ATLANTA, GA, May 08, 2007 (MARKET WIRE via COMTEX News Network) -- CompuCredit (NASDAQ: CCRT) reported a first quarter 2007 managed net
loss of $9.5 million, or $0.19 of managed loss per common share on a
fully diluted basis, as compared with $54.8 million of managed
earnings, or $1.09 of managed earnings per common share on a fully
diluted basis, for the first quarter of 2006.
Under GAAP, the first quarter 2007 net loss was $2.5 million, or a
$0.05 net loss per common share on a fully diluted basis, as compared
to first quarter 2006 net income of $30.7 million, or $0.61 of net
income per common share on a fully diluted basis.
"Factors adversely affecting our first quarter results included lower
than expected fee assessments due to lower than expected
delinquencies, the timing and extent of our marketing efforts, and
the final transitional effects of implementing our previously
announced decision to discontinue billing finance charges and fees on
credit card accounts that become over 90 days delinquent," said David
G. Hanna, CompuCredit's Chairman and Chief Executive Officer.
"We remain happy with the fundamentals and underlying credit quality
of our business, and we are pleased with the capital we deployed
during and shortly after the close of the first quarter to acquire
over $1.1 billion in credit card and auto finance receivables, expand
our auto financing platform and capabilities, and repurchase
approximately 2.9 million of our shares," added Mr. Hanna.
CompuCredit's net interest margin was 17.9 percent in the first
quarter of 2007, as compared to 25.0 percent for the first quarter of
2006 and 22.6 percent in the previous quarter. The adjusted
charge-off rate was 12.5 percent in the first quarter of 2007, as
compared to 7.1 percent for the first quarter of 2006 and 11.0
percent in the previous quarter. Also, as of March 31, 2007, the
60-plus day delinquency rate was 12.8 percent, as compared to 10.6
percent as of March 31, 2006 and 14.1 percent as of December 31,
2006.
Various references within this press release and the accompanying
financial information are to CompuCredit's "managed" results, which
include the results of its non-securitized receivables, together with
the receivables underlying its off-balance-sheet securitization
facilities. Financial, operating and statistical data based on these
aggregate managed receivables are key to any evaluation of
CompuCredit's performance in managing (including underwriting,
valuing purchased receivables, servicing and collecting) the
portfolios of receivables reflected on CompuCredit's balance sheet
and underlying its securitization facilities. In allocating
CompuCredit's resources and managing its business, management relies
heavily upon financial, operating and statistical data prepared on a
so-called "managed basis." It is also important to analysts,
investors and others that CompuCredit provides selected metrics and
data on a managed basis because this allows a comparison of
CompuCredit to others within the specialty finance industry.
Moreover, CompuCredit's management, analysts, investors and others
believe it is critical that they understand the credit performance of
the entire portfolio of CompuCredit's managed receivables because it
reveals information concerning the quality of loan originations and
the related credit risks inherent within the securitized portfolios
and CompuCredit's retained interests in its securitization facilities.
Managed receivables data assume that none of the credit card
receivables underlying CompuCredit's off-balance-sheet securitization
facilities was ever transferred to securitization facilities and
present the net credit losses and delinquent balances on the
receivables as if we still owned the receivables. Reconciliation of
the managed receivables data to CompuCredit's GAAP financial
statements requires: (1) recognition that a significant majority of
CompuCredit's credit card receivables (i.e., all but $801.4 million
of GAAP credit card receivables at gross face value) had been sold in
securitization transactions as of March 31, 2007; (2) an
understanding that CompuCredit's managed receivables data are based
on billings and actual charge-offs as reported to us through
underlying systems of record (i.e., without regard to an allowance for
uncollectible loans and fees receivable); (3) a look-through to
CompuCredit's economic share of (or equity interest in) the
receivables that we manage for CompuCredit's equity-method investees;
(4) removal of CompuCredit's minority interest holders' interests in
the managed receivables underlying CompuCredit's GAAP consolidated
results; and (5) recognition that CompuCredit's Fingerhut managed
receivables were recorded at a $0 basis in CompuCredit's GAAP
financial statements prior to CompuCredit's re-securitization of
these receivables in September 2005.
Further details regarding CompuCredit's first quarter 2007 financial
performance will be discussed during management's conference call on
Tuesday, May 8, 2007 at 5:00 p.m., Eastern Time. The media and public
are invited to listen to the live webcast of the call, accessible on
the Internet at www.CompuCredit.com. A replay of the conference call
also will be available on the web site.
CompuCredit is a specialty finance company and marketer of branded
credit cards and related financial services. CompuCredit provides
these services to consumers who are underserved by traditional
financial institutions. Through corporate and affinity contributions
focused on the underserved and un-banked communities, CompuCredit
also uses its financial resources and volunteer efforts to address
the numerous challenges affecting its customers. For more information
about CompuCredit, visit
www.CompuCredit.com.
CompuCredit Corporation and Subsidiaries
Financial, Operating and Statistical Measures
(Unaudited)
(In thousands, except for per share data and percentages)
As Of And For The Three Months Ended
March, 31 December 31, March, 31
2007 2006 2006
----------- ----------- -----------
Common Share Statistics
Net (Loss) Income Per Common
Share--Basic ($ 0.05) $ 0.20 $ 0.63
Net (Loss) Income Per Common
Share--Diluted ($ 0.05) $ 0.19 $ 0.61
Book Value Per Common Share
Outstanding (Period End) $ 17.30 $ 17.89 $ 16.29
Stock Price Per Share (Period End) $ 31.22 $ 39.81 $ 36.81
Total Market Capitalization (Period
End) $ 1,532,434 $ 1,967,240 $ 1,806,265
Shares Outstanding (Period End)(1) 49,085 49,416 49,070
Weighted Average Shares
Outstanding--Basic 50,262 48,745 48,632
Weighted Average Shares
Outstanding--Diluted 50,262 50,328 50,304
Average Managed Receivables
Statistics (2)
Average Managed Receivables $ 2,896,801 $ 2,771,383 $ 2,505,417
Average Shareholders' Equity $ 902,092 $ 878,944 $ 782,269
GAAP Return on Average Managed
Receivables -0.3% 1.4% 4.9%
GAAP Return on Average Equity (ROE) -1.1% 4.4% 15.6%
Net Interest Margin 17.9% 22.6% 25.0%
Other Income Ratio 15.8% 16.5% 19.2%
Net Charge-Off Rate 12.7% 12.1% 8.5%
Adjusted Charge-Off Rate 12.5% 11.0% 7.1%
Adjusted Charge Offs $ 90,291 $ 76,050 $ 44,779
Risk Adjusted Margin 20.8% 27.7% 36.5%
Operating Ratio 17.9% 18.7% 18.5%
Period-End Managed Receivables
Statistics (2)
Total Managed Receivables $ 2,894,136 $ 2,815,219 $ 2,511,588
Delinquency Rate (60+ days) 12.8% 14.1% 10.6%
Number of Accounts 3,945 3,865 3,549
Shareholders' Equity $ 848,977 $ 883,940 $ 799,387
Equity to Managed Receivables Ratio 29.3% 31.4% 31.8%
(1) Shares outstanding balances exclude 5,677,950 shares that are
outstanding at March 31, 2007, December 31, 2006 and March 31, 2006 but
that are returnable to CompuCredit under the terms of a share lending
arrangement.
(2) Excludes receivables at or near charge off at the time of purchase.
CompuCredit Corporation and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands)
March 31, December 31,
2007 2006
----------- -----------
(Unaudited)
Assets
Cash and cash equivalents (including restricted
cash of $16,778 at March 31, 2007 and $15,104
at December 31, 2006) $ 140,184 $ 110,412
Securitized earning assets 658,423 801,715
Non-securitized earning assets, net:
Loans and fees receivable, net (of $118,756 and
$118,005 in deferred revenue and $224,081 and
$225,319 in allowances for uncollectible loans
and fees receivable at March 31, 2007 and
December 31, 2006, respectively) 819,158 653,716
Investments in previously charged-off
receivables 13,750 12,871
Investments in securities 163,766 141,657
U.S. government securities resale agreements 50,809 50,577
Deferred costs, net 24,858 25,762
Software, furniture, fixtures and equipment, net 67,644 63,986
Investments in equity-method investees 76,089 83,038
Intangibles, net 13,550 12,382
Goodwill 128,550 120,115
Prepaid expenses and other assets 77,410 37,666
----------- -----------
Total assets $ 2,234,191 $ 2,113,897
=========== ===========
Liabilities
Accounts payable and accrued expenses $ 116,659 $ 112,453
Notes payable and other borrowings 539,174 358,694
Convertible senior notes 550,000 550,000
Deferred revenue primarily from forward flow
agreement 49,900 55,260
Current and deferred income tax liabilities 89,524 112,983
----------- -----------
Total liabilities 1,345,257 1,189,390
Minority interests 39,957 40,567
Shareholders' equity
Common stock, no par value, 150,000,000 shares
authorized: 61,879,156 shares issued and
54,762,793 shares outstanding at March 31, 2007
(including 5,677,950 loaned shares to be
returned); and 59,464,216 shares issued
and 55,093,686 shares outstanding at December 31,
2006 (including 5,677,950 loaned shares to
be returned) - -
Additional paid-in capital 402,053 321,010
Treasury stock, at cost, 7,116,363 and 4,370,530
shares at March 31, 2007 and December 31,
2006, respectively (209,211) (124,084)
Warrants - 25,610
Foreign currency translation adjustment 343 12
Retained earnings 655,792 661,392
----------- -----------
Total shareholders' equity 848,977 883,940
----------- -----------
Total liabilities and shareholders' equity $ 2,234,191 $ 2,113,897
=========== ===========
CompuCredit Corporation and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
For Three Months Ended
-------------------------------------
March, 31 December, 31 March, 31
2007 2006 2006
----------- ----------- -----------
Interest income:
Consumer loans, including past
due fees $ 80,634 $ 83,212 $ 52,975
Other 5,510 5,663 4,575
----------- ----------- -----------
Total interest income 86,144 88,875 57,550
Interest expense (15,784) (15,528) (11,450)
----------- ----------- -----------
Net interest income before fees and
related income on non-securitized
earning assets and provision for
loan losses 70,360 73,347 46,100
Fees and related income on
non-securitized earning assets 171,151 180,084 119,770
Provision for loan losses (134,440) (171,777) (77,829)
----------- ----------- -----------
Net interest income, fees and
related income on non-securitized
earning assets 107,071 81,654 88,041
Other operating income:
Fees and related income on
securitized earning assets 19,702 53,786 50,469
Servicing income 18,895 19,566 27,810
Ancillary and interchange revenues 11,761 14,223 8,194
Equity in income of equity-method
investees 9,719 13,172 25,665
----------- ----------- -----------
Total other operating income 60,077 100,747 112,138
Other operating expense:
Salaries and benefits 18,609 15,493 13,801
Card and loan servicing 70,987 65,559 62,153
Marketing and solicitation 35,126 30,371 26,079
Depreciation 10,119 10,094 7,634
Goodwill impairment - - 10,546
Other 35,526 44,651 28,659
----------- ----------- -----------
Total other operating expense 170,367 166,168 148,872
----------- ----------- -----------
(Loss) income before minority
interests and income taxes (3,219) 16,233 51,307
Minority interests (712) (1,069) (3,405)
----------- ----------- -----------
(Loss) income before income taxes (3,931) 15,164 47,902
Income tax benefit (expense) 1,415 (5,459) (17,244)
----------- ----------- -----------
Net (loss) income $ (2,516) $ 9,705 $ 30,658
=========== =========== ===========
Net (loss) income per common
share--basic $ (0.05) $ 0.20 $ 0.63
=========== =========== ===========
Net (loss) income per common
share--diluted $ (0.05) $ 0.19 $ 0.61
=========== =========== ===========
CompuCredit Corporation and Subsidiaries
Business Segment Data
(Unaudited)
(In thousands)
Investments
in Previously
Charged Off Retail
Three Months Ended March 31, 2007 Credit Cards Receivables Micro-Loans
------------ ------------- ------------
Net interest income, fees and
related income (loss) on
non-securitized earning assets $ 54,711 $ 17,730 $ 21,364
============ ============= ============
Total other operating income $ 59,216 $ 316 $ -
============ ============= ============
(Loss) income before income taxes $ (8,140) $ 11,439 $ 1,011
============ ============= ============
Loans and fees receivable, gross $ 787,929 $ 13,452 $ 73,077
============ ============= ============
Loans and fees receivable, net $ 477,221 $ 10,964 $ 65,918
============ ============= ============
Total assets $ 1,613,526 $ 45,118 $ 204,456
============ ============= ============
Three Months Ended March 31, 2007 Auto Finance Other Total
------------ ------------- ------------
Net interest income, fees and
related income (loss) on
non-securitized earning assets $ 13,304 $ (38) $ 107,071
============ ============ ============
Total other operating income $ 545 $ - $ 60,077
============ ============ ============
(Loss) income before income taxes $ (593) $ (7,648) $ (3,931)
============ ============ ============
Loans and fees receivable, gross $ 280,793 $ 6,744 $ 1,161,995
============ ============ ============
Loans and fees receivable, net $ 259,928 $ 5,127 $ 819,158
============ ============ ============
Total assets $ 332,537 $ 38,554 $ 2,234,191
============ ============ ============
Investments
in Previously
Charged Off Retail
Three Months Ended March 31, 2006 Credit Cards Receivables Micro-Loans
------------ ------------- ------------
Net interest income, fees and
related income on
non-securitized earning assets $ 57,139 $ 9,645 $ 12,897
============ ============= ============
Total other operating income $ 108,153 $ 61 $ 3,735
============ ============= ============
Income (loss) before income taxes $ 69,365 $ 5,391 $ (17,039)
============ ============= ============
Loans and fees receivable, gross $ 418,528 $ 5,006 $ 51,312
============ ============= ============
Loans and fees receivable, net $ 249,496 $ 3,820 $ 42,193
============ ============= ============
Total assets $ 1,387,472 $ 34,841 $ 183,372
============ ============= ============
Three Months Ended March 31, 2006 Auto Finance Other Total
------------ ------------- ------------
Net interest income, fees and
related income on
non-securitized earning assets $ 7,852 $ 508 $ 88,041
============ ============ ============
Total other operating income $ 164 $ 25 $ 112,138
============ ============ ============
Income (loss) before income taxes $ 847 $ (10,662) $ 47,902
============ ============ ============
Loans and fees receivable, gross $ 142,191 $ 12,246 $ 629,283
============ ============ ============
Loans and fees receivable, net $ 115,422 $ 6,923 $ 417,854
============ ============ ============
Total assets $ 155,232 $ 28,890 $ 1,789,807
============ ============ ============
CompuCredit Corporation and Subsidiaries
Managed Earnings and Reconciliation of Reported GAAP Net Income to Managed
Earnings
(Unaudited)
(In thousands, except per share data)
For The Three Months Ended
-------------------------------------
March 31, December March 31,
2007 31, 2006 2006
----------- ----------- -----------
GAAP net (loss) income as reported $ (2,516) $ 9,705 $ 30,658
Securitization adjustment, net of
tax (7,942) (11,698) 3,715
Provision to charge off adjustment,
net of tax 999 21,912 20,444
----------- ----------- -----------
Managed net (loss) income $ (9,459) $ 19,919 $ 54,817
=========== =========== ===========
Managed net (loss) income per common
share $ (0.19) $ 0.40 $ 1.09
=========== =========== ===========
For The Three Months Ended March 31, 2007
-------------------------------------
GAAP Adjustments Managed
----------- ----------- -----------
Net interest margin on loans
receivable $ 80,634 $ 49,188 $ 129,822
Net interest expense (10,274) 6,839 (3,435)
Provision / charge offs (134,440) 44,149 (90,291)
Other operating income 231,228 (116,798) 114,430
Marketing expense (35,126) - (35,126)
Ancillary product expense (485) - (485)
Operating expenses (134,756) 5,061 (129,695)
Minority interests (712) 712 -
----------- ----------- -----------
Pre-tax net income (3,931) (10,849) (14,780)
Income tax benefit (expense) 1,415 3,906 5,321
----------- ----------- -----------
Net (loss) income $ (2,516) $ (6,943) $ (9,459)
=========== =========== ===========
Weighted average shares outstanding 50,262 50,262 50,262
----------- ----------- -----------
Net (loss) income per common share $ (0.05) $ (0.14) $ (0.19)
=========== =========== ===========
Gross loans and fees receivable $ 1,161,995 $ 1,732,141 $ 2,894,136
=========== =========== ===========
For The Three Months Ended March 31, 2006
-------------------------------------
GAAP Adjustments Managed
----------- ----------- -----------
Net interest margin on loans
receivable $ 52,975 $ 103,384 $ 156,359
Net interest expense (6,875) 3,880 (2,995)
Provision / charge offs (77,829) 33,050 (44,779)
Other operating income 231,908 (111,617) 120,291
Marketing expense (26,079) - (26,079)
Ancillary product expense (1,093) - (1,093)
Operating expenses (121,700) 5,646 (116,054)
Minority interests (3,405) 3,405 -
----------- ----------- -----------
Pre-tax net income 47,902 37,748 85,650
Income tax benefit (expense) (17,244) (13,589) (30,833)
----------- ----------- -----------
Net (loss) income $ 30,658 $ 24,159 $ 54,817
=========== =========== ===========
Weighted average shares outstanding 50,304 50,304 50,304
----------- ----------- -----------
Net (loss) income per common share $ 0.61 $ 0.48 $ 1.09
=========== =========== ===========
Gross loans and fees receivable $ 629,283 $ 1,882,305 $ 2,511,588
=========== =========== ===========
For The Three Months Ended December 31, 2006
-------------------------------------
GAAP Adjustments Managed
----------- ----------- -----------
Net interest margin on loans
receivable $ 83,212 $ 73,502 $ 156,714
Net interest expense (9,865) 6,344 (3,521)
Provision / charge offs (171,777) 95,727 (76,050)
Other operating income 280,831 (166,221) 114,610
Marketing expense (30,371) - (30,371)
Ancillary product expense (412) - (412)
Operating expenses (135,385) 5,538 (129,847)
Minority interests (1,069) 1,069 -
----------- ----------- -----------
Pre-tax net income 15,164 15,959 31,123
Income tax expense (5,459) (5,745) (11,204)
----------- ----------- -----------
Net income $ 9,705 $ 10,214 $ 19,919
=========== =========== ===========
Weighted average shares outstanding 50,328 50,328 50,328
----------- ----------- -----------
Net income per common share $ 0.19 $ 0.21 $ 0.40
=========== =========== ===========
Gross loans and fees receivable $ 997,040 $ 1,818,179 $ 2,815,219
=========== =========== ===========
Contacts
Media Relations:
Denise Harrod
678-259-8114
Contact via http://www.marketwire.com/mw/emailprcntct?id=E1A4876DDE862526
InvestorRelations:
Jay Putnam
770-206-6364
Contact via http://www.marketwire.com/mw/emailprcntct?id=E0CE0DA03A0C73BE
SOURCE: CompuCredit
Printer Friendly