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November 21, 2002
Headlines--- Pictures from the Past---1988---Millerbis
and Possehl Classified---Jobs
Wanted-Credit to Finance U.S.
Housing Starts Fall 11.4% - October 2002 Streamlined
Sales Tax Update--Dennis Brown, ELA Great
Christmas Gift---or Reward to a Colleague for business
or recommendation ITAA
---The New Customer for Equipment/Software Leasing Out
of 1,500 B2B, only 200 to Survive--Beth Cox, Internetnews.com Irwin
Financial Fourth Quarter Dividend HP
Reports Strong Profit 4th Quarter/Financial Services
up 5% Siemens
Fin. Services Names Lowry Fenton & Steven Taylor
VP's ###
Denotes Press Release New
Section Tomorrow---Recommendations ------------------------------------------------------------------------------------------------------------ Pictures from the Past---1988---Millerbis and
Possehl
1988 WAEL (Western Association of Equipment
Leasing President ) Ben Millerbis, CLP (left) of Pentech
Financial Services passes the gavel to 1989 President-elect
Jim Possehl, CLP of Republic Financial Corporation
during the Annual Business Meeting at Lake Tahoe Conference. Classified---Jobs Wanted—Credit to Finance 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:New York, NY. V.P.Credit & Collections w/23 years exp.looking
for a situation where I can utilize my varied &
extensive knowledge of credit/ collections/risk-management
& leasing. Email:rcouzzi@yahoo.com Credit: Mill Valley, CA Senior corporate officer with financial services
credit background. M and A, fund raising and workout
expertise. Email:nywb@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: Atlanta, GA Twenty five plus years experience in middle
market lease/ asset based/cash flow transactions.
Heavy banking and credit background, with particular
expertise in structure and negotiation. Email:brown235@bellsouth.net http://65.209.205.32/LeasingNews/JobPosting.htm ________________________________________________________________________ U.S.
Housing Starts Fall 11.4% - October 2002 Largest Drop Since 1994---except for the West “main concern looking forward is the potential
for disinflation (slow growth in inflation” US Government Report with Economic Forecast
Although starts fell 11.4%, to 1.6 million (SAAR),
the housing market remains much healthier than the
rest of the economy.
Single-family activity fell 7% (1.35 million
SAAR) from a very strong September number, while the
more volatile multi family sector fell 29%.
All regions posted losses except the West,
which was up a modest 3.6%. There were double digit
decreases in the Northeast (-18.8%), Midwest (-19.5%),
while the South (-14.5%).
Permits, an indicator of future activity, were
actually up 1.7%. Analysis and outlook: The housing market remains in good shape, thanks
to very attractive mortgage rates, continuing, albeit
slower income growth for most households, and price
appreciation of real estate. Mortgage rates (30 year fixed as reported
by Freddie Mac) have hit new historical lows seven
times this year, and now stand slightly below 6% at
time of writing.
And, the refinancing boom is supporting consumer
spending, partly compensating for the recent slowing
in income growth. Mortgage demand remains very strong, so lower consumer confidence
and a flat job market are not hurting demand for housing
yet. The main concern looking forward is the potential
for disinflation (slow growth in inflation - not to
be confused with deflation or an across the board
drop in prices).
The problem with disinflation is that firms
have little pricing power to recoup rising costs,
and if you have lots of debt, the burden of paying
it off becomes onerous. In such an environment, cost cutting, including
more layoffs, becomes the norm.
The problem is exacerbated by the fact that
we have too much capacity in most commodities (lumber,
panels, engineered wood products, steel, aluminum,
computers, chips, telecommunications equipment, ….). Furthermore, with the exception of a few countries
(Canada, South Korea, and a few SE Asian countries
including China), the U.S., even with slow growth,
is still the strongest of the major economies.
Most of Europe is either in recession or headed
there, while Japan is back in recession again. That means offshore economies won't provide
much help (e.g. export potential) for the U.S. economy
in the near future. In fact, most of the world will be shipping
as many products as they can to the U.S. to shore
up their economies. Looking forward, housing should continue to
be the main economic driver, although with each passing
month, the consensus forecast for 2003 drops a little.
The consensus (NAHB, RISI, and the big banks)
is now about 1.6 million total starts with 1.3 million
single family. The
key for the U.S. economy in 2003 is consumer spending
(as usual) because business spending isn't expected
to strengthen until 2004 according to most analysts.
The
"challenging business environment" means
the "jobless recovery" will probably continue
into 2003, and that means income growth will be weaker
than it has been for some time.
Furthermore, wealth loss in the stock market
will impact spending to some degree too.
Overall, consumer spending is expected to slow
next year, and that means weaker remodeling activity
too. Despite
all this, housing is expected to remain relatively
healthy, fueled by low interest rates and favorable
demographics. Furthermore, the mid term election results
should accelerate decision making by our Federal government,
and that may mean progress in favorable tax legislation,
homeland security, and other matters that impact consumer
(and business) confidence which is needed to support
consumer spending.
from Carl Villella,Jr , CLP Onyx
Capital Corporation CVillella@msn.com -------------------------------------------------------------------------------------- Streamlined Sales Tax Update - Implementation
Questions & January Meetings Dennis
Brown, Equipment Leasing Association Issues covered in this update are: Questions About The System SSTP Meets In January NCSL Task Force Meets In January Questions About The System http://www.leasingnews.org/articles.doc/newsletter9.htm The Executive Committee of the Streamlined Sales
Tax Project has requested questions from the business
community relating to implementation and administration
of the new sales tax system. Steve Kranz at the Council On State Taxation
(COST) has agreed to compile these issues for submission
to the Project. Please forward issues you wish addressed to Steve Kranz at SKranz@statetax.org As stated in a previous update, questions that
arise about the system could fill billboards with
12-point type. Some examples of the concerns expressed
by business are provided below. Please send your questions to Steve Kranz so
they can be presented to the Project. If vendors are held harmless for errors in the
system does the burden fall on the purchaser for penalties
on an audit? The audit process has not been defined. Will the system hire a 3rd party? What are the standards for a Model 1 Certified
Service Provider (CSP) contracted as an agent to perform
all sales tax functions for businesses volunteering
to join the system? As states debate the model legislation, who
will resolve questions that arise about specific provisions
of the Agreement? SSTP Meets In January The Streamlined Sales Tax Project (SSTP or Project)
will meet Thursday and Friday, January 23-24, 2003
in Tampa, Florida.
The sessions will begin at 8:30 am on Thursday
and continue until 4:00 pm on Friday. The agenda is being developed for distribution
by December 1. However,
it may include a special public session on Thursday
morning for those wishing to learn more about telecom
issues. The meeting will be held at the Hyatt Regency
Tampa Downtown, located at 211 North Tampa Street
about six miles from the airport.
A block of rooms has been set-aside for Wednesday
and Thursday nights (Jan. 22-23), and a limited number
of rooms are available for Friday and Saturday evenings. The rate is $93 single/$118 double plus tax.
Please make your hotel reservations directly by calling
813/225-1234; be certain to indicate you are part
of the FTA Streamlined Sales Tax meeting room block
to receive the appropriate rate.
The cut-off for making reservations is December
18, 2002. The registration fee for the meeting will be
$200. The
fee will cover breakfast and lunch on both Thursday
and Friday as well as the requisite breaks. You may register (and pay if possible) online
at http://www.taxexchange.org/meet/0103sales.taf NCSL Task Force Meets In January The National Conference of State Legislatures
(NCSL) Task Force monitoring the Project will meet
in conjunction with the NCSL Executive Committee in
Tucson, Arizona on Friday and Saturday, January 24-25.
The potential congressional linkage of Business
Activity Tax protections with the Streamlined Sales
and Use Tax Agreement drafted SSTP may be the primary
focus of their attention. Dennis Brown Equipment Leasing Association http://www.leasingnews.org/articles.doc/newsletter9.htm # ############################################# Great Christmas Gift---or Reward to a Colleague
for business or recommendation: Power Tools for Successful Leasing— the acclaimed book adopted for Equipment Leasing
Association workshops, and
on the recommended reading list for CLP and
CAUCUS certification programs, as well as Leasing News book recommendation. http://two.leasingnews.org/Books.htm Technology Leasing: Power Tools for Lessees--(c)
2002, the unique lessee focused book on the recommended reading list for CAUCUS certification. Both titles are available through year-end at
the reduced price of $59.95 each, with shipping and handling waived. Orders may be placed by phone (815.753.1116),
secure fax (630.365.5602) or email (phdleasing@fastmail.fm In addition, over 70 leasing websites and a
dozen leasing articles are available for complimentary download at www.leasingpress.com James M. Johnson, Ph.D. Graduate School, Northern Illinois University www.leasingpress.com Barry S. Marks, Esq. Berkowitz, Lefkovits, Isom & Kushner ITAA ---The New Customer for Equipment/Software
Leasing http://www.itaa.org/about/index.cfm Information Technology Association of America
(ITAA) web site. “With the market in 2001 spending over $800
billion, Information Technology (IT) is one of America's
fastest growing industries, encompassing computers,
software, telecommunications products and services,
Internet and online services, systems integration,
and professional services companies. Located just
across the river from the nation's capital in Arlington,
Va., ITAA today is the only trade association representing
the broad spectrum of the world-leading U.S. IT industry.
“The ITAA web site provides information about
the IT industry, its issues, association programs,
publications, meetings, seminars and more...plus links
to other valuable web sites. Enjoy your visit and
check back periodically because the industry is not
only fast growing...but fast changing. The ITAA Home
Page can be your best stop on the Internet for industry
news and perspective. It's also a great way to get
to know the Association and its many valuable programs.” Out of 1,500 B2B, only 200 to Survive By Beth Cox
Internet.com Of an estimated 1,500 B2B exchanges operating
in 2000, only about 200 will survive through 2003
if the current shakeout trend continues, according
to a new research study. The study, entitled "Shakeouts in Digital
Markets: Lessons from B2B Exchanges," tracks
what it calls the "amazingly compressed boom-
to-bust cycle" for Internet startups in B2B markets.
The research report was prepared by Prof. George
S. Day of the Wharton School of the University of
Pennsylvania and Pembroke Consulting President Adam
J. Fein. "Our study of eight industries found only
43 percent of independent B2B exchanges survived between
April 2000 and July 2002," said Fein. "B2B
exchanges thought they had a great value proposition
but actually misdiagnosed their advantage versus existing
ways of doing business." "One venture capitalist behind a prominent
industrial supplies B2B exchange was reluctantly forced
to admit: 'We thought buyers would want to surf the
Web for industrial supplies, but they had other priorities',"
Fein said. "This site was shut down after more
than $50 million had been invested." What happened to burst this particular portion
of the Internet bubble? "B2B exchanges were late movers -- not
first movers," Fein said. "They couldn't
replace longstanding relationships in the B2B supply
chain between customers and their distributors."
"B2B exchanges discovered that their greatest
competition was not other exchanges, but rather existing
ways of doing business," Fein said. "Business
customers are reluctant to disrupt systems that work,
even if those systems are costly or inefficient."
According to Fein a "first mover advantage"
versus another exchange was relatively meaningless
compared with the hurdle of competing against an in-place
system of buyers, wholesaler- distributors, brokers,
and other manufacturers. "Business customers care more about getting
the right product at the right time than about saving
a few incremental percentage points on price by perusing
an online site that lacks access to their preferred
brands," he said. "Only a handful of exchanges (and suppliers)
such as FreeMarkets (Quote, Company Info) ... have
capitalized on the breakthrough possibilities of the
Internet," Fein said. FreeMarkets, whose software has been hailed
for successfully enabling companies to save money
on goods and services by aggregating big orders and
purchasing online, recently reported its third-quarter
net loss narrowed to $3 million, or 7 cents a share,
from a loss of $7.9 million, or 20 cents a share a
year ago. Indeed, many B2B exchanges and related companies
are just gone, and others are hanging on by their
fingernails. Fairfield, Conn.-based General Electric
(Quote, Company Info) sold off its GE Global eXchange
Services B2B unit last June. And Goldman, Sachs at
one point bravely predicted a $1.5 trillion B2B playing
field in the United States by 2004. And VerticalNet (Quote, Company Info), for example,
once a player in the business exchange software game,
has recently seen its CEO and CFO step down and talk
is the firm is looking for a buyer, according to a
recent article at eMarketect.com. Pierre Mitchell, an analyst at independent research
and analysis firm AMR Research, goes on to say in
his VerticalNet piece that "companies are buying
tactically, and concerns about vendor viability indeed
loom large." Who will the winners be? Fein said that "our study identifies three
winning types of players: adaptive survivors who find
a protected niche by retooling their strategy for
re-formed markets; ... incumbents who acquire the
assets of pure-play companies at steep discounts;
and pure play start-ups that capitalize on their early
mover advantages in breakthrough markets." The full results of the study will be published
in a forthcoming edition of "California Management
Review," which is published by the Haas School
of Business at the University of California Berkeley. ### ######################################################### Irwin Financial Corporation Announces Fourth
Quarter Dividend COLUMBUS, Indiana -- -- Irwin Financial Corporation
(NYSE: IFC) today announced a dividend of $0.0675
per share to be paid on December 27, 2002, to all
shareholders of record on December 13, 2002. The dividend
rate is a $0.0025 per share or 3.8% increase as compared
with the dividend paid in the fourth quarter of 2001.
Irwin Financial Corporation (www.irwinfinancial.com)
is an interrelated group of specialized financial
services companies organized as a bank holding company,
with a history tracing to 1871. The Corporation, through
its five subsidiaries -- Irwin Home Equity Corporation,
Irwin Mortgage Corporation, Irwin Union Bank and Trust
Company, Irwin Capital Holdings, and Irwin Ventures
LLC -- provides a broad range of consumer and commercial
financial services in selected markets nationwide.
CONTACT: Suzie Singer Irwin Financial Corporation Phone Number: (812) 376-1917 ( courtesy
ELAonline.com) ############## ############################################### HP Reports Strong Profit 4th Quarter/Financial
Services up 5% PALO ALTO, Calif.----HP (NYSE:HPQ) --
Revenue of $18 billion, up 9% sequentially --
All businesses and regions post sequential
revenue growth --
Strong gross margin improvement --
Significant sequential operating profit improvement
in Enterprise
Systems, Personal Systems, HP Services and Imaging and
Printing --
Solid sequential improvement in channel inventories
overall --
Pro Forma EPS $0.24; GAAP EPS $0.13 --
Meeting or exceeding integration targets --
Affirms current Q1 consensus estimates Financial Services HP Financial Services offers leasing and financial
asset management services to HP customers worldwide,
operating as a wholly-owned subsidiary. Revenue was
$537 million, up 5% sequentially and down 1% year
over year on a combined company basis, with strong
results in North America. Operating margin for the
segment was negative 18.8%, compared to negative 4.7%
last quarter and negative 9.3% in the prior year.
Included in the quarter were bad debt expenses of
$116 million due in large part to economic deterioration
in Latin America. Growth in the quarter was further
constrained by tightened credit terms and conditions.
Total assets stayed relatively constant quarter to
quarter, reflecting a slower market and the relative
maturity of the legacy HP portfolio. fiscal quarter ended Oct. 31, 2002. The company
reported fourth quarter revenue of $18.0 billion,
compared to $16.5 billion in the prior quarter. Sequentially,
revenue increased 9%, while pro forma gross margin
increased from 25.7% to 26.6%. GAAP gross margin increased
from 24.9% to 26.5%. Pro forma operating expenses as a percent of
revenue were down sequentially from 22.5% to 21.7%
of net revenue, reflecting progress in merger-related
value-capture savings, which were offset in part by
costs for the employee performance bonus program,
provisions for bad debt, increased R&D and marketing
expenditures in the Imaging and Printing segment and
currency effects. GAAP operating expenses as a percent
of revenue were down sequentially from 39.9% to 24.1%
of net revenue, primarily as a result of higher one-time
charges for restructuring, in-process research and
development and merger-related charges in the prior
quarter. Pro forma earnings per share (EPS) for the quarter
was 24 cents, compared to 14 cents in the third quarter
and 8 cents in the year-ago period on a combined company
basis. (1) This represents a pro forma net earnings
improvement of 72% sequentially and 203% year over
year. GAAP net earnings before extraordinary items
improved 364% year over year. Reported GAAP EPS was 13 cents per diluted share,
versus a loss of 67 cents last quarter and a loss
on a combined company basis of 17 cents in the year
ago period. Pro forma EPS reflects a $331 million
adjustment on an after-tax basis, or 11 cents on a
diluted per share basis. The pre-tax pro forma adjustment
includes a $150 million restructuring charge; $151
million of amortization of goodwill and purchased
intangible assets; and $155 million for other merger-related
items. "We are proud of our progress," said
Carly Fiorina, HP chairman and chief executive officer.
"We delivered solid results in a tough market.
The HP team is executing, customers are responding
and we're beginning to deliver on the promise of the
merger. We feel good about our trajectory." "HP's revenue grew sequentially in every
business and in every region," Fiorina stated.
"Operating profit improved sequentially in Enterprise
Systems, Personal Systems, HP Services, and Imaging
and Printing. Cost structure improvements are helping
us compete more aggressively, improve our market position
and grow top line revenues; and HP generated $1.5
billion in cash from operations in the quarter." Personal Systems cut its operating loss by more
than 50 percent sequentially, continued to make progress
in direct distribution, stabilized the channel with
HP's new partnerONE program, grew sequentially in
both consumer and commercial PCs, managed channel
inventories lower, and reinforced the company's leadership
in innovation with successful new product launches. Enterprise Systems showed solid revenue and
profit improvement in a weak IT market with quarter-over-quarter
growth in every region and in every business unit,
reducing operating losses by more than 60% sequentially.
HP Services returned to double-digit profitability
in the quarter and posted continued good growth in
managed services. Meanwhile, Imaging and Printing
posted another record quarter with double-digit sequential
growth in revenue and profit in every region, and
revenue and share gains across all businesses. HP's 30 largest new business contracts in the
quarter - with an average value of more than $120
million each - represent more than $3.7 billion in
new long-term revenue. "Six months into the merger, HP has completed
the alignment of our global sales force with a single
compensation plan, met or exceeded all integration
targets, introduced over 100 new products, added roughly
1,400 patents to our worldwide patent portfolio of
over 17,000 patents, introduced comprehensive three-year
product roadmaps and managed complex product transitions
- all while relentlessly focusing on customers,"
Fiorina said. "We're cutting costs, boosting productivity,
delivering more for our customers and shareowners,
and investing in the future. Our strategy is working
and we're picking up momentum," Fiorina stated. Merger related cost savings for the second half
of 2002 were $651 million, 30% above plan. The company
completed 12,500 net workforce reductions in the half,
25% above plan. Of the $651 million of merger-related
costs savings, $257 million came from workforce reductions,
$243 million from direct and indirect procurement
savings, and $151 million from other savings, including
marketing program cuts and facilities closures in
conjunction with our restructuring plans. The company
continues to target $3.0 billion of total cost savings.
The company is on track to meet 17,900 targeted job
reductions by the end of fiscal 2003, in part due
to an additional 1,100 positions that are part of
a voluntary workforce reduction primarily in Japan
in the fourth quarter of fiscal year 2002. Asset Management HP exited the quarter with $11.8 billion in
gross cash, which includes cash and cash equivalents
and short-and long-term cash investments. Inventory
ended the quarter at $5.8 billion, a sequential increase
of $229 million over Q3. Trade receivables also increased
$285 million from the prior quarter to $8.5 billion.
Cash generated from operations for the quarter was
$1.5 billion, reflecting strong operational results
and minimal cash needs for inventory and receivables.
In addition, the company funded its pension plan with
approximately $360 million in the quarter and paid
down $656 million in short-term and long-term debt
throughout the quarter. HP's dividend of $0.08 in
the fourth quarter resulted in a cash use of $244
million. In addition, HP repurchased $125 million
of stock. Outlook For the first quarter 2003, HP affirmed Wall
Street consensus estimates of $18.4 billion in revenue
and $0.27 earnings per share on a pro forma basis. The company noted that spending for brand and
demand generation advertising would be stepped up
in first half 2003 over second half 2002. In addition,
the company said it would incur additional expenses
in the quarter associated with aligning Compaq retirement
programs with those of HP. More information on this quarter's earnings
is available on HP's Investor Relations site at http://www.hp.com/hpinfo/investor/financials/quarters/. ############# ######################################################### SIEMENS FINANCIAL SERVICES, INC. NAMES LOWRY
FENTON AND STEVEN TAYLOR AS VICE PRESIDENTS OF BUSINESS
DEVELOPMENT FOR THE VENDOR SERVICES DIVISION BRIDGEWATER, NJ,– Siemens Financial Services,
Inc. (SFS) today announced that Lowry Fenton and Steven
Taylor have been named Vice President of Business
Development for the Vendor Services Division. In their
new roles, Lowry and Steven will be developing new
customer finance programs for manufacturers and software
providers in the Western and Midwestern regions respectively.
Lowry will be headquartered in San Francisco, and
Steven in Troy, MI. Siemens Financial Services Vendor Services Division
offers proven customer financing solutions for companies
in a broad set of industries. The addition of these
experienced industry veterans to the team will greatly
enhance the support SFS provides to its vendor clients.
“I am certain that Lowry and Steve's background
in developing customer financing programs and their
familiarity with their respective regional markets,
will play a prominent role in the growth and success
of our vendor business at SFS,” said Jeff Teucke,
Vice President and General Manager of the Vendor Services
Division. Lowry Fenton comes to Siemens Financial Services
with more than twenty years of experience in the leasing
industry. In the past six years, Lowry was an essential
part of building Oracle Finance into one of the leading
captive finance companies in the world. Steven Taylor integrates over twenty years of
leasing expertise and contacts to the team, having
been a key player in the origination and management
of customer financing programs for a number of well
known IT manufacturers. Steven most recently held
several senior level sales and marketing positions
with industry leaders Heller Financial and Dana Commercial
Credit. About Siemens Financial Services Siemens Financial Services, comprised of Siemens
AG’s worldwide independently operated financial services
affiliates, is an international financial services
provider with a strong customer focus and more than
1,100 employees in over 30 countries, offering customized
financial solutions ranging from sales and investment
financing to fund management. Siemens AG (NYSE: SI), headquartered in Munich,
is a leading global electronics and engineering company.
It employs 426,000 people in 192 countries and reported
worldwide sales of more than $84 billion in fiscal
2002 (10/1/01 - 9/30/02). The United States is Siemens'
largest market in the world, with sales of more than
$21 billion in fiscal 2002 and more than 74,000 employees
in all 50 states. Corporate headquarters for Siemens'
U.S. businesses are located in New York City. For
more information: www.usa.siemens.com CONTACT: Cheryl Dentale SIEMENS FINANCIAL SERVICES Phone Number: (908) 429-6033 ( courtesy
ELAonline.com ) ############# #############################################
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