Exhibit 99.1
Advanta Provides Earnings Guidance for
2005; Increases 2005 Dividends by 20 Percent
SPRING HOUSE, Pa.--(BUSINESS WIRE)--Nov. 29, 2004--Advanta Corp.
(NASDAQ:ADVNB; ADVNA) today announced that it expects its 2005 pretax
earnings for Advanta Business Cards of between $90 million and $95
million. Earnings from continuing operations is expected to be between
$1.85 and $1.95 per diluted share for Class A and Class B shares
combined. Consistent with prior periods, the earnings per share
estimate assumes no gains or losses associated with the Company's
venture capital portfolio as such amounts are based on future market
conditions that cannot be reliably forecasted. During 2005, managed
receivables are expected to grow 10% to 20% and owned receivables are
expected to grow 23% to 33%.
"Our strategy for 2005 remains focused on improving our asset
quality and building our relationships with profitable, high credit
quality customers," said Dennis Alter, Chairman and CEO. "We will
continue to strengthen our offerings to the small business market by
emphasizing access to products and services that meet the unique
demands of small business and providing exceptional value to our
customers."
Advanta also announced that its Board of Directors has approved a
20 percent increase in its regular quarterly cash dividend effective
for its first quarter 2005 dividend payable in May. As a result of
this increase, 2005 quarterly dividends declared for its Class A
common stock will increase from 9.45 cents to 11.34 cents and 2005
quarterly dividends declared for its Class B common stock will
increase from 11.34 cents to 13.61 cents.
Conference Call Details
Advanta management will hold a conference call with analysts and
institutional investors today, November 29, at 8:30 a.m. Eastern time.
The call will be broadcast simultaneously for the public over the
Internet through www.advanta.com or www.vcall.com. To listen to the
live call, please go to the website at least 15 minutes early to
register, download, and install any necessary audio software. Replays
of the call will be available beginning at noon today on the Internet
at www.advanta.com or www.vcall.com or by dialing (719) 457-0820 and
referring to confirmation code 885511. The conference call may include
a discussion of non-GAAP financial measures, which are reconciled to
the most directly comparable GAAP financial measure in this press
release or the statistical supplements available at www.advanta.com in
the "Corporate Info section.
About Advanta
Advanta focuses on the small business market and related
community, providing funding and support to the nation's small
businesses through innovative products and services. Using its direct
marketing and information based expertise, Advanta identifies
potential customers and provides a high level of service tailored to
the unique needs of small businesses. Advanta is one of the nation's
largest issuers (through Advanta Bank Corp.) of MasterCard business
credit cards to small businesses. Since 1951, Advanta has pioneered
many of the marketing techniques common in the financial services
industry today, including remote lending and direct mail, affinity and
relationship marketing. Learn more about Advanta at www.advanta.com.
This Press Release contains forward-looking statements that are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those projected. The most
significant among these risks and uncertainties are: (1) the Company's
managed net interest income including changes resulting from
fluctuations in the volume of receivables and the range and timing of
pricing offers to cardholders; (2) competitive pressures; (3)
political conditions, social conditions, monetary and fiscal policies
and general economic conditions that affect the level of new account
originations, customer spending, delinquencies and charge-offs; (4)
factors affecting fluctuations in the number of accounts or receivable
balances, including the retention of cardholders after promotional
pricing periods have expired; (5) interest rate fluctuations; (6) the
level of expenses; (7) the timing of the securitizations of the
Company's receivables; (8) factors affecting the value of investments
held by the Company; (9) the effects of government regulation,
including restrictions and limitations imposed by banking laws,
regulators and examinations; (10) effect of, and changes in, tax laws,
rates, regulations and policies; (11) relationships with customers,
significant vendors and business partners; (12) factors affecting the
Company's ability to successfully develop, acquire, produce, test and
market products or services; (13) the amount and cost of financing
available to the Company; (14) the ratings on the debt of the Company
and its subsidiaries; (15) revisions to estimates associated with the
discontinued operations of the Company's mortgage and leasing
businesses; (16) the effect of changes in accounting policies or
practices as may be required by changes in U.S. generally accepted
accounting principles; (17) the impact of litigation; (18) the proper
design and operation of the Company's disclosure controls and
procedures; and (19) the ability to attract and retain key personnel.
Additional risks that may affect the Company's future performance are
detailed in the Company's filings with the Securities and Exchange
Commission, including its most recent Annual Report on Form 10-K and
its Quarterly Reports on Form 10-Q.
The Company has provided managed receivable data and other
non-GAAP financial measurements in this document. Management believes
that these non-GAAP financial measures used in managing the business
may provide users additional useful information. The table attached to
this press release includes a reconciliation of these non-GAAP
financial measures to the most directly comparable GAAP financial
measure and a description of why the non-GAAP financial measures are
useful to investors.
ADVANTA
($ in thousands)
RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES
- -------------------------------------------------------------
In addition to evaluating the financial performance of the Advanta
Business Cards segment under U.S. generally accepted accounting
principles ("GAAP"), we evaluate Advanta Business Cards'
performance on a managed basis. Our managed business credit card
receivable portfolio is comprised of both owned and securitized
business credit card receivables. We sell business credit card
receivables through securitizations accounted for as sales under
GAAP. We continue to own and service the accounts that generate
the securitized receivables. Managed data presents performance as
if the securitized receivables had not been sold. We believe that
performance on a managed basis provides useful supplemental
information because we retain interests in the securitized
receivables and, therefore, we have a financial interest in and
exposure to the performance of the securitized receivables.
Revenue and credit data on the managed portfolio provides
additional information useful in understanding the performance of
the retained interests in business credit card securitizations.
The data below provides a reconciliation of forward-looking
managed receivables and managed net principal charge-offs as a
percentage of average managed receivables (non-GAAP financial
measures) to owned receivables and owned net principal charge-offs
as a percentage of average owned receivables (the most directly
comparable GAAP financial measures). In the forward-looking
business credit card credit data below, the Low End of Range
column assumes the forward- looking average receivable balances
multiplied by our Low End of Range charge-off rate expectations,
and the High End of Range column assumes the forward-looking
average receivable balances multiplied by our High End of Range
charge-off rate expectations. The data presented below depict only
certain possibilities out of a large set of possible scenarios.
At December 31, 2005
-----------------------------
Forward-Looking Ending Business Credit Low End of High End of
Card Receivable Balances: Range Range
------------ --------------
Owned $ 905,000 $ 985,000
Securitized 2,705,000 2,950,000
------------ --------------
Managed $ 3,610,000 $ 3,935,000
Forward-Looking Average Business Credit Year Ended
Card Receivable Balances: Dec. 31, 2005
-------------
Owned $ 840,000
Securitized 2,685,000
-------------
Managed $ 3,525,000
Year Ended December 31, 2005
----------------------------
Forward-Looking Business Credit Card Low End of High End of
Credit Data: Range Range
------------ --------------
Owned net principal charge-offs $ 41,600 $ 45,800
As a percentage of average owned
receivables 4.95 % 5.45 %
Securitized net principal charge-
offs $ 143,500 $ 156,900
As a percentage of average
securitized receivables 5.34 % 5.84 %
Managed net principal charge-offs $ 185,100 $ 202,700
As a percentage of average
managed receivables 5.25 % 5.75 %
CONTACT: Advanta Corp.
David Weinstock
Investor Relations
(215) 444-5335
dweinstock@advanta.com
or
Jennifer Lyons
Communications
(215) 444-5073
AdvantaCommunications@advanta.com