AmeriCredit Reports Second Quarter Operating Results
FORT WORTH, Texas--Jan. 16, 2003--AmeriCredit Corp. today announced a net loss of $27.6 million, or $0.18 per share, for its second fiscal quarter ended December 31, 2002, versus earnings of $80.6 million, or $0.91 per share, for the same period a year earlier. This was the first quarter that AmeriCredit structured its securitization transactions as secured financings, which did not require the recognition of gain-on-sale revenue. This net loss also included a $46.6 million pretax impairment of the interest-only receivable from prior securitization transactions.For the six months ended December 31, 2002, AmeriCredit reported net income of $42.6 million, or $0.36 per share, versus earnings of $159.3 million, or $1.79 per share, for the six months ended December 31, 2001.
Automobile loan purchases were $1.89 billion for the second quarter of fiscal 2003, down 7% from loan purchases of $2.04 billion for the second quarter of fiscal 2002. AmeriCredit's managed auto receivables totaled $16.2 billion at December 31, 2002.
Annualized net charge-offs were 5.8% of average managed auto receivables for the second quarter of fiscal 2003. This compares to net charge-offs of 5.3% last quarter and 4.3% for the second quarter of fiscal 2002. Vehicles pending sale at auction totaled 1.4% of the portfolio at December 31, 2002, up from 1.1% at September 30, 2002. Managed auto receivables more than 60 days delinquent were 4.1% of total managed auto receivables at December 31, 2002, compared to 3.8% at December 31, 2001.
"We're seeing continued weakness in recovery values on repossessed vehicles and in the overall economy, causing increases in both loss severity and frequency. Therefore, we are projecting that credit losses will rise during the first half of 2003," said AmeriCredit Chief Executive Officer Michael R. Barrington. "We reduced both loan origination volume and operating expenses in the December quarter to align loan growth with available liquidity. We are committed to maintaining this balance going forward."
REGULATION FD
AmeriCredit provides information to investors on its Web site at www.americredit.com including press releases, conference calls, SEC filings and other financial data.
Pursuant to Regulation FD, the Company provides its expectations regarding future business trends to the public via a press release or 8-K filing. The Company anticipates some risks and uncertainties with its guidance as it continues to align loan growth with available liquidity.
12 mos. ending 12 mos. ending
($ millions) 6/30/03 12/31/03
--------------- ------------------
Net income forecast $70 - 80 $100 - 125
"AmeriCredit expects to be profitable in 2003," said AmeriCredit Chief Financial Officer Daniel E. Berce. "We are revising our guidance to take into account possible changes in the scale of our business given the continued weakness in the overall economy and our projected increase in credit losses in 2003."
AmeriCredit will host a conference call for analysts and investors at 9:00 A.M. Eastern Standard Time on Thursday, January 16, 2003. 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.
AmeriCredit Corp. is the largest independent middle-market auto finance company in North America. Using its branch network and strategic alliances with auto groups and banks the company purchases retail installment contracts entered into by auto dealers with consumers who are typically unable to obtain financing from traditional sources. AmeriCredit has more than one million customers throughout the United States and Canada 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 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 period ended June 30, 2002. Such risks include - but are not limited to - deteriorating economic environment, adverse portfolio performance, reliance on capital markets, fluctuating interest rates, increased competition, regulatory changes and tightening labor markets. 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 Six Months Ended
December 31, December 31,
------------------------ ------------------------
2002 2001 2002 2001
------------ ----------- ------------ -----------
Revenue:
Finance charge
income $133,943 $80,027 $224,572 $176,824
Gain on sale of
receivables - 108,690 132,084 201,620
Servicing fee income 51,630 94,571 159,705 179,806
Other income 5,613 3,377 10,633 6,250
------------ ----------- ------------ -----------
191,186 286,665 526,994 564,500
------------ ----------- ------------ -----------
Costs and expenses:
Operating expenses 109,242 108,390 225,068 207,766
Provision for loan
losses 86,892 16,667 152,676 31,509
Interest expense 39,884 30,557 79,903 66,147
------------ ----------- ------------ -----------
236,018 155,614 457,647 305,422
------------ ----------- ------------ -----------
Income (loss) before
income taxes (44,832) 131,051 69,347 259,078
Income tax provision
(benefit) (17,260) 50,455 26,699 99,745
------------ ----------- ------------ -----------
Net income (loss) $(27,572) $80,596 $42,648 $159,333
============ =========== ============ ===========
Earnings (loss) per
share:
Basic $(0.18) $0.95 $0.36 $1.89
============ =========== ============ ===========
Diluted $(0.18) $0.91 $0.36 $1.79
============ =========== ============ ===========
Weighted average
shares 153,001,207 84,546,353 119,420,462 84,217,345
============ =========== ============ ===========
Weighted average
shares and
assumed incremental
shares 153,042,849 88,669,914 120,053,018 89,253,406
============ =========== ============ ===========
Condensed Consolidated Balance
Sheets
(Unaudited, Dollars in Thousands)
December September
31, 30, June 30,
2002 2002 2002
----------- ----------- -----------
Cash and cash equivalents $215,826 $97,059 $119,445
Finance receivables, net 3,779,648 2,041,316 2,198,391
Interest-only receivables from
Trusts 400,372 556,285 514,497
Investments in Trust receivables 791,343 742,464 691,065
Restricted cash - gain on sale 356,138 386,499 343,570
Restricted cash - securitization
notes 117,205 - -
Restricted cash - medium term
notes 265,877 198,468 27,759
Other assets 407,179 345,011 330,204
----------- ----------- -----------
Total assets $6,333,588 $4,367,102 $4,224,931
=========== =========== ===========
Borrowings under warehouse lines $1,750,000 $1,820,409 $1,751,974
Securitization notes payable 1,792,399 - -
Senior notes 379,668 381,676 418,074
Other notes payable 69,683 64,534 66,811
Other liabilities 424,405 599,642 555,756
----------- ----------- -----------
Total liabilities 4,416,155 2,866,261 2,792,615
Shareholders' equity 1,917,433 1,500,841 1,432,316
----------- ----------- -----------
Total liabilities
and shareholders'
equity $6,333,588 $4,367,102 $4,224,931
=========== =========== ===========
Cash Flow Data
(Unaudited, Dollars in
Thousands) Three Months Ended Six Months Ended
December 31, December 31,
-------------------- --------------------
2002 2001 2002 2001
---------- --------- ---------- ---------
Cash flows from operating
activities:
Net income (loss) $(27,572) $80,596 $42,648 $159,333
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and
amortization 11,383 8,156 22,536 16,469
Provision for loan
losses 86,892 16,667 152,676 31,509
Deferred income taxes (70,491) (26,413) (68,341) 15,178
Accretion of present
value discount (20,328) (35,997) (64,457) (70,235)
Impairment charge 46,648 7,573 65,592 13,969
Non-cash gain on sale
of receivables - (99,859) (124,831) (189,537)
Other (1,789) - 4,240 -
Distributions from Trusts --
gain on sale 47,856 57,130 111,118 127,863
Change in assets and
liabilities:
Other assets 8,175 (2,348) (16,549) (29,465)
Accrued taxes and
expenses (63,572) 27,311 (28,695) 43,225
---------- --------- ---------- ---------
Operating cash flow, excluding
initial deposits to
securitization Trusts and
purchases, principal
collections and sales of
receivables 17,202 32,816 95,937 118,309
Initial deposits to
securitization Trusts (235,621) (38,500) (293,722) (73,000)
---------- --------- ---------- ---------
$(218,419) $(5,684) $(197,785) $45,309
========== ========= ========== =========
Total cash flow generated by
securitization Trusts $105,420 $107,891 $245,651 $197,310
========== ========= ========== =========
Other Financial Data (Unaudited, Dollars in Thousands)
Three Months Ended Six Months Ended
December 31, December 31,
------------------------- -------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------
Loan originations $1,887,003 $2,035,693 $4,306,087 $4,070,912
Loans securitized 2,032,287 1,924,998 4,540,193 3,649,997
Average on-book
receivables $3,136,066 $1,653,046 $2,547,350 $1,808,214
Average serviced
receivables 12,930,404 10,232,783 13,134,949 9,513,853
------------ ------------ ------------ ------------
Average managed
receivables $16,066,470 $11,885,829 $15,682,299 $11,322,067
============ ============ ============ ============
December 31, 2002
-------------------------------------
Auto loan portfolio: On-Book Serviced Total
Managed
----------- ------------ ------------
Principal $3,998,081 $12,210,492 $16,208,573
Allowance for losses (218,433) (1,347,496) (1,565,929)
----------- ------------ ------------
$3,779,648 $10,862,996 $14,642,644
=========== ============ ============
Allowance for losses (%) 5.5% 11.0% 9.7%
=========== ============ ============
December 31, September 30, December 31,
(% of ending portfolio 2002 2002 2001
balance) ----------- ------------ -----------
Loan delinquency:
31 - 60 days 9.2 % 7.6 % 8.5 %
greater than 60 days 4.1 3.5 3.8
----------- ------------ -----------
13.3 11.1 12.3
Repossessions 1.4 1.1 1.1
----------- ------------ -----------
14.7 % 12.2 % 13.4 %
=========== ============ ===========
Three Months Ended Six Months Ended
December 31, December 31,
------------------- -------------------
2002 2001 2002 2001
--------- --------- --------- ---------
Net charge-offs:
On-book $18,705 $13,545 $32,301 $21,808
Serviced 217,897 116,367 409,582 212,317
--------- --------- --------- ---------
$236,602 $129,912 $441,883 $234,125
========= ========= ========= =========
Net charge-offs as a
percent of average
managed receivables 5.8% 4.3% 5.6% 4.1%
========= ========= ========= =========
Managed Basis Data(1)
(Unaudited, Dollars in
Thousands)
Three Months Ended Six Months Ended
December 31, December 31,
------------------- ---------------------
2002 2001 2002 2001
--------- --------- --------- -----------
Finance charge, fee and
other income $704,516 $552,961 $1,391,244 $1,065,505
Funding costs (195,011) (188,309) (397,001) (367,801)
--------- --------- ----------- -----------
Net margin $509,505 $364,652 $994,243 $697,704
========= ========= =========== ===========
Three Months Ended Six Months Ended
December 31, December 31,
------------------- ---------------------
2002 2001 2002 2001
--------- --------- --------- -----------
Finance charge, fee and
other income 17.4 % 18.5 % 17.6 % 18.7 %
Funding costs (4.8) (6.3) (5.0) (6.5)
--------- --------- --------- -----------
Net margin as a
percent of average
managed receivables 12.6 % 12.2 % 12.6 % 12.2 %
========= ========= ========= ===========
Three Months Ended Six Months Ended
December 31, December 31,
------------------- ---------------------
2002 2001 2002 2001
--------- --------- --------- -----------
Operating expenses $109,242 $108,390 $225,068 $207,766
Operating expenses as a
percent of average managed
receivables 2.7% 3.6% 2.8% 3.6%
Tax rate 38.5% 38.5% 38.5% 38.5%
(1) The Company evaluates the profitability of its lending activities based upon the net margin related to its managed auto loan portfolio, including owned and serviced receivables. The Company routinely securitizes its receivables and historically has recorded a gain on the sale of such receivables in the income statement. The net margin on a managed basis presented above assumes that securitized receivables have not been sold and are still on the Company's consolidated balance sheet. Accordingly, no gain on sale or servicing fee income would have been recognized. Instead, finance charges and fees would be recognized over the life of the securitized receivables as accrued and interest and other costs related to the asset-backed securities also would be recognized as incurred.