World Acceptance Corporation Reports Record Second Quarter
October 27, 2011
GREENVILLE, SC – October 27, 2011 – World Acceptance Corporation (NASDAQ: WRLD) today reported record financial results for its second fiscal quarter and six months ended September 30, 2011.
Net income for the second quarter rose 15.2% to $23.3 million compared to $20.2 million for the same quarter of the prior year. Net income per diluted share increased 20.6% to $1.52 in the second quarter of fiscal 2012 compared to $1.26 in the prior year quarter.
Total revenues increased to $132.1 million in the second quarter of fiscal 2012, an 11.9% increase over the $118.1 million reported in the second quarter last year. The primary driver for the growth in revenue was a 12.0% increase in average net loans and the associated growth in interest and fees. Gross loans outstanding increased 11.1% to $965.0 million at September 30, 2011, up from $868.2 million at September 30, 2010. Interest and fees rose 12.1% to $116.2 million in the second quarter of fiscal 2012 compared to $103.7 million in the second quarter of fiscal 2011.
This was our 43rd consecutive year over year quarterly increase of net income and diluted earnings per share, excluding the September 2007 quarter which was restated by approximately $700,000 with the adoption of FASB ASC Topic 470-20. We believe this highlights the strong demand for our loan product, our ongoing focus on expense control, and our close management of credit risks, stated Sandy McLean, CEO. The Company’s growth in earnings per share has also benefitted from our ongoing share repurchase program during the current fiscal year. Over the past six months, the Company has repurchased 1,153,700 shares of World Acceptance’s stock. We continue to use our excellent cash flow and strong financial position to fund our growth while repurchasing shares
Our charge-off rate was consistent with the prior year as expected, stated Mr. McLean. Charge-offs as a percent of net loans on an annualized basis were 14.8% for the three month periods ended September 30, 2011 and 2010. Managing our credit risks is a key driver of our earnings growth. Additionally, our past due loans as measured by those that are 61+ days delinquent, has remained flat at 4.2% on a contractual basis for the two quarterly periods.
The provision for loan losses rose 10.2% to $30.1 million in the second quarter of fiscal 2012 compared to the second quarter of fiscal 2011. We remain focused on monitoring our loan portfolio in light of the difficult economy and we believe that our allowance for loan losses is adequate based on the current outlook, noted Mr. McLean
The Company’s general and administrative expenses increased by 9.6% compared with the second quarter of the prior year due primarily to the new office openings during fiscal 2012. The Company opened 41 new offices, purchased one new office and closed one office during the first six-months of the fiscal year resulting in a total of 1,108 offices at September 30, 2011. General and administrative expenses as a percent of total revenues decreased from 47.5% in the prior year quarter to 46.5% during the current fiscal quarter. The Company benefited from increased leverage of general and administrative expenses due to growth in the revenue and continued cost control management
The Company’s second quarter effective income tax rate increased to 36.5% compared with 33.9% the prior year’s second quarter. During the prior year quarter, the Company benefited from an income tax settlement with the state of South Carolina for tax years March 31, 1997, through March 31, 2006, which resulted in the Company recognizing a tax benefit of approximately $900,000 (or $0.06 per diluted share). A similar benefit was not recognized during the current quarter.
Other key return ratios for the second quarter included a 13.7% return on average assets and a return on average equity of 23.0% (both on a trailing 12 month basis).
Six-Month Results
For the first six-months of the fiscal year, net income rose 11.6% to $43.5 million compared to $38.9 million for the six-months ended September 30, 2010. Fully diluted net income per share rose 15.8% to $2.78 in fiscal 2012 compared to $2.40 for the first six months of fiscal 2011.
Total revenues for the first six-months of fiscal 2012 rose 11.7% to $255.3 million compared to $228.5 million during the corresponding period of the previous year. Annualized net charge-offs as a percent of average net loans were 13.7% for both the first six-months of fiscal 2012 and the first six-months of fiscal 2011.
About World Acceptance Corporation
World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 1,108 offices in 12 states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry.
