World Acceptance (WRLD) Q4 2019 Earnings Call Transcript

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World Acceptance (WRLD 0.45%)
Q4 2019 Earnings Call
May. 09, 2019, 10:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the World Acceptance Corporation sponsored fourth-quarter press release conference call. This call is being recorded. [Operator instructions] Before we begin, the corporation has requested that I make the following announcements. The comments made during this conference call may contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 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. Additional information regarding forward-looking statements and any factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements are included in the paragraph discussing forward-looking statements in today's earnings press release and in the Risk Factors section of the corporation's most recent Form 10-K for the fiscal year ended March 31, 2019, and subsequent 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, Chad Prashad, president and chief executive officer.

Chad Prashad -- President and Chief Executive Officer

Good morning. This is Chad Prashad, president and CEO of World Acceptance. I'm also joined by John Calmes, our chief financial officer and strategy officer; and Luke Umstetter, general counsel. I that trust you've all had a chance to read our press release and the earnings transcript that we released earlier this morning.

At this time, we'll then open up to any questions that you may have.

Questions & Answers:

Operator

[Operator instructions] The first question comes from Kyle Joseph from Jefferies.

Kyle Joseph -- Jefferis -- Analyst

Hey, good morning, and thanks for taking my questions. Just regarding the acceleration of growth you guys are seeing, can you give us a sense for what's driving that? Any changes in the competitive environment? Or is it more a thing -- more initiatives you guys have undertaken because it's continued to accelerate? So you obviously guys are doing a good job, but just give us a little more sense of what's driving that.

John Calmes -- Chief Financial Officer and Strategy Officer

Yes. Sure. So this past year, we did have a couple of acquisitions in the third quarter, which contributed to about 4% of our total year-over-year growth.

Chad Prashad -- President and Chief Executive Officer

4% to 5%, yes.

John Calmes -- Chief Financial Officer and Strategy Officer

4% to 5% of our total year-over-year growth out of that 12.3% growth that you see for the year. The rest of the growth, the organic growth of around 8% or so, 7.5% to 8%, most of that has to do with improvements in marketing, also increased digital presence and just general referrals and word of mouth from our customers.

Kyle Joseph -- Jefferis -- Analyst

Got it. And additionally, it looked like the insurance revenue has accelerated. Anything driving that? Is that anything related to new customers? Or is that a trend we can expect to continue?

John Calmes -- Chief Financial Officer and Strategy Officer

So a lot of that is driven by where some of the growth has been. And some of the acquisitions that we've had over last year have been in states that rely on insurance products. So it really will be a function of where the -- which states the growth happens in. But it should grow, all things equal, in line with overall growth of the portfolio.

Kyle Joseph -- Jefferis -- Analyst

Got it. That's helpful. And then shifting to credit. Totally understand how new accounts impact credit performance and the dynamics there.

Just want to give -- get a sense for -- so for repeat borrowers, what kind of credit trends are you seeing there? Have those been fairly stable?

Chad Prashad -- President and Chief Executive Officer

Yes. Across the board for customers that have a lot of tender with us or key customers, we're seeing similar to improved delinquency and charge-off rates.

Kyle Joseph -- Jefferis -- Analyst

Got it. And then lastly, on the buybacks, so you guys did about 600,000 shares in the quarter. Can you just remind us your remaining authorization and your appetite?

John Calmes -- Chief Financial Officer and Strategy Officer

Sure. So at the end of the quarter, we had $2.4 million available under the current authorization, and we have around $22.3 million available under the current credit facility structure, adding on 50% of the Q4 net income. We still see the purchase as an attractive option for an attractive use of capital in the short term and medium term.

Kyle Joseph -- Jefferis -- Analyst

Got it. One last one from me, apology. Can you just talk about the delays in tax refunds and any impacts in the quarter?

Chad Prashad -- President and Chief Executive Officer

So I think, overall, we haven't seen a huge impact to us throughout the fourth quarter. And most of our tax refunds, it seems to come in late February, early March, just about a week later than last year. We did experience an increase in our tax preparation this year. I think we're at about 17% year over year in a number of taxes that we prepared and filed.

And either the government shutdown or the proxy offer or some combination of the two may have contributed to that increase.

Kyle Joseph -- Jefferis -- Analyst

Got it. Thanks very much for answering my questions.

Operator

[Operator instructions] We'll take the next question from John Rowan of Janney.

John Rowan -- Janney Montgomery Scott -- Analyst

Good morning, guys.

Chad Prashad -- President and Chief Executive Officer

Good morning.

John Rowan -- Janney Montgomery Scott -- Analyst

Just -- I mean, how I had the repurchase model is basically 50% of net income. But it seems like -- in the fourth quarter, was that a catch-up because of kind of the institution of the program that you could maybe buy more of the trailing 12 months, and that maybe going forward, kind of 50% of net income is more of an appropriate rate in perpetuity sort of?

John Calmes -- Chief Financial Officer and Strategy Officer

That's right. So we've had a buildup in that bucket over that included all of fiscal '17, fiscal '18 and year to date, fiscal 2019. So that's how we've gotten to that initial buying level. At this point, we will achieve all that, and we'll just be building.

So as of middle of the quarter or as of right now, we have $22.3 million available to buy under the facility. And on the current facility, we'll add to that at 50% of consolidated net income.

John Rowan -- Janney Montgomery Scott -- Analyst

OK. So the $23 million, that's the current authorization, or that's the current that's available based on the buildup of prior income for your credit agreement?

John Calmes -- Chief Financial Officer and Strategy Officer

Right. So that's the buildup under the current credit facility that we have available to repurchase.

John Rowan -- Janney Montgomery Scott -- Analyst

OK. And then on the share count, obviously, 600,000 came -- you repurchased 600,000, but your share count didn't go down by that much. I'm wondering what the timing was, and if there's a way that you can handicap for us what the diluted share count was, in other words, the potential at the end of the quarter as opposed to the average share count that we've got a number right going into fiscal '20.

Chad Prashad -- President and Chief Executive Officer

Right. So we ended -- you don't include the unvested restricted shares in the beginning share count number, even though they're legally outstanding. For purposes of calculating EPS, they don't go into that number. So if you start with the $8.5 million, you add around $200,000, $300,000 for dilution, and that number will change, right, based on what happens with the share price.

So I think the $200,000 to $300,000 in dilution is a pretty good estimate on a quarterly basis.

John Rowan -- Janney Montgomery Scott -- Analyst

OK. And then what's the right tax rate to use going forward? And I assume that the tax rate in the quarter had a large -- was influenced significantly by your share price.

John Calmes -- Chief Financial Officer and Strategy Officer

So a lot of it is driven -- we purchased some state tax credits for the current year and past years, and that drove the tax rate down in the current quarter and year. So, obviously, we'll tend to continue to buy those on an annual basis going forward and possibly change our state tax structure to make that sort of a permanent benefit. Absent changes in tax structure or purchasing those tax credits, we still think the tax rate will be in that 23% to 24% range. If we are able to continue those purchases and/or change the state tax structure, it could be in the 22% to 23% range.

John Rowan -- Janney Montgomery Scott -- Analyst

OK. And then just, lastly, your peer last night talked about -- one of your peers last night talked about the trimming your credit bonds a little bit. I'm wondering if, I mean, there's a lot of overlap in your branches, and I'm wondering if there's any incremental benefit from them trimming up a bit and having customers shelving your branch.

Chad Prashad -- President and Chief Executive Officer

I think that's certainly possible. However, we experienced growth across our entire footprint, which isn't necessarily the same footprint as a lot of our competitors. So it may be a contributing factor in some areas, but probably isn't contributing across the board.

John Rowan -- Janney Montgomery Scott -- Analyst

Thank you very much.

Operator

It appears there are no further questions at this time, Mr. Prashad.

Chad Prashad -- President and Chief Executive Officer

Well, thanks for joining us. This concludes our 2019 year-end conference call, and we look forward to seeing you again in August.

Operator

[Operator signoff]

Duration: 12 minutes

Call participants:

Chad Prashad -- President and Chief Executive Officer

Kyle Joseph -- Jefferis -- Analyst

John Calmes -- Chief Financial Officer and Strategy Officer

John Rowan -- Janney Montgomery Scott -- Analyst

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