EXHIBIT (a)(5)(vi)
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.
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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.
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