DVI Reports First Quarter Earnings of $5.1 Million, $0.33 Per Share; Company Focusing Resources on Core Business Strengths.Business Editors JAMISON, Pa.--(BUSINESS WIRE)--Oct. 31, 2002 DVI (1) (Digital Video Interactive) An earlier compression technique that provided up to 72 minutes of full-screen video on a CD-ROM. Acquired by Intel in 1988 from RCA's Sarnoff Research labs, Princeton, NJ, DVI never caught on. , Inc. (NYSE NYSE See: New York Stock Exchange :DVI), an independent specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. finance company for healthcare providers worldwide, today announced results for the first quarter ended September September: see month. 30, 2002. For the first quarter ended September 30, 2002, the Company reported net income of $5.1 million, or $0.33 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with net income of $6.2 million, or $0.40 per diluted share, for the first quarter ended September 30, 2001. The Company's book value per share at September 30, 2002, increased to $15.85. Loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. volume was $278.4 million for the quarter. Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. A. O'Hanlon O'Hanlon is an Irish surname, and may refer to:
tr.v. re·di·rect·ed, re·di·rect·ing, re·di·rects To change the direction or course of. n. A redirect examination. re our resources from less productive areas and allocate To reserve a resource such as memory or disk. See memory allocation. them to this proven growth vehicle. We began this initiative at the end of our last fiscal year, and our efforts continued in the first quarter. As we carry out this transition from DVI's lower contribution businesses, we expect to see measurable improvements." Mr. O'Hanlon continued, "We are committed to sustaining and enhancing the solid trends in our core domestic business. Our initiatives include: -- Utilizing the strong cash flow in our core business to support our domestic business model; -- Redefining our international commitment in order to significantly de-leverage our balance sheet, thereby reducing our international exposure and facilitating the return of capital to support our domestic core business; -- Pursuing the sale or the liquidation of the assets of Third Coast Capital, our venture leasing business; -- Relocating Business Credit, our medical receivables financing business unit, to our headquarters in Jamison, Pennsylvania, to take advantage of synergies and cross-selling opportunities with our core equipment financing business; -- Reducing Business Credit's cost structure while better supporting that business unit to realize its full potential; -- Working to realize the value of our investments in healthcare ventures." In closing, Mr. O'Hanlon added, "It is clear that we have tremendous earnings power and sufficient capital and liquidity within DVI to support our future domestic growth. We are hard at work executing strategies to redirect resources from underperforming areas to our domestic large-ticket equipment and medical receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed businesses. We are committed to demonstrating our resolve in this realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of our business and are comforted by the fact that we have a solid core business that supports execution of intelligent improvements over a realistic time frame that preserves business relationships and the very best of our strong business platform. We are making real progress, and I continue to be excited and confident about the future of our company." DVI is an independent specialty finance company for healthcare providers worldwide. The Company extends loans and leases to finance the purchase of diagnostic imaging and other therapeutic medical equipment directly and through vendor programs throughout the world. DVI also offers lines of credit for working capital backed by healthcare receivables in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Additional information is available at www.dvi-inc.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 . Any statements contained in this press release, which are not historical facts, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Such statements are based upon many important factors, which may be outside the Company's control, causing actual results to differ materially from those suggested. Such factors include, but are not limited to, legislative and regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes in general, including such changes affecting the healthcare industry, demand for DVI's services, pricing, market acceptance, the effect of economic conditions, litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , competitive products and services, corporate financing arrangements, the ability to complete transactions, and other risks identified in the Company's filings with the Securities and Exchange Commission.
Selected Financial Information
Condensed Consolidated Financial Highlights
(Unaudited)
For Quarter Ended
September 30, Change
--------------------- ----------------------
2002 2001 $ %
-------- ---------- --------- ----------
Per Common Share Data
($ in thousands,
except per share
data and book value)
Net Earnings $ 5,073 $ 6,160 $ (1,087) (17.6%)
Diluted Earnings per
Share $ 0.33 $ 0.40 $ (0.07) (17.5%)
Basic Earnings per
Share $ 0.34 $ 0.43 $ (0.09) (20.9%)
Book Value $ 15.85 $ 15.73 $ 0.12 0.8%
Period End Shares 14,827 14,337 490 3.4%
Diluted EPS Shares 16,125 15,806 319 2.0%
Basic EPS Shares 14,783 14,337 446 3.1%
Financial Ratios
ROE (%) 8.79% 11.10% (20.8%)
ROA (%) 1.19% 1.62% (26.5%)
Assets/Equity (x) 7.13 6.87 3.8%
Equity/Assets (%) 14.02% 14.56% (54) B.P.
Asset Quality ($ in
thousands)
Net Charge-offs $ 2,609 $ 2,503 $ 106 4.2%
Allowance for Losses
on Receivables $ 26,692 $ 16,675 $ 10,017 60.1%
Allowance of Net
Financed
Assets (%) 1.88% 1.28% 60 B.P.
Period End Balances
($ in millions)
Total Assets $ 1,677 $ 1,549 $ 128 8.3%
Net Financed Assets $ 1,416 $ 1,302 $ 114 8.8%
Managed Net Financed
Assets $ 2,657 $ 2,376 $ 281 11.8%
Borrowings under
Warehouse
Facilities $ 368 $ 398 $ (30) (7.5%)
Long-term Debt $ 835 $ 738 $ 97 13.1%
Shareholders' Equity $ 235 $ 226 $ 9 4.0%
Average Balances
($ in millions)
Total Assets $ 1,709 $ 1,522 $ 187 12.3%
Net Financed Assets $ 1,467 $ 1,355 $ 112 8.3%
Managed Net Financed
Assets $ 2,653 $ 2,308 $ 345 14.9%
Shareholders' Equity $ 231 $ 222 $ 9 4.1%
Portfolio Activity
($ in millions)
Domestic Loan
Origination,
Placements &
Commitments $ 205 $ 209 $ (4) (1.9%)
Corporate Acquisitions $ -- $ 13 $ (13) (100.0%)
International Loan
Origination,
Placements &
Commitments $ 66 $ 47 $ 19 40.4%
Business Credit
Commitments $ 7 $ 59 $ (52) (88.1%)
Total Origination,
Placements &
Commitments $ 278 $ 328 $ (50) (15.2%)
Selected Financial Information
Condensed Consolidated Income Statements
($ in thousands, except per share data and book value)
(Unaudited)
For Quarter Ended Variance
September 30, B (W)
--------------------- ---------------------
2002 2001 $ %
--------- --------- ---------- ---------
Finance and Other Income:
Amortization of Finance
Income $ 26,910 $ 27,808 $ (898) (3.2%)
Other Income 8,736 3,452 5,284 153.1%
--------- --------- ----------
Total Finance and Other
Income 35,646 31,260 4,386 14.0%
Interest Expense 20,839 22,078 1,239 5.6%
--------- --------- ----------
Net Interest and Other
Income 14,807 9,182 5,625 61.3%
Provision for Losses on
Receivables 3,582 2,557 (1,025) (40.1%)
--------- --------- ----------
Net Interest and Other
Income After Provision
for Losses 11,225 6,625 4,600 69.4%
Net Gain on Sale of
Financing Transactions 13,566 14,892 (1,326) (8.9%)
--------- --------- ----------
Net Operating Income 24,791 21,517 3,274 15.2%
Selling, General and
Administrative Expenses 14,760 10,633 (4,127) (38.8%)
--------- --------- ----------
Earnings Before Minority
Interest, Equity in Net
Gain (Loss) of Investees
and Provision for Income
Taxes 10,031 10,884 (853) (7.8%)
Minority Interest in Net
Loss of Consol. Subs 154 267 (113) (42.3%)
Equity in Net Gain (Loss)
of Investees (28) 11 (39) (354.5%)
Provision for Income
Taxes (5,084) (5,002) (82) (1.6%)
--------- --------- ----------
Net Earnings $ 5,073 $ 6,160 $ (1,087) (17.6%)
========= ========= ==========
Diluted Earnings per
Share $ 0.33 $ 0.40 $ (0.07) (17.5%)
Diluted Shares 16,125 15,806 319 2.0%
The financial statements for the quarter ended September 30, 2002
include the consolidated operations for Valley. Included in the above
financial statement is $2.3 million in Finance and Other Income and
$2.3 million in Selling, General & Administrative Expenses that are
attributable to Valley.
Selected Financial Information
Condensed Consolidated Balance Sheets
($ in thousands, except per share data and book value)
(Unaudited)
September 30, Change
----------------- ---------------
2002 2001 $ %
---- ---- --- ---
ASSETS
Cash and Cash
Equivalents $18,847 $12,961 $5,886 45.4%
Restricted Cash 105,272 105,054 218 0.2%
Net Investment in
Direct Financing
Leases and Notes
Secured by Equipment 1,127,921 1,039,202 88,719 8.5%
Medical Receivables 277,645 253,455 24,190 9.5%
Allowance for Losses
on Receivables (26,692) (16,675) (10,017) 60.1%
Other Assets 174,010 154,982 19,028 12.3%
----------- ----------- -----------
Total Assets $1,677,003 $1,548,979 $128,024 8.3%
=========== =========== ===========
LIABILITIES AND
SHAREHOLDERS' EQUITY
Borrowings under
Warehouse Facilities $367,999 $397,729 $(29,730) (7.5%)
Senior Notes 155,000 155,000 -- 0.0%
Long-term Financings
(Primarily Limited
Recourse) 507,369 459,944 47,425 10.3%
Other Debt 134,987 109,306 25,681 23.5%
Convertible
Subordinated Notes 37,750 13,750 24,000 174.5%
----------- ----------- -----------
Total Interest
Bearing Liabilities 1,203,105 1,135,729 67,376 5.9%
Other Liabilities 235,488 180,632 54,856 30.4%
----------- ----------- -----------
Total Liabilities 1,438,593 1,316,361 122,232 9.3%
Minority Interest in
Consolidated
Subsidiaries 3,330 7,101 (3,771) (53.1%)
Shareholders' Equity 235,080 225,517 9,563 4.2%
----------- ----------- -----------
Total Liabilities
and Shareholders'
Equity $1,677,003 $1,548,979 $128,024 8.3%
=========== =========== ===========
Book Value per
Number Shares
Outstanding (Period
End) $15.85 $15.73 $0.12 0.8%
Number Shares
Outstanding (Period
End) 14,827 14,337 490 3.4%
TABLE I
LOAN ORIGINATION AND MEDICAL RECEIVABLE COMMITMENTS
($ in millions)
1Q03 vs.
Business Unit Fiscal 2003 1Q02
------------- -------------------------------------------- Variance
1Q 2Q 3Q 4Q Total %
-------- -------- -------- -------- -------- --------
Equipment
Finance Group:
Domestic
Equipment
Origination $ 204.8 $ 204.8 (2.0%)
Corporate
Acquisitions - - (100.0%)
Loan Placements 6.3 6.3 117.2%
International
Origination &
Commitments 59.9 59.9 34.3%
-------- --------
Total Loan
Orig.,
Placements
& Commit. 271.0 271.0 0.6%
Business Credit
Commitments 7.4 7.4 (87.4%)
-------- --------
Total Orig.,
Placements
& Commitments $ 278.4 $ 278.4 (15.2%)
======== ========
Business Unit Fiscal 2002
------------- --------------------------------------------
1Q 2Q 3Q 4Q Total
-------- -------- -------- -------- --------
Equipment
Finance Group:
Domestic
Equipment
Origination $ 209.0 $ 225.2 $ 233.0 $ 232.2 $ 899.4
Corporate
Acquisitions 13.0 - - - 13.0
Loan
Placements 2.9 3.1 2.8 4.1 12.9
International
Origination &
Commitments 44.6 38.7 38.5 44.9 166.7
-------- -------- -------- -------- --------
Total Loan
Orig.,
Placements
& Commit. 269.5 267.0 274.3 281.2 1,092.0
Business Credit
Commitments 58.7 41.4 56.3 30.5 186.9
-------- -------- -------- -------- --------
Total Orig.,
Placements
& Commitments $ 328.2 $ 308.4 $ 330.6 $ 311.7 $1,278.9
======== ======== ======== ======== ========
TABLE II
NET FINANCED ASSETS
($ in millions)
1Q03 vs.
Fiscal 2003 1Q02
-----------------------------------------------Variance
1Q 2Q 3Q 4Q Year %
-------- -------- -------- -------- -------- -----
Period End Net
Financed
Assets $1,416.4 8.8%
Period End
Assets
Serviced $1,349.1 19.3%
Period End
Managed Net
Financed
Assets $2,657.3 11.8%
Average Net
Financed
Assets $1,466.9 $1,466.9 8.3%
Avg. Managed
Net Financed
Assets $2,652.5 $2,652.5 14.9%
Net Financed
Assets Sold $165.9 $165.9 4.7%
Fiscal 2002
------------------------------------------------
1Q 2Q 3Q 4Q Year
-------- -------- -------- -------- --------
Period End Net
Financed
Assets $1,302.2 $1,335.5 $1,367.3 $1,419.3
Period End
Assets
Serviced $1,130.9 $1,200.7 $1,248.8 $1,342.1
Period End
Managed Net
Financed
Assets $2,376.0 $2,487.1 $2,556.9 $2,664.8
Average Net
Financed
Assets $1,354.8 $1,379.5 $1,423.4 $1,450.8 $1,402.1
Avg. Managed
Net Financed
Assets $2,308.3 $2,404.4 $2,510.3 $2,583.9 $2,451.7
Net Financed
Assets Sold $158.5 $165.9 $163.9 $170.5 $658.8
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