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August 9, 2001 Headlines--- Comdisco Objection Announced Lindsey McLorg says, “ Goodbye.” 2001 ELA Survey of Industry Activity is here! PLM International Announces Second Quarter Results United Capital Request from Phil Duley Willis Lease Finance Reports 95% ILC Names New V. P Operations: Delphia Hamms Manufacturing weakness spreads across USA—USA Today Globalnet's Woes Spin Cautionary Spending Tale-New York Times ### denotes press release --------------------------------------------------------------------------------------------- Comdisco Objection Announced SunGard, Inc. announced that it filed an objection with the U.S. Bankruptcy Court to the bidding procedures proposed by Comdisco, Inc. and Hewlett-Packard Co., on the grounds that the proposed procedures were unfair to SunGard and other potential bidders. The objection further affirms SunGard's bid to purchase the Availability Solutions business of Comdisco for $775 million in cash (subject to customary conditions). --------------------------------------------------------------------------------------------- United Capital Request Kit, I've been trying to reach United Capital concerning a vendor check that were returned NSF. These checks took awhile to make there way back to me and unfortunately I'm afraid I've missed my window of opportunity to collect from United. Do you or any of your readers know how to get in touch with someone at United. The phone numbers we had either are disconnected, constantly busy, or just ring endlessly. Any assistance would be greatly appreciated. Phil Duley Quest Financial Corporation 3151 Airway Ave. Ste. H-3 Costa Mesa, CA 92626 tel. 800-728-8873 fax. 714-918-5125 www.questfinancial.com ( Leasing News gave Mr. Duley this information: United Capital is being serviced under private label by ILC 888-452-7845, but it did not help his situation. We understand from insiders Spectrum Leasing is being run by Steve Dallas with several or many ex-United Capital employees. We believe the portfolio is being service by ILC, and other parts have been sold. There has been no news of a bankruptcy filing, and if United Capital is still operating, it is a skeleton crew, or perhaps an answering device as Mr. Duley has not been able to reach anyone. editor ) --------------------------------------------------------------------------------------------- Lindsey McLorg says, “ Goodbye.” Dear Kit: Today will be my last day at Mellon US Leasing. I would appreciate your redirecting your newsletter to my home e-address (as indicated in the cc above) until I surface elsewhere. The absorption of MUSL into GE Capital process is at the halfway mark, with today being 60 days post closing date of the sale by Mellon. The turn out the lights day for the San Francisco operations is October 5, 2001. I have been most appreciative of my daily Menkit - dose and hope that you can continue indefinitely what I imagine is a mostly rewarding but perhaps sometimes thankless endeavor . You are performing a real service to the leasing industry for which I thank you. As I leave US Leasing behind and look forward to a bit of a sabbatical while I figure out what comes next, it is worthwhile to note in passing that if US Leasing had made it to 2002, this Granddaddy of the leasing industry would have hit its Golden anniversary next year. Instead it must remain forever a 49er, which in the final analysis isn't the worst thing that could happen to a venerable San Francisco based institution now laid to rest! Again, thank you for your continuing service and happy trails to you. Best regards, Lindsey McLorg ( I asked Lindsey if I could publish her e-mail and she said yes. Here is another good person "on the street" and available. editor )) --------------------------------------------------------------------------------------------- 2001 ELA Survey of Industry Activity is here! ****************************** Considered by the Equipment Leasing Association as the “Bible” of leasing and finance industry, the 2001 Survey of Industry Activity captures virtually every measurable characteristic of a leasing operation, from new business volume to portfolio performance to profitability ratios-- and much more. It is advised by ELA, to make smart business decisions regarding your leasing operation, “you need to access the Survey.” Go to the ELA Store on ELA's website http://www.elaonline.com/ELAstore/index.cfm?fuseaction=view_product&prod_id=32 to order your copy of the 2001 Survey of Industry Activity today! Cost: Member - $295 Non-Member - $495 In addition, respondents and purchasers of the Survey will gain FREE access to the Interactive Survey of Industry Activity (iSIA). The iSIA allows you to search from among various benchmarking criteria and immediately view custom results on-line. Another feature announced today in the Thursday ELA Newsletter: PAYNET, Inc. announces the official launch of its PAYNET service for the commercial lending industry, taking advantage of the much-touted "second wave" of the world's technological evolution in commercial credit information. A cooperative network of commercial finance companies representing more than $160 billion net assets are committed to PAYNET's online database illustrating that shared data coupled with the power of the Internet is the future of the commercial credit industry. In exchange for sharing their data, the members have access to PAYNET's exclusive information products and services. There are a number of alerts to members to help with writing letters and getting involved in legislation, both on the nationial and local level, such as: California Tax Credit Meeting Scheduled October 17 ****************************** An ELA meeting with California Senate Revenue & Taxation Committee Chairman Jack Scott (D) has been scheduled in his Pasadena district office for 9:30 AM on Wednesday, October 17. ELA members are encouraged to take part in urging passage of ELA backed legislation before his committee that would give lessees an option to pass the 6% Manufacturers Investment Credit (MIC) to the equipment lessor. Please respond by email to dbrown@elamail.com if you and/or a colleague can participate in this important meeting. Include your name and company. ( Note: this is for ELA members only. I print this to show readers how active this association is for the entire industry, not just its members. editor ) --------------------------------------------------------------------------------------------- ( “The Company's commercial and industrial equipment and trailer leasing subsidiaries were sold in 2000 and are accounted for as discontinued operations and prior periods have been restated” thus its turn to profitability ) ### ##################### ######################## ############## PLM International Announces Second Quarter Results
SAN FRANCISCO, / -- San Francisco-based PLM International, Inc. (AMEX: PLM) today reported the results of its operations for the quarter and six months ended June 30, 2001. For the three months ended June 30, 2001, consolidated revenues from continuing operations were $2.2 million compared to $2.1 million for the same period in 2000. Operating income rose to $0.3 million, compared to $13,000 in the second quarter of 2000. Net income from continuing operations totaled $0.3 million for the second quarter of 2001 versus a loss of $17,000 for the same period in 2000. The Company's commercial and industrial equipment and trailer leasing subsidiaries were sold in 2000 and are accounted for as discontinued operations and prior periods have been restated. For the second quarter of 2000, discontinued operations produced net income of $0.6 million. Diluted and basic income per share from discontinued operations both totaled $0.08 for the second quarter of 2000. As a result of the foregoing, diluted and basic earnings per share both totaled $0.03 for the second quarter of 2001, compared to $0.07 for the second quarter of 2000. Consolidated revenues from continuing operations, during the first six months of 2001, totaled $5.3 million compared to $4.6 million in the same period of 2000. Operating income was $0.9 million compared to $0.5 million in the same period of 2000. Net income from continuing operations totaled $0.6 million versus $0.1 million for the first six months of 2000. For the first six months of 2000, discontinued operations resulted in net income of $0.5 million. Diluted and basic income per share from discontinued operations both totaled $0.06 for the first six months of 2000. As a result of the foregoing, diluted and basic earnings per share both totaled $0.08 in the first six months of 2001 and 2000. PLM International is a management company providing services to transportation, industrial, and commercial companies. The Company manages a diversified portfolio of over $500 million (based on original equipment cost) of transportation and related equipment for approximately 60,000 third-party investors. ### ####################### ###################### ################ Willis Lease Finance Reports 95% Increase in Net Income From Continuing Operations; Lease Revenue Up 27% in the Second Quarter
SAUSALITO, Calif.-- --Willis Lease Finance Corporation (Nasdaq:WLFC) and its affiliates today reported second quarter net earnings from continuing operations that increased 95% as lease revenue grew 27% over the prior year period. These results reflect the substantial growth of the lease portfolio over the last three quarters, the continued strong worldwide demand for the company's services and the benefit of lower interest rates. Second quarter net earnings from continuing operations were $3.0 million or $0.33 per diluted share on total revenue of $19.2 million. In the second quarter a year ago, net earnings from continuing operations were $1.5 million, or $0.21 per diluted share, on total revenue of $15.2 million. Including net results from discontinued operations, WLFC reported net earnings of $2.4 million, or $0.27 per diluted share, compared to net earnings of $1.9 million, or $0.25 per diluted share, in last year's second quarter. For the first half of 2001, net earnings from continuing operations increased 79% to $5.5 million, or $0.61 per diluted share, on revenues of $36.3 million, compared to $3.1 million, or $0.41 per diluted share, on revenues of $29.1 million in the same period last year. Including discontinued operations, net income totaled $4.7 million, or $0.53 per diluted share, in the first six months of 2001 compared to $3.5 million, or $0.47 per diluted share, in the like period of 2000. Leasing Activity Lease revenue grew 27% to $15.6 million in the second quarter and increased 25% to $30.1 million in the first six months of 2001 compared to the first six months of 2000. WLFC purchased $43 million of engines for its lease portfolio in the second quarter, $85 million in the first half of 2001 and $174 million in the past three quarters. In contrast, in the first six months of 2000, the company added $46 million to its lease portfolio. The lease portfolio at June 30, 2001, had a net book value of $473.3 million, compared to $356.9 million at June 30, 2000. "Over the past year the net book value of the lease portfolio has grown by 33% and it continues to perform very well," said Charles F. Willis, President and CEO. "The growth has been fueled by continued strong demand for leased spare engines, despite or perhaps because of the downturn in the global airline business. We closely monitor the demand for our engines and the payment experience of our lessees. Our off-rent and past-due receivable positions remain at normal levels. Based upon what I see happening, I'm still reasonably upbeat about our business prospects for the remainder of the year." Finance Activity Since the beginning of this year, WLFC has increased its revolving debt facilities from $275 million to $315 million, an increase of $40 million. "Continued expansion of our credit facilities is a priority for us. With the contraction in credit availability many companies are experiencing this year, we are pleased to have earned such a strong level of support from the global banking community," said Willis. In November of 2000, WLFC entered into an alliance with Swissair Group. As part of the alliance, Swissair Group subsidiaries purchased a 15% ownership interest in WLFC and acquired WLFC's interests in its spare parts and repair businesses. Consequently, results from the spare parts and repair businesses, are now reported separately as "discontinued operations" and prior-period results have been restated. Results from Continuing Operations Second quarter revenue from continuing operations was $19.2 million, up 27% from $15.2 million in the second quarter of 2000. Year-to-date, revenues increased 25% to $36.3 million from $29.1 million in the first six months a year ago. Lease revenue represented 81% of total revenue in both the second quarter of this year and last year, and 83% in the first half of both years. Gains on the sale of leased equipment accounted for the remainder. In the second quarter, lease revenue increased 27% to $15.6 million, compared to $12.3 million in the second quarter last year. The increase reflects the 33% growth in the lease portfolio to $473.3 million at June 30, 2001. Revenue from gains on the sale of leased equipment was $3.6 million from the sale of two engines, compared to $2.9 million in last year's second quarter. Second quarter general and administrative expenses from continuing operations increased 6% to $3.7 million compared to $3.5 million in the second quarter of 2000. For the first half, G&A expenses increased $721,000 or 12% to $6.9 million, with more than half the increase attributable to various one-time expenses. G&A expenses decreased to 24% of lease revenue this quarter compared to 28% of lease revenue in the same quarter last year. Second quarter net interest and finance costs increased 2% to $6.3 million compared to $6.2 million in the like quarter a year ago. Year-to-date, net interest and finance costs increased 5% to $12.4 million compared to $11.9 million for the same period last year. The higher interest and finance costs reflect increased borrowing to finance expansion of the lease portfolio which was largely offset by lower interest rates. "Average debt outstanding during the second quarter of 2001 was 15% higher than the comparable quarter of 2000, yet our interest expense was only 3% higher. Our effective average interest rate is significantly below year-ago levels, and we will benefit further if interest rates continue to drop," said Nicholas J. Novasic, Chief Financial Officer. Second quarter pre-tax earnings from continuing operations nearly doubled to $4.9 million including $3.6 million in gains on the sale of leased equipment, compared to $2.5 million including $2.9 million in gains on sale in the second quarter a year ago. Pre-tax earnings in the first half of 2001 increased 80% to $9.0 million, including $6.2 million in gains on sale compared to $5.0 million, including $4.9 million in gains on sale, in the first half a year ago. "As the lease portfolio has grown, the profit contribution solely from leasing operations has increased sharply," said Donald A. Nunemaker, Chief Operating Officer. WLFC accrued taxes at a combined rate of 39% of pre-tax income from continuing operations in the second quarter of both 2001 and 2000. Net earnings from continuing operations increased 95% to $3.0 million, or $0.33 per diluted share, for the second quarter of 2001, compared to $1.5 million, or $0.21 per diluted share, in the second quarter of 2000. Year-to-date net earnings from continuing operations increased 79% to $5.5 million, or $0.61 per diluted share, compared to $3.1 million, or $0.41 per diluted share, in the first six months of 2000. Discontinued Operations During the second quarter, WLFC sold 6 of the 10 Stage II engines from discontinued operations for a loss and wrote down the value of 2 of the remaining 4 engines due to a decline in the market value of the engines and their residual components. The loss on the sale plus the writedown comprised the majority of the loss of $606,000 or $0.06 per diluted share in the quarter. The year-to-date loss from discontinued operations totaled $785,000 or $0.08 per diluted share compared to profits of $474,000 or $0.06 per diluted share for the same period a year ago. The net book value of the remaining 4 engines in discontinued operations is approximately $1.3 million. Of these engines, two are currently on lease and three are subject to an agreement whereby the engines may be sold to a subsidiary of the Swissair Group at WLFC's option at combined prices equal to $800,000. Solid Balance Sheet At June 30, 2001, WLFC had 111 commercial jet engines, 4 aircraft parts packages and 6 aircraft in its lease portfolio from continuing operations with a net book value of $473.3 million. The lease portfolio increased 33% in net book value from $356.9 million at June 30, 2000, when it consisted of 92 commercial jet engines, 4 aircraft parts packages and 6 aircraft. The company had $34.2 million of restricted and unrestricted cash and equivalents at June 30, 2001, compared to $25.4 million at December 31, 2000 and $25.9 million at June 30, 2000. The company's funded debt to equity ratio was 3.5 to 1 at June 30, 2001, compared to 3.2 to 1 at December 31, 2000 and 4.1 to 1 at June 30, 2000. Assets totaled $520.4 million at June 30, 2001, $455.9 million at December 31, 2000 and $426.7 million a year ago. Stockholders' equity was $99.6 million at June 30, 2001, up 36% from year ago levels. Stockholders' equity equates to a book value of $11.19 per share on a diluted basis. About Willis Lease Finance Willis Lease Finance Corporation leases spare commercial aircraft engines, rotable parts and aircraft to commercial airlines, aircraft engine manufacturers and overhaul/repair facilities. These leasing activities are integrated with the purchase and resale of used and refurbished commercial aircraft engines. ### ###################### ################### ################## --------------------------------------------------------------------------------------------- Globalnet's Woes Spin Cautionary Spending Tale By SUZANNE KAPNER, NEW YORK TIMES
LONDON, SAN MATEO, CALIF.. — Dismissing employees and selling subsidiaries as it runs out of money, Globalnet Financial.com looks like another Internet venture going bust in a hurry. But instead of quietly closing shop, the company is the center of a takeover battle for stakes it owns in a few promising businesses, including a broker of shares in initial public offerings and an online seller of personal pensions, life insurance and other financial services. The tussle is a cautionary tale of the consequences of freewheeling spending sanctioned by the Internet boom. At issue is whether Globalnet, which is based in Santa Monica, Calif., but does most of its business in Britain, suffered from mistakes or malfeasance. Did the executives make some bad investments, spending $120 million on deals that generated little return, or did they breach their fiduciary responsibility to shareholders through a series of insider transactions? Arguing the latter, a group of angry shareholders are trying to oust management by backing a takeover bid by AISoftware, a software company based in Italy. AISoftware today made an unsolicited offer of $13.7 million in stock for Globalnet. Globalnet managers, who deny any wrongdoing and say they have consistently acted in the best interest of the company, said they supported an earlier $9 million cash takeover offer from NewMedia Spark, a British company that invests in start- ups. The companies have shared some directors, have some joint investments and have offices in the same building in London. Ron Goldie, Globalnet's chief operating officer, said today that the board backed NewMedia's bid as the only tangible offer on the table. Michael Whitaker, NewMedia's chief executive and until recently a Globalnet board member, said the close relationship of the two companies could benefit Globalnet's shareholders. "Because NewMedia Spark has a number of investments in common with Globalnet, we are better placed than anyone else to realize value from those assets," he said. Investors must decide by Aug. 22 whether to sell their shares to NewMedia. As the debate intensifies, dissident shareholders are questioning some recent deals, like one in which Globalnet sold UK-Invest, its flagship financial Web site, to Advanced Financial (news/quote) Network for £800,000, or $1.1 million, in stock. As part of the deal, Globalnet agreed to invest £700,000 in Advanced Financial, in which NewMedia Spark also owns some shares. One of the dissident shareholders, Peter Fuhrman of New York, says that Globalnet is spending its precious cash to prop up NewMedia's portfolio. Mr. Goldie defended the agreement with Advanced Financial by saying that the only way Globalnet can sell assets in such a competitive market is to contribute its own money to the deal. The takeover debate comes amid a simmering battle over earlier management decisions made after the Internet bubble burst last year and while Globalnet's share value plunged more than 90 percent. Dissident shareholders, for example, have challenged Globalnet's decision to pay $1.9 million in severance to three top executives, even though its remaining cash reserve of $3 million is not enough to keep operations afloat or to cover liquidation costs. They also wonder why executives adopted a "poison pill" — a decision to issue new shares to dilute the stake of an unwanted suitor — if they are truly interested in selling the company to the highest bidder. Roger Alford, a senior research associate in the financial markets group of the London School of Economics, said poison pills protected management at the expense of shareholders. "It gives them a trump card," he said, by allowing management to negotiate not necessarily with the highest bidder, but with one who promises to "safeguard their jobs or pay severance packages." |