- 3rd quarter earnings of $104 million, $0.80 per share
- Quarterly origination volume increased to $2.52 billion
- Charge-offs declined to 4.6%
- FY08 earnings guidance issued
FORT WORTH, Texas--(BUSINESS WIRE)--April 30, 2007--AMERICREDIT
CORP. (NYSE:ACF) today announced net income of $104 million, or $0.80
per share, for its fiscal third quarter ended March 31, 2007.
AmeriCredit reported net income of $87 million, or $0.60 per share,
for the same period a year earlier. For the nine months ended March
31, 2007, AmeriCredit reported net income of $273 million, or $2.06
per share, versus earnings of $227 million, or $1.53 per share, for
the nine months ended March 31, 2006. Operating results for the three
and nine months ended March 31, 2007, included Bay View Acceptance
Corporation, acquired on May 1, 2006, and Long Beach Acceptance Corp.
since its acquisition on January 1, 2007.
Net income for the three months ended March 31, 2007, included a
$10 million after-tax gain ($16 million pre-tax), or $0.08 per share,
related to the sale of AmeriCredit's investment in DealerTrack
Holdings, Inc., and a $21 million, or $0.16 per share, adjustment to
reserves for contingent tax positions. Net income for the nine months
ended March 31, 2007 and 2006, included a $33 million after-tax gain
($52 million pre-tax), or $0.25 per share, and a $6 million after-tax
gain ($9 million pre-tax), or $0.04 per share, respectively, related
to the sale of AmeriCredit's investment in DealerTrack Holdings, Inc.
Automobile finance originations increased to $2.52 billion for the
third quarter of fiscal year 2007, compared to $1.61 billion for the
same period last year. Origination volume for the nine months ended
March 31, 2007, was $5.94 billion compared to $4.47 billion for the
same period a year earlier. Managed receivables totaled $15.15 billion
at March 31, 2007, compared to $11.13 billion at March 31, 2006.
Annualized net charge-offs totaled 4.6% of average managed
receivables for the March 2007 quarter compared to 5.2% for the March
2006 quarter. For the nine months ended March 31, 2007, annualized net
charge-offs were 5.2% compared to 5.6% for the same period last year.
Managed auto receivables 31-to-60 days delinquent were 4.1% of the
portfolio at March 31, 2007, compared to 4.7% at March 31, 2006.
Accounts more than 60 days delinquent were 1.5% of the portfolio at
March 31, 2007, compared to 1.6% at March 31, 2006.
"Our strong origination volume and improved credit results this
quarter reflected both the normal seasonal lifts and the impact of our
transition to full-spectrum lending. Full-spectrum lending provides an
opportunity to efficiently originate an optimal mix of business and
positions us to continue to grow our business, manage credit
volatility and generate solid returns for our shareholders," said
President and Chief Executive Officer Dan Berce.
Regulation FD
Pursuant to Regulation FD, the Company provides its expectations
regarding future business trends to the public via a press release or
8-K filing. The Company anticipates some risks and uncertainties with
its business.
Net income and EPS forecasts
Fiscal year ending
June 30, 2008
--------------------
Net income ($ millions) $345 - $375
Earnings per share $2.65 - $2.85
The forecasts include the results of Long Beach Acceptance Corp.
for fiscal year 2008. The Company completed this acquisition on
January 1, 2007. Long Beach Acceptance Corp. provides financing to
customers with near prime credit scores. Therefore, its net interest
margin and credit losses are historically lower than AmeriCredit's.
The forecasts for fiscal year 2008 incorporate, but are not limited
to, the following assumptions:
- Origination volume of $10.0 to $10.5 billion;
- Net interest margin of 10.5% to 11.5% of average receivables;
- Operating expenses of 2.6% to 3.0% of the portfolio;
- Credit losses to average between 4.0% and 5.0% 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 4.5% and 5.5%.
These forecasts do not assume 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 approximately $15
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, 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 Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Revenue:
Finance charge
income $564,104 $414,440 $1,550,678 $1,182,251
Servicing income 571 15,006 9,009 61,792
Other income 50,598 25,658 154,843 79,452
------------ ------------ ------------ ------------
615,273 455,104 1,714,530 1,323,495
------------ ------------ ------------ ------------
Costs and
expenses:
Operating
expenses 109,446 89,686 291,829 251,470
Provision for
loan losses 189,028 118,769 537,733 410,494
Interest expense 186,610 107,106 485,941 298,556
Restructuring
charges 757 1,874 1,143 2,126
------------ ------------ ------------ ------------
485,841 317,435 1,316,646 962,646
------------ ------------ ------------ ------------
Income before
income taxes 129,432 137,669 397,884 360,849
Income tax
provision 25,700 50,937 124,490 133,510
------------ ------------ ------------ ------------
Net income $103,732 $86,732 $273,394 $227,339
============ ============ ============ ============
Earnings per
share:
Basic $0.88 $0.67 $2.29 $1.68
============ ============ ============ ============
Diluted $0.80 $0.60 $2.06 $1.53
============ ============ ============ ============
Weighted average
shares 117,540,639 129,629,967 119,539,921 135,397,387
============ ============ ============ ============
Weighted average
shares and
assumed
incremental
shares 131,166,057 144,954,396 133,693,242 150,332,001
============ ============ ============ ============
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
March 31, June 30, March 31,
2007 2006 2006
------------ ------------ ------------
Cash and cash equivalents $615,395 $513,240 $700,800
Finance receivables, net 14,367,447 11,097,008 9,770,018
Credit enhancement assets 5,977 104,624 203,208
Restricted cash -
securitization notes payable 1,144,173 860,935 803,110
Restricted cash - credit
facilities 194,693 140,042 101,981
Property and equipment, net 63,393 57,225 58,343
Deferred income taxes 153,521 78,789 60,795
Goodwill 200,497 14,435 -
Other assets 139,815 201,567 209,981
------------ ------------ ------------
Total assets $16,884,911 $13,067,865 $11,908,236
============ ============ ============
Credit facilities $3,004,774 $2,106,282 $1,435,134
Securitization notes payable 10,883,909 8,518,849 7,867,074
Senior notes - - 153,869
Convertible debt 750,000 200,000 200,000
Funding payable 93,170 54,623 54,559
Accrued taxes and expenses 188,984 155,799 160,899
Other liabilities 14,404 23,426 20,998
------------ ------------ ------------
Total liabilities 14,935,241 11,058,979 9,892,533
------------ ------------ ------------
Shareholders' equity 1,949,670 2,008,886 2,015,703
------------ ------------ ------------
Total liabilities and
shareholders' equity $16,884,911 $13,067,865 $11,908,236
============ ============ ============
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
----------------------- -----------------------
2007 2006 2007 2006
----------- ----------- ----------- -----------
Cash flows from
operating activities:
Net income $103,732 $86,732 $273,394 $227,339
Adjustments to
reconcile net
income to net cash
provided by
operating
activities:
Depreciation and
amortization 4,528 9,506 24,025 27,635
Accretion and
amortization of
loan fees (3,307) (5,787) (17,266) (12,535)
Provision for loan
losses 189,028 118,769 537,733 410,494
Deferred income
taxes (25,754) (20,028) (22,186) (22,112)
Accretion of
present value
discount (439) (8,029) (6,394) (30,687)
Stock-based
compensation
expense 5,054 3,392 14,375 12,690
Gain on sale of
available for
sale securities (15,801) - (51,997) (8,847)
Other 1,273 1,003 3,719 314
Changes in assets
and liabilities:
Other assets 23,869 73,385 27,174 83,295
Accrued taxes and
expenses 17,840 47,509 4,485 28,462
----------- ----------- ----------- -----------
Net cash provided by
operating activities 300,023 306,452 787,062 716,048
----------- ----------- ----------- -----------
Cash flows from
investing activities:
Purchase of
receivables (2,542,356) (1,947,168) (6,283,184) (5,093,811)
Principal
collections and
recoveries on
receivables 1,621,219 1,156,337 4,252,500 3,109,116
Distributions from
gain on sale Trusts 248 92,463 92,957 346,136
Net (purchases)
sales of property
and equipment (9,736) (2,004) (12,737) 30,554
Proceeds from sale
of available for
sale securities 18,661 - 62,961 11,992
Acquisition of Long
Beach, net of cash
acquired (257,813) - (257,813) -
Net change in
restricted cash and
other (197,472) 320,092 (209,284) 187,834
----------- ----------- ----------- -----------
Net cash used by
investing activities (1,367,249) (380,280) (2,354,600) (1,408,179)
----------- ----------- ----------- -----------
Cash flows from
financing activities:
Net change in credit
facilities 401,371 202,227 695,970 444,160
Net change in
securitization
notes payable 384,858 (8,491) 771,631 699,984
Net change in senior
notes and other (3,878) 3,093 (15,271) (18,724)
Proceeds from
issuance of
convertible debt - - 497,376 -
Repurchase of common
stock - (23,117) (323,964) (422,046)
Proceeds from
issuance of common
stock 4,638 14,967 47,864 24,148
----------- ----------- ----------- -----------
Net cash provided by
financing activities 786,989 188,679 1,673,606 727,522
----------- ----------- ----------- -----------
Net (decrease)
increase in cash and
cash equivalents (280,237) 114,851 106,068 35,391
Effect of Canadian
exchange rate changes
on cash and cash
equivalents (1,754) (196) (3,913) 1,908
Cash and cash
equivalents at
beginning of period 897,386 586,145 513,240 663,501
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period $615,395 $700,800 $615,395 $700,800
=========== =========== =========== ===========
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Origination volume $2,518,336 $1,614,267 $5,943,072 $4,473,939
Loans securitized 1,919,503 1,000,002 4,895,244 3,702,707
Average on-book
receivables $14,669,061 $10,115,082 $12,993,241 $9,575,795
Average gain on
sale receivables 31,500 902,246 132,185 1,443,547
------------ ------------ ------------ ------------
Average managed
receivables $14,700,561 $11,017,328 $13,125,426 $11,019,342
============ ============ ============ ============
March 31, June 30, March 31,
2007 2006 2006
------------ ------------ ------------
On-book
receivables $15,123,907 $11,775,665 $10,382,505
Gain on sale
receivables 28,979 421,037 750,637
------------ ------------ ------------
Managed
receivables $15,152,886 $12,196,702 $11,133,142
============ ============ ============
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Operating expenses $109,446 $89,686 $291,829 $251,470
Operating expenses
as a percent of
average managed
receivables 3.0% 3.3% 3.0% 3.0%
Tax rate 19.86% 37.00% 31.29% 37.00%
March 31, June 30, March 31,
2007 2006 2006
------------ ------------ ------------
Loan delinquency:
On-book:
(% of ending on-
book
receivables)
31 - 60 days 4.1% 5.0% 4.5%
Greater than
60 days 1.5 2.0 1.5
------------ ------------ ------------
Total 5.6% 7.0% 6.0%
============ ============ ============
Gain on sale:
(% of ending
gain on sale
receivables)
31 - 60 days 0.8% 9.2% 7.0%
Greater than
60 days 0.4 3.8 3.3
------------ ------------ ------------
Total 1.2% 13.0% 10.3%
============ ============ ============
Total portfolio:
(% of ending
managed
receivables)
31 - 60 days 4.1% 5.1% 4.7%
Greater than
60 days 1.5 2.1 1.6
------------ ------------ ------------
Total 5.6% 7.2% 6.3%
============ ============ ============
Three Months Ended Nine Months Ended
March 31, March 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) 5.0% 5.4% 6.0% 6.1%
============ ============ ============ ============
Gain on sale (%
of average gain
on sale
receivables) 1.5% 7.4% 2.8% 9.2%
============ ============ ============ ============
Total portfolio
(% of average
managed
receivables) 5.0% 5.6% 6.0% 6.5%
============ ============ ============ ============
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Net charge-offs:
On-book $165,117 $122,119 $510,134 $359,635
Gain on sale 58 19,020 4,874 103,659
------------ ------------ ------------ ------------
$165,175 $141,139 $515,008 $463,294
============ ============ ============ ============
Net charge-offs as
a percent of
average
receivables:
On-book 4.6% 4.9% 5.2% 5.0%
============ ============ ============ ============
Gain on sale 0.7% 8.5% 4.9% 9.6%
============ ============ ============ ============
Total portfolio 4.6% 5.2% 5.2% 5.6%
============ ============ ============ ============
Net recoveries as
a percent of
gross
repossession
charge-offs:
On-book 49.5% 50.6% 49.0% 48.9%
============ ============ ============ ============
Gain on sale 60.7% 45.0% 43.9% 41.4%
============ ============ ============ ============
Total portfolio 49.5% 49.8% 49.0% 47.2%
============ ============ ============ ============
March 31, June 30, March 31,
2007 2006 2006
------------ ------------ ------------
On-book
receivables:
Principal $15,123,907 $11,775,665 $10,382,505
Allowance for
loan losses and
nonaccretable
acquisition
fees (756,460) (678,657) (612,487)
------------ ------------ ------------
$14,367,447 $11,097,008 $9,770,018
============ ============ ============
Allowance as a
percentage of
on-book
receivables 5.0% 5.8% 5.9%
============ ============ ============
The Company's net margin as reflected on the consolidated
statements of income, excluding the pre-tax gains on the sale of the
Company's investment in DealerTrack Holdings, Inc., of $16 million
realized during the three months ended March 31, 2007, and $52 million
and $9 million realized during the nine months ended March 31, 2007
and 2006, respectively, is as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- -----------------------
2007 2006 2007 2006
--------- --------- ----------- -----------
Finance charge income $564,104 $414,440 $1,550,678 $1,182,251
Other income 34,797 25,658 102,846 70,605
Interest expense (186,610) (107,106) (485,941) (298,556)
--------- --------- ----------- -----------
Net margin $412,291 $332,992 $1,167,583 $954,300
========= ========= =========== ===========
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- -----------------------
2007 2006 2007 2006
--------- --------- ----------- -----------
Finance charge income 15.6% 16.6% 15.9% 16.5%
Other income 1.0 1.1 1.1 1.0
Interest expense (5.2) (4.3) (5.0) (4.2)
--------- --------- ----------- -----------
Net margin as a percent
of average on-book
receivables 11.4% 13.4% 12.0% 13.3%
========= ========= =========== ===========
The following table provides additional information for
comparative purposes related to the Company's acquisition of Bay View
Acceptance Corporation on May 1, 2006, and Long Beach Acceptance Corp.
on January 1, 2007:
Three Months Ended Nine Months Ended
March 31, 2007 March 31, 2007
------------------------- -------------------------
AmeriCredit AmeriCredit
Core Total Core Total
------------ ------------ ------------ ------------
Origination volume $2,020,236 $2,518,336 $5,181,483 $5,943,072
Average managed
receivables $11,943,812 $14,700,561 $11,653,892 $13,125,426
Net charge-offs $153,378 $165,175 $498,883 $515,008
Net charge-offs as
a percent of
average
receivables 5.2% 4.6% 5.7% 5.2%
============ ============ ============ ============
Contracts
receiving a
payment deferral
as an average
quarterly
percentage of
average
receivables
outstanding 5.7% 5.0% 6.5% 6.0%
============ ============ ============ ============
Net margin $376,077 $412,291 $1,115,273 $1,167,583
============ ============ ============ ============
Net margin as a
percent of
average on-book
receivables 12.7% 11.4% 12.9% 12.0%
============ ============ ============ ============
March 31, 2007
-------------------------
AmeriCredit
Core Total
------------ ------------
Managed
receivables $12,280,054 $15,152,886
Loan delinquency:
(% of ending
managed
receivables)
31 - 60 days 4.9% 4.1%
Greater than 60
days 1.7 1.5
------------ ------------
Total 6.6% 5.6%
============ ============
Allowance as a
percentage of on-
book receivables 5.7% 5.0%
============ ============
CONTACT: AmeriCredit Corp.
Investor Relations
Caitlin DeYoung, 817-302-7394
or
Media Relations
John Hoffmann, 817-302-7627
SOURCE: AmeriCredit Corp.