World Acceptance Corporation Reports Record Second Quarter

GREENVILLE, S.C., Oct. 27, 2011 /PRNewswire/ -- World Acceptance Corporation (NASDAQ:  WRLD) today reported record financial results for its second fiscal quarter and six months ended September 30, 2011.

Net income for the second quarter rose 15.2% to $23.3 million compared to $20.2 million for the same quarter of the prior year.  Net income per diluted share increased 20.6% to $1.52 in the second quarter of fiscal 2012 compared to $1.26 in the prior year quarter.  

Total revenues increased to $132.1 million in the second quarter of fiscal 2012, an 11.9% increase over the $118.1 million reported in the second quarter last year.  The primary driver for the growth in revenue was a 12.0% increase in average net loans and the associated growth in interest and fees.  Gross loans outstanding increased 11.1% to $965.0 million at September 30, 2011, up from $868.2 million at September 30, 2010.  Interest and fees rose 12.1% to $116.2 million in the second quarter of fiscal 2012 compared to $103.7 million in the second quarter of fiscal 2011.

"This was our 43rd consecutive year over year quarterly increase of net income and diluted earnings per share, excluding the September 2007 quarter which was restated by approximately $700,000 with the adoption of FASB ASC Topic 470-20.  We believe this highlights the strong demand for our loan product, our ongoing focus on expense control, and our close management of credit risks," stated Sandy McLean, CEO.  "The Company's growth in earnings per share has also benefitted from our ongoing share repurchase program during the current fiscal year.  Over the past six months, the Company has repurchased 1,153,700 shares of World Acceptance's stock.  We continue to use our excellent cash flow and strong financial position to fund our growth while repurchasing shares.

"Our charge-off rate was consistent with the prior year as expected," stated Mr. McLean.   "Charge-offs as a percent of net loans on an annualized basis were 14.8% for the three month periods ended September 30, 2011 and 2010.  Managing our credit risks is a key driver of our earnings growth.  Additionally, our past due loans as measured by those that are 61+ days delinquent, has remained flat at 4.2% on a contractual basis for the two quarterly periods."  

The provision for loan losses rose 10.2% to $30.1 million in the second quarter of fiscal 2012 compared to the second quarter of fiscal 2011.  "We remain focused on monitoring our loan portfolio in light of the difficult economy and we believe that our allowance for loan losses is adequate based on the current outlook," noted Mr. McLean.

The Company's general and administrative expenses increased by 9.6% compared with the second quarter of the prior year due primarily to the new office openings during fiscal 2012.  The Company opened 41 new offices, purchased one new office and closed one office during the first six-months of the fiscal year resulting in a total of 1,108 offices at September 30, 2011.  General and administrative expenses as a percent of total revenues decreased from 47.5% in the prior year quarter to 46.5% during the current fiscal quarter.  The Company benefited from increased leverage of general and administrative expenses due to growth in the revenue and continued cost control management.

The Company's second quarter effective income tax rate increased to 36.5% compared with 33.9% the prior year's second quarter.  During the prior year quarter, the Company benefited from an income tax settlement with the state of South Carolina for tax years March 31, 1997, through March 31, 2006, which resulted in the Company recognizing a tax benefit of approximately $900,000 (or $0.06 per diluted share).  A similar benefit was not recognized during the current quarter.  

Other key return ratios for the second quarter included a 13.7% return on average assets and a return on average equity of 23.0% (both on a trailing 12 month basis).  

Six-Month Results

For the first six-months of the fiscal year, net income rose 11.6% to $43.5 million compared to $38.9 million for the six-months ended September 30, 2010.  Fully diluted net income per share rose 15.8% to $2.78 in fiscal 2012 compared to $2.40 for the first six months of fiscal 2011.  

Total revenues for the first six-months of fiscal 2012 rose 11.7% to $255.3 million compared to $228.5 million during the corresponding period of the previous year.  Annualized net charge-offs as a percent of average net loans were 13.7% for both the first six-months of fiscal 2012 and the first six-months of fiscal 2011.

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 1,108 offices in 12 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 1-888-578-6632, passcode 1148585.  A simulcast of the conference call is also available on the Internet at http://www.videonewswire.com/event.asp?id=82915 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 the following:  the continuation or worsening of adverse conditions in the global and domestic credit markets and uncertainties regarding, or the impact of governmental responses to those conditions; changes in interest rates; risks inherent in making loans, including repayment risks and value of collateral, which risks may increase in light of adverse or recessionary economic conditions; recently-enacted or proposed legislation; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquencies and charge-offs); changes in the Company's markets and general changes in the economy (particularly 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,







2011


2010


2011


2010














Interest & fees



$  

116,233

$

103,717

$

223,581

$

199,788

Insurance & other




15,906


14,349


31,714


28,676


Total revenues




132,139


118,066


255,295


228,464

Expenses:













Provision for loan losses



30,057


27,275


52,896


46,973


General and administrative expenses











Personnel




40,742


37,351


85,377


77,085



Occupancy & equipment



8,720


7,893


16,939


15,082



Advertising




2,699


2,607


5,482


5,069



Intangible amortization



434


510


867


1,017



Other




8,869


7,730


17,312


15,136







61,464


56,091


125,977


113,389


Interest expense




3,947


4,096


7,331


7,450



Total expenses



95,468


87,462


186,204


167,812

Income before taxes




36,671


30,604


69,091


60,652

Income taxes




13,367


10,369


25,605


21,703

Net income




$  

23,304

$

20,235

$

43,486

$

38,949

Diluted earnings per share


$  

1.52

$

1.26

$

2.78

$

2.40

Diluted weighted average shares outstanding


15,328


16,023


15,619


16,236














Consolidated Balance Sheets

(unaudited and in thousands)






















September 30,


March 31,


September 30,









2011


2011


2010



ASSETS











Cash







$  

13,061

$

8,031

$

8,825

Restricted cash






77,000


-


-

Gross loans receivable






964,955


875,046


868,192


Less: Unearned interest & fees




(258,484)


(228,974)


(230,314)


Allowance for loan losses





(54,164)


(48,355)


(48,343)



Loans receivable, net





652,307


597,717


589,535

Property and equipment, net





23,199


23,366


23,439

Deferred income taxes






17,958


14,480


13,316

Goodwill







5,635


5,634


5,609

Intangibles







5,885


6,365


7,091

Other assets






9,308


10,804


8,576








$  

804,353

$

666,397

$

656,391
















LIABILITIES AND SHAREHOLDERS' EQUITY








Liabilities:













Notes payable






359,600


187,430


242,163


Income tax payable





11,615


13,098


2,974


Accounts payable and accrued expenses




20,494


23,294


19,161



Total liabilities





391,709


223,822


264,298

Shareholders' equity






412,644


442,575


392,093








$  

804,353

$

666,397

$

656,391
















Selected Consolidated Statistics

(dollars in thousands)




















Three Months Ended


Six Months Ended







September 30,


September 30,







2011


2010


2011


2010














Expenses as a percent of total revenues:










Provision for loan losses



22.7%


23.1%


20.7%


20.6%


General and administrative expenses


46.5%


47.5%


49.3%


49.6%


Interest expense




3.0%


3.5%


2.9%


3.3%














Average gross loans receivable



$              957,903


$           850,622


$              931,122


$        823,330














Average loans receivable



$              699,978


$           625,104


$              682,096


$        606,448














Loan volume




$              703,505


$           642,243


$           1,406,097


$     1,270,029














Net charge-offs as percent of average loans


14.8%


14.8%


13.7%


13.7%














Return on average assets (trailing 12 months)


13.7%


13.5%


13.7%


13.5%














Return on average equity (trailing 12 months)


23.0%


22.9%


23.0%


22.9%














Offices opened (closed) during the period, net


21


24


41


44














Offices open at end of period



1,108


1,034


1,108


1,034
















SOURCE World Acceptance Corporation



More by this Source

Best of Content We Love 2014 


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.