EX-99.1 2 v129507_ex99-1.htm
EXHIBIT 99.1
 
 
 
NEWS RELEASE

   
For Immediate Release

Kelly M. Malson
 
Chief Financial Officer
 
(864) 298-9800
 
WORLD ACCEPTANCE CORPORATION REPORTS
SECOND QUARTER RESULTS
 
GREENVILLE, S.C. (October 23, 2008) – World Acceptance Corporation (NASDAQ: WRLD) today reported a 16.8% increase in gross loan balances, a 14.4% increase in revenues, a 1.9% increase in net income and an 8.3% increase in diluted earnings per share for its second fiscal quarter ended September 30, 2008, compared with the corresponding quarter of the prior fiscal year.

Net income for the second quarter rose to $10.7 million, a 1.9% increase over the $10.5 million for the second quarter of fiscal 2008. Diluted earnings per share increased 8.3% to $0.65 for the current quarter from $0.60 for the prior year quarter.

“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, 2008, grew to $667.2 million, a 16.8% increase over the $571.3 million outstanding at September 30, 2007, and an 11.3% increase since the beginning of the fiscal year.

”Loan demand increased in the second quarter sequentially over the first quarter of this fiscal year and was up 15.6% to over $484.8 million compared with the second quarter of last year. Our loan growth rate is up from the 11.1% year-over-year increase in volume experienced in the June quarter,” McLean said.

Provision for loan losses increased 26.6% to $23.3 million, up from $18.4 million in the second quarter of last year. Net charge-offs as a percentage of average net loans increased to 17.0% on an annualized basis during the most recent quarter from 15.3% in the same quarter of last fiscal year. McLean stated, “This 1.7 percentage point increase in charge offs since last year is similar to the 1.8 percentage point increase experienced in the first quarter of this year. While higher than historical averages, it remains within reasonable ranges in light of current economic conditions.

”We continue to monitor closely the loan portfolio in light of the softening economy. At this time, however, we do not expect to see our loss ratios improve for the remainder of the fiscal year,” McLean concluded.

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WRLD Reports Second Quarter Results
Page 2
October 23, 2008

Total general and administrative expenses increased by 15.4% compared with the second quarter of last year. The increase was due to higher expenses to support 90 net new offices opened or acquired since September 30, 2007, and contributed to general and administrative expenses increasing slightly to 52.7% of total revenues compared with 52.3% during the second quarter of the prior fiscal year.
 
Other key return ratios for the second quarter included an 8.3% return on average assets (annualized) and an annualized return on average equity of 16.9%.

Six-Month Results

For the first six-months of the fiscal year, net income was $22.7 million, or $1.37 per diluted share, representing a 6.6% increase in net earnings and a 14.2% increase in earnings per share over the $21.3 million, or $1.20 per diluted share, for the prior year six-month period. Total revenues for the first six-months of fiscal 2009 were $180.1 million, a 15.0% increase over the $156.6 million during the corresponding period of the previous year. Net charge-offs increased $8.7 million compared to the prior year first six-months. Net-charge-offs as a percent of average net loans were 15.8% compared to 14.0% during the prior year six-month period.

During the first six-months of the fiscal year, the Company opened 62 offices, acquired eight offices and closed one office, resulting in a total of 907 offices at September 30, 2008.

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 907 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 1-877-874-1567. A simulcast of the conference call is also available at http://tinyurl.com/6mwtee or 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 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.
 
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WRLD Reports Second Quarter Results
Page 3
October 23, 2008
 
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,
  
   
2008
  
2007
  
2008
  
2007
  
                   
Interest & fees
  
$
80,054
 
$
69,706
 
$
156,403
 
$
135,095
 
Insurance & other
    
11,667
   
10,492
   
23,739
   
21,492
 
Total revenues
    
91,721
   
80,198
   
180,142
   
156,587
 
Expenses:
                          
Provision for loan losses
    
23,307
   
18,416
   
41,164
   
32,632
 
General and administrative expenses
                          
Personnel
    
31,200
   
27,891
   
64,516
   
56,747
 
Occupancy & equipment
    
6,478
   
5,368
   
12,532
   
10,301
 
Data processing
    
581
   
640
   
1,170
   
1,190
 
Advertising
    
2,532
   
2,278
   
5,241
   
4,730
 
Intangible amortization
    
623
   
638
   
1,224
   
1,253
 
Other
    
6,965
   
5,115
   
12,486
   
9,901
 
     
48,379
   
41,930
   
97,169
   
84,122
 
Interest expense
    
2,749
   
2,932
   
5,229
   
5,268
 
Total expenses
    
74,435
   
63,278
   
143,562
   
122,022
 
Income before taxes
    
17,286
   
16,920
   
36,580
   
34,565
 
Income taxes
    
6,622
   
6,454
   
13,865
   
13,249
 
Net income
  
$
10,664
 
$
10,466
 
$
22,715
 
$
21,316
 
Diluted earnings per share
  
$
0.65
 
$
0.60
 
$
1.37
 
$
1.20
 
Diluted weighted average shares outstanding  
    
16,493
    
17,523
   
16,535
   
17,728
 
 
Consolidated Balance Sheets
 (unaudited and in thousands)

   
September 30,
  
March 31,
  
September 30,
  
   
2008
  
2008
  
2007
  
ASSETS
                    
Cash
  
$
8,070
 
$
7,590
 
$
5,863
 
Gross loans receivable
    
667,179
   
599,509
   
571,319
 
Less: Unearned interest & fees
    
(175,251
)
  
(154,418
)
  
(148,654
)
Allowance for loan losses
    
(38,121
)
  
(33,526
)
  
(32,269
)
Loans receivable, net
    
453,807
   
411,565
   
390,396
 
Property and equipment, net
    
22,970
   
18,654
   
16,937
 
Deferred income taxes
    
18,387
   
22,133
   
19,648
 
Goodwill
    
5,384
   
5,353
   
5,333
 
Intangibles
    
9,927
   
9,997
   
10,907
 
Other assets
    
9,795
   
10,818
   
9,890
 
   
$
528,340
 
$
486,110
 
$
458,974
 
                     
LIABILITIES AND SHAREHOLDERS' EQUITY
                    
Liabilities:
                    
Notes payable
    
256,700
   
214,900
   
225,400
 
Income tax payable
    
239
   
18,039
   
1,605
 
Accounts payable and accrued expenses
    
16,406
    
18,866
    
13,471
  
Total liabilities
    
273,345
   
251,805
   
240,476
 
Shareholders' equity
    
254,995
   
234,305
   
218,498
 
   
$
528,340
 
$
486,110
 
$
458,974
 
 
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WRLD Reports Second Quarter Results
Page 4
October 23, 2008

Selected Consolidated Statistics
(dollars in thousands)

   
Three Months Ended
  
Six Months Ended
  
   
September 30,
  
September 30,
  
   
2008
  
2007
  
2008
  
2007
  
                   
Expenses as a percent of total revenues:
                          
Provision for loan losses
    
25.4
%
  
23.0
%
  
22.9
%
  
20.8
%
General and administrative expenses
    
52.7
%
  
52.3
%
  
53.9
%
  
53.7
%
Interest expense
    
3.0
%
  
3.7
%
  
2.9
%
  
3.4
%
                           
Average gross loans receivable
  
$
653,671
  
$
560,689
  
$
634,097
  
$
543,034
  
                           
Average loans receivable
  
$
482,130
  
$
414,590
  
$
468,316
  
$
402,465
  
                           
Loan volume
  
$
484,806
  
$
419,261
  
$
945,457
  
$
833,750
  
                           
Net charge-offs as percent of average loans
    
17.0
%
  
15.3
%
  
15.8
%
  
14.0
%
                           
Return on average assets
    
8.3
%
  
9.3
%
  
9.0
%
  
9.7
%
                           
Return on average equity
    
16.9
%
  
18.8
%
  
18.4
%
  
19.3
%
                           
Offices opened (closed) during the period, net
    
35
   
35
   
69
   
85
 
                           
Offices open at end of period
    
907
   
817
   
907
   
817
 


END