UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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.)
200 Bailey Avenue, Fort Worth, Texas 76107
(Address of principal executive offices)
(Zip Code)
(817) 332-7000
(Registrant's telephone number, including area code)
(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 28,731,123 shares of common stock, $.01 par value outstanding
as of May 1, 1995.
<PAGE>
AMERICREDIT CORP.
INDEX TO FORM 10-Q
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page
Consolidated Balance Sheets -
March 31, 1995 and June 30, 1994. . . . . . . 3
Consolidated Income Statements -
Three Months and Nine Months Ended
March 31, 1995 and 1994 . . . . . . . . . . . 4
Consolidated Statements of
Cash Flows - Nine Months Ended
March 31, 1995 and 1994 . . . . . . . . . . . 5
Notes to Consolidated Financial
Statements. . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations . . . . . . . . 9
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . 19
SIGNATURE . . . . . . . . . . . . . . . . . . . . . 20
<PAGE>
PART I - FINANCIAL INFORMATION
Item I. FINANCIAL STATEMENTS
AMERICREDIT CORP.
Consolidated Balance Sheets
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION> March 31, June 30,
1995 1994
--------- --------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 21 $ 15,756
Restricted cash 4,002
Investment securities 11,407 26,506
Finance receivables, net 171,776 72,150
Property and equipment, net 5,651 5,345
Other assets 3,215 2,458
------- -------
Total assets $196,072 $122,215
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Automobile receivables
-backed notes $ 42,657 $
Bank line of credit 24,700
Notes payable 787 388
Accrued taxes and expenses 2,549 2,326
------- -------
Total liabilities 70,693 2,714
------- -------
Shareholders' equity:
Common stock, $.01 par value
per share; 120,000,000 shares
authorized; 31,913,483 and
31,757,333 shares issued,
respectively 319 318
Additional paid-in capital 184,166 183,588
Accumulated deficit ( 49,174) ( 55,717)
------- -------
135,311 128,189
Treasury stock, at cost
(3,211,560 and
3,008,360 shares) ( 9,932) ( 8,688)
------- -------
Total shareholders' equity 125,379 119,501
------- -------
Total liabilities and
shareholders' equity $196,072 $122,215
======= =======
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
<PAGE>
AMERICREDIT CORP.
Consolidated Income Statements
(Unaudited, Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION> Three Months Ended Nine Months Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Finance charge
income $ 8,237 $ 3,099 $ 19,375 $ 9,001
Investment income 355 558 1,002 2,157
Other income 374 255 1,028 431
---------- ---------- ---------- ----------
8,966 3,912 21,405 11,589
---------- ---------- ---------- ----------
Costs and expenses:
Operating expenses 3,740 2,326 10,257 6,893
Provision for
losses 1,152 336 2,689 888
Interest expense 1,424 40 1,837 129
---------- ---------- --------- ----------
6,316 2,702 14,783 7,910
---------- ---------- --------- ----------
Income before
income taxes 2,650 1,210 6,622 3,679
Provision for
income taxes 79
---------- ---------- ---------- ----------
Net income $ 2,650 $ 1,210 $ 6,543 $ 3,679
========== ========== ========== ==========
Earnings
per share $ .09 $ .04 $ .22 $ .11
========== ========== ========== ==========
Weighted average
shares and share
equivalents 30,259,850 32,487,816 30,191,000 32,324,556
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
<PAGE>
AMERICREDIT CORP.
Consolidated Statements of Cash Flows
(Unaudited, Dollars in Thousands)
<TABLE>
<CAPTION> Nine Months Ended
March 31,
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,543 $ 3,679
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 976 979
Provision for losses 2,689 888
Changes in assets and liabilities:
Other assets ( 471) 389
Accrued taxes and expenses 223 ( 2,332)
------ ------
Net cash provided by operating
activities 9,960 3,603
------ ------
Cash flows from investing activities:
Purchases and originations of finance
receivables ( 150,348) ( 46,298)
Principal collections and recoveries
on finance receivables 48,033 33,313
Purchases of property and equipment ( 1,065) ( 2,286)
Proceeds from disposition of property
and equipment 61 520
Purchases of investment securities ( 21,402)
Proceeds from sales and maturities
of investment securities 15,099 23,166
Increase in restricted cash ( 4,002)
Proceeds from sale of investment
in affiliate 11,300
------ ------
Net cash used by investing
activities ( 92,222) ( 1,687)
------ ------
Cash flows from financing activities:
Borrowings on bank line of credit 40,300
Repayments on bank line of credit ( 15,600)
Proceeds from issuance of automobile
receivables-backed notes 51,000
Repayments on automobile receivables
-backed notes ( 8,343)
Payments on notes payable ( 165) ( 840)
Purchase of treasury stock ( 1,244) ( 556)
Proceeds from issuance of common stock 579 123
------ ------
Net cash provided (used) by
financing activities 66,527 ( 1,273)
------ ------
Net increase (decrease) in cash and
cash equivalents ( 15,735) 643
Cash and cash equivalents at
beginning of period 15,756 33,268
------ ------
Cash and cash equivalents at
end of period $ 21 $33,911
====== ======
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements
<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 March 31, 1995 and for the
periods ended March 31, 1995 and 1994 are unaudited, but in management's
opinion, include all adjustments, consisting only of normal recurring
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 1994 Annual Report to
Shareholders.
NOTE 2 - FINANCE RECEIVABLES
Finance receivables consist of the following (in thousands):
<TABLE>
<CAPTION> March 31, June 30,
1995 1994
--------- --------
<S> <C> <C>
Indirect consumer lending:
Precomputed interest $148,836 $55,617
Simple interest 72,708 24,890
------- ------
221,544 80,507
Direct lending 1,298 8,467
Premium finance 1,825 6,631
------- ------
Total finance receivables 224,667 95,605
Less unearned finance charges
and fees ( 36,715) ( 14,125)
------- ------
Principal amount of finance
receivables 187,952 81,480
Less allowance for losses ( 16,176) ( 9,330)
------- ------
Finance receivables, net $171,776 $72,150
======= ======
</TABLE>
<PAGE>
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. All direct
lending and premium finance contracts are precomputed interest finance
receivables.
A summary of the allowance for losses is as follows (in thousands):
<TABLE>
<CAPTION> Three Months Nine Months
Ended Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Balance at beginning
of period $13,034 $ 9,210 $ 9,330 $12,581
Provision for losses 1,152 336 2,689 888
Acquisition fees on
indirect consumer
lending contracts 4,018 1,228 9,234 3,094
Net charge-offs ( 2,028) ( 1,904) ( 5,077) ( 7,693)
------ ------ ------ ------
Balance at end of period $16,176 $ 8,870 $16,176 $ 8,870
====== ====== ====== ======
</TABLE>
NOTE 3 - CREDIT AGREEMENT
In September 1994, the Company entered into a revolving credit agreement
with a group of banks under which the Company may borrow up to $75
million, subject to a defined borrowing base. The Company had $24.7
million outstanding under this facility as of March 31, 1995. Borrowings
under the credit agreement are collateralized by the indirect finance
receivables portfolio and bear interest, based upon the Company's option,
at either the reference prime rate plus 1/2% or various market London
Interbank Offered Rates plus 2-1/4%. 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 November 1995,
contains various restrictive covenants requiring certain minimum
financial ratios and results and placing certain limitations on the
incurrence of additional debt, capital expenditures and repurchase of
common stock.
NOTE 4 - AUTOMOBILE RECEIVABLES-BACKED NOTES
In December 1994, the Company completed a private placement of $51
million of automobile receivables-backed notes. The issue, Series 1994-
A, was priced at par to yield 8.19% to the noteholders and is
collateralized by a pool of indirect finance receivables originally
totalling $56.7 million.
<PAGE>
The notes were issued by a wholly-owned special purpose subsidiary of the
Company which holds the related finance receivables. Principal and
interest on the notes are payable monthly from collections and recoveries
on the specific pool of finance receivables. Financial Security
Assurance Inc. ("FSA") issued a financial guaranty insurance policy for
the benefit of the noteholders.
In connection with the issuance of the financial guaranty insurance
policy by FSA, the Company was required to establish a cash account with
a trustee for the benefit of FSA and the noteholders. Such cash account
is shown as restricted cash on the Company's consolidated balance sheets.
Monthly collections and recoveries from the pool of finance receivables
in excess of required principal and interest payments on the notes are
added to the restricted cash account until the balance reaches a
specified percentage of the pool of finance receivables, and thereafter
are distributed to the Company. In the event that monthly collections
and recoveries from the pool of finance receivables are insufficient to
make required principal and interest payments on the notes, any shortfall
would be drawn from the restricted cash account.
Certain agreements with FSA contain restrictive covenants relating to
delinquency, default and net loss ratios in the pool of finance
receivables which collateralize the automobile receivables-backed notes.
NOTE 5 - INCOME TAXES
The Company's effective income tax rate on income before income taxes
differs from the U.S. statutory tax rate as follows:
<TABLE>
<CAPTION> Three Months Nine Months
Ended Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
U.S. statutory tax rate 34% 34% 34% 34%
Utilization of net operating
loss carryforward ( 34 ) ( 34 ) ( 34 ) ( 34 )
State income taxes 1
--- --- --- ---
0% 0% 1% 0%
=== === === ===
</TABLE>
At June 30, 1994, the Company had net operating loss carryforwards of
$56,000,000 for income tax reporting purposes which expire between 2007
and 2009 and an alternative minimum tax carryforward of $900,000 with no
expiration date.
<PAGE>
NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments for interest costs consist of the following (in thousands):
<TABLE>
<CAPTION> Nine Months
Ended
March 31,
1995 1994
---- ----
<S> <C> <C>
Interest costs (none capitalized) $1,516 $129
</TABLE>
During the nine months ended March 31, 1995, the Company sold certain
property and equipment for cash and a note receivable of $184,000.
During the nine months ended March 31, 1995, a capital lease obligation
of $564,000 was incurred when the Company entered into a lease for
equipment.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
General
Since September 1992, the Company has been in the business of purchasing
finance contracts originated by franchised and independent car dealers,
generally referred to as indirect consumer lending.
Since April 1993, the Company has also financed insurance premiums for
consumers purchasing car insurance through independent insurance agents.
However, the Company has recently curtailed its activities in this
business in order to concentrate its resources on the core indirect
consumer lending business.
The Company previously engaged in the retail used car sales and finance
business. However, in connection with a restructuring, the Company
withdrew from the retail used car sales business effective December 31,
1992. The finance receivables originated in this previous business are
referred to as the direct lending portfolio and are being liquidated over
time as the contracts are collected or charged-off.
Three Months Ended March 31, 1995 as compared to
Three Months Ended March 31, 1994
-------------------------------------------------
Revenue:
The Company's overall finance charge income consisted of the following
(in thousands):
<PAGE>
<TABLE>
<CAPTION> Three Months
Ended
March 31,
1995 1994
------------- --------------
<S> <C> <C> <C> <C>
Indirect consumer lending $ 8,055 98% $ 2,089 67%
Direct lending 75 1 686 22
Premium financing 107 1 324 11
----- --- ----- ---
$ 8,237 100% $ 3,099 100%
===== === ===== ===
</TABLE>
The increase in finance charge income for the indirect consumer lending
business is due to growth in average net indirect finance receivables
outstanding. The indirect consumer lending portfolio was $184.9 million
at March 31, 1995, compared to $47.4 million at March 31, 1994. The
Company purchased $69.4 million of indirect loans during the three months
ended March 31, 1995, compared to $17.0 million during the three months
ended March 31, 1994. This increased lending activity is a result of
additional loan production at branches open during both periods as well
as expansion of the Company's loan production capacity. The Company
operated 26 branch offices as of March 31, 1995, compared to 14 as of
March 31, 1994.
The decrease in direct lending and premium financing finance charge
income is due to liquidation of these portfolios.
The Company's overall effective yield on its finance receivables
increased to 20.8% from 20.2% primarily as a result of higher finance
charge rates realized in the Company's indirect consumer lending
business. The effective yield on indirect consumer lending receivables
was 20.9% for the three months ended March 31, 1995 and 20.7% for the
three months ended March 31, 1994.
Investment income decreased as a result of lower average cash and cash
equivalents and investment securities balances for the three months ended
March 31, 1995. The Company's yield on its cash and cash equivalents and
investment securities was 5.6% for the three months ended March 31, 1995
as compared to 3.1% for the three months ended March 31, 1994.
Other income included $222,000 and $105,000 for the three months ended
March 31, 1995 and 1994, respectively, related to the Company's
participation in certain joint ventures which acquire and collect
distressed receivables portfolios.
<PAGE>
Costs and Expenses:
Operating expenses as an annualized percentage of average net finance
receivables outstanding decreased to 9.4% for the three months ended
March 31, 1995 as compared to 15.2% for the three months ended March 31,
1994. The ratio improved as a result of the Company's ability to
leverage its fixed overhead costs by growing its finance receivables
portfolio. The dollar amount of operating expenses increased by $1.4
million, or 61% primarily due to the addition of branch offices,
marketing representatives, branch supervisory personnel and portfolio
servicing and analysis staff.
The provision for losses increased to $1,152,000 as compared to $336,000.
Further discussion concerning the provison for losses is included under
the caption, "Finance Receivables".
Interest expense for the three months ended March 31, 1995 resulted from
borrowings on the Company's bank line of credit and issuance of $51
million of automobile receivables-backed notes on December 22, 1994. The
Company did not have any bank borrowings during the three months ended
March 31, 1994.
Nine Months Ended March 31, 1995 as compared to
Nine Months Ended March 31, 1994
-----------------------------------------------
Revenue:
The Company's overall finance charge income consisted of the following
(in thousands):
<TABLE>
<CAPTION> Nine Months
Ended
March 31,
1995 1994
--------------- ---------------
<S> <C> <C> <C> <C>
Indirect consumer lending $18,207 94% $4,810 53%
Direct lending 471 2 3,315 37
Premium financing 697 4 876 10
------ --- ----- ---
$19,375 100% $9,001 100%
====== === ===== ===
</TABLE>
The increase in finance charge income for the indirect consumer lending
business is due to growth in average net indirect finance receivables
outstanding. The indirect consumer lending portfolio was $184.9 million
at March 31, 1995, compared to $47.4 million at March 31, 1994. The
Company purchased $152.9 million of indirect loans during the nine months
ended March 31, 1995, compared to $39.6 million during the nine months
ended March 31, 1994. This increased lending activity is a result of
additional loan production at branches open during both periods as well
as expansion of the Company's loan production capacity. The Company
operated 26 branch offices as of March 31, 1995, compared to 14 as of
March 31, 1994.
<PAGE>
The decrease in direct lending and premium financing finance charge
income is due to liquidation of these portfolios.
The Company's overall effective yield on its finance receivables
increased to 20.5% from 20.4% primarily as a result of higher finance
charge rates realized in the Company's indirect consumer lending
business. The effective yield on indirect consumer lending receivables
was 20.6% for the nine months ended March 31, 1995 and 21.1% for the nine
months ended March 31, 1994.
Investment income decreased as a result of lower average cash and cash
equivalents and investment securities balances for the nine months ended
March 31, 1995. The Company's yield on its cash and cash equivalents and
investment securities was 5.2% for the nine months ended March 31, 1995
as compared to 3.9% for the nine months ended March 31, 1994.
Other income included $614,000 and $105,000 for the nine months ended
March 31, 1995 and 1994, respectively, related to the Company's
participation in certain joint ventures which acquire and collect
distressed receivables portfolios. These joint ventures were formed
during December 1993.
Costs and Expenses:
Operating expenses as an annualized percentage of average net finance
receivables outstanding decreased to 10.9% for the nine months ended
March 31, 1995 as compared to 15.6% for the nine months ended March 31,
1994. The ratio improved as a result of the Company's ability to
leverage its fixed overhead costs by growing its finance receivables
portfolio. The dollar amount of operating expenses increased by $3.4
million, or 49% primarily due to the addition of branch offices,
marketing representatives, branch supervisory personnel and portfolio
servicing and analysis staff.
The provision for losses increased to $2,689,000 as compared to $888,000.
Further discussion concerning the provison for losses is included under
the caption, "Finance Receivables".
Interest expense for the nine months ended March 31, 1995 resulted from
borrowings on the Company's bank line of credit and issuance of $51
million of automobile receivables-backed notes on December 22, 1994. The
Company did not have any bank borrowings during the nine months ended
March 31, 1994.
FINANCE RECEIVABLES
Net finance receivables represented 87.6% of the Company's total assets
at March 31, 1995. The following table presents certain data related to
the finance receivables portfolio (dollars in thousands):
<PAGE>
<TABLE>
<CAPTION> March 31,
1995
-------------------------------------
Indirect Direct Premium Total
-------------------------------------
<S> <C> <C> <C> <C>
Gross finance receivables $221,544 $1,298 $1,825 $224,667
Unearned finance charges
and fees ( 36,609) ( 54) ( 52) ( 36,715)
------- ----- ----- -------
Finance receivables
(principal amount) 184,935 1,244 1,773 187,952
Allowance for losses ( 15,525) ( 457) ( 194) ( 16,176)
------- ----- ----- -------
Finance receivables, net $169,410 $ 787 $1,579 $171,776
======= ===== ===== =======
Number of outstanding
contracts 23,908 1,018 8,257 33,183
======= ===== ===== =======
Allowance for losses as a
percentage of finance
receivables (principal
amount) 8.4% 36.7% 10.9% 8.6%
======= ===== ===== ======
Average amount of outstanding
contract (principal amount)
(in dollars) $ 7,735 $1,222 $ 215 $ 5,664
======== ===== ====== =======
</TABLE>
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 for a non-refundable
acquisition fee on a non-recourse basis, and such acquisition fees are
also recorded 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 judgements 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):
<PAGE>
<TABLE>
<CAPTION> March 31,
1995 1994
---- ----
<S> <C> <C>
Principal amount of delinquent contracts $3,454 $1,019
Principal amount of delinquent contracts
as a percentage of total net indirect
finance receivables outstanding 1.9% 2.2%
</TABLE>
The following presents charge-off data with respect to the Company's
indirect finance receivables portfolio (dollars in thousands):
<TABLE>
<CAPTION> Three Months Nine Months
Ended Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net charge-offs $1,776 $411 $4,009 $811
Net charge-offs as an
annualized percentage
of average net indirect
finance receivables
outstanding 4.7% 4.1% 4.5% 3.6%
</TABLE>
The Company recorded periodic provisions for losses as charges to
operations of $1,129,000 and $2,579,000 related to its indirect finance
receivables portfolio for the three and nine month periods ended March
31, 1995, respectively. The provisions for losses were $301,000 and
$783,000 for the three and nine month periods ended March 31, 1994,
respectively. The increased loss provisions are a result of higher
average net indirect finance receivables balances. The Company also
accounts for acquisition fees on indirect consumer lending contracts as
additional allowances for losses.
The Company began its indirect consumer lending business in September
1992 and has grown its receivables portfolio to $184.9 million as of
March 31, 1995. The Company expects that its aggregate portfolio
delinquency and charge-offs will increase over time as its portfolio
gains more maturity. Delinquency and charge-offs typically tend to occur
after a loan has been outstanding for several months. 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.
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):
<PAGE>
<TABLE>
<CAPTION> March 31,
1995 1994
---- ----
<S> <C> <C>
Number of delinquent contracts 150 431
Number of delinquent contracts
as a percentage of the total
number of contracts outstanding 14.7% 7.2%
Amount of delinquent contracts * $266 $1,401
Amount of delinquent contracts as
a percentage of total gross
direct finance receivables
outstanding * 20.5% 10.0%
</TABLE>
* Includes unearned finance charges
The following table presents repossession and charge-off data with
respect to the Company's direct finance receivables portfolio:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Repossessions and other
charge-offs 134 564 561 2,229
Repossessions and other
charge-offs as an
annualized percentage
of the average number of
contracts outstanding 38.3% 32.0% 31.2% 33.5%
Net charge-offs
(in thousands) $ 99 $1,450 $ 716 $6,831
Average net charge-off $ 739 $2,571 $1,276 $3,065
Net charge-offs as an
annualized percentage of
average direct finance
receivables outstanding,
less unearned finance
charges 21.8% 35.6% 25.0% 37.1%
</TABLE>
Net charge-offs as an annualized percentage of average direct finance
receivables outstanding has decreased as the portfolio has become more
seasoned and average outstanding contract balances have decreased. The
Company did not record any periodic provisions for losses related to its
direct finance receivables portfolio for the three and nine month periods
ended March 31, 1995 and 1994.
<PAGE>
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, non-refundable
policy fees, insurance company or agency insolvencies or other factors.
The Company recorded periodic provisions for losses of $23,000 and
$110,000 related to its premium finance receivables portfolio for the
three month and nine month periods ended March 31, 1995, respectively.
The provisions for losses were $35,000 and $105,000 for the three and
nine month periods ended March 31, 1994, respectively.
The following table presents charge-off data with respect to the
Company's premium finance receivables portfolio (dollars in thousands):
<TABLE>
<CAPTION> Three Months Nine Months
Ended Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net charge-offs $ 153 $ 43 $ 352 $ 51
Net charge-offs as an
annualized percentage
of average net premium
finance receivables
outstanding 21.9% 3.6% 10.1% 1.7%
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows are summarized as follows (in thousands):
<TABLE>
<CAPTION> Nine Months Ended
March 31,
1995 1994
---- ----
<S> <C> <C>
Operating activities $ 9,960 $ 3,603
Investing activities ( 92,222) ( 1,687)
Financing activities 66,527 ( 1,273)
------ ------
Net increase (decrease) in
cash and cash equivalents ($15,735) $ 643
====== =====
</TABLE>
<PAGE>
In addition to the net change in cash and cash equivalents shown above,
the Company also had net decreases in investment securities of $15.1
million and $1.8 million for the nine months ended March 31, 1995 and
1994, respectively. Such amounts are included as investing activities in
the above table.
The Company's primary sources of cash have been collections and
recoveries on its finance receivables portfolio, borrowings under its
bank line of credit and the issuance in December 1994 of automobile
receivables-backed notes. The Company also received proceeds from the
sale of its interest in Pacific Automart Inc. of $11.3 million in August
1993.
The Company's primary use of cash has been purchases and originations of
finance receivables. The Company entered the indirect consumer lending
business in September 1992 and has grown the indirect finance receivables
portfolio to $184.9 million as of March 31, 1995. The Company operated
26 indirect consumer lending branches in nineteen states and had a group
of marketing representatives as of March 31, 1995. The Company plans to
open additional consumer lending branches, add marketing representatives
and expand loan production capacity at existing branch offices in the
remainder of fiscal 1995. While the Company has been able to establish
and grow this business thus far, there can be no assurance that future
expansion will be successful due to competitive, regulatory, market,
economic or other factors.
The Company's Board of Directors has authorized the repurchase of up to
6,000,000 shares of the Company's common stock. A total of 3,220,500
shares of common stock had been purchased pursuant to this program
through March 31, 1995.
In December 1994, the Company completed a private placement of $51
million of automobile receivables-backed notes. The issue, Series 1994-
A, was priced at par to yield 8.19% to the noteholders and is
collateralized by a pool of indirect finance receivables originally
totalling $56.7 million. The notes were issued by a wholly-owned special
purpose subsidiary of the Company which holds the related finance
receivables. Principal and interest on the notes are payable monthly
from collections and recoveries on the specific pool of finance
receivables. The notes are rated "Aaa" by Moody's Investors Services
Inc. and "AAA" by Standard & Poor's Corp. Financial Security Assurance
Inc. ("FSA") issued a financial guaranty insurance policy for the benefit
of the noteholders.
As of March 31, 1995, the Company had $11.4 million in cash and cash
equivalents and investment securities. The Company also has a revolving
credit agreement with a group of banks under which the Company may borrow
up to $75 million. The Company had $24.7 million outstanding under this
facility at March 31, 1995. The Company estimates that it will require
additional external capital in calendar year 1995 in addition to these
existing capital resources and collections and recoveries on its finance
receivables portfolio in order to fund expansion of its indirect consumer
<PAGE>
lending business, capital expenditures, any additional stock repurchases,
and other costs and expenses.
The Company anticipates that such funding will be in the form of an
expanded bank line of credit and additional issuances of automobile
receivables-backed notes. There can be no assurance that external
funding will be available, or if available, that it will be on terms
acceptable to the Company.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Not Applicable
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
Not Applicable
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
27.1 - Financial Data Schedule
(B) Reports on Form 8-K
The Company did not file any reports on Form
8-K during the quarterly period ended March 31,
1995.<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: May 15, 1995 By: /s/ Daniel E. Berce
(Signature)
------------------------------------
Daniel E. Berce
Chief Financial Officer
EXHIBIT 11.1
AMERICREDIT CORP.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION> Three Months Nine Months
Ended Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY:
Average common shares
outstanding. . . . . 28,711,076 29,130,782 28,740,237 29,131,348
Common share equivalents
resulting from assumed
exercise of stock
options and warrants. 1,548,774 3,357,034 1,450,763 3,193,208
---------- ---------- ---------- ----------
Average common shares
and share equivalents
outstanding. . . . . .30,259,850 32,487,816 30,191,000 32,324,556
========== ========== ========== ==========
FULLY DILUTED:
Average common shares
outstanding. . . . . .28,711,076 29,130,782 28,740,237 29,131,348
Common share equivalents
resulting from assumed
exercise of stock
options and warrants. 2,104,612 3,046,636 1,896,961 3,049,434
---------- ---------- ---------- ----------
Average common shares
and share equivalents
outstanding . . . . 30,815,688 32,177,418 30,637,198 32,180,782
========== ========== ========== ==========
NET INCOME . . . . . . $ 2,650 $ 1,210 $ 6,543 $ 3,679
========== =========== ========== ==========
EARNINGS PER SHARE:
Primary. . . .. . . .$ .09 $ .04 $ .22 $ .11
========== =========== ========== ==========
Fully diluted. . . .$ .09 $ .04 $ .21 $ .11
========== =========== ========== ==========
</TABLE>
Primary earnings per share has been computed by dividing net income 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.
<PAGE>
Fully diluted earnings per share has been computed in the same manner as
primary earnings 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.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the
consolidated financial statements of AmeriCredit Corp. included in its
quarterly report on Form 10-Q and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<CIK> 0000804269
<NAME> AMERICREDIT CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 21
<SECURITIES> 11407
<RECEIVABLES> 187952
<ALLOWANCES> (16176)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 9541
<DEPRECIATION> (3890)
<TOTAL-ASSETS> 196072
<CURRENT-LIABILITIES> 0
<BONDS> 68144
<COMMON> 319
0
0
<OTHER-SE> 125060
<TOTAL-LIABILITY-AND-EQUITY> 196072
<SALES> 0
<TOTAL-REVENUES> 21405
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2689
<INTEREST-EXPENSE> 1837
<INCOME-PRETAX> 6622
<INCOME-TAX> 79
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6543
<EPS-PRIMARY> .22
<EPS-DILUTED> .21
</TABLE>
