Decision Is Part of Company's Plans to Rebuild Shareholder Value
SAN FRANCISCO, Nov. 14 /PRNewswire/ --
Providian Financial Corporation (NYSE: PVN) announced today that it will close
its Henderson, Nevada facility on December 7, 2001. The Company said the
closure grew out of an effort to manage costs and improve overall efficiency
that forms one part of a five-point plan it is pursuing to build investor
confidence and shareholder value.
"The decision to close a site is always difficult but this decision is
critical to our plans to refocus our business going forward," said
Jim Redmond, executive vice president of domestic credit card operations. "We
will work closely with the affected employees through this time of change to
provide them with an appropriate transition package as well as outplacement
and other benefits."
The Company said that it expects that approximately 700 employees will be
affected by the facility closing. Henderson employees who elect to continue
working until their release dates will receive a lump-sum payment equal to the
balance of what they would have received in salary had they remained on the
payroll until January 13. The Company expects that all Henderson employees
will be released by December 7. The Company estimates that it will realize
approximately $18 million in annual operating expense savings as a result of
this closure, and stated that it plans to take a one-time charge of
approximately $12.0 million in the fourth quarter of 2001 to reflect
associated costs.
The closure of the Henderson facility arose from a broad strategic review
now underway at Providian focused on rebuilding shareholder value. In close
consultation with its investment bankers, the Company is also considering
further courses of action that may include business divestitures and asset
sales, and other strategic business transactions. The Company has recently
begun implementing steps designed to address under-performing areas, to focus
the business on those market segments with the highest expected risk-adjusted
returns, to reduce expenses, and to manage its capital, reserves, and
liquidity.
San Francisco-based Providian Financial is a leading provider of credit
cards and deposit products to customers throughout the U.S., and also offers
credit cards and deposit products in the UK and in Argentina. The Company has
more than $32 billion in managed receivables and more than 18 million customer
accounts.
This release contains forward-looking statements as to the Company's
expectations, intentions and goals that are subject to the "safe harbor"
provisions created by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include expressions of "belief," "expectations,"
"intentions" and other words of similar import, statements as to industry and
economic trends, and other statements that are not historical facts. Such
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements. Among the significant risks and uncertainties
are: competitive pressures; factors that affect delinquency rates,
credit loss rates and charge-off rates; general economic conditions;
consumer loan portfolio growth; changes in the cost and/or availability of
funding due to changes in the deposit, credit or securitization markets,
changes in the way in which the Company is perceived in such markets, and/or
conditions relating to existing or future financing commitments; the effects
of government policy and regulation, including restrictions and/or limitations
on the Company's minimum capital requirements, deposit taking abilities,
growth, accounting policies, and/or underwriting criteria; product
development; legal and regulatory proceedings; interest rates; acquisitions;
one-time charges; extraordinary items; the ability to attract and retain key
personnel; the impact of existing, modified or new strategic initiatives; and
international factors. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to update any forward-looking statements.
More information on risks and uncertainties relating to the Company are
available in the Company's filings with the Securities and Exchange
Commission, including its annual report on Form 10-K, quarterly reports on
Form 10-Q, and current reports on Form 8-K.
SOURCE Providian Financial Corporation
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Related links:
http://www.providian.com
CONTACT:
Alan Elias, +1-415-717-1750, or
alan_elias@providian.com, or investors, Jack Carsky,
+1-415-278-4977, or jack_carsky@providian.com, both of Providian
Financial Corporation
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