World Acceptance Corporation Reports Second Quarter

  World Acceptance Corporation Reports Second Quarter

Business Wire

GREENVILLE, S.C. -- October 25, 2012

World Acceptance Corporation (NASDAQ:WRLD) today reported financial results
for its second fiscal quarter and six months ended September 30,2012.

Net income for the second quarter decreased 1.7% to $22.9 million compared to
$23.3 million for the same quarter of the prior year. Net income per diluted
share increased 13.2% to $1.72in the second quarter of fiscal 2013 compared
to $1.52 in the prior year quarter. Total revenues increased to $139.4 million
in the second quarter of fiscal 2013, a 5.5% increase over the $132.1 million
reported in the second quarter last year.

Sandy McLean, CEO, stated, “The Company’s growth in earnings per share has
benefitted from our ongoing share repurchase program during the current fiscal
year. Over the past six months, the Company has repurchased approximately 1.1
million shares of World Acceptance’s stock. We continue to use our excellent
cash flow and strong financial position to fund our growth while repurchasing
shares.”

As previously announced, the Company increased its debt facility by $113
million dollars with the intention of utilizing $100 million to repurchase
shares. In the first six months, the Company has spent $75.1 million to
repurchase approximately 1.1 million shares. Combined with the 2.2 million
shares repurchased during fiscal 2012, the Company has reduced its weighted
average diluted shares outstanding by 12.9% when comparing the two six month
periods.

Loan demand improved during the second quarter, with gross loan balances
increasing to $1.1 billion at the end of the period, up $123.0 million and
12.7% from a year ago.

Interest and fee income increased 4.8%, from $116.2 million to $121.8 million
in the second quarter of fiscal 2013 due to continued growth in loan volume
and expansion of offices. Interest and fee yields decreased during the quarter
as a result of both a shift in collections to October, as well as the ongoing
decline in overall yields resulting from the slight change in mix to larger
balance loans. Insurance and other income rose by 10.5% to $17.6 million in
the second quarter of fiscal 2013 compared with $15.9 million in the second
quarter of fiscal 2012.

“Our charge-off rate decreased as a percent of net loans on an annualized
basis from 14.8% for the three months ended September 30, 2011, to 13.9% for
the three months ended September 30, 2012. Managing our credit risks is a key
driver of our earnings growth. Additionally, our past due loans as measured by
those that are 61+ days delinquent has remained flat at 4.2% on a contractual
basis for the two quarterly periods,” stated Mr. McLean.

The provision for loan losses rose 7.8% to $32.4 million in the second quarter
of fiscal 2013 compared to the second quarter of fiscal 2012. “We remain
focused on monitoring our loan portfolio in light of the difficult economy and
we believe that our allowance for loan losses is adequate based on the current
outlook,” noted Mr.McLean.

The Company’s general and administrative expenses increased by 7.6% compared
with the second quarter of the prior year due primarily to the new office
openings during fiscal 2013. The Company opened 35 new offices, purchased
three new offices and closed two offices during the first six-months of the
fiscal year resulting in a total of 1,173 offices at September30,2012.
General and administrative expenses as a percent of total revenues increased
from 46.5% in the prior year quarter to 47.5% during the current fiscal
quarter, primarily due to the lower revenue growth.

The Company’s second quarter effective income tax rate increased to 37.7%
compared with 36.5% for the prior year’s second quarter. The increase was
primarily due to the effects of a discrete event in the prior year quarter
resulting from the release of a reserve related to a state refund.

Other key return ratios for the second quarter included a 13.4% return on
average assets and a return on average equity of 25.1% (both on a trailing 12
month basis).

Six-Month Results

For the first six-months of the fiscal year, net income rose 4.7% to $45.5
million compared to $43.5 million for the six-months ended September 30, 2011.
Fully diluted net income per share rose 20.5% to $3.35 in fiscal 2013 compared
to $2.78 for the first six-months of fiscal 2012.

Total revenues for the first six-months of fiscal2013 rose 6.6% to
$272.2million compared to $255.3 million during the corresponding periodof
the previous year. Annualized net charge-offs as a percent of average net
loans decreased from 13.7% during the first six-months of fiscal 2012 to 13.1%
for the first six-months of fiscal 2013.

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance
companies, operating 1,173 offices in 13 states and Mexico. It is also the
parent company of ParaData Financial Systems, a provider of computer software
solutions for the consumer finance industry.

Second Quarter Conference Call

The senior management of World Acceptance Corporation will be discussing these
results in its quarterlyconference call to be held at 10:00 a.m. Eastern time
today. A script of the Chairman and Chief Executive Officer’s prepared remarks
for the conference call has been furnished as Exhibit 99.2 to the Company’s
Form 8-K filed today with the Securities and Exchange Commission (“SEC”) in
connection with thispress release, and is available via the SEC’s Edgar
database at www.sec.gov, and will also be posted totheCompany’s website as
soon as practicable. Interested partiesmay participatein this call by
dialing 1-888-455-2296, passcode 1803742. A simulcastof the conference
callisalsoavailable on the Internet at
http://www.videonewswire.com/event.asp?id=89760. The call will be available
for replay on the Internet for approximately 30days.

This press release may contain various “forward-looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
that represent the Company’s expectations or beliefs concerning future events.
Statements other than those of historical fact, as well as those identified by
the words “anticipate,” “estimate,” “plan,” “expect,” “believe,” “may,”
“will,” and “should” or any variation of the foregoing and similar expressions
are forward-looking statements. Such forward-looking statements are about
matters that are inherently subject to risks and uncertainties. Factors that
could cause actual results or performance to differ from the expectations
expressed or implied in such forward-looking statements include the following:
recently enacted, proposed or future legislation and the manner in which it is
implemented; the nature and scope of regulatory authority, particularly
discretionary authority, that may be exercised by regulators having
jurisdiction over the Company’s business or consumer financial transactions
generically; changes in interest rates; risks related to expansion and foreign
operations; risks inherent in making loans, including repayment risks and
value of collateral; the timing and amount of revenues that may be recognized
by the Company; changes in current revenue and expense trends (including
trends affecting delinquencies and charge-offs); changes in the Company’s
markets and general changes in the economy (particularly in the markets served
by the Company); and the unpredictable nature of litigation. These and other
factors are discussed in greater detail in Part I, Item 1A, “Risk Factors” in
the Company’s most recent annual report on Form 10-K filed with the Securities
and Exchange Commission (“SEC”) and the Company’s other reports filed with, or
furnished to, the SEC from time to time. World Acceptance Corporation does not
undertake any obligation to update any forward-looking statements it makes.
The Company is also not responsible for updating the information contained in
this press release beyond the publication date, or for changes made to this
document by wire services or Internet services.

                                                             
World Acceptance Corporation
                                                                       
Consolidated Statements of Operations
(unaudited and in thousands, except per share amounts)
                                                                       
                                   Three Months Ended      Six Months Ended
                                   September 30,           September 30,
                                   2012        2011        2012        2011
                                                                       
Interest & fees                  $ 121,818   $ 116,233   $ 237,117   $ 223,581
Insurance & other                  17,580      15,906      35,117      31,714
   Total revenues                  139,398     132,139     272,234     255,295
Expenses:
   Provision for loan losses       32,402      30,057      56,017      52,896
   General and
   administrative expenses
        Personnel                  44,670      40,742      93,083      85,377
        Occupancy &                9,138       8,720       17,781      16,939
        equipment
        Advertising                2,801       2,699       5,446       5,482
        Intangible                 339         434         708         867
        amortization
        Other                      9,210       8,869       18,299      17,312
                                   66,158      61,464      135,317     125,977
   Interest expense                4,066       3,947       7,992       7,331
        Total expenses             102,626     95,468      199,326     186,204
Income before taxes                36,772      36,671      72,908      69,091
Income taxes                       13,871      13,367      27,392      25,605
Net income                       $ 22,901    $ 23,304    $ 45,516    $ 43,486
Diluted earnings per share       $ 1.72      $ 1.52      $ 3.35      $ 2.78
Diluted weighted average           13,287      15,328      13,596      15,619
shares outstanding

                                                            
Consolidated Balance Sheets
(unaudited and in thousands)

                                 September 30,     March 31,      September
                                                                  30,
                                 2012              2012           2011
         ASSETS
Cash                           $ 12,704          $ 10,768       $ 13,061
Restricted cash                  -                 -              77,000
Gross loans receivable           1,087,902         972,723        964,955
     Less: Unearned interest     (297,407   )      (257,638 )     (258,484  )
     & fees
     Allowance for loan          (61,329    )      (54,507  )     (54,164   )
     losses
         Loans receivable,       729,166           660,578        652,307
         net
Property and equipment, net      24,319            23,486         23,199
Deferred income taxes            25,599            18,474         17,958
Goodwill                         5,896             5,691          5,635
Intangibles                      4,928             5,479          5,885
Other assets                     10,349           10,527        9,308     
                               $ 812,961        $ 735,003     $ 804,353   
                                                                  
         LIABILITIES AND
         SHAREHOLDERS'
         EQUITY
Liabilities:
     Notes payable               386,600           279,250        359,600
     Income tax payable          6,626             11,528         11,615
     Accounts payable and        22,345           25,350        20,494    
     accrued expenses
         Total liabilities       415,571           316,128        391,709
Shareholders' equity             397,390          418,875       412,644   
                               $ 812,961        $ 735,003     $ 804,353   

                                                             
Selected Consolidated Statistics
(dollars in thousands)
                                                                         
                     Three Months Ended                Six Months Ended
                     September 30,                     September 30,
                       2012              2011            2012              2011
                                                                         
Expenses as a
percent of total
revenues:
  Provision for        23.2      %       22.7    %       20.6      %       20.7      %
  loan losses
  General and
  administrative       47.5      %       46.5    %       49.7      %       49.3      %
  expenses
  Interest             2.9       %       3.0     %       2.9       %       2.9       %
  expense
                                                                         
Average gross        $ 1,063,271       $ 957,903       $ 1,032,306       $ 931,122
loans receivable
                                                                         
Average loans        $ 773,450         $ 699,978       $ 753,254         $ 682,096
receivable
                                                                         
Loan volume          $ 760,709         $ 703,505       $ 1,513,702       $ 1,406,097
                                                                         
Net charge-offs
as percent of          13.9      %       14.8    %       13.1      %       13.7      %
average loans
                                                                         
Return on
average assets         13.4      %       13.7    %       13.4      %       13.7      %
(trailing 12
months)
                                                                         
Return on
average equity         25.1      %       23.0    %       25.1      %       23.0      %
(trailing 12
months)
                                                                         
Offices opened
(closed) during        28                21              36                41
the period, net
                                                                         
Offices open at        1,173             1,108           1,173             1,108
end of period

Contact:

World Acceptance Corporation
Kelly Malson, 864-298-9800
Chief Financial Officer
 
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