<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to __________________
Commission file number
1-10667
AmeriCredit Corp.
(Exact name of registrant as specified in its charter)
Texas 75-2291093
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Taylor Street, Suite 800, Fort Worth, Texas, 76102
(Address of principal executive offices)
(Zip Code)
(817) 332-7000
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal
year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
____ ____
There were 29,140,133 shares of common stock, $.01 par value
outstanding as of February 1, 1994.
<PAGE>
AMERICREDIT CORP.
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets - December 31, 1993
and June 30, 1993 3
Consolidated Statements of Operations - Three Months
Ended December 31, 1993 and 1992 and Six Months
Ended December 31, 1993 and 1992 4
Consolidated Statements of Cash Flows - Six
Months Ended December 31, 1993 and 1992 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
SIGNATURE 16
</TABLE>
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
AMERICREDIT CORP.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1993 1993
------------ -------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 44,652 $ 33,268
Investment securities 30,925 35,157
Finance receivables, net 49,583 43,889
Property and equipment, net 4,514 5,582
Other assets 1,849 1,931
Investment in affiliate 11,300
-------- --------
Total assets $131,523 $131,127
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable $ 977 $ 1,278
Accrued taxes and expenses 5,182 7,065
-------- --------
Total liabilities 6,159 8,343
-------- --------
Contingencies (Note 4)
Shareholders' equity:
Common stock, $.01 par value per
share; 120,000,000 shares authorized;
31,752,733 and 31,723,733 shares
issued, respectively 318 317
Additional paid-in capital 189,805 189,695
Accumulated deficit (58,313) (60,782)
-------- --------
131,810 129,230
Treasury stock, at cost
(2,614,200 shares) (6,446) (6,446)
-------- --------
Total shareholders' equity 125,364 122,784
-------- --------
Total liabilities and
shareholders' equity $131,523 $131,127
======== ========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-3-
<PAGE>
AMERICREDIT CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ ----------------
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Finance charge income $ 3,006 $ 3,638 $ 5,902 $ 7,901
Investment income 877 469 1,599 939
Other income 92 52 176 84
Sales 2,803 8,271
Equity in income of
affiliate 53 131
----------- ----------- ----------- -----------
3,975 7,015 7,677 17,326
----------- ----------- ----------- -----------
Costs and expenses:
Operating expenses 1,568 3,011 2,981 6,098
General and administrative
expenses 755 936 1,586 2,450
Provision for losses 264 6,045 552 7,725
Interest expense 54 59 89 114
Cost of sales 2,820 6,986
Restructuring charges 15,404 15,404
----------- ----------- ----------- -----------
2,641 28,275 5,208 38,777
----------- ----------- ----------- -----------
Income (loss) before
income taxes 1,334 (21,260) 2,469 (21,451)
Provision for income
taxes
----------- ----------- ----------- -----------
Net income (loss) $ 1,334 $ (21,260) $ 2,469 $ (21,451)
=========== =========== =========== ===========
Earnings (loss) per
share $ .04 $ (.73) $ .08 $ (.73)
=========== =========== ========== ===========
Weighted average shares
and share equivalents 32,614,405 28,936,768 31,311,118 29,553,485
=========== =========== ========== ===========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
-4-
<PAGE>
AMERICREDIT CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31,
-----------------------
1993 1992
------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 2,469 $(21,451)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 631 1,064
Provision for losses 552 7,725
Equity in income of affiliate (131)
Restructuring charges 2,401
Changes in assets and liabilities:
Income tax refunds receivable 10,546
Other assets 516 6,724
Accrued taxes and expenses (1,883) 7,950
------- --------
Net cash provided by operating activities 2,285 14,828
------- --------
Cash flows from investing activities:
Purchases and originations of finance receivables (27,457) (10,559)
Principal collections and recoveries on
finance receivables 21,211 22,873
Purchases of property and equipment (90) (330)
Proceeds from disposition of property and equipment 93 94
Purchases of investment securities (9,700) (6,935)
Proceeds from sales and maturities of investment
securities 13,932 539
Proceeds from sale of investment in affiliate 11,300
------- --------
Net cash provided by investing activities 9,289 5,682
------- --------
Cash flows from financing activities:
Payments on notes payable (301) (266)
Proceeds from issuance of common stock 111 194
Purchase of treasury stock (5,852)
------- --------
Net cash used by financing activities (190) (5,924)
------- --------
Net increase in cash and cash equivalents 11,384 14,586
Cash and cash equivalents at beginning of period 33,268 29,762
------- --------
Cash and cash equivalents at end of period $44,652 $ 44,348
======= ========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-5-
<PAGE>
AMERICREDIT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts
of AmeriCredit Corp. and its wholly-owned subsidiaries ("the Company").
All significant intercompany accounts and transactions have been
eliminated in consolidation.
The consolidated financial statements as of December 31, 1993 and for
the periods ended December 31, 1993 and 1992 are unaudited, but in
management's opinion, include all adjustments necessary for a fair
presentation of the results for such interim periods. The results for
interim periods are not necessarily indicative of results for a full
year.
The interim period financial statements, including the notes thereto,
are condensed and do not include all disclosures required by generally
accepted accounting principles. Such interim period financial
statements should be read in conjunction with the Company's consolidated
financial statements which were included in the Company's 1993 Annual
Report to Shareholders.
NOTE 2 - FINANCE RECEIVABLES
Finance receivables consist of the following (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1993 1993
----------- -------
<S> <C> <C>
Indirect consumer lending contracts:
Precomputed interest $29,569 $17,892
Simple interest 10,980 2,180
------- -------
40,549 20,072
Direct lending contracts 22,374 45,071
Premium finance contracts 4,883 1,700
------- -------
Total finance receivables 67,806 66,843
Less:
Unearned finance charges and fees (9,013) (10,373)
Allowance for losses (9,210) (12,581)
------- -------
Finance receivables, net $49,583 $43,889
======= =======
</TABLE>
The Company's finance contracts typically provide for finance charges on
either a precomputed or simple interest basis. Precomputed interest
finance receivables include principal and unearned finance charges.
Simple interest finance receivables include principal only. Finance
charge income related to both types of finance receivables is recognized
in future periods using the interest method. All direct lending and
premium finance contracts are precomputed interest finance receivables.
-6-
<PAGE>
A summary of the allowance for losses is as follows (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ ----------------
1993 1992 1993 1992
------ ------ ------ ------
<S> <C> <C> <C> <C>
Balance at beginning of period $10,212 $26,553 $12,581 $37,468
Provision for losses 264 6,045 552 7,725
Purchase of indirect consumer
lending contracts 927 322 1,866 322
Net charge-offs (2,193) (10,303) (5,789) (22,898)
------- ------- ------- -------
Balance at end of period $ 9,210 $22,617 $ 9,210 $22,617
======= ======= ======= =======
</TABLE>
NOTE 3 - CREDIT AGREEMENT
In October 1993, the Company entered into a revolving credit agreement
with a bank under which the Company may borrow up to $20 million,
subject to a defined borrowing base. No borrowings were outstanding as
of December 31, 1993. Borrowings under the credit agreement will be
collateralized by the indirect finance receivables portfolio and will
bear interest at prime plus 1/2%. The Company is also required to pay
an annual commitment fee equal to 3/8% of the unused portion of the
credit agreement. The credit agreement, which expires in October 1994,
contains various restrictive covenants requiring certain minimum
financial ratios and results and placing certain limitations on the
incurrence of additional debt and capital expenditures.
NOTE 4 - CONTINGENCIES
Four lawsuits were filed against the Company, several of its current and
former officers and directors, and certain other defendants, alleging
violations of federal securities and other laws. The suits were
originally filed in July 1990, and in October 1991, the four lawsuits
were consolidated into one action. The plaintiffs alleged, among other
things, misrepresentations in connection with the Company's public
reports and statements, inadequate disclosure in connection with the
Company's May 1990 public offering, statutory fraud under Chapter 27 of
the Texas Business and Commerce Code and conspiracy, aiding and abetting
and concerted action. In May 1993, the U.S. District Court for the
Northern District of Texas, Dallas Division, dismissed with prejudice
all claims alleging securities fraud and violations of federal
securities laws. The plaintiffs' state law claims were dismissed for
want of jurisdiction. The plaintiffs have appealed the dismissal to the
Court of Appeals for the Fifth Circuit. The Company considers the suit
to be without merit and believes that the dismissal of the suit by the
District Court confirms its position. The Company will continue
vigorously defending against the suit.
The Company is involved in other lawsuits arising in the normal course
of business. In the opinion of management, the resolution of these
matters will not have a material adverse effect on the Company's
consolidated financial position.
-7-
<PAGE>
NOTE 5 - INCOME TAXES
The Company's effective income tax rate on income (loss) before income
taxes differs from the U. S. statutory tax rate as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ ----------------
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
U. S. statutory tax rate 34% (34%) 34% (34%)
Losses with no income tax benefit 34 34
Utilization of net operating loss
carryforward for financial
reporting purposes (34) (34)
--- --- --- ---
0% 0% 0% 0%
=== === === ===
</TABLE>
At June 30, 1993, the Company has a net operating loss carryforward of
approximately $61,000,000 for financial reporting purposes. In
addition, the Company has a net operating loss carryforward of
approximately $48,000,000 for income tax reporting purposes which
expires in 2007 and 2008 and an alternative minimum tax carryforward of
approximately $900,000 with no expiration date.
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest costs consist of the following (in
thousands):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31,
----------------
1993 1992
---- ----
<S> <C> <C>
Interest costs (none capitalized) $89 $114
</TABLE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
RESTRUCTURING
The Company historically engaged primarily in the retail used car sales
and finance business. However, in connection with a restructuring
during the year ended June 30, 1993, the Company withdrew from the
retail used car sales business.
In September 1992, the Company began purchasing individual finance
contracts originated by franchised and independent car dealers,
generally referred to as indirect consumer lending. The Company
operated thirteen indirect consumer lending branch offices as of
December 31, 1993. In April 1993, the Company began financing insurance
premiums for consumers purchasing car insurance through independent
insurance agents.
-8-
<PAGE>
Subsequent to December 31, 1992, the Company has not reported car sales,
cost of car sales and retail operating expenses which have occurred
during the process of liquidating the retail sales operations since such
revenue and costs and expenses have been accounted for as part of the
restructuring charges. The Company's consolidated statements of
operations after December 31, 1992 include the results of its indirect
consumer lending and premium finance businesses, finance charge income
and servicing costs related to the finance contracts originated in
connection with past used car sales transactions and corporate related
income and expenses.
THREE MONTHS ENDED DECEMBER 31, 1993 AS COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 1992
REVENUE:
Finance charge income decreased to $3.0 million as compared to $3.6
million because of a decrease in the average outstanding amount of net
finance receivables. Finance charge income from the Company's direct
lending portfolio decreased to $1,076,000 for the three months ended
December 31, 1993 as compared to $3,521,000 for the three months ended
December 31, 1992 due to the Company's phase-down and subsequent exit
from the retail used car sales business and resultant run-off of the
direct lending portfolio. The Company's indirect consumer lending and
premium finance businesses contributed $1,624,000 and $306,000,
respectively, of finance charge income for the three months ended
December 31, 1993 as compared to $117,000 and none, respectively, for
the three months ended December 31, 1992. Future trends in the
Company's level of finance charge income are dependent upon the
Company's ability to continue to grow its indirect consumer lending and
premium finance businesses in order to offset the effect of the run-off
of the direct lending portfolio.
The Company's overall effective yield on its finance receivables
increased to 20.6% from 18.5% as a result of higher finance charge rates
realized in the Company's indirect consumer lending and premium finance
businesses. The effective yield for both periods differs from the
annual percentage rates specified in the finance contracts because of,
among other factors, suspension of finance charge accruals on delinquent
contracts and amortization of deferred loan origination costs.
Investment income increased for the three months ended December 31, 1993
compared to the three months ended December 31, 1992 due to higher
average cash and cash equivalent and investment securities balances.
The Company's share of operating results of its affiliate, Pacific
Automart Inc., resulted in income of $53,000 for the three months ended
December 31, 1992. The Company sold its entire interest in Pacific
Automart Inc. for $11,300,000 in cash on August 3, 1993. No gain or
loss was recognized on the sale.
COSTS AND EXPENSES:
Operating and general and administrative expenses as a percentage of
average net finance receivables outstanding decreased to 4.0% in the
three months ended December 31, 1993 as compared to 5.0% in the three
months ended December 31, 1992. The dollar amount of operating and
general and administrative expenses decreased by 41% or $1.6 million to
$2.3 million from $3.9 million. These expenses decreased due to the
Company's exit from the retail used car sales business and resultant
reduction in overhead related to these operations.
-9-
<PAGE>
The provision for losses decreased to $264,000 as compared to $6.0
million. Further discussion concerning the provision for losses is
included under the caption, "Finance Receivables".
The restructuring charges in the three months ended December 31, 1992
are described below.
SIX MONTHS ENDED DECEMBER 31, 1993 AS COMPARED TO
SIX MONTHS ENDED DECEMBER 31, 1992
REVENUE:
Finance charge income decreased to $5.9 million as compared to $7.9
million because of a decrease in the average outstanding amount of net
finance receivables. Finance charge income from the Company's direct
lending portfolio decreased to $2,630,000 for the six months ended
December 31, 1993 as compared to $7,783,000 for the six months ended
December 31, 1992 due to the Company's phase-down and subsequent exit
from the retail used car sales business and resultant run-off of the
direct lending portfolio. The Company's indirect consumer lending and
premium finance businesses contributed $2,721,000 and $551,000,
respectively, of finance charge income for the six months ended December
31, 1993 as compared to $118,000 and none, respectively, for the six
months ended December 31, 1992. Future trends in the Company's level of
finance charge income are dependent upon the Company's ability to
continue to grow its indirect consumer lending and premium finance
businesses in order to offset the effect of the run-off of the direct
lending portfolio.
The Company's overall effective yield on its finance receivables
increased to 20.6% from 18.0% as a result of higher finance charge rates
realized in the Company's indirect consumer lending and premium finance
businesses. The effective yield for both periods differs from the
annual percentage rates specified in the finance contracts because of,
among other factors, suspension of finance charge accruals on delinquent
contracts and amortization of deferred loan origination costs.
Investment income increased for the six months ended December 31, 1993
compared to the six months ended December 31, 1992 due to higher average
cash and cash equivalent and investment securities balances.
The Company's share of operating results of its affiliate, Pacific
Automart Inc., resulted in income of $131,000 for the six months ended
December 31, 1992. The Company sold its entire interest in Pacific
Automart Inc. for $11,300,000 in cash on August 3, 1993. No gain or
loss was recognized on the sale.
COSTS AND EXPENSES:
Operating and general and administrative expenses as a percentage of
average net finance receivables outstanding decreased to 8.0% in the six
months ended December 31, 1993 as compared to 9.8% in the six months
ended December 31, 1992. The dollar amount of operating and general and
administrative expenses decreased by 47% or $3.9 million to $4.6 million
from $8.5 million. These expenses decreased due to the Company's exit
from the retail used car sales business and resultant reduction in
overhead related to these operations.
The provision for losses decreased to $552,000 as compared to $7.7
million. Further discussion concerning the provision for losses is
included under the caption, "Finance Receivables".
-10-
<PAGE>
The restructuring charges of $15.4 million in the six months ended
December 31, 1992 included an accrual of future retail lease and other
facility costs, a write-down of used car inventories, a write-down of
property and equipment and other assets and an accrual of other costs
necessary to complete the liquidation of the retail sales operations.
In addition, the Company recorded a provision for losses of $5.0 million
in the second quarter of fiscal 1993 in light of the impact that closure
of the Company's retail sales locations may have on the Company's direct
finance customer base.
FINANCE RECEIVABLES
Prior to September 1992, the Company's finance receivables consisted
solely of finance contracts originated in connection with the sale of
used cars at the Company's former retail locations. These finance
receivables are referred to as the direct lending portfolio. Since the
Company has exited the retail car sales business, the direct lending
portfolio will be liquidated over time as the contracts are collected or
charged-off. In September 1992, the Company entered the indirect
consumer lending business and, in April 1993, the Company began
financing car insurance premiums for consumers.
Net finance receivables represented 37.7% of the Company's total assets
at December 31, 1993. The following table presents certain data related
to the finance receivables portfolio (dollars in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
1993
---------------------------------
INDIRECT DIRECT PREMIUM TOTAL
-------- ------ ------- -----
<S> <C> <C> <C> <C>
Finance receivables $40,549 $22,374 $ 4,883 $67,806
Unearned finance charges
and fees (6,288) (2,408) (317) (9,013)
------- ------- ------- -------
Finance receivables
(principal amount) 34,261 19,966 4,566 58,793
Allowance for losses (3,723) (5,418) (69) (9,210)
------- ------- ------- -------
Finance receivables, net $30,538 $14,548 $ 4,497 $49,583
======= ======= ======= =======
Number of outstanding
contracts 4,917 8,016 10,143 23,076
======= ======= ======= =======
Allowance for losses
as a percentage of
finance receivables
(principal amount) 10.9% 27.1% 1.5% 15.7%
======= ======= ======= =======
Average amount of
outstanding contract
(principal amount)
(in dollars) $ 6,968 $ 2,491 $ 450 $ 2,548
======= ======= ======= =======
</TABLE>
-11-
<PAGE>
The Company provides financing in relatively high-risk markets, and
therefore, charge-offs and related losses are anticipated. The Company
records a periodic provision for losses as a charge to operations and a
related allowance for losses in the consolidated balance sheet as a
reserve against estimated future losses in the finance receivables
portfolio. In the indirect consumer lending business, the Company
typically purchases individual finance contracts at less than face value
on a non-recourse basis, and such purchase allowance is also set up
directly in the consolidated balance sheet as an allowance for losses.
The Company reviews historical origination and charge-off relationships,
charge-off experience factors, collections information, delinquency
reports, estimates of the value of the underlying collateral, economic
conditions and trends and other information in order to make the
necessary judgments as to the appropriateness of the periodic provision
for losses and the allowance for losses. Although the Company uses many
resources to assess the adequacy of the allowance for losses, there is
no precise method for accurately estimating the ultimate losses in the
finance receivables portfolio.
INDIRECT FINANCE RECEIVABLES:
The following is a summary of indirect consumer lending contracts which
are more than 60 days delinquent (dollars in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
1993
-----------
<S> <C>
Principal amount of delinquent contracts * $710
Principal amount of delinquent contracts
as a percentage of total indirect
finance receivables outstanding
(principal amount) * 2.1%
<FN>
* Excludes unearned finance charges and fees
</TABLE>
The following table presents charge-off data with respect to the
Company's indirect finance receivables portfolio (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, 1993 DECEMBER 31, 1993
----------------- -----------------
<S> <C> <C>
Net charge-offs $ 256 $ 400
Net charge-offs as a percentage
of the average outstanding
amount of indirect finance
receivables (principal amount) .8% 1.6%
</TABLE>
The Company recorded periodic provisions for losses as charges to
operations of $228,000 and $482,000 related to its indirect finance
receivables portfolio for the three month and six month periods ended
December 31, 1993, respectively. In addition, the Company recorded
$927,000 and $1,866,000 of purchase allowances on indirect consumer
lending contracts as additions to the allowance for losses in the
consolidated balance sheets for the three month and six month periods
ended December 31, 1993, respectively.
The Company began its indirect consumer lending business in September
1992. Accordingly, the delinquency and charge-off data above is not
necessarily indicative of delinquency and charge-off experience that
could be expected for a more seasoned portfolio.
-12-
<PAGE>
DIRECT FINANCE RECEIVABLES:
The following is a summary of direct lending contracts which are more
than three payments delinquent if payment terms are weekly, biweekly or
semi-monthly, and 60 days delinquent if payment terms are monthly
(dollars in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
1993
-----------
<S> <C>
Number of delinquent contracts 749
Number of delinquent contracts as a percentage
of the total number of outstanding contracts 9.3%
Amount of delinquent contracts* $ 2,564
Amount of delinquent contracts as a percentage
of total direct finance receivables outstanding
(principal amount plus unearned finance charges)* 11.5%
<FN>
* Includes unearned finance charges
</TABLE>
The following table presents repossession and charge-off data with
respect to the Company's direct finance receivables portfolio:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------ ----------------
1993 1992 1993 1992
---- ---- ---- ----
<S> <C> <C> <C> <C>
Repossessions and other charge-offs 669 2,020 1,665 4,629
Repossessions and other charge-offs
as a percentage of the average
outstanding number of contracts 7.5% 12.1% 17.0% 26.1%
Net charge-offs (in thousands) $ 1,936 $10,303 $ 5,381 $22,898
Average net charge-off $ 2,894 $ 5,100 $ 3,232 $ 4,947
Net charge-offs as a percentage of
the average outstanding amount
of direct finance receivables
(principal amount) 8.1% 13.4% 18.7% 26.5%
</TABLE>
Net charge-offs as a percentage of the average outstanding amount of
direct finance receivables has decreased as the portfolio has become
more seasoned and average outstanding contract balances have decreased.
PREMIUM FINANCE RECEIVABLES:
Premium finance loans made by the Company are collateralized by the
unearned premium value of the car insurance policies financed. If the
consumer defaults on the payment terms of the loan, the Company has the
right to cancel the insurance policy and obtain a refund of the unearned
premium from the insurance carrier. While the Company generally
requires a sufficient down payment and limits the terms of loans so that
the unearned premium value typically exceeds the outstanding principal
balance of the loan, charge-offs may still result from untimely policy
cancellations, short rate insurance premium refunds, insurance company
or agency insolvencies or other factors. The Company recorded periodic
provisions for losses as charges to operations of $36,000 and $70,000
related to its premium finance receivables portfolio for the three month
and six month periods ended December 31, 1993, respectively.
-13-
<PAGE>
The following table presents charge-off data with respect to the
Company's premium finance receivables portfolio (dollars in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, 1993 DECEMBER 31, 1993
------------------ -----------------
<S> <C> <C>
Net charge-offs $ 1 $ 8
Net charge-offs as a percentage
of the average outstanding amount
of premium finance receivables
(principal amount) 0.1% 0.2%
</TABLE>
The Company began its premium finance business in April 1993.
Accordingly, the charge-off data above is not necessarily indicative of
charge-off experience that could be expected for a more seasoned
portfolio.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows are summarized as follows (in thousands):
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31,
------------------
1993 1992
---- ----
<S> <C> <C>
Operating activities $ 2,285 $14,828
Investing activities 9,289 5,682
Financing activities (190) (5,924)
------- -------
Net increase in cash and cash
equivalents $11,384 $14,586
======= =======
</TABLE>
The Company entered the indirect consumer lending business in September
1992 and has grown the indirect finance receivables portfolio to $34.3
million as of December 31, 1993. Thirteen indirect consumer lending
branches were open as of December 31, 1993. The Company also entered
the premium finance business in April 1993 and has grown the premium
finance receivables portfolio to $4.6 million as of December 31, 1993.
The Company plans to open additional consumer lending branches in fiscal
1994 and continue to expand its indirect consumer lending and premium
finance businesses. While the Company has been able to establish and
grow these new businesses thus far, there can be no assurance that
future expansion will be successful due to competitive, regulatory,
market, economic or other factors.
As of December 31, 1993, the Company had $75.6 million of cash and cash
equivalents and investment securities. In October 1993, the Company
also entered into a revolving credit agreement with a bank under which
the Company may borrow up to $20 million. The Company estimates that
these existing capital resources, along with collections on its finance
receivables portfolio, will exceed the funding required for its indirect
consumer lending and premium finance businesses, capital expenditures
and other costs and expenses through June 30, 1994.
The Company has also considered and may continue to evaluate other
business opportunities in which to invest any excess resources which are
not required to fund the expansion of its current lines of business.
There can be no assurance that suitable business opportunities will be
available, or if available, that they will be on terms acceptable to the
Company, or that the Company will have sufficient excess resources
available to invest in such other business opportunities.
-14-
<PAGE>
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Reference should be made to information
contained in Note 4 of the Notes to
Consolidated Financial Statements in response
to this Item 1.
Item 2. CHANGES IN SECURITIES
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
On November 10, 1993, the Company held its
Annual Meeting of Shareholders. The
shareholders voted upon the election of six
directors and the ratification of the
appointment of the Company's independent
auditors. Each of the six nominees identified
in the Company's proxy statement, filed
pursuant to Rule 14a-6 of the Securities
Exchange Act of 1934, were elected at the
meeting to hold office until the next annual
meeting or until their successors are duly
elected and qualified. The Company's selection
of independent auditors was also ratified.
Item 5. OTHER INFORMATION
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits:
11.1 - Statement Re Computation of Per
Share Earnings
(B) Reports on Form 8-K
The Company did not file any reports on
Form 8-K during the quarterly period ended
December 31, 1993.
-15-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AmeriCredit Corp.
---------------------------
(Registrant)
Date: February 11, 1994 By: /s/ Daniel E. Berce
---------------------------
(Signature)
Daniel E. Berce
Chief Financial Officer
-16-
<PAGE>
EXHIBIT 11.1
AMERICREDIT CORP.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------------- ---------------------
1993 1992 1993 1992
------ ------ ------- ------
<S> <C> <C> <C> <C>
PRIMARY:
Average common shares
outstanding 29,133,174 28,936,768 29,131,625 29,553,485
Common share equivalents
resulting from assumed
exercise of stock
options and warrants 3,481,231 3,179,493
---------- ----------- ---------- ----------
Average common shares and
share equivalents
outstanding 32,614,405 28,936,768 32,311,118 29,553,485
========== ========== ========== ==========
FULLY DILUTED:
Average common shares
outstanding 29,133,174 28,936,768 29,131,625 29,553,485
Common share equivalents
resulting from assumed
exercise of stock
options and warrants 3,709,347 3,710,274
---------- ----------- ---------- ----------
Average common shares and
share equivalents
outstanding 32,842,521 28,936,768 32,841,899 29,553,485
========== ========== ========== ==========
NET INCOME (LOSS) $ 1,334 $ (21,260) $ 2,469 $ (21,451)
========== ========== ========== ==========
EARNINGS (LOSS) PER SHARE:
Primary $ .04 $ (.73) $ .08 $ (.73)
========== ========== ========== ==========
Fully diluted $ .04 $ (.73) $ .08 $ (.73)
========== ========== ========== ==========
</TABLE>
Primary earnings (loss) per share has been computed by dividing net income
(loss) by the average common shares and share equivalents outstanding.
Common share equivalents were computed using the treasury stock method. The
average common stock market price for the period was used to determine the
number of common share equivalents.
Fully diluted earnings (loss) per share has been computed in the same manner
as primary earnings (loss) per share except that the higher of the average
or end of period common stock market price was used to determine the number
of common share equivalents.
