a buying opportunity--or do i sound like an analyst
CMSI to Litigate Contract Dispute with THE MONEY STORE
COLUMBIA, Md., Jan. 26 /PRNewswire/ -- Credit Management Solutions, Inc. (CMSI) (Nasdaq: CMSS), a service bureau provider for various credit transactions and a developer and provider of software for automating the consumer and small business credit analysis, decision-making and funding process, today announced that it has filed a complaint in the Circuit Court for Howard County, Maryland, asserting claims against The Money Store Auto Finance, Inc. and The Money Store Service Corporation (collectively, "The Money Store").
The Money Store (Nasdaq: MONE) has informed CMSI that it is terminating the project under which CMSI was developing software to be licensed by The Money Store. The Money Store stated that the termination was not based on any disagreement with or dissatisfaction with CMSI or any CMSI products, services or actions.
James DeFrancesco, CEO for CMSI, reported, "We were very surprised that The Money Store would unilaterally terminate this project three weeks before scheduled delivery. We have invested a tremendous amount of effort in this project over the past eight months. We are disappointed by The Money Store's actions, which left us with no choice but to file a lawsuit to protect the interests of our Company and our shareholders."
Repeated efforts by CMSI to obtain a settlement which would avoid litigation have failed. The original software license price was $1.5 million. To date, The Money Store his paid $375,000 to CMSI, which was recognized in revenues for the third quarter of 1997.
Robert Vollono, CFO for CMSI stated, "We are writing off all revenues associated with this project in excess of the initial $375,000. This adjustment will result in an adverse impact to CMSI's earnings in the fourth quarter and for the year. It is currently anticipated that this adjustment will result in an incremental loss of approximately 10 cents per share. Absent this unexpected event, the Company believes its earnings for the fourth quarter would have been consistent with anticipated results." The Company is currently in the process of its annual audit and expects to announce fourth quarter and 1997 results in early February. |
