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October 31, 2002 Headlines--- Pictures
from the Past: 1991-The Wild Kingdom of SIGs Correction:
regarding IDS and Summit Debra
Marshall Joins IDS as Director of Marketing Microfinancial
3rd Quarter a net loss of $19.6 million Key
Equipment Finance Names David Angel Sr. V-P
CapitalStream Corporate Take-Over
Significant Consolidation Seen in Software
Sector Swapalease.com Celebrates Two Years
of Business CIT Full Press Release on latest
Quarter and Fiscal Year Results MAEL Conference----November 7th Fed's Largess Boosting Bank
Numbers ####
Denotes Press Release Credit: Los Angeles, CA Over 15 years experience in Credit/Operations
with Small Ticket and transactions up to $500,000.00. CLP, with
excellent relationships with most major lenders. Email:jonbh123@earthlink.net Credit:
Columbia, SC Seasoned senior credit professional with 14
years experience in small ticket. Strong analytical skills, spreadsheet
proficiency, all types financials, tax returns. Looking for new
career in Southeast/Mid Atlantic Email:lrport2001@yahoo.com Credit: Hayward, CA. Versatile/ creative senior financial executive
w/extensive experience in varied areas of the commercial lending
environment. Strong written/ oral skills with a results-oriented
team-player attitude. Email: daveschultz9@aol.com Credit: Vista, CA +15 years experience structuring, underwriting,
and collecting leases to privately and publicly held companies.
Creative and results oriented. Proven ability to achieve bottom-line
results. Email:dkalitow@pacbell.net
Finance: Lyndhurst, NJ CFO w/20+ years leasing/financing. Respected
by lenders/rating agencies full & fair financial reporting.
Outstanding record restructuring debt. Adept at investor relations
and mentoring people. Email:joemcdev@aol.com Finance: Orange County, CA CFO/Controller/IT Director - 15 years experience
in leasing and ABL. Experienced in: Accounting, Finance, Systems,
Tax, Operations, Securitizations, etc.MBA, ELA member. Many accomplishments.
Email:gosween@cox.net for the full list: http://65.209.205.32/LeasingNews/JobPostings.htm Pictures from the Past 1991—The Wild Kingdom of SIGs
“Ring Master” C. Michael Baker, CLP, the April
17-21, WAEL Spring Conference Chairman, introduces the “ Wild Kingdom
of SIGs”—(Special Interest Groups) during the 1991 WAEL Spring
Conference. Baker, President of Pacific
States Leasing, Fresno, CA, was responsible for keeping three
rings going with presentations from the SIGs representing Brokers,
Funders, and Lessors during the four day event.
SIG chairmen pictured here are (l to 4) Lion---Funders
SIG-Mike Wing, President, Fleet Credit/Denrich Leasing Group;
Fox—Brokers SIG—George Davis II, President, Fortune Financial;
and Bear—Lessors SIG—Rick Wilbur, President, Charter Equipment
Leasing ----------------------------------------------------------------------------------------------------- Correction: regarding IDS
and Summit. “On behalf of Tom Quilling and myself, I would
like to submit a correction to your recent email. Tom Quilling
voluntarily resigned and I voluntarily resigned after a successful
job search. I enjoy your
newsletters but in this case there was an error.
Curious as to who your source was?
“ Joseph Franco
Address = 5421 Bryant Avenue South City = Minneapolis State = MN Zipcode = 55419 Phone = 612.822.9361 Fax = 612.824.4583` Email = joseph.franco@iqfinancial.com Cannot divulge sources. No names were mentioned
in the e-mail. In view of trying to be fair to all parties, we
have revised the story on line to, plus at your request, have
printed your e-mail above. For
readers not familiar with the story, here is the revised version:: Decision Systems. This mess started two years ago this week when
CFS Leasetek acquired IDS, then known as Decision Systems ("DSI"), at one time the
premier leasing software company for Monitor 100 companies. At
the time the merger was consummated the stock traded
at $4.80 and the market cap was $265 million! Today the stock trades at $0.09 and the market
cap is about $5 million. So they have somehow managed to blow
$260 million of their stockholders and employees(esop) funds in
two short years. There's more wrong with IDS than "soft US
markets". As Paul Harvey says, "and now the rest
of the story". In July 2001 Summit
offered to acquire IDS for $25 million cash. They laughed
at them. The Summit
investment bankers said "just wait", and they
did. In Feb
'02 Summit offered a stock exchange merger that would have given
them Board and Management control
since the management team that started with $265 million and turned
it into $5 million probably needed "tweaking". Again
they laughed. In July '02, Summit offered $15 million cash and
of course they again, brushing them off.. (The value of the employees
ESOPs has declined from about $20 million to $400,000. and that's
tragic.) The corporate investors who control the company have
lost theirs too but their loss is a drop in the bucket compared
to the hit taken by the loyal staff. This week Summit again offered
to acquire IDS, this time of course for the market cap price of $5 million. They're laughing! to keep from
crying. Trick or treat! ( Name With Held ) --Press
Release on International Decision Systems follows ------------------------------------------------------------------------------------ #########
################################################### Debra Marshall Joins IDS
as Director of Marketing International Decision Systems, Inc. (IDS) –
the global leader in lease accounting and portfolio management
software systems – announced today that Debra Marshall has joined
the company as director of marketing to head strategic planning,
brand positioning and corporate identity initiatives. According to Jim Meinen, IDS group CEO, “Debra’s
23 years of corporate, product and agency marketing management
experience will be a tremendous asset in helping implement our
new Web services strategy with the introduction of new products
that provide web-enabled front-end access and an open back-end
lease accounting engine. She has an outstanding track record for
developing marketing strategies that build brand awareness and
gain market share, as well as positioning products for specific
markets.” Ms. Marshall was most recently director of communications
with PLATO Learning, Inc. and chief marketing officer for VirtualFund,
Inc., a manufacturer of large-format printers. About International Decision Systems With nearly three decades of leasing industry-specific
expertise, International Decision Systems (IDS) is the global
market leader in developing lease accounting and portfolio management
software and services. Hundreds of independent, bank-related,
captive leasing and financial services companies worldwide use
IDS products and services, which include anchor products InfoLease,
LeaseEnterprise and FleetWare. InfoLease is the world's most stable, scalable
and robust end-to-end equipment lease accounting software, and
LeaseEnterprise is designed for small to mid size lessors who
want an easy-to-use, Windows-based lease accounting and portfolio
management solution that will accommodate their growing businesses.
FleetWare is a comprehensive full-service vehicle-leasing and
contract-management system. Companies use IDS' software to streamline,
manage and automate the entire leasing life cycle, as well as
to leverage the Internet's speed and flexibility for improved
customer service, achieving greater internal efficiencies and
closing deals faster. In addition to its product lines, IDS also has
the leasing industry's largest global consulting, implementation
and technical support organizations that provide incomparable
service from offices located in the United Kingdom, North America
(Minneapolis), Australia (Sydney) and Southeast Asia (Singapore). IDS' parent company, IDS Group plc, is publicly
traded on the London Stock Exchange (IDGL). For additional information
about International Decision Systems and IDS Group plc, visit
www.idsgrp.com ############## #################################### __________________________________________________________________ Microfinancial 3rd
Quarter a net loss of $19.6 million 29% reduction in lease and loan revenues to
$12.8 million and a 43% decline in service fee additional allowance of $35 million is warranted Past due balances greater than 31 days delinquent
at September 30, 2002 increased to 17.2% from 17.0% last quarter.
$35 million is warranted. This additional allowance
will provide for 104% coverage of our 90-day past due accounts as
compared to previous quarters which had coverage in the 50-60%
range Based upon the results for the third quarter,
the company is no longer in compliance with the terms of its revolving
credit facility. Recent stories on MicroFinancial/Leasecomm http://www.leasingnews.org/Conscious-Top%20Stories/leasecomm.htm The headlines you see in other newspapers were
supplied by the Press Release and do not reflect the full press
release, let alone the real story about insiders selling $500,000
worth of stock right before Leasecomm closed down. The facts
highlighted above are from the Microfinancial Press Release, their
spin to the events, which follows: #### ########################################################### MicroFinancial Incorporated Announces Third
Quarter 2002 Results WALTHAM, Mass.,) -- MicroFinancial Incorporated
(NYSE:MFI), a leader in Microticket leasing and finance, announced
today its financial results for the third quarter and the nine
months ended September 30, 2002. Third quarter revenue for the period ended September
30, 2002 decreased 22%, or $8.8 million to $30.5 million compared
to $39.3 million last year. Net income for the third quarter,
before an additional provision of $35 million discussed below,
was $1.4 million, or $0.11 per diluted share as compared with
$3.6 million or $0.28 per diluted share in the prior year's third
quarter. After
the additional provision, earnings were a net loss of $19.6 million,
or ($1.53) per diluted share. Besides the additional provision,
the decline in earnings for the quarter is primarily the result
of a 29% reduction in lease and loan revenues to $12.8 million
and a 43% decline in service fee and other revenues to $4.4 million
as compared with the third quarter ended September 30, 2001. Additionally,
gross lease investment was down 7.8% or $34.4 million from the
same period last year, caused in part by lower than anticipated
lease origination volumes. As part of management's ongoing analysis of
its portfolio, it has determined that an additional allowance
of $35 million is warranted. This additional allowance will provide
for 104% coverage of our 90-day past due accounts as compared
to previous quarters which had coverage in the 50-60% range. This
provision will reserve against certain dealer receivables, as
well as delinquent portfolio assets. In the past, dealer receivables
had been offset, in some instances, against the funding of new
contracts. Since we have temporarily suspended the funding of
new deals we feel that the collection of these receivables will
be more difficult. Although the company will continue to pursue
collections on these accounts, management believes that the cost
associated with the legal enforcement would outweigh the benefits
realized. Total operating expenses for the quarter before
the additional provision remained relatively flat at $28 million
compared to the same period in 2001. Interest expense declined
29% to $2.5 million as a result of lower debt balances of approximately
$9.0 million and lower interest costs of approximately 162 basis
points. Selling, General and Administrative expenses decreased
$0.6 million to $10.3 million for the third quarter ended September
30, 2002 versus $10.9 million for the same period last year. The
majority of the decreases are attributable to reductions in personnel
related expenses and collection expenses. The provision for credit
losses, before the additional provision, decreased to $9.7 million
for the quarter ended September 30, 2002 from $15.1 million for
the same period last year, while net charge offs decreased 17%
to $9.8 million. Past due balances greater than 31 days delinquent
at September 30, 2002 increased to 17.2% from 17.0% last quarter.
Revenues for the nine months ended September
30, 2002 decreased 16% to $98.8 million compared to $117.2 million
during the same period in fiscal 2001. Net income for the nine
months ending September 30, 2002 was $6.6 million before the additional
provision. Including the additional provision, the net loss for
the nine months ending September was $14.4 million versus net
income of $14.2 million for the same period last year. Fully diluted
earnings per share for the nine months was $0.51 before the provision.
Including the additional provision, fully diluted earnings per
share for the nine months was a loss of $1.12 versus a profit
of $1.10 for the same period in 2001. Based upon the results for the third quarter,
the company is no longer in compliance with the terms of its revolving
credit facility. Management is in the process of working with
its lenders to receive a waiver for the covenant violation. Management
recently announced that it is in the process of generating a plan
to revise its capital structure, and business and operating strategy
in order to streamline the business during these difficult economic
times. The revolving credit facility was converted to a three-year
term loan on September 30, 2002. MICROFINANCIAL INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, except share data) (Unaudited) December 31, September 30, 2001 2002 ----
---- ASSETS Net investment in leases and loans: Receivables due in installments $399,361 $373,756 Estimated residual value 37,114 32,115 Initial direct costs 7,090 5,597 Loans
receivable
2,248 1,911 Less: Advance
lease payments and deposits (287) (130) Unearned
income
(104,538) (77,900) Allowance
for credit losses (45,026) (75,726) -------- -------- Net investment in leases and loans $295,962 $259,623 Investment in service contracts 14,126 15,632 Cash and cash equivalents 4,429 9,916 Restricted Cash 16,216 15,362 Property and equipment, net 16,034 11,033 Other assets 14,961 12,643 -------- -------- Total
assets
$361,728 $324,209 ======== ======== LIABILITIES
AND STOCKHOLDERS' EQUITY Notes payable $203,053 $194,003 Subordinated notes payable 3,262 3,262 Capitalized lease obligations 833 593 Accounts payable 2,517 2,475 Dividends payable 642 641 Other liabilities 6,182 7,166 Income taxes payable 4,211 1,659 Deferred income taxes payable 30,472 20,131 -------- -------- Total
liabilities
251,172 229,930 --------
-------- Commitments and contingencies - - Stockholders' equity: Preferred stock, $.01 par value; 5,000,000
shares authorized; no
shares issued at 12/31/01 and
9/30/02 - - Common stock, $.01 par value; 25,000,000
shares authorized; 13,410,646
shares issued at 12/31/01
and 9/30/02 134 134 Additional paid-in capital 47,723 47,723 Retained earnings 69,110 52,800 Treasury stock (588,700 shares of
common stock at 12/31/01, 588,700
shares of common stock at
9/30/02), at cost
(6,343) (6,343) Notes
receivable from officers and
employees
(68) (35) -------- -------- Total
stockholders' equity
110,556 94,279 --------
-------- Total
liabilities and stockholders'
equity $361,728
$324,209 ======== ======== MICROFINANCIAL INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data) (Unaudited) For the three months For the nine months ended
ended September 30, September 30, 2001 2002 2001
2002 ---- ---- ----
---- Revenues: Income
on financing leases
and loans $18,105
$12,819 $54,897 $41,845 Income on service contracts
2,186 2,479 6,420 7,332 Rental income 9,744
9,212 28,131 28,295 Loss
and damage waiver fees
1,598 1,633 4,746 4,691 Service fees and other 7,676
4,406 23,010 16,632 ----------
---------- ---------- ---------- Total
revenues 39,309 30,549 117,204 98,795 ----------
---------- ---------- ---------- Expenses: Selling general and administrative
10,899 10,306 33,462 34,289 Provision for credit losses
15,064 44,672 37,150
66,460 Depreciation and amortization
3,618 5,713 10,700 14,203 Interest 3,445
2,458 11,307 7,823 ----------
---------- ---------- ---------- Total
expenses 33,026
63,149 92,619 122,775 ----------
---------- ---------- ---------- Income before provision for
income taxes 6,283 (32,600) 24,585 (23,980) Provision for income taxes 2,644 (13,042)
10,348 (9,593) ----------
---------- ---------- ---------- Net income $3,639 ($19,558)
$14,237 ($14,387) ==========
========== ========== ========== Net income per common share - basic $0.28
($1.53) $1.11 ($1.12) ==========
========== ========== ========== Net income per common share - diluted $0.28
($1.53) $1.10
($1.12) ==========
========== ========== ========== Weighted-average shares used
to compute: Basic
net income per
share 12,825,139 12,821,946
12,775,519 12,821,946 ----------
---------- ---------- ---------- Fully
diluted net income
per share 13,094,690
12,821,946 12,988,959
12,862,105 ----------
---------- ---------- ---------- MicroFinancial Inc. (NYSE: MFI), headquartered
in Waltham, MA, and with additional locations in Woburn, MA and
Herndon, VA, 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 and has been profitable each
year since 1987. 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.
CONTACT: MicroFinancial Incorporated Richard F. Latour President
and CEO Tel: 781-890-0177 Fax: 781-890-1368 ################################################################## http://www.leasingnews.org/Conscious-Top%20Stories/leasecomm.htm --------------------------------------------------------------------------------------------------- Reuters NEW YORK - U.S. mortgage applications dropped
nearly 20 percent last week, a trade group said on Wednesday,
but that trend could reverse this week thanks to lower rates,
economists said. The number of mortgage applications fell for
the third straight week, reaching its lowest level since the week
ended July 19, the Mortgage Bankers Association of America (MBA)
said. The decline in applications came even as mortgage
rates fell, potentially because some consumers are waiting to
see if rates drop even further before applying for mortgages,
said Jade Zelnik, chief economist at Greenwich Capital Markets,
Inc. Or the decline may be linked to slowing consumer
confidence, which could make consumers less inclined to make big-ticket
purchases. But mortgage applications may rise next week
thanks to recent declines in rates, economists said. The rate for a 30-year mortgage, the most popular
mortgage in the United States, fell 0.20 percentage points last
week to 6.01 percent. If the Federal Reserve cuts rates in the next
several months, as the market increasingly expects, rates could
fall even further. EARLY SIGNS OF SLOWING The housing sector is showing early signs of
slowing. If the trend continues, a key support of consumer
spending could weaken, economists said last week. Applications to refinance mortgages plummeted
24.1 percent last week, the sharpest drop since the week ended
March 8. Applications for mortgages to buy homes fell 6.3 percent,
reaching their lowest level since April. Refinancing activity has put more money in consumers'
pockets this year, which has helped to support consumer spending
and the economy as a whole. But with 30-year rates rising by over 0.35 percentage
points between late September and mid-October, mortgage applications
have been falling. Since peaking in early October, the number of
applications to refinance mortgages has fallen nearly 40 percent. Home purchasing, which has also been a key source
of strength in the economy, could also slow. Consumer confidence fell in October to its lowest
level in nine years, a report said on Tuesday, which could signal
decreased consumer willingness to buy big ticket items like homes. NOT SO FAST But economists are not yet saying goodbye to
the housing market boom. Applications to refinance home loans may increase
this week, because mortgage rates fell last week and early this
week. Rates may fall even further if the Federal Reserve
delivers more rate cuts this year, which looks increasingly probable. Demand for refinancing has slackened for the
last three weeks, but is still well above its average level for
the year. The MBA's barometer of applications for refinancing
fell 24.1 percent to 4,240.4 last week. But that is still over
35 percent higher than the average level so far for 2002, which
has been a year of heavy refinancing. And consumer confidence has been declining for
five months, without any appreciable impact on spending, Greenwich
Capital Markets' Zelnik said. As long as 30-year mortgage rates
are below 7 percent, home purchasing activity should be vigorous,
she said. The MBA's barometer of overall mortgage application
activity, its Market index, fell 19.3 percent last week to 911.0.
Its barometer of applications for mortgages to purchase homes
fell 6.3 percent to 338.6. ----------------------------------------------------------------------------------- ################ ################################# NAMES DAVID I. ANGEL SENIOR VICE PRESIDENT ALBANY, N.Y.? Key Equipment Finance, one of
the nation's largest bank-affiliated equipment financing
companies and an affiliate of KeyCorp (NYSE: KEY), has announced
the promotion of David I. Angel to the position of senior vice president.
As manager of leveraged leasing for Key Equipment Finance for the past
nine years, Mr. Angel has been responsible for the origination and closing
of Key's equity investments in leveraged leases, both domestic
and cross-border. These equity investments total more than $1.5 billion
in transactions with an aggregate equipment cost in excess of $7 billion. "Dave's consistent and skilled performance
has resulted in significant contributions to Key over the past decade,"
said Paul A. Larkins, president and chief executive officer, Key Equipment Finance.
"He has garnered a great deal of respect within our industry, and
his promotion to senior vice president is in recognition of his contributions,
tenure and industry stature." Mr. Angel joined Key Equipment Finance in 1991
as a senior credit analyst and was named manager of leveraged leasing in
1993. Prior to joining Key, Mr. Angel held various positions at Fleet Capital
Leasing starting in 1985. He earned his bachelor of science degree in
business management from Alfred University and holds a masters in business administration,
with a concentration in finance, from Russell Sage
Graduate School. Key Equipment Finance is an affiliate of KeyCorp
(NYSE: KEY) and provides business-to-business equipment financing solutions
to businesses of many types and sizes. They focus on four distinct
markets: · businesses
of all sizes in the U.S. (from small business to large corporate); · equipment
manufacturers, distributors and value-added resellers worldwide; · federal,
state and local governments as well as other public sector organizations; and · lease
advisory services for manufacturers' captive leasing and finance companies. Headquartered outside Boulder, Colorado, Key
Equipment Finance oversees an $8 billion equipment portfolio with annual originations
of approximately $3 billion. The company, which operates in 25 countries
and employs more than 600 people worldwide, has been in the equipment
financing business for nearly 30 years. Additional information regarding
Key Equipment Finance, its products and services can be obtained online
at KEFonline.com. Cleveland-based KeyCorp is one of the nation's
largest bank-based financial services companies, with assets of approximately
$83 billion. Key companies provide investment management, retail and commercial
banking, retirement, consumer finance, and investment banking products
and services to individuals and companies throughout the United
States and, for certain businesses, internationally. The company's businesses
deliver their products and services through KeyCenters and
offices; a network of approximately 2,400 ATMs; telephone banking
centers (1.800.KEY2YOU); and a Web site, Key.com, that provides account access
and financial products 24 hours a day. # # # # # _________________________________ Lisa A. Miller, Corporate Development Key Equipment Finance NY-31-66-0900 P.O. Box 1865 Albany NY 12201-1865 Phone: (518) 257-8235 Fax: (518) 257-8821 ############ ##################################### CapitalStream Corporate
Take-Over by Christopher Menkin “What is John Kruse's position as I had him
as vice-president of business development.” From: Karen Thorsen <KarenT@CapitalStream.com> Subject:
RE: confirmation Date:
Wed, 30 Oct 2002 13:07:09 -0800 “John Kruse, Sales Representative.” second e-mail “Kevin Riegelsberger is President & CEO “David Orren is Executive Vice President of
Sales & Marketing, “Kaveh Majoob is Vice-President of Development,
“Mike Pennell is Vice President of Marketing “Jeff Dirks is Executive Vice President, Business
Development “thanks for checking!” Karen Robert Thorsen PR/Marketing Manager, CapitalStream 206-548-1703 www.capitalstream.com All
these management people worked with Kevin Riegelsberger at Platinum/Epicor. There has not been any founders
at WiredCapital since March 2001 when Riegelsberger joined the
company. Ex-WiredCapital founders have told Leasing News they
are not happy about the stock situation. Stock options is the question of the hour. In
essence they eliminated all the common stock. Leasing News was
told that was true for both CapitalStream as well as WiredCapital
and that post the acquisition then they would issue the remaining
employees CapitalStream stock. It is not know if the company has
awarded the stock to the employees. It is not known what happened
to the preferred stock. This
is a privately held company. October 11, a press release from CapitalStream
“...announced that it has acquired WiredCapital, a provider of
enterprise automation software solutions for the Commercial Finance
Industry, based in Orange County, California. The combined companies
will continue operating under the CapitalStream name.
Along with the acquisition, CapitalStream has raised an
additional $10 million total in equity financing.” John Kruse is one of the originals of System1
which later became CapitalStream. The company started from developing a leasing
tracking system for Jim McCommon, McCommon Leasing, Bellevue,
Washington. One of the original beta users of the system
was American Leasing, Santa Clara, California.
The program became very popular with both brokers, discounters,
and lessors and at one time was planned to go “seamless” with
then Nation’s Credit under Jim Merrilees in Oregon over the internet. This evolved into an internet system with scoring of credits and
processing of lease transactions, at one time, utilizing the “back-end”
capabilities of LeasePlus Accounting software. (For the record,
John Kruse has made no comments “on” or “off the record,” and
we were told not available for comment—to go through marketing).
Mr. Kruse was the Top Gun Conference Chairman at the United Association
of Equipment Leasing Association in San Diego, serves as a director
on the board and is very popular in the leasing industry, extremely
well known and highly regarded.) “When we were first told as employees of the
potential deal they called it a Merger, with Capital Stream being the surviving
name because we were better known in the industry, “ an ex-CapitalStream
employee told Leasing News. “ People at WiredCapital
were not told they were being acquired till the week of the press
release. In fact, several had planned to attend the Equipment
Leasing Association Conference in San Francisco. They were surprised. They also lost their founder stock options and other benefits,
I am told.” In its “hey day,” the Seattle based company
had 130 employees, then announced in 2001 a reduction to 90 employees; 2002, when
the Stephen Campbell left the company, it was reported to be 60 employees
“as product had been developed. and major cuts were made in the “sales force” and
direction due to an effort to go after major corporate accounts, rather
than the “small” and “middle” market place in the banking, finance, and leasing
industry. According to John Kruse, then vice-president
of business development, CapitalStream,
had 56 employees and WiredCapital 23 employees, many, so
taking away 26 employees leaves 53. There have been further reduction
in employees, it is reported. Thirty of the employees were reported to be
“engineers” needed to write and maintain the software to service
customer accounts. The press release claimed CapitalStream was
purchasing WiredCapital for $10 million. Interesting there is no mention of "leasing"
rather only "financial institutions" this being because
they are targeting beyond leasing, as it was identified early
in that leasing was too small of a space. The idea being that
leasing would be the spring board into the other sectors of a
bank or financial institution. "Our market research indicates that the
industry has tried to solve this problem through internal systems
development because a truly viable solution provider had not yet emerged,” Riegelsberg stated in
the first press release.” With the recent funding and acquisition,
CapitalStream is now perfectly positioned as the leader in financial
front office automation with a proven track record of success at some of the most respected brands
in banking and finance." In a telephone interview, Riegelsberger said
the purpose of the two software programs was to provide “solutions
for businesses.” He said both programs could exist for the same company
in different divisions as they served “different needs.” He was not able to elaborate. In trying to describe the difference between the two software approaches, Leasing
News described the difference as WiredCaptail appearing to have been designed
from a mid to high ticket perspective, while CapitalStream was
really a small ticket product. For instance their product does
not even have the concept of a
repeat customer in it. WiredCapital tracks master credit
lines, and allows for a single customer to have multiple Master Leases, as well as
if that customer is a guarantor to a different customer, it is
all being tracked to the single exposure customer. Things like
that were built in from the very beginning. CapitalStream's desktop product (Centerpoint)
offered those things, but instead of porting that to the web, CapitalStream started over and
wrote "FinanceCenter" which did not yet incorporate Master Lease
or a Customer entity. Those enhancements
were under construction and
Mr. Reiselsberger said he was not aware of this and referred any
questions regarding this to “marketing.”.
An engineer who was working on the program told Leasing
News the missing Customer Entity and Master Finance agreement
were, indeed, on the top of the list of "what's stopping
CapitalStream from getting more big
deals." It is true CapitalStream had major clients such
as division of Textron, Bank of the West, and WiredCapital’s latest customer was
Arrow Capital of San Jose, California. Reiselberger said his main focus was “bandwidth
of the company from the investors viewpoint.” He added that he would insure customers would
either have a hosted program or a licensed program or both, depending on the
needs of the company, and it would be possible to migrate from one to the other.
He concluded that the description of now being able to service small customer needs
to large customer needs would be accurate as to the reason for the “merger”
of both software programs. He confirmed the company would continue to be
a “front control” and would not venture into financial accounting, “back
end,” which his former company presently offers. They do not have a leasing accounting program, he stated, or any accounting program to merge with CapitalStream
or Wired Capital. ############ ##################################################### Significant Consolidation
Seen in Software Sector Survey of RBC Capital Markets Software Conference
Attendees With the outlook for technology spending in
the coming year expected to experience little if any growth, mergers
and acquisitions of software companies will increase in the next
year, according to a survey of attendees at the 2002 RBC Capital
Markets Software Conference in San Francisco. More than 600 investment professionals, venture
capitalists and corporate executives heard presentations by 80
software firms at the conference that ends today. This merger and acquisition activity will most
likely occur in the security, applications and enterprise areas,
the survey found. Companies such as IBM, Microsoft and Computer
Associates were seen as among the most likely acquirers, respondents
said. Given their near-term outlook for the sector,
it's not surprising that respondents saw at best only slight improvement
in the initial public offering market for software and technology
companies in the coming year, with profitability and high revenue
growth being the most important factors for companies considering
an IPO. "It is clear that we are moving into a
buyers' market in which private software companies can be bought
at a discount," said Robert Reynolds, managing director of
RBC Capital Markets. "Most of our conference attendees believe
that consolidation will be a major factor in the software sector.
This was further supported by the finding that private company
executives and venture capitalists attending the conference overwhelmingly
indicated that the most likely liquidity alternative for their
nonpublic software companies was a sale, versus an IPO or recapitalization,"
he added. Respondents were nearly unanimous in their belief
that information technology spending in 2003 would remain unchanged,
while more than two-thirds of the respondents indicated that in
the current environment, government spending is important to the
software industry. Factors identified as being the most important
catalysts for increased activity in the sector included an improving
economy (33 percent), demonstrable return on investment (ROI)
(25 percent) and the ability to leverage existing infrastructure
(19 percent). The sectors identified as being the most promising
over the next year or so included security, applications and enterprise
software, and respondents felt that North America represented
the most promising market for a sector rebound. "We believe these survey findings support
the core of our outlook for the sector over the next 12 months,"
said Jeff Greiner, managing director of RBC Capital Markets. "Until
the economy improves, the government will continue to be an important
driver for what growth does occur. And, even with an up tick in
the economy, buyers will be purchasing only those applications
that provide enhanced existing security and enterprise applications
to make their existing infrastructure work better and more efficiently,"
he added. The survey also explored the impact of a potential
war with Iraq on the current business environment, with respondents
evenly split between those who felt it was having little or no
impact and those who believed the talk of war has had a moderately
or significantly unfavorable impact on their business. "It's clear that software companies face
a challenging environment and that investors are cautious,"
said Neil Selfe, managing director of RBC Capital Markets. At
the same time, the value represented by new technology portends
growth opportunities in select areas." RBC Capital Markets is the global brand name
for the corporate and investment banking divisions of Royal Bank
of Canada (NYSE:RY - News; TSX:RY - News). RBC Capital Markets
offers a broad and expanding range of corporate and investment
banking products and services to corporations, governments and
institutions across North America and around the globe. RBC Capital
Markets' in-depth industry knowledge and superior research position
RBC Capital Markets to deliver the best in customized solutions
for our clients through teams of top-ranked professionals worldwide.
For more information, please visit www.rbccm.com. This information is intended to provide a summary
of the results of a survey of RBC Capital Markets software conference
attendees and is not intended and should not be construed as an
analysis that provides information reasonably sufficient upon
which to base an investment decision. Readers of this press release
should consult research notes and reports on the subject company
and discuss the information contained therein with their salesperson
or Financial Consultant prior to making any investment decision
regarding the subject company. -------------------------------------------------------------------------------- Contact: RBC Capital Markets, Minneapolis Dan Callahan, 612/313-1234 ###
#################################################### Swapalease.com Celebrates
Two Years of Business with Eight Consecutive Quarters of Uninterrupted
Growth CINCINNATI-- Amidst Turbulent Economic Times and Hundreds
of Dot Com Failures, Cincinnati-based Swapalease.com Experiences
Consistent Growth with Increased Traffic and Business for Two
Years As Swapalease marks two years in business this
month, an increasing number of consumers across the U.S. are discovering
it is possible to get out of their auto leases early without incurring
large financial penalties or hassle. Thanks to Swapalease (www.swapalease.com),
the first and only full-service online marketplace dedicated to
transferring auto leases, consumers now have an affordable, convenient
option available to them as they shop for cars. "Swapalease has exceeded our expectations
in just two years," said Ron Joseph, Jr., CEO and co-founder
of Swapalease. "Despite a volatile economy, we have successfully
transferred over $10,000,000 of vehicles on Swapalease's online
marketplace." The most recent market data shows that of the
17 million consumers currently driving a leased vehicle, upwards
of 15% of those lessees want or need to get out of their auto
lease early. Thus creating a huge demand in what is developing
into a needed consumer marketplace for automotive lease transfers.
Swapalease has seen consistent growth over the past 24 months
in both the number of consumers visiting the site and the number
of auto lease listings posted at the online marketplace. "We have over 5,000 vehicles currently
listed on the site and vehicle listings from every state -- and
we still feel like we are just getting warmed up," said Richard
Joseph, president of Swapalease. "There are currently 17
million people driving leased vehicles, and if they want out of
their lease early, we can help." "The Swapalease concept is one that has
been desperately needed by auto leasing consumers for a long time,
but just didn't exist before," said Al Hearn, president of
LeaseGuide, Inc. "Beyond the obvious benefits, it also provides
peace of mind to people who are reluctant to lease by creating
a hassle-free way to exit their lease if they ever need it." A PARADIGM SHIFT Despite much of the "buzz" surrounding
the zero percent financing in the automobile industry, market
data shows that many of the consumers enter a dealership with
a zero percent advertisement for purchase, yet leave in a leased
vehicle. Why? Zero percent, in most cases, is only for 36 months,
which yields a very high payment on most car prices. Consumers
consistently opt for leases to achieve a lower monthly payment. "Leasing will always be an important part
of the retail automobile industry, and Swapalease will remain
a powerful tool to those who lease," said Norm Barron, General
Counsel of the Greater Cincinnati Automobile and Dealers Association
(GCADA). "Consumers' car needs are evolving constantly,
and we think they will enjoy the value and flexibility Swapalease
can bring to their auto leasing experience," said Ron Joseph.
"Our growing customer base is evidence of the fact that we
are providing a powerful new service to consumers when it comes
to their automotive needs." SWAPALEASE HIGHLIGHTS -- Two
years in business -- Vehicle
listing from every state -- 5,000
vehicles currently live -- Successfully
transferred over $10,000,000 of vehicles -- Featured
on CNBC, New York Times, The Wall Street Journal, Business Week and Wired About Swapalease.com: Based in Cincinnati, Ohio, Swapalease.com is
the first and only full-service online marketplace for transferring
automobile leases. Swapalease.com matches and enables transactions
between lessees wanting to get out of their leases prior to the
maturity date with consumers interested in taking over such leases,
through a quick and easy process. Committed to providing automotive
lessees the most efficient channel to transfer leases, Swapalease.com
is forging relationships with financial institutions and auto
dealerships in an effort to give consumers more options in acquiring
their next vehicle of choice. Established in October 2000, the
company's management team brings more than 50 years experience
from the automotive industry. To learn more about Swapalease.com,
visit www.swapalease.com, or call 1-866 Swap-Now (1-866-792-7669). CONTACT: Swapalease, Inc. Jack Langworthy, 513/381-0100, ext. 11 jack@swapalease.com ########### ############################################ CIT Full Press Release
on latest Quarter and Fiscal Year Results Several readers have requested that we print
the full press release. It can be obtained in entirety by going here: You do not need our permission to quote any
or all of any story in Leasing Newes. MAEL Conference----November
7th Register Now!!! Plan To Be In Chicago November 7th,
2002 To Attend The 20th Annual Dinner Meeting of the MidAmerica Association of Equipment Lessors (MAEL) you won't want to miss SPECIAL GUEST SPEAKER: WGN Radio personality
Wes Bleed The
MidAmerica Association of Equipment Lessors ("MAEL"),
ELA s largest regional affiliate, will be hosting its 20th Annual
Dinner Meeting at the Westin Hotel @ O'Hare in Rosemont, Illinois.
Pricing for the meeting is as follows: Registration Level
Special Benefits
On-line Registration by
mail, fax
or telephone MAEL
Members
$100.00 $125.00 Non-Members $145.00 $175.00 Event
Sponsor Table for eight Full Page Advertisement in Program $1,500.00
$1,500.00 Register on-line or complete & fax the attached
registration form to 312-541-1275. If you need further information
or assistance, please e-mail events@mael.org or call Melissa @ 312-541-6000. or go here: http://www.leasingnews.org/PDFFiles/MAEL_Meeting.pdf Fed's Largess Boosting Bank
Numbers By Peter Eavis, TheStreet.com (Talk on “the street” is that the Feds may lower
rates next week due to the drop in consumer confidence and other indicators,
such as unemployment and manufacturing. Other factors include the drop in sales tax
and revenues to state, county, and city governments. And to the
cost of funds, as noted in this report from TheStreet.com. Editor) American Express became the latest large lender
to report solid-looking third-quarter earnings, which will no
doubt prompt observers to marvel once again at the fundamental
soundness of the American financial system despite the economic
slowdown. Investors also have been reassured by third-quarter
results from Citigroup, Bank of America, Wells Fargo and Bank
One. But the critical reason why financial companies haven't blown
up at the bottom of this business cycle isn't primarily of their
own doing: Instead, an arm of the government has enabled banks
to drastically cut one of their main operating expenses. That arm is the Federal Reserve, and the expense
is the cost of the money that lenders themselves borrow. By making
five cuts in the federal funds rate since the third quarter of
last year, the central bank under Alan Greenspan has effectively
bailed out the banks by allowing them to generate billions of
extra dollars in lending income. Without the large drops in interest
expense, bank profits could be flat or lower, compared with the
year-ago period, and balance sheets would be showing signs of
stress. As a result, investors need to approach banks
with caution. The ability of large financial institutions to stay
on an even keel as the economy has soured says little about management's
skill and almost nothing about the banks' true earnings power.
It would be like buying Ford on a 50% drop in steel prices. In fact, the easy money is a reason to be fearful
of bank stocks over the long run, because the Fed's decision to
cut the fed funds rate all the way to 1.75% has encouraged bankers
to expand their loan portfolios to individuals in a binge that
could one day cause nasty credit problems. But for the time being,
banks are in favor, and their recent rally has much to do with
rumors that Greenspan, seeing more economic weakness, will cut
rates again at its policy meeting on Nov. 6. The drop in interest costs has been stunning.
But before looking at some hard numbers, a caveat: The interest
expense figure is only one item in the income statement. Lower
interest rates also mean lower revenue on the loans banks make. Generally, banks' interest costs have fallen
much more than the revenue they gain from making loans. For example,
at Bank One and Bank of America, third-quarter interest costs
fell at twice the speed of interest income from the year-earlier
period. Somehow, Citigroup's third-quarter interest
expense of $5.9 billion was $2.4 billion, or 29%, below the year-ago
figure. That's over three times the $690 million increase in pretax
core income over the same period. Clearly, without a helping hand
from the Fed, Citigroup's earnings would be a lot softer. As the
table shows, only Bank of America's drop in interest expense was
exceeded by the growth in pretax income. Of course, one of the Fed's jobs is to pump
liquidity into the financial system in tough times to avoid a
credit crunch. But one of the unintended consequences of that
policy is that banks keep on making stupid loans, as is the case
with the mortgage refinancing boom right now. When credit problems for retail borrowers surface,
the market will start demanding that banks borrow at much higher
rates. And that's when interest costs soar no matter what the
Fed does. |
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