Asset Acceptance Capital Corp. Announces The Expansion Of Its Legal Collections Operations In Florida And The Closing Of Its Arizona Collections Call Center
Asset Acceptance Capital Corp. (NASDAQ: AACC), a leading purchaser and collector of charged-off consumer debt, today announced that it will be expanding its legal collections operations in Riverview, Florida and closing its Tempe, Arizona collections call center. The closing of the Tempe collections office, along with related inventory reallocations is expected to be accretive to earnings on an annual basis by approximately $4.0 million or $0.13 per share.
In connection with closing the Tempe collections office, the Company will incur approximately $0.9 million, or $0.02 per fully diluted share after the effect of taxes, in restructuring charges during the third and fourth quarters of 2012. Restructuring charges include employee termination benefits, contract termination fees for the remaining lease payments on the Arizona office, net of potential sub-lease, and accelerated depreciation. The employee termination benefits and contract termination costs will require an outlay of cash of approximately $0.7 million, while the accelerated depreciation represents a non-cash charge.
As part of this action, the Company plans to expand its India collection channel and reallocate the inventory from the Tempe collections office to that channel. In addition, given the Company’s continued investment in the legal collections channel and launch of Recovery Services, a fee for service legal collections business, it will be fully transitioning its Riverview, Florida call center collections staff to the legal collections channel also located in Riverview. These reallocations are expected to yield significant improvement to profitability by optimizing channel mix and inventory returns. The Company anticipates some modest negative cash collections impact during the inventory transition period of September through December 2012.
Rion Needs, President and CEO, Asset Acceptance Capital Corp. noted, “Office closures are never easy. However, these actions reflect our continued efforts to improve our operating efficiencies and competitive positioning, as well as increase shareholder value. As we have recently discussed, we have been making investments in our legal collections channel that we believe have attractive economics. This is another example of where our improved use of analytics has allowed us to better assess profitability across our inventory and collection networks. We anticipate further operational improvements going forward that are expected to add increased value to our business model.”About Asset Acceptance Capital Corp. For 50 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.
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