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Press release from PR Newswire

World Acceptance Corporation Reports Record Third Quarter

Thursday, January 27, 2011

World Acceptance Corporation Reports Record Third Quarter06:30 EST Thursday, January 27, 2011GREENVILLE, S.C., Jan. 27, 2011 /PRNewswire/ -- World Acceptance Corporation (NASDAQ: WRLD) today reported record financial results for its third fiscal quarter and nine months ended December 31, 2010.Net income for the third quarter rose 22.5% to $18.1 million compared to $14.8 million for the same quarter of the prior year.  Net income per diluted share increased 25.8% to $1.12 in the third quarter of fiscal 2011 compared to $0.89 in the prior year quarter.  "Our record results benefited from increased customer demand for the Company's loan products, growth in new offices and our continued focus on managing operating expenses and credit risks," stated Sandy McLean, Chairman and CEO. "The Company's growth in earnings per share also benefitted from our aggressive 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."Total revenues increased to $126.0 million in the third quarter of fiscal 2011, a 12.2% increase over the $112.3 million reported in the third quarter last year.  The primary driver for the growth in revenue was a 14.9% increase in average net loans and the associated growth in interest and fees.  Gross loans outstanding increased 15.1% to $965.4 million at December 31, 2010, up from $838.9 million at December 31, 2009. Interest and fees rose 12.1% to $109.5 million in the third quarter of fiscal 2011 compared to $97.6 million in the third quarter of fiscal 2010."Our credit loss ratios showed further improvement during the quarter," continued Mr. McLean.  "Our net charge-offs as a percentage of average net loans remained near historical levels at 16.3% on an annualized basis during the quarter compared to 17.8% in the third quarter of the prior year.  Additionally, the Company's past due loans, as measured by those that are 61+ days delinquent, decreased from 4.3% to 4.0% on a contractual basis."  The provision for loan losses rose 7.9% to $32.0 million in the third quarter of fiscal 2011 compared to the third quarter of fiscal 2010.  "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 59 new offices and purchased 6 offices in the first nine months of fiscal 2011, including our first offices in the state of Wisconsin," 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 $61.4 million in the third quarter of fiscal 2011 compared with $55.5 million in the third quarter of the prior fiscal year primarily due to the increase in new office openings during fiscal 2011.  Although general and administrative expenses increased, as a percent of total revenues, general and administrative expenses decreased from 49.5% in the prior year quarter to 48.7% during the current fiscal quarter.  During the first nine-months of the fiscal year, the Company opened 59 new offices, including three in Wisconsin. Additionally, six new offices were purchased and one nonperforming office was closed, resulting in a total of 1,054 offices at December 31, 2010. Other key return ratios for the third quarter included a 13.3% return on average assets and a return on average equity of 22.7% (both on a trailing 12 month basis).  Nine-Month ResultsFor the first nine-months of the fiscal year, net income rose 29.6% to $57.0 million compared to $44.0 million for the nine-months ended December 31, 2009.  Fully diluted net income per share rose 31.3% to $3.52 in fiscal 2011 compared to $2.68 for the first nine-months of fiscal 2010.  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).Total revenues for the first nine-months of fiscal 2011 rose 11.9% to $354.5 million compared to $316.7 million during the corresponding period of the previous year.  Net charge-offs increased $2.9 million, or 4.4%, compared to the prior year first nine-months and annualized net charge-offs as a percent of average net loans decreased from 16.0% during the prior year nine-month period to 14.6% for the first nine-months of fiscal 2011.About World Acceptance CorporationWorld Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 1,054 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 CallThe 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 1-877-604-9668, passcode 5241280.  A simulcast of the conference call is also available on the Internet at http://www.videonewswire.com/event.asp?id=75872 or 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 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 CorporationConsolidated Statements of Operations(unaudited and in thousands, except per share amounts)Three Months EndedNine Months EndedDecember 31,December 31,2010200920102009Interest & fees$  109,462$  97,610$  309,250$  274,218Insurance & other16,57714,70045,25342,528Total revenues126,039112,310354,503316,746Expenses:Provision for loan losses31,96229,63378,93575,217General and administrative expensesPersonnel38,93634,028116,021104,232Occupancy & equipment7,8347,65822,91621,475Advertising5,2735,07110,3429,892Intangible amortization4805631,4971,696Other8,8708,21724,00623,33161,39355,537174,782160,626Interest expense3,8033,75611,25310,483Total expenses97,15888,926264,970246,326Income before taxes28,88123,38489,53370,420Income taxes10,8178,63332,52026,423Net income$  18,064$  14,751$  57,013$  43,997Diluted earnings per share$      1.12$      0.89$      3.52$      2.68Diluted weighted average shares outstanding16,10316,57616,20316,434Consolidated Balance Sheets(unaudited and in thousands)December 31,March 31,December 31,201020102009ASSETSCash$    12,864$    5,445$    12,946Gross loans receivable965,434770,265838,864Less: Unearned interest & fees(257,825)(199,179)(223,441)Allowance for loan losses(53,256)(42,897)(47,679)Loans receivable, net654,353528,189567,744Property and equipment, net23,36622,98622,936Deferred income taxes16,03711,64213,027Goodwill5,6355,6165,581Intangibles6,7807,6147,541Other assets16,23111,56010,350$  735,266$  593,052$  640,125LIABILITIES AND SHAREHOLDERS' EQUITYLiabilities:Notes payable282,841170,642262,494Income tax payable8,12914,0435,625Accounts payable and accrued expenses29,65425,41924,854Total liabilities320,624210,104292,973Shareholders' equity414,642382,948347,152$  735,266$  593,052$  640,125Selected Consolidated Statistics(dollars in thousands)Three Months EndedNine Months EndedDecember 31,December 31,2010200920102009Expenses as a percent of total revenues:Provision for loan losses25.4%26.4%22.3%23.7%General and administrative expenses48.7%49.5%49.3%50.7%Interest expense3.0%3.3%3.2%3.3%Average gross loans receivable$ 903,622$        785,167$    850,961$      742,518Average loans receivable$ 663,183$        577,553$    625,999$      547,060Loan volume$ 761,432$        674,095$ 2,031,461$   1,783,646Net charge-offs as percent of average loans16.3%17.8%14.6%16.0%Return on average assets (trailing 12 months)13.3%12.2%13.3%12.2%Return on average equity (trailing 12 months)22.7%22.6%22.7%22.6%Offices opened (closed) during the period, net2096431Offices open at end of period1,0549751,054975SOURCE World Acceptance CorporationFor further information: Kelly Malson, Chief Financial Officer, +1-864-298-9800