AutoBond Announces Earnings for 1997
31 March 1998
AutoBond Announces Earnings for 1997The Following is Not an Offer to Buy or Sell Securities or Assets of any Kind AUSTIN, Texas, March 31 -- AutoBond Acceptance Corporation (Amex: ABD) ("AutoBond"), listed on the Amex under the symbol ABD, is reporting fourth quarter 1997 profits of $0.03 per share on net income of $201,753 and full year 1997 profits of $0.29 per share ($0.28 fully diluted) on net income of $1,859,464 versus $0.08 per share on net income of $512,739 for the fourth quarter 1996 and full year 1996 profits of $0.62 per share on net income of $3,584,886. Revenue for 1997 was $22,931,301 versus $16,386,540 for 1996. AutoBond is pleased that each quarter in 1997 was profitable and that the past three years have each been profitable. As per SFAS No. 130, AutoBond's financial statements present a new accounting line item called Comprehensive Income, which is comprised of recognized net income and unrealized appreciation net of tax, amounted to $2,908,720 ($0.45 per share) for the full year 1997. The unrealized appreciation as of December 31, 1997 was $1,049,256. Due primarily to retained earnings and unrealized appreciation, total shareholders' equity increased to $15,417,602 at December 31, 1997. This reflects an increase in shareholders' equity of $3,275,408 from December 31, 1996. AutoBond is pleased to report that all servicing functions were successfully transferred from a third party service provider to in-house technology and personnel during the fourth quarter. AutoBond's delinquencies increased in 1997, consistent with increased seasoning. As of the end of the fourth quarter 1997 the 60-89 days past due delinquencies amounted to 5.17% and the 90 plus days past due delinquencies amounted to 3.95%. Unlike past quarterly delinquency reporting from AutoBond, these statistics now include finance contracts where the underlying vehicle is repossessed, the borrower is in bankruptcy, a dealer buyback is expected or where insurance claims are filed or pending. By contrast, the effect of seasoning can be positively observed with respect to the six most seasoned quarterly production gross annualized default rates for the fourth quarter 1997 in that they are below 10% while only five quarterly production rates were below 10% as of the third quarter 1997. Finance contracts acquired in 1994 have experienced gross annualized default rates that approximate 7.0%. AutoBond currently has 6,531,311 shares outstanding. AutoBond is a specialty consumer finance company engaged in underwriting, acquiring, servicing and securitizing retail installment contracts originated primarily by franchised automobile dealers in connection with the sale of used and, to a lesser extent, new vehicles to selected consumers with limited access to traditional sources of credit. AutoBond is located in Austin, Texas and in 1997 acquired contracts nationwide from dealers in approximately 40 states. AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES Consolidated Statements of Income and Comprehensive Income Year Ended December 31, 1995 1996 1997 Revenues: Interest income $2,880,961 $2,519,612 $4,341,297 Gain on sale of finance contracts 4,085,952 12,820,700 18,944,241 Servicing fee income -- 657,950 1,131,142 Other income (loss) -- 388,278 (1,485,379) Total revenues 6,966,913 16,386,540 22,931,301 Expenses: Provision for credit losses 48,702 412,387 612,715 Interest expense 2,099,867 2,382,818 3,879,543 Salaries and benefits 1,320,100 4,529,006 7,357,284 General and administrative 1,462,740 2,331,246 6,201,948 Other operating expenses 963,017 1,119,644 2,005,237 Total expenses 5,894,426 10,775,101 20,056,727 Income before income taxes and extraordinary loss 1,072,487 5,611,439 2,874,574 Provision for income taxes 199,000 1,926,553 1,015,110 Income before extraordinary loss 873,487 3,684,836 1,859,464 Extraordinary loss, net of tax -- (100,000) -- Net income 873,487 3,584,886 1,859,464 Other comprehensive income, net of tax; Unrealized appreciation on interest-only strip receivables -- -- 1,049,256 Other comprehensive income -- -- 1,049,256 Comprehensive income $ 873,487 $3,584,886 $2,908,720 Earnings per common share: Income before extraordinary loss $0.17 $0.64 $0.29 Extraordinary loss, net of tax -- (0.02) -- Net income $0.17 $0.62 $0.29 AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES Consolidated Balance Sheets December 31, 1996 1997 ASSETS Cash and cash equivalents $ 4,121,342 $ 159,293 Restricted funds 2,981,449 6,904,264 Finance contracts held for sale, net 228,429 1,366,114 Collateral acquired, net 152,580 150,908 Class B certificates 10,465,294 7,878,306 Retained interest in beneficial interest of trust -- 5,083,213 Interest-only strip receivables 4,247,274 9,352,641 Debt issuance cost 997,338 605,847 Trust receivable 2,230,003 9,627,144 Due from affiliates 25,300 21,285 Other assets 683,955 1,703,587 Total assets $26,132,964 $42,852,602 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Revolving credit facilities $ -- $ 7,639,201 Notes payable 10,174,633 9,841,043 Accounts payable and accrued liabilities 1,474,586 3,386,685 Bank overdraft -- 2,936,883 Payable to affiliates 265,998 -- Deferred income taxes 2,075,553 3,631,188 Total liabilities 13,990,770 27,435,000 Commitments and contingencies Shareholders' equity: Preferred stock, no par value; 5,000,000 shares authorized; no shares issued -- -- Common stock, no par value; 25,000,000 shares authorized, 6,512,500 and 6,531,311 shares issued and outstanding 1,000 1,000 Additional paid-in capital 8,617,466 8,781,669 Deferred compensation (11,422) -- Due from shareholders (378,618) (187,555) Unrealized appreciation on interest-only strip receivables -- 1,049,256 Retained earnings 3,913,768 5,773,232 Total shareholders' equity 12,142,194 15,417,602 Total liabilities and shareholders' equity $26,132,964 $42,852,602 SOURCE AutoBond Acceptance Corporation