-----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, FOVzmun+grs69WUTKBmxBerXlySi0E2+rsIDN1pEogAJ1oHTAr/7XJgNO8B57hxA tgkeeahc2vcPmW/xH3Sw1Q== 0000950129-03-002772.txt : 20030515 0000950129-03-002772.hdr.sgml : 20030515 20030515101717 ACCESSION NUMBER: 0000950129-03-002772 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030515 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20030515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTCITY FINANCIAL CORP CENTRAL INDEX KEY: 0000828678 STANDARD INDUSTRIAL CLASSIFICATION: SHORT-TERM BUSINESS CREDIT INSTITUTIONS [6153] IRS NUMBER: 760243729 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 033-19694 FILM NUMBER: 03701512 BUSINESS ADDRESS: STREET 1: 6400 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 BUSINESS PHONE: 2547511750 MAIL ADDRESS: STREET 1: 6400 IMPERIAL DRIVE CITY: WACO STATE: TX ZIP: 76712 FORMER COMPANY: FORMER CONFORMED NAME: FIRST CITY BANCORPORATION OF TEXAS INC/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FIRST CITY ACQUISITION CORP DATE OF NAME CHANGE: 19880523 8-K 1 h06016e8vk.txt FIRSTCITY FINANCIAL CORPORATION ================================================================================ 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): MAY 15, 2003 FIRSTCITY FINANCIAL CORPORATION (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 033-19694 76-0243729 (STATE OF INCORPORATION) (COMMISSION FILE NO.) (IRS EMPLOYER IDENTIFICATION NO.) 6400 IMPERIAL DRIVE WACO, TEXAS 76712 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (254) 751-1750 ================================================================================ ITEM 7. FINANCIAL STATEMENTS, PRO-FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits 99.1 - Text of press release of FirstCity Financial Corporation issued on May 15, 2003. ITEM 9. REGULATION FD DISCLOSURE (INFORMATION PROVIDED UNDER ITEM 12 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION). On May 15, 2003, FirstCity Financial Corporation ("FirstCity" or the "Company") issued a press release announcing its financial results for the quarter ended March 31, 2003 and certain other information. A copy of this press release is attached hereto as Exhibit 99.1. The information required by Form 8-K, Item 12 - Results of Operations and Financial Condition, is being provided under Item 9 pursuant to SEC Release No. 33-8216. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing of FirstCity, whether made before or after the date hereof, regardless of any general incorporation language in such filing. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FirstCity Financial Corporation Date: May 15, 2003 By: /s/ J. Bryan Baker ------------------------------------- J. Bryan Baker Senior Vice President, and Chief Financial Officer EXHIBIT INDEX
Exhibit No. Description - ----------- ----------- 99.1 - Text of press release of FirstCity Financial Corporation issued on May 15, 2003.
EX-99.1 3 h06016exv99w1.txt TEXT OF PRESS RELEASE ISSUED MAY 15, 2003 NEWS RELEASE (FIRSTCITY FINANCIAL CORPORATION LOGO) contact: Suzy W. Taylor (866) 652-1810 FIRSTCITY FINANCIAL ANNOUNCES FIRST QUARTER 2003 RESULTS WACO, TEXAS MAY 15, 2003... FirstCity Financial Corporation (Nasdaq FCFC) today announced a loss from continuing operations for the quarter ended March 31, 2003 of $19,000. The net loss to common shareholders was $85,000, or $ .01 per share on a diluted basis, after subtracting $66,000 in accrued and unpaid dividends on the Company's preferred stock. Components of the results for the three months ended March 31, 2003 and 2002, respectively, are detailed below:
($ Thousands) THREE MONTHS ENDED MARCH 31, -------------------------- 2003 2002 ---------- ---------- Portfolio Asset Acquisition and Resolution $ 1,777 $ 2,331 Consumer 576 (1,081) Corporate interest (1,172) (822) Corporate overhead (1,200) (1,262) ---------- ---------- Loss from continuing operations (19) (834) Accrued preferred dividends (66) (642) Loss from discontinued operations -- (500) ---------- ---------- Net loss to common shareholders $ (85) $ (1,976) ========== ==========
PORTFOLIO ASSET ACQUISITION The $1.8 million profit contribution from Portfolio Asset Acquisition and Resolution was impacted by $1.5 million in foreign currency losses due to the devaluation of the Mexican peso experienced in the quarter and $.2 million in currency gains related to the appreciation of the Euro. Since the end of the quarter the Mexican peso has strengthened and has resulted in currency gains which will be reflected in the second quarter if the trend continues. The Company continues to monitor the foreign currency exposure on a daily basis and evaluate the necessity of hedging these investments through analysis of currency forecasts, the cost to hedge those investments and the available liquidity required to do so. The Company continues to see many opportunities to invest in the U.S., Europe and Latin America. Although there were no acquisition closings during the first quarter the Company is currently performing due diligence on pools with an unpaid principal balance in excess of $800 million. Of the total currently being pursued $600 million is in the U.S. It is anticipated that the initial investments in Latin American countries other than Mexico will be small negotiated transactions which will allow the Company to enter those markets in a deliberate and disciplined manner. Operating contribution for the quarter was $1.8 million, comprised of $6.8 million in revenues, net of $5.0 million of expenses. The business generated 64% of the revenues from domestic investments, 21% from investments in Mexico and 15% from investments in France. The major components of revenue for the quarter include servicing fees of $3.5 million, equity earnings in Acquisition Partnerships and servicing entities of $1.2 million and interest income of $1.1 million. (more) (2) CONSUMER FirstCity owns a 31% Interest in Drive Financial Services L.P., a subprime auto lending company. Drive originated $126 million of receivables during the quarter. Defaults and losses have risen to 21.03% and 10.83%, respectively, at the end of the quarter compared to 17.49% and 8.19%, respectively, for the same period last year. These increases are primarily a result of a continued weakness in the economy and the resulting impact on used car prices. Delinquencies have decreased to 4.66% from 4.87% for the corresponding quarters. Drive continues on a strategy to grow the balance sheet and record interest income from loans and interest expense on the related debt as incurred to build an earnings stream over time. The trend is detailed in the table below:
INCOME (LOSS) BEFORE PROVISIONS ON LOAN TOTAL PROVISIONS ON RESIDUAL NET INCOME FIRSTCITY'S $ Thousands INVENTORY ASSETS RESIDUAL ASSETS ASSETS (LOSS) 31% SHARE ----------- --------- -------- --------------- ------------- ---------- ----------- 1st Quarter 2003 $ 443,000 $551,412 $ 3,707 $ (1,217) $ 2,490 $ 689 Prior year: 4th Quarter 2002 368,379 472,553 3,207 (3,303) (96) (29) 3rd Quarter 2002 310,540 416,295 1,025 (112) 913 282 2nd Quarter 2002 238,096 341,882 1,281 -- 1,281 398 1st Quarter 2002 159,052 254,647 (3,470) -- (3,470) (1,076)
As the table shows, the trend of income (loss) before provisions for residual assets reflects the positive effects of growing the balance sheet. DISCONTINUED OPERATIONS The anticipated net realizable value of the Company's investment in discontinued operations remained constant at $7.9 million as of March 31, 2003. The valuation is net of reserves of $.8 million. CONFERENCE CALL FirstCity will host a conference call to discuss the quarterly results today, Thursday, May 15, 2003 at 9:00 a.m., CST. James T. Sartain, FirstCity's President and Chief Executive Officer will lead the call. To participate, dial 1-800-493-3979 and specify conference I.D. number 3582788. Please dial in five minutes prior to the call. If you are unable to listen to the live conference call, a replay will be available by dialing 1-888-211-2648. The pass code for the replay is 3582788. The replay will be available until Wednesday May 28, 2003. FORWARD LOOKING STATEMENTS Certain statements in this press release, which are not historical in fact, including, but not limited to, statements relating to future performance, may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, performance or achievements, and may contain the words "expect", "intend", "plan", "estimate", "believe", "will be", "will continue", "will likely result", and similar expressions. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. There are many important factors that could cause FirstCity's actual results to differ materially from those indicated in the forward-looking statements. (more) (3) These factors include, but are not limited to, the performance of FirstCity's subsidiaries and affiliates, availability of portfolio assets, assumptions underlying portfolio asset performance, risks associated with foreign operations, currency exchange rate fluctuations, interest rate risk; the degree to which FirstCity is leveraged, FirstCity's continued need for financing, availability of FirstCity's credit facilities, the impact of certain covenants in loan agreements of FirstCity and its subsidiaries, risks of declining value of loans, collateral or assets, the ability of FirstCity to utilize net operating loss carryforwards, uncertainties of any litigation arising from discontinued operations, general economic conditions, foreign social and economic conditions, changes (legislative and otherwise) in the asset securitization industry; fluctuation in residential and commercial real estate values, capital markets conditions, including the markets for asset-backed securities; factors more fully discussed and identified under Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," risk factors and other risks identified in FirstCity's Annual Report on Form 10-K, filed with the SEC on April 15, 2003, as well as in FirstCity's other filings with the SEC. Many of these factors are beyond FirstCity's control. In addition, it should be noted that past financial and operational performance of FirstCity is not necessarily indicative of future financial and operational performance. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements. The forward-looking statements in this release speak only as of the date of this release. FirstCity expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in FirstCity's expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based. FirstCity is a diversified financial services company with operations dedicated to portfolio asset acquisition and resolution and consumer lending with offices in the U.S. and with affiliate organizations in France and Mexico. Its common (FCFC) and preferred (FCFCO) stocks are listed on the Nasdaq National Market System. (Tables follow) FIRSTCITY FINANCIAL CORPORATION SUMMARY OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED)
THREE MONTHS ENDED MARCH 31, -------------------------- 2003 2002 ---------- ---------- Revenues: Servicing fees from affiliates $ 3,507 $ 2,222 Gain on resolution of Portfolio Assets 695 244 Equity in earnings of investments 2,091 1,475 Interest income from affiliates 915 1,020 Interest income - other 188 285 Other income 362 240 ---------- ---------- Total revenues 7,758 5,486 Expenses: Interest and fees on notes payable to affiliates 1,891 1,405 Interest and fees on notes payable - other 62 143 Salaries and benefits 3,496 2,735 Provision for loan and impairment losses 34 99 Occupancy, data processing, communication and other 1,994 1,910 ---------- ---------- Total expenses 7,477 6,292 Earnings from continuing operations before income taxes and minority interest 281 (806) Provision for income taxes (121) (13) ---------- ---------- Earnings (loss) from continuing operations before minority interest 160 (819) Minority interest (179) (15) ---------- ---------- Loss from continuing operations (19) (834) Loss from discontinued operations -- (500) ---------- ---------- Net loss (19) (1,334) Accumulated preferred dividends in arrears (66) (642) ---------- ---------- Net loss to common shareholders $ (85) $ (1,976) ========== ========== Basic and diluted loss per common share are as follows: Loss from continuing operations $ (0.01) $ (0.18) Discontinued operations -- (0.06) Net loss per common share $ (0.01) $ (0.24) Wtd. avg. common shares outstanding 11,202 8,376
SELECTED UNAUDITED BALANCE SHEET DATA
MARCH 31, DECEMBER 31, 2003 2002 ------------ ------------ Cash $ 2,869 $ 4,118 Portfolio acquisition and resolution assets 72,007 77,744 Consumer assets 9,793 9,127 Deferred tax asset 20,101 20,101 Net assets of discontinued operations 7,948 7,764 Total assets 120,123 126,456 Notes payable to affiliates 89,621 95,560 Notes payable other 504 1,113 Preferred stock 3,647 3,705 Total common shareholders' equity 18,702 18,752
4 FIRSTCITY FINANCIAL CORPORATION SUPPLEMENTAL INFORMATION (DOLLARS IN THOUSANDS) (UNAUDITED)
THREE MONTHS ENDED MARCH 31, ------------------------- 2003 2002 ---------- ---------- SUMMARY OPERATING STATEMENT DATA FOR EACH BUSINESS Portfolio Asset Acquisition and Resolution: Revenues $ 6,836 $ 6,791 Expenses 5,025 4,361 ---------- ---------- Operating contribution before provision for loan and impairment losses 1,811 2,430 Provision for loan and impairment losses 34 99 ---------- ---------- Operating contribution, net of direct taxes $ 1,777 $ 2,331 ========== ========== Consumer Lending: Revenues, net of equity in loss of investment $ 861 $ (1,345) Expenses, net of minority interest 285 (264) Cumulative effect of accounting change -- -- ---------- ---------- Operating contribution, net of direct taxes $ 576 $ (1,081) ========== ========== PORTFOLIO ASSET ACQUISITION AND RESOLUTION: OVERVIEW AGGREGATE PURCHASE PRICE OF PORTFOLIOS ACQUIRED: Acquisition partnerships Domestic $ -- $ 12,770 Mexico -- 11,709 ---------- ---------- Total $ -- $ 24,479 ========== ==========
PURCHASE FIRSTCITY'S PRICE INVESTMENT ---------- ----------- HISTORICAL ACQUISITIONS - ANNUAL: 2003 $ -- $ -- 2002 171,769 16,717 2001 224,927 24,319 2000 394,927 22,140 1999 210,799 11,203 1998 139,691 28,478
MARCH 31, MARCH 31, 2003 2002 ---------- ---------- PORTFOLIO ACQUISITION AND RESOLUTION ASSETS BY REGION: Domestic $ 41,339 $ 51,562 Mexico 15,407 21,039 France and Italy 15,261 10,894 ---------- ---------- Total $ 72,007 $ 83,495 ========== ========== REVENUES BY REGION: Domestic $ 4,407 $ 3,446 Mexico 1,425 2,436 France and Italy 1,004 908 Other foreign -- 1 ---------- ---------- Total $ 6,836 $ 6,791 ========== ========== REVENUES BY SOURCE: Equity earnings $ 1,230 $ 2,820 Servicing fees 3,507 2,222 Interest income - loans 1,096 1,277 Gain on sale of interest in equity investment -- -- Gain on resolution of Portfolio Assets 695 244 Other 308 228 ---------- ---------- Total $ 6,836 $ 6,791 ========== ==========
5 FIRSTCITY FINANCIAL CORPORATION SUPPLEMENTAL INFORMATION (DOLLARS IN THOUSANDS) (UNAUDITED)
THREE MONTHS ENDED MARCH 31, ------------------------------- 2003 2002 ------------ ------------ ANALYSIS OF EQUITY INVESTMENTS IN ACQUISITION PARTNERSHIPS: FIRSTCITY'S AVERAGE INVESTMENT IN ACQUISITION PARTNERSHIPS Domestic $ 32,977 $ 33,357 Mexico 1,042 1,409 France 11,264 8,780 France-Servicing subsidiaries 3,414 2,169 ------------ ------------ Total $ 48,697 $ 45,715 ============ ============ FIRSTCITY SHARE OF EQUITY EARNINGS (LOSS): Domestic $ 2,347 $ 1,959 Mexico (2,060) (17) France 727 460 France-Servicing subsidiaries 216 418 ------------ ------------ Total $ 1,230 $ 2,820 ============ ============ SELECTED OTHER DATA: AVERAGE INVESTMENT IN WHOLLY OWNED PORTFOLIO ASSETS AND LOANS RECEIVABLE: Domestic $ 9,558 $ 14,656 Mexico 15,354 19,406 ------------ ------------ Total $ 24,912 $ 34,062 ============ ============ INCOME FROM WHOLLY OWNED PORTFOLIO ASSETS AND LOANS RECEIVABLE: Domestic $ 913 $ 535 Mexico 878 986 ------------ ------------ Total $ 1,791 $ 1,521 ============ ============ SERVICING FEE REVENUES: Domestic partnerships: $ Collected $ 24,051 $ 31,824 Servicing fee revenue 1,041 817 Average servicing fee % 4.3% 2.6% Mexico partnerships: $ Collected $ 16,512 $ 19,194 Servicing fee revenue 2,395 1,353 Average servicing fee % 14.5% 7.0% Incentive service fees $ 71 $ 52 Total Service Fees: $ Collected $ 40,563 $ 51,018 Servicing fee revenue 3,507 2,222 Average servicing fee % 8.6% 4.4% SERVICING PORTFOLIO (FACE VALUE) Domestic $ 399,403 $ 502,295 Mexico 1,141,495 1,570,032 France and Italy 730,710 450,424 ------------ ------------ Total $ 2,271,608 $ 2,522,751 ============ ============ NUMBER OF PERSONNEL AT PERIOD END: Production 25 23 Servicing Domestic 59 53 Mexico 135 75 ------------ ------------ Total personnel 219 151 ============ ============
6 FIRSTCITY FINANCIAL CORPORATION SUPPLEMENTAL INFORMATION (DOLLARS IN THOUSANDS) (UNAUDITED)
THREE MONTHS ENDED MARCH 31, ------------------------------- 2003 2002 ------------ ------------ Consumer Lending: (1) Retail installment contracts acquired $ 126,118 $ 113,401 Origination characteristics: Face value to wholesale value 98.86% 101.27% Weighted average coupon 20.91% 20.97% Purchase discount (% of face value) 17.08% 15.75% Servicing portfolio (face value in $) 723,456 599,814 Defaults (% of original balance at time of default) 21.03% 17.49% Net loss on defaults after recovery 10.83% 8.19% Delinquencies (% of total serviced portfolio) 4.66% 4.87% Equity in earnings (loss) of Drive $ 861 $ (1,345) Cumulative effect of accounting change -- -- Minority interest (172) 269 ------------ ------------ Net equity in earnings (loss) of Drive $ 689 $ (1,076) ============ ============
(1) Auto lending business conducted by Drive Financial Services LP, of which FirstCity owns 31% and accounts for its investment using the equity method of accounting. 7 -----END PRIVACY-ENHANCED MESSAGE-----