EX-99.1 2 a05-7844_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

COMPUCREDIT REPORTS FIRST QUARTER RESULTS

And Confirms 2005 EPS Guidance of Over $3.00 Per Share

 

ATLANTA, GA, May 4, 2005 – CompuCredit (NASDAQ: CCRT) reported first quarter 2005 net income attributable to common shareholders of $49.2 million, or $0.94 per diluted share, as compared to its first quarter 2004 net income attributable to common shareholders of $17.7 million, or $0.36 per diluted share.

 

The net interest margin was 20.8 percent in the first quarter of 2005, as compared to 19.9 percent for the first quarter of 2004.  The adjusted charge-off rate was 6.9 percent in the first quarter of 2005, as compared to 8.2 percent for the first quarter of 2004.  Also, as of March 31, 2005, the 60-plus day delinquency rate was 8.7 percent, as compared to 10.5 percent as of March 31, 2004.

 

“Continued strength in the credit quality of our originated and acquired portfolios contributed to a terrific first quarter for us,” said David Hanna, CompuCredit Chairman and Chief Executive Officer. He added, “We are most encouraged by the organic growth that we have experienced, the performance of our three acquisitions completed during the first quarter, as well as the prospects for our new auto lending segment that we added on April 1st.  We continue to see 2005 as somewhat of a breakthrough year for us as we expect to exceed $3.00 per share of earnings for the first time in our company’s history.”

 

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.  Financial, operating and statistical 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, operating and statistical data 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 assume that none of the credit card receivables underlying the Company’s off balance sheet securitization facilities were ever transferred to securitization facilities and present the net credit losses and delinquent balances on the receivables as if the Company still owned the receivables.  Reconciliation of the managed receivables data to the Company’s GAAP financial statements requires: (1) recognition that a significant majority of the Company’s loans and fees receivable (i.e., all but $135.1 million of GAAP loans and fees receivables at gross face value) had been sold in securitization transactions as of March 31, 2005; (2) a look-through to the Company’s economic share of the receivables that it manages for its two equity-method investees; (3) removal of the Company’s minority interest holders’ interests in the managed receivables underlying the Company’s GAAP consolidated results; and (4) recognition that the de-securitized Fingerhut managed receivables are recorded at a $0.0 basis in the Company’s GAAP financial statements.

 

Our expectation with regard to earnings per share is a forward-looking statement. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond CompuCredit’s control. Actual results may differ materially from those suggested by the forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the factors set forth in “Item 1. Business—Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, changes in the general economy that might make originated and acquired receivables more difficult to collect (and future receivables less profitable), our ability to transfer acquired receivables to our systems and effectively collect them, and our ability to successfully integrate and grow acquired businesses. CompuCredit expressly disclaims any obligation to update any forward-looking statements except as may be required by law.

 

*       *       *      *      *

 

Further details regarding CompuCredit’s first quarter 2005 financial performance will be discussed during management’s conference call on Thursday, May 5, 2005 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 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:

 

Jay Putnam

 

 

Investor Relations

 

 

+1-770-206-6200

 

 

Jay.Putnam@CompuCredit.com

 


 

CompuCredit Corporation (CCRT)

Financial and Statistical Summary

(Unaudited)(1)

 

 

 

At or For the Three Months Ended

 

 

 

March 31,
2005

 

December 31,
2004

 

March 31,
2004

 

 

 

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

Common Share Statistics

 

 

 

 

 

 

 

EPS — Basic

 

$

0.96

 

$

0.55

 

$

0.36

 

EPS — Diluted

 

$

0.94

 

$

0.54

 

$

0.36

 

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

 

$

14.25

 

$

13.24

 

$

11.77

 

Stock Price Per Share (period end)

 

$

26.62

 

$

27.34

 

$

21.14

 

Total Market Capitalization (period end)

 

$

1,371,254

 

$

1,401,164

 

$

995,525

 

Shares Outstanding (period end)

 

51,507

 

51,245

 

47,092

 

Weighted Average Shares Outstanding — Basic

 

51,277

 

50,993

 

51,726

 

Weighted Average Shares Outstanding — Diluted

 

52,516

 

51,961

 

52,681

 

 

 

 

 

 

 

 

 

Average Managed Receivables Statistics (3)

 

 

 

 

 

 

 

Average Managed Receivables

 

$

2,335,567

 

$

2,066,834

 

$

2,219,537

 

Average Shareholders’ Equity

 

$

705,344

 

$

665,565

 

$

589,632

 

Net Interest Margin

 

20.8

%

20.2

%

19.9

%

Return on Average Managed Receivables

 

8.4

%

5.4

%

3.4

%

Return on Average Equity (ROE)

 

27.9

%

16.9

%

12.7

%

Net Charge-Off Rate

 

9.2

%

12.0

%

15.7

%

Adjusted Charge-Off Rate

 

6.9

%

8.4

%

8.2

%

Adjusted Charge-Offs

 

$

40,491

 

$

43,621

 

$

45,294

 

Risk Adjusted Margin

 

27.8

%

25.1

%

20.9

%

Operating Ratio

 

14.3

%

16.5

%

10.0

%

Other Income Ratio

 

13.9

%

13.4

%

8.9

%

 

 

 

 

 

 

 

 

Period-End Data (3)

 

 

 

 

 

 

 

Total Managed Receivables

 

$

2,274,329

 

$

2,194,837

 

$

2,090,644

 

Delinquency Rate (60+ days)

 

8.7

%

10.4

%

10.5

%

Number of Accounts

 

3,009

 

2,963

 

2,276

 

Shareholders’ Equity

 

$

734,201

 

$

683,890

 

$

610,849

 

Equity to Managed Receivables Ratio

 

32.3

%

31.2

%

29.2

%

 

(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 that any outstanding 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

Consolidated Balance Sheets

 

 

 

March 31,
2005

 

December 31,
2004

 

 

 

(Unaudited)

 

 

 

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Cash and cash equivalents (including restricted cash of $11,776 and $11,615 at March 31, 2005 and December 31, 2004, respectively)

 

$

90,400

 

$

68,240

 

Securitized earning assets

 

473,367

 

536,718

 

Non-securitized earning assets

 

176,730

 

158,430

 

Deferred costs, net

 

31,081

 

34,920

 

Software, furniture, fixtures and equipment, net

 

34,298

 

31,552

 

Investment in equity-method investees

 

60,744

 

42,059

 

Intangibles, net

 

10,699

 

10,643

 

Goodwill

 

108,465

 

100,552

 

Prepaid expenses and other assets

 

22,789

 

20,412

 

 

 

 

 

 

 

Total assets

 

$

1,008,573

 

$

1,003,526

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Accounts payable and accrued expenses

 

$

38,724

 

$

36,088

 

Notes payable

 

79,547

 

83,624

 

Deferred revenue

 

5,735

 

6,390

 

Deferred gain on Fingerhut receivables

 

17,635

 

23,440

 

Current and deferred income tax liabilities

 

77,060

 

115,786

 

Total liabilities

 

218,701

 

265,328

 

Minority interests

 

55,671

 

54,308

 

Shareholders’ equity

 

 

 

 

 

Common stock, no par value, 150,000,000 shares authorized: 53,352,938 and 53,159,253 issued at March 31, 2005 and December 31, 2004, respectively

 

—

 

—

 

Additional paid-in capital

 

309,379

 

303,356

 

Treasury stock, at cost, 1,845,781 and 1,914,646 shares at March 31, 2005 and December 31, 2004, respectively

 

(26,358

)

(26,721

)

Deferred compensation

 

(6,177

)

(922

)

Warrant

 

25,610

 

25,610

 

Retained earnings

 

431,747

 

382,567

 

Total shareholders’ equity

 

734,201

 

683,890

 

Total liabilities and shareholders’ equity

 

$

1,008,573

 

$

1,003,526

 

 


 

CompuCredit Corporation and Subsidiaries

Consolidated Statements of Income (Unaudited)

 

 

 

For the three months ended

 

 

 

March 31,
2005

 

December 31,
2004

 

March 31,
2004

 

 

 

(Dollars in thousands,
except per share data)

 

 

 

 

 

 

 

 

 

Interest Income:

 

 

 

 

 

 

 

Consumer loans, including past due fees

 

$

14,037

 

$

14,090

 

$

6,032

 

Other(1)

 

2,912

 

2,171

 

1,673

 

Total interest income

 

16,949

 

16,261

 

7,705

 

Interest expense

 

(2,422

)

(2,007

)

(91

)

Net interest income (expense) before fees and other income on
non-securitized earning assets and provision for loan losses

 

14,527

 

14,254

 

7,614

 

Fees and other income on non-securitized earning assets

 

100,766

 

96,422

 

30,775

 

Provision for loan losses

 

(19,224

)

(26,961

)

(9,115

)

Net interest income (expense), fees and other income on non-securitized earning assets

 

96,069

 

83,715

 

29,274

 

 

 

 

 

 

 

 

 

Other operating income:

 

 

 

 

 

 

 

Fees and other income on securitized earning assets

 

43,492

 

28,012

 

40,643

 

Servicing income

 

30,459

 

21,708

 

25,298

 

Ancillary and interchange revenues

 

5,533

 

7,990

 

4,238

 

Equity in income of equity-method investees

 

18,819

 

2,593

 

(214

)

Total other operating income

 

98,303

 

60,303

 

69,965

 

Other operating expense:

 

 

 

 

 

 

 

Salaries and benefits

 

7,107

 

5,171

 

6,245

 

Card and loan servicing

 

59,335

 

46,721

 

37,018

 

Marketing and solicitation

 

18,050

 

15,090

 

5,699

 

Depreciation

 

4,213

 

3,927

 

3,993

 

Other(2)

 

19,058

 

27,760

 

9,915

 

Total other operating expense

 

107,763

 

98,669

 

62,870

 

Income before minority interests and income taxes

 

86,609

 

45,349

 

36,369

 

Minority interests

 

(9,161

)

(2,167

)

(6,293

)

Income before income taxes

 

77,448

 

43,182

 

30,076

 

Income taxes

 

(28,268

)

(15,114

)

(11,288

)

Net income

 

$

49,180

 

$

28,068

 

$

18,788

 

Net income attributable to common shareholders

 

$

49,180

 

$

26,955

 

$

17,718

 

Net income per common share-basic

 

$

0.96

 

$

0.55

 

$

0.36

 

Net income per common share-diluted

 

$

0.94

 

$

0.54

 

$

0.36

 

 

(1)   Other interest income includes $302, $292, and $248 (in thousands) for the respective periods related to a minority interest partner’s share of other interest income.

(2)   Other operating expense includes ancillary product expenses of $166, $159, and $298 (in thousands) for the respective periods.

 


 

CompuCredit Corporation and Subsidiaries

Business Segment Data (Unaudited)

 

Period Ended March 31, 2005

 

Credit Cards

 

Investments in
Previously
Charged Off
Receivables

 

Retail Micro-
Lending and
Servicing

 

Other

 

Total

 

Net interest income, fees and other income on non-securitized earning assets

 

$

64,010

 

$

17,508

 

$

14,315

 

$

236

 

$

96,069

 

Total other operating income

 

$

92,868

 

—

 

$

5,435

 

—

 

$

98,303

 

Income (loss) before income taxes

 

$

75,263

 

$

7,071

 

$

890

 

$

(5,776

)

$

77,448

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

819,472

 

$

19,069

 

$

158,414

 

$

11,618

 

$

1,008,573

 

 

Period Ended March 31, 2004

 

Credit Cards

 

Investments in
Previously
Charged Off
Receivables

 

Retail Micro-
Lending and
Servicing

 

Other

 

Total

 

Net interest income, fees and other income on non-securitized earning assets

 

$

15,238

 

$

14,019

 

—

 

$

17

 

$

29,274

 

Total other operating income

 

$

69,965

 

—

 

—

 

—

 

$

69,965

 

Income (loss) before income taxes

 

$

27,696

 

$

5,259

 

—

 

$

(2,879

)

$

30,076

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

758,154

 

$

24,616

 

—

 

$

1,090

 

$

783,860