EX-99.1 2 ex991.htm COMPUCREDIT 033109 NEWS RELEASE ex991.htm
EXHIBIT 99.1
 
 
COMPUCREDIT REPORTS FIRST QUARTER 2009 RESULTS

ATLANTA, GA, May 6, 2009 – CompuCredit (NASDAQ: CCRT) reported a first quarter 2009 GAAP net loss from continuing operations attributable to controlling interests of $112.5 million, or $2.40 per fully diluted common share, which compares to first quarter 2008 GAAP net income from continuing operations attributable to controlling interests of $4.0 million, or $0.08 per fully diluted common share.

CompuCredit also reported a first quarter 2009 managed loss from continuing operations attributable to controlling interests of $121.6 million, or $2.59 per fully diluted common share, which compares to first quarter 2008 managed losses from continuing operations attributable to controlling interests of $103.3 million, or $2.21 per fully diluted common share.

“In this very challenging economic environment, we continue to focus on account management, cost-savings initiatives and the expansion of our businesses that are not reliant on the securitization markets, such as our charged-off-debt-buying business and standalone third party servicing capabilities,” said David G. Hanna, Chairman and CEO of CompuCredit.

Effective January 1, 2009, CompuCredit implemented FASB Staff Position APB 14-1 "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)" to account for CompuCredit’s outstanding convertible senior notes. As a result, prior periods’ consolidated financial statements have been retrospectively adjusted to present them as though APB 14-1 were effective in those prior periods. For the quarter ended March 31, 2008, CompuCredit’s retrospective adjustment increased interest costs (net of a reduction in deferred loan costs) by $0.04 per fully diluted common share, and for the quarter ended December 31, 2008, the retrospective adjustment increased interest costs (net of a reduction in deferred loan costs) and reduced gain on repurchase of convertible senior notes by an aggregate $0.52 per fully diluted common share.

CompuCredit’s net interest margin was 5.1 percent in the first quarter of 2009, as compared to 13.6 percent for the first quarter of 2008 and 13.8 percent in the previous quarter. The adjusted charge-off rate was 19.5 percent in the first quarter of 2009, as compared to 18.5 percent for the first quarter of 2008 and 14.2 percent in the previous quarter. As of March 31, 2009, the 60-plus day delinquency rate was 17.1 percent, up from 16.5 percent as of March 31, 2008 and 16.3 percent as of December 31, 2008.

Various references within this press release and the accompanying financial information are to CompuCredit’s “managed” results, which include the results of its non-securitized receivables, together with the receivables underlying its off-balance-sheet securitization facilities. Financial, operating and statistical data based on these aggregate managed receivables are key to any evaluation of CompuCredit’s performance in managing (including underwriting, valuing purchased receivables, servicing and collecting) the portfolios of receivables reflected on CompuCredit’s balance sheet and underlying its securitization facilities. In allocating CompuCredit’s resources and managing its business, management relies heavily upon financial, operating and statistical data prepared on a so-called “managed basis.” It also is important to analysts, investors and others that CompuCredit provide selected metrics and data on a managed basis because this allows a comparison of CompuCredit to others within the specialty finance industry. Moreover, CompuCredit’s management, analysts, investors and others believe it is critical that they understand the credit performance of the entire portfolio of CompuCredit’s managed receivables because it reveals information concerning the quality of loan originations and the related credit risks inherent within the securitized portfolios and CompuCredit’s retained interests in its securitization facilities.
 
 
Managed receivables data assume that none of the credit card receivables underlying CompuCredit’s off-balance-sheet securitization facilities was ever transferred to securitization facilities and present the net credit losses and delinquent balances on the receivables as if CompuCredit still owned the receivables. Reconciliation of the managed receivables data to CompuCredit’s GAAP financial statements requires: (1) recognition that substantially all of CompuCredit’s credit card receivables had been sold in securitization transactions as of March 31, 2009; (2) an understanding that CompuCredit’s managed receivables data are based on billings and actual charge-offs as reported to it through underlying systems of record (i.e., without regard to an allowance for uncollectible loans and fees receivable); (3) a look-through to CompuCredit’s economic share of (or equity interest in) the receivables that it manages for its equity-method investees; and (4) removal of CompuCredit’s minority interest holders’ interests in the managed receivables underlying CompuCredit’s GAAP consolidated results.
 
* * * * *

For further details regarding CompuCredit’s first quarter 2009 financial performance, the media and public are invited to listen to management’s pre-recorded first quarter 2009 earnings commentary, which will be available after 5:00 p.m. Eastern Standard Time on Wednesday, May 6, 2009 via the Internet at www.CompuCredit.com.

CompuCredit is a specialty finance company and marketer of branded credit cards and related financial services. CompuCredit provides these services to consumers who are underserved by traditional financial institutions. Through corporate and affinity contributions focused on the underserved and un-banked communities, CompuCredit also uses its financial resources and volunteer efforts to address the numerous challenges affecting its customers. For more information about CompuCredit, visit www.CompuCredit.com.

Contact:
Investor Relations
Jay Putnam
770.828.2612
Jay.Putnam@CompuCredit.com
 
Media Relations
Tom Donahue
770.828.1577
Thomas.Donahue@CompuCredit.com
 
 
 

CompuCredit Corporation and Subsidiaries
  
Financial, Operating and Statistical Measures
  
(In thousands, except for per share data and percentages)
  
                   
   
As Of And For The Three Months Ended
  
   
March 31,
    
December 31,
    
March 31,
  
   
2009
    
2008
    
2008
  
Common Share Statistics (1)
    (Unaudited)      (Unaudited)      (Unaudited)  
Net (Loss) Income From Continuing Operations Per Common Share:
              
 Basic
   $ (2.40 )   $ (1.09 )   $ 0.08  
 Diluted
   $ (2.40 )   $ (1.09 )   $ 0.08  
Loss On Discontinued Operations Per Common Share:
                        
 Basic
     N/A       N/A     $ (0.07 )
 Diluted
     N/A       N/A     $ (0.07 )
Net (Loss) Income Per Common Share:
                        
 Basic
   $ (2.40 )   $ (1.09 )   $ 0.01  
 Diluted
   $ (2.40 )   $ (1.09 )   $ 0.01  
                         
Stock Price Per Common Share (Period End)
   $ 2.45     $ 5.53     $ 8.87  
Total Market Capitalization (Period End)
   $ 118,012     $ 265,412     $ 425,166  
Shares Outstanding (Period End)(2)
     48,168       47,995       47,933  
Weighted Average Shares Outstanding—Basic
     46,866       46,807       46,742  
Weighted Average Shares Outstanding—Diluted
     46,866       46,807       46,839  
                         
Average Managed Receivables Statistics (3)
                        
Average Managed Receivables
   $ 2,918,099     $ 3,318,998     $ 3,986,532  
GAAP Return On Average Managed Receivables
     -15.4 %     -6.1 %     0.4 %
Net Interest Margin
     5.1 %     13.8 %     13.6 %
Other Income Ratio
     3.6 %     13.5 %     4.8 %
Net Charge-Off Rate
     20.1 %     15.0 %     20.1 %
Adjusted Charge-Off Rate
     19.5 %     14.2 %     18.5 %
Risk Adjusted Margin
     -11.4 %     12.2 %     -0.9 %
Operating Ratio
     13.7 %     14.1 %     13.1 %
                         
Period-End Managed Receivables Statistics (3)
                        
Total Managed Receivables
   $ 2,673,845     $ 3,121,682     $ 3,813,040  
Delinquency Rate (60+ days)
     17.1 %     16.3 %     16.5 %
Number of Accounts
     3,560       3,993       4,983  
                         
(1) Except as otherwise noted herein, all per share financial, operating and statistical measures are those that are attributable
  
to controlling interests only.
                        
                         
(2) Shares outstanding balances exclude 3,651,069 shares that were outstanding at March 31, 2009, December 31, 2008
  
and March 31, 2008 but that are returnable to CompuCredit under the terms of a share lending arrangement.
  
                         
(3) Receivables-based statistics are based on continuing operations only.
                  
                         



 
 
 

CompuCredit Corporation and Subsidiaries
  
Condensed Consolidated Balance Sheet
  
 (Dollars in thousands)
  
       
   
March 31,
  
   
2009
  
   
(Unaudited)
  
Assets
      
Cash and cash equivalents (including restricted cash of $18,355)
   $ 96,429  
Securitized earning assets
     621,834  
Non-securitized earning assets, net:
        
   Loans and fees receivable, net (of $22,585 in deferred revenue and $53,530 in allowances for uncollectible loans and fees receivable)
     319,352   
   Investments in previously charged-off receivables
     55,488  
   Investments in securities
     4,005  
Deferred costs, net
     5,833  
Property at cost, net of depreciation
     43,265  
Investments in equity-method investees
     44,774  
Intangibles, net
     4,041  
Goodwill
     64,355  
Prepaid expenses and other assets
     45,501  
Total assets
   $ 1,304,877  
         
         
Liabilities
        
Accounts payable and accrued expenses
   $ 87,748  
Notes payable and other borrowings
     182,988  
Convertible senior notes
     302,048  
Deferred revenue, primarily from forward flow agreement
     23,377  
Current and deferred income tax liabilities
     74,378  
Total liabilities
     670,539  
         
         
         
Equity
        
Common stock, no par value, 150,000,000 shares authorized: 60,478,232 shares issued and 51,818,573 shares outstanding (including 3,651,069 loaned shares to be returned)
     -  
Additional paid-in capital
     520,001  
Treasury stock, at cost, 8,659,659 shares
     (220,564 )
Accumulated other comprehensive loss
     (32,772 )
Retained earnings
     340,632  
Total shareholders' equity
     607,297  
Noncontrolling interests
     27,041  
Total equity
     634,338  
Total liabilities and equity
   $ 1,304,877  


 
 
 

CompuCredit Corporation and Subsidiaries
  
Condensed Consolidated Statements of Operations
  
(In thousands, except per share data)
  
                   
   
For The Three Months Ended
  
   
March 31,
    
December 31,
    
March 31,
  
   
2009
    
2008
    
2008
  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
Interest income:
                  
     Consumer loans, including past due fees
   $ 19,801     $ 21,580     $ 22,916  
     Other
     329       627       2,083  
Total interest income
     20,130       22,207       24,999  
Interest expense
     (10,192 )     (13,320 )     (13,990 )
Net interest income before fees and related income on non-
     securitized earning assets and provision for loan losses
     9,938       8,887       11,009  
Fees and related income on non-securitized earning assets
     44,465       44,525       56,264  
Provision for loan losses
     (12,763 )     (18,470 )     (20,406 )
Net interest income, fees and related income on non-securitized
    earning assets
     41,640       34,942       46,867  
                         
Other operating (loss) income:
                        
Fees and related (loss) income on securitized earning assets
     (152,026 )     (93,198 )     42,593  
Servicing income
     39,404       44,192       48,286  
Ancillary and interchange revenues
     5,998       9,751       15,421  
Gain on repurchase of convertible senior notes
     160       47,943       -  
Equity in (loss) income of equity-method investees
     (2,182 )     5,189       8,474  
Total other operating (loss) income
     (108,646 )     13,877       114,774  
Other operating expense:
                        
Salaries and benefits
     14,232       14,340       18,779  
Card and loan servicing
     58,233       67,878       77,413  
Marketing and solicitation
     4,182       4,649       15,859  
Depreciation
     6,357       6,911       9,954  
Goodwill impairment
     -       1,704       -  
Other
     25,682       31,228       29,131  
Total other operating expense
     108,686       126,710       151,136  
(Loss) income from continuing operations before income taxes
     (175,692 )     (77,891 )     10,505  
Income tax benefit (expense)
     60,586       23,343       (4,518 )
(Loss) income from continuing operations
     (115,106 )     (54,548 )     5,987  
Discontinued operations:
                        
Loss from discontinued operations before income tax benefit
     -       -       (4,685 )
Income tax benefit
     -       -       1,640  
Loss from discontinued operations
     -       -       (3,045 )
Net (loss) income
     (115,106 )     (54,548 )     2,942  
Net loss (income) attributable to noncontrolling interests
     2,589       3,616       (2,019 )
Net (loss) income attributable to controlling interests
   $ (112,517 )   $ (50,932 )   $ 923  
                         
 (Loss) income from continuing operations attributable to controlling interests per common share—basic
   $ (2.40 )   $ (1.09 )   $ 0.08  
 (Loss) income from continuing operations attributable to controlling interests per common share—diluted
   $ (2.40 )   $ (1.09 )   $ 0.08  
                         
 Loss from discontinued operations attributable to controlling interests per common share—basic
   $ -     $ -     $ (0.07 )
 Loss from discontinued operations attributable to controlling interests per common share—diluted
   $ -     $ -     $ (0.07 )
                         
 Net (loss) income attributable to controlling interests per common share—basic
   $ (2.40 )   $ (1.09 )   $ 0.01  
 Net (loss) income attributable to controlling interests per common share—diluted
   $ (2.40 )   $ (1.09 )   $ 0.01  


 
 
 

CompuCredit Corporation and Subsidiaries
  
Business Segment Data
  
(Unaudited)
  
(In thousands)
  
                                     
Three Months Ended March 31, 2009
  
Credit Cards
    
Investments in Previously Charged Off Receivables
  
Retail Micro-Loans
  
Auto Finance
  
Other
    
Total
  
Net interest income, fees and related (loss) income on non-securitized earning assets
   $ (5,616 )   $ 4,205     $ 15,683     $ 18,584     $ 8,784     $ 41,640  
Total other operating (loss) income
   $ (108,987 )   $ 28     $ -     $ 313     $ -     $ (108,646 )
(Loss) income from continuing operations before income taxes
   $ (178,025 )   $ (2,328 )   $ (927 )   $ 2,030     $ 3,558     $ (175,692 )
Loss from discontinued operations before income taxes
   $ -     $ -     $ -     $ -     $ -     $ -  
Loans and fees receivable, gross
   $ 1,064     $ -     $ 32,870     $ 340,548     $ 20,985     $ 395,467  
Loans and fees receivable, net
   $ 797     $ -     $ 26,898     $ 276,726     $ 14,931     $ 319,352  
Total assets
   $ 796,490     $ 65,100     $ 41,670     $ 329,713     $ 71,904     $ 1,304,877  
                                                 
Three Months Ended March 31, 2008
  
Credit Cards
    
Investments in Previously Charged Off Receivables
  
Retail Micro-Loans
  
Auto Finance
  
Other
    
Total
  
Net interest income, fees and related (loss) income on non-securitized earning assets
   $ (7,928 )   $ 18,937     $ 17,860     $ 15,812     $ 2,186     $ 46,867  
Total other operating income
   $ 114,365     $ 213     $ -     $ 196     $ -     $ 114,774  
(Loss) income from continuing operations before income taxes
   $ (1,783 )   $ 13,573     $ 4,432     $ (2,924 )   $ (2,793 )   $ 10,505  
Loss from discontinued operations before income taxes
   $ -     $ -     $ (4,185 )   $ -     $ (500 )   $ (4,685 )
Loans and fees receivable, gross
   $ 28,395     $ -     $ 33,472     $ 370,939     $ 14,943     $ 447,749  
Loans and fees receivable, net
   $ 23,282     $ -     $ 28,088     $ 303,744     $ 9,455     $ 364,569  
Total assets
   $ 1,352,723     $ 36,058     $ 98,222     $ 390,547     $ 59,871     $ 1,937,421  
                                                 


 
 
 

CompuCredit Corporation and Subsidiaries
  
Managed Earnings and Reconciliation of Reported GAAP Net (Loss) Income to Managed Earnings
  
(Unaudited)
  
 (In thousands, except per share data)
  
 
   
For The Three Months Ended
                  
     
March 31,
 2009
    
December 31,
 2008
    
March 31,
 2008
                  
GAAP net (loss) income attributable to controlling interests as reported
   $ (112,517 )   $ (50,932 )   $ 923                    
Securitization adjustment, net of tax
     (2,372 )     32,996       (102,348 )                  
Provision to charge off adjustment, net of tax
     (6,710 )     1,936       (5,393 )                  
Managed net loss attributable to controlling interests
   $ (121,599 )   $ (16,000 )   $ (106,818 )                  
Managed net loss attributable to controlling interests per common share
   $ (2.59 )   $ (0.34 )   $ (2.29 )                  
                                           
   
For The Three Months Ended March 31, 2009
  
For The Three Months Ended March 31, 2008
  
   
GAAP
    
Adjustments
  
Managed
  
GAAP
    
Adjustments
    
Managed
  
Net interest margin on loans receivable
   $ 19,801     $ 17,754     $ 37,555     $ 22,916     $ 112,708     $ 135,624  
Net interest expense
     (9,863 )     5,249       (4,614 )     (11,907 )     3,987       (7,920 )
Provision / charge offs
     (12,763 )     (129,470 )     (142,233 )     (20,406 )     (163,798 )     (184,204 )
Other operating (loss) income
     (64,181 )     90,539       26,358       171,038       (123,364 )     47,674  
Marketing expense
     (4,182 )     -       (4,182 )     (15,859 )     -       (15,859 )
Ancillary product expense
     (104 )     -       (104 )     (344 )     -       (344 )
Operating expenses
     (104,400 )     4,547       (99,853 )     (134,933 )     4,203       (130,730 )
(Loss) income from continuing operations before income taxes
     (175,692 )     (11,381 )     (187,073 )     10,505       (166,264 )     (155,759 )
Income tax benefit (expense)
     60,586       4,888       65,474       (4,518 )     56,994       52,476  
(Loss) income from continuing operations
     (115,106 )     (6,493 )     (121,599 )     5,987       (109,270 )     (103,283 )
Loss from discontinued operations before income tax benefit
     N/A       N/A       N/A       (4,685 )     (753 )     (5,438 )
Income tax benefit of discontinued operations
     N/A       N/A       N/A       1,640       263       1,903  
Loss from discontinued operations
     N/A       N/A       N/A       (3,045 )     (490 )     (3,535 )
Net (loss) income
     (115,106 )     (6,493 )     (121,599 )     2,942       (109,760 )     (106,818 )
Net loss (income) attributable to noncontrolling interests
     2,589       (2,589 )     -       (2,019 )     2,019       -  
Net (loss) income attributable to controlling interests
   $ (112,517 )   $ (9,082 )   $ (121,599 )   $ 923     $ (107,741 )   $ (106,818 )
                                                 
Weighted average shares outstanding
     46,866               46,866       46,839               46,742  
(Loss) income from continuing operations attributable to controlling interests per common share
   $ (2.40 )   $ (0.19 )   $ (2.59 )   $ 0.08     $ (2.29 )   $ (2.21 )
Loss from discontinued operations attributable to controlling interests per common share
     N/A       N/A       N/A     $ (0.07 )   $ (0.01 )   $ (0.08 )
Net (loss) income attributable to controlling interests per common share
   $ (2.40 )   $ (0.19 )   $ (2.59 )   $ 0.01     $ (2.30 )   $ (2.29 )
                                                 
Gross loans and fees receivable
   $ 395,467     $ 2,278,378     $ 2,673,845     $ 447,749     $ 3,365,291     $ 3,813,040  
                                                 
 
 
 
 
  For The Three Months Ended December 31, 2008
                          
   
GAAP
    
Adjustments
  
Managed
                          
Net interest margin on loans receivable
   $ 21,580     $ 93,002     $ 114,582                          
Net interest expense
     (12,693 )     5,859       (6,834 )                        
Provision / charge offs
     (18,470 )     (99,533 )     (118,003 )                        
Other operating income
     58,402       53,480       111,882                          
Marketing expense
     (4,649 )     -       (4,649 )                        
Ancillary product expense
     (146 )     -       (146 )                        
Operating expenses
     (121,915 )     4,562       (117,353 )                        
Loss from continuing operations before income taxes
     (77,891 )     57,370       (20,521 )                        
Income tax benefit
     23,343       (18,822 )     4,521                          
Loss from continuing operations
     (54,548 )     38,548       (16,000 )                        
Loss from discontinued operations before income tax benefit
     N/A       N/A       N/A                          
Income tax benefit of discontinued operations
     N/A       N/A       N/A                          
Loss from discontinued operations
     N/A       N/A       N/A                          
Net loss
    (54,548 )     38,548       (16,000 )                        
Net loss attributable to noncontrolling interests
     3,616       (3,616 )     -                          
Net loss attributable to controlling interests
   $ (50,932 )   $ 34,932     $ (16,000 )                        
                                                 
Weighted average shares outstanding
     46,807               46,807                          
(Loss) income from continuing operations attributable to controlling interests per common share
   $ (1.09 )   $ 0.75     $ (0.34 )                        
Loss from discontinued operations attributable to controlling interests per common share
     N/A       N/A       N/A                          
Net (loss) income attributable to controlling interests per common share
   $ (1.09 )   $ 0.75     $ (0.34 )                        
                                                 
Gross loans and fees receivable
   $ 421,244     $ 2,700,438     $ 3,121,682