UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
Form 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT of 1934
For the transition period from ______________ to ______________
Commission File Number: 0-19599
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WORLD ACCEPTANCE CORPORATION
----------------------------
(Exact name of registrant as specified in its charter.)
South Carolina 57-0425114
------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
108 Frederick Street
Greenville, South Carolina 29607
----------------------------------------
(Address of principal executive offices)
(Zip Code)
(864) 298-9800
------------------
(registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for shorter period than the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
X Yes No
----- -----
Indicate the number of shares outstanding of each of issuer's classes of common
stock, as of the latest practicable date, February 14, 2001.
Common Stock, no par value 18,652,973
-------------------------- -------------------
(Class) (Outstanding)
1
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Page
Item 1. Consolidated Financial Statements (unaudited):
Consolidated Balance Sheets as of December 31,
2000, and March 31, 2000 3
Consolidated Statements of Operations for the
three-month periods and nine-month periods ended
December 31, 2000, and December 31, 1999 4
Consolidated Statements of Shareholders' Equity
for the year ended March 31, 2000, and the nine-month
period ended December 31, 2000 5
Consolidated Statements of Cash Flows for the three-month
periods and nine-month periods ended December 31, 2000, and
December 31, 1999 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations for the three-month
periods and nine-month periods ended December 31, 2000,
and December 31, 1999 8
Item 3. Quantitative and Qualitative Disclosures about market risk 11
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 15
2
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, March 31,
2000 2000
------------ -----------
ASSETS (Unaudited)
Cash $ 1,720,060 1,690,676
Gross loans receivable 235,531,800 173,609,123
Less:
Unearned interest and fees (56,185,987) (37,949,381)
Allowance for loan losses (13,027,281) (10,008,257)
------------ -----------
Loans receivable, net 166,318,532 125,651,485
Property and equipment, net 6,752,501 6,752,791
Other assets, net 8,922,253 8,269,399
Intangible assets, net 13,686,938 11,108,477
------------ -----------
$197,400,284 153,472,828
============ ===========
LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Senior notes payable 115,400,000 77,900,000
Other note payable 482,000 482,000
Income taxes payable 1,547,159 2,059,441
Accounts payable and accrued expenses 4,732,821 4,839,001
------------ -----------
Total liabilities 122,161,980 85,280,442
------------ -----------
Shareholders' equity:
Common stock, no par value - -
Additional paid-in capital - 267,958
Retained earnings 75,238,304 67,924,428
------------ -----------
Total shareholders' equity 75,238,304 68,192,386
------------ -----------
$197,400,284 153,472,828
============ ===========
See accompanying notes to consolidated financial statements.
3
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
December 31, December 31,
----------------------- ----------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Interest and fee income $26,265,723 22,701,793 74,043,425 64,728,962
Insurance and other income 3,614,595 4,228,754 11,389,997 12,041,417
----------- ---------- ---------- ----------
Total revenues 29,880,318 26,930,547 85,433,422 76,770,379
----------- ---------- ---------- ----------
Expenses:
Provision for loan losses 7,038,705 5,540,330 16,106,118 13,152,128
----------- ---------- ---------- ----------
General and administrative expenses:
Personnel 10,566,842 9,605,213 31,836,793 29,111,530
Occupancy and equipment 1,931,412 1,745,307 5,622,941 5,154,222
Data processing 393,668 387,004 1,097,677 1,117,031
Advertising 1,848,957 1,660,173 3,315,532 3,226,004
Amortization of intangible assets 476,682 378,153 1,322,574 1,092,756
Other 2,338,167 2,109,706 7,088,120 6,208,258
----------- ---------- ---------- ----------
17,555,728 15,885,556 50,283,637 45,909,801
----------- ---------- ---------- ----------
Interest expense 2,303,843 1,582,876 6,217,342 4,401,605
----------- ---------- ---------- ----------
Total expenses 26,898,276 23,008,762 72,607,097 63,463,534
----------- ---------- ---------- ----------
Income before income taxes 2,982,042 3,921,785 12,826,325 13,306,845
Income taxes 1,007,000 1,336,000 4,400,000 4,536,000
----------- ---------- ---------- ----------
Net income $ 1,975,042 2,585,785 8,426,325 8,770,845
=========== ========== ========== ==========
Net income per common share:
Basic $ .11 .14 .45 .46
=========== ========== ========== ==========
Diluted $ .11 .14 .45 .46
=========== ========== ========== ==========
Weighted average common shares
outstanding:
Basic 18,627,573 19,019,703 18,676,840 19,017,616
=========== ========== ========== ==========
Diluted 18,748,298 19,140,205 18,804,146 19,177,901
=========== ========== ========== ==========
See accompanying notes to consolidated financial statements.
4
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
Additional
Paid-in Retained
Capital Earnings Total
---------- ----------- ----------
Balances at March 31, 1999 $ 935,921 53,755,909 54,691,830
Proceeds from exercise of stock options (15,000 shares),
including tax benefit of $11,932 55,682 - 55,682
Common stock repurchases (144,000 shares) (723,645) - (723,645)
Net income - 14,168,519 14,168,519
---------- ---------- ----------
Balances at March 31, 2000 $ 267,958 67,924,428 68,192,386
Proceeds from exercise of stock options (15,000 shares),
including tax benefit of $9,756 53,506 - 53,506
Common stock repurchases (275,000 shares) (321,464) (1,112,449) (1,433,913)
Net income for the nine months - 8,426,325 8,426,325
---------- ---------- ----------
Balances at December 31, 2000 $ - 75,238,304 75,238,304
========== ========== ==========
See accompanying notes to consolidated financial statements.
5
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended Nine months ended
December 31, December 31,
--------------------------- --------------------------
2000 1999 2000 1999
---- ---- ---- ----
Cash flows from operating activities:
Net income $ 1,975,042 2,585,785 8,426,325 8,770,845
Adjustments to reconcile net income
to net cash provided by operating activities:
Provision for loan losses 7,038,705 5,540,330 16,106,118 13,152,128
Amortization of intangible assets 476,682 378,153 1,322,574 1,092,756
Amortization of loan costs and discounts 50,192 24,076 77,430 73,918
Depreciation 397,917 390,039 1,179,900 1,095,649
Change in accounts:
Other assets, net 78,143 (156,588) (730,284) (818,108)
Income taxes payable (192,707) (562,970) (502,526) (1,640,646)
Accounts payable and accrued expenses 519,951 547,655 (106,180) (367,084)
------------ ----------- ----------- -----------
Net cash provided by operating activities 10,343,925 8,746,480 25,773,357 21,359,458
------------ ----------- ----------- -----------
Cash flows from investing activities:
Increase in loans, net (24,739,997) (18,234,709) (41,134,291) (32,608,353)
Net assets acquired from office acquisitions,
primarily loans (263,648) (706,473) (15,653,874) (3,256,510)
Purchases of premises and equipment (265,568) (357,464) (1,164,610) (1,523,905)
Purchases of intangible assets (237,687) (185,000) (3,901,035) (1,305,800)
------------ ----------- ----------- -----------
Net cash used by investing activities (25,506,900) (19,483,646) (61,853,810) (38,694,568)
------------ ----------- ----------- -----------
Cash flows from financing activities:
Proceeds of senior notes payable, net 12,450,000 16,200,000 39,500,000 23,100,000
Repayment of term notes - (4,000,000) (2,000,000) (4,000,000)
Proceeds from exercise of stock options - 26,250 43,750 26,250
Common stock repurchases - - (1,433,913) -
------------ ----------- ----------- -----------
Net cash provided by financing activities 12,450,000 12,226,250 36,109,837 19,126,250
------------ ----------- ----------- -----------
Increase (decrease) in cash (2,712,975) 1,489,084 29,384 1,791,140
Cash, beginning of period 4,433,035 1,538,363 1,690,676 1,236,207
------------ ----------- ----------- -----------
Cash, end of period $ 1,720,060 3,027,447 1,720,060 3,027,347
============ =========== =========== ===========
Supplemental disclosure of cash flow information:
Cash paid for interest expense $ 2,215,446 1,226,879 5,719,655 4,075,510
Cash paid for income taxes 1,199,707 1,898,970 4,902,526 6,176,646
Supplemental schedule of noncash financing activities:
Tax benefits from exercise of stock options - 6,495 9,756 6,495
See accompanying notes to consolidated financial statements.
6
WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The consolidated financial statements of the Company at December 31, 2000, and
for the periods then ended were prepared in accordance with the instructions for
Form 10-Q and are unaudited; however, in the opinion of management, all
adjustments (consisting only of items of a normal recurring nature) necessary
for a fair presentation of the financial position at December 31, 2000, and the
results of operations and cash flows for the three and nine-month periods then
ended, have been included. The results for the three and nine-month periods
ended December 31, 2000, are not necessarily indicative of the results that may
be expected for the full year or any other interim period.
These consolidated financial statements do not include all disclosures
required by generally accepted accounting principles and should be read in
conjunction with the Company's audited financial statements and related notes
for the year ended March 31, 2000, included in the Company's 2000 Annual Report
to Shareholders.
NOTE 2 - COMPREHENSIVE INCOME
- -----------------------------
The Company applies the provision of Financial Accounting Standards Board's
(FASB) Statement of Financial Accounting Standards (SFAS) No. 130 "Reporting
Comprehensive Income." The Company has no items of other comprehensive income;
therefore, net income equals comprehensive income.
NOTE 3 - ALLOWANCE FOR LOAN LOSSES
- ----------------------------------
The following is a summary of the changes in the allowance for loan losses for
the periods indicated (unaudited):
Three months Nine months
ended December 31, ended December 31,
------------------------ --------------------------
2000 1999 2000 1999
---- ---- ---- ----
Balance at beginning of period $12,589,573 9,602,961 10,008,257 8,769,367
Provision for loan losses 7,038,705 5,540,330 16,106,118 13,152,128
Loan losses (6,340,570) (5,046,411) (15,387,615) (12,518,389)
Recoveries 355,270 332,346 1,065,853 975,775
Allowance on acquired loans,
net of specific charge-offs (615,697) 36,495 1,234,668 86,840
----------- ---------- ----------- -----------
Balance at end of period $13,027,281 10,465,721 13,027,281 10,465,721
=========== ========== =========== ===========
7
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------
Results of Operations
- ---------------------
The following table sets forth certain information derived from the Company's
consolidated statements of operations and balance sheets, as well as operating
data and ratios, for the periods indicated (unaudited):
Three months Nine months
ended December 31, ended December 31,
-------------------- --------------------
2000 1999 2000 1999
---- ---- ---- ----
(Dollars in thousands)
Average gross loans receivable /(1)/ $ 218,017 168,244 201,123 161,532
Average loans receivable /(2)/ 165,945 130,663 154,054 124,930
Expenses as a % of total revenue:
Provision for loan losses 23.6% 20.6% 18.9% 17.1%
General and administrative 58.8% 59.0% 58.9% 59.8%
Total interest expense 7.7% 5.9% 7.3% 5.7%
Operating margin (3) 17.7% 20.4% 22.3% 23.1%
Return on average assets (annualized) 4.2% 6.8% 6.4% 8.1%
Offices opened or acquired, net 2 5 16 25
Total offices (at period end) 426 404 426 404
/(1)/ Average gross loans receivable have been determined by averaging month-
end gross loans receivable over the indicated period.
/(2)/ Average loans receivable have been determined by averaging month-end
gross loans receivable less unearned interest and deferred fees over the
indicated period.
/(3)/ Operating margin is computed as total revenues less provision for loan
losses and general and administrative expenses, as a percentage of total
revenues.
Comparison of Three Months Ended December 31, 2000, Versus
- ----------------------------------------------------------
Three Months Ended December 31, 1999
- ------------------------------------
Net income amounted to $2.0 million for the three months ended December 31,
2000, a 23.6% decrease from the $2.6 million earned during the corresponding
three-month period of the previous year. This decrease resulted from a decrease
in operating income (revenues less provision for loan losses and general and
administrative expenses) of $219,000, or 4.0%, combined with an increase in
interest expense and offset by a decrease in income taxes.
Interest and fee income for the quarter ended December 31, 2000, increased by
$3.6 million, or 15.7%, over the same period of the prior year. This increase
resulted primarily from the $35.3 million increase, or 27.0%, in average loans
receivables over the two corresponding periods. The increase in interest and
fees was less than the increase in average balances outstanding due to a
reduction in the overall yield in the loan portfolio, which was due to lower
interest rates charged on larger loans made in certain states. Insurance
commissions and other income decreased by $614,000 million, or 14.5%, over the
two quarters primarily as a result of a decrease in revenue at the Company's
ParaData computer subsidiary. Insurance commissions decreased by $71,000, or
3.3%, when comparing the two quarterly periods. This decrease was largely due
to a change in the Tennessee statute governing loans less than $1,000. The
change in the statute, which the Company believes will ultimately be revenue
neutral, increased the interest and fees that can be charged on these loans, but
eliminated the sale of all insurance products in conjunction with these loans.
The decline in insurance income resulting from the change was partially offset
by the growth in loans in states where credit insurance may be sold, primarily
Kentucky. Other income decreased by $543,000, or 26.2%, over the two quarterly
periods as a result of the decrease in net revenue from ParaData. This
subsidiary attracted several new customers during the prior fiscal year, which
resulted in an excellent prior year third quarter that was not expected to be
duplicated during the current third quarter.
8
WORLD ACCEPTANCE CORPORATION
MANAGEMENTS' DISCUSSION AND ANALYSIS, CONTINUED
-----------------------------------------------
Total revenues rose to $29.9 million during the quarter ended December 31,
2000, an 11.0% increase over the $26.9 million in total revenues for the same
quarter of the prior year. Revenues from the 372 offices open throughout both
three-month periods increased by approximately 2.2%. At December 31, 2000, the
Company had 426 offices in operation, a net increase of 2 offices during the
current quarter, and 16 offices since the beginning of the fiscal year.
The provision for loan losses amounted to $7.0 million during the quarter
ended December 31, 2000, representing a 27.0% increase over the $5.5 million
during the same quarter of the prior fiscal year. This increase resulted from
an increase in net loans charged off during the quarter due primarily to the
growth in the loan portfolio. As a percentage of average loans receivable
outstanding, net charge-offs remained the same at 14.4% when comparing the two
quarterly periods. The Company expected to see a decline in this loss ratio
during the period due to the growth in the larger loan portfolio, which
generally sustains less losses than the smaller loans; however, the net charge-
off percentage on the small loan portfolio rose from 14.5% for the three months
ended December 31, 1999, to 16.9% for the most recent quarter. Although the
Company's management remains concerned over the rise in the level of charge-offs
on its smaller loans and continues to focus on strict adherence to the Company's
lending and collection guidelines and policies by all branch personnel, there
can be no assurance that this trend will not continue, or that earnings will not
be negatively affected as a result in future quarters. The charge-off
percentage on the larger loan portfolio remained in line with management's
expectations at 6.7% during the most recent quarter.
General and administrative expenses for the quarter ended December 31, 2000,
increased by $1.7 million, or 10.5%, over the same quarter of fiscal 2000. This
increase resulted primarily from the additional expenses associated with the 25
new offices opened or acquired between December 31, 1999, and December 31, 2000.
During the same 12-month period, the Company has also sold or merged three
offices. These were offices that had not grown as expected to a profitable size
within a reasonable period of time. As a percentage of total revenues, total
general and administrative expenses decreased from 59.0% for the quarter ended
December 31, 1999, to 58.8% for the most recent quarter. Additionally,
excluding the expenses associated with ParaData, overall general and
administrative expenses when divided by the average open offices increased by
4.8% when comparing the two periods.
Interest expense increased by $721,000, or 45.5%, when comparing the two
corresponding quarterly periods. This increase resulted from an increase in the
level of debt, which grew from $90.7 million at December 31, 1999, to $115.9
million at December 31, 2000, combined with an increase in interest rates over
the two periods.
Comparison of Nine Months Ended December 31, 2000,
- --------------------------------------------------
Versus Nine Months Ended December 31, 1999
- ------------------------------------------
For the nine month period ending December 31, 2000, net income amounted to
$8.4 million. This represents a decrease of $345,000, or 3.9% when comparing
the two nine-month periods. Operating income increased by $1.3 million, or
7.5%, over the two periods; however, this was more than offset by a $1.8 million
increase in interest expense.
Total revenues amounted to $85.4 million during the current nine-month period,
an increase of $8.7 million, or 11.3%, over the prior-year period. This
increase resulted from an increase in interest and fee income of 14.4%, offset
by a decrease in insurance and other income of 5.4%. Revenues from the 372
offices open throughout both nine-month periods increased approximately 4.2%.
Interest and fee income rose by $9.3 million during the two corresponding
nine-month periods primarily as a result of increases in loan balances
outstanding. Average loans receivable were $154.1 million during the nine
months ended December 31, 2000, representing a 23.3% increase over the average
balances of the prior year. Other income decreased by 5.4%, decreased gross
profits from ParaData of $882,000, partially offset by increased insurance
commissions
The provision for loan losses increased by $3.0 million, or 22.5%, during the
current nine month period when compared to the same period of fiscal 2000. This
increase was due primarily to the growth in the loan portfolio. As a percentage
of average loans, net charge-offs on an annualized basis grew slightly from
12.3% for the nine months ended December 31, 1999, to 12.4% for the most recent
nine month period.
9
WORLD ACCEPTANCE CORPORATION
MANAGEMENTS' DISCUSSION AND ANALYSIS, CONTINUED
-----------------------------------------------
General and administrative expenses increased by $4.4 million, or 9.5%, during
the most recent nine-month period. As a percentage of total revenues, these
expenses decreased from 59.8% during the prior year nine-month period to 58.9%
during the current period. Excluding the expenses associated with ParaData,
overall general and administrative expenses, when divided by the average open
offices, increased by only 2.7% when comparing the two nine-month periods.
Interest expense increased by $1.8 million when comparing the two nine-month
periods, an increase of 41.3%. This increase reflects the 25.8% increase in the
average level of debt outstanding when comparing the two nine month periods
combined with a rise in interest rates over these periods.
Liquidity and Capital Resources
- -------------------------------
The Company's primary sources of funds are cash flow from operations and
borrowings under its revolving credit agreement. The Company's primary ongoing
cash requirements are funding the opening and operation of new offices, funding
overall growth of loans outstanding (including acquisitions), the repayment of
existing debt and the repurchase of its common stock.
The Company has a $105.0 million revolving credit agreement, (temporarily
increased to $120.0 million), and $8.0 million of subordinated notes.
The revolving credit facility expires on September 30, 2002, and bears
interest, at the Company's option, at the agent's prime rate or LIBOR plus
1.75%. At December 31, 2000, the weighted average interest rate under the
facility was 8.51%, and the Company's outstanding balance was $107.4 million,
leaving $12.6 million in borrowing availability under existing borrowing base
limitations (based on eligible loans receivable). The Company received a
temporary increase in availability under the revolving credit facility of $15.0
million for the period beginning June 28, 2000, through March 31, 2001.
The subordinated notes provide for interest payments to be made quarterly at a
fixed rate of 10.0%. Annual principal payments of $2.0 million are due each
June 1, with a final maturity date of June 1, 2004.
Borrowings under the revolving credit agreement and the senior subordinated
notes are secured by a lien on substantially all the tangible and intangible
assets of the Company and its subsidiaries pursuant to various security
agreements.
The Company believes that cash flow from operations and borrowings under its
revolving credit facility will be adequate to fund the continuing growth of the
Company's loan portfolio, the principal payments due under the subordinated
notes, the repurchase of the Company's common stock on a limited basis and the
expected cost of opening and operating new offices, including funding initial
operating losses of new offices and loans receivable originated by those offices
and the Company's other offices.
Inflation
- ---------
The Company does not believe that inflation has a material adverse effect on
its financial condition or results of operations. The primary impact of
inflation on the operations of the Company is reflected in increased operating
costs. While increases in operating costs would adversely affect the Company's
operations, the consumer lending laws of three of the six states in which the
Company currently operates allow indexing of maximum loan amounts to the
Consumer Price Index. These provisions will allow the Company to make larger
loans at existing interest rates, which could partially offset the effect of
inflationary increases in operating costs.
10
WORLD ACCEPTANCE CORPORATION
MANAGEMENTS' DISCUSSION AND ANALYSIS, CONTINUED
-----------------------------------------------
Quarterly Information and Seasonality
- -------------------------------------
The Company's loan volume and corresponding loans receivable follow seasonal
trends. The Company's highest loan demand occurs each year from October through
December, its third fiscal quarter. Loan demand is generally the lowest and
loan repayment is highest from January to March, its fourth fiscal quarter.
Loan volume and average balances remain relatively level during the remainder of
the year. This seasonal trend causes fluctuations in the Company's cash needs
and quarterly operating performance through corresponding fluctuations in
interest and fee income and insurance commissions earned, since unearned
interest and insurance income are accreted to income on a collection method.
Consequently, operating results for the Company's third fiscal quarter are
significantly lower than in other quarters and operating results for its fourth
fiscal quarter are generally higher than in other quarters.
Forward-Looking Information
- ---------------------------
This report on Form 10-Q, including "Management's Discussion and Analysis of
Financial Condition and Results of Operations," may contain various "forward-
looking statements," within the meaning of Section 21E of the Securities
Exchange Act of 1934, that are based on management's belief and assumptions, as
well as information currently available to management. When used in this
document, the words "anticipate," "estimate," "expect," and similar expressions
may identify forward-looking statements. Although the Company believes that the
expectations reflected in any such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to be correct. Any such
statements are subject to certain risks, uncertainties and assumptions. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, the Company's actual financial results, performance
or financial condition may vary materially from those anticipated, estimated or
expected. Among the key factors that could cause the Company's actual financial
results, performance or condition to differ from the expectations expressed or
implied in such forward-looking statements are the following: changes in
interest rates; risks inherent in making loans, including repayment risks and
value of collateral; recently-enacted or proposed legislation; 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 and general changes in the economy (particularly in the
markets served by the Company); and other matters discussed in this Report and
the Company's other filings with the Securities and Exchange Commission.
The Company is a party to certain legal proceedings. See Part II, Item 1.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Company's outstanding debt under its revolving credit facility was
$107.4 million at December 31, 2000. Interest on borrowings under this
facility is based, at the Company's option, on the prime rate or LIBOR
plus 1.75%. Based on the outstanding balance at December 31, 2000, a
change of 1% in the interest rate would cause a change in interest
expense of approximately $1.07 million on an annual basis.
11
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
From time to time the Company is involved in other routine litigation
relating to claims arising out of its operations in the normal course
of business. The Company believes that it is not presently a party to
any such other pending legal proceedings that would have a material
adverse effect on its financial condition.
Item 2. Changes in Securities
---------------------
The Company's credit agreements contain certain restrictions on the
payment of cash dividends on its capital stock.
12
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
PART II. OTHER INFORMATION, CONTINUED
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits:
Filed
Herewith (*) or
Previous Company
Exhibit Exhibit Registration
Number Description Number No. or Report
- --------- -------------------------------------------------------------- --------------- -------------
3.1 Second Amended and Restated Articles of Incorporation of the 3.1 1992 10-K
Company
3.2 First Amendment to Second Amended and Restated Articles 3.2 1995 10-K
of Incorporation
3.3 Amended Bylaws of the Company 3.4 33-42879
4.1 Specimen Share Certificate 4.1 33-42879
4.2 Articles 3, 4 and 5 of the Form of Company's Second 3.1, 3.2 1995 10-K
Amended and Restated Articles of Incorporation (as amended)
4.3 Article II, Section 9 of the Company's Second Amended 3.2 1995 10-K
and Restated Bylaws
4.4 Amended and Restated Revolving Credit Agreement, dated as 4.4 9-30-97 10-Q
of June 30, 1997, between Harris Trust and Savings Bank,
the Banks signatory thereto from time to time and the Company
4.5 Note Agreement, dated as of June 30, 1997, between Principal 4.7 9-30-97 10-Q
Mutual Life Insurance Company and the Company re: 10%
Senior Subordinated Secured Notes
4.6 Amended and Restated Security Agreement, Pledge and Indenture 4.8 9-30-97 10-Q
of Trust, dated as of June 30, 1997, between the Company and
Harris Trust and Savings Bank, as Security Trustee
10.1 Employment Agreement of Charles D. Walters, effective April 1, 10.1 1994 10-K
1994
10.2 Employment Agreement of A. Alexander McLean, III, effective 10.2 1994 10-K
April 1, 1994
10.3 Employment Agreement of Douglas R. Jones, effective August *
16, 1999
10.4 Settlement Agreement dated as of April 1, 1999, between the 10.3 1999 10-K
Company and R. Harold Owens,
13
10.5 Securityholders' Agreement, dated as of September 19, 1991, 10.5 33-42879
between the Company and certain of its securityholders
10.6 World Acceptance Corporation Supplemental Income Plan 10.7 2000 10-K
10.7 Board of Directors Deferred Compensation Plan 10.6 2000 10-K
10.8 1992 Stock Option Plan of the Company 4 33-52166
10.9 1994 Stock Option Plan of the Company, as amended 10.6 1995 10-K
10.10 The Company's Executive Incentive Plan 10.6 1994 10-K
10.11 World Acceptance Corporation Retirement Savings Plan 4.1 333-14399
# Omitted from filing -- substantially identical to immediately preceding
exhibits, except for the parties thereto and the principal amount involved.
(b) Reports on Form 8-K.
There were no reports filed on Form 8-K during the quarter ended December 31,
2000.
14
WORLD ACCEPTANCE CORPORATION
AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WORLD ACCEPTANCE CORPORATION
Dated: February 14, 2001 /s/ C. D. Walters
-------------------------------------------
C. D. Walters, Chief Executive Officer
Dated: February 14, 2001 /s/ A. A. McLean III
-------------------------------------------
A. A. McLean III, Executive Vice President
and Chief Financial Officer
15