World Acceptance Corp. (WRLD, Financial) filed Quarterly Report for the period ended 2010-09-30.
World Acceptance Corp. has a market cap of $651.4 million; its shares were traded at around $41.63 with a P/E ratio of 8.9 and P/S ratio of 1.5. World Acceptance Corp. had an annual average earning growth of 16.8% over the past 10 years. GuruFocus rated World Acceptance Corp. the business predictability rank of 5-star.WRLD is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Chuck Royce of Royce& Associates.
The provision for loan losses during the three months ended September 30, 2010 increased by $2.1 million, or 8.4%, from the same quarter last year. The Company continued to see improvement in its delinquencies and charge-offs during the second quarter in spite of the ongoing difficult economic environment. Accounts that were 61+ days past due decreased from 3.3% to 2.9% on a recency basis and from 4.6% to 4.2% on a contractual basis when comparing the two quarter end statistics. Net charge-offs as a percentage of average net loans decreased from 16.2% (annualized) during the prior year second quarter to 14.8% (annualized) during the most recent quarter. This is the sixth straight quarter where the charge-off ratios declined from the corresponding quarter of the previous year and current loss percentages are back in line with historical levels. Over the last ten years charge-off ratios during the second fiscal quarter have ranged from a high of 17.0% in fiscal 2008 to a low of 14.0% in fiscal 2006.
General and administrative expenses for the quarter ended September 30, 2010 increased by $4.3 million, or 8.4% over the same quarter of fiscal 2010. Overall, general and administrative expenses, when divided by average open offices, increased by approximately 1.6% when comparing the two periods. The total general and administrative expense as a percent of total revenues was 47.5% for the three months ended September 30, 2010 and was 49.7% for the three months ended September 30, 2009.
The provision for loan losses during the six months ended September 30, 2010 increased by $1.4 million, or 3.0%, from the same period of the prior year. Accounts that were 61 days or more past due decreased from 3.3% to 2.9% on a recency basis and decreased from 4.6% to 4.2% on a contractual basis when comparing the two period end statistics. Net charge-offs as a percentage of average net loans decreased from 15.1% (annualized) during the prior year first six months to 13.7% (annualized) during the most recent six months.
General and administrative expenses for the six months ended September 30, 2010 increased by $8.3 million, or 7.9% over the same period of fiscal 2010. Overall, general and administrative expenses, when divided by average open offices, increased by approximately 1.7% when comparing the two periods. During the first six months of fiscal 2011, the Company opened or acquired 44 branches compared to 22 branches opened or acquired in the first six months of fiscal 2010. The total general and administrative expense as a percent of total revenues decreased from 51.4% for the six months ended September 30, 2009 to 49.6% for the six months ended September 30, 2010.
The Company has a $225.0 million base credit facility with a syndicate of banks. The credit facility will expire on August 31, 2012. Funds borrowed under the revolving credit facility bear interest, at the Company's option, at either the agent bank's prime rate per annum or the LIBOR rate plus 3.0% per annum with a minimum 4.0% interest rate. At September 30, 2010, the interest rate on borrowings under the revolving credit facility was 4.25%. The Company pays a commitment fee equal to 0.375% per annum of the daily unused portion of the revolving credit facility. Amounts outstanding under the revolving credit facility may not exceed specified percentages of eligible loans receivable. On September 30, 2010, $138.9 million was outstanding under this facility, and there was $86.1 million of unused borrowing availability under the borrowing base limitations.
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World Acceptance Corp. has a market cap of $651.4 million; its shares were traded at around $41.63 with a P/E ratio of 8.9 and P/S ratio of 1.5. World Acceptance Corp. had an annual average earning growth of 16.8% over the past 10 years. GuruFocus rated World Acceptance Corp. the business predictability rank of 5-star.WRLD is in the portfolios of Columbia Wanger of Columbia Wanger Asset Management, Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Net income increased to $20.2 million for the three months ended September 30, 2010, or 38.5%, from the three month period ended September 30, 2009. Operating income (revenues less provision for loan losses and general and administrative expenses) increased, approximately $7.4 million, or 27.1%, interest expense increased by approximately $500,000, or 13.1%, and income tax expense increased by $1.3 million, or 14.4%.The provision for loan losses during the three months ended September 30, 2010 increased by $2.1 million, or 8.4%, from the same quarter last year. The Company continued to see improvement in its delinquencies and charge-offs during the second quarter in spite of the ongoing difficult economic environment. Accounts that were 61+ days past due decreased from 3.3% to 2.9% on a recency basis and from 4.6% to 4.2% on a contractual basis when comparing the two quarter end statistics. Net charge-offs as a percentage of average net loans decreased from 16.2% (annualized) during the prior year second quarter to 14.8% (annualized) during the most recent quarter. This is the sixth straight quarter where the charge-off ratios declined from the corresponding quarter of the previous year and current loss percentages are back in line with historical levels. Over the last ten years charge-off ratios during the second fiscal quarter have ranged from a high of 17.0% in fiscal 2008 to a low of 14.0% in fiscal 2006.
General and administrative expenses for the quarter ended September 30, 2010 increased by $4.3 million, or 8.4% over the same quarter of fiscal 2010. Overall, general and administrative expenses, when divided by average open offices, increased by approximately 1.6% when comparing the two periods. The total general and administrative expense as a percent of total revenues was 47.5% for the three months ended September 30, 2010 and was 49.7% for the three months ended September 30, 2009.
The provision for loan losses during the six months ended September 30, 2010 increased by $1.4 million, or 3.0%, from the same period of the prior year. Accounts that were 61 days or more past due decreased from 3.3% to 2.9% on a recency basis and decreased from 4.6% to 4.2% on a contractual basis when comparing the two period end statistics. Net charge-offs as a percentage of average net loans decreased from 15.1% (annualized) during the prior year first six months to 13.7% (annualized) during the most recent six months.
General and administrative expenses for the six months ended September 30, 2010 increased by $8.3 million, or 7.9% over the same period of fiscal 2010. Overall, general and administrative expenses, when divided by average open offices, increased by approximately 1.7% when comparing the two periods. During the first six months of fiscal 2011, the Company opened or acquired 44 branches compared to 22 branches opened or acquired in the first six months of fiscal 2010. The total general and administrative expense as a percent of total revenues decreased from 51.4% for the six months ended September 30, 2009 to 49.6% for the six months ended September 30, 2010.
The Company has a $225.0 million base credit facility with a syndicate of banks. The credit facility will expire on August 31, 2012. Funds borrowed under the revolving credit facility bear interest, at the Company's option, at either the agent bank's prime rate per annum or the LIBOR rate plus 3.0% per annum with a minimum 4.0% interest rate. At September 30, 2010, the interest rate on borrowings under the revolving credit facility was 4.25%. The Company pays a commitment fee equal to 0.375% per annum of the daily unused portion of the revolving credit facility. Amounts outstanding under the revolving credit facility may not exceed specified percentages of eligible loans receivable. On September 30, 2010, $138.9 million was outstanding under this facility, and there was $86.1 million of unused borrowing availability under the borrowing base limitations.
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