EX-99.1 2 a4742821ex991.txt NEWS RELEASE Exhibit 99.1 World Acceptance Corporation Reports Record Second Quarter Income GREENVILLE, S.C.--(BUSINESS WIRE)--Oct. 18, 2004--World Acceptance Corporation (NASDAQ/NM:WRLD) today reported higher revenue, net income and loans for its second fiscal quarter ended September 30, 2004. Net income for the second quarter rose 13.2% to $6.9 million, or $0.36 per diluted share, compared with $6.1 million, or $0.32 per diluted share, for the same quarter of the prior year. Total revenues for the quarter increased 19.4% to $49.8 million from $41.7 million for the prior year quarter. "World Acceptance's record results for the second quarter were due to increased loan demand, improved operating leverage and the contribution of offices acquired since last year," stated Douglas R. Jones, President and CEO of World Acceptance Corporation. "At the end of the quarter, we acquired 17 offices with loan portfolios totaling $9.7 million. These offices will increase our market presence in Texas and Kentucky and we believe that these investments in the first half of the fiscal year should pay benefits in the upcoming growth season quarter and on into the future." Gross loans outstanding increased to $349.4 million at September 30, 2004, a 23.3% increase over the $283.5 million in balances outstanding at September 30, 2003, and a 12.7% increase since the beginning of the fiscal year. Two acquisitions were completed effective September 30, 2004, including 10 offices and $2.9 million in gross loans receivable in Texas and seven offices and $6.8 million in gross loans in Kentucky. The acquisitions had no effect on operating results for the quarter. Net charge-offs as a percentage of average loans outstanding declined to 15.4% during the most recent quarter compared with 16.0% during the three month period ending September 30, 2003. "We continue to make progress in reducing charge-offs," stated Mr. Jones. "We normally experience a seasonal increase in our charge-offs in the second quarter compared to our first quarter due to vacations by both our employees and our customers and this year followed a similar pattern. For the first six months of this fiscal year, our charge-off rate declined to 14.0% from 14.7% in the same period of last year." Operating income (revenues less the provision for loan losses and general and administrative expenses) increased to $11.9 million and 24.0% of revenues during the most recent quarter compared to $10.4 million and 24.9% of revenues during the corresponding quarter of the prior year. Several key return ratios remained very high during the quarter, as the return on average assets (annualized) amounted to 9.7% and the annualized return on average equity was 17.0%. This compares with a 10.4% return on assets and a 19.0% return on equity for the quarter ended September 30, 2003. Six-Month Results For the first six months of the fiscal year, net income was $14.2 million, or $0.73 per diluted share, representing a 21.0% increase over the $11.7 million, or $0.62 per diluted share, for the prior year six-month period. Total revenues for the first six months of fiscal 2005 were $97.2 million, an 18.7% increase over the $81.9 million during the corresponding period of the previous year. During the first six months of the fiscal year, the Company opened or acquired 50 offices and closed one non-performing office, leaving a total of 575 offices at September 30, 2004. About World Acceptance World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 575 offices in 12 states. 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 review the Company's second quarter 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 1-888-694-4769. 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=953600. 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. 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, ------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- Interest & fees $ 43,478 36,549 84,079 70,954 Insurance & other 6,276 5,127 13,153 10,985 --------- --------- --------- --------- Total revenues 49,754 41,676 97,232 81,939 Expenses: Provision for loan losses 11,282 9,328 19,909 17,257 General and administrative expenses Personnel 17,478 14,511 35,184 29,860 Occupancy & equipment 3,112 2,443 6,027 4,745 Data processing 399 446 867 922 Advertising 1,370 1,171 2,950 2,454 Intangible amortization 633 566 1,265 1,122 Other 3,539 2,824 6,658 5,500 --------- --------- --------- --------- 26,531 21,961 52,951 44,603 Interest expense 1,067 928 2,056 1,919 --------- --------- --------- --------- Total expenses 38,880 32,217 74,916 63,779 --------- --------- --------- --------- Income before taxes 10,874 9,459 22,316 18,160 Income taxes 3,968 3,358 8,145 6,447 --------- --------- --------- --------- Net income $ 6,906 6,101 14,171 11,713 ========= ========= ========= ========= Diluted earnings per share $ 0.36 0.32 0.73 0.62 ========= ========= ========= ========= Diluted weighted average shares outstanding 19,429 19,163 19,459 18,962 ========= ========= ========= ========= Consolidated Balance Sheets ---------------------------------------------------------------------- (unaudited and in thousands) September 30, March 31, September 30, 2004 2004 2003 -------------- ------------- ------------- ASSETS Cash $ 5,318 4,314 3,133 Gross loans receivable 349,402 310,131 283,485 Less: Unearned interest & fees (84,136) (73,603) (69,228) Allowance for loan losses (20,421) (17,261) (17,053) -------------- ------------- ------------- Loans receivable, net 244,845 219,267 197,204 Property and equipment, net 9,634 9,274 8,238 Intangible assets 17,484 15,514 14,304 Other assets 14,785 13,600 12,576 -------------- ------------- ------------- $ 292,066 261,969 235,455 ============== ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Notes payable 110,300 95,032 97,432 Accounts payable and accrued expenses 14,673 10,357 5,148 -------------- ------------- ------------- Total liabilities 124,973 105,389 102,580 Shareholders' equity 167,093 156,580 132,875 -------------- ------------- ------------- $ 292,066 261,969 235,455 ============== ============= ============= Selected Consolidated Statistics ---------------------------------------------------------------------- (dollars in thousands) Three Months Ended Six Months Ended September 30, September 30, ------------------- ------------------- 2004 2003 2004 2003 --------- --------- --------- --------- Expenses as a percent of total revenues: Provision for loan losses 22.7% 22.4% 20.5% 21.1% General and administrative expenses 53.3% 52.7% 54.5% 54.4% Interest expense 2.1% 2.2% 2.1% 2.3% Average gross loans receivable $340,829 $282,578 $331,614 $276,957 Average loans receivable $258,705 $213,684 $252,119 $209,822 Loan volume $251,030 $209,008 $502,272 $417,751 Net charge-offs as percent of average loans 15.4% 16.0% 14.0% 14.7% Return on average assets 9.7% 10.4% 10.2% 10.1% Return on average equity 17.0% 19.0% 17.7% 18.9% Offices opened (closed) during the period, net 31 13 49 16 Offices open at end of period 575 486 575 486 CONTACT: World Acceptance Corporation, Greenville Sandy McLean, 864-298-9800