-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bq8RPDaiO4QEVgNQGkF4k6a9bCl0wa2HnZoHG67kpEn924oAm6+iWHVmkQ0irWkQ B5bTMjvNzFm8QisYV1R7nw== 0001157523-06-000676.txt : 20060126 0001157523-06-000676.hdr.sgml : 20060126 20060126080021 ACCESSION NUMBER: 0001157523-06-000676 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060126 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060126 DATE AS OF CHANGE: 20060126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ADVANTA CORP CENTRAL INDEX KEY: 0000096638 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 231462070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-14120 FILM NUMBER: 06551399 BUSINESS ADDRESS: STREET 1: P.O. BOX 844 STREET 2: WELSH & MCKEAN ROADS CITY: SPRING HOUSE STATE: PA ZIP: 19477 BUSINESS PHONE: 2154445341 MAIL ADDRESS: STREET 1: C/O WELSH & MCKEAN ROADS STREET 2: P.O. BOX 844 CITY: SPRING HOUSE STATE: PA ZIP: 19477-0844 FORMER COMPANY: FORMER CONFORMED NAME: TSO FINANCIAL CORP DATE OF NAME CHANGE: 19880306 FORMER COMPANY: FORMER CONFORMED NAME: TEACHERS SERVICE ORGANIZATION INC DATE OF NAME CHANGE: 19850812 8-K 1 a5064741.txt ADVANTA CORP. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) January 26, 2006 ---------------- Advanta Corp. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-14120 23-1462070 - -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) Welsh & McKean Roads, P.O. Box 844, Spring House, Pennsylvania 19477 - -------------------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (215) 657-4000 -------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operation and Financial Condition. The information in this Current Report on Form 8-K is to be considered "filed" under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). On January 26, 2006, Advanta Corp. (the "Company") issued a press release describing its results for the quarter ended December 31, 2005 and for the full year 2005. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. On January 26, 2006 at 9:00 a.m. Eastern time, Company management also will hold a conference call, publicly announced in its press release dated January 13, 2006. The call will be broadcast for the public simultaneously over the Internet through www.advanta.com or www.vcall.com. Replays of the call are available on the Vcall site for 30 days from the date of the call. In addition to historical information, this Current Report on Form 8-K contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ from those projected. Risks that may affect the Company's future performance are detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. The following exhibit relating to Item 2.02 shall be deemed "filed" under the Exchange Act: 99.1 Press Release issued January 26, 2006 regarding financial results for the quarter ended December 31, 2005 and full year 2005. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Advanta Corp. --------------------------------- (Registrant) Date: January 26, 2006 By: /s/ Elizabeth Mai ----------------------------- Elizabeth H. Mai, Chief Administrative Officer, Senior Vice President, Secretary and General Counsel EXHIBIT INDEX ------------- Exhibit Description Method of Filing - ------- ----------- ---------------- 99.1 Press release issued January 26, 2006 Filed herewith regarding financial results for the quarter ended December 31, 2005 and full year 2005 EX-99.1 2 a5064741ex99-1.txt EXHIBIT 99.1 Exhibit 99.1 Advanta Completes Strong 2005 as Expected SPRING HOUSE, Pa.--(BUSINESS WIRE)--Jan. 26, 2006--Advanta Corp. (NASDAQ:ADVNB; ADVNA) today reported full year 2005 net income from continuing operations of $116.7 million or $4.02 per diluted share for Class A and Class B shares combined as compared to $44.3 million or $1.60 per combined diluted share for 2004. Book value per share increased $3.84 during 2005, including a $2.56 increase representing the net after-tax gain and increase in additional paid-in capital in the first quarter associated with the agreement with Bank of America. Net income from continuing operations for 2005 includes a $2.14 per combined diluted share gain relating to the agreement with Bank of America and a $0.02 per combined diluted share asset valuation gain associated with the Company's venture capital portfolio. Net income from continuing operations for 2004 includes a $0.03 per combined diluted share asset valuation charge associated with the Company's venture capital portfolio and a $0.02 per combined diluted share charge associated with the closure of the Company's New York venture capital office in the first quarter of 2004. "We are pleased with our performance for full year 2005, a year in which we experienced both record transaction volume and additions of new high credit quality customers," said Dennis Alter, Chairman and CEO. "The execution of our strategy has us very well positioned for 2006." Advanta reported net income from continuing operations of $13.5 million or $0.46 per combined diluted share for fourth quarter 2005, consistent with expectations, as compared to $13.4 million or $0.47 per combined diluted share for fourth quarter 2004. Net income from continuing operations includes a $0.01 per combined diluted share asset valuation gain associated with the Company's venture capital portfolio in both periods. Conference Call Details Advanta management will hold a conference call with analysts and institutional investors today, January 26, at 9:00 a.m. Eastern time. The call can be accessed by dialing 719-457-2727 and referring to pass code 9621491. The call will also be webcast simultaneously via a Vcall link on the Company's website, www.advanta.com, or at www.vcall.com. Those interested in listening to the webcast should go to the website at least fifteen minutes before the call to register and download any necessary software. Replays of the call will be available beginning at noon today on the Internet at www.advanta.com or www.vcall.com or by dialing (719) 457-0820 and referring to confirmation code 9621491. The conference call may include a discussion of non-GAAP financial measures, which are reconciled to the most directly comparable GAAP financial measure in this press release or the statistical supplements available at www.advanta.com in the "Corporate Info" section. About Advanta Advanta focuses on the small business market and related community, providing funding and support to the nation's small businesses and business professionals through innovative products and services. Using its direct marketing and information based expertise, Advanta identifies potential customers and provides a high level of service tailored to the unique needs of small businesses. Advanta is one of the nation's largest issuers (through Advanta Bank Corp.) of MasterCard business credit cards to small businesses. Since 1951, Advanta has pioneered many of the marketing techniques common in the financial services industry today, including remote lending and direct mail, affinity and relationship marketing. Learn more about Advanta at www.advanta.com. This Press Release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ from those projected. Risks that may affect the Company's future performance are detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. In addition to the GAAP results provided throughout this document, the Company has provided managed receivable data and other non-GAAP financial measurements. Management believes that the non-GAAP financial measures used to manage the business may provide users additional useful information. The tables attached to this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure and a description of why the non-GAAP financial measures are useful to investors. ADVANTA SEGMENT INCOME STATEMENT (in thousands) Three Months Ended December 31, 2005 - ---------------------------------------------------------------------- Advanta Business Venture Cards Capital Other (A) Total -------- ------- --------- --------- Interest income $36,018 $ 4 $ 5,262 $ 41,284 Interest expense 9,453 20 6,509 15,982 -------- ------- --------- --------- Net interest income 26,565 (16) (1,247) 25,302 Provision for credit losses 10,018 0 0 10,018 -------- ------- --------- --------- Net interest income after provision for credit losses 16,547 (16) (1,247) 15,284 Noninterest revenues: Interchange income 45,528 0 0 45,528 Securitization income 16,792 0 0 16,792 Servicing revenues 12,876 0 0 12,876 Business credit card rewards (15,828) 0 0 (15,828) Other revenues, net 3,906 548 2,467 6,921 -------- ------- --------- --------- Total noninterest revenues 63,274 548 2,467 66,289 Operating expenses 58,252 0 1,220 59,472 -------- ------- --------- --------- Income before income taxes 21,569 532 0 22,101 Income tax expense 8,412 207 0 8,619 -------- ------- --------- --------- Income from continuing operations 13,157 325 0 13,482 Gain on discontinuance of mortgage and leasing businesses, net of tax 0 0 2,074 2,074 -------- ------- --------- --------- Net income $13,157 $ 325 $ 2,074 $ 15,556 ======== ======= ========= ========= Three Months Ended December 31, 2004 - ---------------------------------------------------------------------- Advanta Business Venture Cards Capital Other (A) Total -------- ------- --------- --------- Interest income $27,694 $ 7 $ 2,513 $ 30,214 Interest expense 8,842 60 3,059 11,961 -------- ------- --------- --------- Net interest income 18,852 (53) (546) 18,253 Provision for credit losses 10,721 0 (16) 10,705 -------- ------- --------- --------- Net interest income after provision for credit losses 8,131 (53) (530) 7,548 Noninterest revenues: Interchange income 37,460 0 0 37,460 Securitization income 28,192 0 0 28,192 Servicing revenues 12,502 0 0 12,502 Business credit card rewards (11,721) 0 0 (11,721) Other revenues, net 3,159 510 1,748 5,417 -------- ------- --------- --------- Total noninterest revenues 69,592 510 1,748 71,850 Operating expenses 56,872 27 1,218 58,117 -------- ------- --------- --------- Income before income taxes 20,851 430 0 21,281 Income tax expense 7,688 191 0 7,879 -------- ------- --------- --------- Income from continuing operations 13,163 239 0 13,402 Gain, net, on discontinuance of mortgage and leasing businesses, net of tax 0 0 308 308 -------- ------- --------- --------- Net income $13,163 $ 239 $ 308 $ 13,710 ======== ======= ========= ========= (A) Other includes investment and other activities not attributable to the Advanta Business Cards or Venture Capital segments. ADVANTA HIGHLIGHTS (in thousands, except per share data) Three Months Ended --------------------------- Percent Change From Dec. 31, Sept. 30, Dec. 31, Prior Prior EARNINGS 2005 2005 2004 Quarter Year - ---------------------------------------------------------------------- Basic income from continuing operations per common share: Class A $0.48 $0.58 $0.51 (17.2)% (5.9)% Class B 0.51 0.61 0.54 (16.4) (5.6) Combined (A) 0.50 0.60 0.53 (16.7) (5.7) Diluted income from continuing operations per common share: Class A 0.45 0.54 0.46 (16.7) (2.2) Class B 0.46 0.56 0.48 (17.9) (4.2) Combined (A) 0.46 0.55 0.47 (16.4) (2.1) Basic net income per common share: Class A 0.56 0.12 0.52 366.7 7.7 Class B 0.59 0.15 0.55 293.3 7.3 Combined (A) 0.58 0.14 0.54 314.3 7.4 Diluted net income per common share: Class A 0.52 0.12 0.47 333.3 10.6 Class B 0.53 0.14 0.49 278.6 8.2 Combined (A) 0.53 0.13 0.48 307.7 10.4 Return on average common equity 12.28% 3.08% 14.24% 298.7 (13.8) COMMON STOCK DATA - ---------------------------------------------------------------------- Weighted average common shares used to compute: Basic earnings per common share Class A 8,837 8,829 8,811 0.1% 0.3% Class B 17,992 17,901 16,630 0.5 8.2 -------- --------- -------- Total 26,829 26,730 25,441 0.4 5.5 Diluted earnings per common share Class A 8,837 8,829 8,811 0.1 0.3 Class B 20,535 20,409 19,589 0.6 4.8 -------- --------- -------- Total 29,372 29,238 28,400 0.5 3.4 Ending shares outstanding: Class A 9,607 9,607 9,607 0.0 0.0 Class B 18,756 18,692 18,350 0.3 2.2 -------- --------- -------- Total 28,363 28,299 27,957 0.2 1.5 Stock price: Class A High $31.30 $28.75 $24.19 8.9 29.4 Low 22.62 24.34 20.34 (7.1) 11.2 Closing 30.13 26.06 22.62 15.6 33.2 Class B High 33.06 30.96 26.07 6.8 26.8 Low 24.76 26.65 21.68 (7.1) 14.2 Closing 32.44 28.23 24.27 14.9 33.7 Cash dividends declared: Class A 0.113 0.113 0.095 0.0 20.0 Class B 0.136 0.136 0.113 0.0 20.0 Book value per common share 18.74 18.35 14.90 2.1 25.8 (A) Combined represents income available to common stockholders divided by the combined total of Class A and Class B weighted average common shares outstanding. ADVANTA BUSINESS CREDIT CARD STATISTICS ($ in thousands) Three Months Ended Percent ----------------------------------- Change From Dec. 31, Sept. 30, Dec. 31, Prior Prior 2005 2005 2004 Quarter Year --------------------------------------------------- New account originations 64,206 57,974 40,663 10.7% 57.9% Average number of active accounts (A) 621,966 604,486 575,204 2.9 8.1 Ending number of accounts 877,114 846,472 777,943 3.6 12.7 Transaction volume $2,693,908 $2,513,752 $2,214,215 7.2 21.7 Securitization volume increase excluding replenishment sales $ 100,000 $ 96,968 $ 55,000 3.1 81.8 Average managed receivables: Owned $1,011,684 $ 819,870 $ 722,088 23.4 40.1 Securitized 2,694,391 2,751,024 2,536,711 (2.1) 6.2 ----------- ----------- ----------- Managed (B) 3,706,075 3,570,894 3,258,799 3.8 13.7 Ending managed receivables: Owned $ 879,468 $ 822,821 $ 730,483 6.9 20.4 Securitized 2,880,401 2,781,397 2,564,147 3.6 12.3 ----------- ----------- ----------- Managed (B) 3,759,869 3,604,218 3,294,630 4.3 14.1 - ---------------------------------------------------------------------- CREDIT QUALITY - OWNED - ------------------ Receivables 30 days or more delinquent $ 23,595 $ 27,324 $ 28,287 Receivables 90 days or more delinquent 10,837 12,479 13,638 As a percentage of gross receivables: Receivables 30 days or more delinquent 2.68% 3.32% 3.87% (19.3)% (30.7)% Receivables 90 days or more delinquent 1.23 1.52 1.87 (19.1) (34.2) Net principal charge-offs: Amount $ 15,768 $ 10,075 $ 10,721 As a percentage of average gross receivables (annualized) 6.23% 4.92% 5.94% 26.6 4.9 CREDIT QUALITY - SECURITIZED - ------------------ Receivables 30 days or more delinquent $ 87,610 $ 100,650 $ 107,546 Receivables 90 days or more delinquent 40,223 45,387 51,770 As a percentage of gross receivables: Receivables 30 days or more delinquent 3.04% 3.62% 4.19% (16.0)% (27.4)% Receivables 90 days or more delinquent 1.40 1.63 2.02 (14.1) (30.7) Net principal charge-offs: Amount $ 46,151 $ 35,873 $ 38,457 As a percentage of average gross receivables (annualized) 6.85% 5.22% 6.06% 31.2 13.0 CREDIT QUALITY - MANAGED (B) - ------------------ Receivables 30 days or more delinquent $ 111,205 $ 127,974 $ 135,833 Receivables 90 days or more delinquent 51,060 57,866 65,408 As a percentage of gross receivables: Receivables 30 days or more delinquent 2.96% 3.55% 4.12% (16.6)% (28.2)% Receivables 90 days or more delinquent 1.36 1.61 1.99 (15.5) (31.7) Net principal charge-offs: Amount $ 61,919 $ 45,948 $ 49,178 As a percentage of average gross receivables (annualized) 6.68% 5.15% 6.04% 29.7 10.6 (A) Active accounts are defined as accounts with a balance at month-end. Active account statistics do not include charged-off accounts. The statistics reported above are the average number of active accounts for the periods presented. (B) Managed statistics are non-GAAP financial measures and represent the sum of owned (GAAP) business credit card statistics and securitized business credit card statistics. We believe that performance on a managed basis provides useful supplemental information because we retain interests in the securitized receivables and, therefore, we have a financial interest in and exposure to the performance of the securitized receivables. CONTACT: Advanta Corp. Christopher G. Curran Vice President, Investor Relations (215) 444-5335 ccurran@advanta.com or David M. Goodman Director, Communications (215) 444-5073 AdvantaCommunications@advanta.com -----END PRIVACY-ENHANCED MESSAGE-----