-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bxi+D1eX5XqWGF11FGyoYi61cL2RaqWxIqVlAhGYpFD8VKDUxsdjYAA9J5BbRdMq ccucoJ4LZi5ASVkL/G1m4g== 0000950131-99-002432.txt : 19990422 0000950131-99-002432.hdr.sgml : 19990422 ACCESSION NUMBER: 0000950131-99-002432 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990420 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990421 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELLER FINANCIAL INC CENTRAL INDEX KEY: 0000046738 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 361208070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 001-06157 FILM NUMBER: 99598043 BUSINESS ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661 BUSINESS PHONE: 3124417000 MAIL ADDRESS: STREET 1: 500 W MONROE ST CITY: CHICAGO STATE: IL ZIP: 60661 FORMER COMPANY: FORMER CONFORMED NAME: HELLER WALTER E & CO /NEW/ DATE OF NAME CHANGE: 19850503 8-K/A 1 FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: April 20, 1999 -------------- (Date of earliest event reported) HELLER FINANCIAL, INC. ---------------------- (Exact name of registrant as specified in its charter) Delaware -------- (State or other jurisdiction of incorporation) 1-6157 36-1208070 ------ ---------- (Commission File Number) (IRS Employer Identification Number) 500 West Monroe Street, Chicago, Illinois 60661 - ----------------------------------------- ----- (Address of principal executive offices) (Zip Code) (312) 441-7000 -------------- (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS - ------- ------------ On April 20, 1999, Heller Financial, Inc. (the "Registrant") issued a press release announcing its earnings for the quarter ended March 31, 1999. The 8-K filed on April 20, 1999 had an incorrect press release attached as an exhibit. This amendment is being filed to attach the correct press release. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS - ------- --------------------------------- (c) Exhibits 99 Heller Financial, Inc. - Press Release SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: April 20, 1999 -------------- HELLER FINANCIAL, INC. By: /s/ Lauralee E. Martin ------------------------------- Lauralee E. Martin Title: Executive Vice President and Chief Financial Officer 2 EXHIBIT INDEX Exhibit Sequentially Number Numbered Pages - ------ -------------- 99 Heller Financial, Inc. - Press Release 4-10 3 EX-99 2 PRESS RELEASE HELLER FINANCIAL REPORTS RECORD FIRST QUARTER 1999 NET INCOME, IMPROVED EFFICIENCY, CONTINUED EXCELLENT CREDIT QUALITY (Chicago, IL, April 20, 1999) -- Heller Financial, Inc. (NYSE: HF) today reported record net income of $57 million for the first quarter of 1999, an increase of 19 percent over the first quarter of 1998. Net income applicable to common stock was $50 million, a 16 percent increase over the prior year period. Earnings per share were $0.55 on a fully diluted basis, an increase of 15 percent over the first quarter of 1998. Heller's earnings growth for the quarter was driven by growth in lending assets and investments, strong factoring volume, improvement in the Company's operating efficiency and net interest margin, and the continued excellent credit quality of the Company's portfolio. "This quarter's solid results clearly demonstrate that we are tracking right to our plan" said Chairman and Chief Executive Officer Richard J. Almeida. "Our net interest margin is increasing, our efficiency ratio is improving, the credit quality in our portfolio remains excellent, and our balance sheet is growing as we expected. Our originations pipeline is strong, we have a solid backlog of approved and committed transactions, and our business has outstanding momentum." Operating highlights: Heller's U.S. and international new business volume totaled $1.2 billion for the first quarter. Exclusive of Real Estate CMBS volume, Heller's new business volume grew two percent over the first quarter of 1998. New business growth was strongest in Heller's Leasing Services and Small Business Finance units. As of March 31, 1999, Heller's total lending assets and investments had grown to $13.7 billion, up 15 percent from March 31, 1998. Heller's total factoring volume was nearly $5.1 billion for the quarter, an increase of 15 percent for the quarter over the prior year period. Growth was due to the continued performance of Factofrance, Heller's wholly owned French factoring subsidiary and the largest factoring company in France. Factofrance's factoring volume increased 19 percent compared to the first quarter of 1998. Heller Financial remains the largest factoring company in the world. Operating revenues for the quarter were $223 million, a 20 percent increase over the first quarter of 1998. Growth in operating revenues was due to increases in both net interest income and non-interest income. Heller's net interest income as a percentage of average funds employed (AFE) improved to 3.8 percent for the quarter, up from 3.6 percent during the first quarter of 1998. Total operating revenues improved to 7.5 percent of AFE, compared to 6.7 percent during the first quarter 1998. Credit quality in Heller's portfolio remained excellent. Net writedowns for the quarter totaled $22 million or 0.7 percent of average lending assets, up modestly from 0.6 for the same period in 1998, and still below Heller's stated writedown target. Heller's nonearning assets remained low at $219 million or 1.8 percent of total lending assets, unchanged from the prior quarter. The Company's loan loss reserve was unchanged at 2.3 percent of receivables and remains in excess of 100 percent of nonearning receivables. 4 Operating expenses for the first quarter were $108 million, compared to $94 million in the first quarter of 1998, a 15 percent increase. Operating expenses, adjusted for the impact of Heller's acquisition of certain assets from the Dealer Products Group of Dana Commercial Credit Corporation, increased only $3 million or three percent compared to the prior year period. Heller's efficiency ratio for the first quarter improved to 48 percent compared to 51 percent for the first quarter of 1998, reflective of Heller's continuing focus on improving operating efficiency. "We're proud of Heller's consistent ability to deliver on our commitments to our clients and our shareholders" said Almeida. "We remain focused on building our business franchises, providing value added financing to our clients, maintaining our disciplined credit standards, improving margins, controlling expense growth, and delivering strong earnings growth and improving returns to our shareholders." Heller Financial, Inc. is a worldwide commercial finance company providing a broad range of financing solutions to middle-market and small business clients. With $14 billion in owned and managed assets, Heller offers equipment financing and leasing, vendor and sales finance programs, factoring and working capital loans, collateral- and cash flow-based financing, and financing for commercial real estate. The Company also offers trade finance, factoring, asset- based lending, leasing and vendor finance products and programs to clients in Europe, Asia, Australia and Latin America. Heller's common stock is listed as "HF" on the New York and Chicago Stock Exchanges. Heller's website is http://www.hellerfin.com. Certain statements made herein are or may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. No assurances can be given that any predicted results will actually be achieved and actual results could differ materially from those predicted as the result of the factors discussed in the Company's periodic reports filed with the Securities and Exchange Commission. 5 HELLER FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (in millions)
ASSETS March 31, December 31, 1999 1998 ----------- ------------- (unaudited) (audited) Cash and cash equivalents........................ $ 873 $ 529 Receivables...................................... 12,081 11,854 Less: Allowance for losses of receivables........ 277 271 ------- ------- Net receivables............................. 11,804 11,583 Investments...................................... 1,404 1,338 Investments in international joint ventures...... 222 235 Other assets..................................... 692 681 ------- ------- Total assets................................ $14,995 $14,366 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Senior debt Commercial paper and short-term borrowings...... $ 3,885 $ 3,681 Notes and debentures............................ 7,220 6,768 ------- ------- Total senior debt........................... 11,105 10,449 Credit balances of factoring clients............. 1,360 1,441 Other payables and accruals...................... 534 504 ------- ------- Total liabilities........................... 12,999 12,394 Minority interest................................ 10 10 Stockholders' equity Preferred stock................................ 400 400 Common stockholders' equity.................... 1,586 1,562 ------- ------- Total stockholders' equity.................. 1,986 1,962 ------- ------- Total liabilities and stockholders' equity.. $14,995 $14,366 ======= =======
6 HELLER FINANCIAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (in millions, except per share information) (unaudited)
Three Months Ended March 31, --------- 1999 1998 ---- ---- Interest Income.............................................. $ 262 $ 254 Interest Expense............................................. 149 155 ----- ----- Net interest income........................................ 113 99 Fees and other income........................................ 74 53 Factoring commissions........................................ 28 27 Income of international joint ventures....................... 8 7 ----- ----- Operating revenues......................................... 223 186 Operating expenses........................................... 108 94 Provision for losses......................................... 29 15 ----- ----- Income before income taxes and minority interest........... 86 77 Income tax provision......................................... 29 27 Minority interest............................................ - 2 ----- ----- Net income................................................. $ 57 $ 48 ===== ===== Dividends on preferred stock............................... $ 7 $ 5 ===== ===== Net income applicable to common stock.................... $ 50 $ 43 ===== ===== Basic net income applicable to common stock per share (1).................................... $0.56 $0.84 ===== ===== Diluted net income applicable to common stock per share (1).................................... $0.55 $0.84 ===== ===== Pro forma basic net income applicable to common stock per share (1)............................. $0.56 $0.48 ===== ===== Pro forma diluted net income applicable to common stock per share (1)............................. $0.55 $0.48 ===== =====
7 HELLER FINANCIAL, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA (unaudited)
SELECTED DATA AND RATIOS For the Three Months (dollars in millions) Ended March 31, --------------- 1999 1998 ---- ---- Profitability: - -------------- Pro forma net income applicable to common stock per share (1): Basic $0.56 $0.48 Diluted $0.55 $0.48 Net income applicable to common stock per share (actual) (1): Basic $0.56 $0.84 Diluted $0.55 $0.84 Return on average common stockholders' equity (2) 12.9% 13.9% Return on AFE (3) 1.9% 1.7% Net interest income as a percentage of AFE (3) 3.8% 3.6% Non-interest operating revenues as a percentage of AFE (3) 3.7% 3.1% Total operating revenues as a percentage of AFE (3) 7.5% 6.7% Operating expenses as a percentage of AFE (3) 3.6% 3.4% Operating expenses to operating revenues 48.4% 50.5% Operating expenses to AMA (4) 3.2% 3.2% Gross writedowns $ 27 $ 20 Gross recoveries $ 5 $ 5
8
March 31, December 31, March 31, 1999 1998 1998 ---- ---- ---- Credit Quality: - --------------- Ratio of earning loans delinquent 60 days or more to receivables 1.1% 1.6% 1.4% Ratio of total nonearning assets to total lending assets 1.8% 1.8% 1.6% Ratio of net writedowns to average lending assets 0.7% 0.7% 0.6% Ratio of allowance for losses of receivables to receivables 2.3% 2.3% 2.4% Ratio of allowance for losses of receivables to nonearning receivables 129% 130% 171%
March 31, December 31, March 31, --------- ------------ --------- 1999 1998 1998 ---- ---- ---- Leverage: - --------- Ratio of debt (net of short-term investments) to total stockholders' equity 5.3x 5.2x 7.0x Ratio of commercial paper and short-term borrowings to total debt 35% 35% 36% Other: (dollars in millions) - ------ Total lending assets and investments $13,711 $13,430 $11,955 Total common stockholders' equity 1,586 1,562 988 Average common stockholders' equity 1,574 1,392 1,252 Funds employed (3) 12,351 11,989 10,675 Average funds employed (3) 12,128 11,814 11,304 Managed assets (4) 13,977 13,664 11,819 Average managed assets (4) 13,641 13,007 11,810
(1) Based on 90,077,000 basic and 90,091,000 diluted weighted average shares of common stock outstanding for the three months ended March 31, 1999. The diluted weighted average shares as of March 31, 1999, include the effect of 2.4 million stock options issued to management of the Company. (2) Return on average common stockholders' equity is computed as net income less preferred stock dividends paid, divided by average total common stockholders' equity. (3) Funds employed include lending assets and investments, less credit balances of factoring clients. (4) Total managed assets include funds employed, plus receivables previously securitized or sold and currently managed by the Company. At March 31, 1999, managed assets includes $41 million from the 1995 real estate securitization, $109 million from the 1997 equipment securitization in which the Company has not retained any credit risk, $393 million from the 1998 sale of equipment receivables to a conduit in which the Company has retained approximately $14 million, $442 million of loans sold or securitized which are fully guaranteed by the U.S. Government through a Small Business Administration Program, $475 million from the sale of factored accounts receivable and $166 million from the sale of Factofrance's factored accounts receivable. 9 LENDING ASSETS AND INVESTMENTS
March 31, December 31, March 31, BY BUSINESS SEGMENT 1999 1998 1998 ----------- ------------- ---------- (dollars in millions) Domestic Commercial Finance Segment Corporate Finance $ 4,083 $ 3,784 $ 3,559 Real Estate Finance 2,099 2,044 1,763 Leasing Services 2,950 2,840 2,199 Small Business Finance 1,024 1,013 823 Commercial Services 524 401 481 Other 569 687 818 ------------- -------------- ------------ Total Domestic Commercial Finance Segment $11,249 $10,769 $ 9,643 International Factoring and Asset Based Finance Segment 2,462 2,661 2,312 ------------- -------------- ------------ Total lending assets and investments $13,711 $13,430 $11,955 ============= ============== ============
FEES AND OTHER INCOME (dollars in millions) For the Three Months Ended March 31, --------------- 1999 1998 ---- ---- Factoring commissions $ 28 $ 27 Income of international joint ventures 8 7 Fees and other income: Fee income and other 41 25 Net investment gains 33 17 Securitization income - 11 -------------------------- Total fees and other income $ 74 $ 53 ========================== Total non-interest income $ 110 $ 87 ==========================
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