-----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, UKtKHktn1jv7JaII/bM7t1ZZ5uBV7efc7sBFVdcrtYc+dqF30uOs449FtTt1SxYT omH12QL7YCPoh+FLvVN+Sg== 0000908662-04-000177.txt : 20040802 0000908662-04-000177.hdr.sgml : 20040802 20040802111257 ACCESSION NUMBER: 0000908662-04-000177 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040728 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040802 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: 04944082 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_8k.txt FORM 8-K DATED 7/28/04 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): July 28, 2004 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 July 28, 2004 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 announcing its results for the second quarter of 2004. 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: August 2, 2004 EX-99 2 exh_99.txt PRESS RELEASE DATED 7/28/04 Exhibit 99 ---------- For Release July 28, 2004 Contact: 4:01 pm Richard F. Latour President and CEO Tel: 781-994-4800 MicroFinancial Incorporated Announces Second Quarter 2004 Results Woburn, MA-- July 28, 2004-- MicroFinancial Incorporated (NYSE-MFI), announced today its financial results for the second quarter and the six months ended June 30, 2004. Second quarter revenue for the period ended June 30, 2004, was $15.8 million compared to $24.0 million for the same period last year. The reduction in revenues is attributable to the decrease in the size of the Company's portfolio of leases, rentals and service contracts. The reduction in revenues is directly related to the Company's suspension of virtually all originations beyond October 2002. The net loss for the quarter was $5.9 million, or ($0.45) per share on 13,182,666 shares as compared with a net loss of $3.7 million or ($0.29) per share in the prior year's second quarter. The net loss is primarily the result of a 61.4% decline in lease and loan revenues to $3.2 million, a 33.0% decline in service contracts to $1.6 million, and a 44.3% decrease in service fees and other to $1.8 million as compared to the same period last year. Other components of revenue declined by 8.5% to $9.2 million. Total operating expenses for the quarter declined approximately 15.3% to $25.6 million as compared to the same period in 2003. Interest expense declined 71.5% to $0.6 million as a result of lower debt balances of approximately $95.2 million. Selling, general and administrative expenses decreased 21.4% to $6.8 million for the second quarter ended June 30, 2003, versus $8.7 million for the same period last year. The decrease was attributable to reductions in personnel related expenses of approximately $0.7 million, a $0.4 million reduction in sales program costs, a $0.5 million reduction in professional and legal fees, and a $0.1 million reduction in cost of goods sold. The provision for credit losses decreased 7.0% to $14.2 million for the quarter ended June 30, 2004 from $15.2 million for the same period last year, while net charge offs decreased to $19.7 million. Past due balances greater than 31 days delinquent at June 30, 2004 decreased to 17.7% from 19.2% last quarter. Total cash received from customers for the quarter decreased 10.7% to $22.5 compared to $25.2 million for the previous quarter. During the quarter the Company repaid $15.1 million on its senior credit facility and securitized debt. Richard Latour, President and Chief Executive Officer stated, "I am pleased that the collections from our existing portfolio remained strong in the second quarter. The Company's ongoing strategy of driving down expenses while maximizing collections continued." The Company remains in full compliance with the terms and conditions of its securitizations and senior credit facility. The Company operates within all delinquency and charge-off covenants and 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 $14.4 million to $26.1 million. The Company also made its final payment on the securitized debt. Year to date revenues for the period ended June 30, 2004 decreased 31.8% to $33.8 million compared to $49.5 million during the same period in 2003. The reduction in revenues is directly related to the Company's decision to suspend funding virtually all 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 June 30, 2004 was $10.6 million versus a net loss of $4.5 million for the same period last year. Net loss per share year to date was ($0.80) on 13,181,107 shares. Total operating expenses for the six months ended June 30, 2004 were $51.4 million compared to $57.0 million in 2003. Interest expense declined 69.5% to $1.5 million as a result of lower average debt balances of approximately $101.3 million. Selling, general and administrative expenses decreased 20.8% to $14.1 million for the six months ended June 30, 2004 versus $17.8 million for the same period last year. The decrease was driven by a reduction in personnel related expenses of approximately $1.7 million, a $0.8 million reduction in professional fees and legal costs, a $0.8 million reduction in sales program expenses, and a reduction in facilities expenses of $0.8 million. The Company's headcount at June 30, 2004 was 120, down from 159 from the same period last year. The provision for credit losses increased 5.9% to $27.6 million for the six months ended June 30, 2004 from $26.1 million for the same period last year. Year to date net charge-offs increased to $39.3 million from $36.2 million for the same period last year, and the Company repaid $32.5 million on its senior credit facility and securitizations for the six months ended June 30, 2004. 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 0.6 to 1. Mr. Latour concluded, "MicroFinancial's capital structure and cash flow remain strong. Although no new originations occurred during the second quarter, the closing of a new $10 million credit facility in June has allowed the Company to begin the process of signing new vendors and processing lease applications. We continue to seek various financing, restructuring and strategic alternatives that will enable the Company to strengthen its position in the leasing market." MICROFINANCIAL INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
December 31, June 30, ------------- ---------- 2003 2004 ---- ---- ASSETS Net investment in leases and loans: Receivables due in installments $ 175,788 $ 113,681 Estimated residual value 19,110 12,788 Initial direct costs 1,804 930 Less: Advance lease payments and deposits (37) (30) Unearned income (23,729) (12,279) Allowance for credit losses (43,011) (31,256) --------- --------- Net investment in leases and loans $ 129,925 $ 83,834 Investment in service contracts 8,844 6,679 Cash and cash equivalents 6,533 7,370 Restricted cash 2,376 1,278 Property and equipment, net 5,844 4,308 Other assets 2,892 2,983 --------- --------- Total assets $ 156,414 $ 106,452 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Notes payable $ 58,843 $ 26,249 Subordinated notes payable 3,262 4,374 Capitalized lease obligations 209 121 Accounts payable 3,186 3,033 Other liabilities 4,104 2,914 Income taxes payable 7,789 7,818 Deferred income taxes payable 7,755 710 --------- --------- Total liabilities 85,148 45,219 --------- --------- Stockholders' equity: Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued at 12/31/03 and 6/30/04 - - Common stock, $.01 par value; 25,000,000 shares authorized; 13,410,646 shares issued at 12/31/03 and 6/30/04, respectively 134 134 Additional paid-in capital 44,245 44,769 Retained earnings 29,402 18,836 Treasury stock, at cost (234,230 shares at 12/31/03 and 6/30/04) (2,515) (2,447) Unearned compensation - (59) --------- --------- Total stockholders' equity 71,266 61,233 --------- --------- Total liabilities and stockholders' equity $ 156,414 $ 106,452 ========= =========
MICROFINANCIAL INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data) For the three months ended June 30, ---------------------------- 2003 2004 ---- ---- Revenues: Income on financing leases and loans $ 8,378 $ 3,235 Income on service contracts 2,334 1,563 Rental income 8,627 8,164 Loss and damage waiver fees 1,423 1,035 Service fees and other 3,201 1,784 ---------------------------- Total revenues 23,964 15,782 ---------------------------- Expenses: Selling general and administrative 8,709 6,845 Provision for credit losses 15,249 14,181 Depreciation and amortization 4,087 3,936 Interest 2,145 611 ---------------------------- Total expenses 30,190 25,573 ---------------------------- Loss before benefit for income taxes (6,226) (9,791) Benefit for income taxes (2,490) (3,917) ---------------------------- Net loss ($ 3,736) ($ 5,874) ============================ Net loss per common share - basic ($ 0.29) ($ 0.45) ============================ Net loss per common share - diluted ($ 0.29) ($ 0.45) ============================ Weighted-average shares used to compute: Basic net income per share 12,917,752 13,182,666 ---------------------------- Fully diluted net income per share 12,917,752 13,182,666 ---------------------------- For the six months ended June 30, --------------------------- 2003 2004 ---- ---- Revenues: Income on financing leases and loans $ 18,199 $ 7,402 Income on service contracts 4,586 3,294 Rental income 17,175 16,629 Loss and damage waiver fees 2,906 2,166 Service fees and other 6,670 4,299 ---------------------------- Total revenues 49,535 33,790 ---------------------------- Expenses: Selling general and administrative 17,841 14,124 Provision for credit losses 26,048 27,589 Depreciation and amortization 8,357 8,230 Interest 4,774 1,457 ---------------------------- Total expenses 57,020 51,401 ---------------------------- Loss before benefit for income taxes (7,485) (17,611) Benefit for income taxes (2,994) (7,045) ---------------------------- Net loss ($ 4,491) ($ 10,566) ============================ Net loss per common share - basic ($ 0.35) ($ 0.80) ============================ Net loss per common share - diluted ($ 0.35) ($ 0.80) ============================ Weighted-average shares used to compute: Basic net income per share 12,917,752 13,181,107 ---------------------------- Fully diluted net income per share 12,917,752 13,181,107 ---------------------------- 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-----