CompuCredit Reports Second Quarter Results.Business Editors ATLANTA--(BUSINESS WIRE)--Aug. 13, 2003 CompuCredit (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) ) reported second quarter 2003 net income attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to common shareholders of $20.3 million, or $0.42 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, as compared to its second quarter of 2002 net loss attributable to common shareholders of ($37.1) million, or ($0.80) per diluted share. The Company's year to date net income attributable to common shareholders as of June June: see month. 30, 2003 were $53.5 million, or $1.08 per diluted share, as compared to its year to date net loss attributable to common shareholders of ($36.0) million, or ($0.77) per diluted share as of June 30, 2002. The net interest margin was 16.4 percent in the second quarter of 2003 as compared to 13.1 percent for the second quarter of 2002. The adjusted 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 11.0 percent in the second quarter of 2003 as compared to 15.0 percent for the second quarter of 2002. At June 30, 2003, the 60-plus day 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 10.5 percent, as compared to 9.0 percent at June 30, 2002. On August 1, 2003, the Company in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. purchased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $824 million (face amount) in credit card 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 from Providian Providian Financial Corporation was one of the leading credit card issuers in the United States. It was headquartered in San Francisco, California, Providian had more than 10 million card holders and was ranked as the ninth largest credit card issuer. Bank. The Company has agreed to service the entire portfolio of credit card receivables. "We are very excited about this purchase," 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). , 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. of CompuCredit. "It allows us to leverage the expertise we have developed with this type of asset." Certain references within this press release are to the managed credit card receivables owned by the off balance sheet securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. facilities. Performance metrics Performance metrics are measures of an organizations activities and performance. Performance metrics should support a range of stakeholder needs from customers, shareholders to employees [1]. and data based on these managed receivables are key to any evaluation of the Company's performance in managing (including underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. , valuing purchased receivables, servicing and collecting) the portfolios of receivables owned by the securitization facilities. Indeed, the Company is managed and resources are allocated within the Company based on financial data and results prepared on a so-called so-called adj. 1. Commonly called: "new buildings ... in so-called modern style" Graham Greene. 2. "managed basis." It is also important to analysts, investors and others that the Company provides selected metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. and data on a managed basis because it is through the Company's reporting on this basis that they are able to compare CompuCredit to others within the specialty A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. 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 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. and the related credit risks inherent within the securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. portfolios and the Company's 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 securitization facilities. Managed receivables data assumes that CompuCredit had not sold the credit card receivables owned by the off balance sheet securitization facilities and presents the net credit losses and delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. balances on the receivables as if the Company had still owned the receivables. Reconciliation of the managed receivables data to CompuCredit's GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial statements requires recognition that substantially all of the Company's credit card receivables had been sold in securitization transactions as of June 30, 2003; this reconciliation requires the removal of all but $1.3 million of the managed receivables data from the Company's books and records to yield only the $1.3 million of originated credit card receivables and associated statistics under GAAP (which are included in other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. within the Company's GAAP balance sheet), coupled with the recording under GAAP of retained interests in various securitization structures. Further details regarding CompuCredit's second quarter financial performance will be discussed during management's conference call on Thursday Thursday: see week. , August 14, 2003 at 8:00 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 (Nasdaq: CCRT) 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 to serve consumers it believes to be underserved by traditional grantors of credit. Credit cards marketed by CompuCredit are generally 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. For more information about CompuCredit, visit http://www.CompuCredit.com.
CompuCredit Corporation (CCRT)
Financial and Statistical Summary
(Unaudited)
At or For the Three Months Ended
June 30, March 31, June 30,
2003 2003 2002
-----------------------------------------
(In thousands, except per share data)
Common Share Statistics
EPS - Basic $0.42 $0.67 $(0.80)
EPS - Diluted $0.42 $0.67 $(0.80)
Book Value Per Common
Share Outstanding
(period end) (1) $9.87 $9.47 $8.06
Stock Price Per Share
(period end) $12.14 $6.28 $6.82
Total Market
Capitalization (period
end) $568,201 $288,478 $317,534
Shares Outstanding
(period end) 46,804 45,936 46,559
Weighted Average Shares
O/S - Basic 51,116 50,827 46,559
Weighted Average Shares
O/S - Diluted 51,608 50,971 46,585
Average Managed Loans
Statistics (2)
Average Managed Loans $2,359,513 $2,636,728 $1,945,024
Average Shareholders'
Equity $489,211 $462,539 $435,842
Net Interest Margin 16.4% 15.5% 13.1%
Return on Average Managed
Loans 3.6% 5.2% (7.4)%
Return on Average Equity
(ROE) 17.5% 29.7% (33.1)%
Net Charge-Off Rate 20.9% 20.3% 15.0%
Adjusted Charge-Off Rate 11.0% 10.2% 15.0%
Adjusted Charge-Offs $64,745 $67,180 $72,979
Risk Adjusted Margin 14.4% 14.1% 5.5%
Operating Ratio 8.5% 8.4% 7.6%
Other Credit Card Income
ratio 9.2% 9.1% 7.4%
Period-End Selected
Credit Card Data (2)
Total Managed Loans $2,242,542 $2,470,041 $2,260,442
Delinquency Rate (60+
days) 10.5% 13.3% 9.0%
Number of Accounts 2,707 3,169 2,285
Shareholders' Equity $506,110 $482,008 $412,350
Equity to Managed Loans
Ratio 22.6% 19.5% 18.2%
(1) Assumes preferred shares are converted into common shares as of
end of each period.
(2) Excludes receivables at or near charge-off at the time of
purchase.
CompuCredit Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
June 30, December 31,
2003 2002
------------------------------
(Dollars in thousands)
Assets
Cash and cash equivalents $100,333 $120,416
Restricted cash 10,127 10,112
Retained interests in credit card
receivables securitized 373,204 291,439
Amounts due from securitization 14,245 7,235
Deferred costs, net 4,609 8,314
Software, furniture, fixtures and
equipment, net 25,782 29,296
Investment in equity-method investee 6,810 15,593
Investment in previously charged off
receivables 12,164 -
Investment in debt securities 23,910 18,819
Prepaid expenses and other assets 15,474 17,691
------------------------------
Total assets $586,658 $518,915
==============================
Liabilities
Accounts payable and accrued expenses $25,078 $32,570
Notes payable 7,506 -
Deferred revenue 9,943 8,979
Income tax liability 38,021 29,498
------------------------------
Total liabilities 80,548 71,047
Shareholders' equity
Preferred stock, no par value,
10,000,000 shares authorized:
Series A preferred stock, 25,912 and
30,000 shares issued and outstanding
at June 30, 2003 and December 31,
2002, respectively 28,572 32,466
Series B preferred stock, 10,000 shares
issued and outstanding
at June 30, 2003 and December 31,
2002, respectively 11,593 11,035
Common stock, no par value, 150,000,000
shares authorized;
47,676,802 and 46,809,165 issued at
June 30, 2003 and December 31,
2002, respectively - -
Additional paid-in capital 249,022 241,400
Treasury stock, at cost, 872,900 and
832,900 shares
at June 30, 2003 and December 31,
2002, respectively (4,586) (4,338)
Deferred compensation (803) (1,013)
Note issued to purchase stock - (500)
Retained earnings 222,312 168,818
------------------------------
Total shareholders' equity 506,110 447,868
------------------------------
Total liabilities and shareholders'
equity $586,658 $518,915
==============================
CompuCredit Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
For the Three Months For the Six Months
Ended Ended
June 30, March 31, June 30, June 30, June 30,
2003 2003 2002 2003 2002
---------------------------- -------------------
(Dollars in thousands, except per share data)
Net Interest
(expense) income ($1,404) ($2,089) $252 ($3,493) $557
Other operating
income:
(Loss) income
from retained
interests in
credit card
receivables
securitized 10,766 36,307 (62,921) 47,073 (57,219)
Servicing income 24,863 27,666 2,394 52,529 3,679
Other credit
card fees and
other income 38,718 33,774 31,775 72,492 65,055
Equity in income
of equity-
method investee 13,612 14,296 4,544 27,908 4,544
---------------------------- -------------------
Total other operating
income 87,959 112,043 (24,208) 200,002 16,059
Other operating
expense:
Salaries and
benefits 4,428 4,341 3,028 8,769 6,624
Credit card
servicing 33,456 38,047 15,817 71,503 35,887
Marketing and
solicitation 2,827 1,587 2,417 4,414 5,041
Depreciation 3,905 3,865 3,620 7,770 7,190
Other (2) 8,783 8,539 6,654 17,322 14,116
---------------------------- -------------------
Total other operating
expense 53,399 56,379 31,536 109,778 68,858
(Loss) income before
income taxes 33,156 53,575 (55,492) 86,731 (52,242)
Income taxes (11,736) (19,287) 19,422 (31,023) 18,284
---------------------------- -------------------
Net (loss) income $21,420 $34,288 ($36,070) $55,708 ($33,958)
============================ ===================
Net (loss) income
attributable to
common shareholders $20,314 $33,180 ($37,099) $53,494 ($35,991)
============================ ===================
Average shares
outstanding - basic 51,116 50,827 46,559 51,032 46,559
============================ ===================
Average shares
outstanding -
diluted 51,608 50,971 46,585 51,358 46,575
============================ ===================
(Loss) income per
share - basic (1) $0.42 $0.67 ($ 0.80) $1.09 ($ 0.77)
============================ ===================
(Loss) income per
share - diluted (1) $0.42 $0.67 ($ 0.80) $1.08 ($ 0.77)
============================ ===================
(1) The effects of the preferred stock, which are convertible into
common shares, were excluded from the EPS computations because their
inclusion would have been anti-dilutive for the three and six months
ended June 30, 2002.
(2) Other operating expense includes ancillary product expenses of
$507, $683, $1,054, $1,190 and $3,053 (in thousands) for the
respective periods.
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