EXHIBIT 99.1
WORLD ACCEPTANCE CORPORATION
REPORTS RECORD FIRST QUARTER RESULTS
GREENVILLE, S.C. (July 26, 2007) - World Acceptance Corporation (NASDAQ:
WRLD) today reported record first quarter revenues and net income for its first
fiscal quarter ended June 30, 2007.
Net income for the quarter rose 8.7% to $10.9 million compared with $10.0
million for the same quarter of the prior year. Diluted earnings per share rose
to $0.61 per share for the quarter, a 15.1% increase over the $0.53 per share
for the prior year quarter. Growth in earnings per share benefited from the 1.2
million shares repurchased during the prior fiscal year.
Total revenues for the quarter increased 19.7% to $76.4 million from $63.8
million for the prior year quarter. Gross loans outstanding were $545.0 million
at June 30, 2007, a 21.7% increase over the $447.8 million in balances
outstanding at June 30, 2006, and a 7.7% increase over the $505.8 million at the
end of the prior fiscal year.
Sandy McLean, CEO, stated, "The Company has been able to maintain the
excellent growth in its loan portfolio during the first quarter that it
experienced during the prior fiscal year due to increased loan demand and the
contribution from new offices opened or acquired since last year. We added $39.2
million in gross loans during the first quarter. Our earnings, however, did not
keep pace with our loan and revenue growth this quarter due to the additional
cost associated with opening 38 new branch offices during the quarter combined
with an increase in charge-off ratios compared to the first quarter of the prior
fiscal year. Net charge-offs as a percent of average net loans (annualized)
increased to 12.7% during the quarter from 11.6% for the quarter ended June 30,
2006. We believe that the benefit from the change in bankruptcy law has
completed its cycle, and that net charge-offs are returning to more historical
levels."
World Acceptance has opened or acquired 141 net new offices during the 12
month period ended June 30, 2007. The Company opened 38 branches in the first
quarter of fiscal 2008 compared with 21 branches in the first quarter of fiscal
2007. The additional costs associated with the new branch offices was reflected
in the increase in total general and administrative expenses as a percent of
total revenues to 55.2% during the most recent quarter, from 54.6% during the
prior year quarter. The Company believes that while the decision to more
aggressively open new offices will negatively effect earnings in the short term,
it will greatly enhance earnings in the future.
Other key return ratios for the first quarter included a 10.2% return on
average assets (annualized) and a 19.6% (annualized) return on average equity.
During the quarter, the Company opened 38 new offices and acquired 12
offices, for a total of 782, a 22.0% increase from 641 offices open at June 30,
2006.
About World Acceptance
World Acceptance Corporation is one of the largest small-loan consumer
finance companies, operating 782 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.
First 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
today. Interested parties may participate in this call by dialing
1-800-289-0726. A simulcast of the conference call is also available on the
Internet at www.streetevents.com and www.vcall.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 and
changes in the economy (particularly 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.
World Acceptance Corporation
Condensed Consolidated Statements of Operations
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(unaudited and in thousands, except per share amounts)
Three Months Ended
June 30,
-------------------
2007 2006
Interest & fees $ 65,389 $ 54,536
Insurance & other 11,000 9,301
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Total revenues 76,389 63,837
Expenses:
Provision for loan losses 14,217 11,167
General and administrative expenses
Personnel 28,856 23,593
Occupancy & equipment 4,933 3,915
Data processing 550 495
Advertising 2,451 1,890
Intangible amortization 615 794
Other 4,785 4,160
-------- -------
42,190 34,847
Interest expense 2,336 1,901
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Total expenses 58,743 47,915
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Income before taxes 17,646 15,922
Income taxes 6,795 5,935
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Net income $ 10,851 $ 9,987
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Diluted earnings per share $ 0.61 $ 0.53
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Weighted average shares outstanding (diluted) 17,916 18,741
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Condensed Consolidated Balance Sheets
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(unaudited and in thousands)
June 30, March 31, June 30,
2007 2007 2006
---- ---- ----
ASSETS
Cash $ 7,387 $ 5,779 $ 4,897
Gross loans receivable 544,964 505,788 447,840
Less: Unearned interest & fees (141,715) (127,750) (114,330)
Allowance for loan losses (29,682) (27,840) (24,605)
-------- -------- --------
Loans receivable, net 373,567 350,198 308,905
Property and equipment, net 15,577 14,310 11,517
Deferred tax benefit 19,310 14,507 3,898
Intangible assets 16,826 16,100 16,227
Other assets 10,679 10,222 7,014
-------- -------- ---------
$ 443,346 $ 411,116 $ 352,458
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable 192,950 171,200 113,200
Income tax payable 9,083 8,015 4,376
Accounts payable and
accrued expenses 13,600 16,408 12,028
-------- -------- ---------
Total liabilities 215,633 195,623 129,604
Shareholders' equity 227,713 215,493 222,854
-------- -------- ---------
$ 443,346 $ 411,116 $ 352,458
======== ======== =========
Selected Consolidated Statistics
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(dollars in thousands)
Three Months Ended
June 30,
---------------------
2007 2006
Expenses as a percent of total revenues:
Provision for loan losses 18.6% 17.5%
General and administrative expenses 55.2% 54.6%
Interest expense 3.1% 3.0%
Average gross loans receivable $ 527,000 $ 432,574
Average loans receivable $ 391,530 $ 323,465
Loan volume $ 414,488 $ 341,833
Net charge-offs as percent of average loans 12.7% 11.6%
Return on average assets 10.2% 11.7%
Return on average equity 19.6% 18.4%
Offices opened (closed) during the period, net 50 21
Offices open at end of period 782 641
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