-----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, D6H0WqStoSYGUGKb58ItNwBNheHaSgRVT4RF1W4zR8JqjGYi+CKUl25H0rZ6a/nf AfKxdvgN79/Aedsr9YAKyQ== 0000814677-97-000009.txt : 19970520 0000814677-97-000009.hdr.sgml : 19970520 ACCESSION NUMBER: 0000814677-97-000009 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19970516 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLM INTERNATIONAL INC CENTRAL INDEX KEY: 0000814677 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 943041257 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-09670 FILM NUMBER: 97610690 BUSINESS ADDRESS: STREET 1: STEUART ST TOWER STE 900 STREET 2: ONE MARKET PLZ CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 4159741399 DEFA14A 1 [PLM logo] T O O U R S H A R E H O L D E R S : PLM International (the Company) achieved positive results for the ninth consecutive quarter following completion of the Company's 1994 financial restructuring. For the quarter ended March 31, 1997, PLM International reported net income of $1.3 million, or $0.14 per common share. PLM International reported net income of $0.8 million, or $0.07 per common share, for the comparable period in 1996. First quarter 1997 consolidated revenues totaled $12.5 million, compared to $12.4 million for the same quarter in 1996. The improvement in first quarter earnings is the direct result of our strategic growth plan to expand and diversify PLM International's revenue sources. This growth plan, which we implemented in May 1996, has three components: (1) building the operations of American Finance Group, Inc., the Company's commercial and industrial equipment leasing and management subsidiary; (2) expanding PLM Rental, Inc.'s trailer leasing and management activities; and (3) continuing to manage existing investor equipment leasing programs. Additionally, in early March 1997, we announced a continuation of our Company stock repurchase plan, under which we have already repurchased 3.5 million shares (at an average cost of $3.58 per share), which represents more than 22% of PLM International outstanding common stock since the beginning of the plan in 1994. With this latest announcement on March 3, 1997, the Board of Directors has authorized the repurchase of an additional $5 million of common stock, bringing the total authorized to $17.5 million. American Finance Group Subsidiary Continues to Post Strong Results American Finance Group, Inc. (AFG) originates, services, and manages leases for a wide range of commercial and industrial equipment for investment-grade, Fortune 2000 companies. In 1996, its first full year of operation, AFG produced $8 million in direct finance and operating lease revenues. For the first quarter of 1997, AFG generated $3 million in similar revenues. AFG's income before taxes for the first quarter, of $836,000, exceeded its income before taxes for full-year 1996, of $618,000. We are expanding the AFG lease portfolio, which totaled $97.5 million as of March 31, 1997, using primarily nonrecourse, securitized debt. We are able to utilize this less expensive form of debt because of the relatively predictable cash flows generated by AFG's longer-term leases. Based on the attractive returns and strong growth potential of this business, we intend to continue aggressively expanding AFG's lease portfolio and are targeting to double it in 1997. Thus, we expect the revenues generated by AFG to become an increasingly large portion of total Company revenues in the future. Our Focus on Cost Controls Adds to Bottom-Line Results An integral part of PLM International's strategic growth plan is our ongoing focus on containing and, wherever possible, reducing operating costs. For the first quarter of 1997, total costs and expenses were 16% lower than in the comparable period in 1996, primarily as a result of decreased operations support and general and administrative expenses. Additionally, the Company continues to realize long-term benefits from sharp reductions in both senior and subordinated debt achieved in 1996 and prior years. Revenue Sources Changing -- for the Better A fundamental goal of our strategic growth plan is to provide long-term earnings growth that will be more predictable than was generated by the Company's main revenue sources in the past. With the strong growth in AFG's operations, we are making steady progress toward this goal. PLM International's revenue sources are changing in other important ways as well. In prior quarters, the gains reported from asset sales were primarily due to the sale of older assets from the Company's owned transportation equipment portfolio. In the first quarter of 1997, over one-half of the $1.4 million gain reported was from the sale of equipment subject to leases recently originated by AFG and subsequently sold to third parties, rather than from the sale of older assets. Additionally, a $0.4 million gain was realized on the sale of an aircraft bought and sold during the first quarter. A second aircraft was sold in a similar transaction early in the second quarter. Using our core expertise in equipment management, we expect to complete additional such transactions on an ongoing basis as we identify market opportunities. Building for a Solid Future With the successful implementation of our strategic growth plan, we believe PLM International has entered a new era of long-term growth in earnings and shareholder value. Going forward, in addition to continuing to build AFG's operations, we will focus on the other two components of our plan as well: (1) expanding PLM Rental's trailer leasing and management operations in selected market niches and (2) managing our existing investor equipment leasing programs. We hope to report solid progress in all of these areas in the months ahead. Thank you for your continued support. Sincerely, /s/ J. Alec Merriam /s/ Robert N. Tidball - ------------------------- ------------------------------------- J. Alec Merriam Robert N. Tidball Chairman of the Board President and Chief Executive Officer May 8, 1997, San Francisco, California Consolidated Statements of Income (in thousands, except per share amounts - unaudited)
For the Three Months Ended March 31, 1997 1996 Revenues: Operating leases $ 4,229 $ 5,046 Finance lease income 1,814 322 Management fees 2,861 2,553 Partnership interests and other fees 486 992 Acquisition and lease negotiation fees 178 1,555 Aircraft brokerage and services 674 687 Gain on the sale or disposition of assets, net 1,368 800 Other 841 446 -------- ------- Total revenues 12,451 12,401 Costs and expenses: Operations support 4,164 5,113 Depreciation and amortization 2,205 2,709 General and administrative 1,916 2,095 Total costs and expenses 8,285 9,917 Operating income 4,166 2,484 Interest expense 2,642 1,442 Interest income 386 237 Other expense, net 21 26 Income before income taxes 1,889 1,253 Provision for income taxes 608 461 -------- ------- Net income to common shares $ 1,281 $ 792 -------- ------- Earnings per common share outstanding $ 0.14 $ 0.07
Consolidated Balance Sheets (in thousands, except share amounts - unaudited) March 31, Dec 31, 1997 1996 -------- ------- Assets Cash and cash equivalents $ 13,995 $ 7,638 Receivables 3,966 5,286 Receivables from 4,802 6,019 affiliates Investment in direct 67,425 69,994 finance leases, net Loans receivable 6,017 5,718 Equity interest in 29,577 30,407 affiliates Assets held for sale -- 6,222 Transportation equipment held for operating leases 65,175 66,546 Less accumulated depreciation (41,618) (41,750) ------------ ------------ 23,557 24,796 Commercial and industrial equipment held for operating leases 15,786 15,930 Less accumulated depreciation (3,182) (2,302) ------------ ------------ 12,604 13,628 Restricted cash and cash 20,130 17,828 equivalents Other, net 11,887 11,213 ----------- ------------ Total assets $ 193,960 $ 198,749 Liabilities, Minority Interest, and Shareholders' Equity Liabilities: Short-term secured debt $ 22,524 $ 30,966 Senior secured loan 25,000 25,000 Senior secured notes 18,000 18,000 Other secured debt 556 618 Nonrecourse securitization facility 47,674 45,392 Payables and other liabilities 16,024 16,757 Deferred income taxes 16,030 15,334 Total liabilities 145,808 152,067 Minority interest 367 362 Shareholders' equity: Common stock ($.01 par value, 50,000,000 shares authorized, 9,209,431 shares authorized, 9,209,431 outstanding at March 31, 1997 and 9,142,761 at December 31, 1996) 117 117 Treasury stock (3,386,960 and 3,453,630 shares at respective dates) (12,143) (12,382) ------------ ------------ 65,752 65,513 Accumulated deficit (17,967) (19,193) ------------ ------------ Total shareholders' equity 47,785 46,320 ------------ ------------ Total liabilities, minority interest, and shareholders' equity $ 193,960 $ 198,749 C E L E B R A T I N G 25 Y E A R S During our twenty-fifth anniversary, we salute the many investors, customers, business partners, and employees who together have succeeded in building one of the world's foremost equipment leasing corporations: PLM International. [PLM Logo] PLM INTERNATIONAL, INC. One Market, Steuart Tower, Suite 800 San Francisco, CA 94105-1301 PLM International's First Quarter 1997 Results -----END PRIVACY-ENHANCED MESSAGE-----