UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 12b-25
SEC File Number:001-12351
NOTIFICATION OF LATE FILING
(Check One): Form 10-K Form 20-F Form 11-K X Form 10-Q
Form N-SAR
For Period Ended: September 30, 2003
__Transition Report on Form 10-K
__Transition Report on Form 20-F
__Transition Report on Form 11-K
__Transition Report on Form 10-Q
__Transition Report on Form N-SAR
For the Transition Period Ended: ___________________
Read Instruction (on back page) Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has
verified any information contained herein.
If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
PART I -- REGISTRANT INFORMATION
Metris Companies Inc.
Full Name of Registrant
Not applicable
Former Name if Applicable
10900 Wayzata Boulevard
Address of Principal Executive Office (Street and Number)
Minnetonka, Minnesota 55305
City, State and Zip Code
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed. (Check box if appropriate) ____
(a) The reasons described in reasonable detail in Part III of this form could
not be eliminated without unreasonable effort or expense; (b) The subject annual
report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K
or Form N-SAR, or portion thereof, will be filed on or before the fifteenth
calendar day following the prescribed due date; or the subject quarterly report
or transition report on Form 10-Q, or portion thereof, will be filed on or
before the fifth calendar day following the prescribed due date; and (c) The
accountant's statement or other exhibit required by Rule 12b-25(c) has been
attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Form 10-Q could not be filed
within the prescribed time period.
Metris Companies Inc. (the "Company") could not file its quarterly report on
Form 10-Q for the quarter ended September 30, 2003, within the prescribed time
period because of an outstanding valuation issue relating to the retained
interests in loans securitized by the Company. The Company's outside auditors,
KPMG LLP, issued a letter to the Audit Committee noting a material weakness
involving internal control relating to the Company's policies and procedures for
valuing its retained interests. The Company is analyzing its policies and
procedures and will convey the results of that analysis to KPMG. The Company
will complete its analysis for this and prior periods and file its report for
the quarter ended September 30, 2003, as soon as possible.
PART IV-- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
John A. Witham (952) 525-5028
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of
1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If answer is no,
identify report(s). X Yes No
(3) Is it anticipated that any significant change in results of operations from
the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?
X Yes No
If so, attach an explanation of the anticipated change, both narratively and
quantitatively, and, if appropriate, state the reasons why a reasonable estimate
of the results cannot be made.
Subject to resolution of the outstanding valuation issue discussed above, set
forth below is an explanation of the anticipated change in results of operations
from the corresponding period in the last fiscal year:
Net loss for the three-months ended September 30, 2003, was $120.3 million,
compared to a net loss of $1.3 million for the third quarter of 2002. Diluted
loss per common share for the three-months ended September 30, 2003 was $2.27
compared to a diluted loss per common share of $0.19 for the third quarter of
2002. The $119.0 million increase in net loss is due to a $5.8 million decrease
in "Net interest income," a $6.7 million decrease in "Provision for loan
losses," a $138.9 million decrease in "Other operating income" and a $21.3
million increase in "Other operating expense." Included in the third quarter
2003 results is a $67.1 million after-tax net loss consisting of special items
associated with the impacts from the sale of the Company's membership club and
warranty business, a credit card loan portfolio sale of approximately $590
million, a workforce reduction, the sale of certificates of deposit, the
write-down of certain fixed assets and leases, and a portfolio sale of
approximately $500 million, which closed on November 13, 2003.
Net loss for the nine-months ended September 30, 2003 was $161.0 million,
compared to net income of $14.6 million for the first nine-months of 2002.
Diluted loss per common share for the nine-months ended September 30, 2003 was
$3.32 compared to diluted loss per common share of $0.22 for the nine-months
ended September 30, 2002. The $175.6 million decrease in net income primarily
relates to a $79.8 million decrease in "Net interest income," and a $344.8
million decrease in "Other operating income" offset by a $121.0 million decrease
in "Provision for loan losses" and a $42.5 million decrease in "Other operating
expense." In addition to the $67.1 million net loss after-tax consisting of
special items noted above, the nine-month period ended September 30, 2003
includes a $15.1 million after-tax charge for workforce reductions and the
write-down of certain assets and leases taken in the first and second quarters
of 2003. Included in the same nine-month period of 2002 is the $5.9 million
after-tax write-down of a portfolio of charged-off loans purchased in 2001 and
2000.
Metris Companies Inc.
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: November 17, 2003 By: /s/John A. Witham
Name: John A. Witham
Title: Executive Vice President
and Chief Financial Officer