-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WF+yRuFF2JkEVQF+nZarYKrdXo64EWwCZJRaACCRL+2HNggaiXbBFk5gb0EbU3+u vyzUOb7IKij+0pji8OSnMw== 0000950124-06-005291.txt : 20060915 0000950124-06-005291.hdr.sgml : 20060915 20060915162242 ACCESSION NUMBER: 0000950124-06-005291 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060915 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060915 DATE AS OF CHANGE: 20060915 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREDIT ACCEPTANCE CORPORATION CENTRAL INDEX KEY: 0000885550 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 381999511 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20202 FILM NUMBER: 061093666 BUSINESS ADDRESS: STREET 1: 25505 W TWELVE MILE RD STREET 2: STE 3000 CITY: SOUTHFIELD STATE: MI ZIP: 48034-8334 BUSINESS PHONE: 8103532700 MAIL ADDRESS: STREET 1: 25505 WEST TWELVE MILE ROAD STREET 2: SUITE 3000 CITY: SOUTHFIELD STATE: MI ZIP: 48034-8334 8-K 1 k08508e8vk.txt CURRENT REPORT DATED SEPTEMBER 15, 2006 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 15, 2006 CREDIT ACCEPTANCE CORPORATION (Exact name of registrant as specified in its charter) Commission File Number 000-20202 MICHIGAN 38-1999511 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) 25505 W. TWELVE MILE ROAD, SUITE 3000 SOUTHFIELD, MICHIGAN 48034-8339 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 248-353-2700 ---------- Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written Communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On September 15, 2006, Credit Acceptance Corporation (the "Company"), issued a press release announcing operational data for the two months ended August 31, 2006. The press release is attached as Exhibit 99.1 to this Form 8-K and incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. 99.1 Press Release dated September 15, 2006 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CREDIT ACCEPTANCE CORPORATION (Registrant) By: /s/ Kenneth S. Booth ------------------------------- Kenneth S. Booth Chief Financial Officer September 15, 2006 EXHIBIT INDEX
EXHIBIT NO. EXHIBIT 99.1 Press Release dated September 15, 2006
EX-99.1 2 k08508exv99w1.txt PRESS RELEASE DATED SEPTEMBER 15, 2006 EXHIBIT 99.1 SILVER TRIANGLE BUILDING 25505 WEST TWELVE MILE ROAD, SUITE 3000 SOUTHFIELD, MI 48034-8339 (248) 353-2700 CREDITACCEPTANCE.COM NEWS RELEASE FOR IMMEDIATE RELEASE DATE: SEPTEMBER 15, 2006 INVESTOR RELATIONS: DOUGLAS W. BUSK TREASURER (248) 353-2700 EXT. 4432 IR@CREDITACCEPTANCE.COM NASDAQ SYMBOL: CACC CREDIT ACCEPTANCE ANNOUNCES OPERATING RESULTS FOR THE TWO MONTHS ENDED AUGUST 31, 2006 SOUTHFIELD, MICHIGAN -- SEPTEMBER 15, 2006 -- CREDIT ACCEPTANCE CORPORATION (NASDAQ: CACC) (the "Company") announced certain operating results for the two months ended August 31, 2006. The operational data set forth in this press release is for informational purposes to be used by investors in making decisions about whether to tender shares in the Company's previously announced modified Dutch auction tender offer. Results for the two months ended August 31, 2006 compared to the same period in 2005 include the following: - Consumer loan unit volume increased 12.0%. - Consumer loan dollar volume increased 25.2%. - The number of active dealer-partners increased 20.1%. - Consumer loan unit volume per active dealer-partner decreased 7.1%. - Net cash collections on loans increased 16.5%. - Dealer holdback payments increased 27.2%. The Company modified its loan pricing model during the first two months of the third quarter of 2006. The composition of new loan originations changed during the two months ended August 31, 2006 compared to the same period in 2005 as follows: (1) The average loan size is larger by 11.8%, (2) the average loan term increased from 35 to 40 months, (3) the projected return on capital has decreased by approximately 100 basis points, and (4) the average spread between the advance rate and the expected collection rate has decreased by approximately 300 basis points. The following tables summarize unit and dollar volume activity: (DOLLARS IN THOUSANDS)
SIX MONTHS ENDED JUNE 30, EIGHT MONTHS ENDED AUGUST 31, --------------------------------- -------------------------------- 2006 2005 % CHANGE 2006 2005 % CHANGE ---- ---- -------- ---- ---- -------- Consumer loan unit volume 49,170 44,865 9.6 64,373 58,442 10.1 Consumer loan dollar volume $583,474 $539,763 8.1 $781,906 $698,225 12.0
ONE MONTH ENDED JULY 31, ONE MONTH ENDED AUGUST 31, TWO MONTHS ENDED AUGUST 31, ------------------------------ ------------------------------ ------------------------------ 2006 2005 % CHANGE 2006 2005 % CHANGE 2006 2005 % CHANGE ---- ---- -------- ---- ---- -------- ---- ---- -------- Consumer loan unit volume 6,506 6,202 4.9 8,697 7,375 17.9 15,203 13,577 12.0 Consumer loan dollar volume $83,927 $72,700 15.4 $114,505 $85,762 33.5 $198,432 $158,462 25.2
DEALER-PARTNER ENROLLMENTS AND VOLUME The following table summarizes the changes in active dealer-partners and corresponding consumer loan unit volume for the two months ended August 31, 2006 and 2005:
TWO MONTHS ENDED AUGUST 31, -------------------------------- 2006 2005 % CHANGE ------ ----- -------- Consumer loan unit volume 15,203 13,577 12.0 Active dealer-partners (1) 1,458 1,214 20.1 ------- ------ Average volume per dealer-partner 10.4 11.2 -7.1 Consumer loan unit volume from dealer-partners active both periods 10,006 10,469 -4.4 Dealer-partners active both periods 778 778 -- ------- ------ Average volume per dealer-partner active both periods 12.9 13.5 -4.4 Consumer loan unit volume from new dealer-partners 683 726 -5.9 New active dealer-partners (2) 147 136 8.1 ------- ------ Average volume per new active dealer-partner 4.6 5.3 -13.2 Attrition (3) -22.9% -16.3%
(1) Active dealer-partners are dealer-partners who submit at least one consumer loan during the period. (2) New dealer-partners are dealer-partners that have enrolled in the Company's program and have submitted their first consumer loan to the Company during the period. (3) Attrition is measured according to the following formula: decrease in consumer loan unit volume from dealer-partners who submitted at least one consumer loan during the comparable period of the prior year but who submitted no consumer loans during the current period divided by prior year comparable period consumer loan unit volume. CONSUMER LOAN PERFORMANCE The following table compares the Company's forecast of consumer loan collection rates as of August 31, 2006 with the forecast as of December 31, 2005:
August 31, 2006 December 31, 2005 Loan Origination Year Forecasted Collection % Forecasted Collection % Variance - --------------------- ----------------------- ----------------------- -------- 1996 55.1% 55.0% 0.1% 1997 58.4% 58.3% 0.1% 1998 67.6% 67.7% -0.1% 1999 72.5% 72.7% -0.2% 2000 73.1% 73.2% -0.1% 2001 67.6% 67.2% 0.4% 2002 70.6% 70.3% 0.3% 2003 74.4% 74.0% 0.4% 2004 73.8% 72.9% 0.9% 2005 74.3% 73.6% 0.7%
During the two months ended August 31, 2006, collection rates were generally consistent with the Company's expectations. 2 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of its forward-looking statements. Certain statements in this release that are not historical facts, such as those using terms like "may," "will," "should," "believes," "expects," "anticipates," "assumes," "forecasts," "estimates," "appears," "intends," "plans" and those regarding the Company's future results, plans and objectives, are "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements represent the Company's outlook only as of the date of this release. While the Company believes that its forward-looking statements are reasonable, actual results could differ materially since the statements are based on our current expectations, which are subject to risks and uncertainties. Factors that might cause such a difference include, but are not limited to, the factors set forth in Item 1A of the Company's Form 10-K for the year ended December 31, 2005, other risk factors discussed herein or listed from time to time in the Company's reports filed with the Securities and Exchange Commission and the following: - - The Company's inability to accurately forecast the amount and timing of future collections could have a material adverse effect on results of operations. - - Due to increased competition from traditional financing sources and non-traditional lenders, the Company may not be able to compete successfully. - - The Company's ability to maintain and grow the business is dependent on the ability to continue to access funding sources and obtain capital on favorable terms. - - The Company may not be able to generate sufficient cash flow to service its outstanding debt and fund operations. - - The substantial regulation to which the Company is subject limits the business, and such regulation or changes in such regulation could result in potential liability. - - Adverse changes in economic conditions, or in the automobile or finance industries or the non-prime consumer finance market, could adversely affect the Company's financial position, liquidity and results of operations and its ability to enter into future financing transactions. - - Litigation the Company is involved in from time to time may adversely affect its financial condition, results of operations and cash flows. - - The Company is dependent on its senior management and the loss of any of these individuals or an inability to hire additional personnel could adversely affect its ability to operate profitably. - - Natural disasters, acts of war, terrorist attacks and threats or the escalation of military activity in response to such attacks or otherwise may negatively affect the business, financial condition and results of operations. Other factors not currently anticipated by management may also materially and adversely affect the Company's results of operations. The Company does not undertake, and expressly disclaims any obligation, to update or alter its statements whether as a result of new information, future events or otherwise, except as required by applicable law. DESCRIPTION OF CREDIT ACCEPTANCE CORPORATION Since 1972, Credit Acceptance has provided auto loans to consumers, regardless of their credit history. Our product is offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing; from repeat and referral sales generated by these same customers; and from sales to customers responding to advertisements for our product, but who actually end up qualifying for traditional financing. Without our product, consumers may be unable to purchase a vehicle or they may purchase an unreliable one, or they may not have the opportunity to improve their credit standing. As we report to the three national credit reporting agencies, a significant number of our customers improve their lives by improving their credit score and move on to more traditional sources of financing. Credit Acceptance is publicly traded on the NASDAQ under the symbol CACC. For more information, visit creditacceptance.com. 3 -----END PRIVACY-ENHANCED MESSAGE-----