SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 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): May 3, 2004
Encore Capital Group,
Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 000-26489 | 48-1090909 | ||
|---|---|---|---|---|
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) | (I.R.S Employer (Identification No.) | ||
5775 Roscoe Court
San Diego, California
92123
(Address of Principal
Executive Offices) (Zip Code)
(877) 445-4581
(Registrant’s
Telephone Number, Including Area Code)
Item 9. Regulation FD Disclosure
On May 3, 2004 the Company issued a press release announcing that it had entered into a commitment letter related to a $75 million three-year revolving credit facility to be utilized for the purpose of purchasing portfolios of receivables and for working capital needs. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 9.
The information in this Current Report on Form 8-K, including the exhibit, is furnished pursuant to Item 9 and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities under that Section. Furthermore, the information in this Current Report on Form 8-K, including the exhibit, shall not be deemed to be incorporated by reference into the filings of Encore Capital Group, Inc. under the Securities Act of 1933.
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 thereunto duly authorized.
| Date: May 5, 2004 | ENCORE CAPITAL GROUP, INC. By /s/ Barry R. Barkley —————————————— Barry R. Barkley Executive Vice President, Chief Financial Officer and Treasurer |
2
EXHIBIT INDEX
| Exhibit | Description |
| 99.1 | Press release dated May 3, 2004. |
3
Exhibit 99.1
Encore Enters Into a
Commitment Letter
for a $75 Million
– Three Year Revolving Facility
SAN DIEGO — (BUSINESS WIRE)—May 3, 2004 — Encore Capital Group, Inc. (Nasdaq: ECPG), a leading accounts receivable management firm reported that effective April 29, 2004, the Company entered into a commitment letter related to a $75 million three-year revolving credit facility to be utilized for the purpose of purchasing portfolios of receivables and for working capital needs. It is the Company’s expectation that this facility will be used, at the Company’s option, during the second half of 2004 to fund portfolio purchases of non-credit card paper classes and, upon the expiration of the Company’s Secured Financing Facility on December 31, 2004, to fund all types of portfolio purchases, including credit card receivables. This commitment is subject to the satisfactory completion of lender due diligence and credit facility documentation, as well as the absence of any material adverse change in the business condition (financial or otherwise), operations, performance, properties, or prospects of the Company or any of its material subsidiaries since December 31, 2003. Interest rates will be based, at the Borrower’s option, on the lender’s prime rate or on LIBOR plus an applicable margin. The applicable margin will be adjusted quarterly based on a pricing grid which takes into account certain financial covenants related to the borrower’s balance sheet and results of operations. It is anticipated that the resulting initial interest rate will be in the mid single digits. The facility will be secured by a security interest in all of the assets of the Company except for those assets in which the current lenders have a first priority security interest. The commitment also requires the Company to pay certain fees and expenses to the lender in connection with the commitment letter and the loan. While there can be no assurance that the Company will be able to close this facility on acceptable terms, it is anticipated to close by the end of the second quarter of 2004.
About Encore Capital Group, Inc.
Encore Capital Group, Inc. is an accounts receivable management firm that specializes in purchasing charged-off and defaulted consumer debt.
Forward Looking Statements
The statements in this press release that are not historical facts, including, most importantly, those statements preceded by, or that include, the words “may,” “believes,” “projects,” “expects,” “anticipates” or the negation thereof, or similar expressions, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). These statements may include, but are not limited to, anticipated interest rates under the new credit facility; whether the Company will be successful in securing the new credit facility on acceptable terms; projections of revenues, income or loss; estimates of capital expenditures; plans for future operations, products or services; and financing needs or plans, as well as assumptions relating to those matters. For all “forward-looking statements,” the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and our subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that could affect the Company’s results and cause them to materially differ from those contained in the forward-looking statements include: the availability and cost of financing, including increases in interest rates and adverse changes or disruptions in primary and secondary loan syndication markets, financial markets, or capital markets generally that could impair syndication of the new credit facility or otherwise affect the financial terms or the lender’s willingness to enter into the new facility on acceptable terms; the Company’s ability to purchase receivables portfolios on acceptable terms and in sufficient quantities; the Company’s ability to recover sufficient amounts on or with respect to receivables to fund operations; the Company’s continued servicing of receivables in its third party financing transactions; the Company’s ability to hire and retain qualified personnel to recover on its receivables efficiently; changes in, or failure to comply with, government regulations; the costs, uncertainties and other effects of legal and administrative proceedings; and risk factors and cautionary statements made in the Company’s Annual Report on Form 10-K as of and for the year ended December 31, 2003. Forward-looking statements speak only as of the date the statement was made. They are inherently subject to risks and uncertainties, some of which the Company cannot predict or quantify. Future events and actual results could differ materially from the forward-looking statements. The Company will not undertake and specifically declines any obligation to publicly release the result of any revisions to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events, whether as the result of new information, future events or for any other reason. In addition, it is the Company’s policy generally not to make any specific projections as to future earnings, and the Company does not endorse any projections regarding future performance that may be made by third parties.
CONTACT:
Encore Capital Group,
Inc. (Shareholders/Analysts)
Carl C. Gregory, III, 858-309-6961
carl.gregory@encorecapitalgroup.com
or
Financial Relations Board
(Press)
Tony Rossi, 310-407-6563 (Investor Relations)
trossi@financialrelationsboard.com
SOURCE:
Encore Capital Group, Inc.