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BSB
No More Bruce
Zwillger called me to let readers know the security officers from Unicapital showed
up first thing this morning, turning off all computers, seizing all records, and
asking everyone to leave. He knows about files and cases and will get to everyone
once the telephone are installed at his new place of business. He wanted all his
friends and people he knows that he and his staff will be opening Procure Financing
Services. They were expecting this, but thought with the announcement yesterday,
things would be done in a more orderly fashion. Although he is the founder and
president, he had no idea what was going on and assumes Unicapital is closing
all its divisions in this manner.
Mark Speros: TO MY FRIENDS IN AND OUT OF THE LEASING INDUSTRY Unicapital
has, in it's infinite wisdom, decided to close the office of BSB Leasing, effective
at 9:00 AM today. Some of the employees are being put on "Administrative Lease"
(with pay) for a limited (unknown) time. Five of us (yours truly included) are
being FIRED (why they chose to use that term rather than "laid off" or some other
term without the negative connotation I don't know) effective today. I hope they
give ME as a reference sometime...I'll bury them.
While I could probably retire (if I don't eat and just live off the fat of the
land), I'd go nuts sitting around the house, so it's back into the job market
for me. If someone asks if you want to "Super Size" your meal, take a close look...it
could be me. If
you would like to keep in contact, here is some contact info for you:
ADDRESS: 2566 W. 110th PLACE WESTMINSTER, CO 80234 PHONE:
303-439-2206 CELL PHONE: 720-231-2567 E-MAIL: MSPEROS007@AOL.COM
I want to thank you all for your friendship and support over the years. It truly
means a lot to me, especially at this time. Best
of luck to you all. Mark
Speros FORMER Unit Credit Manager 303-329-0227 Ext. 247
From one of the many Unicapital Employees who read Leasing News:
Thank you for the quick updates!! I get news(what little info. we do get) from
your emails before I hear anything at the office. Well, I've got to go to the
1:30 meeting, so I can get confirmation that the info. I read in your email is
correct.
Have a great week!!, Prefer
to be totally anonymous
Financial Pacific to Close Affinity---first of December. Ted
Brownigg is calling all brokers who send business to Affinity to let them know
the 18 month try at this type of business was not for Financial Pacific. The margins
were not there and it was a step away from their niche in the market place. A
formal press release will be sent out soon. Ted
had asked me to hold this as he was calling on his brokers and people they are
doing business with...but if the news started to hit the streets, I told him I
could no longer hold the news. Ted was intending to call all his people first
and not for you to learn from Leasing News. The
news is on the streets, and a more formal announcement will be coming from Affinity.
Joe Bonanno's Profound Comments
With all of the problems today in the industry, I think people need to hear about
what allegedly happened at First Sierra and learn the lesson from it
Presuming and not assuming (note the difference) that Charlie Lester's account
is correct, the only surprise in the fall of First Sierra was that it lasted as
long as it did. I only hope that people can learn from this, not use 20/20 hindsight
to be unconstructively critical (what difference does it make now, First Sierra
as the industry knew it is history) and that this industry will move forward and
that people in the industry, brokers and funders alike, must use their best efforts
to be certain that something like that never ever happens again. Joe
Bonanno, NAELB Legal Counsel attyjgb@aol.com>
Bob Teichman on Sierra Cities Story
I have been getting calls about it ever since it appeared. The general reaction
has been positive, even though you exposed a lot of dirty laundry. I hope this
will be beneficial for the industry, because our efforts to control unethical
behavior through mechanisms such as the Code of Ethics and enforcement devices
such as Standards Committees have been only partially successful. There
will always be bad apples. NAELB seems to be taking some effective steps towards
getting rid of some of them. We in the industry may have to start educating our
customers as well as educating ourselves. Some lessors already have websites with
extensive consumer sections where they provide practical information about what
consumers should look for, and what they should avoid. Maybe the associations
should take over that task and publish consumer information on their own websites
and in printed form. Our
associations should promote a good image of our industry to users of lease financing
as well as providing services and education to members of the industry itself.
To the extent that we provide good information to consumers and others ourside
the industry, we will have made good progress regulating ourselves. If we fail
in this, we will have regulation imposed upon us. Bob
Teichman, CLP Teichman Financial Training 3030 Bridgeway Sausalito, CA 94965 Tel: 415-331-6445 Fax: 415-331-6451 e-mail: BoTei@aol.com
Did you notice in the press release that VerticalNet is moving everything off
balance sheet? This makes the company just another super broker since it will
not hold leases in its own portfolio or do securtizations.
Name Witheld at Sender's Request.
Kit,
I have been reading your newsletter regularly and must admit that the relevance
of some articles is occasionally lost on this Canadian leasing guy. (Overall I
do find it a good way to keep up with industry trends and gossip.)
I was happily surprised however, to see mention of a Canadian event in today's
posting. Even if it did occur 115 years ago. Thanks and keep up the good work!
Best
regards, Mike McPherson WESTPORT
LEASING CORPORATION Vancouver, Canada mikemc@westportleasing.com
52 Leasing Companies Major Changes Affinity
Leasing, Washington ( 12/2000 to close ) American Business Leasing ( gone ) Balboa Capital ( Founder Byrne "...office available any time he wants to use it" ). The Bancorp Group, Inc. (Southfield, MI) ( no longer in business ) Bankvest (bankrupt) Bombadier ( reported having problems, not confirmed ) BSB Leasing (11/2000 closed, no longer in business ) Charter Financial ( purchased by Wells Fargo 9/5/2000 ) Colonial Pacific (11/98) purchased by GE Capital 5/2000 no more re-brokered applications, except from one or two sources, such as Steve Dunham's Leasing Associates ) Commerce Security ( 9/99 closed to leasing broker program )(11/99 last fundings) Comstock Leasing ( 3/2000 Unicapital then Linc and discontinued operation this date ) Copelco ( 4/2000 sold to Citibank/10/2000 stock down rated/10/2000 ceases broker business, many complaints in manner turning off faucet ) Creative Capital" of Bloomfield Hills, MI. ( shut-down 3/2000 ) Dana ( sold off, active as captive ) DVI Capital ( out of broker ) El Camino Leasing, Woodland Hills, Caifornia (10/2000 No longer taking broker business ) eLease ( June/July/2000 senior management changes ) FMA Finance ( reportedly closed to brokers ) Fidelity ( 4/2000 acquired by EAB, a wholly owned subsidiary of ABN AMRO Bank N.V., headquartered in the Netherlands, raising funds ) Finova ( out of market place )( 10/11/2000 Dow Jones headlines "Finova Stock Falls As Buyout Hopes Wane 10/25/2000 Dow Jones notes stock falling and problems at Finova 11/3 Announces they will discontinue business, sell units )) First State Bancorp, Albuquerque, N.M ( 3/2000 sold leasing division-$64 million---) Franklin Leasing, Des Moines, Iowa--owned by Liberty Bank-- (2/2000)-no longer writing leases ( limited by regulations and leases are for sale ). Golden Gate Funding ( 2/99 purchased by Westover Financial ) Heller Financial's Commercial Services Unit ( 10/99 purchased by CIT ) Imperial Credit Industries (ICII) ( sold portfolio ) Japan Leasing Credit claims ( JLC --6/99 purchased by Orix ) Lease Acceptance Corp---( ceases broker business 7/26/2000 ) Leasing Solutions ( bankrupt ) Liberty Leasing ( closed, California company ) Linc Capital ( out of vendor and broker business, Nasdaq halts stock sales, $13.4 loss last quarter,10/2000 assets for sale ) Lyon Credit Corporaton ( 9/99 purchased by Hudson United Bancorp ) Manifest Group--( 9/1/2000 purchased by US Bancorp Leasing and Financial, "...a win for all the parties involved," Brian Bjella. Matsco Financial ( purchased by Greater Bay Bank ) Merit Leasing ( gone ) Metwest Leasing, Spokane Wa. ( 9/2000 advising brokers that they have run out of funds so they are unable to fund a transaction we have there for funding. 11/2000 Metwest Leasing Spokane, WA. is pulling the plug, confirmed by five sources. ) Metrolease--reports closing operation,John Blazek at Evergreen Leasing, Hathcock losing assets, will not confirm nor deny; many serious rumors of serious fraud floating around the marketplace, including debt to Textron Financial.) NationsCredit, Business Leasing Group (1/29/99 sold to Textron**) *"The Business Leasing Group of Nations Credit was sold to Textron and we still do broker business," Jim Merrilees, very well respected individual in the leasing industry.. NIA National Leasing ( 3/2000 purchased by Lakeland Bancorp ) New England Capital ( sold to Network Capital Alliance a division of Sovereign Bank. Sovereign did hire two people who will run a sales office in CT, doing basically the same deals with the same people as before. Little will change in that aspect. Newcourt ( sold off ) Onset Capital ( Irwin buys 87% equity ) Orix 10/2000 "long-term Outlook has been revised from Stable to Negative" Credit Allianchat it has changed its name to ORIX Financial Services, 9/2000 Japanese Bank President Committs Suicide (Orix is a 14.7% shareholder in bank having problems ), ( 8/2000 closes small ticket vendor division in Portland, Oregon, "Business as usual (in New Jersey and with brokers)," says Steve Geller 11/8 New President at Orrix appointed ) Phoenix ( both divisions ) Republic Leasing, South Carolina 9/27/2000 ( "The expected result will be a sale of Republic Leasing"---Dwight Galloway ) Rockford ( sold to American Express ) Scripp Financial ( 6/29/2000 ( purchased by US Bancorp ) SDI ( closed to broker programs ) SFC Capital ( 9/15/2000 purchased by Trinity Capital ) SierraCities (11/2000 acquired by Vertical Net Credit ) T&W, Washington ( bankrupt, lost their listing ) Transamerica ( for sale, but no buyers, so taken off marketplace, no longer for sale ) Unicapital ( $11.4 million first quarter loss chairman,CEO,CFO resign, 38 employees cutback, BofA extends credit to November 20, as Unicapital closes down divisions, going down the tubes ). USA Capital Leasing ( gone-bk )
any corrections, additions, comments will be appreciated. We are presently working
on dividing the list into last twelve months and prior.
How GE/Colonial Pacific Is Handling On Line Application Consumer Credit Procedures
-- Please
review the attached announcement of how GE/CPL will handle credit bureau authorization
going forward. Please review and give me a call if you have any questions. I have
also included a portion of the ELA E-Leasing newsletter for review.
*********** The E-Leasing Newsletter is SPONSORED by: ************* Nassau Asset Management Recovery and Remarketing Specialists 1(800)462-7728 or 1(800)4-NASSAU GO HERE>>>>>> http://www.nasset.com WE GET RESULTS!!!!!!!!! Servicing The ELA for more than 10 years!!!!!! ******************************************************************* ******************************************************************* ******************** FTC Staff Opinion Letter Impacts Leasing Business ******************** The Equipment Leasing Association wants to inform its members again that The Federal Trade Commission ("FTC") recently issued a staff opinion letter that is important to members of the Association. The opinion relates to the application of the Fair Credit Reporting Act ("FCRA") to the extension of credit for commercial purposes.
Specifically, the issue raised was whether a "permissible purpose" exists under
the FCRA for a business credit grantor to obtain a consumer report on an individual
who is a principal, owner, or officer of a commercial loan applicant (a sole proprietorship,
partnership, or corporation), or who signs a personal guarantee in connection
with a commercial credit application by a third party. The opinion found there
is no such permissible purpose under the FCRA. The opinion confirms that the permissible
purpose requirement will be satisfied only where a business credit grantor receives
written authorization from the individual pursuant to 604(a)(2) to obtain the
consumer credit report.
As an illustration, the staff opinion is significant to ELA members who enter
into a leasing or lending transaction with a small business and desire to obtain
a credit report on an individual who will provide a guaranty of the small business'
obligations under the lease or the loan."
It is unclear from the opinion and the FCRA whether telephone or internet authorization
would satisfy the written authorization requirement.
ELA members are urged to review with their legal counsel the potential ramifications
of this FTC staff opinion letter for their specific business activities.
After you consult with your legal counsel, please inform Steve Fier, ELA's Vice
President for Federal Government Relations, if the FTC Staff Opinion creates compliance
problems for your company. Please also advise Steve as to the general nature of
any compliance problems. The
Opinion can be found at www.ftc.gov, by clicking on "Business Guidance," then
"Fair Credit Reporting Act," then "Staff Opinion Letters" then looking under Section
604(a)(3)(A), Tatelbaum dated July 26, 2000. CONTACT:
Steve Fier ELA Phone Number: 703-516-8369 E-mail: sfier@elamail.com November
7, 2000 As you may know, the Federal Trade Commission (FTC) recently issued a
staff opinion letter regarding access to personal credit bureau reports (CBR's)
in commercial transactions under the Fair Credit Reporting Act (FCRA). To
be in compliance with this new ruling, GE Capital Colonial Pacific Leasing will
as of December 4, 2000 require that credit applications include a signed authorization
(see required language noted below) to obtain a personal CBR at anytime, including:
1) at point of application, 2) downstream in the collection process and 3) when
the lessee requests additional credit. The authorization must be signed as individuals
by all applicable principal(s) or personal guarantor(s). Beginning November 15,
2000, new CPL and generic documents with this new language will be available for
download in BLISSNet (www.gecapital-cpl.com). The
affect this change will have on you and your company depends on how you submit
applications to us: ·
BLISSNet users with auto-decisioning: There's good news¾you won't need to submit
your applications any differently. However, if BLISSNet or the credit bureaus
are down, you'll need to fax us a copy of the signed credit application.
· BLISSNet users: You'll be required to submit signed applications with language
that gives us permission to pull personal CBR's. However, you can bypass this
requirement when you sign up for our auto-decisioning feature of BLISSNet, which
is now available to you. Auto-decisioning enables you to pull CBR's in your own
name when submitting applications to us via BLISSNet, making the process fast
and easy for you and your customers. Please call your CPL representative for details
and to sign up for auto-decisioning.
· Fax users: You'll need to fax a signed application with language (like shown
below) giving us permission to pull personal credit on all your customers. However,
you can bypass this requirement when you sign up for BLISSNet with auto-decisioning,
which is now available to you. Contact your CPL representative to sign up now.
Thank
you for your support and continued business.
Sincerely, Curt
Lysne Vice President, Sales
Note:
We suggest that you consult your legal counsel regarding this FTC opinion to determine
how it may affect your ability to obtain personal CBR's for commercial transactions.
The language in the authorization on your documents to pull personal CBR's must
be substantially similar to the following:
By signing below, the undersigned individual, who is either a principal of the
credit applicant or a personal guarantor of its obligations, provides written
instruction to [broker] or its designee (and any assignee or potential assignee
thereof) authorizing review of his/her personal credit profile from a national
credit bureau. Such authorization shall extend to obtaining a credit profile in
considering this application and subsequently for the purposes of update, renewal
or extension of such credit or additional credit and for reviewing or collecting
the resulting account. A photostat or facsimile copy of this authorization shall
be valid as the original. By signature below, I/we affirm my/our identity as the
respective individual/s identified in the above application. [signature block]
Addendum---I
would suggest all subscribers to the credit bureau reports, read you contracts,
as you will find like mine, they require that you have a "written signature" and
"permission" before you request a credit report on an individual---editor
eFina~ce Forms Strategic Alliance With eScout.com to Provide Online Financing
Solutions to the eScout MarketPlace PALO
ALTO, Calif. & LEE'S SUMMIT, Mo.--(BUSINESS WIRE)--Nov. 8, 2000--eFinance Corporation,
a technology infrastructure provider of automated online credit decisions, today
announced a strategic alliance with eScout.com(SM), a Web-based e-commerce and
e-business network for independent businesses and banks, to provide a customized
point-of-sale financing technology for the eScout MarketPlace(SM) and member banks.
Through
this alliance, eFinance Corporation, based in Palo Alto, will provide its Transaction
Finance System(TM) (TFS) to enable the delivery of instant, online financing of
e-commerce transactions between members on the eScout MarketPlace a{ well as allowing
eScout's regional and local bank members to offer online lending products to their
business customers. Today, the bank membership within the eScout network exceeds
1,219, more than 12 percent of the nation's banks. This
partnership will progress in three stages, beginning immediately with the implementation
of a point-of-sale leasing solution on the eScout MarketPlace. The first phase
will also include the delivery of eFinance's technology to eScout's regional bank
members. The second phase will allow eScout's community bank members to offer
online leasing to their business customers. The third phase will allow eScout
community bank members to offer other online lending products.
"eFinance Corporation is changing the future of e-business by automating the entire
transaction finance process to offer instant and final credit decisions online,"
said Reid Rutherford, founder, president and CEO of eFinance Corporation. "eScout
is dedicated to providing local and regional businesses and banks with the innovative,
online tools they need to compete; this strategic alliance will offer those businesses
and banks complete online lending solutions as another powerful tool. Participating
banks will experience improved risk management and fraud mitigation capabilities
through the consistent application of lending policy and by leveraging technology
and electronic data. Bank customers will benefit from access to real-time financing
solutions on the Web at the point-of-sale."
eFinance Corporation is an application service provider (ASP) that intelligently
automates online credit decisions and fulfillment. eFinance's TFS accepts a credit
application via the Internet; delivers an immediate credit decision; creates and
delivers documents online; and provides verification, funding, shipment, and settlement
notification. The eFinance end-to-end solution also includes proprietary fraud
detection technology and portfolio tracking and management.
"eScout has created a trusted community-based e-commerce network that brings banks
and businesses together, making sure they aren't excluded from the benefits of
the information age-" said Sandy Kemper, founder and chief executive officer of
eScout. "Offering eFinance's complete lending solution is another way to empower
independent banks and their businesses to better serve each other on a national
platform through online business."
eScout enables its member banks to deliver powerful e-commerce services and to
create Internet-based e-business solutions for their commercial customers. eScout
provides independent businesses with the tools they need to succeed in the new
economy and empowers them to network through an electronic marketplace to buy,
sell, learn and grow(SM). eScout's powerful online services include the eScout
MarketPlace(SM), for purchasing and selling business products and services; eScout
Solutions(SM), a growing suite of e-business applications from logistics to human
resources; eScout Insight(SM), for business news, trends and events; and eScout
University(SM), for web-based orientation and training programs. About
eFinance Corporation Founded
in 1999, eFinance is revolutionizing the way e-commerce is conducted on the Web.
Utilizing its revolutionary Transaction Finance System, the company enables the
real-time completion of online financing transactions for vendors, e-marketplaces,
financial institutions, and other e-commerce companies. eFinance's end-to-end
financing solution offers automated credit decisions and fulfillment at the Web
point-of-sale for a wide variety of online transactions. eFinance is a privately
held company, with its headquarters in Palo Alto, California. The company's seasoned
management team combines extensive experience in credit, financing, risk management,
and technology. eFinance's investors include: Donaldson, Lufkin & Jenrette's Sprout
Group; NIF Ventures USA; Sanchez Capital Partners; and DigitalVentures. For more
information, please visit the company's website at www.efinance.com. About
eScout.com(SM) LLC eScout
is a web-based e-commerce and e-business network for independent businesses and
banks. We empower members through a group of online services so they can buy,
sell, learn and grow, From Many, One(SM). As the premier e-Marketplace for independent
businesses and banks in The Global Trading Web(TM), eScout enables all of its
members to buy and sell to one another. In addition, eScout Solutions(SM), a growing
suite of e-business applications from logistics to human resources, enables eScout
members to outsource their e-business infrastructure demands. Because these solutions
are browser-based, they are available without the expense, workload and burden
of software and hardware installation and management. eScout's community-based
network now includes 1,219 banks (12 percent of the nation's banks) and 5,403
independent businesses, with more than 100 new members joining each week. In addition
to an equity position held by UMB Financial Corporation (NASDAQ: UMBF), investors
include: Mayfield Fund; Oak Hill Venture Partners; Tarrant Venture Partners; Commerce
One (NASDAQ: CMRC); Citizens Financial Group, Inc.; Golden State Bancorp Inc. (NYSE: GSB); and Utilicorp Communications Services, Inc. (NYSE:UCU). eScout is headquartered at 850 NW Chipman Road, Suite 5050, Lee's Summit, MO 64063. Visit www.escout.com for more information. CONTACT:
eFinance Corporation Annamarie Dunn, 408/206-6252 annamarie@efinance.com or For eFinance Corporation Dave Miller, 415/354-6245 dave@agencyx.com or eScout.com Shannon Guder, 816/448-4759 shannon.guder@escout.com
Comdisco, Inc. Announces Best Quarter Ever and All-Time Record Results From Continuing
Operations, for Fiscal 2000; Announces Quarterly Cash Dividend.
ROSEMONT, Ill.--(BUSINESS WIRE)--Nov. 8, 2000--Comdisco, Inc. (NYSE:CDO) today
reported operating results for its fourth quarter and fiscal year ended September
30, 2000. Operating
results: For the fourth quarter, Comdisco reported all-time record earnings from
continuing operations of $70 million, or 44 per common share, compared with $44
million, or $.27 per common share, for the year earlier period. Including the
loss from discontinued operations, the net loss for the fourth quarter was $168
million, or a loss of $1.05 per share, compared to earnings of $30 million, or
$.19 per common share, for the prior year period. Total revenue for the fourth
quarter was $1.03 billion, compared with $1.0 billion, for the prior year period.
For the year ended September 30, 2000, the company reported all-time record earnings
from continuing operations, of $255 million, or $1.58 per common share, compared
to $70 million,(or $.44 per common share in the prior year period. Including the
loss from discontinued operations, the net loss for the year was $67 million,
or $.41 per common share, compared to earnings of $48 million, or $.30 per common
share for the prior year period. Net earnings for the prior year period also includes
a $150 million pre-tax charge related to the divestiture of low-margin businesses
and the realignment of the company's service businesses. Total revenue for the
twelve months was $3.9 billion, compared to $4.2 billion, for the prior year period.
The prior year period includes $598 million of revenue from the sale of non-strategic
assets. Discontinued
operations: On October 3, 2000, Comdisco announced that it would cease funding
ongoing operations of its subsidiary, Prism Communication Services, Inc. Since
that time, Prism has decided to cease operations and dispose of its assets. Accordingly,
Comdisco has presented its losses associated with its investment in Prism, including
the writedown of its investment to estimated fair market value, as a discontinued
operation. The company recorded pre-tax operating losses of $196 million during
fiscal year 2000, of which $64 million was recorded in the fourth quarter. In
addition, during the fourth quarter, the company recorded the above mentioned
asset writedown, which totaled $331 million pre-tax, net of the anticipated proceeds
from the sale of Prism's telecommunications network equipment. Therefore, the
loss from discontinued operations, net of tax, for the quarter ended September
30, 2000, was $238 million, or $1.49 per common share, compared with a loss of
$14 million, or $.08 per common share for t e prior year period. For the twelve
months ended September 30, 2000, the loss from discontinued operations, net of
tax, was $322 million, or $1.99 per common share, compared to a loss of $22 million,
or $.14 per common share, for the prior year period. CEO
cOmmentary: Commenting on fourth quarter results, Nick Pontikes, President and
Chief Executive Officer, stated, "While the loss on our Prism operations was a
disappointment, it is clear from our fiscal 2000 results that our continuing operations
remain strong. Last week we pre-announced our fiscal fourth quarter results stating
that we anticipated that we would exceed consensus Wall Street estimates. I am
happy to report that this was the strongest quarter in the company's history.
We set a record for earnings from continuing operations for both the quarter and
the fiscal year. We met or exceeded our targets for the quarter in each of our
three core businesses. Our
leasing business, due to a strong remarketing quarter, exceeded targeted pre-tax
profitability of $25 million by $3 million, or 12%. Our technology services business
met our pre-tax profitability expectations of $13 million and our Ventures division
experienced another outstanding quarter, exceeding our pre-tax profitability targets
by 31%, earning $68 million for the quarter. The mark-to-market valuation for
publicly traded securities within the Comdisco Ventures portfolio was over $750
million as of November 1, 2000." Continued
Pontikes, "Our cash flow from normal operations at September 30, 2000 was over
$3.3 billion and our liquidity (consisting of cash on hand and available commercial
paper and bank facilities) was over $1 billion. We are well positioned to fund
future growth and operating requirements." "We
look forward to the opportunities that lie ahead in fiscal 2001 as we continue
towards our goal of maximizing shareholder value."
Dividend Information: On November 7, 2000, the Board of Directors declared a quarterly
cash dividend of $.025 per share to common stockholders. The common stock cash
dividend will be payable on December 11, 2000, to stockholders of record on November
13, 2000. Comdisco had 152,569,367 shares of common stock outstanding at September
30, 2000. Safe
Harbor: The foregoing contains forward-looking statements regarding Comdisco,
which are based on current expectations and assumptions, and which involve risks
and uncertainties that could cause results to differ. The company intends that
such forward-looking statements be subject to the safe harbor created by Section
27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange
Act of 1934. The following lists some of the factors, which could cause results
to differ from expectations. As
a result of the evolving nature of its services business, the company has limited
meaningful historical data in which to base its planned operating expenses. A
significant portion of the company's expense levels are based in part on its expectations
as to future services revenues, and, to a large extent, are fixed.
To attain its services earnings contribution goals for fiscal 2001 the company
will have to meet its obligations under the agreements underlying its sales backlog.
Also, the company must expand its contract subscription base (through new contract
signings and contract renewals), increase its revenues through other technology
services, primarily network services, Web-Availability services, and IT CAP Solutions,
and contain costs. The
company's ability to obtain new business and realize revenue on its sales backlog
depends on its ability to anticipate technological changes, develop services to
meet customer requirements on a global basis and achieve delivery of services
that meet customer requirements on a domestic and global basis. In addition, with
respect to new business opportunities, the company must successfully compete with
organizations offering similar services.
The company's liquidity depends, in part, on its access to capital markets, specifically
medium-te m and senior notes, and commercial paper, and on its lines of credit
and the willingness of the banks to renew these lines. If the company was not
able to refinance its indebtedness or obtain new financing under these circumstances,
the company would have to consider other options, including: sales of some assets;
sales of equity; negotiations with lenders to restructure applicable indebtedness;
or other options available to the company under applicable law. Further, the Company's
cash flow from operating activities is dependent on a number of variables, including,
but not limited to, the ability of the Company to implement its strategic plan
and respond to external market conditions, the ability of the Company to dispose
of the securities held by Comdisco Ventures, timely payment by its customers,
global economic conditions and controlling operating costs and expenses. Securities
held by Comdisco Ventures are generally subject to lockups restricting its ability
to sell until several months after an initial public offering. The public market
for high technology and other emerging growth companies is extremely volatile.
Such volatility may adversely affect the ability of the company to dispose of
the securities held by Comdisco Ventures and the value of those securities on
the date of sale. Unrealized gains are based upon market and business data available
to the Company as of today's date and is subject to change based on additional
market and business data as it becomes available.
Additional factors that would cause results to differ are discussed in the company's
Form 10-Q for the quarter ended June 30, 2000. The company undertakes no obligation
to publicly update or revise any forward-looking statement whether as a result
of new information, future events or otherwise.
About Comdisco: Comdisco (www.comdisco.com) provides global technology services
to help its customers maximize technology functionality, predictability and availability,
while freeing them from the complexity of managing their technology. The Rosemont,
(IL) company offers a complete suite of infor mation technology services including
business continuity, Web-Availability(SM), network, and IT Control and Predictability
Solutions(SM). Comdisco also offers equipment solutions to key vertical industries,
including electronics, telecommunications, pharmaceutical, biotechnology and manufacturing.
Through its Ventures division, Comdisco is providing equipment leasing and other
financing and services to venture capital backed start-up companies. The company's
revenue for the 12 months ended September 30, 2000 was $3.9 billion.
Comdisco, Inc. |
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