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
World Acceptance Corporation Reports Second Quarter
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