Exhibit 99.1
Contact: Sandy McLean
Chief Executive Officer
(864) 298-9800
WORLD ACCEPTANCE CORPORATION
REPORTS RECORD FOURTH QUARTER RESULTS
GREENVILLE, S.C. (April 25, 2006) - World Acceptance Corporation
(Nasdaq/NM:WRLD) today reported record revenue and net income for its fourth
fiscal quarter and year ended March 31, 2006.
Net income for the fourth quarter rose 26.3% to $18.1 million, or $.96 per
diluted share, compared with $14.3 million, or $.73 per diluted share, for the
same quarter of the prior year. Total revenues for the quarter increased 21.7%
to $73.4 million from $60.4 million for the prior year quarter. Gross loans
outstanding amounted to $416.3 million at March 31, 2006, an 18.4% increase over
the $351.5 million in balances outstanding at March 31, 2005.
"Our record results were due to strong loan growth, a lower provision for
loan losses as a percent of total revenues and improved operating margins,"
stated Sandy McLean, CEO. "Loan demand was very strong in the third fiscal
quarter and carried over through year end. In addition, we have experienced a
drop in delinquencies and net charge offs since the third quarter that have had
a positive effect on our provision for loan losses compared with earlier in the
year. Additionally, fees generated from our tax preparation business enhanced
our fourth quarter earnings and rose by 11.3% from the prior year quarter."
Several key ratios remained very good during the quarter: total general and
administrative expenses as a percent of total revenues improved to 48.6% during
the most recent quarter compared to 49.4% during the prior year quarter; and net
charge-offs as a percent of average net loans (annualized) decreased to 11.6%
during the quarter from 13.9% for the quarter ended March 31, 2005.
McLean further stated, "We believe the current positive trends in loan
demand and declining delinquencies position us well for excellent results in the
coming year. Our loan growth rose 18.4% in fiscal 2006 due to increased demand
and the contribution of new offices opened since the prior year. This compares
with loan growth of 13.3% in fiscal 2005."
Twelve-Month Results
For the fiscal year ended March 31, 2006, net income was $38.5 million, or
$2.02 per diluted share, representing a 13.3% increase over the $34.0 million,
or $1.74 per diluted share for the prior fiscal year. Total revenues for fiscal
2006 were $243.3 million, a 15.4% increase over the $210.8 million during the
previous fiscal year.
Key ratios were also excellent for the fiscal year with a return on assets
of 11.9%, a return on equity of 19.9%, general and administrative expenses as a
percent of total revenue of 52.8% (compared with 53.2% for fiscal 2005), and net
charge-offs as a percent of average net loans of 14.8% (compared with 14.6% for
fiscal 2005).
During the fiscal year, the Company opened or acquired 47 offices and
closed six non-performing offices, leaving a total of 620 offices at March 31,
2006.
About World Acceptance
World Acceptance Corporation is one of the largest small-loan consumer
finance companies, operating 620 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.
Fourth Quarter Conference Call
The senior management of World Acceptance Corporation will be discussing
these results in its quarterly conference call to be held at 10:30 A.M. Eastern
today. Interested parties may participate in this call by dialing
1-866-814-8482. 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 contains 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.
Specifically, the statements in the fifth paragraph of this press release that
express the Company's expectations about excellent results in the coming year
based on the continuation of current positive trends in loan demand and
delinquencies are forward-looking statements. 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 performance, growth, financial results, financial condition
or expansion plans may vary materially from those anticipated, estimated or
expected. Among the key factors that could cause actual outcomes 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, proposed or future
legislation; 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 general changes in
the economy (particularly in the markets served by the Company); and other
matters discussed from time to time in the Company's reports on Forms 10-K, 10-Q
and 8-K filed with, or furnished to, the Securities and Exchange Commission.
World Acceptance Corporation is not responsible for updating the information
contained in this press release beyond the publication date, nor 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 Year Ended
March 31, March 31,
----------------------- -----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Interest & fees $ 58,728 $ 47,460 $ 204,450 $ 177,582
Insurance & other 14,713 12,900 38,822 33,176
---------- ---------- ---------- ----------
Total revenues 73,441 60,360 243,272 210,758
Expenses:
Provision for loan
losses 6,629 6,397 46,026 40,037
General and administrative
expenses
Personnel 25,317 20,169 84,817 73,361
Occupancy & equipment 3,762 3,283 14,167 12,431
Data processing 584 501 2,109 1,910
Advertising 1,330 1,316 8,592 7,792
Intangible
amortization 736 670 2,861 2,585
Other 3,999 3,874 15,968 14,144
---------- ---------- ---------- ----------
35,728 29,813 128,514 112,223
Interest expense 2,067 1,269 7,137 4,640
---------- ---------- ---------- ----------
Total expenses 44,424 37,479 181,677 156,900
---------- ---------- ---------- ----------
Income before taxes 29,017 22,881 61,595 53,858
Income taxes 10,930 8,563 23,080 19,868
---------- ---------- ---------- ----------
Net income $ 18,087 $ 14,318 $ 38,515 $ 33,990
========== ========== ========== ==========
Diluted earnings
per share $ 0.96 $ 0.73 $ 2.02 $ 1.74
========== ========== ========== ==========
Diluted weighted average
shares outstanding 18,872 19,708 19,098 19,558
========== ========== ========== ==========
Consolidated Balance Sheets
(unaudited and in thousands)
March 31, March 31,
2006 2005
------------ ------------
ASSETS
Cash $ 4,034 $ 3,047
Gross loans receivable 416,302 351,496
Less: Unearned interest & fees (103,556) (84,472)
Allowance for loan losses (22,717) (20,673)
------------ ------------
Loans receivable, net 290,029 246,351
Property and equipment, net 11,040 9,806
Deferred tax benefit 3,400 10,690
Intangible assets 16,861 17,358
Other assets 6,922 6,254
------------ ------------
$ 332,286 $ 293,506
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable $ 100,600 $ 83,900
Accounts payable and accrued expenses 21,256 19,895
------------ ------------
Total liabilities 121,856 103,795
Shareholders' equity 210,430 189,711
------------ ------------
$ 332,286 $ 293,506
============ ============
Selected Consolidated Statistics
(dollars in thousands)
Three Months Ended Year Ended
March 31, March 31,
----------------------- -----------------------
2006 2005 2006 2005
---------- ---------- ---------- ----------
Expenses as a percent of total
revenues:
Provision for loan
losses 9.0% 10.6% 18.9% 19.0%
General and
administrative
expenses 48.6% 49.4% 52.8% 53.2%
Interest expense 2.8% 2.1% 2.9% 2.2%
Average gross loans
receivable $ 432,065 $ 359,465 $ 396,582 $ 344,133
Average loans receivable $ 324,069 $ 272,161 $ 298,267 $ 261,187
Loan volume $ 263,806 $ 219,496 $1,218,131 $1,028,670
Net charge-offs as
percent of average
loans 11.6% 13.9% 14.8% 14.6%
Return on average assets 20.8% 18.8% 11.9% 11.8%
Return on average equity 35.9% 31.3% 19.9% 20.1%
Offices opened (closed)
during the period, net 1 1 41 53
Offices open at end
of period 620 579 620 579
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