- 1st Quarter earnings of $62 million, $0.49 per share
- Credit results showed primarily seasonal deterioration
- Originations totaled $2.38 billion for the quarter
- FY08 earnings guidance updated
FORT WORTH, Texas, Oct. 24, 2007 /PRNewswire-FirstCall/ -- AMERICREDIT
CORP. (NYSE: ACF) today announced net income of $62 million, or $0.49 per
share, for its fiscal first quarter ended September 30, 2007. AmeriCredit
reported net income of $74 million, or $0.54 per share, for the same period a
year earlier. Operating results include Long Beach Acceptance Corp. since its
acquisition on January 1, 2007.
Automobile loan purchases increased to $2.38 billion for the first quarter
of fiscal year 2008, compared to $1.68 billion for the same quarter last
fiscal year. Managed receivables totaled $16.40 billion at September 30,
2007, compared to $12.33 billion at September 30, 2006.
Annualized net charge-offs were 5.4% of average managed receivables for
both the September 2007 and September 2006 quarters.
Managed receivables 31-to-60 days delinquent were 5.5% of the portfolio at
September 30, 2007, compared to 6.0% at September 30, 2006. Accounts more
than 60 days delinquent were 2.6% of the portfolio compared to 2.5% a year
ago.
"While we saw normal seasonal credit deterioration during the September
quarter, we also experienced weaker than expected results primarily from loans
originated in 2006. As a result of this underperformance and a potentially
softer economy in the near term, we have boosted the provision for loan losses
for the quarter, which reduced our net income," said AmeriCredit President and
Chief Executive Officer Dan Berce.
During the quarter, the Company repurchased $128 million of its common
stock and has $172 million remaining under its board-approved stock repurchase
plan. Shareholders' equity was $2.01 billion at September 30, 2007, resulting
in a book value of $17.61 per share and tangible book value of $15.78 per
share.
"From a funding perspective, we were pleased with our execution in the
capital markets. We have completed $3.5 billion in securitization
transactions and obtained $2.0 billion in warehouse funding commitments since
July 1, 2007. Our liquidity position remains solid with over $637 million in
unrestricted cash at September 30, 2007," said Chief Financial Officer Chris
Choate.
Regulation FD
Pursuant to Regulation FD, the Company provides its expectations regarding
future business trends to the public via a press release or 8-K filing. The
Company anticipates some risks and uncertainties with its business.
The following net income and earnings per share forecasts and the related
assumptions have been updated from guidance provided on August 8, 2007, to
reflect changes in the Company's current business outlook and the impact of
stock repurchased through September 30, 2007.
Net income and EPS forecasts
Revised Previous
Fiscal year ending Fiscal year ending
June 30, 2008 June 30, 2008
------------- -------------
Net income ($ millions) $295 - $320 $320 - $350
Earnings per share $2.30 - $2.50 $2.50 - $2.75
The forecasts for fiscal year 2008 incorporate, but are not limited to,
the following assumptions:
- New loan origination volume of $9.0 to $9.5 billion;
- Net interest margin of 10.5% to 11.0% of average receivables;
- Operating expenses excluding leased vehicles depreciation of 2.5% to
2.7% of the portfolio;
- Credit losses of between 4.5% and 5.0%; and
- Provision for loan losses as a percent of average receivables of
between 5.0% and 5.5%.
These forecasts do not include any future share repurchase activity.
AmeriCredit will host a conference call for analysts and investors today
at 5:30 P.M. Eastern Time. For a live Internet broadcast of this conference
call, please go to the Company's Web site to register, download and install
any necessary audio software. For those who cannot listen to the live
broadcast, a replay will be available shortly after the call.
About AmeriCredit
AmeriCredit Corp. is a leading independent automobile finance company that
provides financing solutions indirectly through auto dealers and directly to
consumers in the United States and Canada. AmeriCredit has over one million
customers and more than $16 billion in managed auto receivables. The Company
was founded in 1992 and is headquartered in Fort Worth, Texas. For more
information, visit www.americredit.com.
Except for the historical information contained herein, the matters
discussed in this news release include forward-looking statements that involve
risks and uncertainties detailed from time to time in the Company's filings
and reports with the Securities and Exchange Commission including the
Company's annual report on Form 10-K for the year ended June 30, 2007. Such
risks include -- but are not limited to -- variable economic conditions,
adverse portfolio performance, volatile wholesale vehicle values, reliance on
warehouse financing and capital markets, the ability to continue to securitize
its loan portfolio, the continued availability of credit enhancement for its
securitization transactions on acceptable terms, fluctuating interest rates,
increased competition, regulatory changes, the high degree of risk associated
with subprime borrowers, acquisition integration and exposure to litigation.
These forward-looking statements are based on the beliefs of the Company's
management as well as assumptions made by and information currently available
to Company management. Actual events or results may differ materially.
AmeriCredit Corp.
Consolidated Income Statements
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Three Months Ended
September 30,
------------------------
2007 2006
----------- -----------
Revenue:
Finance charge
income $611,858 $484,357
Servicing income 376 7,459
Other income 40,440 31,805
----------- -----------
652,674 523,621
----------- -----------
Costs and expenses:
Operating
expenses 104,965 88,288
Leased vehicles
depreciation 5,585 -
Provision for
loan losses 244,645 173,905
Interest expense 211,261 143,471
Restructuring
charges (130) 309
----------- -----------
566,326 405,973
----------- -----------
Income before income
taxes 86,348 117,648
Income tax provision 24,529 43,412
----------- -----------
Net income $61,819 $74,236
=========== ===========
Earnings per share:
Basic $0.53 $0.59
=========== ===========
Diluted $0.49 $0.54
=========== ===========
Weighted average
shares 115,550,318 125,278,738
=========== ===========
Weighted average
shares and
assumed incremental
shares 128,111,826 139,718,283
=========== ===========
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
September 30, June 30, September 30,
2007 2007 2006
------------ ------------ ------------
Cash and cash equivalents $637,070 $910,304 $840,767
Finance receivables, net 15,532,786 15,102,370 11,520,531
Restricted cash - securitization
notes payable 994,813 1,014,353 1,350,602
Restricted cash - credit facilities 374,378 166,884 759,411
Credit enhancement assets 5,833 5,919 24,075
Property and equipment, net 58,717 58,572 55,509
Leased vehicles, net 169,701 33,968 -
Deferred income taxes 239,812 151,704 95,625
Goodwill 209,417 208,435 8,914
Other assets 205,696 158,511 243,481
------------ ------------ ------------
Total assets $18,428,223 $17,811,020 $14,898,915
============ ============ ============
Credit facilities $2,212,780 $2,541,702 $1,971,095
Securitization notes payable 12,881,613 11,939,447 10,081,115
Senior notes 200,000 200,000 -
Convertible debt 750,000 750,000 750,000
Funding payable 70,438 87,474 196,089
Accrued taxes and expenses 265,435 199,059 166,506
Other liabilities 37,564 18,188 10,964
------------ ------------ ------------
Total liabilities 16,417,830 15,735,870 13,175,769
------------ ------------ ------------
Shareholders' equity 2,010,393 2,075,150 1,723,146
------------ ------------ ------------
Total liabilities and
shareholders' equity $18,428,223 $17,811,020 $14,898,915
============ ============ ============
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Three Months Ended
September 30,
------------------------
2007 2006
----------- -----------
Cash flows from operating activities:
Net income $61,819 $74,236
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 16,955 6,078
Accretion and amortization of fees 4,688 (7,487)
Provision for loan losses 244,645 173,905
Deferred income taxes 24,529 43,412
Stock-based compensation expense 7,032 3,886
Other 438 (3,343)
Changes in assets and liabilities:
Other assets (39,057) (35,822)
Accrued taxes and expenses (40,810) (38,528)
----------- -----------
Net cash provided by operating
activities 280,239 216,337
----------- -----------
Cash flows from investing activities:
Purchase of receivables (2,290,411) (1,790,828)
Principal collections and
recoveries on receivables 1,585,813 1,331,107
Distributions from gain on
sale Trusts 173 76,017
Net purchases of property and
equipment (2,877) (1,064)
Net purchases of leased vehicles (131,713) -
Net change in restricted cash
and other (196,244) (1,104,797)
----------- -----------
Net cash used by investing
activities (1,035,259) (1,489,565)
----------- -----------
Cash flows from financing
activities:
Net change in credit facilities (333,457) (135,187)
Net change in securitization
notes payable 940,327 1,561,410
Proceeds from issuance of
convertible debt - 497,376
Repurchase of common stock (127,901) (323,964)
Proceeds from issuance of
common stock 10,199 14,020
Other net changes (9,064) (12,799)
----------- -----------
Net cash provided by financing
activities 480,104 1,600,856
----------- -----------
Net (decrease) increase in cash
and cash equivalents (274,916) 327,628
Effect of Canadian exchange rate
changes on cash and cash equivalents 1,682 (101)
Cash and cash equivalents at
beginning of period 910,304 513,240
----------- -----------
Cash and cash equivalents at end
of period $637,070 $840,767
=========== ===========
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended
September 30,
-------------------------
2007 2006
------------ -----------
Origination volume $2,381,217 $1,683,969
Loans securitized 2,688,182 2,373,941
Average on-book receivables $16,188,641 $11,953,970
Average gain on sale receivables 21,810 304,795
------------ -----------
Average managed receivables $16,210,451 $12,258,765
============ ===========
September 30, June 30, September 30,
2007 2007 2006
------------ ----------- -----------
On-book receivables $16,377,528 $15,922,458 $12,218,713
Gain on sale receivables 19,844 24,091 107,314
------------ ----------- -----------
Managed receivables $16,397,372 $15,946,549 $12,326,027
============ =========== ===========
Three Months Ended
September 30,
---------------------
2007 2006
--------- ---------
Operating expenses $104,965 $88,288
========= =========
Annualized operating expenses as a
percent of average managed receivables 2.6% 2.9%
========= =========
Tax rate 28.4% 36.9%
========= =========
September 30, June 30, September 30,
2007 2007 2006
------------ --------- ------------
Loan delinquency:
On-book:
(% of ending on-book
receivables)
31 - 60 days 5.5% 4.7% 6.0%
Greater than 60 days 2.6 2.1 2.5
------------ --------- ------------
Total 8.1% 6.8% 8.5%
============ ========= ============
Managed portfolio:
(% of ending managed
receivables)
31 - 60 days 5.5% 4.7% 6.0%
Greater than 60 days 2.6 2.1 2.5
------------ --------- ------------
Total 8.1% 6.8% 8.5%
============ ========= ============
Three Months Ended
September 30,
-------------------
2007 2006
-------- --------
Contracts receiving a payment deferral
as an average quarterly percentage of
average receivables outstanding:
On-book (% of average on-book receivables) 6.0% 6.3%
======== ========
Managed portfolio (%of average managed
receivables) 6.0% 6.3%
======== ========
Three Months Ended
September 30,
-------------------
2007 2006
-------- --------
Net charge-offs:
On-book $219,991 $161,864
======== ========
Managed portfolio: $220,013 $166,396
======== ========
Annualized net charge-offs as a percent of
average receivables:
On-book 5.4% 5.4%
======== ========
Managed portfolio: 5.4% 5.4%
======== ========
Annualized net recoveries as a percent of
gross repossession charge-offs:
On-book 48.8% 48.8%
======== ========
Managed portfolio: 48.8% 48.6%
======== ========
September 30, June 30, September 30,
2007 2007 2006
------------ ------------ ------------
On-book receivables:
Principal $16,377,528 $15,922,458 $12,218,713
Allowance for loan losses
and nonaccretable
acquisition fees (844,742) (820,088) (698,182)
------------ ------------ ------------
$15,532,786 $15,102,370 $11,520,531
============ ============ ============
Allowance as a percentage
of on-book receivables 5.2% 5.2% 5.7%
============ ============ ============
The Company's net margin as reflected on the consolidated statements of
income is as follows:
Three Months Ended
September 30,
--------------------
2007 2006
-------- --------
Finance charge income $611,858 $484,357
Other income 40,440 31,805
Interest expense (211,261) (143,471)
-------- --------
Net margin $441,037 $372,691
======== ========
Three Months Ended
September 30,
--------------------
2007 2006
-------- --------
Finance charge income 15.0% 16.1%
Other income 1.0 1.1
Interest expense (5.2) (4.8)
-------- --------
Annualized net margin as a
percent of average on-book
receivables 10.8% 12.4%
======== ========
The following table provides additional information for comparative
purposes related to the Company's acquisition of Long Beach Acceptance Corp.
("LBAC") on January 1, 2007:
Three Months Ended
September 30, 2007
-----------------------------
Total
Company Total
Excluding
LBAC
------------- ------------
Origination volume $2,108,982 $2,381,217
Average managed receivables $14,140,562 $16,210,451
Net charge-offs $203,377 $220,013
Annualized net charge-offs as a percent
of average receivables 5.7% 5.4%
============= =============
Contracts receiving a payment deferral
as an average quarterly percentage of
average receivables outstanding 6.5% 6.0%
============= =============
Net margin $408,451 $441,037
============= =============
Annualized net margin as a percent of
average on-book receivables 11.5% 10.8%
============= =============
September 30, 2007
-----------------------------
Total
Company Total
Excluding
LBAC
------------- -------------
Managed receivables $14,302,421 $16,397,372
Loan delinquency:
(% of ending managed receivables)
31 - 60 days 6.0% 5.5%
Greater than 60 days 2.8 2.6
------------- -------------
Total 8.8% 8.1%
============= =============
Allowance as a percentage of on-book
receivables 5.5% 5.2%
============= =============
Contact:
Investor Relations Media Relations
Caitlin DeYoung John Hoffmann
(817) 302-7394 (817) 302-7627
SOURCE AmeriCredit Corp.
CONTACT: Investor Relations, Caitlin DeYoung, +1-817-302-7394, or Media
Relations, John Hoffmann, +1-817-302-7627, both of AmeriCredit Corp.