CompuCredit Announces Fourth Quarter Earnings.Business Editors ATLANTA--(BUSINESS WIRE)--Jan. 30, 2001 CompuCredit Corporation (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 : CCRT CCRT Core Conflictual Relationship Theme CCRT Conseil Canadien de la Réadaptation et du Travail (Canadian Council on Rehabilitation and Work) CCRT Cape Cod Rail Trail (Massachusetts, USA) ) today reported fourth quarter 2000 net income of $11.3 million, or $0.24 per share. For the year ending December December: see month. 31, 2000, CompuCredit reported net income of $82.4 million, or $1.79 per share. These results compare to fourth quarter 1999 net income of $32.3 million or $.77 per share. The fourth quarter of 1999 included one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. income of $18.1 million from retained interests Retained interest (also colloquially known as a payout penalty) is future, currently unpaid, interest that some lenders add to the remaining principal of a loan to determine a payout figure in the event that the loan is terminated before the completion of the original term. in the company's purchased portfolios. For the year ending December 31, 1999, the company reported net income of $63.5 million or $1.61 per share. "We are disappointed in our fourth quarter financial performance," said David Hanna Han·na , Marcus Alonzo Known as "Mark." 1837-1904. American financier and politician who managed the 1896 and 1900 presidential campaigns of William McKinley and served as a U.S. senator from Ohio (1897-1904). , Chief Executive Officer. "Several factors impacted the quarter, including slower balance growth due to increased competition and decreased consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. . Other factors were increased marketing expenses and a higher level of charge-offs from the seasoning of our portfolio. "We have taken a hard look at the current environment and adjusted our outlook, resulting in revised growth and profitability targets," Mr. Hanna added. "Our business model continues to be validated val·i·date tr.v. val·i·dat·ed, val·i·dat·ing, val·i·dates 1. To declare or make legally valid. 2. To mark with an indication of official sanction. 3. and we expect to grow profitably as the portfolio seasons." CompuCredit spent a record $20.7 million on marketing during the fourth quarter of 2000, compared to $9.6 million in the fourth quarter of 1999. "We spent a tremendous amount on marketing which helped generate record growth of nearly 400,000 accounts, and also allowed us to test segments within our target market to identify shifts in the supply and demand of our targeted consumers," Mr. Hanna noted. "This testing gives us confidence that we should have continued success within our core niches. Additionally, this testing will allow us to focus on the most profitable segments for our future growth." During the quarter, the company continued testing and evaluating various channels to expand its lending base and marketing opportunities. It also strengthened its commitment to building and maintaining long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. relationships with its customers by engaging a highly respected consumer satisfaction survey firm to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data its own on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" findings of superior customer service. For the fourth quarter of 2000, the managed net interest margin was 21.8 percent as compared to 23.6 percent in the fourth quarter of 1999 and 23.4 percent in the third quarter of 2000. The decrease in the net interest margin is primarily a function of higher charge-offs as APR APR See: Annual Percentage Rate and late fee charge-offs are netted against current period net interest margins. The pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. rate was 13.2 percent in the fourth quarter of 2000 as compared to 11.0 percent for the third quarter of 2000. At December 31, 2000, the 60+ day managed delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. rate was 9.5 percent as compared to 8.8 percent as of September September: see month. 30, 2000. The return on average managed loans was 3.2 percent for the fourth quarter of 2000, compared to 7.1 percent for the third quarter of 2000. The operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: was 7.9 percent for the fourth quarter of 2000, compared to 7.6 percent for the third quarter of 2000. During the year 2000, CompuCredit's book value per share increased to $8.69 from $4.21 at the end of 1999. 2001 Business Guidance CompuCredit had reduced growth targets for 2001 in order to position the company for a strong and successful future. "Our business strategy has always been to focus on profitability first, liquidity second and then growth," said Mr. Hanna. "Because of market conditions and our unwillingness to grow at the expense of profitability, we are resetting our expectations to 30 - 35 percent growth in our managed portfolio. Our earnings expectations for 2001 are in the range of $1.22 - $1.26 per share. For the future, we are also targeting year over year earnings growth of 25 percent. "Even with our reset projections, we believe that we can achieve a return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). in excess of 3 percent -- still one of the highest return on assets in the credit card sector," he said.
2001 ANNUAL TARGETS
New Account Growth 600,000 - 800,000 new accounts
Receivable Growth 30% - 35%
Managed EPS $1.22 to $1.26 ($.10 Q1 and $.35 to
$.40 in other quarters)
Managed ROA 3.3%
Net Interest Margin 22%
ProForma Charge-Offs 15%, peaking in the first quarter.
All Other Credit Card Income 8%
Risk Adjusted Margin 15%
Operating Ratio 8%
Further details regarding CompuCredit's fourth quarter financial performance will be discussed during management's conference call on Wednesday Wednesday: see week. , January January: see month. 31, 2001 at 8:30 a.m. Eastern Standard Time. The media and public are invited to listen to the live webcast of the call, accessible on 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 at http://www.CompuCredit.com. The conference call will be archived at the above web site for those interested parties that are unable to attend at this time. CompuCredit Corporation is a credit card company that uses analytical techniques An analytical technique is a method that is used to determine the concentration of a chemical compound or chemical element. There are a wide variety of techniques used for analysis, from simple weighing (gravimetric) to titrations (titrimetric)to very advanced techniques using , including sophisticated computer models, to identify consumers who it believes are credit-worthy adj. 1. having an acceptable credit rating; worthy of having credit extended; as, a credit-worthy customer s>. and are overlooked by more traditional consumer credit providers. CompuCredit markets unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. Aspire(R) Visa(R) credit cards through direct mail, telemarketing telemarketing, the practice of selling goods or services to customers by means of the telephone or of surveying consumer preferences in telephone conversations. and the Internet. In July July: see month. 1999, CompuCredit launched its consumer web site, www.aspirecard.com, through its Internet marketing See Internet advertising. services subsidiary AspireCard.com, Inc. Consumers can apply online and receive a credit decision within seconds. CompuCredit also markets credit life insurance, card registration, buying club memberships and travel services to its cardholders. Aspire Visa cards are issued by Columbus Columbus. 1 City (1990 pop. 178,681), seat of Muscogee co., W Ga., at the head of navigation on the Chattahoochee River; settled and inc. 1828 on the site of a Creek village. Bank and Trust Company under an agreement with CompuCredit. CompuCredit completed its initial public offering in April of 1999 and was included in the Russell Russell, English noble family. It first appeared prominently in the reign of Henry VIII when John Russell, 1st earl of Bedford, 1486?–1555, rose to military and diplomatic importance. 2000(R) Index in July 1999 and the NASDAQ FIN-100 Index in May 2000. For more information about CompuCredit, visit our web site at www.CompuCredit.com. All statements in this press release concerning our financial performance and earnings expectations for fiscal year 2001, including expectations with respect to loss rates and information under "2001 Business Guidance," are 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. . These forward-looking statements are not guarantees of future performance and are subject to various assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those that are suggested by these forward-looking statements. These factors include, among others, the following risks and others set forth under the caption "Risk Factors" in CompuCredit's 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. for the year ended December 31, 1999, on file with the Securities and Exchange Commission: we have a limited experience with our 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 ; we may be unable to meet our future capital and liquidity needs or may be forced to rely on more expensive funding sources than securitizations to sustain our growth; we may encounter other unanticipated difficulties as we seek to sustain and manage our growth; we may be unable to successfully evaluate the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of our clients and price our credit products so as to remain as profitable as expected; we may experience increased delinquencies and defaults resulting from lack of seasoning of our credit card portfolio; increases in interest rates may increase our cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. and reduce the payment performance of our clients; unpredictable economic and other factors could adversely affect our business; changes in consumer protection or other laws may adversely affect our ability to collect credit card account balances or otherwise adversely affect our business or expose us to 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. ; adverse publicity could impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. acceptance of our products; intense competition for credit card customers could hinder hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. our efforts to attract new customers and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. cause us to lose accounts or account balances; we may not be able to successfully target internet clients or evaluate their creditworthiness; our reputation and business may be damaged by internet security ''This article or section is being rewritten at Internet security is the process of protecting data and privacy of devices connected to internet from information robbery, hacking, malware infection and unwanted software. breaches or other internet related problems; we may encounter unanticipated difficulties integrating and managing acquired companies or businesses; and we may not realize the benefits or net income we expect from acquisitions. Moreover, as a consequence of those or other factors, CompuCredit's plans or expectations may change. CompuCredit expressly disclaims any obligation, publicly or otherwise, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CompuCredit Corporation (CCRT)
Financial and Statistical Summary
At or For the Three Months Ended
December 31, September 30, December 31,
2000 2000 1999
-------------------------------------------
(In thousands, except per share data)
Common Share Statistics(1)
EPS - Basic $ 0.24 $ 0.48 $ 0.77
EPS - Diluted $ 0.24 $ 0.48 $ 0.77
Book Value Per Share
(period end) $ 8.69 $ 8.45 $ 4.21
Stock Price Per Share
(period end) $ 18.13 $ 56.09 $ 38.50
Total Market
Capitalization
(period end) $ 843,078 $2,609,183 $1,610,624
Shares Outstanding
(period end) 46,515 46,515 41,834
Weighted Average
Shares O/S - Basic 46,515 46,468 41,834
Weighted Average
Shares O/S - Diluted 46,647 46,686 41,991
Average Managed Loans Statistics(2)
Average Managed Loans $1,398,041 $1,256,239 $ 769,624
Average Equity $ 395,385 $ 380,569 $ 162,334
Net Interest Margin 21.8% 23.4% 23.6%
Return on Average Managed
Loans 3.2% 7.1% 16.8%
Return on Average Equity
(ROE) 11.5% 23.3% 79.6%
Net Charge-Off Rate 13.3% 11.4% 9.3%
Pro Forma Net Charge-Off
Rate(3) 13.2% 11.0% 5.6%
Net Charge-Offs $ 46,552 $ 35,678 $ 17,985
Pro Forma Net
Charge-Offs(3) $ 46,132 $ 34,525 $ 10,828
Risk Adjusted Margin 18.6% 21.8% 29.4%
Operating Ratio 7.9% 7.6% 8.7%
Period-End Managed Loans Statistics(2)
Total Managed Loans $1,528,372 $1,321,128 $ 898,691
Delinquency Rate (60+ days) 9.5% 8.8% 6.4%
Number of Accounts 2,178 1,891 1,181
Shareholders' Equity $ 404,181 $ 392,844 $ 176,221
Equity to Managed Loans
Ratio 26.4% 29.7% 19.6%
(1) After giving retroactive effect to the 15.2-for-1 stock split
effective April 28, 1999.
(2) Excludes receivables at or near charge-off at the time of
purchase.
(3) Net of purchase discount related to credit quality on purchased
portfolios.
CompuCredit Corporation and Subsidiaries
Consolidated Balance Sheets
December 31, December 31,
2000 1999
--------------------------------
(Dollars in thousands)
Assets
Cash and cash equivalents $68,980 $11,837
Restricted cash - 10,000
Retained interests in credit card
receivables securitized 325,583 165,572
Accrued interest and fees 24,569 9,828
--------------------------------
Net credit card receivables 350,152 175,400
Amounts due from securitization 11,735 12,010
Deferred costs, net 8,332 2,235
Software, furniture, fixtures
and equipment, net 14,268 6,605
Prepaid expenses 5,540 1,742
Other assets 11,498 5,719
--------------------------------
Total assets $470,505 $225,548
================================
Liabilities
Accrued expenses $21,531 $10,575
Deferred revenue 9,217 6,601
Income tax liability 35,576 32,151
--------------------------------
Total liabilities 66,324 49,327
Shareholders' equity
Preferred stock, no par value,
10,000,000 shares authorized,
no shares issued and outstanding
at December 31, 2000 and
December 31, 1999 - -
Common stock, no par value,
150,000,000 shares authorized;
46,514,639 and 41,834,725 issued
and outstanding at December 31, 2000
and December 31, 1999, respectively - -
Additional paid-in capital 239,789 93,374
Retained earnings 164,392 82,847
--------------------------------
Total shareholders' equity 404,181 176,221
--------------------------------
Total liabilities and
shareholders' equity $470,505 $225,548
================================
CompuCredit Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
For the Three For the Twelve
Months Ended Months Ended
Dec 31, Sept 30, Dec 31, Dec 31, Dec 31,
2000 2000 1999 2000 1999
------------------------------ ------------------
(Dollars in thousands, (Dollars in thousands,
except per share data) except per share data)
Interest income $1,461 $1,796 $675 $7,091 $2,152
Other operating income:
Securitization income,
net 1,981 4,041 6,858 11,778 12,470
Income from retained
interests in credit
card receivables
securitized 20,593 29,547 40,384 113,944 88,800
Servicing income 1,648 1,791 2,186 7,705 8,893
Other credit card
fees 16,999 14,557 8,135 53,165 19,506
Interchange fees 6,154 4,939 4,443 19,880 9,202
Ancillary products 8,455 6,424 6,598 28,497 17,731
------------------------------ ------------------
Total other operating
income 55,830 61,299 68,604 234,969 156,602
Other operating expense:
Salaries and
benefits 1,894 1,485 954 5,833 3,094
Credit card
servicing 9,768 7,838 4,183 28,320 9,009
Marketing and
solicitation 20,715 14,414 9,583 59,509 33,234
Professional fees 775 555 364 2,255 1,660
Data processing 1,254 909 845 4,519 2,745
Net occupancy 355 285 244 1,160 737
Ancillary product
expense 2,308 2,189 1,805 8,501 6,758
Other 2,781 2,176 1,263 7,808 3,147
------------------------------ ------------------
Total other
operating expense 39,850 29,851 19,241 117,905 60,384
Income before
income taxes 17,441 33,244 50,038 124,155 98,370
Income tax expense (6,104) (11,068) (17,752) (41,781) (34,267)
------------------------------ ------------------
Net income $11,337 $22,176 $32,286 $82,374 $64,103
============================== ==================
Net income
attributable to
common Shareholders $11,337 $22,176 $32,286 $82,374 $63,521
============================== ==================
Average shares
outstanding -
basic (1) 46,515 46,468 41,834 45,886 39,363
============================== ==================
Average shares
outstanding -
diluted (1) 46,647 46,686 41,991 46,070 39,439
============================== ==================
Earnings per
share - basic (1) $0.24 $0.48 $0.77 $1.80 $1.61
============================== ==================
Earnings per
share - diluted (1) $0.24 $0.48 $0.77 $1.79 $1.61
============================== ==================
(1) After giving retroactive effect to the 15.2-for-1 stock split
effective April 28, 1999.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion