DVI Third Quarter Net Income at $3.0 Million - $0.20 EPS; Results Include Impact of Strategic Initiatives.Business Editors JAMISON, Pa.--(BUSINESS WIRE)--May 12, 2003 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, today announced results for the third quarter and first nine months of its fiscal year ending June June: see month. 30, 2003. For the quarter ended March 31, 2003, the Company reported net income of $3.0 million, or $0.20 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 a net loss of $(9.2) million, or $(0.64) per diluted share, for the same period in its previous fiscal year. Net income for the nine-month period ended March 31, 2003, was $13.3 million, or $0.89 per diluted share, compared with net income of $3.2 million, or $0.22 per diluted share, for the nine-month period ended March 31, 2002. Last year's third quarter and nine months results included pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charges for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. in the value of minority investments of $16.6 million and provision for losses and charges for Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. operations of $13.7 million. At March 31, 2003, managed net financed assets totaled $2.8 billion. The net income reported for the quarter ended March 31, 2003 reflected costs associated with several previously announced strategic initiatives intended to address the reorganization The process of carrying out, through agreements and legal proceedings, a business plan for winding up the affairs of, or foreclosing a mortgage upon, the property of a corporation that has become insolvent. and relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of DVI's Business Credit unit and the phase-out Noun 1. phase-out - the act or instance of a planned discontinuation discontinuance, discontinuation - the act of discontinuing or breaking off; an interruption (temporary or permanent) of its Third Coast Capital business unit. During the third quarter, the Company incurred costs of $0.8 million associated with the Business Credit relocation, such as parallel staffing, recruiting costs, severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when expenses and retention bonuses. In connection with the Third Coast Capital phase-out, the Company incurred $0.3 million in employment-related expenses in the quarter just ended. In addition, DVI recorded a $2.7 million provision in the quarter for loan losses in the Third Coast Capital portfolio. DVI expects a significant reduction in future costs as these transition expenses are eliminated over the next several quarters. The total of the various charges associated with the Business Credit and Third Coast Capital units in this quarter was $3.8 million, or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.15 per share. 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:
Mr. O'Hanlon commented further, "We previously announced our discussions to form a joint venture with De Lage Landen Landen is a municipality located in the Belgian province of Flemish Brabant. The municipality comprises the city of Landen proper and the towns of Attenhoven, Eliksem, Ezemaal, Laar, Neerlanden, Neerwinden, Overwinden, Rumsdorp, Waasmont, Walsbets, Walshoutem, Wange and Wezeren. , to take over a substantial portion of our business in the Asia / Pacific region. These discussions are ongoing and the terms of an agreement have not been finalized See finalization. , but our objective is for DVI to hold a minority investment interest in a newly formed entity that would purchase a material portion of the existing $59 million portfolio in the region, removing such assets from our balance sheet while allowing DVI to recover its invested capital. This initiative follows an earlier joint venture with Diamond Lease Company, which was formed in 2002, and is now active in Japan. The Company is also in the advanced stages of discussions with two large financial institutions with the objective of forming strategic alliances that should result in the sale of a material portion of our portfolio in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). (including the UK) and Turkey. In
total, DVI now holds portfolio assets in Europe (including the UK) and
Turkey of $203 million. Under the terms being discussed, DVI may be
required to continue to support the origination OriginationThe process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real and sales effort in this area. If completed, we expect these transactions together will have the effect of reducing financial leverage, improving profitability and liquidity and focusing attention on our domestic core business." "The Company hopes to arrange a similar solution for its business in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . While this region has experienced unstable unstable, adj 1. not firm or fixed in one place; likely to move. 2. capable of undergoing spontaneous change. A nuclide in an unstable state is called radioactive. An atom in an unstable state is called excited. economic conditions in the past, the economies of some countries in the region appear to be improving. Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. has strengthened its currency by more than 26% over the last seven months, successfully sold $1 billion in government bonds in April and recently approved a 10% increase in healthcare reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. rates. DVI continues to carefully manage this portfolio, and no new financing commitments are being made at this time in Latin America. The portfolio continues to decline through scheduled amortization, with $133 million presently outstanding. The portfolio runoff Portfolio Runoff A decrease in the value and size of portfolios investing in mortgages and mortgage-backed securities. Notes: This decrease occurs because of homeowners capitalizing on lowering interest rates through refinancing. scheduled over the next four quarters has the potential for an additional $44 million reduction in loans outstanding, further reducing leverage and generating a return of capital." "If successful, these international initiatives may allow us to repatriate repatriate To bring home assets that are currently held in a foreign country. Domestic corporations are frequently taxed on the profits that they repatriate, a factor inducing the firms to leave overseas the profits earned there. as much as $114 million of capital, reduce leverage by as much as $395 million in portfolio assets and eliminate the current losses associated with our international operations." Commenting on the Company's outlook, Mr. O'Hanlon noted, "The healthcare industry remains vibrant and strong, and there continues to be an opportunity to improve our market share in this sector. This optimism Optimism See also Hope. Bontemps, Roger personification of cheery contentment. [Fr. Lit.: “Roger Bontemps” in Walsh Modern, 66] Candide beset by inconceivable misfortunes, hero indifferently shrugs them off. [Fr. is supported by a stable to improving reimbursement environment, a growing base of medical science utilizing high-tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. medical equipment and explosive explosive, substance that undergoes decomposition or combustion with great rapidity, evolving much heat and producing a large volume of gas. The reaction products fill a much greater volume than that occupied by the original material and exert an enormous pressure, growth in the aging of our population." Pursuant to the rules of the Security and Exchange Commission, the Company will notify the SEC of its election to file its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended March 31, 2003, five days later than would be otherwise required. DVI is an independent specialty finance company for healthcare providers. The Company extends loans and leases to finance the purchase of diagnostic and other therapeutic medical equipment directly and through vendor programs. DVI also offers lines of credit for working capital backed by healthcare 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 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, market interest rates, pricing, market condition in the markets in which we operate, 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. , competition from institutions offering similar products and services, our access to funding on acceptable terms, the ability to complete financing 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
March 31, Change
----------------- -----------------
2003 2002 $ %
-------- -------- -------- --------
Per Common Share Data
==================================
($ in thousands, except per share
data and book value)
Net Earnings (Loss) $3,024 $(9,242) $12,266 132.7%
Diluted Earnings (Loss) per Share $0.20 $(0.64) $0.84 131.3%
Basic Earnings (Loss) per Share $0.20 $(0.64) $0.84 131.3%
Period End Shares 15,182 14,492 690 4.8%
Diluted EPS Shares 15,172 14,448 724 5.0%
Basic EPS Shares 15,170 14,448 722 5.0%
Asset Quality ($ in thousands)
==================================
Net Charge-offs $6,642 $2,591 $4,051 156.3%
Allowance for Losses on
Receivables $20,301 $17,002 $3,299 19.4%
Allowance of Net Financed
Assets (%) 1.41% 1.24% 17B.P.
Portfolio Activity ($ in millions)
==================================
Domestic Loan Origination,
Placements & Commitments $209 $233 $(24) (10.3%)
International Loan Origination,
Placements & Commitments $40 $42 $(2) (4.8%)
Business Credit Commitments $47 $56 $(9) (16.1%)
Total Origination, Placements &
Commitments $296 $331 $(35) (10.6%)
Selected Financial Information
Condensed Consolidated Income Statements
($ in thousands, except per share data and book value)
(Unaudited)
For Quarter Ended Variance
March 31, B (W)
----------------- -----------------
2003 2002 $ %
-------- -------- -------- --------
Finance and Other Income:
Amortization of Finance Income $22,765 $27,934 $(5,169) (18.5%)
Other Income 7,842 5,788 2,054 35.5%
-------- -------- --------
Total Finance and Other Income 30,607 33,722 (3,115) (9.2%)
Interest Expense 19,130 20,658 1,528 7.4%
-------- -------- --------
Net Interest and Other Income 11,477 13,064 (1,587) (12.1%)
Provision for Losses on
Receivables 4,265 2,638 (1,627) (61.7%)
Provision for Losses on Argentina
Contracts - 13,747 13,747 100.0%
-------- -------- --------
Net Interest and Other Income
After Provision for Losses 7,212 (3,321) 10,533 317.2%
Net Gain on Sale of Financing
Transactions 16,040 11,831 4,209 35.6%
Loss on Securities Impairment - (16,594) 16,594 100.0%
-------- -------- --------
Net Operating Income (Loss) 23,252 (8,084) 31,336 387.6%
Selling, General and
Administrative Expenses 16,835 11,472 (5,363) (46.7%)
-------- -------- --------
Earnings (Loss) Before Minority
Interest, Equity in Net Gain
(Loss) of Investees and Provision
for Income Taxes 6,417 (19,556) 25,973 132.8%
Minority Interest in Net Loss
(Gain) of Consol. Subs. 165 3,549 (3,384) (95.4%)
Equity in Net Gain (Loss) of
Investees (32) (11) (21) (190.9%)
Benefit from (Provision for)
Income Taxes (3,526) 6,776 (10,302) (152.0%)
-------- -------- --------
Net Earnings (Loss) $3,024 $(9,242) $12,266 132.7%
======== ======== ========
Diluted Earnings (Loss) per Share $0.20 $(0.64) $0.84 131.3%
Diluted Shares 15,172 14,448 724 5.0%
The financial statements for the quarter ended March 31, 2003
include the consolidated operations for Valley Health Group, Inc.
("Valley"). Included in the above financial statement is $2.6 million
in Finance and Other Income and $2.6 million in Selling, General &
Administrative Expenses that are attributable to Valley.
Selected Financial Information
Condensed Consolidated Financial Highlights
(Unaudited)
Year-to-Date
March 31, Change
----------------- -----------------
2003 2002 $ %
-------- -------- -------- --------
Per Common Share Data
==================================
($ in thousands, except per share
data and book value)
Net Earnings $13,334 $3,191 $10,143 317.9%
Diluted Earnings per Share $0.89 $0.22 $0.67 304.5%
Basic Earnings per Share $0.89 $0.22 $0.67 304.5%
Period End Shares 15,182 14,492 690 4.8%
Diluted EPS Shares 15,060 14,589 471 3.2%
Basic EPS Shares 15,012 14,379 633 4.4%
Asset Quality ($ in thousands)
==================================
Net Charge-offs $16,019 $7,529 $8,490 112.8%
Allowance for Losses on
Receivables $20,301 $17,002 $3,299 19.4%
Allowance of Net Financed
Assets (%) 1.41% 1.24% 17B.P.
Portfolio Activity ($ in millions)
==================================
Domestic Loan Origination,
Placements & Commitments $661 $667 $(6) (0.9%)
Corporate Acquisitions $- $13 $(13) (100.0%)
International Loan Origination,
Placements & Commitments $147 $131 $16 12.2%
Business Credit Commitments $66 $156 $(90) (57.7%)
Total Origination, Placements &
Commitments $874 $967 $(93) (9.6%)
Selected Financial Information
Condensed Consolidated Income Statements
($ in thousands, except per share data and book value)
(Unaudited)
Year-to-Date Variance
March 31, B (W)
---------------------------------------
2003 2002 $ %
-------- -------- --------- ---------
Finance and Other Income:
Amortization of Finance Income $74,272 $84,727 $(10,455) (12.3%)
Other Income 23,003 13,667 9,336 68.3%
-------- -------- ---------
Total Finance and Other Income 97,275 98,394 (1,119) (1.1%)
Interest Expense 60,694 63,874 3,180 5.0%
-------- -------- ---------
Net Interest and Other Income 36,581 34,520 2,061 6.0%
Provision for Losses on
Receivables 10,274 6,988 (3,286) (47.0%)
Provision for Losses on
Argentina Contracts - 13,747 13,747 100.0%
-------- -------- ---------
Net Interest and Other Income
After Provision for Losses 26,307 13,785 12,522 90.8%
Net Gain on Sale of Financing
Transactions 46,190 39,431 6,759 17.1%
Loss on Securities Impairment - (16,594) 16,594 100.0%
-------- -------- ---------
Net Operating Income 72,497 36,622 35,875 98.0%
Selling, General and
Administrative Expenses 48,056 34,943 (13,113) (37.5%)
-------- -------- ---------
Earnings Before Minority
Interest, Equity in Net Gain
(Loss)
of Investees and Provision for
Income Taxes 24,441 1,679 22,762 NA
Minority Interest in Net Loss
(Gain) of Consol. Subs. 408 3,437 (3,029) (88.1%)
Equity in Net Gain (Loss) of
Investees (82) 2 (84) NA
Provision for Income Taxes (11,433) (1,927) (9,506) (493.3%)
-------- -------- ---------
Net Earnings $13,334 $3,191 $10,143 317.9%
======== ======== =========
Diluted Earnings per Share $0.89 $0.22 $0.67 304.5%
Diluted Shares 15,060 14,589 471 3.2%
The financial statements for year-to-date March 31, 2003 include
the consolidated operations for Valley Health Group, Inc. ("Valley").
Included in the above financial statement is $7.4 million in Finance
and Other Income, $7.3 million in Selling, General & Administrative
Expenses and a tax benefit of $1.3 million that are attributable to
Valley.
LOAN ORIGINATION AND MEDICAL RECEIVABLE COMMITMENTS
($ in millions)
Business Unit Fiscal 2003
----------------------------------------------------------------------
1Q 2Q 3Q 4Q Total
------- ------- ------- ------- ---------
Equipment Finance Group:
Domestic Equipment
Origination $204.8 $246.8 $209.2 $660.8
Loan Placements 6.0 8.3 5.0 19.3
International Origination &
Commitments 60.5 33.0 34.6 128.1
------- ------- ------- ---------
Total Loan Orig.,
Placements & Commit. 271.3 288.1 248.8 808.2
Business Credit Commitments 7.4 11.4 47.3 66.1
------- ------- ------- ---------
Total Orig., Placements &
Commitments $278.7 $299.5 $296.1 $874.3
======= ======= ======= =========
3Q03 vs. FY03 vs.
3Q02 FY02
Business Unit Variance Variance
------------- % %
-------- --------
Equipment Finance Group:
Domestic Equipment Origination (10.2%) (1.0%)
Loan Placements 78.6% 119.3%
International Origination & Commitments (10.1%) 5.2%
Total Loan Orig., Placements & Commit. (9.3%) (0.3%)
Business Credit Commitments (16.0%) (57.7%)
Total Orig., Placements & Commitments (10.4%) (9.6%)
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
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