- 2nd quarter net loss of $19 million, $0.17 per share
- Increased loan loss reserves through higher provision for loan losses
- FY08 originations target reduced to $6.5 to $7.0 billion
- FY08 earnings guidance updated
FORT WORTH, Texas, Jan. 22, 2008, 2008 /PRNewswire-FirstCall via COMTEX News Network/ -- AMERICREDIT
CORP. (NYSE: ACF) today announced a net loss of $19 million, or $0.17 per
share, for its second fiscal quarter ended December 31, 2007, versus earnings
of $95 million, or $0.74 per share, for the same period a year earlier. For
the six months ended December 31, 2007, AmeriCredit reported net income of $43
million, or $0.35 per share, versus earnings of $170 million, or $1.27 per
share, for the six months ended December 31, 2006. Operating results include
Long Beach Acceptance Corp. since its acquisition on January 1, 2007.
Net income for the three and six months ended December 31, 2006, included
a $23 million after-tax gain ($36 million pre-tax), or $0.18 per share and
$0.17 per share, respectively, related to the partial sale of AmeriCredit's
investment in DealerTrack Holdings, Inc.
Automobile loan purchases increased to $1.80 billion for the three months
ended December 31, 2007, compared to $1.74 billion for the same quarter last
fiscal year. Loans purchased for the six months ended December 31, 2007, were
$4.19 billion compared to $3.42 billion for the same period a year earlier.
Managed receivables totaled $16.35 billion at December 31, 2007, compared to
$12.58 billion at December 31, 2006.
Annualized net charge-offs totaled 6.9% of average managed receivables for
the December 2007 quarter compared to 5.8% for the December 2006 quarter. For
the six months ended December 31, 2007, annualized net charge-offs were 6.2%
compared to 5.6% for the same period last year.
Managed receivables 31-to-60 days delinquent were 6.8% of the portfolio at
December 31, 2007, compared to 6.7% at December 31, 2006. Accounts more than
60 days delinquent were 3.0% of the portfolio at December 31, 2007, compared
to 2.6% a year ago.
"The December quarter was challenging on many fronts, with weaker credit
performance and uncertainty in the capital markets. As a result, we have
revised our operating plans to align our loan volume with available capital
resources," said AmeriCredit President and Chief Executive Officer Dan Berce.
"Over the next several months, we will bring our originations infrastructure
and overhead into alignment with our revised originations target."
Regulation FD
Pursuant to Regulation FD, the Company provides its expectations regarding
future business trends to the public via a press release or 8-K filing. The
Company anticipates some risks and uncertainties with its business. The
Company undertakes no obligations to update its expectations regarding future
business trends.
The following net income and earnings per share forecasts and the related
assumptions have been updated from guidance provided on October 24, 2007, to
reflect changes in the Company's current business outlook.
Net income and EPS forecast
Revised Previous
Fiscal year ending Fiscal year ending
June 30, 2008 June 30, 2008
------------------- ------------------
Net income ($ millions) $170 - $195 $295 - $320
Earnings per share $1.35 - $1.55 $2.30 - $2.50
The forecasts for fiscal year 2008 incorporate, but are not limited to,
the following assumptions:
- New loan origination volume of $6.5 to $7.0 billion;
- Net interest margin of 10.5% to 11.0% of average receivables;
- Operating expenses, excluding depreciation on leased vehicles, of 2.5%
to 2.7% of the portfolio;
- Credit losses of between 5.7% and 6.2%; and
- Provision for loan losses as a percent of average receivables of
between 5.8% and 6.3%.
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 http://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. It is
advisable not to place undue reliance on any forward-looking statements. The
Company undertakes no obligation to, and does not, publicly update or revise
any forward-looking statements, except as required by federal securities laws,
whether as a result of new information, future events or otherwise.
AmeriCredit Corp.
Consolidated Statement of Operations
(Unaudited, Dollars in Thousands, Except Per Share Amounts)
Three Months Ended Six Months Ended
December 31, December 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Revenue:
Finance charge
income $612,699 $502,217 $1,224,557 $986,574
Other income 40,137 36,244 80,577 68,049
Servicing income 418 979 794 8,438
Gain on sale of
equity investment - 36,196 - 36,196
----------- ----------- ----------- -----------
653,254 575,636 1,305,928 1,099,257
----------- ----------- ----------- -----------
Costs and expenses:
Operating expenses 103,084 94,095 208,049 182,383
Depreciation expense
- leased vehicles 8,848 - 14,433 -
Provision for loan
losses 356,513 174,800 601,158 348,705
Interest expense 214,033 155,860 425,294 299,331
Restructuring charges (163) 77 (293) 386
----------- ----------- ----------- -----------
682,315 424,832 1,248,641 830,805
----------- ----------- ----------- -----------
(Loss) income before
income taxes (29,061) 150,804 57,287 268,452
Income tax (benefit)
provision (9,971) 55,378 14,558 98,790
----------- ----------- ----------- -----------
Net (loss) income $(19,090) $95,426 $42,729 $169,662
=========== =========== =========== ===========
(Loss) earnings per
share:
Basic $(0.17) $0.82 $ 0.37 $1.41
=========== =========== =========== ===========
Diluted $(0.17) $0.74 $ 0.35 $1.27
=========== =========== =========== ===========
Weighted average
shares 114,253,706 115,834,752 114,933,806 120,518,553
=========== =========== =========== ===========
Weighted average
shares and
assumed incremental
shares 114,253,706 130,153,556 127,505,633 134,935,826
=========== =========== =========== ===========
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
December 31, June 30, December 31,
2007 2007 2006
----------- ----------- -----------
Cash and cash
equivalents $567,087 $910,304 $897,386
Finance receivables,
net 15,436,986 15,102,370 11,857,385
Restricted cash -
securitization
notes payable 994,336 1,014,353 865,591
Restricted cash -
credit facilities 175,971 166,884 149,173
Property and equipment,
net 60,762 58,572 54,796
Leased vehicles,
net 204,558 33,968 -
Deferred income taxes 244,065 151,704 99,657
Goodwill 212,595 208,435 8,914
Other assets 252,952 164,430 180,358
----------- ----------- -----------
Total assets $18,149,312 $17,811,020 $14,113,260
=========== =========== ===========
Credit facilities $2,479,400 $2,541,702 $2,400,881
Securitization
notes payable 12,368,081 11,939,447 8,907,498
Senior notes 200,000 200,000 -
Convertible debt 750,000 750,000 750,000
Funding payable 49,666 87,474 56,484
Accrued taxes and
expenses 240,589 199,059 141,548
Other liabilities 84,438 18,188 14,212
----------- ----------- -----------
Total liabilities 16,172,174 15,735,870 12,270,623
----------- ----------- -----------
Shareholders' equity 1,977,138 2,075,150 1,842,637
----------- ----------- -----------
Total liabilities
and shareholders'
equity $18,149,312 $17,811,020 $14,113,260
=========== =========== ===========
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Three Months Ended Six Months Ended
December 31, December 31,
---------------------- ----------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Cash flows from operating
activities:
Net (loss) income $(19,090) $95,426 $42,729 $169,662
Adjustments to
reconcile net (loss)
income to net cash
provided by operating
activities:
Depreciation and
amortization 20,505 13,419 37,460 19,497
Accretion and
amortization
of fees 5,904 (6,472) 10,592 (13,959)
Provision for loan
losses 356,513 174,800 601,158 348,705
Deferred income
taxes (87,740) (43,370) (63,211) 42
Stock-based
compensation
expense 5,520 5,435 12,552 9,321
Gain on sale of
available for sale
securities - (36,196) - (36,196)
Other 447 (166) 885 (3,509)
Changes in assets
and liabilities:
Other assets (41,594) 39,127 (80,651) 3,305
Accrued taxes
and expenses 77,065 28,699 36,255 (9,829)
--------- --------- --------- ---------
Net cash provided by
operating activities 317,530 270,702 597,769 487,039
--------- --------- --------- ---------
Cash flows from
investing activities:
Purchase of
receivables (1,835,876) (1,950,000) (4,126,287) (3,740,828)
Principal
collections and
recoveries on
receivables 1,534,023 1,300,174 3,119,836 2,631,281
Distributions from
gain on sale
Trusts 7,293 16,692 7,466 92,709
Purchases of property
and equipment (3,841) (1,937) (6,718) (3,001)
Net purchases of
leased vehicles (40,837) - (172,550) -
Proceeds from sale
of available
for sale securities - 44,300 - 44,300
Net change in
restricted cash
and other 199,566 1,092,985 3,322 (11,812)
--------- --------- --------- ---------
Net cash (used)
provided by
investing activities (139,672) 502,214 (1,174,931) (987,351)
--------- --------- --------- ---------
Cash flows from
financing activities:
Net change in
credit facilities 267,361 429,786 (66,096) 294,599
Net change in
securitization
notes payable (514,863) (1,174,637) 425,464 386,773
Proceeds from
issuance of
convertible debt - - - 497,376
Repurchase of
common stock - - (127,901) (323,964)
Proceeds from issuance
of common stock 3,347 29,206 13,546 43,226
Other net changes (3,695) 1,406 (12,759) (11,393)
--------- --------- --------- ---------
Net cash (used)
provided
by financing
activities (247,850) (714,239) 232,254 886,617
--------- --------- --------- ---------
Net (decrease)
increase in
cash and cash
equivalents (69,992) 58,677 (344,908) 386,305
Effect of Canadian
exchange rate changes
on cash and cash
equivalents 9 (2,058) 1,691 (2,159)
Cash and cash
equivalents
at beginning of
period 637,070 840,767 910,304 513,240
--------- --------- --------- ---------
Cash and cash
equivalents
at end of period $567,087 $897,386 $567,087 $897,386
========= ========= ========= =========
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended Six Months Ended
December 31, December 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Origination volume $1,804,719 $1,740,767 $4,185,936 $3,424,736
Loans securitized 1,025,651 601,800 3,713,833 2,975,741
Average on-book
receivables $16,409,662 $12,392,922 $16,298,629 $12,173,441
Average gain on
sale receivables 6,462 58,069 14,137 181,432
----------- ----------- ----------- -----------
Average managed
receivables $16,416,124 $12,450,991 $16,312,766 $12,354,873
=========== =========== =========== ===========
December 31, June 30, December 31,
2007 2007 2006
----------- ----------- -----------
On-book
receivables $16,352,204 $15,922,458 $12,548,925
Gain on sale
receivables - 24,091 34,083
----------- ----------- -----------
Managed
receivables $16,352,204 $15,946,549 $12,583,008
=========== =========== ===========
Three Months Ended Six Months Ended
December 31, December 31,
------------------------ ------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Operating expenses $103,084 $94,095 $208,049 $182,383
=========== =========== =========== ===========
Annualized operating
expenses as a
percent of average
managed receivables 2.5% 3.0% 2.5% 2.9%
=========== =========== =========== ===========
Tax rate 34.3% 36.7% 25.4% 36.8%
=========== =========== =========== ===========
December 31, June 30, December 31,
2007 2007 2006
----------- ----------- -----------
Loan delinquency:
On-book:
(% of ending on-book
receivables)
31 - 60 days 6.8% 4.7% 6.7%
Greater than 60 days 3.0 2.1 2.6
----------- ----------- -----------
Total 9.8% 6.8% 9.3%
=========== =========== ===========
Managed portfolio:
(% of ending managed
receivables)
31 - 60 days 6.8% 4.7% 6.7%
Greater than 60 days 3.0 2.1 2.6
----------- ----------- -----------
Total 9.8% 6.8% 9.3%
=========== =========== ===========
Three Months Ended Six Months Ended
December 31, December 31,
------------------------ -------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Contracts receiving
a payment deferral as
an average quarterly
percentage of average
receivables
outstanding:
On-book (% of average
on-book receivables) 6.8% 6.8% 6.4% 6.5%
=========== =========== =========== ===========
Managed portfolio
(% of average managed
receivables) 6.8% 6.7% 6.4% 6.5%
=========== =========== =========== ===========
Three Months Ended Six Months Ended
December 31, December 31,
------------------------ -------------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Net charge-offs:
On-book $286,146 $183,153 $506,137 $345,017
=========== =========== =========== ===========
Managed portfolio: $286,162 $183,437 $506,175 $349,833
=========== =========== =========== ===========
Annualized net
charge-offs as a
percent of average
receivables:
On-book 6.9% 5.9% 6.2% 5.6%
=========== =========== =========== ===========
Managed portfolio: 6.9% 5.8% 6.2% 5.6%
=========== =========== =========== ===========
Annualized net
recoveries as a
percent of gross
repossession
charge-offs:
On-book 43.9% 48.8% 46.0% 48.8%
=========== =========== =========== ===========
Managed portfolio: 43.9% 48.8% 46.1% 48.7%
=========== =========== =========== ===========
December 31, June 30, December 31,
2007 2007 2006
----------- ----------- -----------
On-book receivables:
Principal $16,352,204 $15,922,458 $12,548,925
Allowance for
loan losses and
nonaccretable
acquisition fees (915,218) (820,088) (691,540)
----------- ----------- -----------
$15,436,986 $15,102,370 $11,857,385
=========== =========== ===========
Allowance as a
percentage of
on-book receivables 5.6% 5.2% 5.5%
=========== =========== ===========
The Company's net margin as reflected on the consolidated statement of
operations is as follows:
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- -----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Finance charge
income $ 612,699 $ 502,217 $1,224,557 $ 986,574
Other income 40,137 36,244 80,577 68,049
Interest expense (214,033) (155,860) (425,294) (299,331)
---------- ---------- ---------- ----------
Net margin $ 438,803 $ 382,601 $879,840 $ 755,292
========== ========== ========== ==========
Three Months Ended Six Months Ended
December 31, December 31,
----------------------- -----------------------
2007 2006 2007 2006
---------- ---------- ---------- ----------
Finance charge income 14.8% 16.1% 14.9% 16.1%
Other income 1.0 1.1 1.0 1.1
Interest expense (5.2) (5.0) (5.2) (4.9)
---------- ---------- ---------- ----------
Annualized net margin
as a percent of
average on-book
receivables 10.6% 12.2% 10.7% 12.3%
========== ========== ========== ==========
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 Six Months Ended
December 31, 2007 December 31, 2007
------------------ ------------------
Total Total
Company Company
Excluding Excluding
LBAC Total LBAC Total
---------- ---------- ---------- ----------
Origination volume $1,601,136 $1,804,719 $3,710,118 $4,185,936
Average managed
receivables $14,333,313 $16,416,124 $14,236,416 $16,312,766
Net charge-offs $262,521 $286,162 $465,898 $506,175
Annualized net
charge-offs as a
percent of average
receivables 7.3% 6.9% 6.5% 6.2%
========== ========== ========== ==========
Contracts receiving
a payment
deferral as an
average quarterly
percentage of
average receivables
outstanding 7.3% 6.8% 6.9% 6.4%
========== ========== ========== ==========
Net margin $409,661 $438,803 $818,112 $879,840
========== ========== ========== ==========
Annualized net margin
as a percent of
average on-book
receivables 11.3% 10.6% 11.4% 10.7%
========== ========== ========== ==========
December 31, 2007
-----------------
Total
Company
Excluding
LBAC Total
---------- ----------
Managed
receivables $14,276,457 $16,352,204
Loan delinquency:
(% of ending managed
receivables)
31 - 60 days 7.0% 6.8%
Greater than 60 days 3.2 3.0
---------- ----------
Total 10.2% 9.8%
========== ==========
Allowance as a
percentage of
on-book receivables 5.9% 5.6%
========== ==========
Contact:
Investor Relations Media Relations
Caitlin DeYoung John Hoffmann
(817) 302-7394 (817) 302-7627
SOURCE AMERICREDIT CORP.