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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 7, 2021
CREDIT ACCEPTANCE CORPORATION
(Exact name of registrant as specified in its charter)
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Michigan | | 000-20202 | | 38-1999511 |
(State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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25505 West Twelve Mile Road | | | | |
Southfield, | Michigan | | | | 48034-8339 |
(Address of principal executive offices) | | | | (Zip Code) |
Registrant’s telephone number, including area code: (248) 353-2700
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| Not Applicable | |
(Former name or former address, if changed since last report.) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading symbol(s) | | Name of each exchange on which registered |
| Common Stock, $.01 par value | | CACC | | The Nasdaq Stock Market |
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 240.14a-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))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 7.01 Regulation FD Disclosure.
Credit Acceptance Corporation is furnishing materials, included as Exhibit 99.1 to this report and incorporated herein by reference, which were prepared for inclusion on its investor relations website. Credit Acceptance Corporation is not undertaking to update these materials. This report should not be deemed an admission as to the materiality of any information contained in these materials.
The information furnished in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit No. | | Description |
| | | | Shareholder Letter added to website on or about April 7, 2021. |
| 104 | | | | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |
Forward-Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1, contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties and include information about our expectations and possible or assumed future results of operations. When we use any of the words "may," "will," "should," "believe," "expect," "anticipate," "assume," "forecast," "estimate," "intend," "plan," “target” or similar expressions, we are making forward-looking statements.
We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. These forward-looking statements represent our outlook only as of the date of this report. While we believe that our 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 our Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 12, 2021, and the risks and uncertainties discussed in our other reports filed or furnished from time to time with the SEC and the following:
Industry, Operational and Macroeconomic Risks
◦The outbreak of COVID-19 has adversely impacted our business, and the continuance of this pandemic, or any future outbreak of any contagious diseases or other public health emergency, could materially and adversely affect our business, financial condition, liquidity and results of operations.
◦Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
◦Due to competition from traditional financing sources and non-traditional lenders, we may not be able to compete successfully.
◦Reliance on third parties to administer our ancillary product offerings could adversely affect our business and financial results.
◦We are dependent on our senior management and the loss of any of these individuals or an inability to hire additional team members could adversely affect our ability to operate profitably.
◦Our reputation is a key asset to our business, and our business may be affected by how we are perceived in the marketplace.
◦The concentration of our dealers in several states could adversely affect us.
◦Reliance on our outsourced business functions could adversely affect our business.
◦Our ability to hire and retain foreign information technology personnel could be hindered by immigration restrictions.
◦We may be unable to execute our business strategy due to current economic conditions.
◦Adverse changes in economic conditions, the automobile or finance industries, or the non-prime consumer market could adversely affect our financial position, liquidity and results of operations, the ability of key vendors that we depend on to supply us with services, and our ability to enter into future financing transactions.
◦Natural disasters, acts of war, terrorist attacks and threats or the escalation of military activity in response to these attacks or otherwise may negatively affect our business, financial condition and results of operations.
◦A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders have interests which may conflict with the interests of our other security holders.
Capital and Liquidity Risks
◦We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
◦The terms of our debt limit how we conduct our business.
◦A violation of the terms of our asset-backed secured financing facilities or revolving secured warehouse facilities could have a material adverse impact on our operations.
◦Our substantial debt could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition.
◦We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.
◦Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.
◦The phaseout of the London Interbank Offered Rate (“LIBOR”), or the replacement of LIBOR with a different reference rate, could result in a material adverse effect on our business.
◦Reduction in our credit rating could increase the cost of our funding from, and restrict our access to, the capital markets and adversely affect our liquidity, financial condition and results of operations.
◦We may incur substantially more debt and other liabilities. This could exacerbate further the risks associated with our current debt levels.
◦The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations.
Information Technology and Cybersecurity Risks
◦Our dependence on technology could have a material adverse effect on our business.
◦Our use of electronic contracts could impact our ability to perfect our ownership or security interest in Consumer Loans.
◦Failure to properly safeguard confidential consumer and team member information could subject us to liability, decrease our profitability and damage our reputation.
Legal and Regulatory Risks
◦Litigation we are involved in from time to time may adversely affect our financial condition, results of operations and cash flows.
◦Changes in tax laws and the resolution of uncertain income tax matters could have a material adverse effect on our results of operations and cash flows from operations.
◦The regulations to which we are or may become subject could result in a material adverse effect on our business.
Other factors not currently anticipated by management may also materially and adversely affect our business, financial condition and results of operations. We do not undertake, and expressly disclaim any obligation, to update or alter our 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.
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| CREDIT ACCEPTANCE CORPORATION | |
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| Date: April 7, 2021 | By: | /s/ Kenneth S. Booth | |
| | Kenneth S. Booth | |
| | Chief Financial Officer | |