AutoBond Announces 4th Quarter Profit
1 April 1999
AutoBond Announces 4th Quarter Profit
AUSTIN, Texas, March 31 -- AutoBond Acceptance Corporation
(Amex: ABD) ("AutoBond"), is reporting fourth quarter 1998 profits of
$261,979. After consideration of the preferred dividend, net income available
to common was ($159,896), or ($.02) per share. For full year 1998 the Company
is reporting a loss of $1.31 per share ($1.31 loss fully diluted) on a net
loss of $7,144,423. This compares to earnings of $0.03 per share, on net
income of $201,753 for the fourth quarter 1997, and full year 1997 profits of
$0.29 ($0.28 fully diluted) on net income of $1,613,053. The full year 1998
loss of $7,144,423 is primarily attributable to non-cash impairment of
retained interests of $9,932,169.
Delinquency Statistics:
AutoBond's overall delinquency trends, as reflected below, continue to
improve significantly from December 1997 when the Company assumed full
servicing responsibilities from its former servicer. The Company attributes
this improvement to a variety of factors including: (i) synergies that were
created with the internalization of the servicing function; (ii) proprietary
servicing platform technology; (iii) the addition of personnel with excellent
collections experience; (iv) new training programs; (v) the purchase of a
predictive dialer; (vi) the implementation of the AutoBond Lending Latitude
(ALL) Program; and (vii) simple diligence and hard work in the collections
area. The Company expects this trend to continue as all of the aforementioned
factors continue to positively influence the collections process.
Delinquencies as a percent of total outstanding portfolio balance ($) for
all trusts for the years ended December 31, 1997 and December 31, 1998, and
through February 1999, are:
Bucket December 1997 December 1998 February 1999
60-89 Days: 5.8% 3.7% 2.2%
90+ Days: 4.5% 2.5% 1.9%
Total 60+ Days: 10.3% 6.2% 4.1%
Improvement in Performance of Acquired Contracts:
The Company continues to recognize an improvement in the quality of
contracts most recently acquired. More importantly, and indicative of
potential future production, the Company is recognizing, and expects to
continue to recognize, the benefits of the AutoBond Lending Latitude (ALL)
Program.
Comparative seasoning delinquency statistics for 1997 and 1998, and 1998
since inception of the ALL Program, are:
MOS. 1997 PRODUCTION
OUT. 0-29 30-59 60-89 90+
DAYS DAYS DAYS DAYS
0 99.8% 0.1% 0.0% 0.0%
1 96.9% 3.1% 0.1% 0.0%
2 91.7% 7.0% 1.2% 0.0%
3 83.8% 12.2% 3.6% 0.5%
4 78.8% 15.0% 4.7% 1.5%
MOS. 1998 PRODUCTION
OUT. 0-29 30-59 60-89 90+
DAYS DAYS DAYS DAYS
0 99.9% 0.1% 0.0% 0.0%
1 98.1% 1.9% 0.0% 0.0%
2 95.4% 4.4% 0.3% 0.0%
3 92.2% 6.7% 1.1% 0.0%
4 89.4% 8.3% 2.3% 0.0%
MOS. ALL PROGRAM
OUT. PRODUCTION
0-29 30-59 60-89 90+
DAYS DAYS DAYS DAYS
0 99.9% 0.1% 0.0% 0.0%
1 98.5% 1.5% 0.0% 0.0%
2 96.7% 3.2% 0.1% 0.0%
3 94.9% 4.4% 0.7% 0.0%
4 94.1% 4.7% 1.2% 0.0%
Impact of the AutoBond Lending Latitude (ALL) Program:
The Company continues to recognize the benefit and effectiveness of the
credit-scoring model incorporated into the AutoBond Lending Latitude (ALL)
Program. The positive delinquency performance of contracts funded through the
program, on a tier-by-tier basis, as noted below, reflects that contracts in
the first two acquisition tiers perform better than those in the third tier,
which in turn, perform better than those in the bottom tiers. This evident
trend proves the credit scoring model works as intended.
Delinquency statistics for contracts acquired through the ALL Program, by
tier, from 10/1/98 through 1/31/99, follow as of February 28, 1999:
0-29 30-59 60-89 90+
DAYS DAYS DAYS DAYS
MOS. Tier 1 and 2
OUT.
0 100.0% 0.0% 0.0% 0.0%
1 99.7% 0.3% 0.0% 0.0%
2 97.0% 3.0% 0.0% 0.0%
3 96.7% 3.3% 0.0% 0.0%
4 95.5% 2.7% 1.7% 0.0%
0-29 30-59 60-89 90+
DAYS DAYS DAYS DAYS
MOS. Tier 3
OUT.
0 100.0% 0.0% 0.0% 0.0%
1 98.4% 1.6% 0.0% 0.0%
2 97.8% 2.2% 0.0% 0.0%
3 95.2% 4.4% 0.4% 0.0%
4 94.6% 4.6% 0.8% 0.0%
MOS. Tier 4
OUT.
0 99.8% 0.2% 0.0% 0.0%
1 98.6% 1.4% 0.0% 0.0%
2 96.3% 3.6% 0.1% 0.0%
3 94.7% 4.6% 0.7% 0.0%
4 94.9% 4.5% 0.6% 0.0%
MOS. Tier 5
OUT.
0 100.0% 0.0% 0.0% 0.0%
1 97.8% 2.2% 0.0% 0.0%
2 96.0% 3.8% 0.1% 0.0%
3 93.7% 4.9% 1.4% 0.0%
4 91.1% 6.5% 2.4% 0.0%
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 acquires contracts nationwide from dealers in approximately 40 states.
AutoBond currently has 6,531,311 common and 1,125,000 preferred shares
outstanding.
AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
Years Ended December 31
1996 1997 1998
Revenues:
Interest income $ 2,519,612 $ 4,118,795 $ 1,498,985
Gain on sale of
finance contracts 12,820,700 18,666,570 17,985,045
Servicing income 657,950 1,131,142 3,222,669
Other income (loss) 388,278 (173,146) 347,779
Total revenues 16,386,540 23,743,361 23,054,478
Expenses:
Provision for credit loss 412,387 612,715 100,000
Interest expense 2,382,818 3,879,543 3,117,211
Salaries and benefits 4,529,006 7,357,284 10,471,615
General and administrative 2,331,246 6,075,125 6,782,015
Impairment of retained
interest in securitizations --- 1,312,234 9,932,169
Other operating expenses 1,119,644 2,005,237 3,422,260
Total expenses 10,775,101 21,242,138 33,825,270
Income (loss) before
income taxes 5,611,439 2,501,223 (10,770,792)
Provision (benefit) for
income taxes 1,926,553 888,170 ---
Income before extraordinary
loss 3,684,886 1,613,053 ---
Extraordinary loss, net of tax (100,000) --- ---
Net income 3,584,886 1,613,053 ---
Preferred Stock Dividend --- --- (1,440,000)
Net income available to
common shareholders $ 3,584,886 $ 1,613,053 ---
Weighted average number of
common shares: basic 5,791,189 6,516,056 6,531,311
diluted 5,809,157 6,965,877 6,531,311
Earnings (loss) per common share:
Basic $0.62 $0.25 ---
Diluted $0.62 $0.25 ---
Net income (loss) $ 3,584,886 $ 1,613,053 ($7,144,423)
Other comprehensive income,
net of tax:
Unrealized gain (loss) on
retained interest in
securitizations --- 1,049,256 (1,049,256)
Other comprehensive income
(loss) --- 1,049,256 (1,049,256)
Comprehensive income (loss) $ 3,584,886 $ 2,662,309 ---
AUTOBOND ACCEPTANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31,
1997 1998
ASSETS
Cash and cash equivalents $ 159,293 $ 5,170,969
Restricted funds 6,904,264 ---
Receivable from Dynex --- 6,573,107
Finance contracts held for sale, net 1,366,114 867,070
Collateral acquired, net 150,908 70,957
Retained interest in securitizations
- Trading 7,878,306 4,586,908
Retained interest in securitizations
- Available for sale 24,138,343 9,286,443
Debt issuance costs 605,847 729,206
Due from affiliates 176,963 396,015
Property, plant, and equipment, net 1,148,559 1,187,421
Other assets 681,851 1,463,046
Total assets $43,210,448 ---
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable $ 2,057,824 $10,166,969
Non-recourse debt 7,783,219 3,185,050
Revolving credit facilities 7,639,201 ---
Accounts payable and accrued liabilities 3,386,685 1,324,951
Bank overdraft 2,936,883 ---
Payable to affiliates 554,233 ---
Deferred income taxes 3,504,249 ---
Total liabilities $27,862,294 ---
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value; 5,000,000 shares
authorized; 1,125,000 shares of 15% Series A
cumulative preferred stock, $10 liquidation
preference, issued and outstanding,
at December 31, 1998 $--- $10,856,000
Common stock, no par value; 25,000,000
shares authorized, 6,531,311 shares issued
and outstanding 1,000 1,000
Capital in excess of stated capital 8,781,669 8,291,481
Due from shareholders (10,592) (10,592)
Accumulated other comprehensive income 1,049,256 ---
Retained earnings (accumulated deficit) 5,526,821 ---
Investment in common stock agreement --- (527,915)
Total shareholders' equity 15,348,154 ---
Total liabilities and shareholders' equity $43,210,448 ---
Contact: Adrian Katz 512-435-7000.