First Quarter Earnings per Diluted Share Up
16.7% to $2.71
World Acceptance Corporation (NASDAQ: WRLD) today reported
financial results for its first fiscal quarter ended June
30, 2015.
Net income for the first quarter increased 4.8% to $23.6 million
compared with $22.6 million for the same quarter of the prior year.
Net income per diluted share increased 16.7% to $2.71 on 8.7
million average weighted shares outstanding in the first quarter of
fiscal 2016 compared with $2.32 on 9.7 million average weighted
shares outstanding in the first quarter of fiscal 2015.
The Company did not repurchase any shares in the first quarter
of fiscal 2016. However, the Company benefited from the 1.4 million
shares repurchased during fiscal 2015. The prior year repurchases
resulted in a reduction to the Company’s weighted average diluted
shares outstanding of 10.2% when comparing the two first quarter
periods. Excluding unvested restricted shares, there were 8.6
million shares outstanding as of June 30, 2015.
Total revenues decreased to $137.2 million in the first quarter
of fiscal 2016, a 6.0% decrease over the revised $145.9 million
reported for first quarter last year. Interest and fee income
decreased 5.5%, from a revised $130.0 million to $122.8 million in
the first quarter of fiscal 2016 due to a decrease in average
earning loans as well as lower volumes. Insurance and other income
decreased by 9.5% to $14.4 million in the first quarter of fiscal
2016 compared with $15.9 million in the first quarter of fiscal
2015. The decrease was related to a $770,000 decrease in insurance
revenue and a $740,000 decrease in other income compared with the
first quarter of fiscal 2015.
Gross loans decreased to $1.15 billion as of June 30, 2015, a
1.2% decrease from the $1.16 billion of loans outstanding as of
June 30, 2014. Gross loans in the US decreased 0.4% and gross loans
in Mexico decreased 9.3% in US dollars due to an unfavorable move
in exchange rates. Gross loans in Mexico increased 9.6% in Mexican
pesos.
The provision for loan losses decreased 15.1% to $26.2 million
in the first quarter of fiscal 2016 from $30.9 million in the first
quarter of 2015. The provision decreased due to a reduction in net
charge-offs, slower loan growth, and a smaller increase in past due
accounts that are fully reserved when comparing the first quarter
of 2016 to the first quarter of 2015.
The charge-off ratio improved on a quarter-over-quarter basis.
Annualized net charge-offs as a percent of net loans were 11.9% for
the three month period ended June 30, 2015 compared to 12.7% during
the prior year quarter. The charge-off ratio benefited from two
monthly sales of accounts previously charged-off totaling
approximately $1.8 million.
Total general and administrative expenses as a percent of
revenue decreased to 49.2% compared with a revised 50.2% during the
first quarter of the prior fiscal year.
Key return ratios for the first quarter included a 12.6% return
on average assets and a 36.3% return on average equity for a
trailing 12-month period ended June 30, 2015. The Company opened 12
new offices and merged 1 office into an existing location during
the first fiscal quarter.
About World Acceptance Corporation
World Acceptance Corporation is one of the largest small-loan
consumer finance companies, operating 1,331 offices in 15 states
and Mexico as of June 30, 2015. It is also the parent company of
ParaData Financial Systems, a provider of computer software
solutions for the consumer finance industry.
First 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. A script of the Chairman
and Chief Executive Officer’s prepared remarks for the conference
call has been furnished as Exhibit 99.2 to the Company’s Form 8-K
filed today with the Securities and Exchange Commission (“SEC”) in
connection with this press release, and is available via the SEC’s
Edgar database at www.sec.gov, and will also be posted to the
Company’s website as soon as practicable. A simulcast of the
conference call will be available on the Internet at
https://www.webcaster4.com/Webcast/Page/1118/9498. 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 the Private Securities Litigation
Reform Act of 1995, that represent the Company’s expectations or
beliefs concerning future events. Statements other than those of
historical fact, as well as those identified by the words
“anticipate,” “estimate,” ”intend,” “plan,” “expect,” ”project,”
“believe,” “may,” “will,” “should,” “would,” “could” and any
variation of the foregoing and similar expressions are
forward-looking statements. 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: recently
enacted, proposed or future legislation and the manner in which it
is implemented; the nature and scope of regulatory authority,
particularly discretionary authority, that may be exercised by
regulators, including, but not limited to, the Consumer Financial
Protection Bureau (the “CFPB”), having jurisdiction over the
Company’s business or consumer financial transactions generically;
the unpredictable nature of regulatory proceedings and litigation;
any determinations, findings, claims or actions made or taken by
the CFPB, other regulators or third parties in connection with or
resulting from the previously disclosed civil investigative demand
from the CFPB that assert or establish that the Company’s lending
practices or other aspects of its business violate applicable laws
or regulations; the impact of changes in accounting rules and
regulations, or their interpretation or application, which could
materially and adversely affect the Company’s reported financial
statements or necessitate material delays or changes in the
issuance of the Company’s audited financial statements; the
Company's assessment of its internal control over financial
reporting, and the timing and effectiveness of the Company's
efforts to remediate any reported material weakness in its internal
control over financial reporting; changes in interest rates; risks
related to expansion and foreign operations; risks inherent in
making loans, including repayment risks and value of collateral;
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); the potential
impact of limitations in the Company’s amended revolving credit
facility; whether the Company can successfully implement its CEO
succession and transition plans; and changes in the Company’s
markets and general changes in the economy (particularly in the
markets served by the Company). These and other factors are
discussed in greater detail in Part I, Item 1A, “Risk Factors” in
the Company’s most recent annual report on Form 10-K for the fiscal
year ended March 31, 2015 filed with the Securities and Exchange
Commission (“SEC”) and the Company’s other reports filed with, or
furnished to, the SEC from time to time. World Acceptance
Corporation does not undertake any obligation to update any
forward-looking statements it makes. The Company is also 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 Condensed
Consolidated Statements of Operations (unaudited and in
thousands, except per share amounts)
Three Months
Ended June 30, 2015
2014 Interest & fees $
122,839 $
130,030 Insurance & other
14,386 15,896 Total revenues
137,225 145,926 Expenses: Provision for loan losses
26,228 30,893 General and administrative expenses Personnel
43,220 50,641 Occupancy & equipment
10,393 10,064
Advertising
3,168 3,162 Intangible amortization
140
202 Other
10,647 9,256
67,568 73,325 Interest expense
5,472 5,564 Total expenses
99,268 109,782 Income
before taxes
37,957 36,144 Income taxes
14,325 13,588
Net income $
23,632 $ 22,556 Diluted earnings per share $
2.71 $ 2.32 Weighted average shares outstanding (diluted)
8,712 9,705
Condensed Consolidated Balance
Sheets
(unaudited and in thousands)
June 30,
March 31,
June 30,
2015 2015 2014
ASSETS Cash $
17,211 $ 38,339 $ 16,045 Gross loans
receivable
1,150,669 1,110,145 1,164,368 Less: Unearned
interest & fees
(314,170) (297,402) (315,506) Allowance
for loan losses
(71,960) (70,438) (67,885) Loans receivable,
net
764,539 742,305 780,977 Property and equipment, net
25,704 25,907 25,637 Deferred tax benefit
37,482
37,345 34,495 Goodwill
6,121 6,121 5,967 Intangibles
3,223 3,364 3,638 Other assets
17,429 12,750 12,107 $
871,709 $ 866,131 $ 878,866
LIABILITIES AND
SHAREHOLDERS' EQUITY Liabilities: Notes payable
488,950
501,150 548,100 Income tax payable
18,589 18,204 20,013
Accounts payable and accrued expenses
27,915 31,209 26,458
Total liabilities
535,454 550,563 594,571 Shareholders'
equity
336,255 315,568 284,295 $
871,709 $ 866,131 $
878,866
Selected Consolidated Statistics (dollars in
thousands)
Three Months Ended June 30,
2015 2014
Expenses as a percent of total revenues: Provision
for loan losses 19.1 % 21.2 % General and administrative expenses
49.2 % 50.2 % Interest expense 4.0 % 3.8 % Average gross
loans receivable
$ 1,127,525 $ 1,135,815
Average net loans receivable
$ 822,270 $ 829,116
Loan volume
$ 698,241 $ 731,565 Net
charge-offs as percent of average loans
11.9 % 12.7 %
Return on average assets (trailing 12 months)
12.6
% 12.1 % Return on average equity (trailing 12
months)
36.3 % 32.6 % Offices opened (closed)
during the period, net
11 0 Offices open at end of
period
1331 1271
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version on businesswire.com: http://www.businesswire.com/news/home/20150723005295/en/
World Acceptance CorporationJohn L. Calmes Jr.,
864-298-9800Chief Financial Officer
World Acceptance (NASDAQ:WRLD)
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