 | | NEWS RELEASE For Immediate Release |
Chief Financial Officer
(864) 298-9800
WORLD ACCEPTANCE CORPORATION REPORTS
RECORD FOURTH QUARTER RESULTS
GREENVILLE, S.C. (April 24, 2008) - World Acceptance Corporation (NASDAQ: WRLD) today reported record financial results for its fourth fiscal quarter and fiscal year ended March 31, 2008.
Fourth Quarter Results
Net income for the fourth quarter rose 15.9% to $24.4 million compared with $21.0 million for the same quarter of the prior year. Net income per diluted share increased 23.1% from $1.17 for the prior year quarter to $1.44 in the current quarter. Growth in per share income for the quarter ended March 31, 2008, benefited from the Company’s ongoing share repurchase program, whereby, approximately 685,000 shares were repurchased during the quarter. Total revenues increased to $101.4 million, a 16.3% increase over the $87.2 million for the quarter ended March 31, 2007. Net fees from our tax preparation services increased by 18.1% to $9.1 million during the current quarter from $7.7 million during the fourth quarter of fiscal 2007.
“Our record quarterly results benefited from the large seasonal loan growth that we recorded in the third quarter and the increased demand for our tax preparation services in the fourth quarter,” stated Sandy McLean, Chairman and CEO of World Acceptance Corporation. “During the quarter, loan volume increased by 16.1% to $371.2 million from the prior year quarter, contributing to a 16.3% increase in total revenue.” Gross loans outstanding were $599.5 million at March 31, 2008, an 18.5% increase over the $505.8 million at March 31, 2007.
Total general and administrative expenses as a percent of total revenues were 47.0%, a decrease from the 48.2% during the fourth quarter of the prior fiscal year. Net charge-offs as a percent of average net loans on an annualized basis increased to 13.0% during the quarter from 11.8% during the prior year quarter. Mr. McLean also stated, “This quarter over quarter increase of 120 basis points on an annualized basis was consistent with the Company’s experience during the first three quarters of the fiscal year and brings the current charge-off ratios more in-line with historical levels. The Company’s management continues to monitor the Company’s loan portfolio in light of the softening economy and believes that the allowance is adequate based on current expectations.”
Year-End Results
For the year ended March 31, 2008, net income rose 10.6% to $53.0 million compared with $47.9 million in the prior fiscal year. Net income per diluted share rose 17.3% to $3.05, compared with $2.60, for the prior year fiscal period. Growth in per share income for the year ended March 31, 2008, also benefited from the Company’s ongoing share repurchase program. Approximately 1.4 million shares were repurchased during the fiscal year for a total aggregate price of $41.9 million. Our net income for the year was reduced by a $1.5 million addition to our third quarter tax provision as a result of a recent examination by a state that challenges the deductibility of certain inter-company interest payments. Although we intend to defend our position vigorously, it is too early at this time to predict the final resolution on this tax issue and any potential recovery of this extra tax provision. During fiscal 2008, the Company also recorded a $1.8 million loss associated with its interest rate swap, compared to a corresponding loss of $400,000 during fiscal 2007.
WRLD Reports Record Fourth Quarter Results
April 24, 2008
Total revenues for fiscal 2008 were $346.0 million, an 18.4% increase over the $292.3 million during the previous year. Net charge-offs as a percent of average net loans were 14.5% compared with 13.3% during the prior year.
Key return ratios for the fiscal year included an 11.4% return on average assets and a 23.6% return on average equity.
During the fiscal year, the Company opened 95 offices, acquired 13 offices and merged or closed 2 offices, leaving a total of 838 offices at March 31, 2008. Mr. McLean stated, “We are excited about our growth in the current year and our plan is to open 70 offices in the United States and 25 offices in Mexico during the next fiscal year.”
About World Acceptance Corporation
World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 838 offices in eleven states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry.
Fourth Quarter Conference Call
The senior management of World Acceptance Corporation will be discussing these results in its quarterly conference call to be held at 10:00 a.m. Eastern time today. Interested parties may participate in this call by dialing 1-877-852-6583. A simulcast of the conference call is also available on the Internet at www.streetevents.com. The call will be available for replay on the Internet for approximately 30 days.
This press release may contain various “forward-looking statements” within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, that represent the Company’s expectations or beliefs concerning future events. 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 changes in the timing and amount of revenues that may be recognized by the Company, changes in current revenue and expense trends (including trends affecting charge-offs), changes in the Company’s markets, changes in the Company’s ability to open new offices as planned, and changes in the economy (particular in the markets served by the Company). Such factors are discussed in greater detail in the Company’s filings with the Securities and Exchange Commission. World Acceptance Corporation is 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.
WRLD Reports Record Fourth Quarter Results
April 24, 2008
World Acceptance Corporation
Consolidated Statements of Operations
(unaudited and in thousands, except per share amounts)
| | | Three Months Ended | | Year Ended | |
| | | March 31, | | March 31, | |
| | | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | | |
| Interest & fees | | $ | 82,154 | | $ | 70,212 | | $ | 292,457 | | $ | 247,007 | |
| Insurance & other | | | 19,263 | | | 16,958 | | | 53,590 | | | 45,311 | |
| Total revenues | | | 101,417 | | | 87,170 | | | 346,047 | | | 292,318 | |
| Expenses: | | | | | | | | | | | | | |
| Provision for loan losses | | | 11,685 | | | 8,580 | | | 67,542 | | | 51,925 | |
| General and administrative expenses | | | | | | | | | | | | | |
| Personnel | | | 33,456 | | | 29,781 | | | 119,483 | | | 102,825 | |
| Occupancy & equipment | | | 5,699 | | | 4,628 | | | 21,555 | | | 17,398 | |
| Data processing | | | 578 | | | 539 | | | 2,112 | | | 2,160 | |
| Advertising | | | 1,896 | | | 1,860 | | | 12,648 | | | 10,278 | |
| Intangible amortization | | | 630 | | | 666 | | | 2,505 | | | 2,885 | |
| Other | | | 5,369 | | | 4,557 | | | 20,916 | | | 18,081 | |
| | | | 47,628 | | | 42,031 | | | 179,219 | | | 153,627 | |
| Interest expense | | | 2,963 | | | 2,602 | | | 11,569 | | | 9,596 | |
| Total expenses | | | 62,276 | | | 53,213 | | | 258,330 | | | 215,148 | |
| Income before taxes | | | 39,141 | | | 33,957 | | | 87,717 | | | 77,170 | |
| Income taxes | | | 14,749 | | | 12,919 | | | 34,721 | | | 29,274 | |
| Net income | | $ | 24,392 | | $ | 21,038 | | $ | 52,996 | | $ | 47,896 | |
| Diluted earnings per share | | $ | 1.44 | | $ | 1.17 | | $ | 3.05 | | $ | 2.60 | |
| Diluted weighted average shares outstanding | | | 16,956 | | | 17,917 | | | 17,375 | | | 18,394 | |
Consolidated Balance Sheets
(unaudited and in thousands)
| | | March 31, | | March 31, | |
| | | 2008 | | 2007 | |
ASSETS | | | | | | | |
| Cash | | $ | 7,590 | | $ | 5,779 | |
| Gross loans receivable | | | 599,509 | | | 505,788 | |
| Less: Unearned interest & fees | | | (154,418 | ) | | (127,750 | ) |
| Allowance for loan losses | | | (33,526 | ) | | (27,840 | ) |
| Loans receivable, net | | | 411,565 | | | 350,198 | |
| Property and equipment, net | | | 18,654 | | | 14,310 | |
| Deferred tax benefit | | | 22,133 | | | 14,507 | |
| Goodwill | | | 5,353 | | | 5,040 | |
| Intangibles | | | 9,997 | | | 11,060 | |
| Other assets | | | 10,818 | | | 10,222 | |
| | | $ | 486,110 | | $ | 411,116 | |
| | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | |
| Liabilities: | | | | | | | |
| Notes payable | | | 214,900 | | | 171,200 | |
| Income tax payable | | | 18,039 | | | 8,016 | |
| Accounts payable and accrued expenses | | | 18,866 | | | 16,408 | |
| Total liabilities | | | 251,805 | | | 195,624 | |
| Shareholders' equity | | | 234,305 | | | 215,492 | |
| | | | 486,110 | | | 411,116 | |
WRLD Reports Record Fourth Quarter Results
April 24, 2008
Selected Consolidated Statistics
(dollars in thousands)
| | | Three Months Ended | | Year ended | |
| | | March 31, | | March 31, | |
| | | 2008 | | 2007 | | 2008 | | 2007 | |
| | | | | | | | | | |
| Expenses as a percent of total revenues: | | | | | | | | | | | | | |
| Provision for loan losses | | | 11.5 | % | | 9.8 | % | | 19.5 | % | | 17.8 | % |
| General and administrative expenses | | | 47.0 | % | | 48.2 | % | | 51.8 | % | | 52.6 | % |
| Interest expense | | | 2.9 | % | | 3.0 | % | | 3.3 | % | | 3.3 | % |
| | | | | | | | | | | | | | |
| Average gross loans receivable | | $ | 621,560 | | $ | 524,576 | | $ | 576,050 | | $ | 480,120 | |
| | | | | | | | | | | | | | |
| Average net loans receivable | | $ | 460,594 | | $ | 391,747 | | $ | 426,524 | | $ | 358,047 | |
| | | | | | | | | | | | | | |
| Loan volume | | $ | 371,200 | | $ | 319,747 | | $ | 1,733,614 | | $ | 1,455,122 | |
| | | | | | | | | | | | | | |
| Net charge-offs as percent of average loans | | | 13.0 | % | | 11.8 | % | | 14.5 | % | | 13.3 | % |
| | | | | | | | | | | | | | |
| Return on average assets | | | 19.4 | % | | 19.6 | % | | 11.4 | % | | 12.5 | % |
| | | | | | | | | | | | | | |
| Return on average equity | | | 42.2 | % | | 41.1 | % | | 23.6 | % | | 22.2 | % |
| | | | | | | | | | | | | | |
| Offices opened (closed) during the period, net | | | 7 | | | 1 | | | 106 | | | 112 | |
| | | | | | | | | | | | | | |
| Offices open at end of period | | | 838 | | | 732 | | | 838 | | | 732 | |
