Onyx Acceptance Reports First Quarter Earnings
27 April 2000
Onyx Acceptance Reports First Quarter Earnings
FOOTHILL RANCH, Calif., April 27 Onyx Acceptance
Corporation (Nasdaq: ONYX) announced today its financial and operational
results for the quarter ended March 31, 2000. Net income and earnings per
diluted share were $1.7 million and $0.26 respectively, compared to
$2.2 million and $0.34 for the same period in 1999. Total revenues increased
by 22% to $23.9 million from $19.6 million in the first quarter of 1999.
The reduction in net income and earnings per share was the result of
interest rate spread compression on the contracts securitized in the first
quarter and the expense incurred on the Company's residual interest
certificates securitization consummated in March.
The accelerated increase in market rates tied to the Company's cost of
borrowings resulted in lower net margins on the sale of contracts. Onyx
recorded a gain on sale of $13.7 million (3.2% of the issue amount) on its
first quarter securitization of $430 million, compared to a gain of $12.3
million (4.0% of the issue amount) on $310 million of contracts securitized
during the same period of 1999. In an accelerated rate increase environment,
the Company typically experiences a lag between the time that its funding
costs first rise and the time it is able to obtain higher interest rates on
contract purchases.
At the end of the quarter, Onyx securitized the residual cash flows from
15 of its currently outstanding securitizations. The Class-A Notes received a
rating of BBB from Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. (Standard and Poor's). The Class-B Notes were
unrated. The transaction is the first residual securitization in the auto
lending industry to receive an investment grade rating from Standard and
Poor's. The proceeds of this sale were used to pay off one of the Company's
residual financing lines and to significantly pay down two others; therefore,
freeing up capacity for future needs. Upon issuance of the $49 million of
Class A Notes and $10 million of Class B Notes, the Company recorded a loss on
sale of $938,000.
The increase in revenues was principally due to the growth of the
Company's servicing portfolio and volume of contracts purchased resulting from
the continued development of business with its dealer relationships in new and
existing markets. Service fee income increased 53% to $8.7 million for the
first quarter 2000 compared to $5.7 million for the same period in 1999.
Service fee income comprised 36% of total first quarter revenues, up from 29%
during the first quarter of 1999. The increase is due primarily to higher
amounts of contractual service fees, late fees and document fees related to
the growth in the servicing portfolio. Contract purchases increased by 31% to
$468.7 million for the quarter ended March 31, 2000, compared to $357.8
million for the same quarter in 1999.
Total operating expenses as a percentage of average servicing portfolio
declined to 3.69% for the first quarter 2000, compared to 4.28% for the
quarter ended March 31, 1999. Total delinquencies as a percentage of the
period-end servicing portfolio declined to 2.15% from 3.24% at year-end 1999,
while annualized net charge-offs as a percent of the average servicing
portfolio increased to 2.33% during the first quarter of 2000, from 1.73% for
the same period in 1999. Off balance sheet reserves as a percentage of
securitized assets remained at 4.4% compared to December 31, 1999. "We fully
expected our delinquency ratios to decline from year-end and were gratified to
realize such a material reduction of $18.7 million in total delinquency from
the previous quarter. We believe that our charge-off percentage will also
experience significant improvement in the forthcoming quarters," said John W.
Hall, President and Chief Executive Officer of Onyx Acceptance Corporation.
Onyx Acceptance Corporation is a specialized automobile finance company
based in Foothill Ranch, CA. Onyx provides financing to franchise and select
independent dealerships throughout the United States.
This news release contains forward-looking statements that are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those projected. The most significant among these risks and
uncertainties are (a) the Company's level of delinquencies, gross charge-offs
and net losses, (b) the Company's ability to achieve adequate interest rate
spreads, (c) the effects of economic factors on consumer debt, and (d) the
continued availability of liquidity sources. Other important factors are
detailed in the Company's annual report on Form 10-K for the year ended
December 31, 1999.
For information about Onyx Acceptance Corporation, please visit the
Investor Relations section of our web site at http://www.onyxco.com.
ONYX ACCEPTANCE CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(UNAUDITED) (AUDITED)
March 31, December 31,
2000 1999
ASSETS
CASH & CASH EQUIVALENTS $6,861,553 $5,190,271
CONTRACTS HELD FOR SALE
- Net of Allowance (1) 256,530,992 229,991,667
CREDIT ENHANCEMENT ASSETS 102,488,944 142,883,970
OTHER ASSETS 11,508,126 15,769,202
TOTAL ASSETS $377,389,615 $393,835,110
LIABILITIES AND EQUITY
LIABILITIES
DEBT $276,449,371 $298,167,249
OTHER LIABILITIES 45,653,522 42,559,837
TOTAL LIABILITIES 322,102,893 340,727,086
TOTAL EQUITY 55,286,722 53,108,024
TOTAL LIABILITIES AND EQUITY $377,389,615 $393,835,110
(1) Net of Unearned Discounts
ONYX ACCEPTANCE CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended
March 31,
2000 1999
REVENUES:
Net Interest Income $2,511,793 $1,531,169
Gain on Sale of Contracts 12,756,654 12,327,584
Service Fee Income 8,679,431 5,709,353
Total Revenues 23,947,878 19,568,106
EXPENSES:
Provision for Credit Losses 433,564 499,914
Operating Expenses 20,654,877 15,354,128
Total Expenses 21,088,441 15,854,042
NET INCOME BEFORE INCOME TAXES 2,859,437 3,714,064
INCOME TAXES 1,186,660 1,541,336
NET INCOME $1,672,777 $2,172,728
NET INCOME PER SHARE - BASIC $0.27 $0.35
NET INCOME PER SHARE - DILUTED $0.26 $0.34
BASIC SHARES OUTSTANDING 6,179,922 6,171,034
DILUTED SHARES OUTSTANDING 6,349,518 6,414,445
ONYX ACCEPTANCE CORPORATION and SUBSIDIARIES
DELINQUENCY AND LOSS RATES
(UNAUDITED)
(In Thousands)
March 31, December 31,
2000 1999
Delinquency Experience
Number of Number of
Contracts $ Contracts $
Servicing Portfolio 231,316 $2,344,399 209,745 $2,133,460
Serviced Delinquency
31 to 59 days 2,797 $26,430 3,963 $38,376
60 to 89 days 1,055 10,068 1,671 16,596
90 days or more 1,328 13,965 1,383 14,203
Total 5,180 $50,463 7,017 $69,175
Delinquency as a
percentage of number
and amount of contracts 2.24% 2.15% 3.35% 3.24%
Three Months Ended
March 31,
Loss Experience
2000 1999
Average Contracts
Serviced during
the period $2,238,058 $1,435,409
Gross Charge-offs $15,054 $7,040
Recoveries $2,002 $819
Net Charge-offs $13,052 $6,221
Net Charge-offs
as a percentage 2.33% 1.73%
of contracts
outstanding during
Onyx Acceptance Corporation
Static Pool Information for securitized pools outstanding for the period
from the date of securitization through March 31,2000
Trust: 96-1 96-2 96-3 96-4 97-1 97-2
Month
1 0.00% 0.01% 0.00% 0.00% 0.00% 0.00%
2 0.03% 0.07% 0.02% 0.02% 0.00% 0.00%
3 0.05% 0.20% 0.07% 0.05% 0.03% 0.02%
4 0.11% 0.33% 0.16% 0.14% 0.06% 0.07%
5 0.23% 0.46% 0.43% 0.24% 0.13% 0.22%
6 0.40% 0.78% 0.54% 0.38% 0.26% 0.32%
7 0.69% 0.98% 0.74% 0.53% 0.37% 0.59%
8 0.82% 1.15% 0.97% 0.81% 0.52% 0.80%
9 0.93% 1.39% 1.13% 0.98% 0.60% 0.91%
10 1.15% 1.52% 1.32% 1.18% 0.76% 1.07%
11 1.25% 1.69% 1.47% 1.43% 0.92% 1.26%
12 1.47% 1.94% 1.60% 1.63% 1.02% 1.42%
13 1.65% 2.08% 1.77% 1.73% 1.13% 1.58%
14 1.79% 2.34% 1.94% 1.87% 1.23% 1.68%
15 2.02% 2.52% 2.09% 2.07% 1.40% 1.80%
16 2.25% 2.76% 2.27% 2.23% 1.56% 1.97%
17 2.43% 2.89% 2.42% 2.33% 1.68% 2.10%
18 2.59% 3.10% 2.57% 2.49% 1.75% 2.23%
19 2.77% 3.14% 2.70% 2.62% 1.85% 2.35%
20 2.93% 3.30% 2.83% 2.73% 1.92% 2.48%
21 3.06% 3.47% 2.94% 2.84% 1.98% 2.59%
22 3.15% 3.60% 3.00% 2.93% 2.09% 2.72%
23 3.21% 3.70% 3.08% 3.02% 2.17% 2.81%
24 3.28% 3.81% 3.17% 3.10% 2.22% 2.85%
25 3.40% 3.93% 3.28% 3.22% 2.31% 2.93%
26 3.43% 4.06% 3.38% 3.29% 2.38% 2.96%
27 3.55% 4.13% 3.43% 3.39% 2.44% 3.09%
28 3.60% 4.22% 3.54% 3.46% 2.50% 3.17%
29 3.73% 4.23% 3.59% 3.58% 2.55% 3.22%
30 3.75% 4.29% 3.69% 3.61% 2.63% 3.26%
31 3.79% 4.31% 3.77% 3.64% 2.67% 3.33%
32 3.85% 4.33% 3.75% 3.72% 2.73% 3.39%
33 3.88% 4.37% 3.77% 3.74% 2.77% 3.48%
34 3.90% 4.39% 3.79% 3.77% 2.84% 3.51%
35 3.94% 4.39% 3.81% 3.79% 2.86%
36 3.94% 4.42% 3.83% 3.81% 2.85%
37 3.94% 4.42% 3.84% 3.83% 2.89%
38 3.97% 4.43% 3.88% 3.85%
39 3.99% 4.45% 3.92% 3.89%
40 3.96% 4.46% 3.92% 3.89%
41 3.96% 4.45% 3.92%
42 3.95% 4.45% 3.91%
43 3.96% 4.45% 3.91%
44 3.94% 4.48%
45 3.97% 4.49%
46 3.95% 4.52%
47 3.92% 4.51%
48 3.90%
49 3.89%
50 3.86%
51 3.86%
Trust: 97-3 97-4 98-1 98-A 98-B 98-C
Month
1 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.01% 0.01% 0.00% 0.02%
3 0.02% 0.01% 0.02% 0.03% 0.02% 0.02%
4 0.09% 0.04% 0.08% 0.07% 0.08% 0.04%
5 0.13% 0.11% 0.14% 0.14% 0.19% 0.15%
6 0.24% 0.20% 0.24% 0.23% 0.33% 0.27%
7 0.36% 0.28% 0.40% 0.37% 0.45% 0.46%
8 0.47% 0.43% 0.53% 0.42% 0.61% 0.57%
9 0.62% 0.55% 0.68% 0.51% 0.82% 0.74%
10 0.73% 0.72% 0.85% 0.70% 0.95% 0.94%
11 0.81% 0.87% 1.04% 0.85% 1.10% 1.12%
12 0.94% 0.95% 1.20% 1.01% 1.20% 1.30%
13 1.10% 1.08% 1.33% 1.17% 1.36% 1.54%
14 1.23% 1.19% 1.46% 1.37% 1.48% 1.73%
15 1.38% 1.36% 1.61% 1.48% 1.64% 1.90%
16 1.58% 1.42% 1.71% 1.59% 1.89% 2.10%
17 1.68% 1.52% 1.88% 1.76% 2.05% 2.28%
18 1.77% 1.64% 2.01% 1.96% 2.22%
19 1.91% 1.75% 2.17% 2.07% 2.37%
20 2.04% 1.85% 2.25% 2.25%
21 2.11% 1.97% 2.41% 2.37%
22 2.20% 2.08% 2.52% 2.48%
23 2.31% 2.12% 2.63%
24 2.41% 2.23% 2.75%
25 2.51% 2.36% 2.86%
26 2.59% 2.41%
27 2.71% 2.52%
28 2.79% 2.55%
29 2.92%
30 2.94%
31 3.01%
Trust: 99-A 99-B 99-C 99-D 00-A
Month
1 0.00% 0.00% 0.00% 0.00% 0.00%
2 0.00% 0.00% 0.01% 0.00% 0.00%
3 0.02% 0.03% 0.03% 0.01%
4 0.05% 0.07% 0.06% 0.04%
5 0.11% 0.14% 0.16% 0.09%
6 0.21% 0.27% 0.28% 0.15%
7 0.35% 0.43% 0.47%
8 0.49% 0.60% 0.64%
9 0.63% 0.85%
10 0.81% 1.07%
11 1.04% 1.34%
12 1.29%
13 1.49%
14 1.72%