Shares of once high-flying Creditrust Corp. touched an all-time low of 84.38 cents yesterday, after having soared to a high of $34.125 just 10 months ago. They closed at 93.75 cents, down 6.25 cents on the day.
The struggling Baltimore-based company, which collects and manages delinquent credit-card accounts, filed a document with the Securities and Exchange Commission yesterday noting that its first-quarter financial report will be delayed.
The filing states that the information must be reviewed by independent auditors before the report is filed with the SEC.
Richard J. Palmer, Creditrust's chief financial officer, said he did not have a target date for when the first-quarter numbers will be made public."We are working on it to have it published as quickly as possible," he said. Palmer declined to discuss Creditrust's stock.
Creditrust said in the filing that net income in the three-month period that ended March 31, 2000, "did not increase significantly" from the $2.4 million, or 28 cents a fully diluted share, reported for the corresponding period a year earlier."It sounds like they will still be profitable" in the first quarter, said Derek Derman, an analyst at Wedbush Morgan Securities in Los Angeles.
Derman said he believes that the company is "strategically" delaying the release of first-quarter earnings for "as long as they can so they have more to say with what they are doing with Goldman, Sachs and Seneca" Financial Group Inc.
Creditrust hired Goldman, Sachs & Co. in December to advise it on finding a partner to buy a portion of the company. The move came several days after Standard & Poor's withdrew Creditrust's "above average" ranking as a credit-card servicer, after disclosure that an employee of the company misdirected $500,000.
The money was eventually recovered at no loss to Creditrust.
The company has been scrambling to raise additional capital to fuel its business. Last month, it ended its bid for a $55 million loan after it could not agree with the lender on the terms of the financing.
On April 20, Creditrust said it was in default on a secured line of credit, and it announced that it had hired Seneca to help it with "strategic restructuring options," and to seek additional financing sources.