World Acceptance Corporation Reports Second Quarter

  World Acceptance Corporation Reports Second Quarter

Business Wire

GREENVILLE, S.C. -- October 24, 2013

World Acceptance Corporation (NASDAQ:WRLD) today reported financial results
for its second fiscal quarter and six months ended September 30,2013.

Net income for the second quarter decreased 5.8% to $21.6 million compared to
$22.9 million for the same quarter of the prior year. Net income per diluted
share increased 4.7% to $1.80in the second quarter of fiscal 2014 compared to
$1.72 in the prior year quarter. Total revenues increased to $150.0 million in
the second quarter of fiscal 2014, a 7.6% increase over the $139.4 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. We continue to use our excellent cash flow and strong financial position
to fund our loan growth while repurchasing shares.” In the first six months of
fiscal 2014, the Company has repurchased approximately 733,000 shares for
$65.1 million. Combined with the 2.6 million shares repurchased during fiscal
2013, the Company has reduced its weighted average diluted shares outstanding
by 10.6% when comparing the two six-month periods.

“During the quarter, we opened two offices in Mississippi, increasing the
number of states we operate in to fourteen,” stated Mr. McLean.

Gross loans amounted to $1.16 billion at September 30, 2013, a 6.9% increase
over the $1.09 billion outstanding at September 30, 2012, and a 9.0% increase
since the beginning of the fiscal year. The second quarter’s growth rate of
6.9% in loans is the lowest that the Company has experienced in many years and
is due to a slowing in demand in our US operations.

Interest and fee income increased 9.2%, from $121.8 million to $133.0 million
in the second quarter of fiscal 2014 due to continued growth in loan volume
and expansion of offices. Insurance and other income decreased by 3.6% to
$17.0 million in the second quarter of fiscal 2014 compared with $17.6 million
in the second quarter of fiscal 2013.

The net charge-off rate increased as a percent of net loans on an annualized
basis from 13.9% for the three months ended September 30, 2012, to 15.4% for
the three months ended September 30, 2013. Accounts contractually delinquent
61+ days increased from 4.2% at September 30, 2012, to 5.3% at September 30,
2013. “The increase in net charge-offs and the increase in past due accounts
resulted in the Company recording an additional $1.5 million to the provision
expense during the current quarter,” stated Mr. McLean. The provision for loan
losses rose 17.9% to $38.2 million in the second quarter of fiscal 2014
compared to the second quarter of fiscal 2013.

The Company’s general and administrative expenses increased by 8.8% compared
with the second quarter of the prior year due primarily to new offices opened
during fiscal 2014. The Company opened 27 new offices, purchased one new
office and merged one office during the first six-months of the fiscal year
resulting in a total of 1,230 offices at September30,2013. General and
administrative expenses as a percent of total revenues increased from 47.5% in
the prior year quarter to 48.0% during the current fiscal quarter.

The Company’s second quarter effective income tax rate decreased slightly to
37.5% compared with 37.7% in the prior year’s second quarter.

Other key return ratios for the second quarter included a 12.2% return on
average assets and a return on average equity of 28.2% (both on a trailing
12-month basis).

Six-Month Results

For the first six-months of the fiscal year, net income decreased 1.8% to
$44.7 million compared to $45.5 million for the six-months ended September 30,
2012. Fully diluted net income per share rose 9.9% to $3.67 in fiscal 2014
compared to $3.35 for the first six-months of fiscal 2013.

Total revenues for the first six-months of fiscal2014 rose 8.4% to
$295.2million compared to $272.2 million during the corresponding periodof
the previous year. Annualized net charge-offs as a percent of average net
loans increased from 13.1% during the first six-months of fiscal 2013 to 14.5%
for the first six-months of fiscal 2014.

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance
companies, operating 1,230 offices in 14 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 withthispress release, and is available via the SEC’s Edgar
database at www.sec.gov, and will also be posted tothe Company’s website as
soon as practicable. Interested partiesmay participatein this call by
dialing 1-888-337-8198, passcode 7959773. A simulcastof the conference
callisalsoavailable on the Internet at
http://www.videonewswire.com/event.asp?id=96137. 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,
                       2013        2012            2013            2012
                                                                   
Interest & fees      $ 133,010   $ 121,818       $ 260,988       $ 237,117
Insurance & other      16,954      17,580         34,241         35,117    
    Total revenues     149,964     139,398         295,229         272,234
Expenses:
    Provision for      38,188      32,402          66,891          56,017
    loan losses
    General and
    administrative
    expenses
       Personnel       49,134      44,670          102,444         93,083
       Occupancy &     9,692       9,138           19,071          17,781
       equipment
       Advertising     3,050       2,801           5,773           5,446
       Intangible      265         339             577             708
       amortization
       Other           9,848       9,210          19,361         18,299    
                       71,989      66,158          147,226         135,317
    Interest expense   5,281       4,066          9,957          7,992     
       Total           115,458     102,626        224,074        199,326   
       expenses
Income before taxes    34,506      36,772          71,155          72,908
Income taxes           12,941      13,871         26,478         27,392    
Net income           $ 21,565    $ 22,901       $ 44,677       $ 45,516    
Diluted earnings per $ 1.80      $ 1.72         $ 3.67         $ 3.35      
share
Diluted weighted
average shares         11,980      13,287         12,160         13,596    
outstanding
                                                                   
                                                                   
Consolidated Balance Sheets
(unaudited and in thousands)
                                                                   
                                   September       March 31,       September
                                   30,                             30,
                                   2013            2013            2012
       ASSETS
Cash                             $ 14,489        $ 11,625        $ 12,704
Gross loans                        1,163,238       1,067,052       1,087,902
receivable
    Less: Unearned                 (320,980  )     (284,956  )     (297,407  )
    interest & fees
    Allowance for                  (67,608   )     (59,981   )     (61,329   )
    loan losses
       Loans
       receivable,                 774,650         722,115         729,166
       net
Property and                       23,957          23,935          24,319
equipment, net
Deferred income                    36,243          29,416          25,599
taxes
Goodwill                           5,967           5,896           5,896
Intangibles                        4,253           4,625           4,928
Other assets                       11,150         11,713         10,349    
                                 $ 870,709      $ 809,325      $ 812,961   
                                                                   
       LIABILITIES
       AND
       SHAREHOLDERS'
       EQUITY
Liabilities:
    Notes payable                  486,850         400,250         386,600
    Income tax                     6,024           13,942          6,626
    payable
    Accounts payable
    and accrued                    25,109         28,737         22,345    
    expenses
       Total                       517,983         442,929         415,571
       liabilities
Shareholders' equity               352,726        366,396        397,390   
                                 $ 870,709      $ 809,325      $ 812,961   
                                                                             



Selected Consolidated Statistics
(dollars in thousands)
                                                           
                   Three Months Ended              Six Months Ended
                   September 30,                   September 30,
                   2013            2012            2013            2012
                                                                   
Expenses as a
percent of total
revenues:
  Provision for      25.5      %     23.2      %     22.7      %     20.6      %
  loan losses
  General and
  administrative     48.0      %     47.5      %     49.9      %     49.7      %
  expenses
  Interest           3.5       %     2.9       %     3.4       %     2.9       %
  expense
                                                                   
Average gross      $ 1,150,564     $ 1,063,271     $ 1,121,423     $ 1,032,306
loans receivable
                                                                   
Average loans      $ 833,032       $ 773,450       $ 814,733       $ 753,254
receivable
                                                                   
Loan volume        $ 773,544       $ 760,709       $ 1,555,643     $ 1,513,702
                                                                   
Net charge-offs
as percent of        15.4      %     13.9      %     14.5      %     13.1      %
average loans
                                                                   
Return on
average assets       12.2      %     13.4      %     12.2      %     13.4      %
(trailing 12
months)
                                                                   
Return on
average equity       28.2      %     25.1      %     28.2      %     25.1      %
(trailing 12
months)
                                                                   
Offices opened
(closed) during      20              28              27              36
the period, net
                                                                   
Offices open at      1,230           1,173           1,230           1,173
end of period

Contact:

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