• 2nd Quarter net loss of $25.6 million, $0.21 per share
  • Allowance for loan losses increased to 7.1% of outstanding receivables
  • Total available liquidity of $375.7 million

FORT WORTH, Texas--(BUSINESS WIRE)--AMERICREDIT CORP. (NYSE: ACF - News) today announced a net loss of $25.6 million, or $0.21 per share, for its fiscal second quarter ended December 31, 2008, compared to a loss of $19.1 million, or $0.17 per share, for the same period a year earlier. For the six months ended December 31, 2008, AmeriCredit reported a net loss of $27.2 million, or $0.23 per share, versus earnings of $42.7 million, or $0.35 per share, for the six months ended December 31, 2007.

The allowance for loan losses as a percentage of finance receivables increased to 7.1% at December 31, 2008, from 6.8% at September 30, 2008 and 5.6% at December 31, 2007.

Originations were $320.8 million for the quarter ended December 31, 2008, compared to $1.8 billion for the same quarter last fiscal year. Originations for the six months ended December 31, 2008, were $900.1 million, compared to $4.2 billion for the same period a year earlier. Finance receivables totaled $13.0 billion at December 31, 2008, compared to $16.4 billion at December 31, 2007.

Annualized net charge-offs totaled 9.5% of average finance receivables for the quarter ended December 31, 2008, compared to 6.9% for the quarter ended December 31, 2007. For the six months ended December 31, 2008, annualized net charge-offs were 8.3%, compared to 6.2% for the same period last year.

Finance receivables 31-to-60 days delinquent were 7.8% of the portfolio at December 31, 2008, compared to 6.8% at December 31, 2007. Accounts more than 60 days delinquent were 4.2% of the portfolio at December 31, 2008, compared to 3.0% a year ago.

The Company had total liquidity of $375.7 million at December 31, 2008, consisting of $166.7 million of unrestricted cash and approximately $209.0 million of available borrowing capacity on unpledged eligible receivables.

“Over the past year, the recessionary environment has accelerated, including increasing job losses, falling consumer confidence, a decline in demand for new and used vehicles, and the scarcity and high cost of funding and capital. We do not expect improvement in the macroeconomic outlook in 2009. As such, we are focused on maximizing cash collections from our loan portfolio and diligently managing the business to preserve capital and liquidity,” said AmeriCredit President and Chief Executive Officer Dan Berce.

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 across the United States. AmeriCredit has approximately one million customers and $13 billion in 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, 2008. 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, 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 the Company's 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 Statements of Operations

(Unaudited, Dollars in Thousands, Except Per Share Amounts)

 
  Three Months Ended   Six Months Ended
December 31, December 31,
2008   2007 2008   2007
Revenue:
Finance charge income $ 497,560 $ 612,699 $ 1,031,533 $ 1,224,557
Other income 30,626 40,555 61,702 81,371
Gain on retirement of debt   37,873  

-

    38,867  

-

 
  566,059     653,254     1,132,102     1,305,928  
Costs and expenses:
Operating expenses 84,344 103,084 168,599 208,049
Leased vehicles depreciation 12,157 8,848 23,071 14,433
Provision for loan losses 288,022 356,513 562,887 601,158
Interest expense 219,063 214,033 414,109 425,294
Restructuring charges   2,104     (163 )   2,655     (293 )
  605,690     682,315     1,171,321     1,248,641  
(Loss) income before income taxes (39,631 ) (29,061 ) (39,219 ) 57,287
Income tax (benefit) provision   (14,075 )   (9,971 )   (12,001 )   14,558  
Net (loss) income   ($25,556 )   ($19,090 )   ($27,218 ) $ 42,729  
 
(Loss) earnings per share:
Basic   ($0.21 )   ($0.17 )   ($0.23 ) $ 0.37  
Diluted   ($0.21 )   ($0.17 )   ($0.23 ) $ 0.35  
 
Weighted average shares   120,106,666     114,253,706     118,189,273     114,933,806  
Weighted average shares and
assumed incremental shares   120,106,666     114,253,706     118,189,273     127,505,633  
 
 
Consolidated Balance Sheets

(Unaudited, Dollars in Thousands)

 
  December 31,   June 30,   December 31,
2008 2008 2007
 
Cash and cash equivalents $ 166,690 $ 433,493 $ 567,087
Finance receivables, net 12,076,156 14,030,299 15,436,986
Restricted cash – securitization notes payable 883,734 982,670 994,336
Restricted cash – credit facilities 164,154 259,699 175,971
Property and equipment, net 49,889 55,471 60,762
Leased vehicles, net 184,673 210,857 204,558
Deferred income taxes 296,490 317,319 244,065
Goodwill - - 212,595
Investment in money market fund 20,924 - -
Other assets   310,403   257,402   252,952
Total assets $ 14,153,113 $ 16,547,210 $ 18,149,312
 
Credit facilities $ 1,942,362 $ 2,928,161 $ 2,479,400
Securitization notes payable 9,253,487 10,420,327 12,368,081
Senior notes 91,620 200,000 200,000
Convertible debt 511,150 750,000 750,000
Funding payable 4,539 21,519 49,666
Accrued taxes and expenses 197,564 216,387 240,589
Other liabilities   174,313   113,946   84,438
Total liabilities   12,175,035   14,650,340   16,172,174
 
Shareholders’ equity   1,978,078   1,896,870   1,977,138
Total liabilities and shareholders’ equity $ 14,153,113 $ 16,547,210 $ 18,149,312
 
 
Consolidated Statements of Cash Flows

(Unaudited, Dollars in Thousands)

 
  Three Months Ended   Six Months Ended
December 31,   December 31,  
2008   2007   2008   2007  
Cash flows from operating activities:
Net (loss) income ($25,556 ) ($19,090 ) ($27,218 ) $ 42,729
Adjustments to reconcile net (loss) income to
net cash provided by operating activities:
Depreciation and amortization 32,206 20,505 58,091 37,460
Accretion and amortization of fees 5,029 5,904 12,024 10,592
Provision for loan losses 288,022 356,513 562,887 601,158
Deferred income taxes 46,812 (87,740 ) 43,646 (63,211 )
Stock-based compensation expense 3,653 5,520 7,547 12,552
Amortization of warrants 28,586 - 40,934 -
Gain on retirement of debt (38,628 ) - (39,622 ) -
Ineffectiveness on interest rate swaps 12,219 1,047 9,218 2,729
Other (9,342 )

(600

)

(2,671 )

(1,844

)

Changes in assets and liabilities:
Other assets (61,722 ) (41,594 ) (60,305 ) (80,651 )
Accrued taxes and expenses   (15,009 )   77,065     (8,049 )   36,255  
Net cash provided by operating activities   266,270     317,530     596,482     597,769  
Cash flows from investing activities:
Purchase of receivables (326,908 ) (1,835,876 ) (913,555 ) (4,126,287 )
Principal collections and recoveries on receivables 1,024,477 1,534,023 2,237,921 3,119,836
Purchases of property and equipment (119 ) (3,841 ) (974 ) (6,718 )
Net purchases of leased vehicles - (40,837 ) - (172,550 )
Investment in money market fund - - (115,821 ) -
Proceeds from money market fund 91,422

-

91,422

-

Net change in restricted cash and other   32,951     206,859     186,509     10,788  
Net cash provided (used) by investing activities   821,823     (139,672 )   1,485,502     (1,174,931 )
Cash flows from financing activities:
Net change in credit facilities (1,034,442 ) 267,361 (967,429 ) (66,096 )
Net change in securitization notes payable (27,178 ) (514,863 ) (1,158,040 ) 425,464
Repurchase of common stock - - - (127,901 )
Proceeds from issuance of common stock 1,253 3,347 1,267 13,546
Retirement of convertible debt (100,425 ) - (214,473 ) -
Other net changes   (6,028 )   (3,695 )   (12,376 )   (12,759 )
Net cash (used) provided by financing activities   (1,166,820 )   (247,850 )   (2,351,051 )   232,254  
Net decrease in cash and
cash equivalents (78,727 ) (69,992 ) (269,067 ) (344,908 )
Effect of Canadian exchange rate changes on
cash and cash equivalents 1,665 9 2,264 1,691
Cash and cash equivalents at beginning of period   243,752     637,070     433,493     910,304  
Cash and cash equivalents at end of period $ 166,690   $ 567,087   $ 166,690   $ 567,087  
       
 
Other Financial Data

(Unaudited, Dollars in Thousands)

 
Three Months Ended Six Months Ended
December 31, December 31,
2008 2007 2008 2007
Origination volume $ 320,830 $ 1,804,719 $ 900,120 $ 4,185,936
Loans securitized $ 1,289,082 $ 1,025,651 $ 1,289,082 $ 3,713,833
Average finance receivables $ 13,547,116 $ 16,409,662 $ 14,045,482 $ 16,298,629
 
 
December 31, June 30, December 31,
2008 2008 2007
Finance receivables:
Principal $ 12,999,132 $ 14,981,412 $ 16,352,204
Allowance for loan losses and
nonaccretable acquisition fees   (922,976 )   (951,113 )   (915,218 )
$ 12,076,156   $ 14,030,299   $ 15,436,986  
 
Allowance as a percent of

ending finance receivables

  7.1 %   6.3 %   5.6 %
 
 
December 31,

2008

June 30,

2008

December 31,

2007

Loan delinquency as a percent of
ending finance receivables:
31 - 60 days 7.8 % 6.0 % 6.8 %
Greater than 60 days   4.2     2.9     3.0  
Total   12.0 %   8.9 %   9.8 %
 
 
Three Months Ended Six Months Ended
December 31, December 31,
2008 2007 2008 2007
Contracts receiving a payment
deferral as an average quarterly
percent of average finance
receivables 8.2 % 6.8 % 7.7 % 6.4 %
 
Net charge-offs $ 325,165 $ 286,162 $ 591,024 $ 506,175
 
Annualized net charge-offs as a

percent of average finance receivables

9.5 % 6.9 % 8.3 % 6.2 %
Net recoveries as a
percent of gross repossession
charge-offs 37.1 % 43.9 % 39.3 % 46.1 %
       
 

Components of net margin:

 
Three Months Ended Six Months Ended
December 31, December 31,
2008 2007 2008 2007
Finance charge income 497,560 $ 612,699 1,031,533 $ 1,224,557
Other income 30,626 40,555 61,702 81,371
Interest expense   (219,063 )   (214,033 )   (414,109 )   (425,294 )
Net margin $ 309,123   $ 439,221   $ 679,126   $ 880,634  
 
 
Annualized net margin as a percent of average finance receivables:
 
Three Months Ended Six Months Ended
December 31, December 31,
2008 2007 2008 2007
Finance charge income 14.6 % 14.8 %

14.5

% 14.9 %
Other income 0.9 1.0 0.9 1.0
Interest expense   (6.4 )   (5.2 )   (5.8 )   (5.2 )

 

  9.1 %   10.6 %  

9.6

%   10.7 %
 
 
Three Months Ended Six Months Ended
December 31, December 31,
2008 2007 2008 2007
Operating expenses $ 84,344   $ 103,084   $ 168,599   $ 208,049  
Annualized operating expenses as a
percent of average finance
receivables   2.5 %   2.5 %   2.4 %   2.5 %


Contact:

AmeriCredit Corp. Caitlin DeYoung, 817-302-7394


Source: AmeriCredit Corp.