EX-99.1 2 a04-8522_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

 

Contact:

 

Jay Putnam
Investor Relations
(770) 206-6200

 

COMPUCREDIT REPORTS SECOND QUARTER RESULTS

 

ATLANTA, GA, August 3, 2004 – CompuCredit (NASDAQ: CCRT) reported second quarter 2004 net income attributable to common shareholders of $13.8 million, or $0.28 per diluted share, as compared to its second quarter 2003 net income attributable to common shareholders of $20.7 million, or $0.42 per diluted share.

 

Reflecting continued improvements in the credit quality of CompuCredit’s managed receivables, the net interest margin was 20.2 percent in the second quarter of 2004, as compared to 18.4 percent for the second quarter of 2003.  The adjusted charge-off rate was 8.8 percent in the second quarter of 2004, as compared to 11.0 percent for the second quarter of 2003.  Also, at June 30, 2004, the 60-plus day delinquency rate was 9.6 percent, as compared to 10.5 percent at June 30, 2003.

 

Various references within this press release and the accompanying financial information are to the Company’s managed receivables, which include the Company’s non-securitized receivables, as well as the receivables underlying the Company’s off balance sheet securitization facilities. Performance metrics and data based on these aggregate managed receivables are key to any evaluation of the Company’s performance in managing (including underwriting, valuing purchased receivables, servicing and collecting) the aggregate of the portfolios of receivables reflected on the Company’s balance sheet and underlying the Company’s securitization facilities. In allocating the Company’s resources and managing the Company’s business, management relies heavily upon financial data and results prepared on a so-called “managed basis.” It is also important to analysts, investors and others that the Company provides selected metrics and data on a managed basis because this allows a comparison of CompuCredit to others within the specialty finance industry. Moreover, the Company’s management, analysts, investors and others believe it is critical that they understand the credit performance of the entire portfolio of the Company’s managed receivables because it reveals information concerning the quality of loan originations and the related credit risks inherent within the securitized portfolios and the Company’s retained interests in its securitization facilities.

 

Managed receivables data assumes that none of the credit card receivables underlying the Company’s off balance sheet securitization facilities were ever transferred to securitization facilities and presents the net credit losses and

 


 

delinquent balances on the receivables as if the Company had still owned the receivables. Reconciliation of the managed receivables data to the Company’s GAAP financial statements requires recognition that substantially all of the Company’s credit card receivables had been sold in securitization transactions as of June 30, 2004; this reconciliation requires the removal of all but $96.8 million of the managed receivables data from the Company’s books and records to yield only $96.8 million of loan and fee receivables and associated statistics under GAAP, coupled with the recording under GAAP of the Company’s retained interests in various securitization structures.

 

*  *  *  *  *

 

Further details regarding CompuCredit’s second quarter financial performance will be discussed during management’s conference call on Wednesday, August 4, 2004 at 8:00 a.m., Eastern Time.  The media and public are invited to listen to the live webcast of the call, accessible on the Internet at www.CompuCredit.com.  A replay of the conference call also will be available on the web site.

 

CompuCredit Corporation uses analytical techniques that allow it to provide credit and other complementary services and products to consumers it believes to be underserved by traditional grantors of credit. Credit cards marketed by CompuCredit generally are issued by Columbus Bank and Trust Company under an agreement with CompuCredit. For more information about CompuCredit, visit www.CompuCredit.com.

 


 

CompuCredit Corporation (CCRT)

Financial and Statistical Summary

(Unaudited)(1)

 

 

 

At or For the Three Months Ended

 

 

 

June 30,
2004

 

March 31,
2004

 

June 30,
2003

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

Common Share Statistics

 

 

 

 

 

 

 

EPS — Basic

 

$

0.29

 

$

0.36

 

$

0.43

 

EPS — Diluted

 

$

0.28

 

$

0.36

 

$

0.42

 

Book Value Per Common Share Outstanding (period end) (2)

 

$

11.93

 

$

11.77

 

$

9.87

 

Stock Price Per Share (period end)

 

$

17.30

 

$

21.14

 

$

12.14

 

Total Market Capitalization (period end)

 

$

797,461

 

$

995,525

 

$

568,201

 

Shares Outstanding (period end)

 

46,096

 

47,092

 

46,804

 

Weighted Average Shares O/S — Basic

 

51,548

 

51,726

 

51,116

 

Weighted Average Shares O/S — Diluted

 

52,389

 

52,681

 

51,608

 

 

 

 

 

 

 

 

 

Average Managed Receivables Statistics (3)

 

 

 

 

 

 

 

Average Managed Receivables

 

$

2,007,406

 

$

2,219,537

 

$

2,359,513

 

Average Shareholders’ Equity

 

$

607,827

 

$

589,632

 

$

487,452

 

Net Interest Margin

 

20.2

%

19.9

%

18.4

%

Return on Average Managed Receivables

 

3.0

%

3.4

%

3.7

%

Return on Average Equity (ROE)

 

9.8

%

12.7

%

17.9

%

Net Charge-Off Rate

 

14.8

%

15.7

%

20.9

%

Adjusted Charge-Off Rate

 

8.8

%

8.2

%

11.0

%

Adjusted Charge-Offs

 

$

44,329

 

$

45,294

 

$

64,744

 

Risk Adjusted Margin

 

22.7

%

20.9

%

14.5

%

Operating Ratio

 

11.3

%

10.0

%

8.5

%

Other Income ratio

 

11.1

%

8.9

%

7.3

%

 

 

 

 

 

 

 

 

Period-End Selected Credit Card Data (3)

 

 

 

 

 

 

 

Total Managed Receivables

 

$

1,959,811

 

$

2,090,644

 

$

2,242,542

 

Delinquency Rate (60+ days)

 

9.6

%

10.5

%

10.5

%

Number of Accounts

 

2,222

 

2,276

 

2,707

 

Shareholders’ Equity

 

$

608,144

 

$

610,849

 

$

502,767

 

Equity to Managed Receivables Ratio

 

31.0

%

29.2

%

22.4

%

 

(1) Certain prior period amounts in this and other tables included within this release bear the effects of reclassifications to conform to current period presentation.

(2) Assumes preferred shares are converted into common shares as of end of each period.

(3) Excludes receivables acquired at or near charge-off at the time of purchase.

 


 

CompuCredit Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

 

 

 

June 30,
2004

 

December 31,
2003

 

 

 

(Unaudited)

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents

 

$

49,556

 

$

110,605

 

Restricted cash

 

10,154

 

11,921

 

Retained interests in credit card receivables securitized

 

491,528

 

538,961

 

Amounts due from securitization

 

16,790

 

4,199

 

Loans and fees receivable, net

 

61,341

 

16,271

 

Deferred costs, net

 

35,971

 

7,750

 

Software, furniture, fixtures and equipment, net

 

25,790

 

24,307

 

Investment in equity- method investee

 

6,140

 

6,577

 

Investments in previously charged off receivables

 

16,691

 

13,960

 

Investments in debt securities

 

19,694

 

15,007

 

Intangibles

 

6,437

 

—

 

Goodwill

 

83,133

 

—

 

Prepaid expenses and other assets

 

18,644

 

11,797

 

Total assets

 

$

841,869

 

$

761,355

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

32,312

 

$

26,436

 

Notes payable

 

56,898

 

1,945

 

Deferred revenue

 

7,674

 

9,895

 

Income tax liability

 

78,721

 

96,491

 

Total liabilities

 

175,605

 

134,767

 

 

 

 

 

 

 

Minority interest

 

58,120

 

52,575

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

Preferred stock, no par value, 10,000,000 shares authorized:

 

 

 

 

 

Series A preferred stock, 25,000 shares issued and outstanding
at June 30, 2004 and December 31, 2003, respectively

 

31,358

 

29,816

 

Series B preferred stock, 10,000 shares issued and outstanding
at June 30, 2004 and December 31, 2003, respectively

 

12,797

 

12,181

 

Common stock, no par value, 150,000,000 shares authorized;
47,992,042 and 47,885,506 issued at June 30, 2004 and December 31, 2003, respectively

 

—

 

—

 

Additional paid-in capital

 

252,995

 

250,943

 

Treasury stock, at cost, 1,896,500 and 872,900 shares at June 30, 2004 and December 31, 2003, respectively

 

(22,760

)

(4,586

)

Deferred compensation

 

(468

)

(593

)

Warrants

 

16,498

 

—

 

Retained earnings

 

317,724

 

286,252

 

Total shareholders’ equity

 

608,144

 

574,013

 

Total liabilities and shareholders’ equity

 

$

841,869

 

$

761,355

 

 


 

CompuCredit Corporation and Subsidiaries
Condensed Consolidated Statements of Income (Unaudited)

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

 

June 30,
2004

 

March 31,
2004

 

June 30,
2003

 

June 30,
2004

 

June 30,
2003

 

 

 

(Dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (1)

 

$

11,492

 

$

7,705

 

$

1,577

 

$

19,197

 

$

2,786

 

Interest expense

 

(680

)

(91

)

(2,981

)

(771

)

(6,279

)

Provision for loan losses

 

(14,885

)

(9,115

)

(98

)

(24,000

)

(98

)

Net interest expense after provision for loan losses

 

(4,073

)

(1,501

)

(1,502

)

(5,574

)

(3,591

)

Other operating income:

 

 

 

 

 

 

 

 

 

 

 

Income from retained interests in credit card receivables securitized

 

16,601

 

19,392

 

14,757

 

35,993

 

55,421

 

Servicing income

 

19,515

 

25,298

 

24,863

 

44,813

 

52,529

 

Fees and other income

 

64,573

 

56,264

 

39,259

 

120,837

 

67,263

 

Equity in (loss) income of equity-method investee

 

(223

)

(214

)

13,612

 

(437

)

27,908

 

Total other operating income

 

100,466

 

100,740

 

92,491

 

201,206

 

203,121

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expense:

 

 

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

5,127

 

6,245

 

4,428

 

10,403

 

8,769

 

Card and loan servicing

 

36,874

 

37,018

 

37,447

 

74,861

 

79,851

 

Marketing and solicitation

 

9,030

 

5,699

 

2,827

 

14,729

 

4,414

 

Depreciation

 

3,959

 

3,993

 

3,905

 

7,952

 

7,770

 

Other (2)

 

10,857

 

9,915

 

8,685

 

20,772

 

17,224

 

Total other operating expense

 

65,847

 

62,870

 

57,292

 

128,717

 

118,028

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before minority interest and income taxes

 

30,546

 

36,369

 

33,697

 

66,915

 

81,502

 

Minority interest

 

(6,754

)

(6,293

)

—

 

(13,047

)

—

 

Income before income taxes

 

23,792

 

30,076

 

33,697

 

53,868

 

81,502

 

Income taxes

 

(8,941

)

(11,288

)

(11,927

)

(20,229

)

(29,137

)

Net income

 

$

14,851

 

$

18,788

 

$

21,770

 

$

33,639

 

$

52,365

 

Net income attributable to common shareholders

 

$

13,754

 

$

17,718

 

$

20,664

 

$

31,472

 

$

50,151

 

Average shares outstanding -basic

 

51,548

 

51,726

 

51,116

 

51,648

 

51,032

 

Average shares outstanding -diluted

 

52,389

 

52,681

 

51,608

 

52,541

 

51,358

 

Income per share – basic

 

$

0.29

 

$

0.36

 

$

0.43

 

$

0.65

 

$

1.03

 

Income per share – diluted

 

$

0.28

 

$

0.36

 

$

0.42

 

$

0.64

 

$

1.02

 

 

(1) Interest income includes:

(a)          $267, $248, $0, $515 and $0 (in thousands) for the respective periods related to our minority interest partner’s share of interest income.

(b)          $9,551, $6,030, $0, $15,581, and $0 (in thousands) for the respective periods related to interest earned on unsecuritized credit card receivables, the interest on which is reflected in the Company’s net interest margin calculation and the receivables of which are reflected in the Company’s average managed receivables balances.

(2) Other operating expense includes ancillary product expenses of $239, $298, $507, $537 and $1,190 (in thousands) for the respective periods.