AmeriCredit Reports Third Quarter Operating Results
FORT WORTH, Texas--AMERICREDIT CORP. today announced net income of $9.8 million, or $0.07 per share, for its fiscal third quarter ended March 31, 2009, compared to earnings of $38.2 million, or $0.31 per share, for the same period a year earlier. For the nine months ended March 31, 2009, AmeriCredit reported a net loss of $17.4 million, or $0.14 per share, versus earnings of $80.9 million, or $0.65 per share, for the nine months ended March 31, 2008.
The allowance for loan losses as a percentage of finance receivables increased to 7.7% at March 31, 2009, from 7.1% at December 31, 2008 and 5.7% at March 31, 2008.
Originations were $210.1 million for the quarter ended March 31, 2009, compared to $1.3 billion for the same quarter last fiscal year. Originations for the nine months ended March 31, 2009, were $1.1 billion, compared to $5.5 billion for the same period a year earlier. Finance receivables totaled $11.9 billion at March 31, 2009, compared to $15.8 billion at March 31, 2008.
Annualized net charge-offs totaled 7.8% of average finance receivables for the three months ended March 31, 2009, compared to 6.6% for the three months ended March 31, 2008. For the nine months ended March 31, 2009, annualized net charge-offs were 8.2%, compared to 6.3% for the same period last year.
Finance receivables 31-to-60 days delinquent were 6.0% of the portfolio at March 31, 2009, compared to 5.3% at March 31, 2008. Accounts more than 60 days delinquent were 3.0% of the portfolio at March 31, 2009, compared to 2.3% a year ago.
The Company had total liquidity of $409.4 million at March 31, 2009, consisting of $120.9 million of unrestricted cash and approximately $288.5 million of available borrowing capacity on unpledged eligible receivables.
"Over the past year and a half, we have taken timely steps to preserve liquidity, strengthen our balance sheet and adjust our operating model to weather the economic downturn. This quarter, we solidified our funding platform by amending and extending our Master Warehouse Facility. We also reduced our leverage ratio and increased our allowance for loan losses, while protecting book value," said President and Chief Executive Officer Dan Berce. "We have positioned our business to withstand the economic cycle and take advantage of more favorable conditions in the future."
AmeriCredit will host a conference call for analysts and investors today at 5:30 p.m. Eastern time. For a live Internet broadcast of this conference call, please go to the Company’s Web site to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call.
About AmeriCredit
AmeriCredit Corp. is a leading independent automobile finance company that provides financing solutions indirectly through auto dealers across the United States. AmeriCredit has approximately one million customers and $12 billion in auto receivables. The Company was founded in 1992 and is headquartered in Fort Worth, Texas. For more information, visit www.americredit.com.
Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that involve risks and uncertainties detailed from time to time in the Company’s filings and reports with the Securities and Exchange Commission including the Company's annual report on Form 10-K for the year ended June 30, 2008. Such risks include – but are not limited to – variable economic conditions, adverse portfolio performance, volatile wholesale vehicle values, reliance on warehouse financing and capital markets, the ability to continue to securitize its loan portfolio, the continued availability of credit enhancement for its securitization transactions on acceptable terms, fluctuating interest rates, increased competition, regulatory changes, the high degree of risk associated with subprime borrowers, and exposure to litigation. These forward-looking statements are based on the beliefs of the Company’s management as well as assumptions made by and information currently available to the Company’s management. Actual events or results may differ materially. It is advisable not to place undue reliance on any forward-looking statements. The Company undertakes no obligation to, and does not, publicly update or revise any forward-looking statements, except as required by federal securities laws, whether as a result of new information, future events or otherwise.
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AmeriCredit Corp. Consolidated Statements of Operations (Unaudited, Dollars in Thousands, Except Per Share Amounts) |
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| Three Months Ended | Nine Months Ended | ||||||||||||
| March 31, | March 31, | ||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||
| Revenue: | |||||||||||||
| Finance charge income | $ | 452,186 | $ | 595,743 | $ | 1,483,719 | $ | 1,820,300 | |||||
| Other income | 29,191 | 42,999 | 90,893 | 124,370 | |||||||||
| Gain on retirement of debt | 14,442 | - | 53,309 | - | |||||||||
| 495,819 | 638,742 | 1,627,921 | 1,944,670 | ||||||||||
| Costs and expenses: | |||||||||||||
| Operating expenses | 76,278 | 100,016 | 244,877 | 308,065 | |||||||||
| Leased vehicles depreciation | 13,694 | 9,679 | 36,765 | 24,112 | |||||||||
| Provision for loan losses | 234,816 | 250,659 | 797,703 | 851,817 | |||||||||
| Interest expense | 143,085 | 208,084 | 557,194 | 633,378 | |||||||||
| Restructuring charges | 7,810 | 9,150 | 10,465 | 8,857 | |||||||||
| 475,683 | 577,588 | 1,647,004 | 1,826,229 | ||||||||||
| Income (loss) before income taxes | 20,136 | 61,154 | (19,083 | ) | 118,441 | ||||||||
| Income tax provision (benefit) | 10,303 | 22,989 | (1,698 | ) | 37,547 | ||||||||
|
Net income (loss) |
$ | 9,833 | $ | 38,165 | ($17,385 | ) | $ | 80,894 | |||||
| Earnings (loss) per share: | |||||||||||||
| Basic | $ | 0.07 | $ | 0.33 | ($0.14 | ) | $ | 0.70 | |||||
| Diluted | $ | 0.07 | $ | 0.31 | ($0.14 | ) | $ | 0.65 | |||||
| Weighted average shares | 131,914,885 | 114,692,272 | 122,697,685 | 114,850,727 | |||||||||
| Weighted average shares and | |||||||||||||
| assumed incremental shares | 133,982,994 | 126,728,797 | 122,697,685 | 127,244,120 | |||||||||
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Consolidated Balance Sheets (Unaudited, Dollars in Thousands) |
|||||||||
| March 31, | June 30, | March 31, | |||||||
| 2009 | 2008 | 2008 | |||||||
| Cash and cash equivalents | $ | 120,931 | $ | 433,493 | $ | 484,175 | |||
| Finance receivables, net | 10,983,331 | 14,030,299 | 14,920,808 | ||||||
| Restricted cash – securitization notes payable | 899,105 | 982,670 | 1,009,890 | ||||||
| Restricted cash – credit facilities | 234,054 | 259,699 | 254,857 | ||||||
| Property and equipment, net | 46,764 | 55,471 | 58,282 | ||||||
| Leased vehicles, net | 169,178 | 210,857 | 217,342 | ||||||
| Deferred income taxes |
122,262 |
317,319 | 274,657 | ||||||
| Goodwill | - | - | 212,595 | ||||||
| Income taxes receivable |
202,817 |
22,897 | 18,886 | ||||||
| Investment in money market fund | 13,232 | - | - | ||||||
| Other assets | 196,216 | 234,505 | 167,387 | ||||||
| Total assets | $ | 12,987,890 | $ | 16,547,210 | $ | 17,618,879 | |||
| Credit facilities | $ | 1,782,716 | $ | 2,928,161 | $ | 3,418,571 | |||
| Securitization notes payable | 8,301,785 | 10,420,327 | 10,882,696 | ||||||
| Senior notes | 91,620 | 200,000 | 200,000 | ||||||
| Convertible debt | 486,150 | 750,000 | 750,000 | ||||||
| Funding payable | 6,097 | 21,519 | 28,834 | ||||||
| Accrued taxes and expenses | 158,115 | 216,387 | 207,669 | ||||||
| Other liabilities | 147,605 | 113,946 | 145,333 | ||||||
| Total liabilities | 10,974,088 | 14,650,340 | 15,633,103 | ||||||
| Shareholders’ equity | 2,013,802 | 1,896,870 | 1,985,776 | ||||||
| Total liabilities and shareholders’ equity | $ | 12,987,890 | $ | 16,547,210 | $ | 17,618,879 | |||
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Consolidated Statements of Cash Flows (Unaudited, Dollars in Thousands) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||
| Net income (loss) | $ | 9,833 | $ | 38,165 | ($17,385 | ) | $ | 80,894 | ||||||||
| Adjustments to reconcile net income (loss) to | ||||||||||||||||
| net cash provided by operating activities: | ||||||||||||||||
| Depreciation and amortization | 25,200 | 21,223 | 83,291 | 58,683 | ||||||||||||
| Accretion and amortization of fees | 3,879 | 9,528 | 15,903 | 20,120 | ||||||||||||
| Provision for loan losses | 234,816 | 250,659 | 797,703 | 851,817 | ||||||||||||
| Deferred income taxes | 177,379 | (7,808 | ) | 221,025 | (71,019 | ) | ||||||||||
| Stock-based compensation expense | 3,691 | 2,850 | 11,238 | 15,402 | ||||||||||||
| Amortization of warrants | 2,083 | - | 43,017 | - | ||||||||||||
| Gain on retirement of debt | (14,442 | ) | - | (54,064 | ) | - | ||||||||||
| Other | (2,906 | ) | 5,013 | 3,641 | 5,898 | |||||||||||
| Changes in assets and liabilities: | ||||||||||||||||
| Other assets | (135,613 | ) | 38,828 | (195,918 | ) | (41,823 | ) | |||||||||
| Accrued taxes and expenses | (37,939 | ) | (33,343 | ) | (45,988 | ) | 2,912 | |||||||||
| Net cash provided by operating activities | 265,981 | 325,115 | 862,463 | 922,884 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||
| Purchase of receivables | (198,588 | ) | (1,349,368 | ) | (1,112,143 | ) | (5,475,655 | ) | ||||||||
| Principal collections and recoveries on receivables | 1,074,933 | 1,610,081 | 3,312,854 | 4,729,917 | ||||||||||||
| Net purchases of leased vehicles | - | (19,899 | ) | - | (192,449 | ) | ||||||||||
| Investment in money market fund | - | - | (115,821 | ) | - | |||||||||||
| Proceeds from money market fund | 7,692 | - | 99,114 | - | ||||||||||||
| Net change in restricted cash and other |
(53,497 |
) |
(103,282 |
) |
132,038 |
(99,212 |
) | |||||||||
| Net cash provided (used) by investing activities | 830,540 | 137,532 | 2,316,042 | (1,037,399 | ) | |||||||||||
| Cash flows from financing activities: | ||||||||||||||||
| Net change in credit facilities | (158,105 | ) | 942,518 | (1,125,534 | ) | 876,422 | ||||||||||
| Net change in securitization notes payable | (953,056 | ) | (1,486,411 | ) | (2,111,096 | ) | (1,060,947 | ) | ||||||||
| Repurchase of common stock | - | - | - | (127,901 | ) | |||||||||||
| Proceeds from issuance of common stock | 4 | 505 | 1,271 | 14,051 | ||||||||||||
| Retirement of convertible debt | (10,250 | ) | - | (224,723 | ) | - | ||||||||||
| Other net changes | (22,870 | ) | (1,165 | ) | (35,246 | ) | (13,924 | ) | ||||||||
| Net cash used by financing activities | (1,144,277 | ) | (544,553 | ) | (3,495,328 | ) | (312,299 | ) | ||||||||
| Net decrease in cash and | ||||||||||||||||
| cash equivalents | (47,756 | ) | (81,906 | ) | (316,823 | ) | (426,814 | ) | ||||||||
| Effect of Canadian exchange rate changes on | ||||||||||||||||
| cash and cash equivalents | 1,997 | (1,006 | ) | 4,261 | 685 | |||||||||||
| Cash and cash equivalents at beginning of period | 166,690 | 567,087 | 433,493 | 910,304 | ||||||||||||
| Cash and cash equivalents at end of period | $ | 120,931 | $ | 484,175 | $ | 120,931 | $ | 484,175 | ||||||||
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Other Financial Data (Unaudited, Dollars in Thousands) |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Origination volume | $ | 210,064 | $ | 1,327,112 | $ | 1,110,184 | $ | 5,513,048 | ||||||||
| Loans securitized | - | - | 1,289,082 | 3,713,833 | ||||||||||||
| Average finance receivables | $ | 12,469,678 | $ | 16,187,675 | $ | 13,527,449 | $ | 16,261,870 | ||||||||
| March 31, | June 30, | March 31, | ||||||||||||||
| 2009 | 2008 | 2008 | ||||||||||||||
| Finance receivables: | ||||||||||||||||
| Principal | $ | 11,901,323 | $ | 14,981,412 | $ | 15,820,314 | ||||||||||
| Allowance for loan losses and | ||||||||||||||||
|
nonaccretable acquisition fees |
(917,992 | ) | (951,113 | ) | (899,506 | ) | ||||||||||
| $ | 10,983,331 | $ | 14,030,299 | $ | 14,920,808 | |||||||||||
| Allowance as a percent of ending | ||||||||||||||||
| finance receivables | 7.7 | % | 6.3 | % | 5.7 | % | ||||||||||
|
March 31,
2009 |
June 30,
2008 |
March 31,
2008 |
||||||||||||||
| Loan delinquency as a percent of | ||||||||||||||||
| ending finance receivables: | ||||||||||||||||
| 31 - 60 days | 6.0 | % | 6.0 | % | 5.3 | % | ||||||||||
| Greater than 60 days | 3.0 | 2.9 | 2.3 | |||||||||||||
| Total | 9.0 | % | 8.9 | % | 7.6 | % | ||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Contracts receiving a payment | ||||||||||||||||
| deferral as an average quarterly | ||||||||||||||||
| percent of average finance | ||||||||||||||||
| receivables | 8.0 | % | 5.8 | % | 7.8 | % | 6.2 | % | ||||||||
| Net charge-offs | $ | 239,800 | $ | 266,371 | $ | 830,824 | $ | 772,546 | ||||||||
| Annualized net charge-offs as a | ||||||||||||||||
| percent of average finance | ||||||||||||||||
| receivables | 7.8 | % | 6.6 | % | 8.2 | % | 6.3 | % | ||||||||
| Net recoveries as a | ||||||||||||||||
| percent of gross repossession | ||||||||||||||||
| charge-offs | 39.0 | % | 43.9 | % | 39.2 | % | 45.2 | % | ||||||||
|
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Components of net margin: |
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Finance charge income | $ | 452,186 | $ | 595,743 | $ | 1,483,719 | $ | 1,820,300 | ||||||||
| Other income | 29,191 | 42,999 | 90,893 | 124,370 | ||||||||||||
| Interest expense | (143,085 | ) | (208,084 | ) | (557,194 | ) | (633,378 | ) | ||||||||
| Net margin | $ | 338,292 | $ | 430,658 | $ | 1,017,418 | $ | 1,311,292 | ||||||||
| Annualized net margin as a percent of average finance receivables: | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Finance charge income | 14.7 | % | 14.8 | % | 14.6 | % | 14.9 | % | ||||||||
| Other income | 0.9 | 1.1 | 0.9 | 1.0 | ||||||||||||
| Interest expense | (4.6 | ) | (5.2 | ) | (5.5 | ) | (5.2 | ) | ||||||||
|
|
11.0 | % | 10.7 | % | 10.0 | % | 10.7 | % | ||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, | March 31, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Operating expenses | $ | 76,278 | $ | 100,016 | $ | 244,877 | $ | 308,065 | ||||||||
| Annualized operating expenses as a | ||||||||||||||||
| percent of average finance | ||||||||||||||||
| receivables | 2.5 | % | 2.5 | % | 2.4 | % | 2.5 | % | ||||||||
