World Acceptance Corporation Reports Second Quarter Results

GREENVILLE, S.C., Oct. 23 /PRNewswire-FirstCall/ -- World Acceptance
Corporation (Nasdaq: WRLD) today reported a 16.8% increase in gross loan
balances, a 14.4% increase in revenues, a 1.9% increase in net income and an
8.3% increase in diluted earnings per share for its second fiscal quarter
ended September 30, 2008, compared with the corresponding quarter of the prior
fiscal year.
Net income for the second quarter rose to $10.7 million, a 1.9% increase
over the $10.5 million for the second quarter of fiscal 2008. Diluted
earnings per share increased 8.3% to $0.65 for the current quarter from $0.60
for the prior year quarter.
"World Acceptance's revenues benefited from continued growth in our loan
portfolio and the contribution from offices opened and acquired since last
year," stated Sandy McLean, CEO of World Acceptance Corporation. "Gross loans
outstanding at September 30, 2008, grew to $667.2 million, a 16.8% increase
over the $571.3 million outstanding at September 30, 2007, and an 11.3%
increase since the beginning of the fiscal year.
"Loan demand increased in the second quarter sequentially over the first
quarter of this fiscal year and was up 15.6% to over $484.8 million compared
with the second quarter of last year. Our loan growth rate is up from the
11.1% year-over-year increase in volume experienced in the June quarter,"
McLean said.
Provision for loan losses increased 26.6% to $23.3 million, up from $18.4
million in the second quarter of last year. Net charge-offs as a percentage
of average net loans increased to 17.0% on an annualized basis during the most
recent quarter from 15.3% in the same quarter of last fiscal year. McLean
stated, "This 1.7 percentage point increase in charge offs since last year is
similar to the 1.8 percentage point increase experienced in the first quarter
of this year. While higher than historical averages, it remains within
reasonable ranges in light of current economic conditions.
"We continue to monitor closely the loan portfolio in light of the
softening economy. At this time, however, we do not expect to see our loss
ratios improve for the remainder of the fiscal year," McLean concluded.
Total general and administrative expenses increased by 15.4% compared with
the second quarter of last year. The increase was due to higher expenses to
support 90 net new offices opened or acquired since September 30, 2007, and
contributed to general and administrative expenses increasing slightly to
52.7% of total revenues compared with 52.3% during the second quarter of the
prior fiscal year.
Other key return ratios for the second quarter included an 8.3% return on
average assets (annualized) and an annualized return on average equity of
16.9%.
Six-Month Results
For the first six-months of the fiscal year, net income was $22.7 million,
or $1.37 per diluted share, representing a 6.6% increase in net earnings and a
14.2% increase in earnings per share over the $21.3 million, or $1.20 per
diluted share, for the prior year six-month period. Total revenues for the
first six-months of fiscal 2009 were $180.1 million, a 15.0% increase over the
$156.6 million during the corresponding period of the previous year. Net
charge-offs increased $8.7 million compared to the prior year first
six-months. Net-charge-offs as a percent of average net loans were 15.8%
compared to 14.0% during the prior year six-month period.
During the first six-months of the fiscal year, the Company opened 62
offices, acquired eight offices and closed one office, resulting in a total of
907 offices at September 30, 2008.
About World Acceptance Corporation
World Acceptance Corporation is one of the largest small-loan consumer
finance companies, operating 907 offices in eleven states and Mexico. It is
also the parent company of ParaData Financial Systems, a provider of computer
software solutions for the consumer finance industry.
Second Quarter Conference Call
The senior management of World Acceptance Corporation will be discussing
these results in its quarterly conference call to be held at 10:00 a.m.
Eastern time today. Interested parties may participate in this call by
dialing 1-877-874-1567. A simulcast of the conference call is also available
at http://tinyurl.com/6mwtee or http://www.streetevents.com. The call will be
available for replay on the Internet for approximately 30 days.
This press release may contain various "forward-looking statements" within
the meaning of Section 27A of the Securities Exchange Act of 1934, as amended,
that represent the Company's expectations or beliefs concerning future events.
Such forward-looking statements are about matters that are inherently subject
to risks and uncertainties. Factors that could cause actual results or
performance to differ from the expectations expressed or implied in such
forward-looking statements include changes in the timing and amount of
revenues that may be recognized by the Company, changes in current revenue and
expense trends (including trends affecting charge-offs), changes in the
Company's markets and changes in the economy (particular in the markets served
by the Company). Such factors are discussed in greater detail in the
Company's filings with the Securities and Exchange Commission. World
Acceptance Corporation is not responsible for updating the information
contained in this press release beyond the publication date, or for changes
made to this document by wire services or Internet services.

World Acceptance Corporation

Consolidated Statements of Operations
----------------------------------------
(unaudited and in thousands, except per share amounts)

Three Months Ended Six Months Ended
September 30, September 30,
------------------ ----------------
2008 2007 2008 2007
------- ------- -------- --------
Interest & fees $80,054 $69,706 $156,403 $135,095
Insurance & other 11,667 10,492 23,739 21,492
-------- ------- -------- --------
Total revenues 91,721 80,198 180,142 156,587
Expenses:
Provision for loan losses 23,307 18,416 41,164 32,632
General and administrative
expenses
Personnel 31,200 27,891 64,516 56,747
Occupancy & equipment 6,478 5,368 12,532 10,301
Data processing 581 640 1,170 1,190
Advertising 2,532 2,278 5,241 4,730
Intangible amortization 623 638 1,224 1,253
Other 6,965 5,115 12,486 9,901
-------- ------- -------- --------
48,379 41,930 97,169 84,122
Interest expense 2,749 2,932 5,229 5,268
-------- ------- -------- --------
Total expenses 74,435 63,278 143,562 122,022
Income before taxes 17,286 16,920 36,580 34,565
Income taxes 6,622 6,454 13,865 13,249
-------- ------- -------- --------
Net income $10,664 $10,466 $22,715 $21,316
======== ======== ======== ========
Diluted earnings per share $0.65 $0.60 $1.37 $1.20
======== ======== ======== ========
Diluted weighted average shares
outstanding 16,493 17,523 16,535 17,728
-------- ------- -------- --------

Consolidated Balance Sheets
-----------------------------
(unaudited and in thousands)

September 30, March 31, September 30,
2008 2008 2007
-------- -------- ---------
ASSETS
Cash $8,070 $7,590 $5,863
Gross loans receivable 667,179 599,509 571,319
Less: Unearned interest & fees (175,251) (154,418) (148,654)
Allowance for loan losses (38,121) (33,526) (32,269)
-------- -------- --------
Loans receivable, net 453,807 411,565 390,396
Property and equipment, net 22,970 18,654 16,937
Deferred income taxes 18,387 22,133 19,648
Goodwill 5,384 5,353 5,333
Intangibles 9,927 9,997 10,907
Other assets 9,795 10,818 9,890
-------- -------- --------
$528,340 $486,110 $458,974
======== ======== ========

LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities:
Notes payable 256,700 214,900 225,400
Income tax payable 239 18,039 1,605
Accounts payable and accrued
expenses 16,406 18,866 13,471
-------- -------- --------
Total liabilities 273,345 251,805 240,476
Shareholders' equity 254,995 234,305 218,498
-------- -------- --------
$528,340 $486,110 $458,974
-------- -------- --------

Selected Consolidated Statistics
--------------------------------
(dollars in thousands)

Three Months Ended Six Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
-------- -------- -------- --------

Expenses as a percent of total
revenues:
Provision for loan losses 25.4% 23.0% 22.9% 20.8%
General and administrative
expenses 52.7% 52.3% 53.9% 53.7%
Interest expense 3.0% 3.7% 2.9% 3.4%

Average gross loans receivable $653,671 $560,689 $634,097 $543,034

Average loans receivable $482,130 $414,590 $468,316 $402,465

Loan volume $484,806 $419,261 $945,457 $833,750

Net charge-offs as percent of
average loans 17.0% 15.3% 15.8% 14.0%

Return on average assets 8.3% 9.3% 9.0% 9.7%

Return on average equity 16.9% 18.8% 18.4% 19.3%

Offices opened (closed) during
the period, net 35 35 69 85

Offices open at end of period 907 817 907 817

SOURCE World Acceptance Corporation

Kelly M. Malson of World Acceptance Corporation, Chief Financial Officer,
+1-864-298-9800