Westar Financial's Net Earnings More Than Double to $0.37 Per Share in 1Q02 From 4Q01
TUMWATER, Wash.--July 23, 2001--Westar Financial Services Incorporated (OTC:WEST), the leading automobile e-finance company, today reported its profitability accelerated during the first quarter of fiscal 2002 as volumes from its expanding private label network increased dramatically. Net earnings increased 117% to $.37 per share for its first fiscal quarter of 2002 from $.17 per share in the fourth quarter ended March 30, 2001. In the past 90 days, operating earnings increased 60% to $.48 per share while revenues increased 46% to $146 million.Westar posted its third consecutive profitable quarter, as revenues increased 292% to $146 million from $37 million in the first quarter ended June 30, 2000. First quarter net earnings increased to $866,000, or $0.37 per share. This is an increase of $1.32 per share compared to the first quarter a year ago when the company posted a loss of $2.2 million or $0.95 per share. Operating earnings increased to $1.1 million or $0. 48 per share, which is an improvement of $1.33 per share from the operating loss of $2.0 million or $0.94 per share posted in the first quarter a year ago.
Gross margin was 2.32% in the first quarter of fiscal 2002 compared to 2.86% in 4Q01 and (1.11%) in 1Q01. Gross margin is up dramatically from year ago primarily due to the dramatic increases in volumes. Gross margin is also affected by interest rates, market demand, pricing and timing of asset-based sales into the credit market. "Our margins turned positive last fall and we expect continued improvement in our margins as volumes increase," said Cindy Kay, Vice President.
Overhead expenses increased to $2.2 million in 1Q02, a 4% increase from 4Q01 and a 42% increase from a year ago, when the company moved into its new state-of-the-art facility. As a percent of total revenues, operating expenses were 2% in the first quarter of fiscal 2002, a decline from 4% of first quarter revenues a year ago.
The total value of assets serviced by WEST more than doubled to $509 million at June 30, 2001 from $242 million a year ago.
Credit quality of Westar's managed portfolio demonstrated continued strength, with delinquencies of 1.07% and annualized credit losses of 0.63% at the end of the quarter. At March 31, 2001, delinquencies were 1.17% and annualized credit losses were 0.56%. At June 30, 2000, delinquencies were 1.49% and annualized credit losses were .63%.
WEST is the leading publicly traded automobile-oriented e-commerce financial portal and ASP. Westar originates, decisions, commits to and fulfills consumer financings for itself or others. Westar completed the first entirely electronic Internet automobile purchase and lease transaction in October 1999. The company operates in the western states and nationally through alliances with AmSouth Bancorporation, Mellon Bank, USAA FSB and others.
FINANCIAL HIGHLIGHTS
(unaudited) ($ in thousands, except per share)
For the three months ended 3-month 1-Year
06/30/2001 03/31/2001 06/30/2000 Change Change
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Total revenues $145,701 $100,093 $37,215 46% 292%
Direct costs 142,322 97,234 37,628 46% 278%
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Gross profit 3,379 2,859 (413) 18% n/a
Gross margin 2.32% 2.86% -1.11%
General and
administrative
expenses 2,236 2,159 1,578 4% 42%
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Operating income
(loss) 1,143 700 (1,991) 63% n/a
Operating margin 0.78% 0.70% -5.35% 12% n/a
Net income (loss) 866 406 (2,209)
Net income (loss)
applicable to
common stock $866 $406 $(2,237) 113% n/a
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Net income (loss)
per share $0.37 $0.17 $(0.95)
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Weighted average
number of shares 2,348,170 2,348,170 2,348,120
06/30/2001 03/31/2001 06/30/2000
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Servicing Portfolio $509,024 $410,725 $242,000
Total Assets $12,723 $31,475 $25,009
Total Liabilities $25,919 $45,534 $38,359
Redeemable
preferred stock $1,250 $1,250 $1,250
Net deficit of common
stock equity $(14,445) $(15,309) $(14,600)
Statement regarding "Forward Looking Statements": Statements concerning future performance, developments or events, levels, expansion of operations, growth of consumer financial originations, quality of the company's lease portfolio, the ability to place securitizations, success of the e-commerce model, trends in interest rates, overhead expense variations, results of the year-end audit, various statements concerning expectations for growth or profits and any other guidance on future periods, constitute forward-looking statements which are subject to a number of risks and uncertainties which might cause actual results to differ materially from stated expectations.