National Auto Credit Announces Financial Results for Fiscal 2000 Second Quarter
16 December 1999
National Auto Credit Announces Financial Results for Fiscal 2000 Second Quarter
SOLON, Ohio, Dec. 15 -- National Auto Credit, Inc.
(OTC Bulletin Board: NAKD) today announced financial results for its fiscal
year 2000 second quarter ended July 31, 1999. The Company operates on a
fiscal year ending January 31 and expects to issue fiscal 2000 third quarter
results within the next several weeks.
For the first six months of fiscal 2000, National Auto Credit (NAC)
incurred a net loss of $8,840,000, or $0.31 per share, primarily as a result
of the following factors: a 60.8 percent decline in revenues to $3,873,000,
due to the reduction in the size of NAC's loan portfolio; non-recurring
charges of $3,985,000 for regulatory investigations, internal investigations,
management changes and stockholder litigation; and a $1,500,000 charge related
to the purchase of shares under a stock option agreement. In the first six
months of fiscal 1999, the Company incurred a net loss of $5,740,000, or $0.20
per share, on revenues of $9,892,000.
As a result of the Company receiving higher than expected cash flows from
its loan portfolio, the Company adjusted downward its previously recorded
provision for credit losses during the second quarter of fiscal 2000.
Operating expenses, including sales and marketing costs, collection costs
and other operating costs, increased to $5,726,000 for the first six months of
fiscal 2000, compared with $5,469,000 for the same period in fiscal 1999. As
a percentage of revenues, operating expenses increased to 147.8 percent for
the six months ended July 31, 1999, from 55.3 percent for the comparable
period in fiscal 1999, due principally to the decline in revenues.
National Auto Credit, Inc. is a specialized financial services company
that invests primarily in sub-prime, used-automobile consumer loans, which
take the form of installment loans collateralized by the related vehicle. The
Company, through its affiliate, NAC, Inc., purchases these loans from used-
automobile dealerships that participate in the Company's loan purchase
program.
National Auto Credit also performs the underwriting and collections
functions for all the loans purchased. Its operations enable these dealers to
provide financing to customers who have limited access to more traditional
consumer credit sources or might otherwise be unable to obtain financing.
This news release may include statements that constitute forward-looking
statements, usually containing the words "believe," "estimate," "project,"
"expects," or similar expressions. These statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements inherently involve risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. By making these forward-looking statements, the company
undertakes no obligation to update these statements for revisions or changes
after the date of this document.
National Auto Credit, Inc.
Condensed Consolidated Balance Sheets
(In Thousands, Except Share Amounts)
(Unaudited)
July 31, January 31,
1999 1999
ASSETS
Cash and cash equivalents $45,750 $32,109
Installment loans, net 44,651 70,401
Property and equipment, net
of accumulated depreciation
of $5,642, and $5,262, respectively 8,533 8,558
Affordable housing investments 10,496 10,270
Income taxes refundable 3,242 3,295
Other assets 1,927 2,659
TOTAL ASSETS $114,599 $127,292
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Self-insurance claims $3,734 $4,880
Accrued income taxes 6,458 6,510
Other liabilities 13,464 16,126
Total 23,656 27,516
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY
Preferred stock - $.05 par value,
authorized 2,000,000 shares, none issued - -
Common stock - $.05 par value,
authorized 40,000,000 shares, issued
29,989,445 and 29,982,512 shares,
respectively 1,499 1,500
Additional paid-in capital 166,176 166,168
Retained deficit (64,629) (55,789)
Treasury stock, at cost, 1,345,968 shares (12,103) (12,103)
Total 90,943 99,776
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $114,599 $127,292
National Auto Credit, Inc.
Condensed Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
1999 1998 1999 1998
REVENUE
Interest income $1,684 $4,154 $3,786 $9,433
Fees and other income 42 401 87 459
Total 1,726 4,555 3,873 9,892
COSTS AND EXPENSES
Provision for
credit losses (368) 675 (186) 1,399
Operating 2,653 2,666 5,726 5,469
General and
administrative 1,087 1,200 2,593 2,449
Litigation and non-
recurring charges 2,031 1,260 3,985 3,328
Cost related to purchase
of shares 1,500 - 1,500 -
Interest (income)
expense (480) 1,319 (905) 2,987
Total 6,423 7,120 12,713 15,632
LOSS BEFORE INCOME TAXES (4,697) (2,565) (8,840) (5,740)
Provision for income taxes - - - -
NET LOSS $(4,697) $(2,565) $(8,840) $(5,740)
BASIC AND DILUTED
LOSS PER SHARE $(.16) $(.09) $(.31) $(.20)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING (000'S)
Basic and Diluted 28,641 28,581 28,636 28,571
National Auto Credit, Inc.
Installment Loans, Net
For the Three and Six Months Ended July 31, 1999 and 1998
(In Thousands)
(Unaudited)
Gross Credit Allowance Installment
Finance Unearned Loss for Credit Loans,
Receivable Income Discount Losses Net
Balance, April 30,
1999 $102,726 $(5,917) $(25,140) $(14,074) $57,595
Purchases 5,574 (562) (2,246) - 2,766
Cash collected (17,762) - - - (17,762)
Charge-offs (4,981) - 3,052 1,929 -
Provision for
credit losses - - - 368 368
Interest income - 1,684 - - 1,684
Reclassification - (731) 731 - -
Dealer fees charged - - - - -
Balance, July 31,
1999 $85,557 $(5,526) $(23,603) $(11,777) $44,651
Gross Credit Allowance Installment
Finance Unearned Loss for Credit Loans,
Receivable Income Discount Losses Net
Balance, January 31,
1999 $115,473 $(7,052) $(21,190) $(16,830) $70,401
Purchases 22,888 (1,547) (9,633) - 11,708
Cash collected (41,430) - - - (41,430)
Charge-offs (11,374) - 6,507 4,867 -
Provision for
credit losses - - - 186 186
Interest income - 3,786 - - 3,786
Reclassification - (713) 713 - -
Dealer fees charged - - - - -
Balance, July 31,
1999 $85,557 $(5,526) $(23,603) $(11,777) $44,651
Gross Credit Allowance Installment
Finance Unearned Loss for Credit Loans,
Receivable Income Discount Losses Net
Balance, April 30,
1998 $217,581 $(15,426) $(30,144) $(47,920) $124,091
Purchases 10,747 (314) (2,935) - 7,498
Cash collected (31,860) - - - (31,860)
Charge-offs (19,371) - 6,838 12,533 -
Provision for
credit losses - - - (675) (675)
Interest income - 4,154 - - 4,154
Reclassification - - - - -
Dealer fees charged - - - (353) (353)
Balance, July 31,
1998 $177,097 $(11,586) $(26,241) $(36,415) $102,855
Gross Credit Allowance Installment
Finance Unearned Loss for Credit Loans,
Receivable Income Discount Losses Net
Balance, January 31,
1998 $269,690 $(20,534) $(34,920) $(61,789) $152,447
Purchases 19,986 (485) (5,391) - 14,110
Cash collected (71,056) - - - (71,056)
Charge-offs (41,523) - 14,070 27,453 -
Provision for
credit losses - - - (1,399) (1,399)
Interest income - 9,433 - - 9,433
Reclassification - - - - -
Dealer fees charged - - - (680) (680)
Balance, July 31,
1998 $177,097 $(11,586) $(26,241) $(36,415) $102,855