| IPO Company Profile |
| Current Quote | News | SEC Filings | Peer IPO Companies |
| Rock Financial Corporation |
| 30600 Telegraph Road, Fourth Floor, Bingham Farms, MI 48025 * (248) 540-8000 |
| The company is a specialty marketing company of debt consolidation and home financing products secured primarily by first or second mortgages on one-to-four family, owner occupied residences. |
| Manager | Tier | Phone |
| Bear, Stearns & Co. Inc. | Lead Manager | (212) 272-4850 |
| NASNTL: | RCCK | Financial: | SIC 6162 | |
| Type of Shares: | Common Shares | Filing Date: | 2/25/98 | |
| U.S. Shares: | 3,300,000 | Offer Date: | 4/30/98 | |
| Non-U.S. Shares: | 0 | Filing Range: | $8.00 - $10.00 | |
| Primary Shares: | 3,000,000 | Offer Price: | $10.00 | |
| Secondary Shares: | 300,000 | Gross Spread: | $0.00 | |
| Offering Amount: | $29,700,000 | Selling: | $0.00 | |
| Expenses: | $800,000 | Reallowance: | $0.00 | |
| Post-IPO Shares: | 13,330,000 | |||
| Employees: | 717 |
| Issuer's Law Firm: | Honigman, Miller, Schwartz & Cohn |
| Bank's Law Firm: | Berick, Pearlman & Mills Co., L.P.A. |
| Auditor: | KPMG Peat Marwick |
Dollar amounts in U.S. millions except for per share data | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Audited Income | Balance Sheet | ||
| 12/31/97 | 12/31/97 | ||||
| Revenue: | $52.11 | Assets: | $144.43 | ||
| Net Income: | $7.02 | Curr Assets: | |||
| EPS: | $0.53 | Liabilities: | $129.32 | ||
| Prior EPS: | Curr Liab: | ||||
| Cash Flow/Oper: | -$16.65 | Equity: | $15.11 | ||
| Cash Flow/Fin: | $24.56 | Cash: | $11.95 | ||
| Cash Flow/Inv: | $0.74 | ||||
| Competition |
| The consumer lending industry is highly competitive and fragmented. Rock faces intense competition, primarily from commercial banks, savings and loan associations, credit unions, insurance companies, mortgage brokers, mortgage bankers and other consumer finance companies. If the company expands into additional geographic markets, it will face competition from consumer lenders with established positions in such markets. There can be no assurance that The company will be able to compete successfully with these consumer lenders. Many of the company's competitors in the consumer lending industry are better established, substantially larger and have significantly more capital and other resources than the company. In addition, FNMA and Freddie Mac are currently developing technologies and business practices that will expand the scope of mortgage loans eligible to be purchased by them, including, potentially, Sub-Prime Home Equity Loans. The effect of these purchases on the consumer lending industry and profit margins is not presently determinable, but such expanded scope could attract additional competitors into the market and significantly erode profit margins. Barriers to entry into the consumer lending industry are low, and the current level of gains realized by the company and its existing competitors on the sale of loans could attract additional competitors into the market. Consequently, there are many recent market entrants seeking these relatively attractive profit margins. Increases in the number of companies seeking to originate consumer loans could lower the rates of interest or reduce the amount of origination points and fees the company can charge customers, thereby reducing the potential profitability of such loans. Competition might also reduce the company's loan closing volume. In addition, during periods of declining interest rates, competitors which have "locked in" low borrowing costs may have a competitive advantage. There can be no assurance that the company will be able to compete successfully in this market environment and any failure in this regard could have a material adverse effect on the company's business, financial condition and results of operations. |
| Business Plan |
| The company's business strategy to sustain its growth in profitability while continuing to build its consumer lending operations includes: (i) enhancing consumer recognition of its "Fresh Start(TM)" and "Rock Financial" brand names in its current markets and establishing brand name recognition in new markets, (ii) increasing the number of Fresh Start(TM) stores and expanding its call center operations into additional states, (iii) expanding the cross-selling of existing products and expanding the products offered through existing distribution channels, (iv) exploring establishing additional distribution channels, (v) providing "world class" service, and thereby distinguishing itself from its competitors, (vi) continuing to invest heavily in technology and marketing, and (vii) maintaining consistent underwriting standards, and thereby maintaining secondary market interest in the company's loans. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to fund a distribution to the existing shareholder in connection with termination of the company's status as an S Corporation and to repay a portion of the amounts outstanding under the company's warehouse line of credit used to finance, and secured by, a portion of the company's inventory of loans. |