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Kit Menkin’s Leasing News www.leasingnews.org Monday, May 13, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines----MSM Capital Sign McCue Number #1 Credit Scoring Parker Leasing Hoax Making the Rounds CIT Public Relations CIT Arranges $340 Million Sale/Leaseback Financing For PG&E National Energy Group ( Parent is in bankruptcy, plus has many local and state lawsuits in CA) Unemployment Trend Not Equal in US Winners, Losers, and Liars As Salary Grows, So Does a Gender Gap Willis Lease Finance 1st Q Profits Total $1 Million PDS Gaming 1st Quarter $3.9 Million Loss Pitney Bowes Global Credit Services Selects Cyence ### Denotes Press Release ------------------------------------------------------------------------------------------------ http://groups.yahoo.com/group/theleasingrag Over 90 members by 5:30 Friday and photos have already been uploaded!! I wasn't expecting this turnout at all. Lets get the banter rolling, there have been some excellent questions posted! Thank you for letter the readers know about our bulletin board for the leasing industry. The leasing Rag leasingrag@yahoo.com ---------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------- MSM Capital Sign When Mike Cingari first saw the sign when he drove up, he laughed. He thought it was from some ex-employees who were not happy with their dismissal. Without getting into the details, Bob Pardini came in later, and told him it wasn’t so, they were paid pickets for the plaster union about the landlord not hiring union laborers. He showed him the flyers they were passing out. They both thought it was odd they were being singled out in the building. Their business is national. It wouldn’t effect them, they thought. Later, Cingari and Pardini stopped laughing when their bank called, and others, saying the pictures was being sent around the internet from his ex-employees, on The Leasing Rag( http://groups.yahoo.com/group/theleasingrag/), inferring they had done it as part of their labor dispute. Now serious, he called the management company of the building, who sent over a senior officer. He explained every week the plastering union would choose a company in the building, trying to put pressure on the Irvine Company to use a “union” contractor. What was even more “odd”, the company named in the flyer was not the general contractor of this building nor was the sub-contracted named used to up the drywall. He could do nothing about a public protest by the Union. Leasing News published (and publishes) this to counter any claims for what the sign is all about. http://two.leasingnews.org/images/shame%20on%20you%20%231.jpg The flyer was faxed and does not produce very well, but is from Carpenters Union Local. The last sentence states, “ We are not urging any worked to refuse to work nor are we urging any supplier to refuse to deliver goods.” The headline says “Shame on M.S.M. Capital Corporation For Desecration of the American Way of Life.” It goes on to say “General Contractor DRAC did tenant improvements on a building that is occupied by M.S>M. Capital Corporation at 16520 Laguna Canyon Rd. in the City of Irvine. DBAC contracted with Kron Interior Systems to do the drywall. Kron Interior Systems does not meet area labor standards for wok---it does not pay prevailing wages to all its carpenter-craft employees, including payments for health care and pension.” Carpenter Local 1502 believes M.S.M. Capital Corporation has an obligation to the community to see that area labor standards are met for construction work at buildings they will occupy. They should not be allowed to insulate themselves behind “Independent” contractors. They even give Cingari’s name and telephone number to call. In fact, he did not choose either the general contractor or the sub-contractor, just moved into the space when the work was completed. According to the management of the building, the general contractor by the Carpenter’s Union did not do the work nor did the sub-contractor. Either way, M.S.M Capital is victim to this propaganda and any receipt by e-mail about this sign stating other facts is totally incorrect. McCue Number #1 Today magazine announced McCue Systems advertising was ranked #1 among all lease management technology vendors (including both back-office and front-end providers) and #2 among all industries advertising in the magazine's January issue. Readers rated the ads for "attention-getting", "believable", and "informative". The McCue Systems' ad received a composite score of 79%. Other composite scores for top-placers within the leasing technology sector were: LeaseTeam, Inc. 57% Capital Stream, Inc. 62% IFS 66% Seismiq 69% Thoughtworks 52% The top-placing ad, from iLienOnline (a Web-based service from UCC), scored a composite of 80%, a percentage point higher than McCue's ad. Attached - * McCue Systems' winning ad. (Copywriting: Andrew Lea of McCue Systems. Graphic design: Wayne Krumrei Designs of Concord, CA) * The composite scores of all top-ranking ads. Thanks, Kit. Andrew Andrew Lea, Director, Marketing and Corporate Communications McCue Systems, Inc. 111 Anza Boulevard, Suite 310 Burlingame, CA 94010-1932 (650)348-0650 Ext. 1171 Fax: 888-730-2527 www.mccue.com andrewl@mccue.com 800-549-9570 http://www.leasingnews.org/PDFFiles/eltads.pdf http://www.leasingnews.org/PDFFiles/Balance.pdf Credit Scoring I whole heartedly agree with everything Bob ( Rodi ) said (amazing in itself!) on the topic of credit scoring. He is right on. Credit scoring is here to stay and will only expand in its use by the funding industry. Anyone who thinks that they will be able to avoid it is either operating in a very small and narrow niche or is fooling themselves. The concept of credit scoring as a "tool" is often misunderstood. Credit scoring doesn't in and of itself make credit decisions. The funder uses it as a tool for evaluation. If it is set up improperly or not validated, it can be a dangerous tool. Credit scoring can be set up to make bad decisions and only serves to fuel the deterioration of a portfolio. This is what happened in the last 5 years. Funders motivated by growth incentives and the securities industry looking to generate fee income by placing securitization backed by leases foolishly relied on credit scoring for credibility and as a validation of quality. Thanks to Bob for advancing the discussion on this topic. We will only fail if we fail to learn from our past mistakes as an industry. Paul ************************************************* Paul J. Menzel, CLP Senior Vice President / General Manager Leasing Division SANTA BARBARA BANK & TRUST P.O. Box 60607 Santa Barbara, CA 93160-0607 1 South Los Carneros Road Goleta, CA 93117 Dir Ph# (805)560-1650 Email PaulM@sbbt.com ---- I really want to express my admiration for Bob Rodi's credit scoring commentary. Credit decisions involve a complex analysis of quantitative factors and qualitative factors and no statistical model can be expected to flawlessly adjudicate each decision. Credit scoring models do a very good job of evaluating the major factors involved that lead to relatively clear cut approvals or declines and create efficiencies but they do not eliminate the requirement that the lender think. They are merely tools to be used wisely. The vast majority of credit scored declines that I have seen can be attributed to either data entry errors or disregard for factors that the model assumes to be controlled. And let's not forget that most lending models have a tolerance for losses built in. Credit scoring models never vary on the last day of the month when volume is behind plan nor do they succumb to a vendor's or sales person's siren song. Bob's gun analogy fits perfectly. As with guns, the emotional nature of the anecdotal evidence frequently overshadows the facts. Frank Latourell Director Rave Financial Services, Inc. fml@ravefinancial.com ------------------------
Parker Leasing (In the Leasing News Bulletin Board Complaint Section: http://www.leasingnews.org/bulletin_board.htm Yesterday I received a call from Paul Parker (Parker Leasing). He was upset about comments I made about him in Leasing News. That was about two months ago...he must be a slow reader. He said that he was going to sue me, Leasing News and Bob Bell (??). I told him that was fine with me but if he wanted to sue me then I couldn't talk to him. He said that he was going to "come to my office and beat the crap" out of me. So I told him that he must be confusing me with Ken Goodman and I gave Paul his address. Ken Glasgow ken@cclg.com Corporate Capital By the way, Paul also claimed that he signs up 35 new brokers a week. Now we know where all the new talent is coming from. ------------------------------------------------------------------------------------------ Hoax Making the Rounds: I just received an e-mail today stating that his address has been infected by a virus and it passed along to my computer, my address book in turn has been infected. The virus is called "jdbgmgr.exe" is not detected by either Norton or McAfee anti-virus system. The virus sits quietly for 14 days before damaging the system. It's sent automatically by the messenger and by the address book, whether or not you sent e-mails to your contacts. Here is how to detect it and delete it: 1. Go to start, click on search 2. in the files/folder option, write the name "jdbgmgr.exe" 3. Be sure to search your "c drive" 4. click "find now" 5. the virus has a teddy bear icon on it with the name :jdbgmgr.exe DO NOT OPEN! 6.right click and delete it. It then go to the recycle bin 7. Go to the recycle bin and delete it there also. (This is a hoax now going through the leasing industry mail addresses. Symantec Security Response - Jdbgmgr.exe file hoax The icon you deleted is a driver that reads some types of java script. deleting it just makes windows work worse. See report of hoax from Symantec here: If you have deleted the file search at yahoo for jdbdmgr and reinstall the file, it is a necessary windows system file. Copy the file and put it in your c:\windows\system directory.
http://www.symantec.com/avcenter/venc/data/jdbgmgr.exe.file.hoax.html (Leasing News also recommends pc-cillin, the best anti-virus program in the business because it up-dates constantly. www.antivirus.com for a free virus scan on your system. Perhaps discover what Norton or McAfee let go through to your computer. _______________________________________________________________ The Week Ahead May 13-18 Washington Post May 13 Monday National Summit on Economic Literacy two-day conference opens at National Press Club, Federal Reserve and Treasury. Speakers include Fed Vice Chairman Roger Ferguson, Treasury Secretary Paul H. O'Neill and Education Secretary Roderick R. Paige. Arthur Andersen trial resumes in Houston. May14 Tuesday IRS holds hearing on proposal to collect payroll taxes on value of incentive stock options awarded to executives and employees. Senate resumes debate on trade bill, with amendments expected on steelworkers' health-care benefits and anti-dumping laws. Senate Banking Committee holds hearing on national export strategy. Witnesses include Commerce Secretary Donald L. Evans. National Association of Realtors opens legislative conference at Marriott Wardman Park. Big issue: keeping banks out of their business. Computer Associates, Computer Sciences, Deere, Hewlett-Packard and J.C. Penney issue quarterly reports. Economic indicators: April retail sales. May 15 Wednesday Senate Commerce and Energy committees hold hearings on manipulation of California electric markets. Federated Department Stores, Kmart and Nordstrom issue quarterly reports. Economic indicators: April consumer price index and industrial production. May 16 Thursday Senate Commerce subcommittee holds hearings on impact of Enron collapse on state pension funds. AOL Time Warner holds annual meeting in New York City. Dell Computer, Gap and possibly Liberty Media issue quarterly reports. Economic indicators: April housing starts. May 17 Friday Economic indicators: March trade balance, preliminary May consumer sentiment index May 18 Saturday 5/18-20 Mid-American Association of Lessors Invitational and Warm-Up Weekend in Chicago. Over 300 participants and sponsors in attendance last year at the leasing industry's largest golf related networking event. Tournament is actually on May 20th. For further information, go to: http://www.mael.org/members/news.asp CIT Public Relations It appears this is going to take longer than original anticipated. Leasing News e-mail is still being blocked. We talk to employees and department heads by telephone, and by e-mail from their home. A new development: they can go to the Tyco Yahoo to learn about stock, but are now being blocked from posting comments on Yahoo. Talk so far is not to be surprised if Tyco sells CIT Group, “just as Chase sold their leasing company over ten years ago. They were going to do a public offering, but it didn’t take off, and guess what happened to the Chase Leasing employees---they were let go.” Another manager told me he was “ scared s**t. “Don’t quote me, Kit, in fact, don’t even say you know me. I want to stay off the radar completely. We’re like pawns on a computer chess board.” A Tempe top CIT said, “This is the quiet period. I also don’t have any time to talk to you. We’ve got to get rid of more debt.” From the finance division, “ Remember Newcourt. I think they got two month’s severance. Tyco is taking care of the corporate level much better.” SUMMARY COMPENSATION TABLE (U.S. DOLLARS) http://eol.finsys.com/showfiling.asp?dcn=0000912057-02-016493 4/15/02 ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS --------------------------------- ------------------------------------- OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER NAME AND PRINCIPAL COMPEN- STOCK UNDERLYING COMPEN- POSITIONS YEAR SALARY BONUS(1) SATION(2) AWARDS(3) OPTIONS(4) SATION(5) ------------------ ------------ -------- ---------- --------- ----------- ----------- --------- Albert R. Gamper Jr.................... Jan-Sep 2001 $680,769 $3,120,434 $37,208 $16,949,070 1,200,000 $ 8,250 President and Chief Executive 2000 $878,847 $ 800,000 $98,188 $ 2,946,500 310,815 $41,954 Officer 1999 $761,534 $1,237,503 $57,577 $ 0 345,350 $36,861 1998 $663,471 $1,051,894 $37,778 $ 0 0 $32,939 Thomas B. Hallman...................... Jan-Sep 2001 $288,846 $ 605,000 $ 8,146 $ 1,490,275 200,000 $ 8,500 Group CEO 2000 $333,076 $ 325,000 $16,692 $ 1,057,500 75,977 $20,123 Specialty Finance 1999 $277,115 $ 292,188 $ 9,210 $ 0 103,605 $17,485 1998 $230,000 $ 217,516 $ 6,098 $ 0 0 $15,600 Joseph M. Leone........................ Jan-Sep 2001 $302,308 $ 580,000 $ 8,519 $ 1,659,596 200,000 $ 8,500 Executive Vice President 2000 $358,088 $ 300,000 $21,168 $ 785,626 62,163 $21,124 and Chief Financial 1999 $299,695 $ 433,007 $12,267 $ 0 124,326 $18,388 Officer 1998 $237,000 $ 270,023 $ 7,813 $ 0 0 $15,880 Lawrence A. Marsiello.................. Jan-Sep 2001 $313,846 $ 480,000 $ 8,457 $ 1,806,375 200,000 $ 8,500 Group CEO 2000 $369,230 $ 400,000 $24,108 $ 785,626 69,070 $18,569 Commercial Finance 1999 $319,610 $ 425,011 $15,834 $ 0 124,326 $19,184 1998 $275,002 $ 302,823 $11,052 $ 0 0 $17,400 Nikita Zdanow.......................... Jan-Sep 2001 $344,615 $ 525,000 $ 8,549 $ 1,896,657 125,000 $ 5,100 Group CEO 2000 $409,238 $ 400,000 $22,711 $ 1,057,500 79,431 $23,170 Capital Finance 1999 $356,741 $ 425,011 $14,437 $ 0 107,059 $20,670 1998 $307,008 $ 302,823 $10,004 $ 0 0 $18,680 (1) For 2001, Mr. Gamper received a cash bonus of $2,002,040, based on the performance of the Tyco Capital division of Tyco. The remainder of Mr. Gamper's 2001 bonus was payable in Tyco common shares. The number of shares awarded was also based on the performance of Tyco Capital. Mr. Gamper received 25,020 Tyco common shares. The amount listed in the table reflects the market value on October 1, 2001, the date of grant. The amounts shown in the Bonus column for 2001 (other than for Mr. Gamper, as described above) and 2000 represent the cash amounts paid under CIT's annual bonus plan. The amounts shown in the Bonus column for 1999 and 1998 represent the cash amounts paid under CIT's annual bonus plan and the value of CIT common stock or common stock units received in lieu of cash. Pursuant to the CIT Long-Term Equity Compensation Plan ("ECP"), executive officers could elect to receive between 10% and 50% of their 1998 and 1999 annual bonus awards in CIT common stock or common stock units, respectively, rather than cash. The cash portion deferred was converted to shares of common stock or common stock units with a market value equal to 125% of the deferred amount. CIT paid dividends on the shares of common stock or common stock units awarded to each Named Executive Officer at the same rate applicable to all other issued and outstanding shares. The amounts included in the bonus column for shares issued in 1999 represent the market value on January 26, 2000 (the date of grant) of the shares of CIT common stock awarded at $19.625 per share of CIT common stock. The awards for 1999 were as follows: Mr. Gamper--$687,503, Mr. Hallman--$85,938, Mr. Leone--$165,007, Mr. Marsiello--$125,011, and Mr. Zdanow--$125,011. The amounts included in the bonus column for shares issued in 1998 represent the market value on January 29, 1999 (the date of grant) of the shares of CIT common stock awarded at $32.4375 per share of CIT common stock. The awards for 1998 were as follows: Mr. Gamper--$584,394, Mr. Hallman--$87,516, Mr. Leone--$150,023, Mr. Marsiello--$89,073, and Mr. Zdanow--$89,073. Interesting in the 4/25/2002 CIT Group Inc. Security Exchange Filing S-1 NAME YEAR OF NORMAL RETIREMENT ESTIMATED ANNUAL BENEFIT ---- ------------------------- ------------------------ Albert R. Gamper, Jr............. 2007 $536,100 Thomas B. Hallman................ 2017 $137,100 Joseph M. Leone.................. 2018 $197,900 Lawrence A. Marsiello............ 2015 $215,200 Nikita Zdanow.................... 2002 $162,300 ( no mention of John D. Burr......................... 58 Group Chief Executive Officer, Equipment Financing JOHN D. BURR has served as Group Chief Executive Officer of CIT's Equipment Financing Group since June 2001. Mr. Burr served as President of Equipment Financing/North American Construction and Transportation division since 1999 and Executive Vice President of Equipment Financing since 1983, and held a number of other management and executive positions at CIT since 1967. His unit has produced a high percentage of CIT’s profits. CIT employed approximately 6,320 people at December 31, 2001, of which approximately 5,150 were employed in the United States and 1,170 were outside the United State Also these statements: OUR POTENTIAL ACQUISITION OR DISPOSITION OF BUSINESSES OR ASSET PORTFOLIOS IN THE FUTURE MAY ADVERSELY IMPACT OUR BUSINESS. As part of our long-term business strategy, we may pursue acquisitions of other companies or asset portfolios. In addition, as we have done recently, we may dispose of non-strategic businesses or asset portfolios. Future acquisitions may result in potentially dilutive issuances of equity securities and the incurrence of additional debt, which could have a material adverse effect on our business, financial condition and results of operations. Future acquisitions could involve numerous additional risks, including: difficulties in integrating the operations, services, products and personnel of the acquired company; the diversion of management's attention from other business concerns; entering markets in which we have little or no direct prior experience; and the potential loss of key employees of the acquired company. In addition, acquired businesses and asset portfolios may have credit-related risks arising from substantially different underwriting standards associated with those businesses or assets. In the event of future dispositions of our businesses or asset portfolios, there can be no assurance that we will receive adequate consideration for those businesses or assets at the time of their disposition or will be able to adequately replace the volume associated with the businesses or asset portfolios that we dispose of with higher-yielding businesses or asset portfolios having acceptable risk characteristics. As a result, our future disposition of businesses or asset portfolios could have a material adverse effect on our business, financial condition and results of operations. WE COMPETE WITH A VARIETY OF FINANCING SOURCES FOR OUR CUSTOMERS. Our markets are highly competitive and are characterized by competitive factors that vary based upon product and geographic region. Our competitors include captive and independent finance companies, commercial banks and thrift institutions, industrial banks, leasing companies, manufacturers and vendors with global reach. Substantial financial services networks have been formed by insurance companies and bank holding companies that compete with us. On a local level, community banks and smaller independent finance and mortgage companies are a competitive force. Competition from both traditional competitors and new market entrants has intensified in recent years due to a strong economy, growing marketplace liquidity and increasing recognition of the attractiveness of the commercial finance markets. In addition, the rapid expansion of the securitization markets is dramatically reducing the difficulty in obtaining access to capital, which is the principal barrier to entry into these markets. This is further intensifying competition in certain market segments, including increasing competition from specialized securitization lenders which offer aggressive pricing terms. We compete primarily on the basis of pricing, terms and structure. Our competitors seek to compete aggressively on the basis of these factors and we may lose market share to the extent we are unwilling to match our competitors' pricing, terms and structure in order to maintain interest margins and/or credit standards. To the extent that we match competitors' pricing, terms or structure, we may experience decreased interest margins and/or increased risk of credit losses. Many of our competitors are large companies that have substantial capital, technological and marketing resources, and some of these competitors are larger than us and may have access to capital at a lower cost than us. Further, the size and access to capital of certain of our competitors are being enhanced by the continued consolidation activity in the commercial and investment banking industries. (Now I understand it. There is no public relations. Editor) ________________________________________________________________ #### ################################# CIT Arranges $340 Million Sale/Leaseback Financing For PG&E National Energy Group ( Parent is in bankruptcy, plus has many local and state lawsuits in California) PG&E National Energy Group, a unit of PG&E Corporation, announced the completion of a $340 million sale-leaseback for the Attala Generating plant. CIT Group's structured finance group and another equity lessor provided the lease equity for the transaction. Lease debt financing was provided by institutional investors. "This transaction is another example of our continued success in raising capital for our projects from a variety of sources," said John Cooper, PG&E National Energy Group's senior vice president of finance. A sale leaseback transaction involves the sale of a facility to one or more equity investors who lease the facility back to the original owners for their use over the term of the lease. The power plant, located in Mississippi's Attala County, is a natural gas- fired, combined-cycle electric generating facility capable of producing more than 500 megawatts of electricity. PG&E National Energy Group owns or controls through various contractual arrangements an operating generation portfolio of more than 7,000 MW and owns or controls more than 7,700 MW of generating facilities under construction. Headquartered in Bethesda, MD, PG&E National Energy Group develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. A subsidiary of Tyco International, CIT is a global source of financing and leasing capital and an advisor for companies in more than 30 industries. Founded in 1908, CIT operates extensively in the United States and Canada with strategic locations in Europe, Latin and South America, and the Pacific Rim. The securities representing the lease debt have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration requirements under that act. ########## ################################### Unemployment Trend Not Equal in the United States, such as San Diego defying the National Trend By Michael Kinsman SAN DIEGO UNION-TRIBUNE STAFF WRITER The nation's jobless rate may have climbed to its highest point in nearly eight years, but San Diego County is continuing to defy the employment trends affecting other parts of the country. The region's unemployment rate in April was 3.8 percent, down slightly from 3.9 percent in March, state officials reported yesterday. A year ago, the county's jobless rate was 2.7 percent. "We've got 16,100 more people unemployed (in the county) than a year ago, but we've also got 24,600 more people working," said Cheryl Mason, a state labor market analyst. "We seem to have a mismatch in the kind of jobs and skills of the people who are looking for work." Still, San Diego County's unemployment rate for the month of April is well below the national jobless rate of 6 percent and California's rate of 6.4 percent. Phil Blair, co-owner of the San Diego franchise of Manpower Inc., the nation's largest staffing company, said job prospects appeared to pick up last month. After months of seeing companies shed temporary workers and then hire them back one, two or three at time, Blair said companies are now hiring 10, 20 and as many as 70 temps at once. "Things are definitely getting better," he said. "Temp hiring is a leading indicator of the economy, as a lot of employers will hire temps when they are uncertain of the economic climate. Once they become convinced a rebound is occurring, they make those workers permanent." The state's CalJOBS online job board has 5,000 openings. Despite what the numbers seem to say about the state of the local economy, the business climate is nevertheless leaving many workers with a chill. After being laid off Jan. 1 from her data networking sales job, Patricia Casillas of Tierrasanta has struggled to find work. "I know that people say there are jobs out there, but it seems to me there are lot more people out of work than they say," Casillas said after a visit to the Metro Career Center in Kearny Mesa. Casillas has been to several job fairs in recent weeks, only to find long lines of applicants and few job offerings. "I have a feeling employers want to hire people, but they are holding back," she said. "I'm not sure what they are waiting for." Meanwhile, single mother Shawn Barnes jumped into her job search May 3, the day she was laid off from her position as a computer programmer. She immediately surfed the Internet, began checking newspaper classified ads, e-mailed all the friends she could think of, visited the Metro Career Center and National University's career center and interviewed at a career fair Wednesday. "I did everything I could think of," she said. "I sent out at least 100 resumes in the first week, but I haven't gotten a single response. I think I have skills people want." In a separate survey of households, the state Employment Development Department reported that there are 1.1 million unemployed workers in the state, up 272,000 from a year ago. There were 16.46 million Californians with jobs last month, just 6,000 more than last April. "This is sort of the way things look at the bottom," said Tom Lieser, senior economist at the University of California Los Angeles. "It's one of those reports you get when things are getting ready to turn." He said the state's jobless rate may hover around 6.5 percent for a while because the of the traditional increase in the number of people looking for work during the summer months. Only three other California counties had lower jobless rates than San Diego County in April. San Luis Obispo had the lowest rate in the state at 2.9 percent, followed by Marin County at 3.5 percent, Napa County at 3.7 percent and San Diego and Orange counties at 3.8 percent. The Associated Press contributed to this story. Michael Kinsman: (619) 293-1370; michael.kinsman@uniontrib.com WINNERS, LOSERS AND LIARS The Long Boom Shows Its Ugly Side By DAVID LEONHARDT, New York Times SAY goodbye to the victimless economy. As the 1990's boom stretched on and on, many otherwise sober market watchers decided that the United States had repealed the laws of economics. Not only could the expansion go on forever, but this time, nobody's prosperity need come at the expense of others. The symbols of the boom were not the ruthless robber barons of the Gilded Age, or the corporate raiders of the 1980's, but young new economy entrepreneurs, who started Internet companies and made millionaires not only of themselves but, legend had it, also of their stock-holding receptionists. Even when the stock market began falling two years ago and a recession ended the longest economic expansion on record a year ago, the primary culprit seemed to be the country's irrational but well-intended exuberance. Recently, however, the victimless economy seems as remote as a $200 share of Amazon.com stock. Last week, federal regulators released documents showing that Enron, and perhaps other energy companies, helped cause California's recent power crisis by artificially driving up prices. Other regulators, from the Democratic attorney general of New York to the Republican chairman of the Securities and Exchange Commission, are investigating conflicts of interest on Wall Street. And jury selection began in the government's prosecution of Arthur Andersen, the accounting firm the Justice Department has charged with obstructing justice during the Enron inquiry. The details of the cases vary widely, but they collectively reveal that the 90's boom really did claim millions of economic victims. Virtually every resident of California and every business with an office there seems to have suffered from price gouging after the state's energy deregulation. "About $30 billion was extorted from this state," Gray Davis, California's governor, said last week. Many investors, thinking that the earnings statements approved by Andersen and other major accounting firms were truthful, lost money buying stocks. Others bought stocks on the bullish advice of Wall Street analysts, whose research reports may have been written more to win the investment-banking business of the corporations being analyzed than to make an objective assessment of the future prospects of its stock. In February 2000, analysts made 85 "buy" recommendations for every "sell" recommendation, according to Zacks Investment Research in Chicago. Since then, the stock market has fallen about 25 percent, and many of the technology stocks analysts were hyping as a bargain at $100, including DoubleClick and JDS Uniphase, now trade for less than $10. WHEN the collapse of Enron cost employees and investors billions of dollars, corporate executives like Jeffrey R. Immelt, the new head of General Electric, rushed to criticize Enron, suggesting it was an exception. Such an easy explanation is harder to accept today. "It has been said that the four most dangerous words in business are `This time it's different,' " said Richard S. Tedlow, a historian at Harvard Business School. "And people really thought it was." No longer. Investors have punished the stock prices of G.E., Tyco International and other companies, fearing that they used accounting legerdemain to spiff up their earnings. The S.E.C. is investigating whether analysts deceived investors by publishing falsely optimistic research reports to please the corporate clients of their investment firms. Eliot L. Spitzer, New York's attorney general, is considering whether to bring criminal charges against employees of Merrill Lynch and Salomon Smith Barney for similar reasons. In one internal e-mail, a Merrill analyst called InfoSpace — a technology company whose stock now trades at 79 cents, down from a high of $130 — "a piece of junk" even as the firm's official position on it was favorable. The seven stocks Mr. Spitzer is investigating at Merrill have lost $118 billion of their worth, from peak to trough, according to Brad Hintz of the investment firm Sanford C. Bernstein. Merrill's customers may have lost $4 billion of this total, Mr. Hintz said. Mr. Spitzer has suggested that Merrill establish a restitution fund for investors, and is negotiating with executives over the eventual penalties. The firm has denied some of the allegations, but its chief executive, David H. Komansky, has publicly apologized. "We have failed to live up to the high standards that are our tradition," Mr. Komansky said. Other regulators are investigating whether investment banks, including Goldman, Sachs and J.P. Morgan Chase, and a small group of chosen investors unfairly profited from initial public offerings of stock during the dot- com craze. Individual investors absorbed many of the losses, regulators said. The New York Stock Exchange has been looking into Salomon Smith Barney for its role in persuading employees of Worldcom, the telecommunications company, not to sell some of their shares in the company a few years ago. By holding the stock, the employees helped lift Salomon's profits, but the decision ended up costing some people virtually their entire savings, as Worldcom's stock has fallen to $2 from a peak of $60 in 1999. IT'S all a far cry from the 90's, when Time magazine named as its Man of the Year three businessmen — Ted Turner of CNN, Andrew Grove of Intel and Jeff Bezos of Amazon.com — having named only two in the previous 60 years. Wired, Fast Company and a handful of other magazines sprang up during the decade to chronicle and promote what they called companies' revolutionary role in society. "Business in the 90's became not a fallback for people who weren't creative enough for other pursuits, but a force for innovation and creativity," said William Taylor, a founding editor of Fast Company. "Clearly, the attitude toward business has changed dramatically." Indeed, the current investigations take aim at many of the "victimless" economy's most important pillars. The long bull market? Yes, it fattened the retirement accounts of millions of people, but it also seems to have allowed a small group of investors and bankers to profit off of the ignorance and trust of others. The great surge in corporate profits? Some of it now appears to be fiction, with Arthur Anderson and its peers playing the role of ghost writer. Those beloved technology entrepreneurs? Knowingly or not, they created companies that became the prime vehicles for the questionable stock-market profits. Many of those executives now appear in magazine not as heroes but as symbols of hubris, like Bernard Ebbers of Worldcom, or of greed, like Gary Winnick of Global Crossing. In addition to the thousands of people suffering the financial consequences of one bubble or another, the American economy is also a victim. Investors poured money and employees poured themselves into companies that were far less prosperous than they appeared. The unwinding of this excess is one reason that the economy seems to be recovering slowly from recession and that the unemployment rate actually rose sharply last month, to 6 percent. "There was a massive redeployment of capital and people," said Adrian J. Slywotzky, a partner at Mercer Management Consulting, a consulting firm, "from fundamentally productive activities to fundamentally unproductive activities." Beyond the investigations and prosecutions, policy makers have also called for change. Congress is considering whether to prevent accountants from selling other services, like business consulting, to their clients. On Wednesday, Mr. Pitt, the S.E.C. chairman, proposed new rules to limit conflicts of interest among stock analysts. Wall Street firms praised the plan, but some Democrats and investors called it too tame. Some business leaders, as well as Mr. Pitt, are concerned that a wave of new laws could hamstring businesses and hurt the economy far more than any of the current scandals have. To others, the conflicts of interest that have now been exposed cry out for new rules. Otherwise, Mr. Slywotzky said, "the next bubble won't be victimless, just as the last one wasn't." As Salary Grows, So Does a Gender Gap By DAVID CAY JOHNSTON, New York Times Women may be bringing home larger paychecks, but when it comes to earning the really serious money — wages of $1 million or more — men far outnumber them, as they did a generation ago. Study results released recently by the Internal Revenue Service, based on an extensive analysis of wages reported by employers in 1998, show that men outnumbered women in the $1 million-plus category by more than 13 to 1. The I.R.S. said 43,662 men had annual salaries of at least $1 million four years ago, compared with 3,253 women. The men in that category earned, on average, $2.41 million, while the women earned $2.27 million, on average, or roughly 94 cents for each dollar the men earned. A similar pattern was found in the $500,000-to-$1 million category, in which men outnumbered women 10 to 1, according to the I.R.S. But women in this category had slightly higher average incomes — $670,000 versus $668,000. The gap in total numbers, though, narrows steadily as pay decreases. In the $200,000-to-$500,000 class, men outnumbered women 9 to 1; in the $100,000-to-$200,000 class, the ratio was about 5 to 1; $75,000-to-$100,000, 3 to 1; and $50,000-to-$75,000, nearly 2 to 1. It was not until wages were $25,000 to $30,000 that there were roughly equal numbers of men and women, according to the I.R.S. report in the winter 2001- 2002 Statistics of Income Bulletin. In that class of wages, there were 5.7 million men and 5.3 million women. At wages of less than $25,000, women outnumbered men, accounting for 57.6 percent of the wage earners in that category. Economists say the 1998 salaries were shaped largely from trends that existed a generation ago, when women were less likely to work outside the home or to pursue high-paying careers. "If we go back in time 20 or 30 years, women were quite scarce in the professions and in management, while they are well represented today," said Francine D. Blau, an economist at Cornell University. Three decades ago, women accounted for only 3 percent of students seeking an M.B.A. degree, compared with about 30 percent today, added June O'Neill, an economist at Baruch College and a former director of the Congressional Budget Office. "Fewer women make it to the top because fewer women have set out from the start to make it to the top," she said. Ms. O'Neill said the predominance of women among low-wage earners reflected decisions by many women to focus more on the family than on work, which often meant taking part-time or seasonal jobs. Peter Sailer, who directed the I.R.S. study, said the results, combined with those of two previous studies, suggested that the substantial gender gap in high-income categories was narrowing gradually.
When comparing men and women with similar education, experience and commitment to full-time work, that difference in pay nearly disappears, Ms. O'Neill said. She said the data for people making $500,000 or more "suggest that the women who have geared their lives the same way as men seem to be doing approximately as well." The data also showed that women making seven-figure salaries were more likely to be married than single, which both Ms. O'Neill and Ms. Blau found surprising. Of the 3,253 women with salaries of $1 million or more, 2,328, or 71 percent, were married and filed taxes jointly with their husbands. The I.R.S. study found one category of very high-income Americans in which women outnumbered men: those with million-dollar-plus incomes who receive Social Security benefits. There were 3,342 women in that category, versus 2,519 men. Those findings, of course, reflect the fact that women live longer than men. ------------------------------------------------------------------------------------------------ ### ######################################## #################### Willis Lease Finance First Quarter Profits Total $1 Million, or $0.11 Per Share; 1Q02 Earnings Show Improvement Over Prior Quarter SAUSALITO, Calif--Willis Lease Finance Corporation (Nasdaq:WLFC), a leading lessor of commercial jet engines to the aviation industry, today reported it earned $966,000, or $0.11 per diluted share, during the first quarter of 2002, more than double the $461,000, or $0.05 per diluted share, for the fourth quarter of 2001. In the first quarter a year ago, the company earned $2.5 million, or $0.28 per share, from continuing operations. Profits in both the fourth quarter last year and the first quarter this year were adversely affected by lower revenue stemming from the general economic slowdown and the downturn in the aviation industry following the 9/11 terrorist attacks.
Current Market
"We were pleased to see an improvement in our profit compared to the previous quarter. Dealing with some pretty unusual market conditions over the last six months, the company has shown a level of resilience which is a testament to the hard work of our team," said Charles F. Willis, President and Chief Executive Officer. "Nevertheless, our profits are not where they need to be because of the decline in our lease revenue. The reduction in lease revenue is driven primarily by the decrease in the portfolio utilization rate. Our top priority is remarketing engines that have either come off-lease or are scheduled to come off-lease so that we can raise utilization rates closer to historical levels.
"It's been over six months now since the events of September 11th, and the aviation industry is showing signs of a recovery. The industry is continuing to show improvement in passenger traffic, load factors and revenues. In addition, capacity is being increased again, and furloughed staff are being recalled. Operating losses suffered by the industry in the past six months are declining," said Willis. "If the airlines continue to recover at their current pace, market conditions that affect the demand for leased engines should continue to improve. Ultimately, that should enable us to put more engines on-lease and should significantly improve revenue and our bottom line."
During the first quarter, the portfolio utilization rate continued to decline reaching 81% at March 31, 2002, compared to 85% at December 31, 2001. "While the utilization rate remains depressed, interest in leasing continues to improve as quote activity is very strong and lease rates are firming up. The intensive remarketing campaign by our sales force continues to generate strong interest from customers, both old and new, helping to offset the impact of engines coming off-lease," commented Donald A. Nunemaker, Chief Operating Officer. "We are seeing a larger percentage of our customers requesting short-term leases, which we think is consistent with the current trend of certain airlines to defer heavy shop visit expenditures to conserve cash while leasing spare engines. We expect that our utilization rates will gradually begin to improve as the year progresses."
Results from Continuing Operations
Lease revenue in the first quarter was $13.6 million, a reduction of 6% from the first quarter a year ago and down 7% from the fourth quarter of 2001. "The reduction in lease revenue is primarily a reflection of the drop in utilization, and to a limited extent, some pricing pressures, though those pressures appears to be moderating," Nunemaker noted.
Depreciation expense increased 29% to $4.7 million, compared to $3.6 million in the first quarter a year ago, reflecting the expansion of the lease portfolio. Sales General & Administrative expenses increased 14% to $3.7 million, compared to $3.2 million in the first quarter a year ago, due to severance costs and increased legal fees. Compared to the fourth quarter of 2001, SG&A was up 25%, however all of the increase can be attributed to the decision in the fourth quarter not to pay bonuses, which led to the reversal of an earlier bonus expense accrual. Without the effect of this reversal, SG&A for the current quarter would be up only 2% compared to the previous quarter's SG&A. Higher depreciation and SG&A expenses were largely offset by lower net finance costs reflecting the benefits of lower interest rates. First quarter net interest and finance costs decreased 28% to $4.4 million, compared to $6.1 million in the first quarter a year ago.
First quarter earnings before gains and taxes were $775,000, compared to $1.5 million in the first quarter a year ago. Gains on sale of leased equipment were $735,000 in the first quarter, compared to $2.6 million in the first quarter a year ago, and a loss of $955,000 in the fourth quarter of 2001. The first quarter gain included the sale of an engine that was repossessed from a lessee in default. "The secondary market for jet engines, while less robust than in past years, seems to be holding its own. We will continue, as always, to seek to enhance shareholder value through the timely acquisition and disposal of equipment," Willis commented.
First quarter pre-tax earnings from continuing operations totaled $1.5 million, compared to $4.1 million in the first quarter a year ago, with the difference being mostly attributable to larger gains on sale of engines in the earlier quarter. Net income totaled $966,000, or $0.11 per diluted share, compared to $2.3 million, or $0.26 per diluted share, in the first quarter of 2001, which included a loss of $179,000, or $0.02 per share, from discontinued operations.
Balance Sheet
At March 31, 2002, WLFC had 108 commercial jet engines, 4 aircraft parts packages and 6 aircraft in its lease portfolio from continuing operations with a net book value of $487.5 million. The lease portfolio increased 9.7% in net book value from $444.5 million at March 31, 2001, when it consisted of 106 commercial jet engines, 4 aircraft parts packages and 6 aircraft.
During the first quarter of 2002, WLFC purchased $1.4 million of equipment for its lease portfolio, as most of the company's efforts were focused on the remarketing of equipment from the existing portfolio. Assets totaled $531.5 million at March 31, 2002, compared to $495.1 million at March 31, 2001. Stockholders' equity increased 7% to $103.1 million, or $11.68 per share, at March 2002, compared to $97.0 million, or $11.13 per share, a year ago.
About Willis Lease Finance
Willis Lease Finance Corporation leases spare commercial aircraft engines, rotable parts and aircraft to commercial airlines, aircraft engine manufacturers and overhaul/repair facilities. These leasing activities are integrated with the purchase and resale of used and refurbished commercial aircraft engines.
.
*T Consolidated Statements of Income
(in thousands except per share data) Three Months Ended (Unaudited) March 31, December 31, March 31,
------------------------------------
2002 2001 2001
------------ ----------- ----------- REVENUE Lease revenue $ 13,617 $ 14,582 $ 14,522
EXPENSES Depreciation expense 4,717 5,131 3,648 General and administrative 3,691 2,926 3,214 Net interest and finance costs 4,434 5,394 6,138
------------ ----------- ----------- Total expenses 12,842 13,451 13,000
------------ ----------- -----------
Earnings before gains and taxes 775 1,131 1,522
Gain on sale of leased equipment 735 (955) 2,575
------------ ----------- ----------- Income from continuing operations
before income taxes 1,510 176 4,097 Income taxes (544) 244 (1,598)
------------ ----------- ----------- Income from continuing operations 966 420 2,499
------------ ----------- -----------
DISCONTINUED OPERATIONS Income/(loss) from discontinued
operations (net of income taxes
of $19 and $21 for three months
ended December 31, and March 31, 2001, respectively) - 27 33 Gain/(loss) on disposal of
discontinued operations (net of
income tax benefit of $14 and
$136 for three months ended
December 31, and March 31, 2001, respectively - 14 (212)
------------ ----------- -----------
- 41 (179)
------------ ----------- -----------
Net income $ 966 $ 461 $ 2,320
Basic earnings per common share: Income from continuing operations $ 0.11 $ 0.05 $ 0.29 Discontinued operations - 0.00 (0.02)
------------ ----------- ----------- Net income $ 0.11 $ 0.05 $ 0.27
Diluted earnings per common share: Income from continuing operations $ 0.11 $ 0.05 $ 0.28 Discontinued operations - 0.00 (0.02)
------------ ----------- ----------- Net income $ 0.11 $ 0.05 $ 0.26
Average common shares outstanding 8,828 8,826 8,709 Diluted average common shares
outstanding 8,854 8,844 8,883
Consolidated Balance Sheets
(in thousands, except share data) March 31, December 31, March 31, (Unaudited) 2002 2001 2001
------------ ----------- -----------
ASSETS Cash and cash equivalents, including restricted cash of
$20,743, $20,351 and $27,485
at March 31, 2002, December 31, 2001, and March 31, 2001, respectively $ 33,166 $ 24,817 $ 35,648 Equipment held for operating
lease, less accumulated
depreciation of $44,893, $40,097 and $30,033 at
March 31, 2002, December 31, 2001, and March 31, 2001, respectively 480,338 488,042 436,763 Net investment in direct
finance lease 7,188 7,299 7,724 Operating lease related
receivables (net of allowances
of $225, $175 and $25 at
March 31, 2002, December 31, 2001, and March 31, 2001, respectively) 3,241 2,488 2,930 Net assets of discontinued operations - 1,130 3,332 Investments 1,480 1,480 1,480 Other assets 6,090 7,197 7,232
------------ ----------- ----------- Total assets $531,503 $532,453 $495,109
LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Accounts payable and accrued
expenses 5,443 4,450 5,726 Liabilities under derivative
instruments 2,101 2,906 1,975 Deferred income taxes 23,621 22,804 17,789 Notes payable 355,778 359,547 332,848 Residual share payable - - 2,738 Maintenance reserves 32,457 31,761 26,970 Security deposits 4,177 4,630 4,243 Unearned lease revenue 4,823 4,774 5,807
-------------- ----------- ----------- Total liabilities 428,400 430,872 398,096
-------------- ----------- -----------
Shareholders' equity: Preferred stock ($0.01 par
value, 5,000,000 shares
authorized; none outstanding) - - - Common stock ($0.01 par value, 20,000,000 shares authorized; 8,830,181, 8,825,953 and
8,713,836 shares issued and
outstanding at March 31, 2002, December 31, 2001, and
March 31, 2001, respectively) 88 88 87 Paid-in capital in excess of par 61,555 61,532 60,979 Accumulated other comprehensive
loss (net of tax of $820, $1,091 and $770 at March 31, 2002, December 31, 2001, and
March 31, 2001, respectively) (1,282) (1,815) (1,205) Retained earnings 42,742 41,776 37,152
------------- ----------- ----------- Total shareholders' equity 103,103 101,581 97,013
------------- ----------- ----------- Total liabilities and
shareholders' equity $531,503 $532,453 $495,109
*T
CONTACT:
Willis Lease Finance Corporation
Donald A. Nunemaker, 415/331-5281 ### #################################### ### # ############ PDS
Gaming Corporation Reports First Quarter Earnings and Discontinues
Unprofitable Businesses
LAS
VEGAS--PDS Gaming Corporation (Nasdaq:PDSG
- news), a diversified
gaming company that finances, leases, and sells gaming equipment
for the casino industry and operates Rocky's Sports Pub and Grill
in Reno, Nevada, announced its financial results for the first
quarter 2002 and the discontinuation of two unprofitable businesses,
which last year lost approximately $3.9 million, pre-tax, or $0.58
per diluted share. At
the end of the first quarter 2002, the Company discontinued operations
of its Table Games division and certain components of its Casino
Slot Exchange division, due to unacceptable operating results. As
a result, the Company has reclassified these activities as discontinued
operations as of the first quarter 2002. The
Table Games division continued to record pretax losses of approximately
$300,000 per quarter due to slower than anticipated customer installations,
and the arduous regulatory approval process. The Company decided
to discontinue and subsequently negotiated a mutual termination
of its exclusive manufacturing and distribution agreement for the
Digital Card System ("DCS"). The Company will assemble,
distribute and support its remaining inventory of DCS products on
a non-exclusive basis in a limited geographical area. In
addition, at the end of the first quarter 2002, the Company discontinued
its Casino Slot Exchange operations, under which it sold reconditioned
gaming devices. The Company will continue to sell gaming products
under expiring or terminated gaming equipment leases. As
a result of these decisions, the Company recognized a disposal loss
related to discontinued operations of approximately $1.4 million,
primarily related to the write-off of certain intangibles of $1.0
million in the Table Games and Casino Slot Exchange divisions. In
addition, due to the decision to forego further reconditioning activities,
the Company provided a reserve for its related parts inventory of
approximately $300,000 to sell the inventory quickly and reduce
the associated on-going carrying costs. In accordance with SFAS
144, the Company will not make a one-time entry to accrue expected
future losses from discontinued operations. Rather the Company will
report losses from discontinued operations in the periods in which
they occur. "Obviously,
the Company is unsatisfied with the results this quarter,"
stated Johan Finley, Chief Executive Officer of PDS Gaming Corporation. "The
discontinuation of these unprofitable businesses will ultimately
improve the strength of the Company going forward. The decisions
regarding the Table Games and Casino Slot Exchange divisions included
laying off nine former employees, which was difficult but prudent.
We believe these are the right decisions that allow us to focus
on what we do best - provide creative financing to the gaming industry.
It is important to note that these nonrecurring charges are primarily
non-cash in nature and do not preclude PDS in any way from continuing
to perform under any of its agreements." The
Company will focus on its Finance and Lease division. As a result,
the Company will report under its Finance and Lease division all
continuing activities of both the former Table Games division (from
operating rentals) and the former Casino Slot Exchange division
(from the sale of leased assets). Continuing
Operations Continuing
operations consist of the Company's Finance and Lease division and
Casino Operations. For the quarter ended March 31, 2002, revenue
from continuing operations was $9.5 million, compared to $7.5 million
in first quarter of 2001. For the first quarter of 2002, the Company's
loss from continuing operations was $481,000 or $0.13 per diluted
share compared to income from continuing operations of $764,000
or $0.20 per diluted share in the same period last year. The loss
from continuing operations is primarily due to lower then anticipated
revenues and construction at Rocky's Sports Pub and Grill and pre-opening
costs of $238,000, resulting in a pretax loss from casino operations
of $450,000 (including depreciation and amortization) for the first
quarter of 2002 compared to a slight profit in the year earlier
quarter. The Finance and Lease division recorded $9.5 million in
originations for the first quarter 2002, compared to $5.3 million
for the first quarter 2001. The remaining loss is primarily attributable
to non-recurring charges for consulting fees, legal and an increase
in selling, general and administrative in our retail stores. "The
Finance and Lease division has been the cornerstone of the Company
since its inception," stated Mr. Finely. "We intend to
make it bigger and stronger. The Company has been engaged by our
customers to provide an additional $53.0 million in new transactions
during the remainder of this year. The Casino Slot Exchange activities,
will function as an asset management group that is vital in the
remarketing of our leased equipment and mitigation of our exposure
in Finance and Lease. We are confident that Rocky's will improve
this summer." PDS
Gaming Corporation provides customized finance and leasing solutions
to the casino industry in the United States. The Company also operates
Rocky's Sport Pub and Grill in Reno, Nevada and plans to acquire
additional gaming facilities. PDS Gaming Corporation is headquartered
in Las Vegas, Nevada, and its common stock trades on The Nasdaq
Stock Market under the symbol "PDSG". · (Financial Highlights Follow) -0-
PDS GAMING CORPORATION AND SUBSIDIARIES Consolidated Income Statement (Unaudited) Quarter Ended March 31, 2002 2001 REVENUES: Equipment sales and sales-type leases $4,953,000 $1,672,000 Operating lease rentals 2,511,000 1,790,000 Finance income 1,288,000 1,278,000 Fee income 340,000 2,469,000 Casino 375,000 327,000 ----------------------------- 9,467,000 7,536,000 ----------------------------- COSTS AND EXPENSES: Equipment sales and sales-type leases 4,348,000 1,593,000 Depreciation on leased equipment 1,673,000 1,383,000 Interest 1,894,000 1,840,000 Casino 504,000 263,000 Selling, general and administrative 1,438,000 975,000 Depreciation and amortization on other property 202,000 209,000 Pre-opening expenses 238,000 ----------------------------- 10,297,000 6,263,000 ----------------------------- Income (loss) from continuing operations before income taxes (830,000) 1,273,000 Income taxes (benefit) (349,000) 509,000 ----------------------------- Income (loss) before discontinued operations (481,000) 764,000 Discontinued operations, net of tax (1,392,000) (300,000) ----------------------------- Net income (loss) $(1,873,000) $464,000 ============================= Earnings (loss) per share - diluted: Continuing operations $(0.13) $0.20 Discontinued operations (0.37) (0.08) ----------------------------- Net Income (loss) $(0.50) $0.12 ============================= Weighted average shares outstanding: Diluted 3,783,000 3,764,000 PDS GAMING CORPORATION AND SUBSIDIARIES Selected Consolidated Balance Sheet Information (Unaudited) March 31, December 31, 2002 2001 ----------------------------- Notes receivable, net $2,359,000 $10,819,000 Net investment in leasing operations: Equipment under operating leases, net 23,759,000 22,613,000 Direct financing leases, net 36,154,000 32,668,000 Equipment held for sale or lease, net 4,080,000 4,941,000 Notes payable 55,931,000 53,640,000 Subordinated debentures 11,021,000 11,166,000 Shareholders' equity 10,649,000 12,428,000
### ############################# Pitney
Bowes Global Credit Services Selects Cyence International’s
ExpressOS™ Platform For Global Credit Origination TORONTO
–– Cyence International
Inc. announced that Pitney Bowes Global Credit Services selected
ExpressOS™ as its platform to automate credit decisioning processes
for its global equipment finance business. ExpressOS™ will allow Pitney Bowes Global Credit
Services, and its business partners to complete their entire financial
decisioning process in minutes at the point of sale. The
ExpressOS™ platform incorporates a set of global leasing industry
best practices which will enable Pitney Bowes Global Credit Services
to rapidly and effectively respond to new vendor and market opportunities
utilizing the ExpressOS™ platform to originate business, process
applications, quote pricing, score credit, execute contracts and
initiate the booking of deals from any desktop. ExpressOS ™
will also be able to handle all of Pitney Bowes’ currency and
language requirements for its worldwide business. Managers will
be able to track all applications in the business pipeline in real
time. “Replacing
the present collection of manual systems with a single platform
that can be deployed globally is a major achievement for us,”
states Bill Bubbico, VP of Strategic Business Transformation at
Pitney Bowes Global Credit Services. “After an extensive review
of the potential applications available, we chose Cyence International
and its ExpressOS™ platform because of its robust global lease
origination capabilities. ExpressOS™ provides an easy to use
solution that is flexible enough to support our many sales channels,
countries, programs and workflows and is robust enough to position
us for substantial future growth.” “We
are delighted to be working with Pitney Bowes Global Credit Services
on this global project” says Greg McIntosh, COO of Cyence International.
“Pitney Bowes Global Credit Services is in the Monitor top
30 and is undoubtedly one of the most respected companies in office
equipment, with instant name recognition throughout the world. Our
contribution will go beyond the provision of software. In ExpressOS™,
we have created a solution that will meet their need for speed,
automation and rapid deployment. We are committed to a successful
and long term partnership between Pitney Bowes and Cyence” About Pitney Bowes Pitney
Bowes Inc. is a $4.1 billion global provider of leading edge integrated
mail and document management solutions headquartered in Stamford,
Connecticut. The company serves more than 2 million businesses of
all sizes through dealer and direct operations. For more information
about Pitney Bowes, please visit www.pb.com. About Cyence International Cyence International Inc. (formerly Funder OnLine Corp.) is a specialized financial services technology company focused on providing the global equipment finance industry with Internet based technology solutions to both financial institutions and manufacturers and distributors. Cyence International’s ExpressOS™ solution offers a suite of lender-based software and hardware technologies that have been designed, tested and proven in the global marketplace over the last six years. Cyence International’s technology has been developed on the strength of customer demands for products that help reduce operating costs while increasing market size and penetration. The result is high quality e-business products that encompass sales origination, deal structure, credit adjudication, document management, asset management, as well as integration to credit bureaus and back-end systems. For
more information, visit the company’s Web site at www.cyence.com. |
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