World Acceptance's CEO Discusses F3Q13 Results - Earnings Call Transcript

Jan.30.13 | About: World Acceptance (WRLD)

World Acceptance Corporation (NASDAQ:WRLD)

F3Q13 (Qtr End 12/31/2012) Earnings Call

January 30, 2013 10:00 AM ET

Executives

Alexander McLean - Chairman and Chief Executive Officer

Kelly Malson - Senior Vice President, Chief Financial Officer and Treasurer

Mark Roland - President and Chief Operating Officer

Analysts

John Rowan - Sidoti & Company

Bob Ramsey - FBR

Bill Armstrong - CL King & Associates

Kyle Joseph - Stephens

Bill Dezellem - Tieton Capital Management

Henry Coffey - Sterne, Agee

Clifford Sosin - CAS Investment Partners

Joshua Axel - UBS

Les Bryant - UBS Financial Services

Operator

Good morning, and welcome to the World Acceptance Corporation's sponsored third quarter press release conference call. (Operator Instructions) Before we begin, the corporation has requested that I make the following announcement.

The comments made during this conference may contain certain forward-looking statements within the meaning of section 21-E of the Securities and Exchange Act that represent the corporation's expectations and beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Statements other than those of historical fact, as well as those identified by the words anticipate, estimate, intend, plan, expect, believe, may, will, and should or any variation of the foregoing and similar expressions are forward-looking statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements, include the factors discussed in today's earnings press release and in the Risk Factor section of the corporation's most recent Form 10-K and other reports filed with or furnished to the SEC from time to time. The corporation does not undertake any obligation to update any forward-looking statements it makes.

At this time, it is my pleasure to turn the floor over to your host, Sandy McLean, CEO.

Alexander McLean

Thank you. And I also would like to welcome everybody this morning to our third quarter conference call. I hope that everybody has had a chance to review the press release that was released this morning as well as my prepared remarks. This is a new format for us and I think it works better rather than me read this, to get it out sooner. Some might have a chance to review it and think about any questions they may ask. If this format continues to work well, we'll continue to probably use this format going forward.

With that being said, I'd like to now open the floor for questions, for anybody who may have any.

Question-and-Answer Session

Operator

(Operator Instructions) We will take the first question today from John Rowan with Sidoti & Company.

John Rowan - Sidoti & Company

Looking at the diluted share count, right, it seems like as if you guys fall back to about 900,000 shares worth of stock in the quarter, am I right on that?

Alexander McLean

In the current quarter it was part of the script, it was right around 900,000 shares, yes.

John Rowan - Sidoti & Company

But the diluted share count only came down 187,000. So I'm wondering what the timing of those repurchases were and what the diluted share count at the end of quarter was?

Kelly Malson

Majority of those shares were bought after November 13, so that's second half of the quarter.

John Rowan - Sidoti & Company

So I assume that the diluted share count is quite a bit lower than where the average share count was for the quarter?

Kelly Malson

Correct.

John Rowan - Sidoti & Company

Do you have the period and number?

Kelly Malson

Period and number, yes. If you'll bear with me for one second, if you do have a question, ask it, while I look it up.

John Rowan - Sidoti & Company

I was wondering, we've seen a lot of your other peers maybe you wouldn't call me your peers, but some of the other companies that are loosely regarded in this space, offering a lot of installment products, whether it be through the internet or through other brick and mortars locations. Are you guys seeing, what you would think as any increased competition coming from that or are they just basically swapping out payday loan customers into installment products?

Alexander McLean

I don't have a fairly answer to that, so I'm not seeing any direct competition as a result of. I'm being told that some of the payday lenders are offering various products. But I don't market it, add anything to that. We are not hearing anything from the branches relative to our customers indicating alternative sources for that kind of financial need. If those products are out there, we're just not directly seeing them.

John Rowan - Sidoti & Company

Any thoughts on what you're seeing here on the tax refund season? I assume if taxes are late, but commensurate size on a year-over-year level, it's a benefit to you guys. Any thoughts on where we stand?

Alexander McLean

It's kind of premature to really answer that. I think we fairly leveled with last year, which is not bad considering the delay in the actual delay with our FX and processing returns.

Mark Roland

All of our customers are certainly aware that processing will not occur until at the earliest of 30, and so it's backing up the process, but it's doing almost exactly what our tax partners, Tax Tech Inc., thought it would do. And it's in the ramp up period right now, where we're seeing a lot more activity.

John Rowan - Sidoti & Company

As far as regulations go, what are your people telling you regarding the authority of the CFPB at this point following the appellate court decision?

Alexander McLean

I think we're in the same position as so many other people, but it was certainly an interesting ruling by that court. But I think it will be a decision by the Supreme Court as to what's going to take place and obviously the National Labor Relations Board, this was affected by that decision. But you would assume if it stands up, it'd be a similar type ruling this court raised, but it will be interesting to see how it plays out.

Mark Roland

Kelly has your share count.

Kelly Malson

At December 31, shares outstanding were 12,554,000. And John, a couple of other things to know regarding the dilutive share count going forward. One, as we released in an 8-K in December, we did have a large stock grant that was issued and that impacted the current quarter, diluted EPS was about 130,000 shares. However, that was only from an average standpoint included in one month, so going forward that will be closer to $0.5 million.

John Rowan - Sidoti & Company

But the 12,554,000 that's diluted or is that?

Kelly Malson

That's the basic outstanding.

John Rowan - Sidoti & Company

And then, one last question, going back to, I received the grant in the new compensation agreement. Just to make sure I understand, because obviously you guys put out some commentary on it in the pre remarks. The earnings goals that you have set for yourself, right, that includes the expenses related to the buyback, to the new compensation agreement, correct?

Alexander McLean

Let me correct one thing. We didn't set for ourselves. The compensation committee of the board established this program and set this. But yes, the targets that were outlined do include whatever type of expense associated with these grants.

Operator

Our next question comes from Bob Ramsey with FBR.

Bob Ramsey - FBR

I just hope you could share a little bit more color on the expense front. I know the script sort of highlighted that there were some timing issues or maybe true ups on some variable comp. How are you guys thinking about expenses going forward? Is G&A to revenues, the right way to think about it, and if so, you're a little bit higher this quarter than you have been in the past, is there room to work it out back down?

Alexander McLean

I made an attempt to isolate those, I felt were more time and related like the bonus accruals and so forth, and those were more permanent related and that's more like coming, currently our claims ratio is more about group insurance, is moving forward as the cost of healthcare as that will likely be a little bit higher going forward.

And just like, we mentioned the stock compensation expense that would likely be a little higher going forward. But at this point, there's no reason to believe that we can continue to control, and I think control our expenses as a percent of revenue. And yes, I think that is the most appropriate way to look at it going forward.

Given the lower share count, timing differences to an expense item or revenue item has a big impact on a quarterly basis. But when you look at it on annual basis, I believe that we should still continue to give some economies of scale over time.

Bob Ramsey - FBR

And so if last year G&A to revenues was between 48% and 48.5%, is that a good sort of annualized range in Q2 period, still you think?

Alexander McLean

I don't know what that number is going to be. If it was without any impact of this large equity grant that's out there, that will have an impact, but it will then be kind of rolling through. So that's the only large thing that's going through there, out of the ordinary. So I think it'd be in a better position to judge what to expect as we begin the March going forward rather than what's going to happen in the next month and so forth.

Bob Ramsey - FBR

And I know you all highlighted in the announcements, the repurchases you made I guess at the end of last year, and then also, have you already repurchased some stock this quarter?

Alexander McLean

Yes we have, about $18 million worth. I mean we have, and it is in the script. So I don't want to answer it right now.

Kelly Malson

We repurchased about $18.2 million and that's roughly 240,000 shares.

Operator

And next is Bill Armstrong with CL King & Associates.

Bill Armstrong - CL King & Associates

A couple of questions on those equity grants from December 5. So the estimated annual pre-tax expense you have outlined in the 8-K, does that assume that you will achieve the maximum targets on compounded EPS growth, when we look at those expense estimates. How should we think about that?

Alexander McLean

The answer to that is, yes. And that is an estimate that will be revived as time goes forward. It's being done, while it's actually in three different thoughts. You've got a certain order that it is time based and their options. There's another part that is based on a three-year target, that's a much smaller part in the bulk of those restricted share, are based on five year growth targets between fiscal '12 and fiscal '17. And at this point in time, we're assuming that we will be hitting, but obviously the investment estimate that will be adjusted going forward each period depending on where we are at that point in time. So that is a maximum full discloser cycle time.

Bill Armstrong - CL King & Associates

So those expenses are going to be purely incremental going forward? In another word, is that just additional expense that didn't exist before or does this program replace an expiring program from previous years?

Alexander McLean

This is a change in the compensations committee approach to as instead of having annual grants that have a one-time grant that represent basically a five-year period. So those annual grants will not be made generally speaking. And so this will not be totally incremental expense. It will be a net difference between what's previously been issued on an annual basis as oppose to despite this one timeframe.

And I think if you'll bear with me for one second, I think I can give you some pre-results and hold this numbers to as exactly that we have made an attempt to say that had this program continued like it was previously done with annual grants and so forth. And so the assumption is, I don't know what the board would have done, but had they been consistent with what they've done in last few years as oppose what they did do and in the process of doing, the impact of expenses for the next five years are $4.7 million for 2013, $10.3 million for '14, $7.6 million for '15, $4.6 million for '16 and $2.2 million for '17.

That sum number and that range is what you would anticipate be in the impact of this versus what they could have previously done. And let's not just say, they would have done it or anything else, but that's the only cycle data that we have at this point that would be relevant.

Bill Armstrong - CL King & Associates

Just one very quick follow-up, were there any incentive compensation or bonuses given out in the quarter that might have brought forward to avoid potential tax increases for 2013 and for tax increases?

Alexander McLean

They were not. The only remaining incentives title or equity title grant or whatever out there, it was not part of this grant, were carryovers. Each of the tax grants invested over a period of three to four years. And so the remainders of those programs are still out there, but there has been no acceleration whatsoever of these equity-type grants or direct cash compensation type of things.

Operator

We'll now go to Kyle Joseph with Stephens.

Kyle Joseph - Stephens

Most of my questions have been answered, but just following up on the tax refund delays. Have you guys seen any effect on the credit or your delinquencies as a result of that this quarter or those are in line as well?

Alexander McLean

This is going to be very vague, because I don't want to give any real predictions. But the only real difference is, we try it pretty closely, the amount of reduction in our ledger balances year-over-year, and in the month of January we're slightly behind the reduction in those ledger balances for the same level last year. And we believe that's probably as a result of the delay and individuals getting their tax refunds. But I don't think that certainly not will be a major impact during the course of the quarter.

Kyle Joseph - Stephens

And can you remind me, what tax rate we should be using going forward, is it 37.5%?

Alexander McLean

37% to 37.5% should be the good annualized rate.

Operator

And we'll now go to Bill Dezellem with Tieton Capital Management.

Bill Dezellem - Tieton Capital Management

We have a couple of a question. First of all, last quarter you spent some time discussing the calendar impact on the September quarter results. So I'm hoping if you can review that with us? And then what impact you felt that that had on the December quarter and how the December quarter calendar with the last day of the year falling on a Monday, that was kind of a dangling chad day, it almost felt like. Would you give us some perspective on that? And then I do have an additional question please?

Alexander McLean

I attempted to do so in the prepared comments.

Bill Dezellem - Tieton Capital Management

I do have to apologize. I did not actually have a chance to read the script at all, so I'm coming into this completely cold.

Alexander McLean

That's no problem at all. I'll be more than happy to address it. But if you remember last quarter we said that we believe because of the unusual timing of the quarter-end, that's somewhere between $2 million and $2.5 million, potentially was being differed from the second quarter into the third quarter. That's very difficult to actually quantify that number.

But if you look at our overall yield, when you look at the quarter yields and you look at our interest and fee income as a percent of average net loans for the current quarter, it was about 11.3%, and if you look at this last quarter, it was about 4.6%. But if you look at it for the nine months period it's about 7.9%. And our deals do not jump around like that.

So basically that would indicate that that deferral that we alluded to did in fact take place. Now, once again it's almost because of, we don't isolate what payments come in for one period and so forth. It's impossible to quantify whether it's exactly $2 million or slightly over, slightly less. But we do believe that unusual timing did in fact take place as we indicated.

Bill Dezellem - Tieton Capital Management

And then continuing that thought into the March quarter, because the 30 and 31 fall on a Saturday and a Sunday, it is possible to see a replay of the September quarter phenomenon, is that correct?

Alexander McLean

It is not correct. As we indicated last quarter that we were going to actually change our systems such to be the very full accrual accounting, and not a cash, not anything else, but a full accrual. And as we indicated we did not believe on an annual basis that we will see a significant difference in your expected earnings and so forth going forward.

But by doing this, we will eliminate those fluctuations that we have been seeing on a monthly and quarterly basis. And it will probably show that there will be some fluctuations on reported quarters, but it really will not have a major impact on any annual period. So we should not experience this same type of thing going forward. And it was really unusual that this circumstance happened one time in 11 years and then it was two more times coming up in the near future. So we believe it's appropriate to make these changes to our fiscal.

Bill Dezellem - Tieton Capital Management

And then Indiana, did you enter that state earlier this year? And if so, when did you and have you had enough time now to sense whether the regulations and the regulatory bodies, the way that you thought they would treat you is, is turning out to be the case?

Mark Roland

We entered in second fiscal quarter. I believe it was the first office that we opened. I think at this moment in time, we currently have six offices that are now operational and approximately $2 million of loan receivables that lays exactly the way we anticipated it going in. And our general growth and sales in those offices is progressing well for a brand new state.

Again, most of these folks, some of our employees up there, transferred out of Kentucky, and Tennessee, and Illinois, to help us open there. But the vast majority of the rest were hired locally, so we're in a heavy training period, trying to get folks ramped up and understanding how we operate the business, and we look forward to tremendous success there in that state.

Alexander McLean

And we have not had any regulatory issues whatsoever at this point in time and did not anticipate it.

Bill Dezellem - Tieton Capital Management

And finally, what insights and update do you have forth relative to Mexico?

Alexander McLean

Again, once you have a chance to review the script, I think we had quite a bit of a commentary on that, but we continue to be very pleased with the prospects there. It's becoming more profitable, the delinquencies and charge-offs are also flattening now. The growth is continuing to build the own track with what we had hoped, and we just believe that it will continue to only get better.

Operator

And we'll now take the next question from Henry Coffey with Sterne, Agee.

Henry Coffey - Sterne, Agee

I got a bunch of sort of small questions. You were talking about comparing the old plan with the new plan, Sandy. And am I to assume correctly that under the new plan cost will be lower over the five-year cycle, is that how I should interpret those remarks?

Alexander McLean

I think it will depend upon our success and achieving what I think a fairly substantial growth goal. If in fact we are able to hit the performance targets established by the board, then I believe, when I gave you those quarter numbers, it would indicate its going to look quite a bit more expensive.

Henry Coffey - Sterne, Agee

But there would be more growth and profitability to kind of offset that we're assuming?

Alexander McLean

Well, we're going have to or we're not going to be able to maintain. I believe the underlying growth rates to hit the maximum target is over 22%, growth in compounded basis. So that's absorbing all of the expense associated with it. So we don't have to continue to perform before these last shares are issued.

Henry Coffey - Sterne, Agee

On the installment loan product, if I have done my sums correctly and my multiplications, the installment loan product at the payday loan companies is offering is arguably 1.5 to 2.5 times more expensive than your product. Just two questions, are you drawing in a better customer do you think? And why aren't you advertising this in a more vocal format? Or are you advertising this to your customers?

Alexander McLean

Most of our marketing, not all, but certainly a large percentage of our marketing is in the form of direct mail. And we have not to this point addressed comparable products in that piece of direct mail, and we'd hesitant to do so unless we use specifically, and in each location whether or not it is factually accurate. And you're telling me something I didn't know because as Mark and I both indicated earlier when we were asked about these alternative products, that the payday lending people were offering, we're not necessarily seeing them.

Of course, we don't study the industry like you do. So if in fact, they are offering these products in an installment basis based on twice the cost of us, I don't know what to say. I don't know if it is a better customer or not because if it's the same customer that used to use the payday loan products, we know they at least have to have a banking relationship.

Henry Coffey - Sterne, Agee

Well, maybe a more reliable customer or a more predictable customer?

Alexander McLean

Maybe I don't have an answer to that I'm sorry. I guess, the direct answer is no, we're not currently advertising that fact.

Henry Coffey - Sterne, Agee

No, I think this is something that is important for people to understand, that it is not a question of you competing with them, you're actually offering a better product already. The other issue is with the installment loan product, whether it is a payday based product or your product or a credit card product, there is always kind of a wave you go through.

And looking at your provision and your loss ratios, this quarter, my sort of simplistic view is that you hit an inflection where the products is a little more mature, at least on a year-over-year basis the provision burden is lower. And is that accurate? And as that product matures, you'll see a positive revenue stream that's a longer-life and the small-loan product, but lower credit cost? And do you think you're at that inflection point yet?

Alexander McLean

I think without addressing specifically your comment about any quarterly information, I think what's important is to know that this was the 15 quarter-over-quarter decrease in our net annualized, net charge-offs as a percentage of average net loan. But this is a trend that's been continuing.

And I don't believe it's necessarily a matter of the ceasing of the portfolio, I think it's more of the shift that we've seen towards the larger loan. I think I have said in those comments that this is the fifth or sixth year in a row that we've seen somewhere a deep decline in our yields because of these larger loan products.

Henry Coffey - Sterne, Agee

But now loses are coming lower too?

Mark Roland

As a result of that that's probably what's driving our loss ratios down and it's the reason as I mentioned earlier, I believe we will be able to continue to see some kind of improvement in our G&A to our revenue ratios, although the current quarter in the current circumstances don't necessarily fall within those guidelines.

Henry Coffey - Sterne, Agee

While we're still at 21% growth quarter, so you're saying without some of this noise it would have been even a bigger quarter?

Alexander McLean

We would like to see a better than 7% or 6% growth in net earnings, but we're certainly benefiting from the aggressive share repurchase program met and that we've been disclosing and talking about that for several years, and that which we can plan on continuing to do.

Henry Coffey - Sterne, Agee

And now that you're in the hardest season what's the trigger for you to start buying back stock. Just the calendar or you're going to wait for loan balances to start to come down in the spring or when do you really jump back in again?

Alexander McLean

I think as we disclosed we've been in this entire quarter. We will continue to be in to the certain extent going forward, but we are subject to our borrowing base with subject to certain covenants and while we are not that leveraged, I think we were only 1.37% to 1% debt-to-equity at the end of the last quarter, that because of the profitability and the cash we'll collect during the current quarter.

We're going to continue to drive that leverage back down and in our internal targets have a level higher than that, but we've got to work with our banks to make sure we're within the loan agreements. And we work in through those details now. But suffice it to say, we would prefer to be greater than one-to-one leverage debt-to-equity. And we feel certainly managed a lot for debt in there.

Operator

And we'll take an additional question from John Rowan with Sidoti & Company.

John Rowan - Sidoti & Company

Sandy, you just answered the question I had, but I just want to make sure I understood that, your goal for debt-to-equity is about one-to-one, so it balances out kind of your share repurchases. Did I hear that right?

Alexander McLean

I think you said that's a minimum goal. And I think we could certainly handle a much more leverage company but we have to work with our bank group to make sure that works. And we have to deal with quite a bit of seasonality because of what happens in our third quarter and our fourth quarter. So it's hard to set a specific target when your balance sheet is expanding in December and contracting in March.

John Rowan - Sidoti & Company

One last question, Sandy, you also alluded to this earlier, when you said that switching off of the rule 78s, while it doesn't have an impact on an annual basis and might have some impact seasonally. Can you talk to that a little bit? Is there any change in the heavy seasonal pattern in the March quarter?

Alexander McLean

From an earning standpoint, it will be more leveled. And I don't want to address that map because we're working through all the details. For instance, from true cash basis and you're growing all of these loans in December quarter then our accounting has been a little more conservative than accrual basis.

Obviously, all those loans we're not reporting earnings on, but its consistent year-over-year, year-over-year. But then in the end of the March quarter, when you have a lot of cash payments, you kind of make up for that. So I don't want to get into the details that. That's something Kelly is working through with right now, and will be part of the disclosure next quarter, but I do believe there will be a slight positive impact on an annual basis going forward but it's certainly not of a material nature.

John Rowan - Sidoti & Company

And can you remind me, did you use the old accounting method for this December quarter or have you made the switch previously?

Alexander McLean

We have been completely consistent with what we've been doing for the last, I can tell you, 23 years since I've been here.

John Rowan - Sidoti & Company

So than, when does the switch take effect?

Alexander McLean

The last thing we'll do in March.

Operator

Next is Clifford Sosin with CAS Investment Partners.

Clifford Sosin - CAS Investment Partners

One of thing things that happened this quarter was payroll taxes went up. Can you just give me a sense as to at what point you guys started to have your employees underwrite to an assumption of a higher level of payroll taxes? Is it possible there is a book of loans that were maybe underwritten in the back half of last year where there might be some tax-related payment ability shock that we should expect to see through charge-offs over the next six months?

Mark Roland

Our underwriting standards really didn't change at all. But the nominal impact of a payroll tax increase on our customer base is very small. I mean, we're targeting 1% or 2% on payroll taxes. So now we don't expect to see any impact of that whatsoever.

Operator

We will now go to Joshua Axel with UBS.

Joshua Axel - UBS

Just one quick question for you on the share repurchase, I know you've purchased a significant amount of shares here in the quarter and by my calculation it looks like maybe over the last five years about 30% of the shares outstanding. When you look out over the next five years, can you talk a little bit about what your long-term strategy with the share repurchase program? Is there a share amount you want to get to or as long as the shares is seem under value, do you plan on purchasing them back and definitely as long as cash flows stay strong?

Alexander McLean

As long as cash flows remain strong, as long as our access to capital remains such through the years, and as long as the share price remains a good invest for our shareholders, we will continue to do this going forward. We haven't been aggressive just over the last five years, we've been aggressive in repurchasing shares over the last, I think since 1993 or over the last 15 years at least, and has been more aggressive over the last three years. And I think the timing of those purchases will depend upon a lot of factors. But if that is an ongoing long-term strategy, which we believe makes sense for our shareholders to continue to employ.

Operator

And Clifford Sosin has an additional question.

Clifford Sosin - CAS Investment Partners

Would you guys mind just spending a few minutes, helping us think through both the long-term growth expectations, assumptions, things that might help us think about that because if we think about how you're going to get your 22% compound rate of growth to max out the compensation package that you guys negotiated in December. It would seem to me that you would need to have a meaningfully higher level of organic net income growth over the next five years than you've had.

And I would imagine that when the compensation package was created, the board was looking at some sort of set of management expectations and then computing off of that. So maybe it would helpful for us to understand why you think growth is below trend now and why do you think that it is should over the next few years to be higher?

Alexander McLean

I believe the historical growth of this company has exceeded the 11% year-over-year asset growth that we're currently facing. We've had somewhat of a decline over the last couple of years. And to a certain extent, as you get larger, it becomes much more difficult to maintain the same type of asset growth, because your bank base is so much larger.

But we still have ample opportunities of locations to enter. We certainly have a lot of opportunities in our existing states, in Mexico. And I don't believe there is anything fundamentally changed in what we've been doing over the last 50 years. So I believe a combination of continued office expansion, a combination of asset growth as a result of growth in those new offices well as the so many less than mature offices still outstand, still in existence, we should be able to continue some rate of asset growth.

And I'm not going to say what it is, because there is lot that depends on the future, but certainly a reasonable rate of asset growth. And as we move into different markets, whether its larger loans or smaller loans, we have kind of thing that we have not had a major dilution to our return on asset, it's 13-point something percent of the trailing 12 months, and that which is just as high as it's been for quite some number of years.

I believe if we get larger we can continue to see as we've talked about on this phone, dumb economies have scaled on an ongoing basis, although a lot of our accounts to variable cost. And I believe that there is lot of things that we can do to continue the same type of track record that we've had for 50 years over the foreseeable future. But can I lay that out in a model and a spreadsheet to use, I'm not in a position to do that and would never do so anyway, because we don't provide that kind of guidance. But I certainly don't believe the outlook for this company is anything but positive.

Mark Roland

In addition, we're faced with an economic reality out there right now that while the unemployment rate hovers or dips or up and down a little bit, but the overall marginally employed rate and those that have exit the workforce all together is a massive number. And I have to believe, although, that government doesn't really provide the statistics, if there is a desperate impact that I believe that our customer base is probably more heavily unemployed than the average in the U.S. It's impossible for us to make new loans to individuals who are not employed or don't have a steady source of income.

So I think one of the drivers that will occur is when employment picks up, when we start to see people more comfortable, that their jobs are secured, their paychecks are secure, that we'll see a gradual return to more historical growth rates. But it's difficult right now, because I believe the economic scenario out there for our customers are little worse than the media wishes to paint it.

Clifford Sosin - CAS Investment Partners

And to that point if you were to look across your offices across different states, are you able to see that in states with a higher level of underemployment, that those states are experiencing lower levels of organic loan growth in mature stores?

Alexander McLean

I don't really look at it that way, I mean I could but there are so many other factors out there with regards to exactly what you were getting to, what stores were mature, stores were not, what's the size of the towns that we're in, what's the saturation of the offices in a state.

Obviously, we're not growing nearly as rapidly in a state like South Carolina, where we haven't increased our number of branches in quite some time as opposed to say, Wisconsin where our growth rate may exceed 300% simply because we're adding offices virtually every other day. Not every other day, but every other week or so there is a new office there. So it's very difficult and there are no mature offices in Wisconsin. So to get what you're after is a very difficult and allusive number.

Operator

And we'll now take a question from Les Bryant with UBS Financial Services.

Les Bryant - UBS Financial Services

I have been a shareholder and also an investment advisor for many years. And I have a lot of faith in you guys and you've done the good job. But one thing that troubles me a little bit is our stock is getting so high, and we're getting fewer shares, it seemed like lesser institutional support. It looks to me like if you would split the stock down, that it would both benefit to shareholders and also to the officers who were selling their options. Could you comment on that?

Alexander McLean

Yes. You may have actually had this question before. Certainly it has been raised before, and we have dealt about it as a board and as a management group, and there doesn't appear to be a shortage in the available shares that are being traded, because we purchased well over 3 million over the last year.

And we believe that two shares at $30 a piece versus one at $60 a piece is basically equivalent. And depending on how you're paying for the trade of shares, if it's so much per share you're doubling your commissions. But that being said, it is something 3that we will continue to evaluate.

We appreciate your comment and we certainly appreciate your support as a shareholder and as an investment advisor. And we certainly don't take these things lightly, but just at this point in time, the management, the board has felt that it really is not necessarily the best thing to do at this point.

Operator

And there are no other questions. So Mr. McLean, I'll turn the conference back over to you for any additional or closing remarks.

Alexander McLean

All I want to say is we really appreciate your interest and continued support for World Acceptance Corporation and hope that you'll all have a great day.

Operator

Thank you for your participation. And before concluding this morning's teleconference, the corporation has asked to again remind you that the comments made during this conference may contain certain forward-looking statements within the meaning of Section 21-A of the Securities and Exchange Act that represents the corporation's expectations and beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Statements other than those of historical facts as well as those identified by the words anticipate, estimate, intend, plan, expect, believe, may, will and should or any variation of the foregoing and similar expressions are forward-looking statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward looking statements, include the factors discussed in today's earnings press release and in the risk factor section of the corporations most recent form 10-K and other reports filed with or furnished to the SEC from time to time. The corporation does not undertake any obligation to update any forward-looking statements it makes.

This concludes the World Acceptance Corporation's quarterly teleconference.

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World Acceptance (WRLD): FQ3 EPS of $1.58 misses by $0.06. Revenue of $149.6M (+10.1% Y/Y) misses by $0.02M. (PR)