|
|
www.leasingnews.org Friday, April 12, 2002 Accurate, fair and unbiased news for the equipment Leasing Industry Headlines---- Commercial Money Center Exposed. Revenue Flat as G.E. Profit Drops on Accounting Shift GE’s Press Release ( their version ) CIT's BrokerEdge Online Service has Surpassed $2 Billion Mark Friday—Odds and Ends Highlights from ELA Weekly Newsletter First Niagara Financial Group 1st Quarter Earnings FINOVA Group Sells Franchise Finance Portfolio to GE Capital SCB Computer Tech. Sells Computer Equipment Leasing Business Equilease Acquires Conseco TRAC Lease Portfolio ### Denotes Press Release _____________________________________________________________________ Commercial Money Center Exposed. “Ask Joe Bonanno’s Question: “ Are they a member of NAELB?” Joseph Bonanno, Esq.,CLP, is the legal counsel for the National Association of Equipment Leasing Brokers. It is his intention that if a “funder” is not a member of NAELB, a member should not do business with them. He states this because the association then has no recourse in “negotiating” matters. The other day, Leasing News stated he should get a medal. He responded: “Thank you for your kind words of suggestion that I should receive a ‘medal.’ “However, realize that the entire process involving CMC was an NAELB matter. “Neither myself nor the NAELB takes any delight in what occurred with CMC and apparently you are finding out about even more issues that can potentially make the overall situation even more unfortunate.” The actual announcement of the expulsion of Commercial Money Center came from its president, Mike Meacher, on November 19, 2001. “Dear NAELB members: “ The Board of Directors has unanimously voted to expel Commercial Money Center ( 221 WestCrest Street, #200, Escondido, California ) for membership in the National Association of Equipment Lease Brokers based on the filings of a complaint by a member for ethical violations. The action was taken in accordance with the NAELB ethics procedures. As always, the NAELB advised that members conduct business with other members so that the ethics program can benefit our members. “ Sincerely Mike Meacher NAELB President In writing the story, Leasing News asked Mr. Bonanno for a comment. He stated at the time President Meacher’s statement was sufficient. We asked him “off the record,” why did NAELB expel Bill Hanson, particularly since he was a big support of the association, major financial contributor, a major sponsor, and was very well liked in the leasing business. He said, “ If a company can’t return an advance rental, no matter what the circumstances are, including an expulsion form NAELB, then something more is wrong than just this one incident. We have other complaints, but I can tell you, not returning the advance rental, this is a red flag. They don’t have the money. Something is really wrong here. We need to notify our members not to do business with this company.” The Leasing Industry should have listened. It is more than Commercial Money Center is out of business. There appears to be fraud involved; many lawsuits, a Federal Bureau of Investigation inquiries, the advance rentals that were to be returned, may be an illusion, Leasing News knows many vendors have not been paid, lessee money not returned, unwarranted liens filed, and there is more. It appears the situation is going to become even worse for all those involved. American Motorist Insurance Company (Safeco) on March 26, filed a $6,265,715 against all officers and Capital Markets Corporation and Commercial Money Center regarding deposits and payments on their bond. This is perhaps the first of many. Part of this suit includes leases for Kiosks, reportedly never delivered, never existed, and the vendor who was to build these allegedly was only paid fifty percent, so he reportedly never completed nor delivered the Kiosks, but the partnership with some officers of Capital Markets Corporation testified in leasing contacts they were “accepted” and payments were being made on the lease. Money for the payments allegedly came from CMC. One of the signers of this transaction, has gone to the Federal Bureau of Investigation in Florida, it is reported, to “tell all” with the hopes of a reduced sentence, very similar
to the Enron Auditor plea . Dun and Bradstreet states the company started in 1998. The chief officer is Wayne Pritle. Amwest Surety Insurance Company, San Clemente, California, is listed as a secured party on many UCC’s. Leasing News spoke with them and they told us Commercial Money Center closed their doors “...for a lot of problems, and we can’t go into them at this time.” We were told they were able to negotiate insurance for transactions, but due to all the investigations, did not want to discuss this further. Other officers of this company are Mark Fisher, Tom Matthews, Brian McMichael, Bill Hanson, Sterling Pirtle, and Ronald A. Fisher. D&B states that “Capital Markets was started in 1997” and operated as a holding company ( Commercial Money Center.). The Nevada Charter shows officers as Wayne Pirtle and Ronald A. Fisher. “On January 16, 2001, Dun & Bradstreet records show that Ronald A. Fisher is listed as an officer in Ronald A. Fisher, DUNS #92-675-9457, which filed a voluntary Chapter 7 bankruptcy on May 10,1996. Ronald Fisher is also listed as an officer of Care-Med Centers, Inc. Pompano Beach, Fl. Duns #18-296-5591, which was reported to have discontinued operations in 1991 leaving unpaid debts. A highly reliable source informs Leasing News that Fisher was a Chiropractor, who lost his license due to Medicare and other “malfeasance.” Leasing News could not find an active license in Florida or California for Ronald Fisher, although it is know he prefers to be called Dr. Ronald Fisher. On January 18, 2001, Dun & Bradstreet records show “...Sterling Pirtle is listed as an officer in North Bay Mortgage, Ltd., Englewood, CO. DUNS #80-475-6427, which filed a voluntary Chapter 7 Bankruptcy on February 13,1995. On January 18, 2001, Dun & Bradstreet “records show that Mark Fisher is listed as an officer in CMC Lease In., Escondido, CA, DUNS #17-409-7709, which was also laced on higher-risk status. On January 12, 2001, Andrew J. Alderete, the CPA for both Capital Markets Corporation and Commercial Money Center, indicated that he prepares an audited, combined financial statement for those two companies....on January 12,2001, a check with the New Mexico Public Accountancy Board revealed Andrew J. Alderete is being investigated for “audit competency” specific details regarding the investigation were not available. Dun & Bradstreet states Commercial Money Center, Inc. (subsidiary of Capital Markets Corporation, Las Vegas, Nevada” started 1997. According to the many Uniform Commercial Credit filings, the assigned are Midam Bank, Toledo, Ohio, Privident Bank, Cleveland, Ohio, Huntington National Bank, Cleveland, Ohio, Second National Bank of Warren, Solon, Ohio. No major banks seem to have been involved. The relationship of the banks is being investigated. The officers of both corporations are the same. Ronald Fisher is not the president. (www.commericalmoneycenter.com) states: “Welcome to Commercial Money Center Inc. Whether you are a broker, vendor, business professional (attorney, accountant, or other professional), business owner or manager with tough credit issues and looking for equipment leasing solutions...the Commercial Money Center is the place to be.” Their website proclaims: “We are full service leasing company specializing in doing the tough credit transaction...discharged bankruptcies, paid tax liens/judgments and slow pays within policy are components of our leasing products. We have expanded our scope to include a limited tax lien and judgment payoff sale & leaseback product that could have many useful applications for businesses working earnestly to solve their credit issues. “We ask that you take a moment and sign-on with us to learn more about the Commercial Money Center and the benefits of our leasing programs for your business and for your client's business. “Application Only Lease “This product is designed for quickly processing transactions $75,000 and under that have certain credit barriers that are acceptable to the Commercial Money Center, Inc. Personal credit reports and guarantees are required for all shareholders/principals of each lessee. Co-signers who are not owners and not involved with the lessee business will not be considered in our credit decision. Spouses are required to co-sign in the following states: Louisiana, Texas, New Mexico, Arizona, California, Washington, Idaho, Nevada, and Wisconsin. “The Commercial Money Center Inc. utilize the following scoring elements in our credit decision process:* Fair Isaac Score as low as 500 Revolving Availability Current Account Status Real Estate Ownership Time in Business - minimum 12 calendar months Average bank balance equal to 2 times lease payment over the last 6 months Gross sales & Net Income Dun & Bradstreet Score Bankruptcies are deducted Tax Liens are deducted (See our Tax-lien payoff product) Civil Judgments are deducted Package Requirements: Transactions equal to $10,000 to $75,000 Lease Application completed with gross and net income Last 6 months of bank statements Equipment description, Cost, Vendor name & Address & Phone & Contact Letter of explanation for any account shown as currently past due on credit reports Sale-Lease backs must have letter of explanation indicating use of proceeds Commercial Money Center hired Dennis Doyon, formerly of Colonial Pacific Leasing, to solicit business. Doyon previously worked for Total Funding, a dot.com super broker looking to have brokers submit vendor business and direct business through their internet connection. Leading the fray was Bill Hanson, who learned the leasing business while working for Ron Wagner, who went out on his own . Hanson is now self-employed as a leasing broker, as reported earlier by Leasing News.
January 10, 2002, Bill Hanson, Vice-President and Director of Marketing states the company will return all “Advance Rentals.” There are stipulations. In the “Meet the Leasing News Maker,” he states: “Is CMC currently not funding transactions and effectively out of business until surety issues are resolved? “ [Bill Hanson ANSWERS] “Out of business is a strong word, we are far from out of business we are still accepting applications and intend on processing them and funding them We are returning everyone's advance rentals “ >> INTERVIEW [SUBMITTED QUESTION] “ So you are still accepting applications? “ [Bill Hanson ANSWERS] “YES, please support us and we will support the brokers.”
“ Everyone talks about CMC being the last resort, what does the credit look like and roughly what would be the rate “ [Bill Hanson ANSWERS] “500 fair isaac..closed BK....several NSF's..... released tax liens and judgments.........we have a rate factor ...like renting an apartment .03630 for 64 months… we only have 64 months...we are trying to get our shorter leases back “
“It takes 5 to 6 weeks because we sell the transactions off in pools of 5 to 10 million and this is after all documents are correct “ : “What about all the vendors who have delivered equipment 6 months ago? “ [Bill Hanson ANSWERS] “Good question, we have not given up on being able to fund these transactions and we feel most vendors will be paid We are refunding the lessees advance rentals, but still trying to move forward and fund them as soon as possible” ] “Approximately how many advance rentals will you be returning? “ [Bill Hanson ANSWERS] “All of them “ [SUBMITTED QUESTION] “Will you fax copy of lessee letter to broker? “ [Bill Hanson ANSWERS] “We are working on a letter for the broker and the vendor! We want to keep everybody working together! That's what America's all about “
“Since I was late.............is there even a "realistic" time frame for the deals that have been in the funding process for several months? “ [Bill Hanson ANSWERS] “To fund? 30-60 days...to get their money back? 2 to 10 days “ >> INTERVIEW [SUBMITTED QUESTION] “: Do you have any suggestions as to where to place some of these deals? “ [Bill Hanson ANSWERS] “Contact me and I will be more than happy in trying to help...1-800-856-0907 “ >> INTERVIEW “What are the odds of you being able to straighten everything out??? “ [Bill Hanson ANSWERS] “Excellent “ _______________________________________________________________________ ------------------------------------------------------------------------------------------------ Revenue Flat as G.E. Profit Drops on Accounting Shift By GRETCHEN MORGENSON and CLAUDIA H. DEUTSCH New York Times Battling sales declines in every one of its businesses, the General Electric Company said yesterday that its revenue was essentially flat in the first quarter and that net profit fell because of a change in accounting. Investors dumped the company's shares, slicing almost $35 billion in market value off G.E. The stock closed at $33.75, down $3.45, or 9.3 percent. Almost 79 million shares changed hands on the New York Stock Exchange, making it the most active stock traded there yesterday. G.E.'s fall also contributed to steep declines in both the Dow Jones industrial average and the Standard & Poor's 500-stock index. The company's earnings announcement was the first under its new chairman, Jeffrey R. Immelt, who is struggling to maintain the consistent double-digit earnings growth the company experienced under John F. Welch Jr., its former chief executive. The earnings report was also the first to be provided in a conference call open to investors, analysts and reporters. Sales for the quarter totaled $30.52 billion, up marginally from $30.49 billion in the period a year earlier. The company posted net income of $2.5 billion, or 25 cents a share, down 2.7 percent from $2.57 billion, or 26 cents a share, in the quarter a year earlier. The latest results reflect a required change in how G.E. accounts for acquisitions. Excluding the accounting change, G.E.'s operating earnings were 35 cents a share, matching analysts' expectations, compared with 30 cents a share in the period a year earlier. On the conference call, Keith Sherin, the chief financial officer, said G.E. was on track to earn $1.65 to $1.67 for the full year, in line with earlier forecasts. Analysts say investors were troubled by the fact that revenue was down across the board and that the quality of the earnings was suspect. "Balance sheet and cash concerns really outweighed earnings per share in investors' minds," said James N. Kelleher, an analyst at Argus Research. For example, although profits at GE Capital Services rose 8 percent, to $1.66 billion, much of the quarter's rise came from lower tax rates. Revenue at the business, which had been the company's growth engine in recent years, fell 6 percent. And GE Power Systems, which had been the company's most profitable industrial business, generated a good part of its revenue from fees for canceled orders as large customers like Calpine and Entergy cut back on building power plants. Indeed, G.E. said such terminations accounted for $476 million, or 9 percent, of the segment's $5.27 billion in revenue and $326 million, or 2 cents a share, of its profits. Analysts also noted that cash on the balance sheet had dropped to $7 billion from $11 billion and that payments that corporate customers make at intervals between placing an order and taking delivery were down substantially at the Power Systems group and other divisions. Under pressure from investors concerned that G.E.'s earnings growth is coming more from companies it buys than from internal improvements at its longstanding operations, the company provided more details about its acquisitions during the conference call. The company said it made $2.3 billion in acquisitions during the quarter and that those acquisitions generated 32 percent of earnings growth. But many analysts said more information was needed. Several wondered about the rate of new orders coming in to GE Power Systems, about pension income and whether G.E. had reversed any former restructuring charges. "I walked away with more questions than answers," said Robert Friedman, an analyst with S&P Equity Research. Still, G.E. has retained its share of fans, happy with the details provided by the company. "Disclosure brings with it a threat of giving away potentially competitive information," said Timothy M. Ghriskey whose investment firm, Ghriskey Capital Partners, has invested in G.E. shares. Here is GE’s Spin via their Press Release: ################################ ###################### GE First Quarter Earnings Grow 17% to a Record $3.5 Billion; Cash Flow from Operations Ex-Progress Rises 18% FAIRFIELD, Conn--GE's first-quarter 2002 earnings before required accounting changes grew 17% to a record $3.5 billion, or $.35 per share, the Company announced Thursday. "GE delivered in the first quarter for the same reason we have delivered throughout the economic downturn -- the strength of our business model," said GE Chairman and CEO Jeff Immelt. "Power Systems, GE Capital and broad-based productivity gains helped our short-cycle businesses ride out this still-difficult economy. It's this mix of businesses, and execution of our initiatives, that enable GE to deliver earnings and cash growth through economic cycles." Financial highlights of the quarter include: -- Earnings before required accounting changes rose 17%, to $3.518 billion, or $.35 per share, from last year's $3.017 billion, or $.30 per share. Both earnings and EPS were records for the quarter. Earnings after required accounting changes in both quarters are described below. -- Revenues of $30.5 billion were about the same as in first quarter 2001. Industrial businesses' revenues grew 5%, reflecting continued strength at Power Systems, including termination revenues of $476 million, and NBC's Winter Olympics broadcasts. GE Capital Services (GECS) revenues declined 6% as a result of repositioning activities and the revenue effects of lower interest rates, the earnings effects of which were offset by lower matched borrowing costs. -- Cash generated from GE's operating activities, excluding progress collections, was $2.2 billion, up 18% from last year's $1.8 billion. Reflecting record progress collections in 2001, reported cash flow from operating activities of $1.4 billion was 53% lower than last year's $3.1 billion. -- Operating margin was a first-quarter record 18.2% of sales, up from last year's 17.7%. GE's digitization initiative was a significant contributor to margin expansion in the quarter. -- GE Capital Services (GECS) first-quarter earnings before accounting changes rose to $1.657 billion, up 18% over last year's reported $1.401 billion. These results reflect the diversity of GECS businesses, with strong growth in its Specialized Financing, Mid-Market Financing and Consumer Services segments. GECS assets totaled $427 billion at the end of the quarter, up 15% from $370 billion at the end of first quarter 2001. -- Required accounting changes include a non-cash transition charge to earnings in first quarter 2002 of $1.015 billion, or $.10 per share, for impairment of goodwill as required for adoption of Statement of Financial Accounting Standards 142 (SFAS 142). Earnings after accounting changes totaled $2.503 billion, or $.25 per share. In the first quarter of 2001, GE recorded a one-time, non-cash transition charge of $444 million, or $.04 per share, as required for adoption of new accounting rules for derivatives, warrants, options and other financial instruments (SFAS 133 and EITF 99-20). Earnings after accounting changes were $2.573 billion, or $.26 per share. -- GE stopped amortizing goodwill as of January 1, 2002, in accordance with the adoption of SFAS 142. Excluding goodwill amortization in first quarter 2001, EPS and earnings in first quarter 2002 rose 9% and 8% respectively. To facilitate comparison of segment operating results, prior-year goodwill amortization is now treated as a corporate rather than a segment cost. Other changes to segment operating results relate to the GE pension plan, now reported at the corporate level, and allocation to segments of other selected costs previously reported at the corporate level. These other changes have no impact on consolidated earnings. Prior-period segment results reflecting all of these changes are available at www.ge.com/investor. As previously announced, GE will provide more detail on first-quarter results on a conference call and Webcast to be held at 9 a.m. EDT today. Call information is available at www.ge.com/investor. Among first-quarter business highlights: -- GE Power Systems (GEPS) continued to meet record demand for gas turbines, shipping 85 heavy-duty gas turbines in the quarter. GEPS Energy Services business added 41 contractual services agreements valued at $1.5 billion, driving total commitments for these multi-year agreements to $26.0 billion, up $8.3 billion or 47% over last year. GEPS completed three acquisitions in the quarter to enhance its technology base and expand its Oil and Gas businesses and services capabilities: Bently Nevada, Pipeline Integrity International and KVB-Enertec. GEPS also reached agreement to acquire the manufacturing and technology assets of Enron Wind Corp., establishing a presence in the renewable wind power segment of the industry. -- GE Medical Systems (GEMS) built a global base for growth and continued its product development initiatives. Total orders were up 4%, with double-digit growth in MR (magnetic resonance), ultrasound, PET (positron emission tomography), outpatient monitoring and related clinical information systems; these were partially offset by a 6% decline in CT (computed tomography) orders as the market anticipated the introduction of GEMS new 16-slice technology in the second quarter. During the quarter, GEMS expanded its product lines and capabilities as it completed several acquisitions, including MedicaLogic, a developer of electronic records for outpatient care; iPath, a leader in surgery management software; Danica Biomedical A/S, a Denmark-based developer of wireless technology for secure intra-hospital transmission of patient information; and Surgical Insights, Inc., a pioneer in the development of image-guided orthopedic surgery software. -- GE Aircraft Engines (GEAE), CFMI (its joint venture with Snecma Moteurs) and the GE-PW Engine Alliance won $2.5 billion in equipment orders during the first quarter from customers including Emirates Airline, Ryanair, South African Airways, Frontier Airlines and Continental Airlines. GEAE also added more than $2 billion in multi-year service agreements with customers including KLM and Continental Airlines. The CF34 Growth engine development program achieved a significant milestone with the successful first flight of the Embraer 170 regional jet. To date, GEAE has received over $7 billion in orders for CF34 regional jet engines, the fastest-growing sector of commercial aviation. In addition, GEAE received in excess of $600 million in contracts from the U.S. military during the quarter, including an order to provide engines for the initial phase of the Air Force's C-5 Galaxy Re-engining Program. -- GE Capital Services (GECS) posted a strong performance through continued cost improvement and robust acquisition activity. GECS digitization and productivity enhancements reduced operating and administrative costs by $275 million, which contributed $165 million to GECS earnings. Acquisition activity remained strong, as Real Estate and Commercial Finance completed the acquisition of Daimler Chrysler's real estate and asset-based lending portfolios. Global Consumer Finance completed the acquisition of Kingfisher plc's Time Retail Finance operations and also agreed to acquire the sales finance business of Kawai Instruments, while Commercial Equipment Finance and Healthcare Financial Services agreed to acquire leasing businesses and financing assets from Comdisco. -- NBC continued its success in television's key demographic category, adults 18-49, with first-quarter ratings 40 percent higher than its closest prime-time competitor's. In February, NBC telecast the second-most-viewed Winter Olympics ever, reaching a total of 187 million American viewers. The Olympics led the network to an eighth consecutive sweeps-month victory among adults 18-49, with the highest ratings for any network in a major sweeps month in eight years. NBC was also television's No. 1 network in key demographics for the quarter in late night, daytime, morning news, evening news and Sunday-morning public affairs programming. NBC saw increases in scatter pricing, which at the end of the quarter was 6% higher than upfront pricing. -- GE Appliances (GEA) grew quarterly revenues 8% with a very strong performance in the U.S., where core product volumes were up 10%, outpacing the industry and gaining 0.6 points of market share. GEA products continued to win awards, as the Monogram Advantium(TM) Speed Cook Oven was named a "Top 100 Pick" by Building Products magazine and Home magazine named the GE Profile Arctica(TM) Refrigerator one of its "Products of the Year." A leading consumer magazine named GE cooking products its top products in several categories. GEA also launched a new GE Profile Washer that meets the Department of Energy's stringent Energy Star guidelines. -- GE Plastics (GEP) average daily order rates increased 18% over first quarter 2001, with order growth in the media, consumer and industrial, and automotive segments, but pricing remained difficult. GEP ended the quarter with an increase in its order backlog for the first time in more than a year. Although the backlog was 29% lower than at the end of first quarter 2001, it was 36% higher than at the end of the year. Immelt said, "Our initiatives continue to yield impressive results in productivity, product and services leadership and business development. These initiatives, combined with GE's strong portfolio, will enable us to deliver earnings of $1.65-$1.67 per share in 2002." General Electric, Fairfield David Frail, 203/373-3387 david.frail@corporate.ge.com ############# ################################ CIT's BrokerEdge Online Service has Surpassed $2 Billion Mark in Loan Applications from Brokers Nationwide CIT Specialty Finance's e-commerce initiative, BrokerEdgeSM, has processed more than $2 billion in loan applications from brokers since January 2000. BrokerEdgeSM, accessible at www.brokeredge.com and www.cit.com, is a web- based software resource that enables brokers to submit loan applications and conduct business online. "More than 80 percent of our new business comes through our web site and it continues to grow. As a result, we are reaching record levels of volume with greater operating efficiencies," reported Tom Hallman, Group CEO of CIT Specialty Finance. BrokerEdgeSM, the online resource from CIT's Specialty Finance Group, provides application upload capability directly from the broker's origination system. Additional features include access to real-time application status, the latest product and rate information and the BrokerScorecardSM, which offers an historical review of a company's performance with CIT. With offices in 32 major U.S. markets, CIT provides brokers with lending specialists who understand their marketplace and technology that puts them within a "click" of lending solutions. "This is a powerful combination of service and access, which we believe will create new service standards for the industry," stated Hallman. CIT Specialty Finance specializes in providing a broad range of consumer financing solutions including: mortgages, home equity loans, and recreational vehicle and manufactured housing financing through dealers and brokers nationwide. CIT Specialty Finance also provides servicing for auto relationships and warehouse lenders. CIT Specialty Finance is one of six operating groups within The CIT Group. Founded in 1908 and with over $50 billion in total managed assets, CIT is one of the world's largest consumer and specialty finance organizations. Visit the company's web site at www.cit.com. < |