Exhibit 99.1
Contact: Sandy McLean
Chief Financial Officer
(864) 298-9800
WORLD ACCEPTANCE CORPORATION REPORTS
INCREASED REVENUE, EARNINGS AND LOANS FOR SECOND QUARTER
GREENVILLE, S.C. (October 25, 2005) - World Acceptance Corporation (NASDAQ/NM:
WRLD) today reported higher revenue, net income and loans for its second fiscal
quarter ended September 30, 2005.
Net income for the second quarter rose 7.6% to $7.4 million, or $0.39 per
diluted share, compared with $6.9 million, or $0.36 per diluted share, for the
same quarter of the prior year. Total revenues for the quarter increased 14.0%
to $56.7 million from $49.8 million for the prior year quarter.
Gross loans outstanding increased to $395.6 million at September 30, 2005, a
13.2% increase over the $349.4 million in balances outstanding at September 30,
2004, and a 12.5% increase since the beginning of the fiscal year.
"We recorded solid loan growth in the second quarter from existing operations,"
stated Douglas R. Jones, President and CEO. "Our internal growth rate improved
from the second quarter of last year due to new offices opened, including our
first two offices in Mexico opened this quarter. In addition, we benefited from
the enactment of a new law in Texas, effective September 1, 2005, that increased
the maximum dollar amount of a loan that may be made in that state."
"We believe the excellent growth from existing operations highlights the success
of our business model and the smooth integration into our operations of accounts
and offices that we have acquired over the years. Our growth from acquisitions
slowed this year due to fewer candidates in target markets that met our
criteria. We acquired approximately 6,300 accounts for $3.0 million in gross
loans receivable during the first six months of the current fiscal year compared
with approximately 22,000 accounts for $19.0 million in gross loans during the
first six months of fiscal 2005. We continue to review potential acquisition
candidates in existing and contiguous markets for future growth opportunities,"
concluded Mr. Jones.
Key return ratios for the second quarter included an annualized return on
average assets of 9.5% and an annualized return on average equity of 15.8%.
Total general and administrative expenses as a percent of total revenues were
53.1%, a slight decrease from the 53.3% during the second quarter of the prior
fiscal year. Net charge-offs as a percent of average net loans increased to
16.1% during the quarter from 15.4% during the prior year quarter on an
annualized basis.
Six-Month Results
For the first six months of the fiscal year, net income was $14.7 million, or
$0.76 per diluted share representing a 4.0% increase over the $14.2 million, or
$0.73 per diluted share for the prior year six-month period. Total revenues for
the first six months of fiscal 2006 were $108.5 million, an 11.6% increase over
the $97.2 million during the corresponding period of the previous year. Net
charge-offs as a percent of average net loans were 15.0% compared to 14.0%
during the prior year six month period.
During the first six months of the fiscal year, the Company opened 37 offices,
acquired one office and closed or sold six non-performing offices, leaving a
total of 611 offices at September 30, 2005.
About World Acceptance
World Acceptance Corporation is one of the largest small-loan consumer finance
companies, operating 611 offices in 11 states and Mexico. It is also the parent
company of ParaData Financial Systems, a provider of computer software solutions
for the consumer finance industry.
Second Quarter Conference Call
The senior management of World Acceptance Corporation will be discussing these
results in its quarterly conference call to be held at 2:00 P.M. Eastern time
today. Interested parties may participate in this call by dialing
1-866-425-6191. A simulcast of the conference call is also available on the
Internet at
http://phx.corporate-ir.net/playerlink.zhtml?c=103383&s=wm&e=1147411. 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 the following: changes in interest rates; risk inherent in
making loans, including repayment risks and value of collateral; recently
enacted, proposed or future 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). These and other risk factors are discussed in greater detail in the
Company's most recent reports on Form 10-K and 10-Q, and other reports and
documents it files with the Securities and Exchange Commission from time to
time. These reports and documents may be accessed through the EDGAR filing
system via the web site of the Securities and Exchange (www.sec.gov). 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
Consolidated Statements of Operations
(unaudited and in thousands, except per share amounts)
Three Months Ended Six Months Ended
Sept. 30, Sept. 30,
------------------- -------------------
2005 2004 2005 2004
-------- -------- -------- --------
Interest & fees $ 48,744 43,478 93,343 84,079
Insurance & other 8,000 6,276 15,169 13,153
-------- -------- -------- --------
Total revenues 56,744 49,754 108,512 97,232
Expenses:
Provision for loan losses 13,131 11,282 22,671 19,909
General and administrative
expenses
Personnel 19,633 17,478 39,215 35,184
Occupancy & equipment 3,580 3,112 6,765 6,027
Data processing 512 399 1,013 867
Advertising 1,641 1,370 3,298 2,950
Intangible amortization 731 633 1,416 1,264
Other 4,033 3,539 7,664 6,658
-------- -------- -------- --------
30,130 26,531 59,371 52,950
Interest expense 1,622 1,067 2,928 2,056
-------- -------- -------- --------
Total expenses 44,883 38,880 84,970 74,915
-------- -------- -------- --------
Income before taxes 11,861 10,874 23,542 22,317
Income taxes 4,432 3,968 8,800 8,145
-------- -------- -------- --------
Net income $ 7,429 6,906 14,742 14,172
======== ======== ======== ========
Diluted earnings per share $ 0.39 0.36 0.76 0.73
======== ======== ======== ========
Diluted weighted average shares
outstanding 19,147 19,429 19,312 19,459
======== ======== ======== ========
Consolidated Balance Sheets
(unaudited and in thousands)
Sept. 30, March 31, Sept. 30,
2005 2005 2004
---------- ---------- ----------
ASSETS
Cash $ 4,243 3,047 5,318
Gross loans receivable 395,578 351,496 349,402
Less: Unearned interest & fees (99,169) (84,472) (84,136)
Allowance for loan losses (22,223) (20,673) (20,421)
---------- ---------- ----------
Loans receivable, net 274,186 246,351 244,845
Property and equipment, net 10,738 9,806 9,634
Deferred tax benefit 10,690 10,690 9,535
Intangible assets 17,117 17,358 17,484
Other assets 5,986 6,254 5,250
---------- ---------- ----------
$ 322,960 293,506 292,066
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable 122,400 83,900 110,300
Income tax payable 5,479 1,624 (3,111)
Accounts payable and accrued expenses 9,589 18,271 17,784
---------- ---------- ----------
Total liabilities 137,468 103,795 124,973
Shareholders' equity 185,492 189,711 167,093
---------- ---------- ----------
$ 322,960 293,506 292,066
========== ========== ==========
Selected Consolidated Statistics
(dollars in thousands)
Three Months Ended Six Months Ended
Sept. 30, Sept. 30,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Expenses as a percent of total
revenues:
Provision for loan losses 23.1% 22.7% 20.9% 20.5%
General and administrative
expenses 53.1% 53.3% 54.7% 54.5%
Interest expense 2.9% 2.1% 2.7% 2.1%
Average gross loans receivable $ 381,910 $ 340,829 $ 370,965 $ 331,614
Average loans receivable $ 287,133 $ 258,705 $ 279,824 $ 252,119
Loan volume $ 305,361 $ 251,030 $ 587,329 $ 502,272
Net charge-offs as percent of
average loans 16.1% 15.4% 15.0% 14.0%
Return on average assets 9.5% 9.7% 9.6% 10.2%
Return on average equity 15.8% 17.0% 15.6% 17.7%
Offices opened (closed) during
the period, net 28 31 32 49
Offices open at end of period 611 575 611 575
END