarters as transfers under SFAS
No. 125 and recognized corresponding "gain-on-sale" income. The Company, with
the guidance of its independent accountants, has concluded that such sales,
instead, should be treated as secured borrowings pursuant to SFAS No. 125. As
a result of the recharacterization of these transactions (and the unwinding of
the "gain on sale" relating thereto), net income is approximately $2.0 million
lower than it otherwise
-more-
Summary Financial Information Follows
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EAGLE FINANCE CORP.
APRIL 28, 1998
PAGE TWO
would have been. The Company expects to file its Annual Report as soon as
practicable and the appropriate amendments to its second and third quarter
Forms 10-Q shortly thereafter.
Interest and servicing income on the Company's portfolio of managed Installment
Contracts accounts for most of the Company's revenue. The net amount of
Installment Contracts purchased declined to $57.2 million during the year ended
December 31, 1997 from $105.9 million during the year ended December 31, 1996.
At December 31, 1996, December 31, 1997 and March 31, 1998 the Company's
managed (owned or serviced) finance receivables were $151.6 million, $99.0
million and $65.6 million, respectively. The Company's owned finance
receivables (excluding all sold finance receivables without regard to whether
such finance receivables have been de-recognized as assets of the Company for
financial reporting purposes) were $54.7 million, $28.5 million and $9.8
million at December 31 1996, December 31, 1997 and March 31, 1998,
respectively. The Company began reducing its purchases of installment
contracts from automobile dealers during the fourth quarter of 1995 and
suspended the purchase of installment contracts from automobile dealers during
October, 1997.
Accounts past due 30 or more days represented 11.0%, 14.1% and 10.3% of the
managed (owned or serviced) portfolio at December 31, 1996, December 31, 1997
and March 31, 1998, respectively. Delinquency on owned accounts (excluding all
sold finance receivables without regard to whether such finance receivables
have been de-recognized as assets of the Company for financial reporting
purposes) past due 30 or more days represented 12.4%, 16.2% and 21.1% at
December 31, 1996, December 31, 1997 and March 31, 1998, respectively.
Delinquency levels on owned assets have been adversely influenced by the
periodic sales of finance receivables to third parties. Sold finance
receivables have generally been current accounts, thereby increasing the
concentration of delinquent accounts in the portfolio of finance receivables
retained by the Company.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON THE BELIEFS OF THE COMPANY'S MANAGEMENT, AS WELL AS
ASSUMPTIONS MADE BY AND INFORMATION CURRENTLY AVAILABLE TO, THE COMPANY'S
MANAGEMENT AND ARE SUBJECT TO CERTAIN RISKS OR UNCERTAINTIES. THE COMPANY
CAUTIONS READERS OF THIS PRESS RELEASE THAT NUMEROUS FACTORS COULD CAUSE THE
COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS IN 1998 AND BEYOND TO
DIFFER MATERIALLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED IN,
OR IMPLIED BY, SUCH FORWARD-LOOKING STATEMENTS. INVESTORS SHOULD REFER TO
DOCUMENTS THAT THE COMPANY FILES FROM TIME TO TIME WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR A DESCRIPTION OF CERTAIN FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO VARY FROM CURRENT EXPECTATIONS AND FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS PRESS RELEASE. SUCH FILINGS INCLUDE, WITHOUT LIMITATION, THE
COMPANY'S FORM 10-K, FORM 10-Q AND FORM 8-K REPORTS.
Eagle Finance Corp. is a specialized financial services company whose business
generally consists of purchasing and servicing installment contracts. Eagle
finances the purchase of late model used automobiles for consumers who have
limited access to traditional sources of consumer credit. Eagle is
headquartered in Gurnee, Illinois and conducts its operations through two
regionally centralized offices.
-more-
Summary Financial Information Follows
<PAGE>
EAGLE FINANCE CORP.
APRIL 28, 1998
PAGE THREE
EAGLE FINANCE CORP.
FINANCIAL SUMMARY
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996 AND 1997
(IN THOUSANDS, EXCEPT PER SHARE FIGURES)
<TABLE>
<CAPTION>
Twelve Months Ended
December 31
1997 1996
<S> <C> <C>
Revenues $ 13,629 $ 32,438
Income before taxes $ (12,582) $ (6,007)
Tax expense $ 121 $ (658)
Net Loss $ (12,703) $ (5,349)
Earnings per common share (basic) $ (3.02) $ (1.28)
Earning per common share (diluted) $ (3.02) $ (1.28)
Weighted average number of common shares outstanding (basic) 4,204 4,189
Weighted average number of common shares outstanding (diluted) 4,204 4,189
</TABLE>
<PAGE>
EAGLE FINANCE CORP.
APRIL 28, 1998
PAGE FOUR
EAGLE FINANCE CORP.
Condensed Balance Sheet
(In thousands, except per share figures)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997 AND 1996
<TABLE>
<CAPTION>
December 31, 1997 December 31, 1996
(UNAUDITED)
<S> <C> <C>
Finance receivables, net owned $ 28,455 $ 54,644
Acquisition discount/loss allowance (4,166) (7,489)
24,289 47,175
Finance receivables, owned by third parties $ 27,061 --
Acquisition discount/loss allowance (3,284) --
23,237
Cash 1,809 1,272
Other assets 5,491 15,321
Total assets $ 54,826 $ 63,768
Notes Payable-financial receivables owned by $ 23,707 --
third parties
Senior Debt 15,034 32,828
Subordinated debt 17,544 17,978
Other liabilities 857 2,654
Total liabilities and shareholders' equity 57,142 53,460
Shareholders' equity (2,316) 10,308
Total liabilities and shareholders' equity $ 54,826 $ 63,768
Owned (excluding finance receivables $ 28,455 $ 54,664
owned by third parties)
Serviced 70,506 96,966
Managed (owned or serviced finance 98,961 151,630
receivables)
</TABLE>
<PAGE>
EXHIBIT 99.2
<PAGE>
Robert J. Braasch Van Negris
Eagle Finance Corp. Kehoe, White, Savage & Co., Inc.
(847) 855-7150 (212) 888-1616
FOR IMMEDIATE RELEASE
EAGLE FINANCE CORP. REPORTS ACCELERATED DELISTING OF
ITS STOCK FROM THE NASDAQ NATIONAL MARKET
Gurnee, Illinois - April 29, 1998 - Eagle Finance Corp. (NASDAQ:EFCW) today
reported that, after the issuance of its April 28, 1998 press release, it was
notified by the NASD that the NASD will delist the Company's common stock from
the NASDAQ National Market effective the opening of business on Monday, May 4,
1998. The NASD also indicated that the Company's Nasdaq symbol, "EFCW," will
be changed to "EFCWE" effective the opening of business on Thursday, April 30,
1998. After the delisting occurs, regular quotations for the Company's common
stock may not be available and persons desiring to purchase or sell shares of
the Company's common stock will be required to seek interested counterparties
through "pink sheet" listings.
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON THE BELIEFS OF THE COMPANY'S MANAGEMENT, AS WELL AS
ASSUMPTIONS MADE BY AND INFORMATION CURRENTLY AVAILABLE TO, THE COMPANY'S
MANAGEMENT AND ARE SUBJECT TO CERTAIN RISKS OR UNCERTAINTIES. THE COMPANY
CAUTIONS READERS OF THIS PRESS RELEASE THAT NUMEROUS FACTORS COULD CAUSE THE
COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS IN 1998 AND BEYOND TO
DIFFER MATERIALLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED IN,
OR IMPLIED BY, SUCH FORWARD-LOOKING STATEMENTS. INVESTORS SHOULD REFER TO
DOCUMENTS THAT THE COMPANY FILES FROM TIME TO TIME WITH THE SECURITIES AND
EXCHANGE COMMISSION FOR A DESCRIPTION OF CERTAIN FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO VARY FROM CURRENT EXPECTATIONS AND FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS PRESS RELEASE. SUCH FILINGS INCLUDE, WITHOUT LIMITATION, THE
COMPANY'S FORM 10-K, FORM 10-Q AND FORM 8-K REPORTS.
Eagle Finance Corp. is a specialized financial services company whose business
generally consists of purchasing and servicing installment contracts. Eagle
finances the purchase of late model used automobiles for consumers who have
limited access to traditional sources of consumer credit. Eagle is
headquartered in Gurnee, Illinois and conducts its operations through two
regionally centralized offices.
