Contact Information: Contact: James J. Mastriani Chief Financial Officer Velocity Portfolio Group, Inc. (732) 556-9090
Velocity Portfolio Group Files Annual Report on 10-K and Complies With Section 610(b) of the NYSE Alternext Company Guide
| Source: Velocity Portfolio Group, Inc.
WALL, NJ--(Marketwire - April 23, 2009) - Velocity Portfolio Group, Inc. (AMEX : PGV ), a
portfolio management company that purchases unsecured consumer receivables,
announced today that it has filed its Annual Report on Form 10-K for the
fiscal year ended December 31, 2008 with the U.S. Securities and Exchange
Commission. Such Form 10-K is available on the SEC's website at
www.sec.gov.
In addition, and in compliance with Section 610(b) of the NYSE Alternext
Company Guide, the company disclosed that such Form 10-K contains a
qualified "going concern" qualification from its independent registered
public accounting firm, Weiser LLP. Section 610(b) of the NYSE Alternext
Company Guide requires separate disclosure of a recent audit opinion that
contains a "going concern" qualification. This announcement does not
represent any change or amendment to the company's 2008 audited financial
statements or to its 2008 Annual Report on Form 10-K.
As of December 31, 2008, the company did not satisfy the required minimum
stockholder's equity covenant under its credit facility with Wells Fargo
Foothill. In addition, the company and its wholly owned subsidiary,
Velocity Investments LLC, did not satisfy the minimum net income covenant
for the 4th quarter. The company has requested a waiver from Wells Fargo
Foothill of these December 31, 2008 covenants and is working with the
lender to amend the credit facility to restructure these covenants. The
company has been engaged in discussions with Wells Fargo Foothill and
believes that it should be able to finalize the negotiations and completion
of a waiver and amendment to the credit facility in May 2009.
Jack Kleinert, President and CEO of the company, stated, "Our failure to
satisfy these covenants as of December 31, 2008 was caused by an impairment
charge taken as a result of a revision of our expected estimated cash
collection forecast methodology by extending the collection forecast useful
life of our pools from 60 months to 84 months and adjusting the timing of
expected future collections as a result of the current economic crisis."
He added, "Wells Fargo has indicated that they will waive the technical
covenant violations. We are working with them to modify the covenants to
reflect the revised forecast methodology, but we were not able to complete
these modifications prior to the filing of our annual report."
The company reported a net loss for the year ended December 31, 2008 of
approximately $2.9 million. The net loss was primarily attributable to an
impairment expense of approximately $8.36 million on its consumer
receivable portfolios. This impairment was the result of a combination of
an extension of the collection curve from 60 to 84 months and an expected
shortfall in collections in certain pool groups against management's
original forecast as a result of the current economic crisis. For the
twelve month period ended December 31, 2008, the company posted gross
collections of approximately $17.7 million, compared to gross collections
of $18.0 million in the twelve month period ended December 31, 2007,
representing a 1.3% decrease.
About Velocity Portfolio Group, Inc.
We are a portfolio management company that purchases unsecured consumer
receivables in the secondary market and seeks to collect those receivables
through an outsourced legal collection network. Our primary business is to
acquire credit-card receivable portfolios at significant discounts to the
total amounts owed by the debtors. We use our proprietary valuation process
to calculate the purchase price so that our estimated cash flow from such
portfolios offers us an adequate return on our investment after servicing.
For more information, visit www.velocitycollect.com
"Safe Harbor" statement under the Private Securities Litigation Reform Act
of 1995.
Except for the historical information contained herein, this press release
and the statements of representatives and partners of Velocity Portfolio
Group, Inc. (the "Company") related thereto contain or may contain, among
other things, certain forward-looking statements, within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve significant risks and uncertainties. Such statements may
include, without limitation, statements with respect to the Company's
plans, objectives, projections, expectations and intentions and other
statements identified by words such as "projects," "may," "could," "would,"
"should," "believes," "expects," "anticipates," "estimates," "intends,"
"plans" or similar expressions. These statements are based upon the current
beliefs and expectations of the Company's management and are subject to
significant risks and uncertainties, including those detailed in the
Company's filings with the Securities and Exchange Commission. Actual
results may differ significantly from those set forth in the
forward-looking statements. These forward-looking statements involve
certain risks and uncertainties that are subject to change based on various
factors (many of which are beyond the Company's control).