8-K

UNITED STATES

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

Date of Report (date of earliest event reported): July 18, 2012

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)

16 New England Executive Park, Suite 200, Burlington MA 01803

(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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On July 18, 2012, the Registrant announced its results of operations for its second quarter and six month period ended June 30, 2012. Pursuant to Form 8-K, General Instruction F, the Registrant hereby incorporates by reference the press release attached hereto as Exhibit 99.

Item 9.01. Financial Statements and Exhibits.

Exhibit	Exhibit Title
Exhibit 99	Press Release dated July 18, 2012

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 R. Jackson, Jr.
	James R. Jackson, Jr.
	Vice President and Chief Financial Officer

Dated: July 19, 2012

EX-99

Exhibit 99

For Release July 18, 2012 4:01 pm Contact: Dave Mossberg Three Part Advisors, LLC Tel: 817-310-0051

MICROFINANCIAL INCORPORATED ANNOUNCES

SECOND QUARTER 2012 RESULTS

Burlington, MA — July 18, 2012 — MicroFinancial Incorporated (NASDAQ: MFI), a financial intermediary specializing in vendor-based leasing and finance programs for microticket transactions, today announced financial results for the second quarter and the six months ended June 30, 2012.

Quarterly Highlights:

• Net income was $2.6 million or $0.18 per diluted share which represents an increase of 15.7% as compared to the same period last year;

• Cash received from customers was $30.1 million or $2.05 per diluted share which represents an increase of 12.9% as compared to the same period last year;

• Revenue increased by 9.1% to $14.7 million as compared to the same period last year;

• Originations increased 27.7% to $23.9 million as compared to $18.7 million in the same period last year; and

• The Company paid a cash dividend of $0.06 per share.

Second Quarter Results:

Net income for the quarter ended June 30, 2012 was $2.6 million or $0.18 per diluted share based upon 14,658,235 shares, compared to net income of $2.3 million, or $0.16 per diluted share based upon 14,503,702 shares, for the same period last year.

Revenue for the second quarter increased 9.1% to $14.7 million compared to $13.5 million for the same period in 2011, driven by growth in lease revenue and rental income during the quarter. Revenue from leases was $9.9 million, up $0.8 million from the same period last year and rental income was $2.4 million, up $0.3 million as compared to the second quarter in 2011. Other revenue components contributed $2.4 million for the current quarter, up $0.1 million from the same period last year.

Total operating expenses for the current quarter increased 5.6% to $10.3 million from $9.8 million in the second quarter of 2011. Selling, general and administrative expenses remained relatively flat at $4.0 million as compared to the second quarter of last year as increases in compensation related expenses were offset by reductions in other expense categories. Headcount at June 30, 2012 was 139 as compared to 129 at the same date last year. The second quarter 2012 provision for credit losses increased to $4.5 million from $4.3 million for the same period

in 2011. During the second quarter, net charge-offs increased to $4.4 million from $4.3 million in the same period in 2011. Depreciation and amortization expense increased $0.3 million to $1.1 million for the quarter due to an increase in the number of rental contracts currently being depreciated.

Cash balances at June 30, 2012 were $2.5 million. Cash received from customers in the second quarter increased 12.9% to $30.1 million compared to $26.7 million during the same period in 2011. New lease originations in the quarter increased by $5.2 million to $23.9 million as compared to the same period last year.

Richard Latour, President and Chief Executive Officer said, “We are very pleased with the continued improvement in our financial performance in the second quarter of 2012. We realized solid earnings for the quarter of approximately $2.6 million and received cash from customers of over $30 million. Through the first six months of 2012, we have increased the number of lease applications processed by approximately 45% to 35,000 and increased our lease originations by approximately 23% to $45.5 million as compared to the same period last year.”

Year to Date Highlights:

• Net income increased to $4.7 million or $0.32 per diluted share which represents an increase of 7.9% as compared to the same period last year;

• Cash received from customers was $59.2 million or $4.05 per diluted share which represents an increase of 12.9% as compared to the same period last year;

• Revenue increased by 7.9% to $28.9 million as compared to the same period last year; and

• Originations increased 22.8% to $45.5 million as compared to $37.1 million in the same period last year.

Year to Date Results:

For the six months ended June 30, 2012, net income increased by 7.9% to $4.7 million versus net income of $4.3 million for the same period last year. Net income per diluted share year to date was $0.32 based on 14,635,068 shares versus $0.30 based on 14,495,745 shares for the same period in 2011.

Year to date revenue for the six months ended June 30, 2012 increased 7.9% to $28.9 million compared to $26.8 million during the same period in 2011. Revenue from leases was $19.6 million, up $1.3 million from the same period last year and rental income was $4.7 million, up $0.6 million from the prior period. Other revenue components contributed $4.7 million for the year to date, up $0.2 million from the same period last year. New contract originations year to date were $45.5 million versus $37.1 million through the same period last year.

Total operating expenses for the six months ended June 30, 2012 increased 7.0% to $21.2 million versus $19.8 million for the same period last year. Selling, general and administrative expenses increased by 4.9% or $0.4 million to $8.4 million primarily due to increases in compensation

related expenses associated with increased headcount. The provision for credit losses increased to $9.4 million for the six months ended June 30, 2012, as compared to $9.0 million for the same period last year. Year to date net charge-offs increased 3.8% to $9.6 million as compared to $9.2 million for the same period last year. Year to date cash from customers increased by 12.9% or $6.8 million to $59.2 million as compared to $52.5 million for the same period last year.

MICROFINANCIAL INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	June 30, 2012			December 31, 2011
ASSETS
Cash and cash equivalents	$	2,235		$	2,452
Restricted cash		296			382
Net investment in leases:
Receivables due in installments		208,057			200,499
Estimated residual value		23,844			23,287
Initial direct costs		1,682			1,476
Less:
Advance lease payments and deposits		(3,388	)		(3,530	)
Unearned income		(61,838	)		(59,946	)
Allowance for credit losses		(13,030	)		(13,180	)
Net investment in leases		155,327			148,606
Investment in service contracts, net		120			—
Investment in rental contracts, net		1,046			898
Property and equipment, net		1,730			1,911
Other assets		2,373			1,093
Total assets	$	163,127		$	155,342
LIABILITIES AND STOCKHOLDERS’ EQUITY
	June 30, 2012			December 31, 2011
Revolving line of credit	$	68,538		$	62,740
Capital lease obligation		—			1
Accounts payable		2,984			2,546
Dividends payable		28			19
Other liabilities		2,757			2,220
Income taxes payable		—			760
Deferred income taxes		9,869			11,333
Total liabilities		84,176			79,619
Stockholders’ equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued at June 30, 2012 and December 31, 2011		—			—
Common stock, $.01 par value; 25,000,000 shares authorized; 14,297,524 and 14,257,324 shares issued at June 30, 2012 and December 31, 2011, respectively		143			143
Additional paid-in capital		47,031			46,727
Retained earnings		31,777			28,853
Total stockholders’ equity		78,951			75,723
Total liabilities and stockholders’ equity	$	163,127		$	155,342

MICROFINANCIAL INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Revenues:
Income on financing leases	$	9,920	$	9,136	$	19,555	$	18,237
Rental income		2,402		2,073		4,719		4,079
Income on service contracts		85		103		170		211
Loss and damage waiver fees		1,321		1,220		2,608		2,421
Service fees and other		967		931		1,887		1,863
Total revenues		14,695		13,463		28,939		26,811
Expenses:
Selling, general and administrative		4,025		4,037		8,381		7,990
Provision for credit losses		4,548		4,251		9,444		9,003
Depreciation and amortization		1,065		783		2,073		1,464
Interest		655		680		1,288		1,343
Total expenses		10,293		9,751		21,186		19,800
Income before provision for income taxes		4,402		3,712		7,753		7,011
Provision for income taxes		1,761		1,429		3,101		2,699
Net income	$	2,641	$	2,283	$	4,652	$	4,312
Net income per common share:
Basic	$	0.18	$	0.16	$	0.33	$	0.30
Diluted	$	0.18	$	0.16	$	0.32	$	0.30
Weighted-average shares:
Basic		14,297,524		14,231,692		14,290,806		14,239,180
Diluted		14,658,235		14,503,702		14,635,068		14,495,745

About the Company

MicroFinancial Inc. (NASDAQ: MFI), is a financial intermediary specializing in microticket leasing and financing. MicroFinancial has been operating since 1986, and is headquartered in Burlington, Massachusetts.

Statements in this release that are not historical facts, including statements about future dividends or growth plans, 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,” “will” and similar expressions are intended to identify forward-looking statements. We caution that a number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. Readers should not place undue reliance on forward-looking statements, which reflect our views only as of the date hereof. We undertake no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. We cannot assure that we will be able to anticipate or respond timely to changes which could adversely affect our operating results. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results or other factors may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see the risk factors described in documents that we file from time to time with the Securities and Exchange Commission.