EX-99.1 2 v091012_ex99-1.htm Unassociated Document
EXHIBIT 99.1

LOGO
NEWS RELEASE

For Immediate Release



Contact:
Kelly M. Malson
 
Chief Financial Officer
 
(864) 298-9800


WORLD ACCEPTANCE CORPORATION REPORTS
RECORD SECOND QUARTER RESULTS


GREENVILLE, S.C. (October 23, 2007) - World Acceptance Corporation (NASDAQ: WRLD) today reported record revenues and net income for its second fiscal quarter ended September 30, 2007.

Net income for the second quarter rose 6.1% to $10.5 million up from $9.9 million for the same quarter last year. Diluted earnings per share increased 15.4% to $0.60 for the current quarter from $0.52 for the prior year quarter. Total revenues for the quarter increased 19.3% to $80.2 million from $67.2 million for the quarter ended September 30, 2006.

“World Acceptance’s revenues benefited from continued growth in our loan portfolio and the contribution from offices opened and acquired since last year,” stated Sandy McLean, CEO of World Acceptance Corporation. “Gross loans outstanding at September 30, 2007, grew to $571.3 million, a 21.5% increase over the $470.3 million outstanding at September 30, 2006.”

Provision for loan losses increased 33.3% to $18.4 million, up from $13.8 million in the second quarter of last year. Net charge-offs increased $3.8 million, or 31.5% compared to the prior year quarter. Net charge-offs as a percentage of average net loans increased to 15.3% on an annualized basis during the most recent quarter from 14.0% in the same quarter as last fiscal year. The current quarter loss ratios returned to more historical levels as expected due to the prior year benefit realized from the bankruptcy reform which became effective in October 2005, but appears to have since stabilized.

The growth rate for per share earnings benefited from a 7.2% decrease in diluted shares outstanding over the two quarterly periods due to Company stock repurchases. World Acceptance repurchased 1.8 million shares of the Company’s common stock during the past twelve months for an aggregate purchase price of $73.4 million. The Company repurchased 690,100 shares of its common stock for an aggregate purchase price of $21.3 million in the second fiscal quarter ended September 30, 2007. Interest expense rose 29.2% to $2.9 million in the second quarter compared with the prior year due to higher average loan balances to fund, and in part, the stock repurchases.

Other key return ratios for the second quarter included a 9.3% return on average assets (annualized) and an annualized return on average equity of 18.8%. Total general and administrative expenses as a percent of total revenues were 52.3%, a slight decrease from the 52.5% during the second quarter of the prior fiscal year.


MORE
WRLD Reports Record Second Quarter Results
Page 2
October 23, 2007


Six-Month Results

For the first six months of the fiscal year, net income was $21.3 million, or $1.20 per diluted share, representing a 7.4% increase in net earnings and a 14.3% increase in earnings per share over the $19.8 million, or $1.05 per diluted share, for the prior year six-month period. Total revenues for the first six months of fiscal 2008 were $156.6 million, a 19.5% increase over the $131.0 million during the corresponding period of the previous year. Net charge-offs increased $7.0 million compared to the prior year first six months. Net-charge-offs as a percent of average net loans were 14.0% compared to 12.7% during the prior year six month period.
 
During the first six months of the fiscal year, the Company opened 73 offices and acquired twelve offices, resulting in a total of 817 offices at September 30, 2007.

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 817 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.

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 10:00 a.m. Eastern time today. Interested parties may participate in this call by dialing 1-800-818-5264. 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 (particular 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.


MORE
WRLD Reports Record Second Quarter Results
Page 3
October 23, 2007

World Acceptance Corporation

Consolidated Statements of Operations
(unaudited and in thousands, except per share amounts)
 
   
 Three Months Ended
  
Six Months Ended
  
   
 September 30,
  
September 30,
  
   
 2007
  
2006
  
2007
  
2006
  
                    
Interest & fees
  
$
69,706
  
$
58,750
  
$
135,095
  
$
113,286
  
Insurance & other
    
10,492
   
8,458
   
21,492
   
17,759
 
Total revenues
    
80,198
   
67,208
   
156,587
   
131,045
 
Expenses:
                          
Provision for loan losses
    
18,416
   
13,813
   
32,632
   
24,980
 
General and administrative expenses
                          
Personnel
    
27,891
   
23,673
   
56,747
   
47,266
 
Occupancy & equipment
    
5,368
   
4,412
   
10,301
   
8,328
 
Data processing
    
640
   
555
   
1,190
   
1,050
 
Advertising
    
2,278
   
1,794
   
4,730
   
3,683
 
Intangible amortization
    
638
   
745
   
1,253
   
1,538
 
Other
    
5,115
   
4,110
   
9,901
   
8,271
 
     
41,930
   
35,289
   
84,122
   
70,136
 
Interest expense
    
2,932
   
2,270
   
5,268
   
4,171
 
Total expenses
    
63,278
   
51,372
   
122,022
   
99,287
 
Income before taxes
    
16,920
   
15,836
   
34,565
   
31,758
 
Income taxes
    
6,454
   
5,975
   
13,249
   
11,910
 
Net income
  
$
10,466
  
$
9,861
  
$
21,316
  
$
19,848
  
Diluted earnings per share
  
$
0.60
  
$
0.52
  
$
1.20
  
$
1.05
  
     
17,523
   
18,884
   
17,728
   
18,840
 
 
Consolidated Balance Sheets
(unaudited and in thousands)
 
   
September 30,
  
March 31,
  
September 30,
  
   
2007
  
2007
  
2006
  
ASSETS
                    
Cash
  
$
5,863
  
$
5,779
  
$
6,601
  
Gross loans receivable
    
571,319
   
505,788
   
470,275
 
Less: Unearned interest & fees
    
(148,654
)
  
(127,750
)
  
(120,314
)
Allowance for loan losses
    
(32,269
)
  
(27,840
)
  
(26,549
)
Loans receivable, net
    
390,396
   
350,198
   
323,412
 
Property and equipment, net
    
16,937
   
14,310
   
13,073
 
Deferred tax benefit
    
19,648
   
14,507
   
3,971
 
Goodwill
    
5,333
   
5,040
   
4,936
 
Intangibles
    
10,907
   
11,060
   
10,928
 
Other assets
    
9,890
   
10,222
   
8,644
 
   
$
458,974
  
$
411,116
  
$
371,565
  
                     
LIABILITIES AND SHAREHOLDERS' EQUITY
                    
Liabilities:
                    
Notes payable
    
225,400
   
171,200
   
123,200
 
Income tax payable
    
1,605
   
8,015
   
1,055
 
Accounts payable and accrued expenses
    
13,471
   
16,408
   
13,290
 
Total liabilities
    
240,476
   
195,623
   
137,545
 
Shareholders' equity
    
218,498
   
215,493
   
234,020
 
   
$
458,974
  
$
411,116
  
$
371,565
  


MORE
WRLD Reports Record Second Quarter Results
Page 4
October 23, 2007


Selected Consolidated Statistics
(dollars in thousands)
 
   
Three Months Ended
  
Six Months Ended
  
   
September 30,
  
September 30,
  
   
2007
  
2006
  
2007
  
2006
  
                   
Expenses as a percent of total revenues:
                          
Provision for loan losses
    
23.0
%
  
20.6
%
  
20.8
%
  
19.1
%
General and administrative expenses
    
52.3
%
  
52.5
%
  
53.7
%
  
53.5
%
Interest expense
    
3.7
%
  
3.4
%
  
3.4
%
  
3.2
%
                           
Average gross loans receivable
  
$
560,205
  
$
462,907
  
$
543,244
  
$
447,626
  
                           
Average loans receivable
  
$
414,529
  
$
334,442
  
$
402,851
  
$
333,937
  
                           
Loan volume
  
$
419,261
  
$
348,061
  
$
833,750
  
$
689,894
  
                           
Net charge-offs as percent of average loans
    
15.3
%
  
14.0
%
  
14.0
%
  
12.8
%
                           
Return on average assets
    
9.3
%
  
10.9
%
  
9.7
%
  
11.3
%
                           
Return on average equity
    
18.8
%
  
17.3
%
  
19.3
%
  
17.8
%
                           
Offices opened (closed) during the period, net
    
35
   
37
   
85
   
58
 
                           
Offices open at end of period
    
817
   
678
   
817
   
678
 


END