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): APRIL 22, 2005
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 or (I.R.S. Employer Identification No.)
organization)
25505 W. TWELVE MILE ROAD, SUITE 3000 48034-8339
SOUTHFIELD, MICHIGAN (Zip Code)
(Address of Principal Executive Offices)
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
140.14a-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 8.01. OTHER EVENTS.
As previously announced, Credit Acceptance Corporation (the "Company")
was unable to timely file its Annual Report on Form 10-K for the year ended
December 31, 2004. This resulted in a violation of certain covenants in its Loan
and Security Agreement, dated September 30, 2003, among the Company, CAC
Warehouse Funding Corporation II, Wachovia Bank, National Association, Variable
Funding Capital Corporation, Wachovia Capital Markets, LLC, and Systems &
Services Technologies, Inc., as amended, and agreements related thereto (the
"Loan Agreement"). These violations, and certain related violations, were waived
on April 11, 2005 pursuant to a Waiver that expired on April 22, 2005 (the
"Original Waiver").
On April 22, 2005, the Company and certain other parties to the Loan
Agreement executed a new Waiver ("Waiver No. 2") extending the Original Waiver.
Pursuant to Waiver No. 2, the parties waived the breach of certain provisions of
the Loan Agreement resulting from the Company's ongoing discussions concerning
its accounting policies with Deloitte & Touche LLP, the Company's resulting
inability to timely file its Form 10-K and certain related matters. Waiver No. 2
is effective as of April 22, 2005 and expires on May 31, 2005.
As previously announced, the Company intends to seek SEC guidance as to
the proper accounting methodology in connection with how it accounts for loans.
There can be no assurance as to the length of time necessary to complete this
process, and the Company believes it may not be completed prior to May 31, 2005.
If the Company is not able to determine the appropriate accounting policies for
loans and file its Form 10-K prior to such date, it intends to seek an extension
of Waiver No. 2 from the applicable parties. The Company currently believes the
parties will agree to such an extension, if required.
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,
- 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 alter its
statements whether as a result of new information, future events or otherwise,
except as required by applicable law.
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/ Douglas W. Busk
-----------------------
Douglas W. Busk
Treasurer
April 22, 2005