WORLD ACCEPTANCE CORPORATION 
By GREENVILLE, S.C., Jan. 25, 2012 /PRNewswire/ -- World Acceptance Corporation (NASDAQ: WRLD) today reported record financial results for its third fiscal quarter and nine months ended December 31, 2011.
Net income for the third quarter rose 8.4% to $19.6 million compared to $18.1 million for the same quarter of the prior year. Net income per diluted share increased 16.1% to $1.30 in the third quarter of fiscal 2012 compared to $1.12 in the prior year's third quarter. This was the Company's 44th consecutive year-over-year quarterly increase of net income and diluted earnings per share, excluding the September 2007 quarter which was restated by approximately $700,000 with the adoption of FASB ASC Topic 47020. The Company's record results highlight the strong demand for its loan product, its ongoing focus on expense control, its close management of credit risks and the contribution from new offices.
Total revenues increased to $135.9 million in the third quarter of fiscal 2012, a 7.9% increase over the $126.0 million reported in the third quarter last year. The primary driver for the growth in revenue was a 10.6% increase in average net loans and the associated growth in interest and fees. Gross loans outstanding increased 10.4% to $1.1 billion at December 31, 2011, up from $965.4 million at December 31, 2010. Interest and fees rose 7.0% to $117.1 million in the third quarter of fiscal 2012 compared to $109.5 million in the third quarter of fiscal 2011.
Sandy McLean, CEO, stated, "The Company's growth in earnings per share has also benefitted from our ongoing share repurchase program during the current fiscal year. We continue to use our excellent cash flow and strong financial position to fund our growth while repurchasing shares." Over the past nine months, the Company has repurchased 1,167,245 shares of World Acceptance's stock, representing a 6.1% decrease in diluted weighted average shares outstanding compared with the third quarter of last fiscal year.
"Our charge-off rate was consistent with the prior year as expected," continued Mr. McLean. "Our net charge-offs as a percentage of average net loans remained near historical levels at 15.9% on an annualized basis during the quarter compared to 16.3% in the third quarter of the prior year." The Company's past due loans, as measured by those that are 61+ days delinquent on a contractual basis, increased from 4.0% in the third quarter of last year to 4.3% in the third quarter of this fiscal year.
The provision for loan losses rose 13.0% to $36.1 million in the third quarter of fiscal 2012 compared to the third quarter of fiscal 2011. "We remain focused on monitoring our loan portfolio in light of the difficult economy and we believe that our allowance for loan losses is adequate based on the current outlook," noted Mr. McLean.
"We opened 53 new offices and purchased one office in the first nine months of fiscal 2012," continued Mr. McLean. "Our earnings growth continues to benefit from the increase in new offices and the leverage we are achieving in our general and administrative expenses as reflected by the improved ratio of G&A expenses to total revenues. We believe our success highlights our strategic goal of managing costs while expanding our base of offices in both domestic and international markets."
The Company's general and administrative expenses rose to $66.2 million in the third quarter of fiscal 2012 compared with $61.4 million in the third quarter of the prior fiscal year primarily due to the increase in new office openings during fiscal 2012. As a percent of total revenues, general and administrative expenses remained flat at 48.7% during both fiscal quarters. During the first nine-months of the fiscal year, the Company opened 53 new offices, purchased one office and one nonperforming office was closed, resulting in a total of 1,120 offices at December 31, 2011.
The Company's net income during the current quarter benefited from a tax benefit related to the reduction of its effective rate for state income taxes.
Other key return ratios for the third quarter included a 13.4% return on average assets and a return on average equity of 22.8% (both on a trailing 12 month basis).
Nine-Month Results
For the first nine-months of the fiscal year, net income rose 10.6% to $63.1 million compared to $57.0 million for the nine-months ended December 31, 2010. Fully diluted net income per share rose 15.9% to $4.08 in fiscal 2012 compared to $3.52 for the first nine-months of fiscal 2011. Diluted weighted average shares outstanding were down 4.6% to 15.5 million for the first nine months of fiscal 2012 compared with the same period in fiscal 2011, benefiting from the Company's stock repurchase program.
The Company's net income during the nine-months ended December 31, 2010, benefited from an income tax settlement with the state of South Carolina for tax years March 31, 1997, through March 31, 2006, which resulted in the Company recognizing a tax benefit of approximately $900,000 (or $0.06 per diluted share), which was recognized during the second quarter of fiscal 2011.
Total revenues for the first nine-months of fiscal 2012 rose 10.4% to $391.2 million compared to $354.5 million during the corresponding period of the previous year. Annualized net charge-offs as a percent of average net loans decreased from 14.6% during the prior year nine-month period to 14.4% for the first nine-months of fiscal 2012.
About World Acceptance Corporation
World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 1,120 offices in 12 states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry.
Third 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. Interested parties may participate in this call by dialing 1-888-556-4997, passcode 9324677. A simulcast of the conference call is also available on the Internet at http://www.videonewswire.com/event.asp?id=84417 . 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 the following: the continuation or worsening of adverse conditions in the global and domestic credit markets and uncertainties regarding, or the impact of governmental responses to those conditions; changes in interest rates; risks inherent in making loans, including repayment risks and value of collateral, which risks may increase in light of adverse or recessionary economic conditions; recently-enacted or proposed legislation; 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); changes in the Company's markets and general 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.
World Acceptance Corporation
Consolidated Statements of Operations
-------------------------------------
(unaudited and in thousands, except per share amounts)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Interest & fees $117,113 $109,462 $340,694 $309,250
Insurance & other 18,833 16,577 50,547 45,253
------ ------ ------ ------
Total revenues 135,946 126,039 391,241 354,503
Expenses:
Provision for loan losses 36,109 31,962 89,005 78,935
General and
administrative expenses
Personnel 42,098 38,936 127,475 116,021
Occupancy & equipment 8,343 7,834 25,282 22,916
Advertising 5,854 5,273 11,336 10,342
Intangible amortization 415 480 1,282 1,497
Other 9,524 8,870 26,836 24,006
----- ----- ------ ------
66,234 61,393 192,211 174,782
Interest expense 3,338 3,803 10,669 11,253
Total expenses 105,681 97,158 291,885 264,970
------- ------ ------- -------
Income before taxes 30,265 28,881 99,356 89,533
Income taxes 10,683 10,817 36,288 32,520
------ ------ ------ ------
Net income $19,582 $18,064 $63,068 $57,013
======= ======= ======= =======
Diluted earnings per share $1.30 $1.12 $4.08 $3.52
Diluted weighted average shares
outstanding 15,120 16,103 15,454 16,203
====== ====== ====== ======
Consolidated Balance Sheets
---------------------------
(unaudited and in thousands)
December December
31, March 31, 31,
2011 2011 2010
---- ---- ----
ASSETS
Cash $14,266 $8,031 $12,864
Gross loans receivable 1,066,078 875,046 965,434
Less: Unearned interest & fees (287,849) (228,974) (257,825)
Allowance for loan losses (61,119) (48,355) (53,256)
Loans receivable, net 717,110 597,717 654,353
Property and equipment, net 22,820 23,366 23,366
Deferred income taxes 20,632 14,480 16,037
Goodwill 5,634 5,634 5,634
Intangibles 5,725 6,365 6,781
Other assets 10,367 10,804 10,013
------ ------ ------
$796,554 $666,397 $729,048
======== ======== ========
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities:
Notes payable 328,915 187,430 282,841
Income tax payable 5,443 13,098 8,129
Accounts payable and accrued
expenses 22,685 23,294 23,436
Total liabilities 357,043 223,822 314,406
Shareholders' equity 439,511 442,575 414,642
------- ------- -------
$796,554 $666,397 $729,048
======== ======== ========
Selected Consolidated Statistics
--------------------------------
(dollars in thousands)
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2011 2010 2011 2010
---- ---- ---- ----
Expenses as a percent of total
revenues:
Provision for loan
losses 26.6% 25.4% 22.7% 22.3%
General and
administrative
expenses 48.7% 48.7% 49.1% 49.3%
Interest expense 2.5% 3.0% 2.7% 3.2%
Average gross loans receivable $1,003,584 $903,622 $956,723 $850,961
Average loans receivable $733,613 $663,183 $700,266 $625,999
Loan volume $816,093 $761,432 $2,222,189 $2,031,461
Net charge-offs as percent of
average loans 15.9% 16.3% 14.4% 14.6%
Return on average assets
(trailing 12 months) 13.4% 13.4% 13.4% 13.4%
Return on average equity
(trailing 12 months) 22.8% 22.7% 22.8% 22.7%
Offices opened (closed) during
the period, net 12 20 53 64
Offices open at end of period 1,120 1,054 1,120 1,054
SOURCE World Acceptance Corporation
