CompuCredit Announces Record Growth of 277,000 New Clients for the Second Quarter.ATLANTA--(BUSINESS WIRE)--July 28, 1999-- 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 announced record growth of 277,000 new clients for the quarter. CompuCredit's increased marketing efforts during the second quarter resulted in 59 percent growth in the number of cardholders since the end of the first quarter. CompuCredit also reported second quarter 1999 earnings of $1.1 million or $0.03 per share compared to the first quarter 1999 of $18.9 million or $0.57 per share. For the first six months ended June June: see month. 30, 1999, income was $20.0 million or $0.55 per share. "We are pleased to report record growth in the number of cardholders. Using our proprietary credit modeling technology, we have originated over 277,000 accounts since the end of the first quarter at the rate of around 20,000 to 25,000 new cardholders per week," 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). , CompuCredit's Chairman and Chief Executive Officer. "We also have found that we have attracted customers through a variety of channels, including 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 ," added Hanna. The decrease in the second quarter earnings from the first quarter reflects net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). of $25.1 million that CompuCredit received from its 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 one of the Company's securitizations in the first quarter and a $6.1 million increase in marketing expense in the second quarter. Although the increased marketing expenses decreased second quarter net income, it contributed to the growth in the number of accounts. The managed net interest margin increased to 21.0% for the second quarter of 1999 versus 19.8% for the first quarter of 1999. The managed 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 increased to 4.1% for the second quarter of 1999 versus 3.3% for the first quarter of 1999. This increase reflects the seasoning of the portfolio. At June 30, 1999, 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 fell to 6.4% from 8.2% as of March 31, 1999. The decrease in delinquency is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to better than expected collections and the increase in new 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 growth. As announced last week, CompuCredit has created a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , AspireCard.com, Inc., to market the Aspire(R) Visa(R) card through the Internet. After a significant investment of technology resources, CompuCredit has entered the Internet market. CompuCredit has developed proprietary technology to make on-line, real-time 1. real-time - Describes an application which requires a program to respond to stimuli within some small upper limit of response time (typically milli- or microseconds). Process control at a chemical plant is the classic example. credit decisions on its AspireCard.com web site. CompuCredit Corporation is a credit card company that uses technology based 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 it has developed to identify credit-worthy adj. 1. having an acceptable credit rating; worthy of having credit extended; as, a credit-worthy customer s>. consumers who it believes are not currently being served by more traditional consumer credit providers. CompuCredit completed its initial public offering in April 1999. CompuCredit markets Aspire(R) Visa(R) credit cards to these consumers on an 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. basis. CompuCredit also markets life insurance, card registration, telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. products, membership in buying clubs, travel services and debt waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. programs 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 under an agreement with CompuCredit. CompuCredit 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 July: see month. of this year. This press release includes statements concerning our operations, prospects, strategies, financial condition, future economic performance and consumer demand for our products, as well as our intentions, plans and objectives that 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. within the meaning of the federal securities laws and are intended to have the benefit of the federal safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for forward-looking statements. CompuCredit can give no assurance that its plans or expectations, as reflected in these forward-looking statements will be achieved. These forward-looking statements are subject to various assumptions, risks, trends, uncertainties and other factors that could cause actual results to differ materially from those that are currently planned or expected. These factors include the risks set forth under the caption "Risk Factors" in CompuCredit's prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. dated April 22, 1999 on file with the Securities and Exchange Commission. Moreover, as a consequence of those or other factors, CompuCredit's plans or expectations may change. CompuCredit undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. -0-
CompuCredit Corporation (CCRT)
Financial and Statistical Summary
At or For the Three Months Ended
June 30, March 31, June 30,
1999 1999 1998
----------------------------------
(In thousands, except per share
data)
Common Share Statistics (1)
EPS - Basic and Diluted $ 0.03 $ 0.57 $ 0.43
Book Value Per Share (period end) $ 3.43 $ 2.27 $ 1.06
Stock Price Per Share (period end) $ 19.00 n/a n/a
Total Market Capitalization $ 760,976 n/a n/a
(period end)
Shares Outstanding (period end) 40,051 32,385 31,340
Weighted Average Shares O/S -
Basic 37,719 32,385 31,340
Weighted Average Shares O/S -
Diluted 37,768 32,385 31,340
Average Managed Loans Statistics (2)
Average Managed Loans $ 496,859 $ 500,419 $ 337,161
Average Equity $ 119,617 $ 63,993 $ 31,190
Net Interest Margin 21.0% 19.8% 22.7%
Return on Average Managed Loans 0.9% 15.1% 16.4%
Return on Average Equity (ROE) 3.7% 118.0% 177.7%
Net Charge-Off Rate 18.3% 16.4% 4.3%
Pro Forma Net Charge-Off Rate (3) 4.1% 3.3% 1.4%
Net Charge-Offs $ 22,723 $ 20,457 $ 3,600
Pro Forma Net Charge-Offs (3) $ 5,094 $ 4,067 $ 1,179
Operating Ratio 7.6% 6.6% 3.0%
Period-End Managed Loans Statistics (2)
Total Managed Loans $ 526,217 $ 487,747 $ 397,500
Delinquency Rate (60+ days) 6.4% 8.2% 4.2%
Number of Accounts 606 382 202
Shareholders' Equity $ 137,335 $ 73,392 $ 33,362
Equity to Managed Loans Ratio 26.1% 15.0% 8.4%
(1) After giving effect to the 15.2-for-1 stock split payable to
shareholders of record on April 22, 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
Condensed Consolidated Balance Sheets
Unaudited
June 30, December 31,
1999 1998
-------------------------
(Dollars in thousands)
Assets
Cash and cash equivalents $54,615 $12,256
Retained interests in credit card
receivables securitized 101,677 65,184
Accrued interest and fees 3,443 1,979
-------------------------
Net credit card receivables 105,120 67,163
Amounts due from securitization
Deferred costs, net 1,633 1,375
Software, furniture, fixtures and
equipment, net 3,467 1,736
Prepaid expenses 920 195
Other assets 1,630 1,615
-------------------------
Total assets $170,763 $87,583
=========================
Liabilities
Amounts due to securitization $1,020 $10,774
Accrued expenses 8,412 4,745
Deferred revenue 5,447 2,075
Income tax liability 18,549 15,479
-------------------------
Total liabilities 33,428 33,073
Shareholders' equity
Preferred stock, no par value, 10,000,000
shares authorized, no shares issued and
outstanding at June 30, 1999; $100 par
value, cumulative and non-participating,
500,000 shares authorized, 200,000 issued
and outstanding at December 31, 1998 - 20,000
Common stock, no par value:
60,000,000 shares authorized, 40,051,392
issued and outstanding at June 30, 1999;
45,600,000 shares authorized, 32,384,860
issued and outstanding at December 31,
1998 (1) - -
Additional paid-in capital 92,795 9,953
Retained earnings 44,540 24,557
-------------------------
Total shareholders' equity 137,335 54,510
============ ============
Total liabilities and shareholders' equity $170,763 $87,583
=========================
(1) After giving effect to 15.2-for-1 stock split payable to
shareholders of record on April 22, 1999.
CompuCredit Corporation and Subsidiaries
Condensed Consolidated Statements of Income
Unaudited
For the Three Months Ended
June 30, March 31, June 30,
1999 1999 1998
-----------------------------------
(Dollars in thousands, except per share data)
Interest income $679 $246 $64
Interest expense:
Short-term borrowings - - 506
-----------------------------------
Total interest expense - - 506
Net interest income (expense) 679 246 (442)
Other operating income:
Securitization
income, net 1,737 252 5,868
Income from retained
interests in credit
card receivables
securitized 5,113 31,059 13,696
Servicing income 1,857 2,463 4,860
Other credit card fees 3,421 1,910 843
Interchange fees 1,341 710 353
Ancillary products 1,154 326 170
-----------------------------------
Total other operating
income 14,623 36,720 25,790
Other operating expense:
Salaries and benefits 719 585 221
Credit card servicing 1,310 1,101 643
Marketing and
solicitation 9,490 3,428 1,049
Professional fees 702 419 303
Data processing 241 859 480
Net occupancy 178 108 27
Ancillary product
expense Other 509 478 164
-----------------------------------
Total other operating
expense 13,554 7,385 2,988
Income before income taxes 1,748 29,581 22,360
Income tax expense (647) (10,699) (8,507)
-----------------------------------
Net income $1,101 $18,882 $13,853
===================================
Net income attributable to
common shareholders $963 $18,438 $13,404
===================================
Average shares outstanding
- basic (1) 37,719 32,385 31,340
===================================
Average shares outstanding
- diluted (1) 37,768 32,385 31,340
===================================
Earnings per share -
basic and diluted (1) $0.03 $0.57 $0.43
===================================
For the Six Months
Ended
June 30, June 30,
1999 1998
-----------------------
(Dollars in thousands, except per share data)
Interest income $925 $103
Interest expense:
Short-term borrowings - 506
-----------------------
Total interest expense - 506
Net interest income
(expense) 925 (403)
Other operating income:
Securitization
income, net 1,989 6,138
Income from retained
interests in credit
card receivables
securitized 36,172 14,603
Servicing income 4,320 4,860
Other credit card fees 5,331 1,410
Interchange fees 2,051 589
Ancillary products 1,480 184
-----------------------
Total other operating
income 51,343 27,784
Other operating expense:
Salaries and benefits 1,304 388
Credit card servicing 2,411 802
Marketing and
solicitation 12,918 1,879
Professional fees 1,121 402
Data processing 1,100 610
Net occupancy 286 43
Ancillary product
expense 812 101
Other 987 414
-----------------------
Total other operating 20,939 4,639
expense
Income before income taxes 31,329 22,742
Income tax expense (11,346) (8,507)
-----------------------
Net income $19,983 $14,235
=======================
Net income attributable to
common shareholders $19,401 $13,342
=======================
Average shares outstanding
- basic (1) 35,067 31,340
=======================
Average shares outstanding
- diluted (1) 35,091 31,340
=======================
Earnings per share -
basic and diluted (1) $0.55 $0.43
=======================
(1) After giving effect to the 15.2-for-1 stock split payable to
shareholders of record on April 22, 1999.
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