Advanta Provides Earnings Guidance for 2005; Increases 2005 Dividends by 20 Percent.SPRING HOUSE, Pa. -- Advanta Advanta is an American banking company. Currently, it controls two banks, Advanta Bank Corp and Advanta National Bank. The banking corporation is not associated with Advanta Energy Corp., an energy consulting practice based in California. Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ADVNB; ADVNA ADVNA Advanta Corporation (stock symbol) ) today announced that it expects its 2005 pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern earnings for Advanta Business Cards of between $90 million and $95 million. Earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the is expected to be between $1.85 and $1.95 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for Class A and Class B shares combined. Consistent with prior periods, the earnings per share estimate assumes no gains or losses associated with the Company's venture capital portfolio as such amounts are based on future market conditions that cannot be reliably forecasted. During 2005, managed receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed are expected to grow 10% to 20% and owned receivables are expected to grow 23% to 33%. "Our strategy for 2005 remains focused on improving our asset quality and building our relationships with profitable, high credit quality customers," said Dennis Dennis is a male first name derived from the Greco-Roman name Dionysius meaning "servant of Dionysus", the Thracian god of wine, which is ultimately derived from the Greek Dios (Διος, "of Zeus") combined with Nysos or Nysa (Νυσα), where the Alter, Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We will continue to strengthen our offerings to the small business market by emphasizing access to products and services that meet the unique demands of small business and providing exceptional value to our customers." Advanta also announced that its Board of Directors has approved a 20 percent increase in its regular quarterly cash dividend effective for its first quarter 2005 dividend payable in May. As a result of this increase, 2005 quarterly dividends declared for its Class A common stock will increase from 9.45 cents to 11.34 cents and 2005 quarterly dividends declared for its Class B common stock will increase from 11.34 cents to 13.61 cents. Conference Call Details Advanta management will hold a conference call with analysts and institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. today, November November: see month. 29, at 8:30 a.m. Eastern time. The call will be broadcast simultaneously for the public over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the through www.advanta.com or www.vcall.com. To listen to the live call, please go to the website at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. Replays of the call will be available beginning at noon today on the Internet at www.advanta.com or www.vcall.com or by dialing (719) 457-0820 and referring to confirmation code 885511. The conference call may include a discussion of non-GAAP financial measures, which are reconciled to the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measure in this press release or the statistical supplements available at www.advanta.com in the "Corporate Info section. About Advanta Advanta focuses on the small business market and related community, providing funding and support to the nation's small businesses through innovative products and services. Using its direct marketing and information based expertise, Advanta identifies potential customers and provides a high level of service tailored to the unique needs of small businesses. Advanta is one of the nation's largest issuers (through Advanta Bank Corp.) of MasterCard MasterCard Worldwide (NYSE: MA) is a mutinational corporation based in Purchase, NY in the United States. Throughout the world, its principal business is to process payments between the banks of merchants and the banks of purchasers that use its "Mastercard" branded debit- and business credit cards to small businesses. Since 1951, Advanta has pioneered many of the marketing techniques common in the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry today, including remote lending and direct mail, affinity and relationship marketing. Learn more about Advanta at www.advanta.com. This Press Release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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: (1) the Company's managed net interest income including changes resulting from fluctuations in the volume of receivables and the range and timing of pricing offers to cardholders; (2) competitive pressures; (3) political conditions, social conditions, monetary and fiscal policies and general economic conditions that affect the level of new account originations, customer spending, delinquencies and charge-offs; (4) factors affecting fluctuations in the number of accounts or receivable balances, including the retention of cardholders after promotional pricing periods have expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. ; (5) interest rate fluctuations; (6) the level of expenses; (7) the timing of the securitizations of the Company's receivables; (8) factors affecting the value of investments held by the Company; (9) the effects of government regulation, including restrictions and limitations imposed by banking laws, regulators and examinations; (10) effect of, and changes in, tax laws, rates, regulations and policies; (11) relationships with customers, significant vendors and business partners; (12) factors affecting the Company's ability to successfully develop, acquire, produce, test and market products or services; (13) the amount and cost of financing available to the Company; (14) the ratings on the debt of the Company and its subsidiaries; (15) revisions to estimates associated with the discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of the Company's mortgage and leasing businesses; (16) the effect of changes in accounting policies or practices as may be required by changes in U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ; (17) the impact of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; (18) the proper design and operation of the Company's disclosure controls and procedures; and (19) the ability to attract and retain key personnel. Additional risks that may affect the Company's future performance are detailed in the Company's filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. and its Quarterly Reports on Form 10-Q Form 10-Q See 10-Q. . The Company has provided managed receivable data and other non-GAAP financial measurements in this document. Management believes that these non-GAAP financial measures used in managing the business may provide users additional useful information. The table attached to this press release includes a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure and a description of why the non-GAAP financial measures are useful to investors.
ADVANTA
($ in thousands)
RECONCILIATION OF FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES
-------------------------------------------------------------
In addition to evaluating the financial performance of the Advanta
Business Cards segment under U.S. generally accepted accounting
principles ("GAAP"), we evaluate Advanta Business Cards'
performance on a managed basis. Our managed business credit card
receivable portfolio is comprised of both owned and securitized
business credit card receivables. We sell business credit card
receivables through securitizations accounted for as sales under
GAAP. We continue to own and service the accounts that generate
the securitized receivables. Managed data presents performance as
if the securitized receivables had not been sold. We believe that
performance on a managed basis provides useful supplemental
information because we retain interests in the securitized
receivables and, therefore, we have a financial interest in and
exposure to the performance of the securitized receivables.
Revenue and credit data on the managed portfolio provides
additional information useful in understanding the performance of
the retained interests in business credit card securitizations.
The data below provides a reconciliation of forward-looking
managed receivables and managed net principal charge-offs as a
percentage of average managed receivables (non-GAAP financial
measures) to owned receivables and owned net principal charge-offs
as a percentage of average owned receivables (the most directly
comparable GAAP financial measures). In the forward-looking
business credit card credit data below, the Low End of Range
column assumes the forward- looking average receivable balances
multiplied by our Low End of Range charge-off rate expectations,
and the High End of Range column assumes the forward-looking
average receivable balances multiplied by our High End of Range
charge-off rate expectations. The data presented below depict only
certain possibilities out of a large set of possible scenarios.
At December 31, 2005
-----------------------------
Forward-Looking Ending Business Credit Low End of High End of
Card Receivable Balances: Range Range
------------ --------------
Owned $ 905,000 $ 985,000
Securitized 2,705,000 2,950,000
------------ --------------
Managed $ 3,610,000 $ 3,935,000
Forward-Looking Average Business Credit Year Ended
Card Receivable Balances: Dec. 31, 2005
-------------
Owned $ 840,000
Securitized 2,685,000
-------------
Managed $ 3,525,000
Year Ended December 31, 2005
----------------------------
Forward-Looking Business Credit Card Low End of High End of
Credit Data: Range Range
------------ --------------
Owned net principal charge-offs $ 41,600 $ 45,800
As a percentage of average owned
receivables 4.95 % 5.45 %
Securitized net principal charge-
offs $ 143,500 $ 156,900
As a percentage of average
securitized receivables 5.34 % 5.84 %
Managed net principal charge-offs $ 185,100 $ 202,700
As a percentage of average
managed receivables 5.25 % 5.75 %
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