Credit Acceptance Corporation Reports First Quarter Earnings
21 April 2000
Credit Acceptance Corporation Reports First Quarter Earnings of $5,726,000 or $.13 Per Diluted Share
SOUTHFIELD, Mich.--April 19, 2000--Credit Acceptance Corporation (Nasdaq:CACC) announced today consolidated net income for the quarter ended March 31, 2000 was $5,726,000 or $.13 per diluted share compared to $5,379,000 or $.12 per diluted share for the same period in 1999. This represents a 6.5% increase in net income and a 9.0% increase in earnings per share.Cash collections on installment contracts receivable, as a percent of average gross installment contracts receivable, improved to 15.4% for the quarter ended March 31, 2000 compared with 14.7% for the same period in 1999. The Company's average annualized yield on its installment contract portfolio improved to 13.9% for the quarter ended March 31, 2000 from 12.1% for the same period in 1999. The improvement in the average yield resulted from a decrease in the percentage of installment contracts which were in non-accrual status to 20.8% as of March 31, 2000 from 29.1% for the same period in 1999.
The Company's consolidated originations totaled $177,514,000 for the quarter ended March 31, 2000 compared with $128,060,000 for the same period in 1999, representing an increase of 38.6% for the quarter.
The Company's North American operations originated $135,313,000 in new installment contracts for the quarter ended March 31, 2000 compared with $114,445,000 for the same period in 1999, representing an increase of 18.2% for the quarter.
The Company's United Kingdom operations originated $30,155,000 in new installment contracts for the quarter ended March 31, 2000 compared with $13,535,000 for the same period in 1999, representing an increase of 122.8% for the quarter.
Originations for the Company's automobile leasing operations were $12,046,000 for the quarter ended March 31, 2000 compared with $80,000 for the same period in 1999. The Company incurred a net loss on its automobile leasing operations of ($221,000) for the quarter ended March 31, 2000 compared with ($70,000) for the same period in 1999. The Company began originating operating leases of used vehicles during the first quarter of 1999.
Credit Acceptance Corporation is a specialized financial services company which provides funding, receivables management, collection, sales training and related products and services to automobile dealers selling vehicles to consumers with limited access to traditional sources of consumer credit.
Credit Acceptance Corporation
Summary Financial Data
(Dollars in thousands, except per share data)
Three Months Ended
March 31
Income Statement 2000 1999
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REVENUE
Finance charges $ 20,039 $ 19,405
Premiums earned 2,601 2,445
Lease revenue 1,590 --
Other income 5,237 8,511
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Total revenue 29,467 30,361
COSTS AND EXPENSES
Operating expenses 12,691 14,549
Provision for credit losses 2,447 2,136
Provision for claims 776 831
Depreciation of leased assets 640 --
Interest 4,193 4,527
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Total costs and expenses 20,747 22,043
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OPERATING INCOME 8,720 8,318
Foreign exchange loss (14) (45)
Provision for income taxes 2,980 2,894
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NET INCOME $ 5,726 $ 5,379
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Net income per common share:
Basic $ 0.13 $ 0.12
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Diluted $ 0.13 $ 0.12
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Weighted average shares outstanding:
Basic 45,363,107 46,298,904
Diluted 45,630,601 46,705,859
Credit Acceptance Corporation
Summary Financial Data
(Dollars in thousands, except per share data)
As of March 31
2000 1999
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Balance Sheet
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ASSETS
Cash and investments $ 23,640 $ 29,679
Installment contracts receivable 582,911 613,469
Allowance for credit losses (4,435) (5,849)
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Installment contracts receivable, net 578,476 607,620
Investment in operating leases, net 19,264 80
Other assets, net 49,017 64,269
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TOTAL ASSETS $ 670,397 $ 701,648
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LIABILITIES
Total debt $ 161,510 $ 186,638
Dealer holdbacks, net 209,067 194,254
Other liabilities 37,510 41,066
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TOTAL LIABILITIES $ 408,087 $ 421,958
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TOTAL SHAREHOLDERS' EQUITY 262,310 279,690
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 670,397 $ 701,648
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Credit Acceptance Corporation
Summary Financial Data
(Dollars in thousands)
Installment Contracts Receivable
--------------------------------
The following table summarizes the composition
of installment contracts receivable:
As of March 31
2000 1999
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Gross installment contracts receivable $ 693,703 $ 724,946
Unearned finance charges (103,966) (104,403)
Unearned insurance premiums,
insurance reserves and fees (6,826) (7,074)
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Installment contracts receivable $ 582,911 $ 613,469
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Non-accrual installment contracts
as a percent of total gross
installment contracts 20.8% 29.1%
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A summary of changes in gross installment
contracts is as follows:
Three Months Ended
March 31
2000 1999
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Balance, beginning of period $ 679,201 $ 794,831
Gross amount of installment
contracts accepted 165,468 127,980
Cash collections on installment
contracts receivable (106,046) (111,503)
Charge offs (42,026) (82,543)
Currency translation (2,894) (3,819)
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Balance, end of period $ 693,703 $ 724,946
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Investment in Operating Leases
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The following table summarizes the composition of
investment in operating leases, net:
As of March 31
2000 1999
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Gross leased vehicles $ 20,060 $ 80
Accumulated depreciation (1,054) --
Lease payments receivable 461 --
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Investment in operating leases 19,467 80
Less: Allowance for lease vehicle losses (203) --
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Investment in operating leases, net $ 19,264 $ 80
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Credit Acceptance Corporation
Summary Financial Data
(Dollars in thousands)
Investment in Operating Leases - (continued)
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A summary of changes in gross leased
vehicles is as follows:
Three Months Ended
March 31
2000 1999
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Balance, beginning of period $ 8,442 $ --
Gross operating leases originated 12,046 80
Operating lease liquidations (428) --
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Balance, end of period $ 20,060 $ 80
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Reserves
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A summary of changes in the allowance for credit losses,
the reserve on advances and the reserve on investment
in operating leases is as follows:
Three Months Ended
March 31
2000 1999
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Allowance for Credit Losses
Balance, beginning of period $ 4,742 $ 7,075
Provision for loan losses 285 192
Charge offs (578) (1,383)
Currency translation (14) (35)
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Balance, end of period $ 4,435 $ 5,849
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Three Months Ended
March 31
2000 1999
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Reserve on Advances
Balance, beginning of period $ 4,329 $ 19,954
Provision for advance losses 1,991 1,944
Advance reserve fees -- 4
Charge offs -- (4,882)
Currency translation (28) (136)
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Balance, end of period $ 6,292 $ 16,884
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Credit Acceptance Corporation
Summary Financial Data
(Dollars in thousands)
Reserves - (continued)
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Three Months Ended
March 31
2000 1999
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Reserve on Investment in Operating Leases
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Balance, beginning of period $ 91 $ --
Provision for lease vehicle losses 171 --
Charge offs (59) --
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Balance, end of period $ 203 $ --
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Dealer Holdbacks
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The following table summarizes the composition of dealer
holdbacks:
As of March 31
2000 1999
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Dealer holdbacks $ 552,329 $ 578,418
Less: Advances (net of reserve
of $6,292 and $16,884
at March 31, 2000 and 1999, respectively) (343,262) (384,164)
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Dealer holdbacks, net $ 209,067 $ 194,254
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