World Acceptance Corporation Reports Fourth Quarter Results

Business Wire

GREENVILLE, S.C.--(BUSINESS WIRE)--

World Acceptance Corporation (NASDAQ: WRLD) today reported financial results for its fourth fiscal quarter and twelve months ended March 31, 2014.

Net income for the fourth quarter increased 2.8% to $39.0 million compared with $37.9 million for the same quarter of the prior year. Net income per diluted share increased 16.9% to $3.52 in the fourth quarter of fiscal 2014 compared with $3.01 in the prior year quarter. Total revenues increased slightly to $161.9 million in the fourth quarter of fiscal 2014 over the $161.8 million reported in the fourth quarter last year.

The Company’s growth in earnings per share benefited from the ongoing share repurchase program during the past year. During the fourth quarter of fiscal 2014, the Company repurchased 740,000 shares at an aggregate cost of $68.5 million. During the fiscal year ended March 31, 2014, the Company repurchased 2,091,699 shares at an aggregate cost of $190.5 million. As of March 31, 2014, 10.3 million shares were outstanding.

Interest and fee income increased 0.6% to $139.0 million in the fourth quarter of fiscal 2014 from $138.1 million in the fourth quarter of fiscal 2013 due to continued growth in outstanding loans receivable and expansion of offices. Insurance and other income decreased by 3.4% to $23.0 million in the fourth quarter of fiscal 2014 compared with $23.8 million in the fourth quarter of fiscal 2013. Tax preparation revenue rose to $8.3 million during the fourth quarter of fiscal 2014 compared with $8.1 million during the fourth quarter of fiscal 2013.

Gross loans rose to $1.11 billion at March 31, 2014, a 4.2% increase over the $1.07 billion outstanding at March 31, 2013. Fourth quarter provision for loan losses decreased to $18.6 million in fiscal 2014 compared with $20.9 million in the fourth quarter of fiscal 2013. The fourth quarter charge-off ratio increased slightly on a year-over-year basis. Net charge-offs to average net loans on an annualized basis increased from 13.7% in the fourth quarter of fiscal 2013 to 13.9% in the current quarter. Accounts contractually delinquent 61+ days increased from 4.4% at March 31, 2013 to 5.3% at March 31, 2014. When excluding the impact of payroll deduct loans in Mexico, the accounts contractually delinquent 61+ days were 4.8% at March 31, 2014. Accounts that were 61+ days past due on a recency basis increased slightly from 2.7% to 3.0%.

The Company’s general and administrative expenses decreased by 0.6% compared with the fourth quarter of the prior year due primarily to a reduction in incentive based compensation partially offset by higher costs associated with new offices opened during fiscal 2014. General and administrative expenses as a percent of total revenues decreased from 46.7% in the prior year quarter to 46.4% during the current fiscal quarter. The Company’s fourth quarter effective income tax rate increased slightly to 37.7% compared with 37.2% in the prior year’s fourth quarter.

Full Year Results

For the year ended March 31, 2014, net income increased 2.4% to $106.6 million compared with $104.1 million for the year ended March 31, 2013. Fully diluted net income per share rose 15.3% to $9.08 for fiscal 2014 compared to $7.88 for fiscal 2013.

Total revenues for fiscal 2014 rose to $617.6 million, a 5.8% increase over the $583.7 million in fiscal 2013. Net charge-offs as a percent of average net loans increased to 14.7% in fiscal 2014 compared with 13.9% during the prior year. Total general and administrative expenses as a percent of revenue decreased from 48.9% in fiscal 2013 to 48.5% in fiscal 2014.

The Company opened 69 new offices, purchased one new office and merged two offices during the fiscal year, resulting in a total of 1,271 offices at March 31, 2014.

Other key return ratios for the fiscal year included a 12.3% return on average assets and a 31.2% return on average equity.

About World Acceptance Corporation

World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 1,271 offices in 14 states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry.

Fourth 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. A script of the Chairman and Chief Executive Officer’s prepared remarks for the conference call has been furnished as Exhibit 99.2 to the Company’s Form 8-K filed today with the Securities and Exchange Commission (“SEC”) in connection with this press release, and is available via the SEC’s Edgar database at www.sec.gov, and will also be posted to the Company’s website as soon as practicable. Interested parties may participate in this call by dialing 1-888-427-9411, passcode 1830559. A simulcast of the conference call is also available on the Internet at http://www.videonewswire.com/event.asp?id=99050. 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 21E of the Securities Exchange Act of 1934, as amended, that represent the Company’s expectations or beliefs concerning future events. Statements other than those of historical fact, as well as those identified by the words “anticipate,” “estimate,” “plan,” “expect,” “believe,” “may,” “will,” and “should” or any variation of the foregoing and similar expressions are forward-looking statements. 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: recently enacted, proposed or future legislation and the manner in which it is implemented; the nature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators having jurisdiction over the Company’s business or consumer financial transactions generically; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported financial statements or necessitate material delays or changes in the issuance of the Company’s audited financial statements; the Company's assessment of its internal control over financial reporting, and the timing and effectiveness of the Company's efforts to remediate any reported material weakness in its internal control over financial reporting; changes in interest rates; risks related to expansion and foreign operations; risks inherent in making loans, including repayment risks and value of collateral; 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); and the unpredictable nature of litigation. These and other factors are discussed in greater detail in Part I, Item 1A, “Risk Factors” in the Company’s most recent annual report on Form 10-K/A filed with the Securities and Exchange Commission (“SEC”) and the Company’s other reports filed with, or furnished to, the SEC from time to time. World Acceptance Corporation does not undertake any obligation to update any forward-looking statements it makes. The Company is also 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 Year Ended
March 31, March 31,
2014 2013 2014 2013
 

Interest & fees

$

138,954 $ 138,066 $ 542,156 $ 505,495
Insurance & other 22,973 23,777 75,493 78,223
Total revenues 161,927 161,843 617,649 583,718
Expenses:
Provision for loan losses 18,569 20,911 126,575 114,323
General and administrative expenses
Personnel 50,957 53,021 202,794 194,423
Occupancy & equipment 10,106 9,387 38,880 36,278
Advertising 2,973 2,869 16,062 14,850
Intangible amortization 236 328 1,058 1,365
Other 10,839 9,990 40,840 38,794
75,111 75,595 299,634 285,710
Interest expense 5,692 4,998 21,196 17,394
Total expenses 99,372 101,504 447,405 417,427
Income before taxes 62,555 60,339 170,244 166,291
Income taxes 23,578 22,440 63,636 62,201

Net income

$

38,977 $ 37,899 $ 106,608 $ 104,090

Diluted earnings per share

$

3.52 $ 3.01 $ 9.08 $ 7.88
Diluted weighted average shares outstanding 11,063 12,583 11,741 13,214
 
Consolidated Balance Sheets
(unaudited and in thousands)
 
March 31, March 31,
2014 2013
ASSETS
Cash $ 19,570 $ 11,625
Gross loans receivable 1,112,307 1,067,052
Less: Unearned interest & fees (298,388) (284,956)
Allowance for loan losses (63,255) (59,981)
Loans receivable, net 750,664 722,115
Property and equipment, net 24,826 23,935
Deferred tax benefit 33,514 29,416
Goodwill 5,967 5,896
Intangibles 3,778 4,625
Other assets 11,708 11,713
$ 850,027 $ 809,325
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable $ 505,500 $ 400,250
Income tax payable 9,521 13,942
Accounts payable and accrued expenses 27,651 28,737
Total liabilities 542,672 442,929
Shareholders' equity 307,355 366,396
$ 850,027 $ 809,325
 
       
Selected Consolidated Statistics
(dollars in thousands)
 
Three Months Ended Year ended
March 31, March 31,
2014 2013 2014 2013
 
Expenses as a percent of total revenues:
Provision for loan losses 11.5% 12.9% 20.5% 19.6%
General and administrative expenses 46.4% 46.7% 48.5% 48.9%
Interest expense 3.5% 3.1% 3.4% 3.0%
 
Average gross loans receivable $ 1,185,200 $ 1,122,658 $ 1,151,713 $ 1,072,500
 
Average net loans receivable $ 864,297 $ 819,695 $ 836,961 $ 782,212
 
Loan volume $ 535,104 $ 606,128 $ 2,954,079 $ 2,985,336
 
Net charge-offs as percent of average loans 13.9% 13.7% 14.7% 13.9%
 
Return on average assets (rolling 12 month period) 12.3% 13.0% 12.3% 13.0%
 
Return on average equity (rolling 12 month period) 31.2% 27.0% 31.2% 27.0%
 
Offices opened (closed) during the period, net 23 17 68 66
 
Offices open at end of period 1,271 1,203 1,271 1,203

Contact:
World Acceptance Corporation
John Calmes, 864-298-9800
Chief Financial Officer

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