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Kit Menkin’s Leasing News www.leasingnews.org Wednesday, May15, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines---- GE Capital: Still the Champ in Making Money PSC Adds Richard Field to Board of Directors PDS Gaming Completion $3.3M Native American Credit Facility InfoLease: Int. Decision Systems/Premier Lease/Loan S.F., San Jose lose stature as business-friendly cities When bigger isn't better re: Bank Stock ### Denotes Press Release _______________________________________________________________ Still the Champ in Making Money: GE Capital GE Capital: 2002 net income still at $6.6 billion to $6.8 billion By Christopher C. Williams, Associated Press NEW YORK (Dow Jones/AP) Critics of General Electric Co. have long looked skeptically at the conglomerate's ability to boost annual earnings at a double-digit pace through any economic environment. GE has repeatedly answered that the diversity of its portfolio of businesses affords the company such earnings power. Officials of GE Capital, a significant contributor to overall earnings, repeated that mantra earlier Tuesday at an analyst meeting. ''How can (we) be so regular?'' asked GE Capital Chairman and Chief Executive Denis Nayden during the webcast presentation. ''We have a diverse collection of businesses'' across customers, products and geography. Nayden pointed out that over the last 10 years, GE Capital's mix of business has changed significantly. For example, the business now operates in 45 countries compared with just four in 1990. ''There's less risk in the company today than in 1990,'' the official said. In a generally upbeat presentation, the official repeated GE's outlook for GE Capital, outlined the operation's growth levers and GE's liquidity and funding issues. For example, Nayden repeated that GE is looking to reduce its ratio of commercial paper to outstanding debt to about 25 percent to 35 percent by the end of the year, from about 42 percent at the end of 2001. GE Capital continues to expect net income of $6.6 billion to $6.8 billion this year, up 18 percent to 21 percent, before goodwill adjustment, said the official. GE expects $600 million from acquisitions and $700 million from core growth. GE Capital is looking for double-digit growth next year, as well, Nayden said. Shares of Fairfield, Conn.-based General Electric Co. finished at $31.50 Tuesday on the New York Stock Exchange, up 65 cents, or 2.1 percent. GE Capital outlined the growth prospects facing each of its business units. The overall theme: Business is strong, and diversity, digitization and productivity gains should continue driving double-digit earnings growth for many businesses. For example, the commercial equipment financing business should generate $750 million of net income this year, according to Paul Bossidy, the operation's president and chief executive. Mike Neal, president and chief operating officer for GE Capital Commercial Financing, said he's ''very comfortable'' with a range of $550 million to $580 million in net income for commercial financing this year. GE Capital Aviation Services, or GECAS, ''can provide earnings similar to last year,'' said GE Capital Chairman Nayden. In March, GE said it expected GECAS to generate $450 million in earnings this year, compared with $470 million in 2001. ''I'll like to confirm that outlook,'' said Nayden. The consumer businesses are ''positioned for growth'' and should generate $2.6 billion to $2.8 billion in net income this year, said Nayden. This group of businesses faces ''huge opportunities in 2003 for double digit growth,'' said the official. Michael Pralle, president of GE Capital Real Estate, said he's ''very confident'' real estate can generate 15 percent to 20 percent earnings growth to $550 million to $570 million in net income this year. GE Capital Real Estate's acquisition of Security Capital Group Inc. closes Tuesday, he said. GE Capital Chairman Nayden said the GE is ''still on plan for (its) estimate'' of the loss from the Sept. 11 terrorist attacks on the World Trade Center in the Employers Reinsurance Corp. ''We are aggressively retooling the business in every respect,'' said Nayden. Overall, ERC should earn $200 million this year, according to GE. GE Credit Card services should post $600 million to $620 million in earnings this year, which is 5 percent to 10 percent below last year's results, a GE official said during the presentation. However, from operations, GE Credit Card services should show an almost 20 percent increase in earnings over last year. The Global Consumer Finance operation still has a lot of room to grow, despite being the leading global financing company in the world, according to David Nissen, president of the operation. Furthermore, the business, which increased assets 25 percent in the first quarter and net asset earnings 13 percent, is only getting better. ''We expect even better (results) in the second quarter,'' Nissen said. Overall, GE officials repeated management's outlook of $475 billion in total assets for GE Capital by the end of the year. In addition, the operation should continue to contribute 42 percent to 43 percent of GE's total earnings, according to Nayden. When asked if GE is looking for opportunities to spin off or divest operations, Nayden said ''you can assume we'll be lot more aggressive portfolio managers.'' Later he added, ''we will have opportunities to monetize our existing portfolio.'' --------------------------------------------------------------------------------
### #################################################### PSC Adds Richard Field to Board of Directors BOSTON--HPSC, Inc. (AMEX:HDR) announced that Richard D. Field was elected to the company's Board of Directors.
Mr. Field most recently served as Senior Executive Vice President of the Bank of New York, where he was a member of the Bank's Senior Policy Committee with oversight for a number of the Bank's consumer and commercial banking operations. He served as a member of MasterCard International's Executive Committee and Chairman of its U.S. Board of Directors from 1992-1997. Mr. Field is a co-founder and presently serves as a Director of LendingTree, Inc., the country's leading on-line consumer lending exchange. He is also a Director of Providian Financial, a member of Bank of New York's Putnam Trust Advisory Board, a Trustee of Salisbury School and head of its Development Committee and a member of the Board of Fellows of Trinity College. He also serves as a financial advisor to Epigen, Inc., a biopharmaceutical venture. Mr. Field, who resides in New Canaan, Connecticut, is a graduate of Trinity College.
Said John Everets, Chairman and Chief Executive Officer of HPSC, "Dick brings significant experience in banking and consumer finance, as well as a healthcare perspective, which will be beneficial to our company. We welcome him to our Board and look forward to his counsel and insights."
Mr. Field added, "I am impressed with how well HPSC has grown its operations through a precise focus on providing much needed, high-quality products and services to its customers. I look forward to contributing to the company's continued growth and progress."
About HPSC
HPSC Inc. (AMEX:HDR) is a leading non-bank financial services company providing leasing and financing opportunities to the medical and dental professions in all 50 states. Through its asset-backed lending subsidiary, American Commercial Finance Corporation (ACFC), the Company provides asset-based lines of credit to manufacturing and distribution companies throughout the eastern United States. For more information, the company's website can be accessed at www.hpsc.com.
CONTACT:
HPSC Inc.
John Everets, Chairman ############### ########################################### PDS Gaming Corporation Announces Completion of $3.3 Million Native American Credit Facility LAS VEGAS--PDS Gaming Corporation (Nasdaq:PDSG), 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, today announced it has completed a new $3.3 million credit facility with a Midwestern based bank. Proceeds from the credit facility will be utilized to fund gaming equipment loans to and leases with Native American casino operators.
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. PDS Gaming Corporation is headquartered in Las Vegas, Nevada, and its common stock trades on The NASDAQ Stock Market under the symbol "PDSG".
CONTACT:
PDS Gaming Corporation
Martha Vlcek, Chief Financial Officer, 702/736-0700 ################## ####################################### International Decision Systems & Premier Lease
and Loan Services Strengthen InfoLease Leasing Software International
Decision Systems, Inc. (IDS) - the global leader in leasing and
sales management software systems - announced today a partnership
with Premier Lease and Loan Services, the leading source for insurance
services and expertise in the leasing industry. Jim Meinen, IDS
president and CEO, explained, "Although we've had a relationship
with Premier for more than a decade, closer ties with the company
- and other future business partners - will generate 'market-driven'
IDS product enhancements that will make this aspect of leasing easier
and more profitable than ever for our customers." Premier
developed IDS' InfoLease Insurance Interface, which automates insurance
underwriting by transferring insurance information from InfoLease
to Premier. Premier arranges for coverage for lessees who lack proof
of insurance, whose coverage isn't current, or who prefer that the
lessor provides coverage and includes it on billing statements.
This arrangement guarantees insurance coverage from the point of
lease inception. "In
offering a single portal to all the resources of IDS and Premier,
the InfoLease Insurance Interface is a real team effort underscored
by our new partnership," says Premier's Brei Abercrombie, Business
Development Manager. "We will provide continued input on how
customers can improve their insurance programs and generate more
fee income." Premier's
large professional and customer services organizations allow lessors
to completely outsource the entire insurance process, saving significantly
on manpower and providing considerably better customer service.
About
International Decision Systems International
Decision Systems (IDS) is a global market leader in developing lease
accounting, portfolio management, and wholesale/floorplan financing
software and services. IDS serves over 500 independent, bank-related,
captive leasing and financial services companies worldwide from
offices in Basingstoke (UK), Hursley (UK), Boston (USA), Minneapolis
(USA), Sydney (AUS), and Singapore. International
Decision Systems is a member of IDS Group plc companies, which is
publicly traded on the London Stock Exchange. IDS has approximately
500 employees and the largest software development and services
teams in the industry. Their clients include many of the world's
most prestigious leasing and financial services companies. For additional
information about International Decision Systems and IDS Group plc,
visit its Web site at www.idsgrp.com.
About
Premier ###
################################################### S.F., San Jose lose stature as business-friendly cities San Diego Top City---low unemployment, great growth and restaurants ( UAEL Conference there this October ) Victoria Colliver, San Francisco Chronicle Staff Writer
It was a stunning fall from grace for two of the Bay Area's high-tech meccas in Forbes magazine's "Best Places for Business" rankings. San Jose -- last year's No. 1 pick -- plummeted to 61st place, and San Francisco, No. 3 last year, fell 51 spots to No. 54 this year. But a couple of other Bay Area cities gained some ground, including Oakland, which moved from 10th to 8th place, and Santa Rosa, last year's No. 6 business city in the country, is No. 2. Santa Rosa boosted its rating by achieving 20 percent job growth during the past five years and a 109 percent increase in gross domestic product during that same period. In addition, the magazine described the city as a "nice place to visit" and the Sonoma County wine industry as classy. The magazine picked San Diego as the best place to do business in the fourth annual Forbes/Milken Best Places for Businesses and Careers, published in the May 27 issue. The survey cited the sunny city's diversified high-tech economy and its 21 percent job growth rate during the past five years as its selling points. Despite the dot-com bust and economic slowdown, California still did well by nabbing six of the top 10 spots, which is even more than last year. "Everybody reads about San Francisco and Silicon Valley and all the problems there . . . and they tend to think that's the story of the California economy," said Ross DeVol, director of regional studies at the Milken Institute. Devol noted that many parts of the state -- especially cities in Southern California -- have weathered the economic turbulence quite well. DeVol said Oakland and other cities in the East Bay did better than their counterparts in the South Bay and San Francisco because they were less reliant on e-commerce and had a more diversified mix of research, biotech, pharmaceutical and other industries. Vallejo jumped from the 39th spot to 15th, due in part to its consistent job growth, more-affordable housing and proximity to Napa County's booming wine country. DeVol said San Francisco was hit especially hard by the falloff in tourism after the Sept. 11 attacks. San Jose ranked as the most expensive place to live, at 47 percent above the U.S. average cost of living, followed by San Francisco at 41.1 percent. As for the big gainers, the Texas border towns of McAllen and Brownsville benefited from the North American Fair Trade Agreement, rising to the 5th and 9th spots from 25th and 59th, respectively, in last year's rankings. E-mail Victoria Colliver at vcolliver@sfchronicle.com. When bigger isn't better re: Bank Stock By Charles Stein, Boston Globe Staff Bank stocks hit bottom in March 2000. If you bought FleetBoston stock back then, your investment would be worth 40 percent more today. But if you bought some of Fleet's tiny competitors, Brookline Savings Bank, Medford Savings Bank, Hingham Institution for Savings, you would have more than doubled your money.
The idea here is not to say that big banks have done worse than small banks, although that is certainly true. Rather it is to point to an example of something that happens all the time: A case where the prevailing wisdom turns out to be mostly wrong. Periodically in business everyone agrees on a certain view of the future. Japan will take over the world; the Internet will change everything; there is no price too high to pay for a great technology company. The prevailing wisdom makes sense. Smart people endorse it. Unfortunately, the unpredictability of real life has a nasty habit of getting in the way. In the case of banking, the prevailing wisdom throughout the 1990s was bigger is better. Big banks, so the theory went, had huge advantages. Their scale allowed them to offer more and better products at cheaper prices. And the small and medium-sized banks? They were toast, relics of a bygone era. A few might survive by offering superior personal service. The rest would disappear. Stan Lukowski is still around. So is his bank, Eastern Bank. With about $4 billion in assets, Eastern, based in Boston, is about 1/50th the size of Fleet. But while Fleet and other big banks are hurting, Eastern is doing just fine, thank you. Earnings are growing; business is solid. How the two banks got to where they are today is instructive. Like many of its large brethren, Fleet got bigger through acquisitions. In the process, it entered some high-return, high-risk businesses. ''I'll never forget what Bill Crozier used to say,'' said Lukowski, referring to the former head of BayBanks, a successful Massachusetts bank that was acquired by BankBoston, which in turn was bought by Fleet. ''He said you can earn good returns by drilling for oil in Kazakhstan, but you can also get shot.'' In a nutshell that is want happened to Fleet. When the booming technology business went bust, so did Fleet's venture capital and investment banking divisions. When Argentina's economy went south, so did Fleet's investment there. Throw in some bad loans to Enron and Kmart, and you have the recipe for Fleet's $507 million fourth-quarter loss. Meanwhile back at Eastern, life has been pretty good. Falling interest rates have bolstered the bottom line. The recent recession did relatively little damage to the core of the bank's business - lending to small business and consumers. ''For community banks the economy has been OK,'' said Tom Finucane, manager of the John Hancock Regional Bank fund. The mortgage business has been better than OK, and the small banks continue to play there, despite predictions that they would not have the technology needed to compete with the big boys. Salem Five Cents Savings Bank, another small bank, tripled its mortgage output last year, in part because it has access to the same technology as the big banks and mortgage companies. Salem has also been a leader in Internet banking. Lukowski says none of that should be surprising. With technology prices falling, small banks can easily afford state-of-the-art equipment. ''We can't develop the technology, but we can copy it,'' said Lukowski. In the meantime, again contrary to predictions, Internet banking has not exactly taken over. The traditional branch system has proven surprisingly resilient, another plus for the small banks. Has the march of the big banks been halted or are the giants merely taking a breather before continuing on the path to world domination? Have the little guys found a competitive niche or have they just been lucky? Beats me. I am going to avoid making any sweeping predictions about the future. I read somewhere they have a history of turning out wrong. Charles Stein can be reached at stein@globe.com. _________________________________________________________________ To reach Leasing News, please e-mail kitmenkin@leasingnews.org or use the contact form at www.leasingnews.org Fax messages are often difficult to read. Telephone calls result in “telephone tag” and often take longer to respond due to time differences and limited time. E-mail is always best. Leasing News is sent ONLY to people who have requested it. We do not spam. You register using our website www.leasingnews.org or contacting kitmenkin@leasingnews.org. . Our subscriber list is NOT made available to the third parties. Subscription and Removal Assistance can be accessed through out contact site at www.leasingnews.org or you may directly contact kitmenkin@leaisngnes.org with you name as you registered it along with you-mail address ( our list is kept by the name registered, not by company or e-mail address. 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