Kit Menkin’s Leasing News

www.leasingnews.org Friday, June 7, 2002

Accurate, fair and unbiased news for the equipment Leasing Industry

 

Headlines----

Equipment Leasing Association Survey: 85% Recommend Leasing

Centerpoint Financial, Colorado Still Not Funding All Deals

Funding Tree---Up-Date

Tyco Ex-Chief Is Said to Face Wider Inquiry Into Finances

Tyco's stock up 8% since CEO quit

Over 300,000 Small Businesses Recruit or Hire Employees Online

New Amtrak president proposes reorganization and more public disclosure

Jon S. Haas Joins Cyence

 

### Denotes Press Release

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June 11th Hanover, Maryland

 

Equipment Association of Equipment Lessors is holding its Fourth Annual (all you can eat) Crabfeast in Hanover, MD.

 

If you are a member of any of the leasing trade associations, you

may attend this event for $65. ($90 nonmembers).

 

Over 200 expected, perhaps more for this networking food fest.

 

For additional information,

 

call the eael office at 914 381 5830.

 

Amfnyc@aol.com

http://www.eael.org/event_calendar.htm#Crab%20Feast

 

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Equipment Leasing Association Survey: 85% Recommend Leasing

 

 

Majority of Financial Executives Lease Equipment; National Survey Details Importance of Strategic Financing Methods

 

A study conducted by Financial Executive Magazine and the Equipment Leasing Association (ELA) finds that 85 percent of senior financial executives agree that leasing equipment is a good business strategy for meeting the demands of a growing company. Results, as detailed in the June 2002 edition of Financial Executive Magazine, show
that 85 percent of the respondents’ companies currently lease equipment, with most respondents leasing computers, telecommunications equipment, office equipment, material handling and industrial equipment.

When polled as to the challenges they face in financing equipment, 54 percent stated the greatest challenge is cash flow limitations. Financial executives take advantage of leasing to meet this demand. Results show that the executives will continue to utilize leasing, with 78 percent of respondents stating they plan to finance equipment in the next 12 months.

“An overwhelming majority of financial executives are using leasing to meet their business challenges,” noted ELA President Michael Fleming. “Equipment leasing allows these financiers to grow their business while defeating cash flow problems.”


Survey participants cited the following as benefits of leasing:
     Ability to have latest equipment      59 percent
     Asset management          44 percent
     Consistent expenses          33 percent
     Manage company growth          33 percent
     Lower costs               33 percent
     Transferring risk to lessor          33 percent

ELA and Financial Executive Magazine conducted this survey to understand the equipment acquisition strategies of financial executives. The study specifically sought to identify how the executives’ companies currently finance equipment and their business attitudes toward leasing as a strategic financing option. Respondents included CFOs, vice presidents of finance, controllers, treasurers and purchasing manager, with 93 percent respondents’ companies operating for more than 15 years. The survey was conducted on-line.

To obtain a copy of the survey, please visit the Marketing Assistance section of ELA Online at http://www.elaonline.com/Mac/MembersOnly/researchBg/custrsrch.htm

Sites of Reference:
http://www.elaonline.com/Mac/MembersOnly/researchBg/custrsrch.htm

CONTACT:
Kristina Boehk
Hill and Knowlton
Phone Number: 202-944-5181
E-mail: kboehk@hillandknowlton.com

 

 

(Equipment Leasing Association ELT’s News)

 

 

Centerpoint Financial, Colorado Still Not Funding All Deals

 

We were told today that Centerpoint is packaging together deals that they

currently have in house (submitted, approved & funding)and are trying to

sell them as a "PORTFOLIO" to Republic in SC. We were also told that

Centerpoint will not be funding ANY transactions, including ones such as

ours that were ready to fund last Monday. That sucks!

 

-dedicated reader-

 

 ---

 

Centerpoint: I do not know if you are aware, but they are refusing to fund

deals even if they cannot be re-approved. We have a deal in funding. It

was supposed to fund 2 days before they made their 1st announcement. Now

they are saying they will not. How could this be for a former UAEL

President. That is not integrity nor is it legal. I would expect more from

such exprienced people. We have vendors whom will sue us now and a customer

who has a enforceable contract

 

( name with held )

 

(Gordon Roberts, president of Centerpoint Financial has not returned telephone calls after two days. Chuck Brazier said he could make not comment, as did

previous COO Randy Schiell. Major investor John Otto would make

no comment. Past presidents of the United Association of Equipment Leasing

have had their share of “bad luck,” as well as the rest of the industry. Time

will tell all; sorry, that is all we know. Editor )

 

 

Funding Tree---Up-Date

 

The fourth hearing of the California Department of Corporations hearing

regarding the lack of a license and activities regarding “cease and desist”

has been postponed.

 

Leasing News has received some reports than vendors have been paid,

and an equal number of reports, that is, complaints, that vendors have

not been paid.

 

The Bulletin Board complaint remains valid:

 

http://www.leasingnews.org/bulletin_board.htm

_______________________________________________________

 

Tyco Ex-Chief Is Said to Face Wider Inquiry Into Finances

 

By ALEX BERENSON and WILLIAM K. RASHBAUM

New York Times

 

 

 

he investigation of L. Dennis Kozlowski, the former chief executive of Tyco International, by Manhattan prosecutors has widened to include whether Tyco owned or paid for the upkeep of homes Mr. Kozlowski used in Florida, lawyers close to the inquiry said yesterday.

 

As prosecutors investigate whether Mr. Kozlowski used company money for personal expenses, they are turning up a web of transactions that must be examined further, these people said. These include Mr. Kozlowski's use of company loans and money to buy artwork, and company money to buy his apartment in New York and possibly one of his homes in Florida.

 

 

SEC Begins Investigation of Tyco Ex- Chief

 

 

NEW YORK (Reuters) - The Securities and Exchange Commission (news - web sites) (SEC) has opened a preliminary investigation into reports that Tyco International Ltd.'s former chief Dennis Kozlowski didn't pay taxes on artwork and that he used a company loan to buy the art, the Wall Street Journal reported.

 

 

In its online edition on Thursday, the Journal also said that New York prosecutors are now looking into whether Kozlowski improperly used company funds to buy his $18 million New York apartment and whether he got interest-free loans from the firm to buy art.

 

Kozlowski resigned from Tyco, one of the world's largest conglomerates, on Monday. A day after, he was charged with conspiring to avoid paying more than $1 million in sales tax on paintings by masters such as Monet and Renoir.

 

The Journal said the New York inquiries are part of a widening probe of Kozlowski's dealings by Manhattan District Attorney Robert M. Morgenthau.

 

Citing people familiar with the situation, the Journal said one area that prosecutors are exploring is whether Kozlowski failed to pay income tax on any company funds used for his personal benefit.

 

Prosecutors are also looking if Tyco did pay for the apartment and extend the loans. Failure to disclose these could be a violation of federal securities laws. The Journal said the inquiries remain at a preliminary stage and was not clear whether they will lead to any charges.

 

Kozlowski ran Tyco for nearly a decade and was instrumental in building it from a little-known company into a sprawling international conglomerate through hundreds of acquisitions valued at about $62 billion.

 

AMI Partners' Study Reveals Human Resource HR- Related Spending by U.S. Small Businesses to Exceed $50 Billion in 2002-A Catalyst of Rebound"

 

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Tyco's stock up 8% since CEO quit

 

By Jeffrey Krasner, Boston Globe Staff

 

Tyco shares yesterday bounced back for the second day in a row, gaining 53 cents to close at $17.30 amid a broad market rise that pushed the Dow Industrials and Nasdaq averages up about 1.1 percent each.

 

 

Tyco's shares have gained nearly 8 percent since Monday, when chairman and chief executive L. Dennis Kozlowski resigned as Manhattan prosecutors prepared to release an indictment charging Kozlowski with failure to pay $1 million in sales taxes on the $13 million purchase of fine art paintings.

 

The stock, at $21.95 on Friday, closed Monday at $16.05, down almost 27 percent.

 

Company officials said Tyco continues to cooperate with Manhattan District Attorney Robert M. Morgenthau and is forging ahead with its own investigation of Kozlowski's alleged efforts to skirt New York sales taxes by shipping paintings to New Hampshire, and later sending them to his Fifth Avenue apartment. Kozlowski also shipped empty boxes to Tyco facilities in New Hampshire, to falsely show other paintings had been sent there, according to the indictment.

 

For Tyco, the clock is ticking.

 

The company has promised to spin off its CIT Group finance unit, either through a sale to a buyer or an offering of shares to investors, by the end of the month. CIT is key to Tyco's plans to pay down some of its $27 billion in debt.

 

But some analysts wonder whether the price a prospective buyer or investor would pay for CIT has declined in the wake of Kozlowski's departure and criminal indictment. Moreover, a public offering to investors could have other negative implications for Tyco, because the Bermuda-based conglomerate carries the New York division on its books for more than $11 billion.

 

Taking that off Tyco's balance sheet could put the company close to violating loan covenants regarding capital ratios, Prudential Securities analyst Nicholas Heymann told Bloomberg. ''If that were to occur, you could have a lot of other issues come to bear,'' he said, noting that holders of convertible bonds could force the company to repay their debt.

 

Jeffrey Krasner can be reached at krasner@globe.com.

___________________________________________

 

NEW YORK--AMI Partners:

Temporary Employment/Staffing Spending Is Expected To Drive 50%

($25.3 Billion) Of Total HR Related Spending, Followed By

Outsourced HR Services ($17.6 Billion) and Employee Training

($8.0 Billion)

Over 300,000 Small Businesses Recruit or Hire Employees Online and

Some 200,000 Small Businesses Purchase Human Resource Services

U.S. small businesses (SBs)(1) will spend more than $50 Billion in 2002 on human resource (HR)-related services such as temporary staffing, employee training, and other outsourced services, indicating that the SB market will be a significant contributor to the awaited U.S. economic rebound.

The above findings were released today by New York-based Access Markets International (AMI) Partners, Inc., a leading consulting firm specializing in IT, Internet, telecom and business services market intelligence, trends and strategy with a strong focus on global small and medium business (SMB) enterprises.

While the nation's unemployment rate stood at 6.0% in April, AMI-Partners' study reveals that U.S. small businesses will serve a robust engine of the U.S. economic growth as evidenced by some 3.8 million SBs that plan to hire additional employees.

Alternative Staffing "The staffing industry business cycle is extremely sensitive to a downward shift in the economy," observed Jackie Chan, a Research Analyst at AMI. "As the economy accelerates, temporary employment is the first to pick up as companies want to ensure the improvement is sustainable." AMI estimates that U.S. SBs spend approximately $25.3 Billion annually on alternative staffing options, and projects such spending to grow at a compound annual growth rate (CAGR) of 13% during 2001-2005.

Having employees available on a temporary basis enables SBs to flexibly adjust their labor force, maintain lower operating costs and respond adeptly to changing business demands in a time of uncertainty. Kelly Services, one of the largest temporary staffing companies in the U.S., has expanded beyond placing clerical temporary help to providing industry specialists on a temporary basis. Firms such as Manpower Inc., a leading workforce solutions firm, also recognizes such opportunities and offers both flexible and transitional staffing to accommodate HR requirement fluctuations associated with an uncertain business climate.

Online Recruitment/Purchasing AMI-Partners' study further revealed an estimated 300,000 SBs have turned to the Internet to recruit employees, while another 200,000 SBs have purchased HR services online. AMI expects these numbers to double in 2002, with the trend reflecting the evolving nature of staffing and an opportunity for SBs to benefit from adopting new models of HR operation. Staffing companies like Kforce Inc. (previously Romac International) and TMP Worldwide (through its acquisiton of Monster.com) are both embracing the Internet with a hybrid strategy.(2)

Outsourced Services "Provisioning outsourced services is emerging as a critical driver of new business activity for many staffing companies," commented Ms. Chan. "As business needs and HR management become more complex, SBs are outsourcing services to staffing companies who offer alternative staffing options as well as full-service HR solutions," according to Mr. Eric Shuster, Executive Vice President at AMI.

The desire for a one-stop-shop has helped fuel a $17.6 Billion HR-related outsourced services market among SBs. AMI estimates that more than 400,000 SBs outsourced HR services in 2001, including payroll, liability management and compliance, benefits administration, recruiting, employee education, and other miscellaneous services like records management and exit interviews. Market leaders Administaff and Kelly Staff Leasing have already begun to offer such a wide range of services functioning as an off-site full service HR department for many SBs (often referred to as a professional employer organization--PEO).

Employee Training According to AMI-Partners, the issue of skills development has become a primary concern as employers face increased national and global competition for goods, services, and labor. About 30% of the SB owners in AMI's annual study indicated that employee education and skills enhancement would be a "very important" business focus in 2002 and beyond. This appears to be supported by the half-million U.S. SBs that spent a total of $8 Billion on employee training and development in 2001. AMI forecasts a 14% annual spending growth rate during 2001-2005, indicating robust opportunities for outsourced and online employee education and training services for HR services firms.

Market Segmentation Segmentation of the SB market provides further evidence of the need for HR service providers to deploy a focused marketing approach to find, target and service high-value SBs. AMI-Partners has segmented the U.S. SB market into four highly distinguishable and actionable clusters. AMI has found that there is a direct correlation between an SB's adoption of information technology (IT) solutions and its propensity to utilize alternative staffing and outsourced HR services.

AMI's segmentation framework successfully identified 7% of the U.S. SB market (Tier 1--high IT adopters) who spent more than double the typical SB on staffing services, outsourced HR related services, and employee training. By executing a segmented market strategy, HR service providers can target specific small businesses according to their lifetime value with respect to HR services. AMI believes the diversity and sophistication of today's SBs will drive successful HR service providers to deploy focused campaigns that flex all aspects of the marketing mix, utilizing a segmented market execution strategy.

About Access Markets International (Partners) Inc. (AMI-Partners)

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital and actionable market intelligence, focusing on global small medium business (SMB) enterprises. The AMI-Partners mission is to empower the firm's clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI-Partners was founded in 1996 under the name of Access Media International (USA), Inc. (AMI-USA) by Andy Bose, formerly a group vice president at IDC. Since its inception, the firm has built a world-class management team spanning 10 to 25 years in IT, telecommunications, online communications, and multimedia. The team is comprised of individuals who have formerly built careers at leading companies such as Cablevision, Compaq, IBM, IDC, JPMorgan, McKinsey and other industry-leading companies.

AMI-Partners has shaped the go-to-market SMB strategies of more than 130 leading IT, Internet, telecom and business services companies in the last five years. The firm is well known for its IT and Internet-adoption-based segmentation of the SMB Markets; for its annual retainership services based on global SMB tracking surveys; and for its proprietary database of several thousand SMBs in the U.S., Europe, Asia-Pacific and Latin America. The firm invests significantly in collecting survey-based information with several thousand SMBs globally through the industry's most comprehensive SMB survey instrument, and is considered to be the leading benchmark for tracking SMB trends.

For more information on AMI-Partners please visit www.ami-partners.com or call 212-944-5100.

(1) A small business is defined as having 1 to 99 total employees, located out of the home (commercial-based), and a non-franchise entity of a larger corporation.

(2) Deploying both Internet-based and traditional recruitment efforts.

CONTACT:

AMI-Partners, New York

Nancy Carty, 212/944-5100 x100

ncarty@ami-partners.com

SOURCE: AMI-Partners, Inc.

 

 

New Amtrak president proposes reorganization and more public disclosure

 

By Laurence Arnold

ASSOCIATED PRESS

 

WASHINGTON – Three weeks into the job, Amtrak's new president says the railroad has a $200 million shortfall and needs a loan to keep operating next month.

 

David Gunn, who met privately Thursday with Amtrak's governing board, also proposed steps to reorganize management and release more information to the public about Amtrak's finances.

 

Gunn is optimistic the loan will come through and Amtrak spokesman Bill Schulz urged passengers holding reservations in July and beyond to keep them.

 

Gunn, who previously ran transit systems in New York City and Washington, took over Amtrak on May 15, succeeding George Warrington.

 

In a letter Wednesday to employees, Gunn said Amtrak faces a $200 million shortfall from now until Sept. 30 and plans to borrow to fill that gap. As collateral, Amtrak can use $200 million of the federal appropriation it expects to receive when the new fiscal year begins in October. Amtrak has asked Congress for $1.2 billion.

 

Gunn wants to consolidate Amtrak's three railroad operating divisions – Intercity, Northeast Corridor and Amtrak West, which now are distinct business units – within company headquarters in Washington.

 

Under the plan, Schulz said, the existing division offices in Chicago, Philadelphia and Oakland, Calif., will remain open, but only to handle local operations, not to make policy decisions.

 

The intent, Gunn said in a memo to employees Wednesday, is to move Amtrak "back to a traditional railroad structure. ... We will have an operating department, a mechanical department, an engineering department, etc."

 

Gunn also wants to reduce the number of "vice president" titles from 84 to about 20. The move is not immediately designed to slice jobs or save money, but to focus the company on its basic role as a railroad operator.

 

Gunn intends to release detailed information each month on Amtrak's financial condition.

 

Schulz said Gunn will outline the governing board's response to the proposals in a memo to employees on Friday. Several board members did not return phone calls seeking comment.

 

Paul Weyrich, a critic of Amtrak management who served as vice chairman of the congressionally appointed Amtrak Reform Council, praised Gunn's initial moves.

 

"He's faced with a dilemma where he just came into office and if he doesn't get the bailout money, he won't have the time to implement the kind of reforms that everybody is hoping he'll be able to implement," Weyrich said.

 

On the Net:

 

Amtrak: amtrak.com

 

______________________________________________________________

 

John S. Haas, CLP, Joins Cyence

TORONTO –– Funder OnLine Corp,the Financial Web Services application and technology solutions provider recently recognized as a winner of the “.NET Award of the Year” at the Microsoft Canada Innovation Awards, is now known as Cyence International. As a member of the Microsoft First Wave Program for the .NET platform in Canada, Cyence International will continue its focus of delivering high quality innovative solutions to the global equipment finance industry.

“The name Cyence is a combination of Cyber and science, and is a creative way of defining and expressing our strengths,” said Greg McIntosh, COO of Cyence International. “We will always be a core solutions provider to the equipment finance industry. Our new name, bringing together the worlds of science and digital technology, adds to that business expertise by showcasing the broad range of our technical knowledge and capabilities.”

 Cyence International enables leasing companies to complete the entire financing process online in minutes. Cyence International brings a unique combination of long-term strategic vision, technical knowledge and leasing and financial expertise to its clients/partners.

 

Well-known leasing personality John Haas has recently joined Cyence, with

a news media release expected soon regarding the announcement.

About Cyence International

Cyence International Corp. is a specialized financial services technology company fcused on providing the global equipment finance industry with Internet based technology solutions to both financial institutions and manufacturers and distributors.

Cyence International’s ExpressOS™ solution offers a suite of lender-based software and hardware technologies that have been designed, tested and proven in the global marketplace over the last six years. Cyence International’s technology has been developed on the strength of customer demands for products that help reduce operating costs while increasing market size and penetration. The result is high quality e-business products that encompass sales origination, deal structure, credit adjudication, document management, asset management, as well as integration to credit bureaus and back-end systems.

For more information, visit the company’s Web site at www.cyence.com.

 

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