SOURCE: Velocity Portfolio Group, Inc.

Velocity Portfolio Group, Inc.

April 23, 2009 09:03 ET

Velocity Portfolio Group Files Annual Report on 10-K and Complies With Section 610(b) of the NYSE Alternext Company Guide

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).

Contact Information

  • Contact:

    James J. Mastriani
    Chief Financial Officer
    Velocity Portfolio Group, Inc.
    (732) 556-9090