Exhibit 99.1
AMERICREDIT REPORTS FOURTH QUARTER AND
FISCAL YEAR 2004 OPERATING RESULTS
• 4th quarter earnings of $0.51 per share
• Executing growth plan
• Improved credit results
FORT WORTH, TEXAS August 9, 2004 – AMERICREDIT CORP. (NYSE: ACF) today announced net income of $82.7 million, or $0.51 per share, for its fiscal fourth quarter ended June 30, 2004. AmeriCredit reported a net loss of $17.1 million, or $0.11 per share, for the same period a year earlier. For the fiscal year ended June 30, 2004, AmeriCredit reported net income of $227.0 million, or $1.42 per share, compared to earnings of $21.2 million, or $0.15 per share, for the fiscal year ended June 30, 2003.
“Fiscal 2004 was a transition year for AmeriCredit. Our performance during the fourth quarter caps a year of improving profitability and supports our goal of working toward an appropriate return on equity for our shareholders,” said AmeriCredit Chairman and CEO Clifton Morris. “We are right on target with our growth plans, our credit performance continues to improve, and our capital and liquidity position has never been stronger.”
Automobile loan purchases increased to $1.075 billion for the fourth quarter of fiscal year 2004, compared to $953.8 million in the March 2004 quarter and $686.9 million in the June 2003 quarter. Managed auto receivables totaled $11.923 billion at June 30, 2004.
Annualized net charge-offs totaled 5.1% of average managed auto receivables for the June 2004 quarter, compared to annualized net charge-offs of 7.4% for the June 2003 quarter and 6.6% for the March 2004 quarter.
Managed auto receivables 31-to-60 days delinquent were 6.3% of the portfolio at June 30, 2004, compared to 8.2% at June 30, 2003. Accounts more than 60 days delinquent were 2.3% of the portfolio at June 30, 2004, compared to 3.3% at June 30, 2003.
Unrestricted cash totaled $421.5 million at June 30, 2004, down $88.2 million from March 31, 2004. During the quarter, the Company retired $168 million of senior notes and purchased $32 million of common stock under the Company’s $100 million stock repurchase plan authorized by its Board of Directors in April 2004. The remainder of the authorization was completed by July 30, 2004.
Shareholders’ equity increased to $2.125 billion at June 30, 2004, compared to $1.881 billion at June 30, 2003, resulting in a managed assets-to-equity ratio of 5.6 at June 30, 2004, compared to 7.9 at June 30, 2003.
“In fiscal year 2005, we will continue to focus on execution in all areas of the Company while maintaining our strong capital position,” said AmeriCredit President Dan Berce. “We have ample liquidity to support our growth plans, and our financial flexibility will improve further as we receive substantial distributions from our old FSA-insured securitization program later this calendar year.”
Regulation FD
Pursuant to Regulation FD, the Company provides its expectations regarding future business trends to the public via a press release or 8-K filing. The Company anticipates some risks and uncertainties with its business. The forecasts for fiscal year 2005 incorporate, but are not limited to, the following assumptions:
| • | $4.5 -$5.0 billion in new originations in fiscal year 2005 consistent with the plan to grow loan volumes 10-15% annually over time; |
| • | Maintain net interest margins on the managed portfolio in the 12-13% range compared to 12.5% for fiscal year 2004; |
| • | Focus on operating efficiencies as the portfolio size begins to stabilize later in fiscal year 2005 for an operating expense ratio of 2.5-3.0% of the managed portfolio; |
| • | Improve portfolio-level credit losses to 5.5-6.0% for fiscal year 2005 compared to 7.2% in fiscal year 2004; |
| • | Implementation of Statement of Position 03-3 on July 1, 2004. As the Company reported in April, this requires the dealer acquisition fee received at loan origination be recognized as a yield enhancement and accreted into income over time. Prior to July 1, 2004, this fee was nonaccretable and used to cover inherent losses in the portfolio, thereby reducing the provision for loan losses. This change is estimated to lower fiscal year 2005 earnings by approximately $48 million, or $0.30 per share. |
The forecasts do not assume conversion of AmeriCredit’s $200 million contingent convertible notes into 10.7 million shares of common stock for the calculation of weighted average shares as proposed by EITF Issue No. 04-8. If implemented, this change would not effect net income, but is estimated to lower fiscal year 2005 earnings per share by $0.07 - $0.08.
Net income and EPS forecasts
12 mos. ending 6/30/05 | |||
Net income ($ millions) | |||
Previous | $ | 180 - $200 | |
New | $ | 230 - $250 | |
Earnings per share | |||
Previous | $ | 1.09 - $1.21 | |
New | $ | 1.44 - $1.56 | |
AmeriCredit will host a conference call for analysts and investors today at 5:30 P.M. Eastern Daylight Time. For a live Internet broadcast of this conference call, please go to the Company’s web site to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.
About AmeriCredit
AmeriCredit Corp. is a leading independent auto finance company. Using its branch network and strategic alliances with auto groups and banks, the Company purchases retail installment contracts entered into by auto dealers with consumers who are typically unable to obtain financing from traditional sources. AmeriCredit has more than one million customers and nearly $12 billion in managed auto receivables. The Company was founded in 1992 and is headquartered in Fort Worth, Texas. For more information, visit www.americredit.com.
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s annual report on Form 10-K for the period ended June 30, 2003. Such risks include – but are not limited to – variable economic conditions, adverse portfolio performance, volatile wholesale values, reliance on warehouse financing and capital markets, the ability to continue to securitize its loan portfolio, the continued availability of credit enhancement for its securitization transactions on acceptable terms, fluctuating interest rates, increased competition, regulatory changes and exposure to litigation. These forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially.
AmeriCredit Corp.
Consolidated Income Statements
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Three Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||
| 2004 | 2003 | 2004 | 2003 | ||||||||||
Revenue: | |||||||||||||
Finance charge income | $ | 255,333 | $ | 202,796 | $ | 927,592 | $ | 613,225 | |||||
Gain on sale of receivables | — | — | — | 132,084 | |||||||||
Servicing income (loss) | 69,858 | (14,236 | ) | 256,237 | 211,330 | ||||||||
Other income | 7,571 | 8,779 | 32,007 | 24,642 | |||||||||
| 332,762 | 197,339 | 1,215,836 | 981,281 | ||||||||||
Costs and expenses: | |||||||||||||
Operating expenses | 67,863 | 73,223 | 325,753 | 373,739 | |||||||||
Provision for loan losses | 67,543 | 77,785 | 257,070 | 307,570 | |||||||||
Interest expense | 51,067 | 70,772 | 251,963 | 202,225 | |||||||||
Restructuring charges | 12,985 | 3,291 | 15,934 | 63,261 | |||||||||
| 199,458 | 225,071 | 850,720 | 946,795 | ||||||||||
Income (loss) before income taxes | 133,304 | (27,732 | ) | 365,116 | 34,486 | ||||||||
Income tax provision (benefit) | 50,624 | (10,677 | ) | 138,133 | 13,277 | ||||||||
Net income (loss) | $ | 82,680 | $ | (17,055 | ) | $ | 226,983 | $ | 21,209 | ||||
Earnings (loss) per share: | |||||||||||||
Basic | $ | 0.53 | $ | (0.11 | ) | $ | 1.45 | $ | 0.15 | ||||
Diluted | $ | 0.51 | $ | (0.11 | ) | $ | 1.42 | $ | 0.15 | ||||
Weighted average shares | 157,328,373 | 156,320,422 | 156,885,546 | 137,501,378 | |||||||||
Weighted average shares and assumed incremental shares | 161,137,846 | 156,320,422 | 159,630,695 | 137,807,775 | |||||||||
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
June 30, 2004 | March 31, 2004 | June 30, 2003 | |||||||
Cash and cash equivalents | $ | 421,450 | $ | 509,690 | $ | 316,921 | |||
Finance receivables, net | 6,363,869 | 6,032,838 | 4,996,616 | ||||||
Interest-only receivables from Trusts | 110,952 | 145,205 | 213,084 | ||||||
Investments in Trust receivables | 528,345 | 576,855 | 760,528 | ||||||
Restricted cash – gain on sale Trusts | 423,025 | 401,129 | 387,006 | ||||||
Restricted cash – securitization notes payable | 482,724 | 429,954 | 229,917 | ||||||
Restricted cash – warehouse credit facilities | 209,875 | 58,974 | 764,832 | ||||||
Property and equipment, net | 101,424 | 106,121 | 123,713 | ||||||
Other assets | 182,915 | 300,240 | 315,412 | ||||||
Total assets | $ | 8,824,579 | $ | 8,561,006 | $ | 8,108,029 | |||
Warehouse credit facilities | $ | 500,000 | $ | 767,486 | $ | 1,272,438 | |||
Whole loan purchase facility | — | — | 902,873 | ||||||
Securitization notes payable | 5,598,732 | 4,761,366 | 3,281,370 | ||||||
Senior notes | 166,414 | 334,607 | 378,432 | ||||||
Convertible debt | 200,000 | 200,000 | — | ||||||
Other notes payable | 21,442 | 24,537 | 34,599 | ||||||
Funding payable | 37,273 | 166,600 | 25,562 | ||||||
Accrued taxes and expenses | 159,798 | 152,149 | 162,433 | ||||||
Derivative financial instruments | 12,348 | 38,973 | 66,531 | ||||||
Deferred income taxes | 3,460 | 81,290 | 103,162 | ||||||
Total liabilities | 6,699,467 | 6,527,008 | 6,227,400 | ||||||
Shareholders’ equity | 2,125,112 | 2,033,998 | 1,880,629 | ||||||
Total liabilities and shareholders’ equity | $ | 8,824,579 | $ | 8,561,006 | $ | 8,108,029 | |||
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income (loss) | $ | 82,680 | $ | (17,055 | ) | $ | 226,983 | $ | 21,209 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 11,105 | 20,324 | 77,157 | 56,677 | ||||||||||||
Provision for loan losses | 67,543 | 77,785 | 257,070 | 307,570 | ||||||||||||
Deferred income taxes | (78,856 | ) | 69,581 | (109,871 | ) | 7,441 | ||||||||||
Accretion of present value discount | (32,552 | ) | (13,981 | ) | (100,235 | ) | (99,351 | ) | ||||||||
Impairment of credit enhancement assets | — | 93,742 | 33,364 | 189,520 | ||||||||||||
Non-cash gain on sale of receivables | — | — | — | (124,831 | ) | |||||||||||
Non-cash restructuring charges and other | 5,890 | 2,027 | 11,002 | 44,433 | ||||||||||||
Distributions from gain on sale Trusts, net of swap payments | 90,018 | (3,766 | ) | 338,296 | 140,836 | |||||||||||
Initial deposits to credit enhancement assets | — | — | — | (58,101 | ) | |||||||||||
Changes in assets and liabilities: | ||||||||||||||||
Other assets | 121,219 | (59,270 | ) | 85,061 | (55,884 | ) | ||||||||||
Accrued taxes and expenses | 1,366 | (40,401 | ) | (6,565 | ) | (48,015 | ) | |||||||||
Purchases, principal collections and sales of receivables held for sale | — | — | — | 1,922,076 | ||||||||||||
Net cash provided by operating activities | 268,413 | 128,986 | 812,262 | 2,303,580 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of receivables | (1,204,914 | ) | (688,785 | ) | (3,859,728 | ) | (5,911,952 | ) | ||||||||
Principal collections and recoveries on receivables | 670,463 | 376,849 | 2,237,731 | 812,825 | ||||||||||||
Purchases of property and equipment | (2,151 | ) | (1,772 | ) | (4,703 | ) | (40,670 | ) | ||||||||
Net change in restricted cash and other | (205,811 | ) | (299,642 | ) | 357,531 | (967,915 | ) | |||||||||
Net cash used by investing activities | (742,413 | ) | (613,350 | ) | (1,269,169 | ) | (6,107,712 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Net change in warehouse credit facilities | (267,486 | ) | (991,109 | ) | (772,438 | ) | (479,223 | ) | ||||||||
Net change in whole loan purchase facility | — | — | (905,000 | ) | 875,000 | |||||||||||
Net change in securitization notes | 839,020 | 1,595,359 | 2,316,551 | 3,261,230 | ||||||||||||
Net change in senior notes and other | (174,001 | ) | (43,806 | ) | (275,797 | ) | (111,010 | ) | ||||||||
Proceeds from issuance of convertible debt | — | — | 200,000 | — | ||||||||||||
Repurchase of common stock | (32,169 | ) | — | (32,169 | ) | — | ||||||||||
Proceeds from issuance of common stock | 20,266 | 2,597 | 30,046 | 482,345 | ||||||||||||
Net cash provided by financing activities | 385,630 | 563,041 | 561,193 | 4,028,342 | ||||||||||||
Net (decrease) increase in cash and cash equivalents | (88,370 | ) | 78,677 | 104,286 | 224,210 | |||||||||||
Effect of Canadian exchange rate changes on cash and cash equivalents | 130 | 111 | 243 | 362 | ||||||||||||
Cash and cash equivalents at beginning of period | 509,690 | 238,133 | 316,921 | 92,349 | ||||||||||||
Cash and cash equivalents at end of period | $ | 421,450 | $ | 316,921 | $ | 421,450 | $ | 316,921 | ||||||||
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended June 30, | Twelve Months Ended June 30, | ||||||||||||||
| 2004 | 2003 | 2004 | 2003 | ||||||||||||
Loan originations | $ | 1,075,484 | $ | 686,851 | $ | 3,474,407 | $ | 6,310,584 | |||||||
Loans securitized | 1,664,080 | 1,947,680 | 4,819,940 | 6,487,873 | |||||||||||
Average on-book receivables | $ | 6,595,442 | $ | 5,186,506 | $ | 6,012,085 | $ | 3,723,023 | |||||||
Average gain on sale receivables | 5,541,432 | 10,200,346 | 7,169,743 | 12,013,489 | |||||||||||
Average managed receivables | $ | 12,136,874 | $ | 15,386,852 | $ | 13,181,828 | $ | 15,736,512 | |||||||
| June 30, 2004 | March 31, 2004 | June 30, 2003 | |||||||||||||
On-book receivables | $ | 6,782,280 | $ | 6,413,435 | $ | 5,326,314 | |||||||||
Gain on sale receivables | 5,140,522 | 5,943,195 | 9,562,464 | ||||||||||||
Managed receivables | $ | 11,922,802 | $ | 12,356,630 | $ | 14,888,778 | |||||||||
| June 30, 2004 | March 31, 2004 | June 30, 2003 | |||||||||||||
On-book receivables: | |||||||||||||||
Principal | $ | 6,782,280 | $ | 6,413,435 | $ | 5,326,314 | |||||||||
Allowance for loan losses and nonaccretable acquisition fees | (418,411 | ) | (380,597 | ) | (329,698 | ) | |||||||||
| $ | 6,363,869 | $ | 6,032,838 | $ | 4,996,616 | ||||||||||
| 6.2 | % | 5.9 | % | 6.2 | % | ||||||||||
| (% of ending managed receivables) | June 30, 2004 | March 31, 2004 | June 30, 2003 | ||||||||||||
Loan delinquency: | |||||||||||||||
On-book: | |||||||||||||||
31 - 60 days | 4.2 | % | 3.7 | % | 4.7 | % | |||||||||
Greater than 60 days | 1.6 | 1.3 | 1.8 | ||||||||||||
Total | 5.8 | % | 5.0 | % | 6.5 | % | |||||||||
Gain on sale: | |||||||||||||||
31 - 60 days | 9.0 | % | 7.4 | % | 10.1 | % | |||||||||
Greater than 60 days | 3.4 | 2.7 | 4.2 | ||||||||||||
Total | 12.4 | % | 10.1 | % | 14.3 | % | |||||||||
Total portfolio: | |||||||||||||||
31 - 60 days | 6.3 | % | 5.5 | % | 8.2 | % | |||||||||
Greater than 60 days | 2.3 | 2.0 | 3.3 | ||||||||||||
Total | 8.6 | % | 7.5 | % | 11.5 | % | |||||||||
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Net charge-offs:(1) | ||||||||||||||||
On-book | $ | 52,051 | $ | 46,369 | $ | 255,134 | $ | 111,366 | ||||||||
Gain on sale | 101,631 | 236,241 | 691,928 | 915,291 | ||||||||||||
| $ | 153,682 | $ | 282,610 | $ | 947,062 | $ | 1,026,657 | |||||||||
Net charge-offs as a percent of average managed receivables | 5.1 | % | 7.4 | % | 7.2 | % | 6.5 | % | ||||||||
| (1) | Charge-offs for the periods ended after September 30, 2003, are not comparable to charge-offs for periods prior due to the change in the Company’s repossession charge-off policy implemented during the quarter ended December 31, 2003. |
The Company evaluates the profitability of its lending activities based partly upon the net margin related to its managed auto loan portfolio, including on-book and gain on sale receivables. The Company uses this information to analyze trends in the components of the profitability of its managed auto portfolio. Analysis of net margin on a managed basis allows the Company to determine which origination channels and loan products are most profitable, guides the Company in making pricing decisions for loan products and indicates if sufficient spread exists between the Company’s revenues and cost of funds to cover operating expenses and achieve corporate profitability objectives. Additionally, net margin on a managed basis facilitates comparisons of results between the Company and other finance companies (i) that do not securitize their receivables or (ii) due to the structure of their securitization transactions, are not required to account for the securitization of their receivables as a sale. The Company routinely securitizes its receivables and prior to October 1, 2002, recorded a gain on the sale of such receivables. The net margin on a managed basis presented below assumes that all securitized receivables have not been sold and are still on the Company’s consolidated balance sheet. Accordingly, no gain on sale or servicing income would have been recognized. Instead, finance charges would be recognized over the life of the securitized receivables as earned, and interest and other costs related to the asset-backed securities would be recognized as incurred.
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Finance charge income | $ | 503,583 | $ | 633,186 | $ | 2,187,523 | $ | 2,662,249 | ||||||||
Other income | 15,327 | 19,231 | 67,754 | 69,794 | ||||||||||||
Interest expense | (117,490 | ) | (193,792 | ) | (602,115 | ) | (779,862 | ) | ||||||||
Net margin | $ | 401,420 | $ | 458,625 | $ | 1,653,162 | $ | 1,952,181 | ||||||||
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Finance charge income | 16.7 | % | 16.5 | % | 16.6 | % | 16.9 | % | ||||||||
Other income | 0.5 | 0.5 | 0.5 | 0.5 | ||||||||||||
Interest expense | (3.9 | ) | (5.0 | ) | (4.6 | ) | (5.0 | ) | ||||||||
Net margin as a percent of average managed receivables | 13.3 | % | 12.0 | % | 12.5 | % | 12.4 | % | ||||||||
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||||||
Operating expenses | $ | 67,863 | $ | 73,223 | $ | 325,753 | $ | 373,739 | ||||||||
Operating expenses as a percent of average managed receivables | 2.2 | % | 1.9 | % | 2.5 | % | 2.4 | % | ||||||||
Tax rate | 37.98 | % | 38.50 | % | 37.83 | % | 38.50 | % | ||||||||
The following is a reconciliation of finance charge income as reflected on the Company’s consolidated income statements to the Company’s managed basis finance charge income:
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||
Finance charge income per consolidated income statements | $ | 255,333 | $ | 202,796 | $ | 927,592 | $ | 613,225 | ||||
Adjustments to reflect finance charge income earned on receivables in gain on sale Trusts | 248,250 | 430,390 | 1,259,931 | 2,049,024 | ||||||||
Managed basis finance charge income | $ | 503,583 | $ | 633,186 | $ | 2,187,523 | $ | 2,662,249 | ||||
The following is a reconciliation of other income as reflected on the Company’s consolidated income statements to the Company’s managed basis other income:
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||
Other income per consolidated income statements | $ | 7,571 | $ | 8,779 | $ | 32,007 | $ | 24,642 | ||||
Adjustments to reflect investment income earned on cash in gain on sale Trusts | 1,735 | 2,157 | 7,618 | 10,716 | ||||||||
Adjustments to reflect other income earned on receivables in gain on sale Trusts | 6,021 | 8,295 | 28,129 | 34,436 | ||||||||
Managed basis other income | $ | 15,327 | $ | 19,231 | $ | 67,754 | $ | 69,794 | ||||
The following is a reconciliation of interest expense as reflected on the Company’s consolidated income statements to the Company’s managed basis interest expense:
Three Months Ended June 30, | Twelve Months Ended June 30, | |||||||||||
| 2004 | 2003 | 2004 | 2003 | |||||||||
Interest expense per consolidated income statements | $ | 51,067 | $ | 70,772 | $ | 251,963 | $ | 202,225 | ||||
Adjustments to reflect interest expense incurred by gain on sale Trusts | 66,423 | 123,020 | 350,152 | 577,637 | ||||||||
Managed basis interest expense | $ | 117,490 | $ | 193,792 | $ | 602,115 | $ | 779,862 | ||||
Contact:
Investor Relations | Media Relations | |||
Kim Pulliam | Jason Landkamer | John Hoffmann | ||
(817) 302-7009 | (817) 302-7811 | (817) 302-7627 |