FORT WORTH, Texas--(BUSINESS WIRE)--Oct. 24, 2006--AmeriCredit
Corp. (NYSE:ACF):
- 1st Quarter earnings of $74 million, $0.54 per share
- $324 million of stock repurchased
- Unrestricted cash balance grew to $841 million
- FY07 earnings guidance updated
AmeriCredit Corp. (NYSE:ACF) today announced net income of $74
million, or $0.54 per share, for its fiscal first quarter ended
September 30, 2006. AmeriCredit reported net income of $54 million, or
$0.35 per share, for the same period a year earlier.
Automobile loan purchases increased to $1.68 billion for the first
quarter of fiscal year 2007, compared to $1.52 billion for the
September 2005 quarter. Managed receivables totaled $12.33 billion at
September 30, 2006, compared to $11.05 billion at September 30, 2005.
Annualized net charge-offs totaled 5.4% of average managed
receivables for the September 2006 quarter compared to 5.7% for the
September 2005 quarter.
Managed receivables 31-to-60 days delinquent were 6.0% of the
portfolio at September 30, 2006, and unchanged from September 30,
2005. Accounts more than 60 days delinquent were 2.5% of the portfolio
at September 30, 2006, compared to 2.6% at September 30, 2005.
"Our September quarter was a solid beginning to fiscal year 2007,
with new loan volume and credit performance improved from a year ago,"
said President and Chief Executive Officer Dan Berce. "We have further
developed our core subprime business as we continued to roll out a
broader credit spectrum of product offerings through our Bay View
platform."
Unrestricted cash totaled $841 million at September 30, 2006. The
Company issued $550 million of convertible senior notes with an
average coupon of 1.44% in September 2006. During the quarter, the
Company repurchased $324 million of its common stock, which brought
total repurchase activity to $1.25 billion since the inception of its
stock repurchase program in April 2004. In September, the Company's
Board of Directors authorized an additional $300 million of stock
repurchases. Shareholders' equity was $1.72 billion at September 30,
2006, resulting in a managed assets-to-equity ratio of 7.2 at
September 30, 2006.
"We rebalanced our capital position and strengthened our balance
sheet during the first quarter by issuing convertible senior notes and
repurchasing a significant amount of common stock," said Chief
Financial Officer Chris Choate. "This better positions us for any
opportunities or challenges that may lie ahead this fiscal year."
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 have
been updated from guidance provided on August 7, 2006, to reflect
stock repurchased through September 30, 2006, and a pre-tax gain of
$36 million on the sale of approximately 2 million shares of the
Company's investment in DealerTrack Holdings, Inc., in October 2006.
Net income and EPS forecasts
----------------------------
Revised Previous
Fiscal year ending Fiscal year ending
June 30, 2007 June 30, 2007
--------------------- --------------------
Net income ($ millions) $325 - $355 $305 - $335
Earnings per share $2.45 - $2.65 $2.15 - $2.35
The forecasts for fiscal year 2007 incorporate, but are not
limited to, the following assumptions, which are unchanged from August
7, 2006:
- New loan origination volume of $7.2 to $7.8 billion;
- Net interest margin of 12.0% to 13.0% of average receivables;
- Operating expenses of 2.8% to 3.2% of the portfolio;
- Credit losses to average between 4.5% and 5.5% overall for the
fiscal year, but varying seasonally by quarter; and
- Annualized provision for loan losses as a percent of average
receivables to range between 5.0% and 6.0%.
These forecasts do not include any future share repurchase
activity or additional disposition of all or a portion of the
Company's remaining investment in DealerTrack.
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 approximately one million customers and $12 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, 2006. Such risks include - but are not
limited to - variable economic conditions, adverse portfolio
performance, volatile wholesale 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 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,
-------------------------
2006 2005
------------ ------------
Revenue:
Finance charge income $484,357 $373,736
Servicing income 7,459 25,341
Other income 31,805 21,186
------------ ------------
523,621 420,263
------------ ------------
Costs and expenses:
Operating expenses 88,288 77,865
Provision for loan losses 173,905 165,860
Interest expense 143,471 90,271
Restructuring charges 309 159
------------ ------------
405,973 334,155
------------ ------------
Income before income taxes 117,648 86,108
Income tax provision 43,412 32,075
------------ ------------
Net income $74,236 $54,033
============ ============
Earnings per share:
Basic $0.59 $0.38
============ ============
Diluted $0.54 $0.35
============ ============
Weighted average shares 125,278,738 142,735,494
============ ============
Weighted average shares and assumed
incremental shares 139,718,283 157,590,746
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
September June September
30, 30, 30,
2006 2006 2005
------------ ------------ ------------
Cash and cash equivalents $840,767 $513,240 $692,476
Finance receivables, net 11,520,531 11,097,008 8,857,389
Credit enhancement assets 24,075 104,624 399,015
Restricted cash -
securitization notes payable 1,350,602 860,935 674,600
Restricted cash - warehouse
credit facilities 759,411 140,042 271,849
Property and equipment, net 55,509 57,225 59,406
Deferred income taxes 95,625 78,789 62,883
Other assets 252,395 216,002 218,048
------------ ------------ ------------
Total assets $14,898,915 $13,067,865 $11,235,666
============ ============ ============
Warehouse credit facilities $1,971,095 $2,106,282 $1,104,740
Securitization notes payable 10,081,115 8,518,849 7,377,648
Senior notes - - 166,841
Convertible debt 750,000 200,000 200,000
Funding payable 196,089 54,623 235,573
Accrued taxes and expenses 166,506 155,799 145,914
Other liabilities 10,964 23,426 15,583
------------ ------------ ------------
Total liabilities 13,175,769 11,058,979 9,246,299
------------ ------------ ------------
Shareholders' equity 1,723,146 2,008,886 1,989,367
------------ ------------ ------------
Total liabilities and
shareholders' equity $14,898,915 $13,067,865 $11,235,666
============ ============ ============
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Three Months Ended
September 30,
-----------------------
2006 2005
----------- -----------
Cash flows from operating activities:
Net income $74,236 $54,033
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 6,078 9,074
Accretion and amortization of loan fees (7,487) (2,215)
Provision for loan losses 173,905 165,860
Deferred income taxes (6,541) (9,109)
Accretion of present value discount (5,291) (11,663)
Stock-based compensation expense 3,886 4,203
Other 1,948 (254)
Changes in assets and liabilities:
Other assets (35,822) 8,366
Accrued taxes and expenses 11,425 11,856
----------- -----------
Net cash provided by operating activities 216,337 230,151
----------- -----------
Cash flows from investing activities:
Purchase of receivables (1,790,828) (1,621,939)
Principal collections and recoveries on
receivables 1,331,107 976,538
Distributions from gain on sale Trusts 76,017 143,018
Net (purchases) sales of property and
equipment (1,064) 33,905
Net change in restricted cash and other (1,104,797) 145,561
----------- -----------
Net cash used by investing activities (1,489,565) (322,917)
----------- -----------
Cash flows from financing activities:
Net change in warehouse credit facilities (135,187) 113,766
Net change in securitization notes payable 1,561,410 210,385
Net change in senior notes and other (12,799) (3,685)
Proceeds from issuance of convertible debt 497,376 -
Repurchase of common stock (323,964) (204,114)
Proceeds from issuance of common stock 14,020 3,407
----------- -----------
Net cash provided by financing activities 1,600,856 119,759
----------- -----------
Net increase in cash and cash equivalents 327,628 26,993
Effect of Canadian exchange rate changes on
cash and cash equivalents (101) 1,982
Cash and cash equivalents at beginning of
period 513,240 663,501
----------- -----------
Cash and cash equivalents at end of period $840,767 $692,476
=========== ===========
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended
September 30,
-------------------------
2006 2005
------------ ------------
Loan originations $1,683,969 $1,520,146
Loans securitized 2,373,941 1,189,191
Average on-book receivables $11,953,970 $9,050,440
Average gain on sale receivables 304,795 1,970,313
------------ ------------
Average managed receivables $12,258,765 $11,020,753
============ ============
September June September
30, 30, 30,
2006 2006 2005
------------ -------------------------
On-book receivables $12,218,713 $11,775,665 $9,462,883
Gain on sale receivables 107,314 421,037 1,590,943
------------ -------------------------
Managed receivables $12,326,027 $12,196,702 $11,053,826
============ =========================
Three Months Ended
September 30,
---------------------
2006 2005
---------- ----------
Operating expenses $88,288 $77,865
Operating expenses as a percent of average
managed receivables 2.9% 2.8%
Tax rate 36.90% 37.25%
September June September
30, 30, 30,
2006 2006 2005
--------- ------- ----------
Loan delinquency:
On-book:
(% of ending on-book receivables)
31 - 60 days 6.0% 5.0% 5.3%
Greater than 60 days 2.5 2.0 2.2
--------- ------- ----------
Total 8.5% 7.0% 7.5%
========= ======= ==========
Gain on sale:
(% of ending gain on sale
receivables)
31 - 60 days 7.5% 9.2% 10.1%
Greater than 60 days 3.2 3.8 4.8
--------- ------- ----------
Total 10.7% 13.0% 14.9%
========= ======= ==========
Total portfolio:
(% of ending managed receivables)
31 - 60 days 6.0% 5.1% 6.0%
Greater than 60 days 2.5 2.1 2.6
--------- ------- ----------
Total 8.5% 7.2% 8.6%
========= ======= ==========
Three Months Ended
September 30,
-----------------------------
2006 2005
--------------- -------------
Contracts receiving a payment
deferral as an average quarterly
percentage of average receivables
outstanding:
On-book (% of average on-book
receivables) 6.3% 6.4%
=============== =============
Gain on sale (% of average gain on
sale receivables) 5.8% 10.7%
=============== =============
Total portfolio (% of average
managed receivables) 6.3% 7.2%
=============== =============
Three Months Ended
September 30,
--------------------------
2006 2005
-------------- -----------
Net charge-offs:
On-book $161,864 $109,173
Gain on sale 4,532 47,982
-------------- -----------
$166,396 $157,155
============== ===========
Net charge-offs as a percent of average
receivables:
On-book 5.4% 4.8%
============== ===========
Gain on sale 5.9% 9.7%
============== ===========
Total portfolio 5.4% 5.7%
============== ===========
Net recoveries as a percent of gross
repossession charge-offs:
On-book 48.8% 47.6%
============== ===========
Gain on sale 43.6% 39.9%
============== ===========
Total portfolio 48.6% 45.2%
============== ===========
September June September
30, 30, 30,
2006 2006 2005
------------ ------------ -----------
On-book receivables:
Principal $12,218,713 $11,775,665 $9,462,883
Allowance for loan losses
and nonaccretable
acquisition fees (698,182) (678,657) (605,494)
------------ ------------ -----------
$11,520,531 $11,097,008 $8,857,389
============ ============ ===========
Allowance as a percentage
of on-book receivables 5.7% 5.8% 6.4%
============ ============ ===========
The Company's net margin as reflected on the consolidated
statements of income is as follows:
Three Months Ended
September 30,
-------------------------------
2006 2005
--------------- ---------------
Finance charge income $484,357 $373,736
Other income 31,805 21,186
Interest expense (143,471) (90,271)
--------------- ---------------
Net margin $372,691 $304,651
=============== ===============
Three Months Ended
September 30,
-----------------------------------
2006 2005
------------------ ----------------
Finance charge income 16.1% 16.4%
Other income 1.1 0.9
Interest expense (4.8) (3.9)
------------------ ----------------
Net margin as a percent of
average on-book receivables 12.4% 13.4%
================== ================
The following table provides additional information for
comparative purposes related to the Company's acquisition of Bay View
Acceptance Corporation on May 1, 2006:
Three Months Ended
September 30, 2006
-------------------------
AmeriCredit Total
Core
------------ ------------
Originations $1,549,997 $1,683,969
Average managed receivables $11,437,542 $12,258,765
Net charge-offs $164,348 $166,396
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 6.7% 6.3%
=========================
Net margin $364,986 $372,691
============ ============
Net margin as a percent of
average on-book receivables 13.0% 12.4%
============ ============
September 30, 2006
-------------------------
AmeriCredit Total
Core
------------ ------------
Managed receivables $11,481,748 $12,326,027
Loan delinquency:
(% of ending managed receivables)
31 - 60 days 6.4% 6.0%
Greater than 60 days 2.7 2.5
------------ ------------
Total 9.1% 8.5%
============ ============
Allowance as a percentage of on-book
receivables 6.0% 5.7%
CONTACT: AmeriCredit Corp., Fort Worth
Investor Relations
Caitlin DeYoung, 817-302-7394
or
Media Relations
John Hoffmann, 817-302-7627
SOURCE: AmeriCredit Corp.