Onyx Acceptance Reports Record Earnings and a $0.25 Dividend for the Second Quarter
Diluted Earnings Per Share Increase 253%
FOOTHILL RANCH, Calif., July 26 -- Onyx Acceptance Corporation announced today its financial and operational results for the quarter ended June 30, 2004, and declared a $0.25 dividend.
Net income and earnings per diluted share for the quarter were $3.7 million and $0.60 respectively, compared to $921 thousand and $0.17 for the quarter ended June 30, 2003. Financial highlights for the quarter were:
* Net Income increased $2.8 million, or $0.43 per diluted share.
* Total Revenues increased 12% over the second quarter of 2003.
* Operating expense ratio declined to 2.6% and 2.8% for the quarter and
six-month periods ended June 30.
* Net Charge-offs decreased by 39% to 1.33% annualized versus the second
quarter of 2003.
* 30+ day delinquency decreased to 0.90% versus 1.37% as of
December 31, 2003.
* A $0.25 dividend was declared.
"We are extremely pleased with the financial and operational results of the quarter. The excellent performance of our portfolio has produced a steady rise in our quarterly cash flows and a reduction in collection related expenses. We look forward to continued improvement in all facets of the Company during the second half of 2004," said John Hall, President and Chief Executive Officer.
Revenues:
Total revenues for the second quarter 2004 increased to $28.7 million compared to $25.6 million for the second quarter of 2003. For the six-month period ended June 30, 2004, total revenues were $56.7 million, compared to $50.1 million for the same period in 2003. Total revenues are comprised of net interest income, service fee income and securitization gains. Net interest income was $6.9 million for the quarter ended June 30, 2004, compared to $7.2 million for the same period in 2003. For the six-month period ended June 30, 2004, net interest income was $12.7 million, versus $14.3 million for the same period in 2003. The decrease in net interest income is principally due to the increase in the balance of the Company's renewable unsecured subordinated notes outstanding. Service fee income was $14.3 million for the second quarter of 2004, compared to $13.2 million for the second quarter of 2003. For the six-month period ended June 30, 2004, service fee income increased to $27.4 million, versus $26.4 million for the same period in 2003. Service fee income is principally comprised of contractual servicing fees earned on Managed Receivables. Managed Receivables include contracts held for sale and investment, contracts sold on a whole loan basis and outstanding securitized contracts. Managed Receivables were approximately $3.5 billion as of June 2004, versus $2.9 billion as of June 2003. Service fee income also includes investment interest, late fees, extension fees, document fees and other fees charged to the customer. The gain on the second quarter securitization decreased to $7.5 million compared to a gross gain of $8.3 million for the same period in 2003. The decrease in gain was principally due to a reduction in the interest rate spread on the 2004-B securitization. For the six-month period ended June 30, 2004, total gains were $16.6 million, versus a net gain of $9.3 million for the same period in 2003.
Operating Expenses:
Operating expenses were $22.0 million, or 2.6% of managed receivables for the second quarter of 2004, versus $23.6 million, or 3.3% of managed receivables for the same period in 2003. For the six-month period ended June 30, 2004, total operating expenses were $45.8 million, compared to $46.0 million for the same period in 2003. The decrease in total operating expenses stems from a reduction in collection related charges resulting from improvements in the Company's delinquency and loss rates.
Portfolio Performance:
Total 30+ day delinquency as a percentage of the serviced portfolio decreased to 0.90% at June 30, 2004, versus 1.37% as of December 31, 2003. Annualized net charge-offs as a percent of the average serviced portfolio decreased to 1.33% for the second quarter of 2004, from 2.19% for the same period in 2003. The Company's serviced repossessed inventory decreased to $11.9 million or 0.42% of the serviced portfolio at the end of June 2004, from $16.0 million or 0.55% of the serviced portfolio at June 30, 2003. The Company's allowance for estimated credit losses on securitized assets was 3.6% at June 30, 2004, and 4.1% at December 31, 2003.
Contract Purchases:
Contract purchases, including Onyx Gold volume, for the quarter ended June 30, 2004 were $687.6 million, compared to $425.5 million for the second quarter of 2003.
Dividend:
The Company's Board of Directors voted to approve a cash dividend of $0.25 per share for the second quarter of 2004. The dividend will be paid on August 27, 2004 for shareholders of record as of August 13, 2004.
Stock Repurchases:
During the second quarter, the Company purchased 166,000 shares of its Common Stock as part of its stock repurchase program authorized by its Board of Directors in April 2004. Repurchases may continue from time to time at prevailing market prices, through open market or unsolicited negotiated transactions, depending upon market conditions. The Company may discontinue purchases at any time that management determines additional purchases are not warranted.
Onyx Acceptance Corporation is a specialized automobile finance company based in Foothill Ranch, CA. Onyx provides financing to franchised and select independent dealerships throughout the United States.
This news release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, including statements regarding the Company's cash flow, revenue and growth opportunities, the performance of the Company's outstanding portfolio and securitization transactions, the Company's expected loss, charge-off and delinquency rates, the continued availability of liquidity sources in coming quarters and the performance of the economy in the United States. Other important factors are detailed in the Company's quarterly report on Form 10-Q for the quarter ended March 31, 2004 and annual report on Form 10-K for the year ended December 31, 2003.
For information about Onyx Acceptance Corporation, please visit the Investor Relations section of our website at www.onyxco.com.
ONYX ACCEPTANCE CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED) (UNAUDITED)
(In Thousands) (In Thousands)
June 30, December 31,
2004 2003
ASSETS
CASH & CASH EQUIVALENTS $31,552 $15,434
RESTRICTED CASH 1,489 500
CONTRACTS HELD FOR SALE --(1) 150,291 195,347
CONTRACTS HELD FOR INVESTMENT --(2) 8,966 8,812
CREDIT ENHANCEMENT ASSETS 181,634 182,344
OTHER ASSETS 13,911 11,378
TOTAL ASSETS $387,843 $413,815
LIABILITIES AND EQUITY
LIABILITIES
DEBT $206,852 $264,782
OTHER LIABILITIES 95,284 69,114
TOTAL LIABILITIES 302,136 333,896
TOTAL EQUITY 85,707 79,919
TOTAL LIABILITIES AND
EQUITY $387,843 $413,815
(1) Net of Unearned Discounts
(2) Net of Unearned Discounts and Allowance
ONYX ACCEPTANCE CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
June 30, June 30,
(In Thousands) (In Thousands)
2004 2003 2004 2003
REVENUES:
Net Interest Income $6,909 $7,181 $12,657 $14,321
Gain on Sale of
Contracts, net 7,516 5,205 16,591 9,332
Service Fee Income 14,310 13,188 27,403 26,426
Total Revenues 28,735 25,574 56,651 50,079
EXPENSES:
Provision for Credit
Losses 442 396 755 1,254
Operating Expenses 21,986 23,603 45,776 45,998
Total Expenses 22,428 23,999 46,531 47,252
Income before Income
Taxes 6,307 1,575 10,120 2,827
Income Taxes 2,554 654 4,079 1,174
NET INCOME $3,753 $921 $6,041 $1,653
NET INCOME PER SHARE --
BASIC $0.71 $0.18 $1.15 $0.32
NET INCOME PER SHARE --
DILUTED $0.60 $0.17 $0.97 $0.31
BASIC SHARES
OUTSTANDING 5,259,141 5,088,806 5,257,741 5,087,800
DILUTED SHARES
OUTSTANDING 6,295,642 5,383,121 6,238,389 5,270,199
ONYX ACCEPTANCE CORPORATION and SUBSIDIARIES
DELINQUENCY AND LOSS RATES
(UNAUDITED)
(Dollars In Thousands)
June 30, December 31,
2004 2003
Delinquency Experience
Number of Number of
Contracts $ Contracts $
Serviced Portfolio 274,343 $2,849,279 280,459 $2,843,446
Managed Portfolio 30,600 $631,585 9,614 $198,281
Serviced Delinquency
31 to 59 days 3,397 $18,319 4,664 $28,084
60 to 89 days 816 4,136 1,047 5,889
90 days or more 644 3,213 943 4,955
Total 4,857 $25,668 6,654 $38,928
Delinquency as a
percentage of number and
amount of serviced portfolio
Net of Repossessed
Inventory and Bankruptcies 1.77% 0.90% 2.37% 1.37%
Three Months Six Months
Ended Ended
June 30, June 30,
Loss Experience
2004 2003 2004 2003
Average Portfolio
Serviced during
the period $2,842,317 $2,892,493 $2,844,977 $2,896,998
Gross Charge-offs $13,468 $19,092 $29,987 $41,355
Recoveries $4,007 $3,256 $7,940 $6,807
Net Charge-offs $9,461 $15,836 $22,047 $34,548
Net Charge-offs as a
percentage of averaged
serviced portfolio
outstanding during
the period.* 1.33% 2.19% 1.55% 2.39%
*Annualized
Onyx Acceptance Corporation
The table below illustrates the cumulative net credit loss performance of
each of the securitized pools outstanding for the period from the date of
securitization through June 30, 2004 stated as a percentage of the
original principal balance.
MONTH
1 00-A 00-B 00-C 00-D 01-A 01-B
2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
4 0.02% 0.02% 0.01% 0.00% 0.00% 0.01%
5 0.04% 0.04% 0.03% 0.02% 0.02% 0.03%
6 0.11% 0.10% 0.06% 0.07% 0.07% 0.10%
7 0.18% 0.17% 0.11% 0.15% 0.12% 0.18%
8 0.37% 0.30% 0.26% 0.26% 0.20% 0.30%
9 0.63% 0.44% 0.41% 0.39% 0.31% 0.39%
10 0.87% 0.67% 0.65% 0.50% 0.47% 0.50%
11 1.05% 0.90% 0.85% 0.65% 0.60% 0.65%
12 1.27% 1.11% 1.08% 0.85% 0.77% 0.77%
13 1.59% 1.38% 1.29% 1.03% 0.95% 0.89%
14 1.82% 1.57% 1.42% 1.25% 1.14% 1.04%
15 2.03% 1.84% 1.65% 1.41% 1.31% 1.19%
16 2.25% 2.08% 1.93% 1.62% 1.47% 1.33%
17 2.48% 2.26% 2.16% 1.86% 1.64% 1.43%
18 2.64% 2.42% 2.42% 2.04% 1.78% 1.55%
19 2.80% 2.69% 2.65% 2.20% 1.96% 1.67%
20 2.98% 2.96% 2.97% 2.41% 2.10% 1.80%
21 3.25% 3.20% 3.25% 2.60% 2.25% 1.94%
22 3.52% 3.44% 3.48% 2.75% 2.36% 2.09%
23 3.69% 3.69% 3.70% 2.92% 2.49% 2.23%
24 3.91% 3.94% 3.95% 3.03% 2.61% 2.35%
25 4.12% 4.18% 4.18% 3.16% 2.75% 2.47%
26 4.32% 4.39% 4.37% 3.32% 2.86% 2.57%
27 4.52% 4.57% 4.54% 3.45% 3.01% 2.67%
28 4.71% 4.74% 4.74% 3.59% 3.12% 2.77%
29 4.87% 4.91% 4.88% 3.71% 3.27% 2.87%
30 5.04% 5.07% 5.03% 3.86% 3.41% 2.96%
31 5.23% 5.22% 5.18% 4.00% 3.52% 3.04%
32 5.35% 5.36% 5.33% 4.09% 3.60% 3.11%
33 5.48% 5.53% 5.43% 4.20% 3.69% 3.19%
34 5.61% 5.67% 5.57% 4.28% 3.78% 3.28%
35 5.74% 5.80% 5.67% 4.39% 3.87% 3.35%
36 5.85% 5.91% 5.77% 4.47% 3.93% 3.41%
37 5.96% 6.04% 5.90% 4.55% 4.03% 3.48%
38 6.06% 6.15% 5.99% 4.64% 4.10% 3.51%
39 6.16% 6.24% 6.09% 4.73% 4.16% 3.56%
40 6.25% 6.35% 6.17% 4.81% 4.20%
41 6.33% 6.43% 6.24% 4.85% 4.24%
42 6.41% 6.53% 6.31% 4.91% 4.28%
43 6.48% 6.60% 6.39% 4.95%
44 6.54% 6.67% 6.47% 4.98%
45 6.59% 6.76% 6.53% 5.02%
46 6.62% 6.82% 6.60%
47 6.86%
MONTH
1 01-C 01-D 02-A 02-B 02-C 02-D
2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
4 0.00% 0.00% 0.01% 0.00% 0.00% 0.00%
5 0.02% 0.02% 0.01% 0.01% 0.01% 0.01%
6 0.05% 0.04% 0.02% 0.04% 0.06% 0.03%
7 0.11% 0.08% 0.07% 0.10% 0.11% 0.07%
8 0.18% 0.14% 0.12% 0.17% 0.17% 0.15%
9 0.29% 0.22% 0.19% 0.23% 0.26% 0.30%
10 0.38% 0.32% 0.26% 0.33% 0.34% 0.37%
11 0.48% 0.44% 0.34% 0.41% 0.42% 0.44%
12 0.59% 0.51% 0.39% 0.49% 0.51% 0.51%
13 0.70% 0.59% 0.48% 0.58% 0.60% 0.59%
14 0.78% 0.69% 0.56% 0.68% 0.70% 0.67%
15 0.89% 0.77% 0.64% 0.75% 0.79% 0.75%
16 1.00% 0.85% 0.74% 0.84% 0.89% 0.79%
17 1.11% 0.94% 0.83% 0.93% 0.98% 0.88%
18 1.23% 1.03% 0.91% 1.02% 1.07% 0.99%
19 1.34% 1.10% 1.00% 1.10% 1.16% 1.07%
20 1.45% 1.19% 1.12% 1.16% 1.29% 1.15%
21 1.58% 1.30% 1.20% 1.26% 1.38% 1.22%
22 1.71% 1.39% 1.27% 1.34% 1.48% 1.30%
23 1.84% 1.51% 1.39% 1.44% 1.60%
24 1.92% 1.59% 1.49% 1.52% 1.69%
25 2.02% 1.67% 1.60% 1.60% 1.76%
26 2.13% 1.73% 1.69% 1.66%
27 2.25% 1.80% 1.76% 1.73%
28 2.33% 1.89% 1.82% 1.77%
29 2.43% 1.96% 1.93%
30 2.52% 2.01% 1.99%
31 2.62% 2.06% 2.02%
32 2.72% 2.09%
33 2.81% 2.14%
34 2.89% 2.19%
35 2.92%
36 2.97%
37 3.00%
MONTH
1 03-A 03-B 03-C 03-D 04-A 04-B
2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
4 0.00% 0.01% 0.00% 0.01% 0.02%
5 0.01% 0.02% 0.01% 0.02% 0.05%
6 0.02% 0.04% 0.03% 0.05% 0.09%
7 0.07% 0.06% 0.08% 0.08%
8 0.11% 0.12% 0.11% 0.15%
9 0.17% 0.21% 0.18% 0.21%
10 0.24% 0.27% 0.23% 0.27%
11 0.31% 0.35% 0.31%
12 0.39% 0.42% 0.35%
13 0.44% 0.49% 0.42%
14 0.50% 0.54%
15 0.59% 0.60%
16 0.67%
17 0.74%
18 0.81%
19 0.89%