EX-99.1 2 wc3834ex991.txt EXHIBIT 99.1 Exhibit 99.1 Contact: Sandy McLean Chief Financial Officer (864) 298-9800 WORLD ACCEPTANCE CORPORATION REPORTS INCREASED REVENUE, EARNINGS AND LOANS FOR SECOND QUARTER GREENVILLE, S.C. (October 25, 2005) - World Acceptance Corporation (NASDAQ/NM: WRLD) today reported higher revenue, net income and loans for its second fiscal quarter ended September 30, 2005. Net income for the second quarter rose 7.6% to $7.4 million, or $0.39 per diluted share, compared with $6.9 million, or $0.36 per diluted share, for the same quarter of the prior year. Total revenues for the quarter increased 14.0% to $56.7 million from $49.8 million for the prior year quarter. Gross loans outstanding increased to $395.6 million at September 30, 2005, a 13.2% increase over the $349.4 million in balances outstanding at September 30, 2004, and a 12.5% increase since the beginning of the fiscal year. "We recorded solid loan growth in the second quarter from existing operations," stated Douglas R. Jones, President and CEO. "Our internal growth rate improved from the second quarter of last year due to new offices opened, including our first two offices in Mexico opened this quarter. In addition, we benefited from the enactment of a new law in Texas, effective September 1, 2005, that increased the maximum dollar amount of a loan that may be made in that state." "We believe the excellent growth from existing operations highlights the success of our business model and the smooth integration into our operations of accounts and offices that we have acquired over the years. Our growth from acquisitions slowed this year due to fewer candidates in target markets that met our criteria. We acquired approximately 6,300 accounts for $3.0 million in gross loans receivable during the first six months of the current fiscal year compared with approximately 22,000 accounts for $19.0 million in gross loans during the first six months of fiscal 2005. We continue to review potential acquisition candidates in existing and contiguous markets for future growth opportunities," concluded Mr. Jones. Key return ratios for the second quarter included an annualized return on average assets of 9.5% and an annualized return on average equity of 15.8%. Total general and administrative expenses as a percent of total revenues were 53.1%, a slight decrease from the 53.3% during the second quarter of the prior fiscal year. Net charge-offs as a percent of average net loans increased to 16.1% during the quarter from 15.4% during the prior year quarter on an annualized basis. Six-Month Results For the first six months of the fiscal year, net income was $14.7 million, or $0.76 per diluted share representing a 4.0% increase over the $14.2 million, or $0.73 per diluted share for the prior year six-month period. Total revenues for the first six months of fiscal 2006 were $108.5 million, an 11.6% increase over the $97.2 million during the corresponding period of the previous year. Net charge-offs as a percent of average net loans were 15.0% compared to 14.0% during the prior year six month period. During the first six months of the fiscal year, the Company opened 37 offices, acquired one office and closed or sold six non-performing offices, leaving a total of 611 offices at September 30, 2005. About World Acceptance World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 611 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. 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 2:00 P.M. Eastern time today. Interested parties may participate in this call by dialing 1-866-425-6191. 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=1147411. 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: changes in interest rates; risk inherent in making loans, including repayment risks and value of collateral; recently enacted, proposed or future legislation; 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). These and other risk factors are discussed in greater detail in the Company's most recent reports on Form 10-K and 10-Q, and other reports and documents it files with the Securities and Exchange Commission from time to time. These reports and documents may be accessed through the EDGAR filing system via the web site of the Securities and Exchange (www.sec.gov). 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 Sept. 30, Sept. 30, ------------------- ------------------- 2005 2004 2005 2004 -------- -------- -------- -------- Interest & fees $ 48,744 43,478 93,343 84,079 Insurance & other 8,000 6,276 15,169 13,153 -------- -------- -------- -------- Total revenues 56,744 49,754 108,512 97,232 Expenses: Provision for loan losses 13,131 11,282 22,671 19,909 General and administrative expenses Personnel 19,633 17,478 39,215 35,184 Occupancy & equipment 3,580 3,112 6,765 6,027 Data processing 512 399 1,013 867 Advertising 1,641 1,370 3,298 2,950 Intangible amortization 731 633 1,416 1,264 Other 4,033 3,539 7,664 6,658 -------- -------- -------- -------- 30,130 26,531 59,371 52,950 Interest expense 1,622 1,067 2,928 2,056 -------- -------- -------- -------- Total expenses 44,883 38,880 84,970 74,915 -------- -------- -------- -------- Income before taxes 11,861 10,874 23,542 22,317 Income taxes 4,432 3,968 8,800 8,145 -------- -------- -------- -------- Net income $ 7,429 6,906 14,742 14,172 ======== ======== ======== ======== Diluted earnings per share $ 0.39 0.36 0.76 0.73 ======== ======== ======== ======== Diluted weighted average shares outstanding 19,147 19,429 19,312 19,459 ======== ======== ======== ======== Consolidated Balance Sheets (unaudited and in thousands)
Sept. 30, March 31, Sept. 30, 2005 2005 2004 ---------- ---------- ---------- ASSETS Cash $ 4,243 3,047 5,318 Gross loans receivable 395,578 351,496 349,402 Less: Unearned interest & fees (99,169) (84,472) (84,136) Allowance for loan losses (22,223) (20,673) (20,421) ---------- ---------- ---------- Loans receivable, net 274,186 246,351 244,845 Property and equipment, net 10,738 9,806 9,634 Deferred tax benefit 10,690 10,690 9,535 Intangible assets 17,117 17,358 17,484 Other assets 5,986 6,254 5,250 ---------- ---------- ---------- $ 322,960 293,506 292,066 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Notes payable 122,400 83,900 110,300 Income tax payable 5,479 1,624 (3,111) Accounts payable and accrued expenses 9,589 18,271 17,784 ---------- ---------- ---------- Total liabilities 137,468 103,795 124,973 Shareholders' equity 185,492 189,711 167,093 ---------- ---------- ---------- $ 322,960 293,506 292,066 ========== ========== ==========
Selected Consolidated Statistics (dollars in thousands)
Three Months Ended Six Months Ended Sept. 30, Sept. 30, ---------------------------- ---------------------------- 2005 2004 2005 2004 ------------ ------------ ------------ ------------ Expenses as a percent of total revenues: Provision for loan losses 23.1% 22.7% 20.9% 20.5% General and administrative expenses 53.1% 53.3% 54.7% 54.5% Interest expense 2.9% 2.1% 2.7% 2.1% Average gross loans receivable $ 381,910 $ 340,829 $ 370,965 $ 331,614 Average loans receivable $ 287,133 $ 258,705 $ 279,824 $ 252,119 Loan volume $ 305,361 $ 251,030 $ 587,329 $ 502,272 Net charge-offs as percent of average loans 16.1% 15.4% 15.0% 14.0% Return on average assets 9.5% 9.7% 9.6% 10.2% Return on average equity 15.8% 17.0% 15.6% 17.7% Offices opened (closed) during the period, net 28 31 32 49 Offices open at end of period 611 575 611 575
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