World Acceptance Corporation Reports Third Quarter Results

World Acceptance Corporation today reported higher revenue, net income and loans for its third fiscal quarter ended December 31, 2005.

Net income for the third quarter rose 3.4% to $5.7 million compared to $5.5 million for the same quarter of the prior year. Diluted earnings per share were $0.30 for the current quarter, a 7.2% increase over the $0.28 per share for the prior year quarter. The larger percentage increase in earnings per share than in net earnings reflects the impact of our ongoing share repurchase program. Total revenues for the quarter increased 15.3% to $61.3 million from $53.2 million for the prior year quarter.

Gross loans outstanding increased to a record $464.4 million at December 31, 2005, a 20.7% increase over the $384.7 million in balances outstanding at December 31, 2004, and a 32.1% increase since the beginning of the fiscal year. During the quarter, the Company loaned a record $367 million in 421,000 separate loan transactions.

Several key return ratios remained very high during the quarter. The return on average assets (annualized) was 6.6% and the annualized return on average equity was 12.0%. Total general and administrative expenses as a percent of total revenue once again showed improvement on a year over year basis dropping to 54.5% during the most recent quarter compared to 55.4% during the prior year quarter.

Doug Jones, President and CEO, said, “Third quarter loans grew $68.8 million, a 17.4% increase from the second quarter of this year. This reflects the continued demand for our loan products and the success of our existing operations. The third quarter is traditionally our busiest period for making loans to new and existing customers and this year was no exception. We are pleased that the majority of our loan growth was generated internally, with only $5.3 million attributable to acquisitions.

“Our earnings growth for the quarter was offset somewhat by an expected increase in interest expense and a higher provision for loans losses, which increased to $16.7 million from $13.7 million in the third quarter of last year. The increased provision reflects both our excellent growth in loan balances and our increase in charge-offs. We continue to evaluate charge-offs relative to our increased loan volume and increase in total balances. We believe, however, that the Company is positioned for excellent earnings during the fourth quarter which is generally the Company’s most profitable.”

Nine-Month Results
For the first nine months of the fiscal year, net income was $20.4 million, or $1.07 per diluted share, representing a 3.8% increase over the $19.7 million, or $1.01 per diluted share, for the prior year nine-month period. Total revenues for the first nine months of fiscal 2006 were $169.8 million, a 12.9% increase over the $150.4 million during the corresponding period of the previous year.

Loan growth has been excellent throughout the entire first nine months of the current year, and has been mostly internally generated. Since the beginning of the fiscal year, gross loans have increased by $112.9 million, or 32.1%, compared to an increase of $74.6 million, or 24.0%, during the first nine months of fiscal 2005. Acquisitions during the current nine-month period amounted to $8.3 million in gross loans compared to $27.4 million during the prior year period.

During the first nine months of the fiscal year, the Company opened or acquired 46 offices and closed six non-performing offices, leaving a total of 619 offices at December 31, 2005.

About World Acceptance
World Acceptance Corporation is one of the largest small-loan consumer finance companies, operating 619 offices in 11 states and Mexico. It is also the parent company of ParaData Financial Systems, a provider of computer software solutions for the consumer finance industry.