AmeriCredit Reports Third Quarter Operating Results; 3rd Quarter Earnings of $87 Million, $0.60 Per Share; Loan Originations Increased to $1.61 Billion; Charge-Offs Declined to 5.2%; FY07 Earnings Guidance Issued
FORT WORTH, Texas--April 24, 2006--AMERICREDIT CORP. today announced net income of $87 million, or $0.60 per share, for its fiscal third quarter ended March 31, 2006. AmeriCredit reported net income of $76 million, or $0.46 per share, for the same period a year earlier. For the nine months ended March 31, 2006, AmeriCredit reported net income of $227 million, or $1.53 per share, versus earnings of $209 million, or $1.25 per share, for the nine months ended March 31, 2005.Automobile loan purchases increased to $1.61 billion for the third quarter of fiscal year 2006, compared to $1.37 billion in the March 2005 quarter. Loan purchases for the nine months ended March 31, 2006, were $4.47 billion compared to $3.58 billion for the same period last year. Managed auto receivables totaled $11.13 billion at March 31, 2006.
Annualized net charge-offs totaled 5.2% of average managed auto receivables for the March 2006 quarter compared to 5.4% for the March 2005 quarter. Annualized net charge-offs for the nine months ended March 31, 2006, were 5.6% compared to 6.2% for the same period last year.
Managed auto receivables 31-to-60 days delinquent were 4.7% of the portfolio at March 31, 2006, compared to 4.9% at March 31, 2005. Accounts more than 60 days delinquent were 1.6% of the portfolio at March 31, 2006, compared to 1.8% at March 31, 2005.
Unrestricted cash totaled $701 million at March 31, 2006. During the March quarter, the Company repurchased $23 million of its common stock. The Company has repurchased a total of $817 million of its common stock since inception of its stock repurchase program in April 2004. At March 31, 2006, the Company had $183 million remaining under its board approved stock repurchase plan. Shareholders' equity was $2.02 billion at March 31, 2006, resulting in a managed assets-to-equity ratio of 5.5 at March 31, 2006.
"Our March results reflected strength in our key performance metrics - net income increased 15% from a year ago, credit results were better than expected, and origination volume was strong," said AmeriCredit President and Chief Executive Officer Dan Berce. "These positive results have further strengthened our balance sheet providing the ability to continue our share repurchase program as well as support our growth initiatives for fiscal year 2007 and beyond."
Regulation FD
Pursuant to Regulation FD, the Company provides its expectations regarding future business trends to the public via a press release or 8-K filing. The Company anticipates some risks and uncertainties with its business.
Net income and EPS forecasts
12 mos. ending
6/30/07
------------------
Net income ($ millions) $305 - $335
Earnings per share $2.10 - $2.30
The forecasts include the results of Bay View Acceptance Corporation for fiscal year 2007 as the Company expects this acquisition to close before June 30, 2006. Because of Bay View Acceptance Corporation's focus on providing specialized auto financing options to customers with prime credit scores, its net interest margin and credit losses are historically lower than AmeriCredit's. The forecasts for fiscal year 2007 incorporate, but are not limited to, the following assumptions:
-- New loan origination volume of $7.2 to $7.8 billion;
-- Net interest margin of 12.5 to 13.0 percent of average receivables;
-- Operating expenses of 2.8 to 3.2 percent of the portfolio;
-- Credit losses to average between 4.5 and 5.5 percent 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 5.0 and 6.0 percent.
This forecast does not include any future share repurchase activity or future disposition of all or a portion of the Company's investment in DealerTrack.
AmeriCredit will host a conference call for analysts and investors today at 6:00 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 approximately one million customers and $11 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/A for the year ended June 30, 2005. 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 sub-prime 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,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Revenue:
Finance charge
income $414,440 $311,869 $1,182,251 $873,472
Servicing income 15,006 44,830 61,792 144,559
Other income 25,658 15,225 79,452 38,616
------------ ------------ ------------ ------------
455,104 371,924 1,323,495 1,056,647
------------ ------------ ------------ ------------
Costs and expenses:
Operating expenses 89,686 80,810 251,470 234,812
Provision for loan
losses 118,769 105,006 410,494 303,919
Interest expense 107,106 65,028 298,556 184,520
Restructuring
charges 1,874 2,130 2,126 2,741
------------ ------------ ------------ ------------
317,435 252,974 962,646 725,992
------------ ------------ ------------ ------------
Income before income
taxes 137,669 118,950 360,849 330,655
Income tax provision 50,937 43,357 133,510 121,688
------------ ------------ ------------ ------------
Net income $86,732 $75,593 $227,339 $208,967
============ ============ ============ ============
Earnings per share:
Basic $0.67 $0.50 $1.68 $1.36
============ ============ ============ ============
Diluted $0.60 $0.46 $1.53 $1.25
============ ============ ============ ============
Weighted average
shares 129,629,967 152,071,432 135,397,387 153,944,984
============ ============ ============ ============
Weighted average
shares and
assumed
incremental
shares 144,954,396 167,269,900 150,332,001 168,760,906
============ ============ ============ ============
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
March 31, June 30, March 31,
2006 2005 2005
------------ ------------ -----------
Cash and cash equivalents $700,800 $663,501 $579,997
Finance receivables, net 9,770,018 8,297,750 7,636,691
Interest-only receivables from
Trusts 5,891 29,905 63,035
Investments in Trust receivables 98,374 239,446 328,974
Restricted cash - gain on sale
Trusts 98,943 272,439 352,040
Restricted cash - securitization
notes payable 803,110 633,900 559,525
Restricted cash - warehouse
credit facilities 101,981 455,426 66,168
Property and equipment, net 58,343 92,000 94,489
Deferred income taxes 60,795 53,759 4,886
Other assets 209,981 208,912 196,758
------------ ------------ -----------
Total assets $11,908,236 $10,947,038 $9,882,563
============ ============ ===========
Warehouse credit facilities $1,435,134 $990,974 $1,261,257
Securitization notes payable 7,867,074 7,166,028 5,874,077
Senior notes 153,869 166,755 166,670
Convertible debt 200,000 200,000 200,000
Funding payable 54,559 158,210 39,130
Accrued taxes and expenses 160,899 133,736 127,173
Other liabilities 20,998 9,419 22,649
------------ ------------ -----------
Total liabilities 9,892,533 8,825,122 7,690,956
------------ ------------ -----------
Shareholders' equity 2,015,703 2,121,916 2,191,607
------------ ------------ -----------
Total liabilities and
shareholders' equity $11,908,236 $10,947,038 $9,882,563
============ ============ ===========
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
----------------------- -----------------------
2006 2005 2006 2005
----------- ----------- ----------- -----------
(Restated) (Restated)
Cash flows from
operating activities:
Net income $86,732 $75,593 $227,339 $208,967
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 3,719 10,802 15,100 44,749
Provision for
loan losses 118,769 105,006 410,494 303,919
Deferred income
taxes (20,028) 5,053 (22,112) 7,192
Accretion of
present value
discount (8,029) (21,703) (30,687) (63,373)
Impairment of
credit
enhancement
assets - - 457 1,122
Stock-based
compensation
expense 3,392 3,636 12,690 6,354
Other 1,003 129 (8,990) 367
Changes in assets and
liabilities:
Other assets 73,385 29,928 83,295 (3,866)
Accrued taxes and
expenses 47,509 44 28,462 (30,910)
----------- ----------- ----------- -----------
Net cash provided by
operating activities 306,452 208,488 716,048 474,521
----------- ----------- ----------- -----------
Cash flows from
investing activities:
Purchases of
receivables (1,947,168) (1,462,380) (5,093,811) (3,863,935)
Principal collections
and recoveries on
receivables 1,156,337 843,120 3,109,116 2,277,911
Distributions from
gain on sale Trusts,
net of swap payments 92,463 146,220 346,136 345,306
Net (purchases) sales
of property and
equipment (2,004) (4,845) 30,554 (6,507)
Net change in
restricted cash and
other 320,092 (48,815) 199,826 97,485
----------- ----------- ----------- -----------
Net cash used by
investing activities (380,280) (526,700) (1,408,179) (1,149,740)
----------- ----------- ----------- -----------
Cash flows from
financing activities:
Net change in
warehouse credit
facilities 202,227 312,320 444,160 761,257
Net change in
securitization notes (8,491) 153,977 699,984 267,197
Net change in senior
notes and other 3,093 (5,274) (18,724) (26,269)
Repurchase of common
stock (23,117) (56,749) (422,046) (200,894)
Net proceeds from
issuance of common
stock 14,967 6,097 24,148 30,780
----------- ----------- ----------- -----------
Net cash provided by
financing activities 188,679 410,371 727,522 832,071
----------- ----------- ----------- -----------
Net increase in cash
and cash equivalents 114,851 92,159 35,391 156,852
Effect of Canadian
exchange rate changes
on cash and cash
equivalents (196) 7 1,908 1,695
Cash and cash
equivalents at
beginning of period 586,145 487,831 663,501 421,450
----------- ----------- ----------- -----------
Cash and cash
equivalents at end of
period $700,800 $579,997 $700,800 $579,997
=========== =========== =========== ===========
Other Financial Data
(Unaudited, Dollars in Thousands)
Three Months Ended Nine Months Ended
March 31, March 31,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
Loan originations $1,614,267 $1,374,012 $4,473,939 $3,579,050
Loans securitized 1,000,002 972,973 3,702,707 2,658,103
Average on-book
receivables $10,115,082 $7,839,932 $9,575,795 $7,392,920
Average gain on
sale receivables 902,246 3,184,145 1,443,547 3,935,123
------------ ------------ ------------ ------------
Average managed
receivables $11,017,328 $11,024,077 $11,019,342 $11,328,043
============ ============ ============ ============
March 31, June 30, March 31,
2006 2005 2005
------------ ------------ ------------
On-book
receivables $10,382,505 $8,838,968 $8,125,036
Gain on sale
receivables 750,637 2,163,941 2,865,723
------------ ------------ ------------
Managed
receivables $11,133,142 $11,002,909 $10,990,759
============ ============ ============
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- -------------------
2006 2005 2006 2005
---------- -------- --------- ---------
Operating expenses $89,686 $80,810 $251,470 $234,812
Operating expenses as a
percent of average managed
receivables 3.3% 3.0% 3.0% 2.8%
Tax rate 37.00% 36.45% 37.00% 36.80%
March 31, June 30, March 31,
2006 2005 2005
---------- -------- ---------
Loan delinquency:
On-book:
(% of ending on-book
receivables)
31 - 60 days 4.5% 4.3% 3.8%
Greater than 60 days 1.5 1.8 1.3
---------- -------- ---------
Total 6.0% 6.1% 5.1%
========== ======== =========
Gain on sale:
(% of ending gain on sale
receivables)
31 - 60 days 7.0% 8.8% 8.2%
Greater than 60 days 3.3 3.9 3.0
---------- -------- ---------
Total 10.3% 12.7% 11.2%
========== ======== =========
Total portfolio:
(% of ending managed
receivables)
31 - 60 days 4.7% 5.2% 4.9%
Greater than 60 days 1.6 2.2 1.8
---------- -------- ---------
Total 6.3% 7.4% 6.7%
========== ======== =========
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- ------------------
2006 2005 2006 2005
--------- --------- --------- --------
Contracts receiving a payment
deferral as an average
quarterly percentage of
average receivables
outstanding:
On-book (% of average on-
book receivables) 5.4% 4.8% 6.1% 4.9%
========= ========= ========= ========
Gain on sale (% of average
gain on sale receivables) 7.4% 9.0% 9.2% 9.5%
========= ========= ========= ========
Total portfolio (% of
average managed
receivables) 5.6% 6.0% 6.5% 6.5%
========= ========= ========= ========
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- -------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Net charge-offs:
On-book $122,119 $79,297 $359,635 $248,232
Gain on sale 19,020 67,149 103,659 282,044
--------- --------- --------- ---------
$141,139 $146,446 $463,294 $530,276
========= ========= ========= =========
Net charge-offs as a percent
of average receivables:
On-book 4.9% 4.1% 5.0% 4.5%
========= ========= ========= =========
Gain on sale 8.5% 8.6% 9.6% 9.5%
========= ========= ========= =========
Total portfolio 5.2% 5.4% 5.6% 6.2%
========= ========= ========= =========
Net recoveries as a percent of
gross repossession charge-
offs:
On-book 50.6% 47.4% 48.9% 45.7%
========= ========= ========= =========
Gain on sale 45.0% 41.7% 41.4% 38.3%
========= ========= ========= =========
Total portfolio 49.8% 44.9% 47.2% 41.8%
========= ========= ========= =========
March 31, June 30, March 31,
2006 2005 2005
------------ ----------- -------------
On-book receivables:
Principal $10,382,505 $8,838,968 $8,125,036
Allowance for loan losses
and nonaccretable
acquisition fees (612,487) (541,218) (488,345)
------------ ----------- -------------
$9,770,018 $8,297,750 $7,636,691
============ =========== =============
Allowance as a percentage
of on-book receivables 5.9% 6.1% 6.0%
============ =========== =============
The Company's net margin as reflected on the consolidated statements of income, excluding a $9 million pre-tax gain on the partial sale of the Company's investment in DealerTrack Holdings, Inc., realized during the nine months ended March 31, 2006, is as follows:
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- ---------------------
2006 2005 2006 2005
--------- --------- ----------- ---------
Finance charge income $414,440 $311,869 $1,182,251 $873,472
Other income 25,658 15,225 70,605 38,616
Interest expense (107,106) (65,028) (298,556) (184,520)
--------- --------- ----------- ---------
Net margin $332,992 $262,066 $954,300 $727,568
========= ========= =========== =========
Three Months Ended Nine Months Ended
March 31, March 31,
------------------- ---------------------
2006 2005 2006 2005
--------- --------- ----------- ---------
Finance charge income 16.6% 16.1% 16.5% 15.7%
Other income 1.1 0.8 1.0 0.7
Interest expense (4.3) (3.3) (4.2) (3.3)
--------- --------- ----------- ---------
Net margin as a percent
of average on-book
receivables 13.4% 13.6% 13.3% 13.1%
========= ========= =========== =========