GREENVILLE, S.C., Jan. 28 /PRNewswire-FirstCall/ -- World
Acceptance Corporation (NASDAQ:WRLD) today reported record results
for the third quarter of fiscal 2010, including a 64.8% increase in
diluted earnings per share, a 13.9% increase in gross loan
balances, and a 13.3% increase in revenues for the quarter ended
December 31, 2009, compared with the corresponding quarter of the
prior fiscal year. Net income for the third quarter rose 66.4% to
$14.8 million compared with $8.9 million for the same quarter of
the prior year. Net income per diluted share increased 64.8% to
$0.89 in the third quarter of fiscal 2010 compared with $0.54 in
the third quarter of fiscal 2009. The fiscal 2009 net income for
the third quarter was revised from $10.0 million, or $0.61 per
share to $8.9 million, or $0.54 per share, due to a change in an
accounting principle for the Company's convertible notes. "World
Acceptance's strong earnings momentum was due to growth in our core
business, reduced loan losses as a percentage of total loans and a
substantial improvement in our expense ratios," stated Sandy
McLean, Chairman and CEO of the Company. "Our record loans
outstanding benefited from increased loan volume at existing
offices and additional volume from offices opened since last year.
We also experienced lower loss ratios over the past three quarters
even though they are above our historical levels due to the soft
economy." Total revenues increased to $112.3 million in the third
quarter of fiscal 2010, a 13.3% increase over the $99.2 million
reported in the third quarter last year. The revenue increase was
consistent with a 13.7% increase in average net loans when
comparing the two quarterly periods. Gross loans outstanding
increased to a record high $838.9 million at December 31, 2009, up
13.9% from $736.2 million at December 31, 2008. The third quarter's
results included a number of financial transactions that resulted
in pretax non operating gains being approximately $1.0 million
lower in fiscal 2010 than in fiscal 2009. Fiscal 2010 results
included $439,000 in net gains for the third quarter, including a
$117,000 gain on the repurchase and cancellation of $1 million par
value of its convertible notes and a $322,000 gain on its interest
rate swaps. Fiscal 2009 results included approximately $1.4 million
in net gains for the third quarter that included a $3.0 million
pre-tax gain from the sale of the Company's $10 million foreign
exchange currency option and the repurchase and cancellation of $5
million par value of its 3% convertible senior subordinated notes,
partially offset by a $1.6 million loss on its interest rate swaps.
The provision for loan losses increased by 0.5% during the current
quarter, to $29.6 million compared with $29.5 million for the
fiscal 2009 third quarter. Net charge-offs amounted to $25.7
million, or 17.8% of average net loans on an annualized basis,
compared with $24.9 million, or 19.6% of average net loans for the
prior year quarter. Delinquencies 61+ days past due decreased by 30
basis points on both a recency and contractual basis, to 3.0% and
4.3%, respectively, as of the end of the current quarter. "We
experienced a reduction in net charge-off ratios in each of the
last three quarters and a steady improvement in our loss ratios
during the current year," noted Mr. McLean. "Although these are
positive trends, they remain above our historical levels for these
credit metrics. The 180 basis points (annualized) decrease in the
third quarter's net charge-off ratio was at least 100 basis points
greater than the previous two quarterly reductions. Additionally,
our net charge-offs as a percent of average net loans (annualized)
for the first nine months of the current fiscal year loss ratio was
approximately 110 basis points greater when compared with the
average ratio for the corresponding three quarters of fiscal 2005
through 2008. Based on the continued softness in the economy, we
cannot predict when or if we will return to more historical loan
loss ratios, yet believe that our current reserves are adequate at
current loss levels." The Company's general and administrative
expenses were $55.5 million in the current quarter, a 7.4% increase
over the $51.7 million in the prior year quarter. This represents
49.5% of total revenues during the current fiscal quarter compared
with 52.2% for last year. The improvement resulted from the strong
growth in revenues combined with reduced start-up costs associated
with a lower number of branch openings in fiscal 2010 compared with
the first nine months of fiscal 2009. The Company opened or
acquired 32 new offices during the current year compared with 85
during the same period of the prior year. Other key return ratios
for the third quarter included a 12.2% return on average assets (on
a trailing four quarters) and a return on average equity of 22.6%
(on a trailing four quarters). Nine-Month Results For the first
nine-months of the fiscal year, net income rose 45.9% to $44.0
million compared with $30.2 million for the nine months ended
December 31, 2008. Fully diluted net income per share rose 47.3% to
$2.68 in fiscal 2010 compared with $1.82 for the first nine months
of fiscal 2009. The fiscal 2009 net income was revised from $32.7
million, or $1.98 per dilutive share, due to a change in an
accounting principle as previously mentioned. Total revenues for
the first nine-months of fiscal 2010 rose 13.4% to $316.7 million
compared with $279.3 million during the corresponding period of the
previous year. Net charge-offs increased $3.9 million, or 6.3%,
compared with the prior year first nine-months. Annualized net
charge-offs as a percent of average net loans were 16.0% compared
with 17.1% during the prior year nine-month period. During the
first nine-months of the fiscal year, the Company opened 32 offices
and closed 1 office, resulting in a total of 975 offices at
December 31, 2009. About World Acceptance Corporation World
Acceptance Corporation is one of the largest small-loan consumer
finance companies, operating 975 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. Third 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 time
today. Interested parties may participate in this call by dialing
1-888-312-9852, passcode 4752518. A simulcast of the conference
call is also available on the Internet at
http://tinyurl.com/yflbmtr or http://www.streetevents.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 the following:
the continuation or worsening of adverse conditions in the global
and domestic credit markets and uncertainties regarding, or the
impact of governmental responses to those conditions; changes in
interest rates; risks inherent in making loans, including repayment
risks and value of collateral, which risks may increase in light of
adverse or recessionary economic conditions; 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 delinquencies and charge-offs);
changes in the Company's markets and general 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 Consolidated Statements of Operations
------------------------------------- (unaudited and in thousands,
except per share amounts) Three Months Ended Nine Months Ended
December 31, December 31, ------------ ------------ 2009 2008 2009
2008 ---- ---- ---- ---- Interest & fees $97,610 $84,881
$274,218 $241,284 Insurance and other 14,700 14,280 42,528 38,019
Total revenues 112,310 99,161 316,746 279,303 Expenses: Provision
for loan losses 29,633 29,490 75,217 70,654 General and
Administrative expenses Personnel 34,028 31,700 104,232 96,216
Occupancy & equipment 7,658 6,491 21,475 19,023 Data processing
475 573 1,503 1,743 Advertising 5,071 5,087 9,892 10,329 Intangible
amortization 563 621 1,696 1,845 Other 7,742 7,244 21,828 19,730
55,537 51,716 160,626 148,886 Interest expense 3,756 3,928 10,483
11,428 Total expenses 88,926 85,134 246,326 230,968 Income before
taxes 23,384 14,027 70,420 48,335 Income taxes 8,633 5,164 26,423
18,183 Net income $14,751 $8,863 $43,997 $30,152 ======= ======
======= ======= Diluted earnings per share $0.89 $0.54 $2.68 $1.82
===== ===== ===== ===== Diluted weighted average shares outstanding
16,576 16,342 16,434 16,543 ====== ====== ====== ======
Consolidated Balance Sheets --------------------------- (unaudited
and in thousands) December 31, March 31, December 31, 2009 2009
2008 ---- ---- ---- ASSETS Cash $12,946 $6,260 $7,139 Gross loans
receivable 838,864 671,176 736,234 Less: Unearned interest &
fees (223,441) (172,743) (194,872) Allowance for loan losses
(47,679) (38,021) (42,576) ------- ------- ------- Loans
receivable, net 567,744 460,412 498,786 Property and equipment, net
22,936 23,060 23,069 Deferred income taxes 13,027 12,251 13,681
Income taxes receivable - - 1,569 Goodwill 5,581 5,581 5,584
Intangibles 7,541 8,988 9,513 Other assets 10,350 9,542 9,162
$640,125 $526,094 $568,503 ======== ======== ======== LIABILITIES
AND SHAREHOLDERS' EQUITY Liabilities: Notes payable 262,494 197,041
276,734 Income tax payable 5,625 11,413 - Accounts payable and
accrued expenses 24,854 21,305 22,734 ------ ------ ------ Total
liabilities 292,973 229,759 299,468 Shareholders' equity 347,152
296,335 269,035 $640,125 $526,094 $568,503 ======== ========
======== Selected Consolidated Statistics
-------------------------------- (dollars in thousands) Three
Months Ended Nine Months Ended December 31, December 31,
------------ ------------ 2009 2008 2009 2008 ---- ---- ---- ----
Expenses as a percent of total revenues: Provision for loan losses
26.4% 29.7% 23.7% 25.3% General and administrative expenses 49.5%
52.2% 50.7% 53.3% Interest expense 3.3% 4.0% 3.3% 4.1% Average
gross loans receivable $785,167 $689,267 $742,518 $652,846 Average
loans receivable $577,553 $507,965 $547,060 $481,807 Loan volume
$674,095 $571,975 $1,783,646 $1,517,431 Net charge-offs as percent
of average loans 17.8% 19.6% 16.0% 17.1% Return on average assets
(trailing 4 quarters) 12.2% 10.4% 12.2% 10.4% Return on average
equity (trailing 4 quarters) 22.6% 21.1% 22.6% 21.1% Offices opened
(closed) during the period, net 9 16 31 85 Offices open at end of
period 975 923 975 923 DATASOURCE: World Acceptance Corporation
CONTACT: Kelly Malson, Chief Financial Officer, +1-864-298-9800 Web
Site: http://tinyurl.com/yflbmtr
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