EX-99.1 2 v121038_ex99-1.htm
EXHIBIT 99-1
 
NEWS RELEASE
   
  Contact:    Kelly M. Malson 
 
Chief Financial Officer
(864) 298-9800
 
WORLD ACCEPTANCE CORPORATION
REPORTS RECORD FIRST QUARTER RESULTS

GREENVILLE, S.C. (July 29, 2008) – World Acceptance Corporation (NASDAQ: WRLD) today reported record revenues and net income for its first fiscal quarter ended June 30, 2008.

Net income for the first quarter rose 11.1% to $12.1 million compared with $10.9 million for the same quarter of the prior year. Earnings per share rose to $0.73 per share for the quarter, a 19.7% increase over the $0.61 per share for the prior year quarter.

Total revenues for the quarter increased 15.8% to $88.4 million from $76.4 million for the prior year first quarter. Gross loans outstanding were $632.7 million at June 30, 2008, a 16.1% increase over the $545.0 million in balances outstanding at June 30, 2007, and a 5.5% increase over the $599.5 million at the beginning of the fiscal year.

Sandy McLean, Chairman and CEO, stated, “Our record quarterly results were tempered to some degree by a reduction in loan demand from both new borrowers and existing customers.  Loan volume for the first quarter of fiscal 2009 increased 11.1% compared to the prior year first quarter. This compares to a 21.3% year over year growth in loan volume in fiscal 2008. We believe that this reduction in demand may be attributed to the economic stimulus tax rebates distributed during the period which totaled over $110 billion, and a general hesitancy to borrow money in an uncertain economic environment.  The final distribution of stimulus checks occurred during the first week of July.” 

Net charge offs as a percent of average net loans on an annualized basis increased to 14.5% during the quarter from 12.7% during the first quarter of the prior year.  “This quarter over quarter increase in charge offs is consistent with the Company’s expectations. While slightly higher than recent historical averages for the quarter, it remains within acceptable ranges given today’s higher energy costs and softening economy,” stated McLean.  The Company’s management continues to closely monitor the loan portfolio in light of these changing conditions.

Total general and administrative expenses as a percent of total revenues remained consistent between the two quarterly periods at 55.2% for the three months ended June 30, 2008, and for the three months ended June 30, 2007.

Key return ratios for the first quarter included a 9.7% return on average assets (annualized) and a 19.9% (annualized) return on average equity.

During the quarter, the Company opened 28 new offices, acquired 7 offices, and closed 1 office for a total of 872, an 11.5% increase from 782 offices open at June 30, 2007.

MORE
 
WRLD Reports Record First Quarter Results
Page 2
July 29, 2008

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 872 offices in eleven states and Mexico. 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 today. Interested parties may participate in this call by dialing 1-877-795-3613. A simulcast of the conference call is also available on the Internet at 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 changes in the timing and amount of revenues that may be recognized by the Company, changes in current revenue and expense trends (including trends affecting charge-offs), changes in the Company’s markets and 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.

MORE
Page 3
July 29, 2008
 
World Acceptance Corporation

Condensed Consolidated Statements of Operations
(unaudited and in thousands, except per share amounts)

   
Three Months Ended
  
   
June 30,
  
   
2008
  
2007
  
           
Interest & fees
  
$
76,349
  
$
65,389
  
Insurance & other
    
12,072
   
11,000
 
Total revenues
    
88,421
   
76,389
 
Expenses:
              
Provision for loan losses
    
17,857
   
14,217
 
General and administrative expenses
              
Personnel
    
33,316
   
28,856
 
Occupancy & equipment
    
6,054
   
4,933
 
Data processing
    
589
   
550
 
Advertising
    
2,710
   
2,451
 
Intangible amortization
    
600
   
615
 
Other
    
5,521
   
4,785
 
     
48,790
   
42,190
 
Interest expense
    
2,480
   
2,336
 
Total expenses
    
69,127
   
58,743
 
Income before taxes
    
19,294
   
17,646
 
Income taxes
    
7,242
   
6,795
 
Net income
  
$
12,052
  
$
10,851
  
Diluted earnings per share
  
$
0.73
  
$
0.61
  
Weighted average shares outstanding (diluted)
    
16,573
   
17,916
 

Condensed Consolidated Balance Sheets
(unaudited and in thousands)

   
June 30,
  
March 31,
  
June 30,
  
   
2008
  
2008
  
2007
  
ASSETS
                    
Cash
  
$
8,099
  
$
7,590
  
$
7,387
  
Gross loans receivable
    
632,715
   
599,509
   
544,964
 
Less: Unearned interest & fees
    
(165,209
)
  
(154,418
)
  
(141,715
)
Allowance for loan losses
    
(35,288
)
  
(33,526
)
  
(29,682
)
Loans receivable, net
    
432,218
   
411,565
   
373,567
 
Property and equipment, net
    
20,100
   
18,654
   
15,577
 
Deferred tax benefit
    
18,047
   
22,133
   
19,310
 
Goodwill
    
5,379
   
5,353
   
5,338
 
Intangibles
    
10,275
   
9,997
   
11,488
 
Other assets
    
10,538
   
10,818
   
10,679
 
   
$
504,656
  
$
486,110
  
$
443,346
  
                     
LIABILITIES AND SHAREHOLDERS' EQUITY
                    
Liabilities:
                    
Notes payable
    
227,100
   
214,900
   
192,950
 
Income tax payable
    
11,662
   
18,039
   
9,083
 
Accounts payable and accrued expenses
    
15,960
   
18,866
   
13,600
 
Total liabilities
    
254,722
   
251,805
   
215,633
 
Shareholders' equity
    
249,934
   
234,305
   
227,713
 
   
$
504,656
  
$
486,110
  
$
443,346
  

MORE


WRLD Reports Record First Quarter Results
Page 4
July 29, 2008

Selected Consolidated Statistics
(dollars in thousands)

   
Three Months Ended
  
   
June 30,
  
   
2008
  
2007
  
           
Expenses as a percent of total revenues:
              
Provision for loan losses
    
20.2
%
  
18.6
%
General and administrative expenses
    
55.2
%
  
55.2
%
Interest expense
    
2.8
%
  
3.1
%
               
Average gross loans receivable
  
$
614,196
  
$
525,881
  
               
Average loans receivable
  
$
454,312
  
$
390,549
  
               
Loan volume
  
$
460,650
  
$
414,488
  
               
Net charge-offs as percent of average loans
    
14.5
%
  
12.7
%
               
Return on average assets
    
9.7
%
  
10.3
%
               
Return on average equity
    
19.9
%
  
19.7
%
               
Offices opened (closed) during the period, net
    
34
    
50
  
               
Offices open at end of period
    
872
    
782
  

END