Asset Acceptance Capital Corp. Announces Additional Cost Reduction Actions
December 30 2010 - 12:05PM
Business Wire
Asset Acceptance Capital Corp. (NASDAQ: AACC), a leading
purchaser and collector of charged-off consumer debt, today
announced that it will be closing its Cleveland, Ohio collections
office. Once substantially completed, the closing of the office is
expected to reduce the Company’s operating expenses by
approximately $3.0 million per year.
In connection with closing the Cleveland collections office, the
Company will incur approximately $1.5 million, or $0.03 per fully
diluted share after the effect of taxes, in restructuring charges
during the fourth quarter 2010, which includes employee termination
benefits, contract termination costs for the remaining lease
payments on the Cleveland, Ohio office, accelerated depreciation
and other exit costs. The employee termination benefits, contract
termination costs and other exit costs will require an outlay of
cash of approximately $1.4 million, while non-cash charges are
estimated at $0.1 million.
The Company also announced that it will incur a charge of
approximately $5.3 million, or $0.10 per fully diluted share after
the effect of taxes, during the fourth quarter 2010 resulting from
the termination for performance of a relationship with a third
party service provider. The charge relates to a cash settlement
payment to reimburse the third party for court costs incurred on
the Company’s behalf that the third party would otherwise have
recovered through commissions in future periods. The Company
expects the action to provide operating expense savings of
approximately $7.5 million in total over the next three years.
Rion Needs, President and CEO, Asset Acceptance Capital Corp.
noted, “These actions reflect our continued efforts to further
streamline our operations and aggressively align our cost structure
to improve our competitive positioning and enhance shareholder
value. Collection efforts previously housed in the Cleveland office
will be transferred to other offices throughout our collections
network. We anticipate that these actions will favorably impact
overall profitability and productivity without sacrificing top-line
collections.”
About Asset Acceptance Capital Corp.
For more than 45 years, Asset Acceptance has provided credit
originators, such as credit card issuers, consumer finance
companies, retail merchants, utilities and others an efficient
alternative in recovering defaulted consumer debt. For more
information, please visit www.AssetAcceptance.com.
Asset Acceptance Capital Corp. Safe Harbor Statement
This press release contains certain statements, including the
Company's plans and expectations regarding its operating
strategies, charged-off receivables, collections and costs, which
are forward-looking statements and are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include reference to the
Company’s presentations and webcasts. These forward-looking
statements reflect the Company's views, expectations and beliefs at
the time such statements were made with respect to such matters, as
well as the Company's future plans, objectives, events, portfolio
purchases and pricing, collections and financial results such as
revenues, expenses, income, earnings per share, capital
expenditures, operating margins, financial position, expected
results of operations and other financial items. Forward-looking
statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions (“Risk Factors”) that
make the timing, extent, likelihood and degree of occurrence of
these matters difficult to predict. Words such as “anticipates,”
“believes,” “estimates,” “expects,” “intends,” “should,” “could,”
“will,” variations of such words and similar expressions are
intended to identify forward-looking statements.
There are a number of factors, many of which are beyond the
Company's control, which could cause actual results and outcomes to
differ materially from those described in the forward-looking
statements. These Risk Factors include the Risk Factors discussed
under “Item 1A Risk Factors” in the Company’s most recently filed
Annual Report on Form 10-K and in other SEC filings, in each case
under a section titled “Risk Factors” or similar headings and those
discussions regarding risk factors as well as the discussion of
forward-looking statements in such sections are incorporated herein
by reference. Other Risk Factors exist, and new Risk Factors emerge
from time to time that may cause actual results to differ
materially from those contained in any forward-looking statements.
Factors that could affect our results and cause them to materially
differ from those contained in the forward-looking statements
include the following:
- instability in the financial markets
and a prolonged economic recession limiting our ability to access
capital and to acquire and collect on charged-off receivable
portfolios;
- our ability to maintain existing, and
to secure additional financing on acceptable terms;
- a decrease in collections if changes in
or enforcement of debt collection laws impair our ability to
collect, including any unknown ramifications from the recently
passed Dodd-Frank Wall Street Reform and Consumer Protection
Act;
- failure to comply with government
regulation, including our ability to successfully conclude the
on-going FTC matter;
- our ability to purchase charged-off
receivable portfolios on acceptable terms and in sufficient
amounts;
- a decrease in collections as a result
of negative attention or news regarding the debt collection
industry and debtors’ willingness to pay the debt we acquire;
- the costs, uncertainties and other
effects of legal and administrative proceedings impacting our
ability to collect on judgments in our favor;
- ongoing risks of litigation in our
litigious industry, including individual and class actions under
consumer credit, collections and other laws;
- our ability to substantiate our
application of tax rules against examinations and challenges made
by tax authorities;
- our ability to make reasonable
estimates of the timing and amount of future cash receipts and
values and assumptions underlying the calculation of the net
impairment charges for purposes of recording purchased receivable
revenues;
- our ability to respond to changes in
technology to remain competitive, including our ability to
successfully complete the conversion of our legacy debt collection
platform to a different software system;
- our ability to successfully hire,
train, integrate into our collections operations and retain
in-house account representatives;
- our ability to successfully seek
opportunities to diversify beyond collecting on our purchased
receivables portfolios;
- our ability to acquire and to collect
on charged-off receivable portfolios in industries in which we have
little or no experience;
- any significant and unanticipated
changes in circumstances leading to goodwill impairment or other
impairment of intangible asset, which, in turn, could adversely
impact earnings and reduce our net worth; and
- other unanticipated events and
conditions that may hinder our ability to compete.
Given these risks and uncertainties, investors should not place
undue reliance on forward-looking statements as a prediction of
actual results. Furthermore, the Company expressly disclaims any
obligation to update, amend or clarify forward-looking
statements.
Asset Acceptance Capital Corp. (MM) (NASDAQ:AACC)
Historical Stock Chart
From May 2024 to Jun 2024
Asset Acceptance Capital Corp. (MM) (NASDAQ:AACC)
Historical Stock Chart
From Jun 2023 to Jun 2024