-----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, RbubMvfXmB9gh80pTc+lqbud0xzfuQt5EUm9ieIYPW+lb0+dEsz2LN81Ykri3o6S XEY1xkunqtqLn7F4AD/pZA== 0000908662-03-000261.txt : 20031024 0000908662-03-000261.hdr.sgml : 20031024 20031024114336 ACCESSION NUMBER: 0000908662-03-000261 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031024 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MICROFINANCIAL INC CENTRAL INDEX KEY: 0000827230 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS BUSINESS CREDIT INSTITUTION [6159] IRS NUMBER: 042962824 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14771 FILM NUMBER: 03955702 BUSINESS ADDRESS: STREET 1: 10 M COMMERCE WAY CITY: WOBURN STATE: MA ZIP: 01801 BUSINESS PHONE: 7819944800 MAIL ADDRESS: STREET 1: 10 M COMMERCE WAY CITY: WOBURN STATE: MA ZIP: 01801 FORMER COMPANY: FORMER CONFORMED NAME: BOYLE LEASING TECHNOLOGIES INC DATE OF NAME CHANGE: 19980605 8-K 1 form_8-k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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 24, 2003 ------------------------------------------------------------------ MICROFINANCIAL INCORPORATED --------------------------- (Exact name of registrant as specified in its charter) MASSACHUSETTS ------------- (State or other jurisdiction of incorporation) 1-14771 04-2962824 ------------------------------------------------------------- (Commission file number) (IRS Employer Identification Number) 10-M Commerce Way, Woburn, MA 01801 ----------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 781-994-4800 ---------------------------------------------------------------- N/A --- (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits. --------------------------------- Exhibit Exhibit Title ------- ------------- Exhibit 99 Press Release dated October 24, 2003 Item 12. Results of Operations and Financial Condition Pursuant to Form 8-K, General Instructions F, Registrant hereby incorporates by reference the press release attached hereto as Exhibit 99. SIGNATURES Pursuant to the requirements of the Securities and 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. MICROFINANCIAL INCORPORATED Registrant By: /s/ James Jackson --------------------------------------- James Jackson Vice President and Chief Financial Officer Dated: October 24, 2003 EX-99 3 exh_99.txt PRESS RELEASE DATED 10/24/03 Exhibit 99 For Release October 24, 2003 Contact: 8:01 am Richard F. Latour President and CEO Tel: 781-994-4800 MicroFinancial Incorporated Announces Third Quarter 2003 Results Woburn, MA -- October 24, 2003 -- MicroFinancial Incorporated (NYSE-MFI), announced today its financial results for the third quarter and the nine months ended September 30, 2003. Third quarter revenue for the period ended September 30, 2003, was $22.1 million compared to $30.5 million for the same period last year. The reduction in revenues is directly related to the Company's decision in October 2002 to cease funding new originations as a result of its Lenders' decision not to renew the revolving credit facility on September 30, 2002. The net loss for the quarter was $3.2 million, or ($0.25) per share as compared with a net loss of $19.6 million or a loss of $1.53 per share in the prior year's third quarter. The improvement in net income for the quarter is primarily due to a lower provision for credit losses as compared to the same period last year. The reduction in revenues for the quarter is primarily the result of a 44.0% decline in lease and loan revenues to $7.2 million and a 35.0% decline in service fee and other revenues to $2.9 million. Total operating expenses for the quarter declined 56.6% to $27.4 million as compared to the same period in 2002. Interest expense declined 35.4% to $1.6 million as a result of lower debt balances of approximately $99.1 million offset by an increase in the Company's average interest rates of 149 basis points. Selling, general and administrative expenses decreased 24.0% to $7.8 million for the third quarter ended September 30, 2003, versus $10.3 million for the same period last year. The decrease was attributable to reductions in personnel related expenses of approximately $1.7 million as well as a $0.7 million reduction in collection related expenses. The provision for credit losses decreased to $13.9 million for the quarter ended September 30, 2003 from $44.7 million for the same period last year, while net charge offs increased to $16.6 million. Past due balances greater than 31 days delinquent at September 30, 2003 remained relatively flat at 22.9% from 23.0% last quarter. Exclusive of a federal tax refund in excess of $11 million received in the second quarter of 2003, net cash provided by operating activities for the third quarter increased slightly to $20.8 million compared to $20.5 million for the previous quarter. The Company repaid debt of $24.6 million on its senior credit facility and securitizations during the quarter. "I am pleased that during the third quarter the Company was able to reduce our total interest bearing debt by an additional $24.6 million which brings our year to date reduction to over $83 million, commented Richard Latour, President and Chief Executive Officer. "We remain ahead our required repayments and other financial expectations of our bank agreement by approximately $5.0 million through September 30, 2003." The Company remains in full compliance with the terms and conditions of its securitizations and senior credit facility. The Company has made or exceeded all scheduled payments on these debt instruments in a timely manner. During the quarter, MicroFinancial's successful collections efforts allowed the Company to reduce its bank debt by $15.4 million to $73.5 million. For the nine-month period ended September 30, 2003 revenues decreased 27.5% to $71.6 million compared to $98.8 million during the same period in 2002. The reduction in revenues is directly related to the Company's decision to cease funding new originations since October 2002 as a result of its Lenders' decision not to renew the revolving credit facility on September 30, 2002. The net loss year to date ending September 30, 2003 was $7.7 million or ($0.59) per share versus a net loss of $14.4 million or ($1.12) per share for the same period last year. Total operating expenses for the nine months ended September 30, 2003 were $84.4 million compared to $122.8 million in 2002. Interest expense declined 18.7% to $6.4 million as a result of lower average debt balances of approximately $73.3 million. Selling, general and administrative expenses decreased 25.1% to $25.7 million for the first nine months of the year versus $34.3 million for the same period last year. The decrease was driven by a reduction in personnel related expenses of approximately $4.7 million, a $1.5 million reduction in cost of goods sold, and a reduction in collection related expenses of $2.0 million. The Company's headcount at September 30, 2003 was 144; down from 300 from the same period last year while depreciation and amortization decreased 12.3% to $12.5 million compared to $14.2 million in 2002. The provision for credit losses decreased 40.0% to $39.9 million for the nine-month period from $66.5 million for the same period last year. Year to date net charge-offs increased to $52.7 million and the Company repaid debt balances on its senior credit facility and securitizations of $83.4 million for the nine months ended September 30, 2003. MicroFinancial Incorporated continues to operate without the use of gain on sale accounting treatment and a balance sheet with total liabilities less subordinated debt to total equity plus subordinated debt of 1.4 to 1. Mr. Latour concluded, "MicroFinancial continues its efforts to secure various financing, restructuring and strategic alternatives that will enable the Company to reenter the financing market." MICROFINANCIAL INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
December 31, September 30, --------------- -------------- 2002 2003 ---- ---- ASSETS Net investment in leases and loans: Receivables due in installments $ 334,623 $ 227,528 Estimated residual value 30,754 22,927 Initial direct costs 4,891 2,515 Loans receivable 1,796 - Less Advance lease payments and deposits (96) (43) Unearned income (67,574) (34,883) Allowance for credit losses (69,294) (56,470) --------- --------- Net investment in leases and loans $ 235,100 $ 161,574 Investment in service contracts 14,463 10,054 Cash and cash equivalents 5,494 7,282 Restricted cash 18,516 8,731 Property and equipment, net 9,026 5,953 Income taxes receivable 8,652 - Other assets 3,834 3,577 --------- --------- Total assets $ 295,085 $ 197,171 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Notes payable $ 168,927 $ 85,535 Subordinated notes payable 3,262 3,262 Capitalized lease obligations 471 253 Accounts payable 3,840 2,888 Other liabilities 6,776 5,273 Income taxes payable 1,400 2,012 Deferred income taxes payable 23,806 18,681 --------- --------- Total liabilities 208,482 117,904 --------- --------- Stockholders' equity: Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued at 12/31/02 and 9/30/03 - - --------- --------- Common stock, $.01 par value; 25,000,000 shares authorized; 13,410,646 shares issued at 12/31/02 and 9/30/03, respectively 134 134 Additional paid-in capital 47,723 44,245 Retained earnings 45,089 37,403 Treasury stock (588,700 and 234,230 shares of common stock at 12/31/02 and 9/30/03, respectively), at cost (6,343) (2,515) --------- --------- Total stockholders' equity 86,603 79,267 --------- --------- Total liabilities and stockholders' equity $ 295,085 $ 197,171 ========= =========
MICROFINANCIAL INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) For the three months ended September 30, ----------------------------- 2002 2003 ---- ---- Revenues: Income on financing leases and loans $12,819 $7,173 Income on service contracts 2,479 2,067 Rental income 9,212 8,589 Loss and damage waiver fees 1,633 1,365 Service fees and other 4,406 2,863 --------------------------- Total revenues 30,549 22,057 --------------------------- Expenses: Selling general and administrative 10,306 7,837 Provision for credit losses 44,672 13,852 Depreciation and amortization 5,713 4,106 Interest 2,458 1,589 --------------------------- Total expenses 63,149 27,384 --------------------------- Income/(loss) before provision for income taxes (32,600) (5,327) Provision/(benefit) for income taxes (13,042) (2,131) --------------------------- Net income/(loss) ($19,558) ($3,196) =========================== Net income/(loss) per common share - basic ($1.53) ($0.25) =========================== Net income/(loss) per common share - diluted ($1.53) ($0.25) =========================== Weighted-average shares used to compute: Basic net income per share 12,821,946 12,999,035 --------------------------- Fully diluted net income per share 12,821,946 12,999,035 --------------------------- For the nine months ended September 30, -------------------------- 2002 2003 ---- ---- Revenues: Income on financing leases and loans $41,845 $25,372 Income on service contracts 7,332 6,653 Rental income 28,295 25,763 Loss and damage waiver fees 4,691 4,271 Service fees and other 16,632 9,533 -------------------------- Total revenues 98,795 71,592 -------------------------- Expenses: Selling general and administrative 34,289 25,677 Provision for credit losses 66,460 39,900 Depreciation and amortization 14,203 12,463 Interest 7,823 6,364 -------------------------- Total expenses 122,775 84,404 -------------------------- Income/(loss) before provision for income taxes (23,980) (12,812) Provision/(benefit) for income taxes (9,593) (5,125) -------------------------- Net income/(loss) ($14,387) ($7,687) ========================== Net income/(loss) per common share - basic ($1.12) ($0.59) ========================== Net income/(loss) per common share - diluted ($1.12) ($0.59) ========================== Weighted-average shares used to compute: Basic net income per share 12,821,946 12,999,035 -------------------------- Fully diluted net income per share 12,821,946 12,999,035 -------------------------- MicroFinancial Inc. (NYSE: MFI), headquartered in Woburn, MA, is a financial intermediary specializing in leasing and financing for products in the $500 to $10,000 range. The company has been in operation since 1986. Statements in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes," "anticipates," "expects," "views, " and similar expressions are intended to identify forward-looking statements. The Company cautions that a number of important factors could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. Readers should not place undue reliance on forward-looking statements, which reflect the management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. The Company cannot assure that it will be able to anticipate or respond timely to changes which could adversely affect its operating results in one or more fiscal quarters. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of the Company's common stock. For a more complete description of the prominent risks and uncertainties inherent in the Company's business, see the risk factors described in documents the Company files from time to time with the Securities and Exchange Commission. -----END PRIVACY-ENHANCED MESSAGE-----