EXHIBIT 99.1
SILVER TRIANGLE BUILDING
25505 WEST TWELVE MILE ROAD - SUITE 3000
SOUTHFIELD, MI 48034-8339
(248) 353-2700
WWW.CREDITACCEPTANCE.COM
NEWS RELEASE
FOR IMMEDIATE RELEASE DATE: MAY 27, 2005
- ---------------------
INVESTOR RELATIONS: DOUGLAS W. BUSK
TREASURER
(248) 353-2700 EXT. 4432
IR@CREDITACCEPTANCE.COM
NASDAQ SYMBOL: CACCE
CREDIT ACCEPTANCE ANNOUNCES RECEIPT OF EXTENSION FROM NASDAQ
AND REVISED WAIVERS FROM LENDERS
SOUTHFIELD, MICHIGAN - MAY 27, 2005 - CREDIT ACCEPTANCE CORPORATION (NASDAQ:
CACCE) Credit Acceptance Corporation (the "Company") announced today that a
Nasdaq Listing Qualifications Panel (the "Panel") has granted the Company's
request for continued listing on the Nasdaq National Market, subject to the
Company filing with the Securities and Exchange Commission (the "SEC"), on or
before June 30, 2005, its annual report on Form 10-K for the year ended December
31, 2004 and Form 10-Q for the quarter ended March 31, 2005.
On April 11, 2005, the Company issued a press release announcing its receipt of
a Nasdaq Staff Determination Letter regarding the potential delisting of the
Company's common stock due to the Company's inability to timely file its annual
report on Form 10-K for the year ended December 31, 2004. Nasdaq Marketplace
Rule 4310(c)(14) requires the Company to make, on a timely basis, all filings
with the SEC required by the Securities Exchange Act of 1934, as amended. The
Company was unable to timely file its 2004 Form 10-K because its independent
accountants, Deloitte & Touche LLP ("Deloitte"), indicated at the deadline that
they had not completed their review of the filing. Subsequent to the deadline on
April 8, 2005, Deloitte informed the Company that they believed the Company
should not account for its loans as an originator of loans to consumers but
should instead account for its loans as a lender to its dealer-partners. The
Company subsequently appealed the Staff Determination by requesting a hearing
before a Nasdaq Listing Qualifications Panel to obtain an extension of time to
maintain the Company's listing on the Nasdaq National Market until the Company
can come into full compliance with Nasdaq Marketplace Rule 4310(c)(14).
As previously announced, the Company is seeking SEC guidance as to the proper
accounting methodology in connection with how it accounts for loans. The Company
submitted a letter on April 26, 2005 to the Office of the Chief Accountant of
the SEC and has subsequently provided additional information. The Company is
currently awaiting guidance from the SEC and does not know how long it will take
to receive an answer. If the Company is required to change its loan accounting
methodology, the Company believes it is unlikely it will be able to complete and
file its 2004 Form 10-K and first quarter 2005 Form 10-Q by the June 30, 2005
extended deadline. In this event, the Panel has requested that the Company
submit in writing to the Panel the impact of
1
the accounting change and a reasonable timeline for completing the necessary SEC
filings. Based on this submission, the Panel has indicated that it will consider
extending the June 30, 2005 deadline.
If the Company does not obtain an extension of the deadline or does not comply
with any new deadline established by the Panel, the Company's shares of common
stock will be subject to delisting from the Nasdaq National Market. If the
Company's shares are delisted from the Nasdaq National Market, they will
continue to be traded in the over-the-counter market and quoted on the Pink
Sheets Electronic Quotation Service. Information regarding the Pink Sheets
Electronic Quotation Service is available at http://www.pinksheets.com/.
The Company has three debt facilities that require the Company to timely file
its annual reports on Form 10-K and quarterly reports on Form 10-Q and to
deliver certain annual and quarterly information to the lenders. The Company has
received waivers of these requirements on all three debt facilities through July
31, 2005. In the event the Company's 2004 Form 10-K and Form 10-Q for the period
ended March 31, 2005 have not been filed by July 31, 2005, the Company intends
to request additional extensions from its lenders. The Company intends to
continue to provide its lenders with financial statements based on the Company's
historical loan accounting policies and is confident that waivers providing the
Company with sufficient time to complete its public filings will be received.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
Certain statements in this release that are not historical facts, such as those
using terms like "believes," "expects," "anticipates," "assumptions,"
"forecasts," "estimates" 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 current expectations,
which are subject to risks and uncertainties. Factors that might cause such a
difference include the following:
- the Company's potential inability to accurately forecast and
estimate the amount and timing of future collections,
- the potential delisting of the Company's common stock,
- the Company's potential restating of prior years financial
statements,
- increased competition from traditional financing sources and
from non-traditional lenders,
- the unavailability of funding at competitive rates of
interest,
- the Company's potential inability to continue to obtain third
party financing on favorable terms,
- the Company's potential inability to generate sufficient cash
flow to service its debt and fund its future operations,
- adverse changes in applicable laws and regulations,
- adverse changes in economic conditions,
- adverse changes in the automobile or finance industries or in
the non-prime consumer finance market,
- the Company's potential inability to maintain or increase the
volume of automobile loans,
- an increase in the amount or severity of litigation against
the Company,
- the loss of key management personnel or the inability to hire
qualified personnel,
- the effect of terrorist attacks and potential attacks, and
- various other factors discussed in the Company's reports filed
with the Securities and Exchange Commission.
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
2
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 by selling vehicles to consumers who otherwise
could not obtain financing, by 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 are often unable to purchase a vehicle or they
purchase an unreliable one and are not provided 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 National Market under the symbol
CACCE. For more information, visit www.creditacceptance.com.
3