CompuCredit Reports First Quarter Results.Business Editors ATLANTA--(BUSINESS WIRE)--May 4, 2004 CompuCredit (NASDAQ: CCRT) reported first quarter 2004 net income attributable to common shareholders of $17.7 million, or $0.36 per diluted share, as compared to its first quarter 2003 net income attributable to common shareholders of $29.5 million, or $0.60 per diluted share. Reflecting broad improvements in the credit quality of CompuCredit's 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 to the company, even if the debts are not currently due., the Company's net interest
margin was 17.5 percent in the first quarter of 2004, as compared to
15.5 percent for the first quarter of 2003. The adjusted charge-off rate
was 8.2 percent in the first quarter of 2004, as compared to 10.2
percent for the first quarter of 2003. Also, at March 31, 2004, the
60-plus day delinquency rate was 10.5 percent, as compared to 13.3
percent at March 31, 2003.CompuCredit also announced the appointment of William R. McCamey as the Company's new Treasurer. "Bill provides us with the necessary breadth of experience in the Treasury role--experience that will serve us well as we continue our business expansion into other markets, products and services," commented David G. Hanna, CompuCredit's CEO and Board Chairman. Bill, a Chartered Financial Analyst, joins CompuCredit from Watershed Advisors, a debt structuring advisory firm that he co-founded. Previously, he served as a Director with Wachovia Securities' Corporate and Investment Banking Group. Various references within this press release and the accompanying financial information are to the managed credit card receivables underlying the Company's off balance sheet securitization facilities. Performance metrics and data based on these managed receivables are key to any evaluation of the Company's performance in managing (including underwriting, valuing purchased receivables, servicing and collecting) the portfolios of receivables underlying the Company's securitization facilities. The Company allocates resources within the Company and manages the Company using financial data and results prepared on a so-called "managed basis." It is also important to analysts, investors and others that the Company provides selected metrics and data on a managed basis because this enables a comparison of CompuCredit to others within the specialty finance industry. Moreover, the Company's management, analysts, investors and others believe it is critical that they understand the credit performance of the entire portfolio of the Company's managed credit card receivables because it reveals information concerning the quality of loan originations and the related credit risks inherent within the securitized portfolios and the Company's retained interests in the securitization facilities. Managed receivables data assumes that none of the credit card receivables underlying the Company's off balance sheet securitization facilities were ever transferred to securitization facilities and presents net credit losses and delinquent balances on the receivables as if the Company still owned the receivables. Reconciliation of the managed receivables data to CompuCredit's GAAP financial statements requires recognition that substantially all (i.e., all but $59.1 million) of the Company's credit card receivables had been sold in securitization transactions as of March 31, 2004; this reconciliation requires the removal of all but $59.1 million of the managed receivables data from the Company's books and records to yield only the $59.1 million of originated credit card receivables and associated statistics under GAAP, coupled with the recording under GAAP of retained interests in various securitization structures. Further details regarding CompuCredit's first quarter financial performance will be discussed during management's conference call on Wednesday, May 5, 2004 at 8:00 a.m., Eastern Time. The media and public are invited to listen to the live webcast of the call, accessible on the Internet at www.CompuCredit.com. A replay of the conference call also will be available on the web site. CompuCredit Corporation uses analytical techniques that allow it to provide credit and other complementary services and products to consumers it believes to be underserved by traditional grantors of credit. Credit cards marketed by CompuCredit generally are issued by Columbus Bank and Trust Company under an agreement with CompuCredit. For more information about CompuCredit, visit www.CompuCredit.com. This release includes forward-looking statements. The words "will," "looking forward," "should" and similar expressions also are intended to identify forward-looking statements; however, this release also contains other forward-looking statements that may not be so identified. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond CompuCredit's control. Actual results may differ materially from those suggested by the forward-looking statements. Accordingly, there can be no assurance that such indicated results will be realized. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are the factors set forth in "Item 1. Business--Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2003. CompuCredit expressly disclaims any obligation to update any forward-looking statements except as may be required by law.
CompuCredit Corporation (CCRT)
Financial and Statistical Summary
(Unaudited)
At or For the Three Months Ended
March 31, December 31, March 31,
2004 2003 2003
---------- ------------ ---------
(In thousands, except per share
data)
Common Share Statistics
EPS -- Basic $ 0.36 $ 0.23 $ 0.60
EPS -- Diluted $ 0.36 $ 0.23 $ 0.60
Book Value Per Common Share
Outstanding (period end) (1) $ 11.77 $ 11.10 $ 9.40
Stock Price Per Share (period end) $ 21.14 $ 21.28 $ 6.28
Total Market Capitalization (period
end) $ 995,525 $1,000,437 $ 288,478
Shares Outstanding (period end) 47,092 47,013 45,936
Weighted Average Shares O/S -- Basic 51,726 51,493 50,827
Weighted Average Shares O/S --
Diluted 52,681 52,482 50,971
Average Managed Receivables
Statistics (2)
Average Managed Receivables $2,219,537 $2,419,674 $2,636,728
Average Shareholders' Equity $ 589,632 $ 569,897 $ 461,616
Net Interest Margin 17.5% 20.2% 15.5%
Return on Average Managed
Receivables 3.4% 2.0% 4.6%
Return on Average Equity (ROE) 12.7% 8.3% 26.5%
Net Charge-Off Rate 15.7% 15.0% 20.3%
Adjusted Charge-Off Rate 8.2% 7.8% 10.2%
Adjusted Charge-Offs $ 45,294 $ 47,304 $ 67,180
Risk Adjusted Margin 20.9% 21.9% 13.2%
Operating Ratio 10.0% 8.4% 8.4%
Other Income ratio 11.3% 9.3% 8.2%
Period-End Selected Credit Card Data(2)
Total Managed Receivables $2,090,644 $2,340,898 $2,470,041
Delinquency Rate (60+ days) 10.5% 12.0% 13.3%
Number of Accounts 2,276 2,416 3,169
Shareholders' Equity $ 610,849 $ 574,013 $ 478,315
Equity to Managed Receivables Ratio 29.2% 24.5% 19.4%
(1) Assumes preferred shares are converted into common shares as of
end of each period.
(2) Excludes receivables acquired at or near charge-off at the time of
purchase.
CompuCredit Corporation and Subsidiaries
Consolidated Balance Sheets
March 31,
2004 December 31,
(Unaudited) 2003
----------- ----------
(Dollars in thousands)
Assets
Cash and cash equivalents $ 69,286 $ 110,605
Restricted cash 10,000 11,921
Retained interests in credit card receivables
securitized 538,201 538,961
Amounts due from securitization 11,198 4,199
Loans receivable, net 29,060 16,271
Deferred costs, net 38,500 7,750
Software, furniture, fixtures and equipment, net 24,006 24,307
Investment in equity method investee 6,363 6,577
Investment in previously charged off
receivables 18,266 13,960
Investment in debt securities 20,678 15,007
Prepaid expenses and other assets 17,302 11,797
---------- ----------
Total assets $ 782,860 $ 761,355
========== ==========
Liabilities
Accounts payable and accrued expenses $ 28,862 $ 26,436
Notes payable 6,139 1,945
Deferred revenue 6,744 9,895
Income tax liability 70,245 96,491
---------- ----------
Total liabilities 111,990 134,767
---------- ----------
Minority interest 60,021 52,575
---------- ----------
Shareholders' equity
Preferred stock, no par value, 10,000,000
shares authorized:
Series A preferred stock, 30,000 shares issued
and 25,000 shares outstanding at March 31,
2004 and December 31, 2003, respectively 30,577 29,816
Series B preferred stock, 10,000 shares issued
and outstanding at March 31, 2004 and December
31, 2003, respectively 12,486 12,181
Common stock, no par value, 150,000,000 shares
authorized; 47,964,975 and 47,885,506 issued
at March 31, 2004 and
December 31, 2003, respectively - -
Additional paid-in capital 252,392 250,943
Treasury stock, at cost, 872,900 shares at
March 31, 2004 and December 31, 2003,
respectively (4,586) (4,586)
Deferred compensation (488) (593)
Warrants 16,498 -
Retained earnings 303,970 286,252
---------- ----------
Total shareholders' equity 610,849 574,013
---------- ----------
Total liabilities and shareholders' equity $ 782,860 $ 761,355
========== ==========
CompuCredit Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
For the Three Months Ended
March 31, December 31, March 31,
2004 2003 2003
---------- ------------ ---------
(Dollars in thousands, except
per share data)
Interest income (1) $ 7,705 $ 5,251 $ 1,209
Interest expense (91) (125) (3,298)
Provision for loan losses (9,115) (4,681) -
-------- -------- --------
Net interest income (expense) after
provision for loan losses (1,501) 445 (2,089)
-------- -------- --------
Other operating income:
Income from retained interests
in credit card receivables
securitized 14,641 10,166 36,307
Servicing income 25,298 23,641 27,666
Fees and other income 56,264 49,504 28,004
Equity in (loss) income of equity
method investee (214) 37 14,296
-------- -------- --------
Total other operating income 95,989 83,348 106,273
-------- -------- --------
Other operating expense:
Salaries and benefits 6,245 5,017 4,341
Credit card servicing 32,267 32,236 38,047
Marketing and solicitation 5,699 4,343 1,587
Depreciation 3,993 3,955 3,865
Other (2) 9,915 9,480 8,539
-------- -------- --------
Total other operating expense 58,119 55,031 56,379
-------- -------- --------
Income before minority interest and
income taxes 36,369 28,762 47,805
Minority interest (6,293) (10,295) -
-------- -------- --------
Income before income taxes 30,076 18,467 47,805
Income taxes (11,288) (6,634) (17,210)
-------- -------- --------
Net income $ 18,788 $ 11,833 $ 30,595
======== ======== ========
Net income attributable to common
shareholders $ 17,718 $ 10,787 $ 29,487
======== ======== ========
Average shares outstanding -- basic 51,726 51,493 50,827
======== ======== ========
Average shares outstanding -- diluted 52,681 52,482 50,971
======== ======== ========
Net income per share -- basic $ 0.36 $ 0.23 $ 0.60
======== ======== ========
Net income per share -- diluted $ 0.36 $ 0.23 $ 0.60
======== ======== ========
(1) Interest income includes:
(a) $248, $447, and $0 (in thousands) for the respective periods
related to our minority interest partner's share of interest income.
(b) $6,030, $2,544, and $0 (in thousands) for the respective periods
related to interest earned on unsecuritized credit card receivables,
the interest on which is reflected in the Company's net interest
margin calculation and the receivables of which are reflected in the
Company's average managed receivables balances.
(2) Other operating expense includes ancillary product expenses of
$298, $285, and $683 (in thousands) for the respective periods.
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