DALLAS, June 9 /PRNewswire/ --
ACE Cash Express, Inc. (Nasdaq: AACE), the nation's largest check-cashing chain and a significant provider of related retail financial services, announced today that it expects to report lower- than-anticipated earnings for its fourth quarter and fiscal year ending June 30, 2000. The Company expects to report revenues of approximately $36 million for the fourth quarter, with diluted earnings per share expected to range from $0.12 to $0.16 for the quarter. Though the expected fourth quarter revenues would be an increase of 14% over the fourth quarter revenues for the last fiscal year, the diluted earnings per share would be less than the analysts' estimates of $0.25 to $0.27 per share for the quarter.
For the fiscal year ending June 30, 2000, the Company expects to report revenue of approximately $140 million, which would be an increase of 15% over the revenues for the fiscal year-ended June 30, 1999. Diluted earnings per share for fiscal 2000 are expected to range from $0.86 to $0.90, which would be an increase of 7.5 % to 12.5% over the diluted earnings per share of $0.80 for fiscal year 1999.
The Company plans to announce its full financial results for the fourth quarter and the fiscal year ending June 30, 2000 during the week of August 14, 2000.
"We are disappointed with our expected earnings for the fourth quarter," said Jay B. Shipowitz, president and chief operating officer. "Earnings per share for the quarter are expected to fall short of the analysts' estimates. Most of that difference is attributable to the pending settlement of a class action lawsuit, increased costs associated with the rollout of the new Goleta National Bank loan product, greater than expected costs related to self- insured medical claims, and lower bill payment transactions from several billers."
As previously disclosed, the Company is defending various purported class- action lawsuits regarding its "payday loan" activities. The Company has tentatively reached a settlement in one of those lawsuits and plans to expense the cost of the settlement in the quarter ending June 30, 2000.
"Based on our belief that the Goleta National Bank loan product will bring significant revenues to ACE, we have invested in technology and training to further the program," stated Jay B. Shipowitz. "We accelerated the rollout, which resulted in higher costs than anticipated in the fourth quarter. But, based on initial consumer demand, we expect that this accelerated rollout will benefit ACE in fiscal 2001. In addition, we had a number of unusually large medical claims that resulted in higher than expected medical expenses."
Shipowitz also explained, "Several of our large bill payment vendors have aggressively added other agent locations, which has reduced the number of transactions processed at ACE locations. We have, however, added new payment relationships with US West, Oklahoma Natural Gas, Baltimore Gas and Electric, Air Touch Cellular, Verizon Wireless, BellSouth Cellular, and GTE Wireless, which we believe will position the Company well for fiscal 2001."
