Onyx Acceptance Reports Record Earnings and a $0.25 Dividend for the Fourth Quarter
Diluted Earnings per Share Increase 123%
FOOTHILL RANCH, Calif., Oct. 27 -- Onyx Acceptance Corporation announced today its financial and operational results for the quarter ended September 30, 2004, and declared a $0.25 per share dividend.
Net income and earnings per diluted share for the quarter were $4.4 million and $0.69 respectively, compared to $1.8 million and $0.31 for the quarter ended September 30, 2003. Financial highlights for the quarter were:
* Net Income increased $2.5 million, or $0.38 per diluted share over the
third quarter of 2003.
* Total Revenues increased 14% over the third quarter of 2003.
* Operating expense ratio declined to 2.6% and 2.8% for the quarter and
nine-month periods ended September 30, 2004.
* Net Charge-offs decreased by 38% to 1.23%, annualized, versus the
third quarter of 2003.
* 30+ day delinquency decreased to 0.87% versus 1.37% as of
December 31, 2003.
* A $0.25 per share dividend was declared.
Revenues:
Total revenues for the third quarter 2004 increased to $30.8 million compared to $27.1 million for the third quarter of 2003. For the nine-month period ended September 30, 2004, total revenues were $87.5 million, compared to $77.2 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 $7.3 million for the quarter ended September 30, 2004, compared to $4.8 million for the same period in 2003. For the nine-month period ended September 30, 2004, net interest income was $20.0 million, versus $19.1 million for the same period in 2003. The increase in net interest income is principally due to an increase in interest income generated from the Company's retained interest in securitized assets. Service fee income was $15.0 million for the third quarter of 2004, compared to $13.6 million for the third quarter of 2003. For the nine-month period ended September 30, 2004, service fee income increased to $42.4 million, versus $40.0 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 with servicing retained and outstanding securitized contracts. Managed receivables were approximately $3.5 billion as of September 30, 2004, versus $2.9 billion as of September 30, 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 third quarter securitization decreased to $8.5 million compared to a gross gain of $9.2 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-C securitization. For the nine-month period ended September 30, 2004, total gains were $25.1 million, versus net gains of $18.1 million for the same period in 2003
Operating Expenses:
Operating expenses were $22.8 million, or 2.6% of managed receivables for the third quarter of 2004, versus $23.0 million, or 3.2% of managed receivables for the same period in 2003. For the nine-month period ended September 30, 2004, total operating expenses were $68.6 million, compared to $69.0 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 0.87% at September 30, 2004, versus 1.37% as of December 31, 2003. Annualized net charge-offs as a percent of the average serviced portfolio decreased to 1.23% for the third quarter of 2004, from 1.98% for the same period in 2003. The Company's serviced repossessed inventory decreased to $13.1 million or 0.46% of the serviced portfolio at the end of September 2004, from $15.7 million or 0.55% of the serviced portfolio at September 30, 2003. The Company's allowance for estimated credit losses on securitized assets was 3.5% at September 30, 2004, compared to 4.1% at December 31, 2003.
Contract Purchases:
Contract purchases, including Onyx Gold volume, for the quarter ended September 30, 2004 were $454.1 million, compared to $457.8 million for the third quarter of 2003.
Dividend:
The Company's Board of Directors voted to approve a cash dividend of $0.25 per share for the fourth quarter of 2004. The dividend will be paid on November 22, 2004 for shareholders of record as of November 8, 2004.
Capital One Merger:
On September 22, 2004, the Company announced the signing of a definitive agreement under which Capital One Auto Finance, Inc. (COAF) will acquire Onyx for approximately $191 million in an all-cash transaction. The acquisition will combine COAF, an auto finance provider through auto dealers and direct to consumers, with Onyx. Ranked by annual originations, the acquisition will create the 2nd largest independent auto lender in the United States. Under the terms of the agreement, Onyx shareholders will receive cash of $28 per share. The transaction, which was approved by the boards of directors of both companies, is subject to regulatory and Onyx shareholder approval and is expected to close in the fourth quarter of 2004 or early in the first quarter of 2005.
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 pending merger with COAF, 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 June 30, 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)
September 30, December 31,
2004 2003
ASSETS
CASH & CASH EQUIVALENTS $28,367 $15,434
RESTRICTED CASH 1,576 500
CONTRACTS HELD FOR SALE - (1) 161,573 195,347
CONTRACTS HELD FOR INVESTMENT- (2) 10,900 8,812
CREDIT ENHANCEMENT ASSETS 184,269 182,344
OTHER ASSETS 12,449 11,378
TOTAL ASSETS $399,134 $413,815
LIABILITIES AND EQUITY
LIABILITIES
DEBT $207,712 $264,782
OTHER LIABILITIES 95,056 69,114
TOTAL LIABILITIES 302,768 333,896
TOTAL EQUITY 96,366 79,919
TOTAL LIABILITIES AND
EQUITY $399,134 $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 Nine Months Ended
September 30, September 30,
(In Thousands) (In Thousands)
2004 2003 2004 2003
REVENUES:
Net Interest Income $7,329 $4,754 $19,986 $19,075
Gain on Sale of
Contracts, net 8,508 8,725 25,099 18,057
Service Fee Income 15,003 13,616 42,406 40,042
Total Revenues 30,840 27,095 87,491 77,174
EXPENSES:
Provision for Credit
Losses 760 967 1,515 2,221
Operating Expenses 22,821 22,986 68,597 68,984
Total Expenses 23,581 23,953 70,112 71,205
Income before Income
Taxes 7,259 3,142 17,379 5,969
Income Taxes 2,903 1,304 6,982 2,478
NET INCOME $4,356 $1,838 $10,397 $3,491
NET INCOME PER SHARE -
BASIC $0.83 $0.36 $1.98 $0.69
NET INCOME PER SHARE -
DILUTED $0.69 $0.31 $1.66 $0.63
BASIC SHARES
OUTSTANDING 5,225,551 5,103,395 5,247,011 5,092,998
DILUTED SHARES
OUTSTANDING 6,310,967 6,002,979 6,262,581 5,514,459
ONYX ACCEPTANCE CORPORATION and SUBSIDIARIES
DELINQUENCY AND LOSS RATES
(UNAUDITED)
(Dollars In Thousands)
September 30, December 31,
2004 2003
Delinquency Experience
Number of Number of
Contracts $ Contracts $
Serviced Portfolio
(excluding gold) 272,014 $2,852,609 280,459 $2,843,446
Gold Portfolio 30,720 $602,742 9,614 $198,281
Total Managed
Portfolio 302,734 $3,455,351 290,073 $3,041,727
Serviced Delinquency
31 to 59 days 2,968 $16,315 4,664 $28,084
60 to 89 days 882 4,735 1,047 5,889
90 days or more 752 3,812 943 4,955
Total 4,602 $24,862 6,654 $38,928
Delinquency as a
percentage of number
and amount of
serviced portfolio
Net of Repossessed
Inventory and
Bankruptcies 1.69% 0.87% 2.37% 1.37%
Three Months Ended Nine Months Ended
September 30, September 30,
Loss Experience
2004 2003 2004 2003
Average Serviced
Portfolio during
the period $2,852,197 $2,873,953 $2,847,384 $2,889,316
Gross Charge-offs $12,312 $17,625 $42,299 $57,611
Recoveries $3,515 $3,370 $11,455 $10,178
Net Charge-offs $8,797 $14,255 $30,844 $47,433
Net Charge-offs as a
percentage of averaged
serviced portfolio
outstanding during
the period.* 1.23% 1.98% 1.44% 2.19%
*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 September 30, 2004 stated as a percentage of the
original principal balance.
Month 00-A 00-B 00-C 00-D 01-A 01-B
1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3 0.02% 0.02% 0.01% 0.00% 0.00% 0.01%
4 0.04% 0.04% 0.03% 0.02% 0.02% 0.03%
5 0.11% 0.10% 0.06% 0.07% 0.07% 0.10%
6 0.18% 0.17% 0.11% 0.15% 0.12% 0.18%
7 0.37% 0.30% 0.26% 0.26% 0.20% 0.30%
8 0.63% 0.44% 0.41% 0.39% 0.31% 0.39%
9 0.87% 0.67% 0.65% 0.50% 0.47% 0.50%
10 1.05% 0.90% 0.85% 0.65% 0.60% 0.65%
11 1.27% 1.11% 1.08% 0.85% 0.77% 0.77%
12 1.59% 1.38% 1.29% 1.03% 0.95% 0.89%
13 1.82% 1.57% 1.42% 1.25% 1.14% 1.04%
14 2.03% 1.84% 1.65% 1.41% 1.31% 1.19%
15 2.25% 2.08% 1.93% 1.62% 1.47% 1.33%
16 2.48% 2.26% 2.16% 1.86% 1.64% 1.43%
17 2.64% 2.42% 2.42% 2.04% 1.78% 1.55%
18 2.80% 2.69% 2.65% 2.20% 1.96% 1.67%
19 2.98% 2.96% 2.97% 2.41% 2.10% 1.80%
20 3.25% 3.20% 3.25% 2.60% 2.25% 1.94%
21 3.52% 3.44% 3.48% 2.75% 2.36% 2.09%
22 3.69% 3.69% 3.70% 2.92% 2.49% 2.23%
23 3.91% 3.94% 3.95% 3.03% 2.61% 2.35%
24 4.12% 4.18% 4.18% 3.16% 2.75% 2.47%
25 4.32% 4.39% 4.37% 3.32% 2.86% 2.57%
26 4.52% 4.57% 4.54% 3.45% 3.01% 2.67%
27 4.71% 4.74% 4.74% 3.59% 3.12% 2.77%
28 4.87% 4.91% 4.88% 3.71% 3.27% 2.87%
29 5.04% 5.07% 5.03% 3.86% 3.41% 2.96%
30 5.23% 5.22% 5.18% 4.00% 3.52% 3.04%
31 5.35% 5.36% 5.33% 4.09% 3.60% 3.11%
32 5.48% 5.53% 5.43% 4.20% 3.69% 3.19%
33 5.61% 5.67% 5.57% 4.28% 3.78% 3.28%
34 5.74% 5.80% 5.67% 4.39% 3.87% 3.35%
35 5.85% 5.91% 5.77% 4.47% 3.93% 3.41%
36 5.96% 6.04% 5.90% 4.55% 4.03% 3.48%
37 6.06% 6.15% 5.99% 4.64% 4.10% 3.51%
38 6.16% 6.24% 6.09% 4.73% 4.16% 3.56%
39 6.25% 6.35% 6.17% 4.81% 4.20% 3.59%
40 6.33% 6.43% 6.24% 4.85% 4.24% 3.62%
41 6.41% 6.53% 6.31% 4.91% 4.28% 3.65%
42 6.48% 6.60% 6.39% 4.95% 4.30%
43 6.54% 6.67% 6.47% 4.98% 4.33%
44 6.59% 6.76% 6.53% 5.02%
45 6.62% 6.82% 6.60% 5.05%
46 6.86%
Month 01-C 01-D 02-A 02-B 02-C 02-D
1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3 0.00% 0.00% 0.01% 0.00% 0.00% 0.00%
4 0.02% 0.02% 0.01% 0.01% 0.01% 0.01%
5 0.05% 0.04% 0.02% 0.04% 0.06% 0.03%
6 0.11% 0.08% 0.07% 0.10% 0.11% 0.07%
7 0.18% 0.14% 0.12% 0.17% 0.17% 0.15%
8 0.29% 0.22% 0.19% 0.23% 0.26% 0.30%
9 0.38% 0.32% 0.26% 0.33% 0.34% 0.37%
10 0.48% 0.44% 0.34% 0.41% 0.42% 0.44%
11 0.59% 0.51% 0.39% 0.49% 0.51% 0.51%
12 0.70% 0.59% 0.48% 0.58% 0.60% 0.59%
13 0.78% 0.69% 0.56% 0.68% 0.70% 0.67%
14 0.89% 0.77% 0.64% 0.75% 0.79% 0.75%
15 1.00% 0.85% 0.74% 0.84% 0.89% 0.79%
16 1.11% 0.94% 0.83% 0.93% 0.98% 0.88%
17 1.23% 1.03% 0.91% 1.02% 1.07% 0.99%
18 1.34% 1.10% 1.00% 1.10% 1.16% 1.07%
19 1.45% 1.19% 1.12% 1.16% 1.29% 1.15%
20 1.58% 1.30% 1.20% 1.26% 1.38% 1.22%
21 1.71% 1.39% 1.27% 1.34% 1.48% 1.30%
22 1.84% 1.51% 1.39% 1.44% 1.60% 1.36%
23 1.92% 1.59% 1.49% 1.52% 1.69% 1.43%
24 2.02% 1.67% 1.60% 1.60% 1.76% 1.49%
25 2.13% 1.73% 1.69% 1.66% 1.82%
26 2.25% 1.80% 1.76% 1.73% 1.89%
27 2.33% 1.89% 1.82% 1.77% 1.96%
28 2.43% 1.96% 1.93% 1.80%
29 2.52% 2.01% 1.99% 1.85%
30 2.62% 2.06% 2.02% 1.92%
31 2.72% 2.09% 2.06%
32 2.81% 2.14% 2.11%
33 2.89% 2.19% 2.15%
34 2.92% 2.21%
35 2.97% 2.26%
36 3.00% 2.30%
37 3.05%
38 3.10%
39 3.13%
Month 03-A 03-B 03-C 03-D 04-A 04-B 04-C
1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3 0.00% 0.01% 0.00% 0.01% 0.02% 0.01%
4 0.01% 0.02% 0.01% 0.02% 0.05% 0.02%
5 0.02% 0.04% 0.03% 0.05% 0.09% 0.05%
6 0.07% 0.06% 0.08% 0.08% 0.13%
7 0.11% 0.12% 0.11% 0.15% 0.22%
8 0.17% 0.21% 0.18% 0.21% 0.32%
9 0.24% 0.27% 0.23% 0.27%
10 0.31% 0.35% 0.31% 0.35%
11 0.39% 0.42% 0.35% 0.43%
12 0.44% 0.49% 0.42% 0.50%
13 0.50% 0.54% 0.46%
14 0.59% 0.60% 0.52%
15 0.67% 0.63% 0.61%
16 0.74% 0.70%
17 0.81% 0.80%
18 0.89%
19 0.97%
20 1.07%
21 1.15%