SAN ANTONIO, April 9, 2002 (PRIMEZONE) -- AutoFund Servicing, Inc.'s (OTCBB:AFSR) Board of Directors announced that it has completed a reduction of the Company's overhead by 40%. Furthermore, due to the company's new strategically focused collecting, revenues are generated in six to nine months rather than in the 18 to 24 months of the past.
"We have restructured and refocused our collection staff to collect first from what we call the 'premium four' (i.e., insurance, collateral, bankruptcy and tax rebates) of our auto portfolios," according to Mr. James Haggard, Chairman of the Board and President of AutoFund Servicing. "These four sections represent over 88% of our collective potential net revenue from the auto portfolio. History has shown us that the fifth part of the portfolio, the deficiency balance section, has always been very labor intensive with a high employee turnover. So by changing the focus of our collection staff, we have been able to cut our employee base significantly and reduce our previous collection time of 18 to 24 months to as low as six to nine months. During the sixth to ninth months we then resize and remarket the portfolio for 150% of its original cost. As a result we collect eight percent of the face value in one-fourth the time. As an added bonus of our strategically refocused debt collecting, our operating costs have adjusted down to 32%."
ABOUT THE COMPANY: AutoFund Servicing, Inc. is a third-party collection and recovery-service provider to auto loan finance companies. Our clients include banks, buy-here/pay-here companies and auto finance companies that have bad debt accounts. These auto loan accounts have, for the most part, been written off or charged off by the company who provided the vehicle loan to the customer, and the debt is still owed by a customer whose vehicle may or may not have been repossessed. AutoFund Servicing aggressively seeks accounts from these companies to process for recovery.
AutoFund Servicing purchases large numbers of these accounts, at pennies on the dollar, from companies that wish to liquidate certain delinquent accounts from their portfolio. Then AutoFund, through its large professional staff, attempts to collect the monies owed on these accounts. It also provides data-storage services for clients and generates reports from this data for its clients.
Certain statements about the Company's future expectations, including future revenues, earnings and transactions, as well as all other statements in the press release other than historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby. Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results and other corporate developments could differ materially from that which has been anticipated in such statements.