Press Release

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

AMERICREDIT REPORTS FOURTH QUARTER AND FISCAL YEAR 2008

OPERATING RESULTS

•

4^th quarter net loss of $150 million, $1.30 per share

•

Quarterly pre-tax income of $13 million excluding goodwill impairment and restructuring charge

•

Quarterly charge-offs declined sequentially to 5.9%

•

Unrestricted cash balance of $433 million

FORT WORTH, TEXAS August 6, 2008 – AMERICREDIT CORP. (NYSE: ACF) today announced a net loss of $150 million, or $1.30 per share, for its fiscal fourth quarter ended June 30, 2008. AmeriCredit reported net income of $87 million, or $0.66 per share, for the same period a year earlier. For the fiscal year ended June 30, 2008, AmeriCredit reported a net loss of $69 million, or $0.60 per share, compared to net income of $360 million, or $2.73 per share, for the fiscal year ended June 30, 2007.

Net loss for the quarter ended June 30, 2008, included a $135 million after-tax impairment charge ($213 million pre-tax), or $1.17 per share, related to the write-off of goodwill recorded in connection with the acquisitions of Long Beach Acceptance Corp. and Bay View Acceptance Corporation, and a $7 million after-tax restructuring charge ($11 million pre-tax), or $0.06 per share, related to changes in our lending programs and organizational structure.

“Excluding the goodwill impairment and restructuring charge, we earned $13 million pre-tax for the quarter even after significantly increasing loan loss provisions to build our allowance for loan losses,” said AmeriCredit Chief Financial Officer Chris Choate.

The allowance for loan losses as a percentage of receivables increased to 6.3% at June 30, 2008, from 5.7% at March 31, 2008.

Originations were $780 million for the quarter ended June 30, 2008, compared to $2.51 billion for the same quarter last year. Originations for the fiscal year ended June 30, 2008, were $6.29 billion, compared to $8.45 billion for the prior fiscal year. Managed receivables totaled $14.98 billion at June 30, 2008, compared to $15.95 billion at June 30, 2007.

Annualized net charge-offs totaled 5.9% of average managed receivables for the quarter ended June 30, 2008, compared to 3.3% for the quarter ended June 30, 2007. For the fiscal year ended June 30, 2008, net charge-offs were 6.2%, compared to 4.7% last year.

Managed auto receivables 31-to-60 days delinquent were 6.0% of the portfolio at June 30, 2008, compared to 4.7% at June 30, 2007. Accounts more than 60 days delinquent were 2.9% of the portfolio at June 30, 2008, compared to 2.1% a year ago.

“We have taken proactive steps to conserve liquidity and position the business to withstand the weak macroeconomic environment and the dislocation in the capital markets,” said AmeriCredit President and Chief Executive Officer Dan Berce. “Our goal as we manage through this challenging environment is to protect the value of our platform and position the franchise to provide shareholder value well into the future.”

AmeriCredit will host a conference call for analysts and investors today at 5:30 p.m. Eastern time. For a live Internet broadcast of this conference call, please go to the Company’s Web site to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.

About AmeriCredit

AmeriCredit Corp. is a leading independent automobile finance company that provides financing solutions indirectly through auto dealers across the United States. AmeriCredit has over one million customers and approximately $15 billion in managed auto receivables. The Company was founded in 1992 and is headquartered in Fort Worth, Texas. For more information, visit www.americredit.com.

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company’s annual report on Form 10-K for the year ended June 30, 2007. Such risks include – but are not limited to – variable economic conditions, adverse portfolio performance, volatile wholesale vehicle values, reliance on warehouse financing and capital markets, the ability to continue to securitize its loan portfolio, the continued availability of credit enhancement for its securitization transactions on acceptable terms, fluctuating interest rates, increased competition, regulatory changes, the high degree of risk associated with subprime borrowers, and exposure to litigation. These forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to Company management. Actual events or results may differ materially. It is advisable not to place undue reliance on any forward-looking statements. The Company undertakes no obligation to, and does not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.

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AmeriCredit Corp.

Consolidated Statement of Operations

(Unaudited, Dollars in Thousands, Except Per Share Amounts)


	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Revenue:
Finance charge income	$	562,184		$	591,792		$	2,382,484		$	2,142,470
Other income		36,216			33,247			159,779			136,093
Servicing income		12			354			819			9,363
Gain on sale of equity investment		—			—			—			51,997

		598,412			625,393			2,543,082			2,339,923

Costs and expenses:
Operating expenses		89,749			106,681			397,814			398,434
Leased vehicles depreciation		12,250			1,207			36,362			1,283
Provision for loan losses		279,145			189,920			1,130,962			727,653
Impairment of goodwill		212,595			—			212,595			—
Interest expense		204,034			194,884			837,412			680,825
Restructuring charges		11,259			(1,482	)		20,116			(339	)

		809,032			491,210			2,635,261			1,807,856

(Loss) income before income taxes		(210,620	)		134,183			(92,179	)		532,067
Income tax (benefit) provision		(60,407	)		47,328			(22,860	)		171,818

Net (loss) income	$	(150,213	)	$	86,855		$	(69,319	)	$	360,249

(Loss) earnings per share:
Basic	$	(1.30	)	$	0.74		$	(0.60	)	$	3.02

Diluted	$	(1.30	)	$	0.66		$	(0.60	)	$	2.73

Weighted average shares		115,299,234			117,999,621			114,962,241			119,155,716

Weighted average shares and assumed incremental shares		115,299,234			131,816,572			114,962,241			133,224,945

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Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)


	June 30, 2008		March 31, 2008		June 30, 2007
Cash and cash equivalents	$	433,493	$	484,175	$	910,304
Finance receivables, net		14,030,299		14,920,808		15,102,370
Restricted cash – securitization notes payable		982,670		1,009,890		1,014,353
Restricted cash – credit facilities		259,699		254,857		166,884
Property and equipment, net		55,471		58,282		58,572
Leased vehicles, net		210,857		217,342		33,968
Deferred income taxes		317,319		274,657		151,704
Goodwill		—		212,595		208,435
Other assets		257,402		186,273		164,430

Total assets	$	16,547,210	$	17,618,879	$	17,811,020

Credit facilities	$	2,928,161	$	3,418,571	$	2,541,702
Securitization notes payable		10,420,327		10,882,696		11,939,447
Senior notes		200,000		200,000		200,000
Convertible debt		750,000		750,000		750,000
Funding payable		21,519		28,834		87,474
Accrued taxes and expenses		216,387		207,669		199,059
Other liabilities		113,946		145,333		18,188

Total liabilities		14,650,340		15,633,103		15,735,870

Shareholders’ equity		1,896,870		1,985,776		2,075,150

Total liabilities and shareholders’ equity	$	16,547,210	$	17,618,879	$	17,811,020

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Consolidated Statements of Cash Flows

(Unaudited, Dollars in Thousands)


	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Cash flows from operating activities:
Net (loss) income	$	(150,213	)	$	86,855		$	(69,319	)	$	360,249
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		28,796			12,712			87,479			36,737
Accretion and amortization of fees		9,315			284			29,435			(16,982	)
Provision for loan losses		279,145			189,920			1,130,962			727,653
Deferred income taxes		(66,930	)		(15,689	)		(137,949	)		(44,564	)
Stock-based compensation expense		2,543			5,855			17,945			20,230
Gain on sale of available for sale securities		—			—			—			(51,997	)
Impairment of goodwill		212,595			—			212,595			—
Other		10,421			(1,566	)		16,319			(4,241	)
Changes in assets and liabilities:
Other assets		3,299			3,139			(38,524	)		30,313
Accrued taxes and expenses		8,106			10,431			11,018			21,605

Net cash provided by operating activities		337,077			291,941			1,259,961			1,079,003

Cash flows from investing activities:
Purchase of receivables		(784,543	)		(2,549,195	)		(6,260,198	)		(8,832,379	)
Principal collections and recoveries on receivables		1,378,773			1,631,640			6,108,690			5,884,140
Distributions from gain on sale Trusts		—			314			7,466			93,271
Net purchases of property and equipment		(744	)		(2,333	)		(8,463	)		(11,604	)
Net purchases of leased vehicles		(6,377	)		(24,961	)		(198,826	)		(28,427	)
Proceeds from sale of available for sale securities		—			—			—			62,961
Acquisition of LBAC, net of cash acquired		—			—			—			(257,813	)
Net change in restricted cash and other		(3,843	)		155,066			(102,802	)		(54,218	)

Net cash provided (used) by investing activities		583,266			(789,469	)		(454,133	)		(3,144,069	)

Cash flows from financing activities:
Net change in credit facilities		(490,811	)		(463,075	)		385,611			232,895
Net change in securitization notes payable		(463,088	)		1,053,048			(1,524,035	)		1,824,679
Proceeds from issuance of senior notes		—			200,000			—			200,000
Net proceeds from issuance of convertible debt		—			—			—			497,376
Repurchase of common stock		—			(90	)		(127,901	)		(324,054	)
Proceeds from issuance of common stock		11,123			10,293			25,174			58,157
Other net changes		(25,100	)		(9,038	)		(39,024	)		(24,309	)

Net cash (used) provided by financing activities		(967,876	)		791,138			(1,280,175	)		2,464,744

Net (decrease) increase in cash and cash equivalents		(47,533	)		293,610			(474,347	)		399,678
Effect of Canadian exchange rate changes on cash and cash equivalents		(3,149	)		1,299			(2,464	)		(2,614	)
Cash and cash equivalents at beginning of period		484,175			615,395			910,304			513,240

Cash and cash equivalents at end of period	$	433,493		$	910,304		$	433,493		$	910,304

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Other Financial Data

(Unaudited, Dollars in Thousands)


	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Origination volume	$	780,446		$	2,511,528		$	6,293,494		$	8,454,600
Loans securitized		920,250			2,764,683			4,634,083			7,659,927

Average on-book receivables	$	15,446,441		$	15,513,774		$	16,059,129		$	13,621,386
Average gain on sale receivables		—			26,483			7,107			105,831

Average managed receivables	$	15,446,441		$	15,540,257		$	16,066,236		$	13,727,217


	June 30, 2008			March 31, 2008			June 30, 2007
On-book receivables	$	14,981,412		$	15,820,314		$	15,922,458
Gain on sale receivables		—			—			24,091

Managed receivables	$	14,981,412		$	15,820,314		$	15,946,549


	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Operating expenses	$	89,749		$	106,681		$	397,814		$	398,434

Annualized operating expenses as a percent of average managed receivables		2.3	%		2.8	%		2.5	%		2.9	%

Tax rate		28.7	%		35.3	%		24.8	%		32.3	%


	June 30, 2008			March 31, 2008			June 30, 2007
Loan delinquency:
On-book:
(% of ending on-book receivables)
31 - 60 days		6.0	%		5.3	%		4.7	%
Greater than 60 days		2.9			2.3			2.1

Total		8.9	%		7.6	%		6.8	%

Managed portfolio:
(% of ending managed receivables)
31 - 60 days		6.0	%		5.3	%		4.7	%
Greater than 60 days		2.9			2.3			2.1

Total		8.9	%		7.6	%		6.8	%

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	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Contracts receiving a payment deferral as an average quarterly percentage of average receivables outstanding:
On-book (% of average on-book receivables)		6.5	%		6.1	%		6.3	%		6.0	%

Managed portfolio (% of average managed receivables)		6.5	%		6.0	%		6.3	%		6.0	%


	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Net charge-offs:
On-book	$	227,538		$	127,960		$	1,000,046		$	638,094

Managed portfolio	$	227,538		$	128,051		$	1,000,084		$	643,059

Annualized net charge-offs as a percent of average receivables:
On-book		5.9	%		3.3	%		6.2	%		4.7	%

Managed portfolio		5.9	%		3.3	%		6.2	%		4.7	%

Net recoveries as a percent of gross repossession charge-offs:
On-book		43.6	%		51.3	%		44.8	%		48.8	%

Managed portfolio		43.6	%		51.3	%		44.8	%		48.8	%


	June 30, 2008			March 31, 2008			June 30, 2007
On-book receivables:
Principal	$	14,981,412		$	15,820,314		$	15,922,458
Allowance for loan losses and nonaccretable acquisition fees		(951,113	)		(899,506	)		(820,088	)

	$	14,030,299		$	14,920,808		$	15,102,370

Allowance as a percentage of on-book receivables		6.3	%		5.7	%		5.2	%

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The Company’s net margin as reflected on the consolidated statement of operations is as follows:


	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Finance charge income	$	562,184		$	591,792		$	2,382,484		$	2,142,470
Other income		36,216			33,247			159,779			136,093
Interest expense		(204,034	)		(194,884	)		(837,412	)		(680,825	)

Net margin	$	394,366		$	430,155		$	1,704,851		$	1,597,738


	Three Months Ended June 30,						Fiscal Year Ended June 30,
	2008			2007			2008			2007
Finance charge income		14.6	%		15.3	%		14.8	%		15.7	%
Other income		0.9			0.8			1.0			1.0
Interest expense		(5.3	)		(5.0	)		(5.2	)		(5.0	)

Annualized net margin as a percent of average on-book receivables		10.2	%		11.1	%		10.6	%		11.7	%

The following is a reconciliation of the Company’s quarterly pre-tax income excluding goodwill impairment and restructuring charges to the Company’s loss before income taxes as reflected on the Company’s consolidated statement of operations (in thousands):


	Three Months Ended June 30, 2008			Fiscal Year Ended June 30, 2008
Pre-tax income, excluding goodwill impairment and restructuring charges	$	13,234		$	140,532
Less goodwill impairment		(212,595	)		(212,595	)
Less restructuring charges		(11,259	)		(20,116	)

Loss before income taxes	$	(210,620	)	$	(92,179	)

Contact:


Caitlin DeYoung		Deborah Vestal
(817) 302-7394		(817) 302-7210

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