SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003 OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-11618
HPSC, Inc.
(Exact name of registrant as specified in its charter)
|
Delaware |
|
04-2560004 |
|
(State or other
jurisdiction of |
|
(IRS Employer Identification No.) |
60 STATE STREET, BOSTON, MASSACHUSETTS 02109
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (617) 720-3600
NONE
(Former name, former address, and former fiscal year if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES ý NO o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)
YES o NO ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: COMMON STOCK, PAR VALUE $0.01 PER SHARE, SHARES OUTSTANDING AT NOVEMBER 4, 2003, 4,313,947.
HPSC, INC.
TABLE OF CONTENTS
2
HPSC, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share and share amounts)
|
|
|
September
30, |
|
December
31, |
|
||||
|
ASSETS |
|
|
|
|
|
||||
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CASH AND CASH EQUIVALENTS |
|
$ |
40 |
|
$ |
51 |
|
||
|
RESTRICTED CASH- SERVICING UNDER SECURITIZATION AGREEMENTS |
|
30,617 |
|
29,633 |
|
||||
|
|
|
|
|
|
|
||||
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INVESTMENT IN LEASES AND NOTES: |
|
|
|
|
|
||||
|
Lease contracts and notes receivable due in installments |
|
759,195 |
|
643,897 |
|
||||
|
Notes receivable |
|
14,608 |
|
21,052 |
|
||||
|
Retained interest in leases and notes sold |
|
39,820 |
|
33,974 |
|
||||
|
Estimated residual value of equipment at end of lease term |
|
25,345 |
|
25,573 |
|
||||
|
Deferred origination costs |
|
14,232 |
|
11,124 |
|
||||
|
Less: Unearned income |
|
(158,222 |
) |
(138,959 |
) |
||||
|
Security deposits |
|
(3,720 |
) |
(4,154 |
) |
||||
|
Allowance for losses |
|
(17,613 |
) |
(16,900 |
) |
||||
|
Net investment in leases and notes |
|
673,645 |
|
575,607 |
|
||||
|
|
|
|
|
|
|
||||
|
OTHER ASSETS |
|
11,523 |
|
9,424 |
|
||||
|
TOTAL ASSETS |
|
$ |
715,825 |
|
$ |
614,715 |
|
||
|
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||||
|
REVOLVING CREDIT BORROWINGS |
|
$ |
71,869 |
|
$ |
43,437 |
|
||
|
SENIOR NOTES, NET OF DISCOUNT |
|
550,306 |
|
473,830 |
|
||||
|
SENIOR SUBORDINATED NOTES |
|
14,960 |
|
17,960 |
|
||||
|
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES |
|
25,174 |
|
24,663 |
|
||||
|
ACCRUED INTEREST |
|
2,164 |
|
1,931 |
|
||||
|
INTEREST RATE SWAP CONTRACTS |
|
8,111 |
|
16,050 |
|
||||
|
DEFERRED INCOME TAXES |
|
6,221 |
|
4,461 |
|
||||
|
TOTAL LIABILITIES |
|
678,805 |
|
582,332 |
|
||||
|
|
|
|
|
|
|
||||
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
||||
|
|
|
|
|
|
|
||||
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
||||
|
PREFERRED STOCK, $1.00 par value; authorized 5,000,000 shares; issued - None |
|
— |
|
— |
|
||||
|
COMMON STOCK, $0.01 par value; 15,000,000 shares authorized; issued and outstanding 5,026,205 shares in 2003 and 4,817,705 in 2002 |
|
50 |
|
48 |
|
||||
|
Additional paid-in capital |
|
16,183 |
|
15,232 |
|
||||
|
Retained earnings |
|
33,492 |
|
32,517 |
|
||||
|
Less: Treasury Stock (at cost) 712,258 shares in 2003 and 685,951 in 2002 |
|
(5,104 |
) |
(4,863 |
) |
||||
|
Accumulated other comprehensive loss, net of tax |
|
(7,014 |
) |
(9,745 |
) |
||||
|
Deferred compensation |
|
— |
|
(106 |
) |
||||
|
Notes receivable from officers and employees |
|
(587 |
) |
(700 |
) |
||||
|
TOTAL STOCKHOLDERS’ EQUITY |
|
37,020 |
|
32,383 |
|
||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
715,825 |
|
$ |
614,715 |
|
||
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
HPSC, INC.
CONDENSED CONSOLIDATED STATEMENTS
OF INCOME
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(in thousands, except per share and share amounts)
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||
|
|
|
September 30, 2003 |
|
September 30, 2002 |
|
September 30, 2003 |
|
September 30, 2002 |
|
||||
|
REVENUES: |
|
|
|
|
|
|
|
|
|
||||
|
Earned income on leases and notes |
|
$ |
17,867 |
|
$ |
16,482 |
|
$ |
50,849 |
|
$ |
49,380 |
|
|
Gain on sales of leases and notes |
|
3,453 |
|
4,884 |
|
3,453 |
|
10,791 |
|
||||
|
Provision for losses |
|
(2,631 |
) |
(3,844 |
) |
(7,696 |
) |
(8,430 |
) |
||||
|
Net revenues |
|
18,689 |
|
17,522 |
|
46,606 |
|
51,741 |
|
||||
|
|
|
|
|
|
|
|
|
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|
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EXPENSES: |
|
|
|
|
|
|
|
|
|
||||
|
Selling, general and administrative |
|
7,402 |
|
5,316 |
|
19,683 |
|
15,841 |
|
||||
|
Loss from employee defalcation |
|
— |
|
— |
|
— |
|
448 |
|
||||
|
Interest expense |
|
8,783 |
|
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