Southfield, Michigan, July 11, 2025 (GLOBE NEWSWIRE) -- Credit Acceptance Corporation (Nasdaq: CACC) (referred to as the “Company”, “Credit Acceptance”, “we”, “our”, or “us”) announced today that we extended the date on which our $75.0 million revolving secured warehouse facility will cease to revolve from September 30, 2026, to September 30, 2028. The interest rate on borrowings under the facility has decreased from the Secured Overnight Financing Rate (“SOFR”) plus 210 basis points to SOFR plus 185 basis ...

Core Viewpoint - Credit Acceptance (CACC) shares have increased by approximately 3.3% over the past month, underperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Estimates Movement - Estimates for Credit Acceptance have trended downward over the past month, with the consensus estimate shifting down by 6.33% [2] VGM Scores - Credit Acceptance has a Growth Score of B, a Momentum Score of D, and a Value Score of B, placing it in the top 40% for the value investment strategy. The overall aggregate VGM Score is B, which is relevant for investors not focused on a single strategy [3] Outlook - The downward trend in estimates indicates a negative shift, with Credit Acceptance holding a Zacks Rank of 3 (Hold). An in-line return is expected from the stock in the coming months [4] Industry Performance - Credit Acceptance is part of the Zacks Financial - Consumer Loans industry. Mr Cooper (COOP), a peer in the same industry, has gained 11% over the past month, reporting revenues of $560 million for the last quarter, which reflects a year-over-year decline of 0.7% [5] Earnings Expectations for Peers - For the current quarter, Mr Cooper is projected to post earnings of $3.33 per share, indicating a year-over-year increase of 32.1%. The Zacks Consensus Estimate for Mr Cooper has changed by -1.1% over the last 30 days, and it holds a Zacks Rank of 2 (Buy) [6]

Core Viewpoint - Credit Acceptance Corporation (CACC) reported a first-quarter 2025 earnings per share of $8.66, which was below the Zacks Consensus Estimate of $10.31, despite a year-over-year increase of 70.5% in earnings [1] Financial Performance - Adjusted net income for the quarter was $114.8 million or $9.35 per share, slightly down from $117.4 million or $9.28 per share in the same quarter last year [2] - Total GAAP revenues reached $571.1 million, reflecting a 12.4% year-over-year increase and surpassing the Zacks Consensus Estimate of $566.6 million [3] - Provision for credit losses decreased by 13% to $161.9 million, while operating expenses rose by 7.5% to $135.5 million [3] Asset and Equity Position - As of March 31, 2025, total assets were $9.26 billion, up from $8.85 billion at the end of December 2024, while total shareholders' equity decreased to $1.71 billion from $1.75 billion [4] Share Repurchase Activity - During the reported quarter, Credit Acceptance repurchased approximately 0.32 million shares [5] Market Outlook - The company faces challenges from rising expenses and weak asset quality, but is positioned for revenue growth due to increasing demand for consumer loans [6]

分组1 - Credit Acceptance (CACC) reported quarterly earnings of $8.66 per share, missing the Zacks Consensus Estimate of $10.31 per share, but showing an increase from $5.08 per share a year ago, resulting in an earnings surprise of -16% [1] - The company posted revenues of $571.1 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.79% and increasing from $508 million year-over-year [2] - Credit Acceptance has surpassed consensus revenue estimates four times over the last four quarters, indicating a strong performance in revenue generation [2] 分组2 - The stock has added about 4.2% since the beginning of the year, contrasting with the S&P 500's decline of -5.5%, suggesting relative outperformance [3] - The current consensus EPS estimate for the coming quarter is $9.70 on revenues of $580.4 million, and for the current fiscal year, it is $39.42 on revenues of $2.32 billion [7] - The Financial - Consumer Loans industry, to which Credit Acceptance belongs, is currently in the top 22% of Zacks industries, indicating a favorable industry outlook [8]

Financial Data and Key Metrics Changes - The company reported a decline in forecasted net cash flows by 0.2% or $21 million, marking the smallest decline in the last eight quarters [4] - The loan portfolio reached a record high of $9.1 billion on an adjusted basis, up 10% from Q1 last year, despite a decline in unit dollar volume growth [4] Business Line Data and Key Metrics Changes - The company financed over 100,000 contracts during the quarter and collected $1.4 billion overall [8] - The dealer holdback and accelerated dealer holdback paid to dealers amounted to $68 million [8] - The market share in the core segment of used vehicles financed by subprime consumers was 5.2% for the first two months of the year, down from 6% for the same period in 2024 [5][38] Market Data and Key Metrics Changes - The company experienced a decline in unit volume likely due to a scorecard change in Q3 2024, which resulted in lower advance rates and increased competition [5][39] Company Strategy and Development Direction - The company aims to maximize intrinsic value and positively impact its five key constituents: dealers, consumers, team members, investors, and communities [5] - Continued investment in technology and modernization of key technology architecture is a focus area for the company [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in forecasting due to volatility in the broader market, including inflation and potential impacts from tariffs [23][25] - The company maintains a conservative cash position to navigate the current volatile capital market environment [30] Other Important Information - The company was named a top workplace USA award winner for the fifth consecutive year, ranking number two among companies of its size [9] - Legal fees related to the CFPB lawsuit were not disclosed, but management expressed satisfaction with the lawsuit's withdrawal [42] Q&A Session Summary Question: Discussion on forecast changes and GAAP provision - Management explained the $76 million provision for forecast changes was due to decreased present value of future cash flows and slower cash flow timing [13][17] Question: Volatility in forecasting collections - Management indicated that predicting global performance is challenging and highlighted inflation as a potential factor affecting forecasts [23][25] Question: Increase in cash position - Management stated the increase in cash is a conservative stance due to uncertainties in the capital markets [30] Question: Acceleration of dealer holdback - Management clarified that accelerating dealer holdback incentivizes dealer behavior at origination [35] Question: Legal fees related to CFPB lawsuit - Management refrained from commenting on specific legal costs but expressed satisfaction with the lawsuit's withdrawal [42]

Financial Data and Key Metrics Changes - The loan portfolio reached a record high of $9.1 billion, up 10% from Q1 last year, despite a decline in unit dollar volume growth [4] - Forecasted net cash flows declined by 0.2% or $21 million, marking the smallest decline in the last eight quarters [4] - Adjusted revenue as a percentage of adjusted capital decreased from 18.4% to 18% due to higher cash and cash equivalents on the balance sheet [13][14] Business Line Data and Key Metrics Changes - Over 100,000 contracts were financed during the quarter, with total collections amounting to $1.4 billion [8] - The company paid $68 million in dealer holdback and accelerated dealer holdback to dealers [8] - The market share in the core segment of used vehicles financed by subprime consumers was 5.2% for the first two months of the year, down from 6% for the same period in 2024 [5][35] Market Data and Key Metrics Changes - The company experienced a decline in unit volume likely due to a scorecard change in Q3 2024, which resulted in lower advance rates and increased competition [5][37] - The broader market environment is characterized by volatility, impacting the accuracy of forecasting models [21][24] Company Strategy and Development Direction - The company aims to maximize intrinsic value and positively impact its five key constituents: dealers, consumers, team members, investors, and communities [5] - Continued investment in technology and modernization of key technology architecture is a priority [9][42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in predicting loan performance due to inflation and potential vehicle price declines [22][24] - The company maintains a conservative cash position to navigate the volatile capital market environment [27][29] Other Important Information - The company was named a top workplace USA award winner for the fifth consecutive year, indicating strong employee satisfaction [9] - Legal fees related to the CFPB lawsuit were not disclosed, but the company expressed satisfaction with the lawsuit's withdrawal [40] Q&A Session Summary Question: Discussion on forecast changes and GAAP provision - Management explained that the $76 million provision for forecast changes was due to decreased present value of future cash flows and slower cash flow timing [12][15] Question: Volatility in forecasting models - Management indicated that predicting loan performance is challenging due to inflation and other economic factors, but they believe their current forecast is a good estimate [21][22] Question: Reason for accelerating dealer holdback - The acceleration of dealer holdback was aimed at incentivizing dealer behavior at the time of origination [32] Question: Increase in cash position - Management stated that the increase in cash position is a conservative approach due to market volatility and recent debt issuances [27][29] Question: Legal fees related to CFPB lawsuit - Management refrained from commenting on specific legal costs but expressed satisfaction with the lawsuit's withdrawal [40] Question: Impact of elevated investment levels - Management acknowledged that elevated investment levels in technology and other areas are expected to continue in the near future [42][44]

Financial Performance - For the three months ended March 31, 2025, consolidated net income was $106.3 million, or $8.66 per diluted share, representing a 65.5% increase from $64.3 million, or $5.08 per diluted share, in the same period of 2024 [170]. - Total revenue for the three months ended March 31, 2025, was $571.1 million, an increase of $63.1 million or 12.4% compared to $508.0 million in 2024 [204]. - Net income for the same period was $106.3 million, representing a 65.3% increase from $64.3 million in 2024 [204]. - Interest expense rose to $114.7 million, a 24.0% increase from $92.5 million in 2024, primarily due to an increase in the average outstanding debt balance [212]. - Total provision for credit losses decreased by $24.1 million or 13.0%, from $186.0 million in 2024 to $161.9 million in 2025 [207]. - The effective income tax rate decreased to 25.0% from 25.6% in the prior year, mainly due to a reduction in the impact of state and local income taxes [213]. Loan Portfolio - The average balance of the Loan portfolio increased by 11.0% year-over-year to $7.9 billion, marking the largest balance ever recorded [170]. - The average net Loans receivable balance increased to $7,882.4 million, up by $781.1 million or 11.0% from $7,101.3 million in 2024 [205]. - The average yield on the Loan portfolio increased to 26.7% from 26.4% in 2024, reflecting a 0.3% improvement [205]. - The forecasted net cash flows from the Loan portfolio decreased by $20.9 million, or 0.2%, for the three months ended March 31, 2025 [175]. Consumer Loans - Consumer Loan assignment unit and dollar volumes declined by 10.1% and 15.5%, respectively, compared to the first quarter of 2024 [170]. - Consumer Loan unit volume decreased by 10.1% to 100,278 in Q1 2025 compared to 111,488 in Q1 2024 [196]. - Dollar volume of Consumer Loans declined by 15.5% in Q1 2025, reflecting a decrease in average advance paid and average size of loans assigned [194]. - The percentage of Consumer Loans assigned as Dealer Loans was 77.0% and as Purchased Loans was 23.0% as of March 31, 2025 [198]. - The spread between the forecasted collection rate and the advance rate for Consumer Loans assigned over the last 10 years ranges from 12.6% to 24.0% [182]. Dealer Operations - The company enrolled 1,617 new Dealers, bringing the total to 10,789 active Dealers during the quarter [170]. - The number of active Dealers decreased by 0.1% to 10,789 in Q1 2025, with average volume per active Dealer declining by 9.7% [196]. - As of March 31, 2025, the forecasted collection percentage for Dealer Loans is 64.7%, while for Purchased Loans it is 70.5% [184]. - The spread for 2025 Dealer Loans is 21.9%, an increase from 21.1% in 2024, attributed to better Consumer Loan performance [189]. Financial Position and Liquidity - As of March 31, 2025, the company maintained over $2.2 billion in unrestricted cash and cash equivalents, along with unused revolving lines of credit [170]. - Cash and cash equivalents increased to $528.8 million as of March 31, 2025, compared to $343.7 million as of December 31, 2024 [217]. - The funded debt to equity ratio was 3.9 to 1 as of March 31, 2025, indicating the company's financial leverage [191]. - Scheduled principal debt maturities total $6,748.1 million as of March 31, 2025, with $1,090.4 million due in the remainder of 2025 [218]. Risks and Challenges - The company may face significant operational risks due to reliance on accurate forecasting of future collections, which could adversely affect results [223]. - Competition from traditional and non-traditional lenders poses a risk to the company's ability to compete successfully [223]. - Economic conditions and changes in the automobile or finance industries could negatively impact the company's financial position and liquidity [223]. - The company's substantial debt levels may hinder its ability to satisfy obligations and negatively impact financial condition [227]. - Interest rate fluctuations could adversely affect borrowing costs and overall profitability [227]. - A reduction in the company's credit rating could increase funding costs and restrict access to capital markets [227]. - The company relies on technology, and breaches in information security could lead to significant financial and reputational damage [227]. - Changes in tax laws and regulatory conditions could materially affect the company's results of operations [227]. - The concentration of dealers in several states may pose additional risks to the company's operations [223]. Shareholder Actions - The company repurchased approximately 329,000 shares, or 2.7% of the shares outstanding at the beginning of the quarter [170]. - The company was named a Top Workplaces USA award winner for the fifth consecutive year, ranking 2 among companies of its size [170].

Financial Performance - Consolidated net income for Q1 2025 was $106.3 million, or $8.66 per diluted share, compared to $151.9 million, or $12.26 per diluted share in Q4 2024[2]. - Adjusted net income for Q1 2025 was $114.8 million, or $9.35 per diluted share, down from $126.0 million, or $10.17 per diluted share in Q4 2024[2]. - GAAP net income for the three months ended March 31, 2025, rose by 65.3% to $106.3 million, driven by a 12.3% increase in finance charges[27]. - Adjusted net income for the three months ended March 31, 2025, was $106.3 million, compared to $151.9 million for the previous quarter, reflecting a decrease of 30%[33]. - Adjusted net income for the same period was $114.8 million, down from $126.0 million in the prior quarter, a decline of 9.5%[37]. - Economic profit decreased by 31.3% to $35.3 million in Q1 2025, down from $51.4 million in Q1 2024[29]. - Economic profit for the quarter was $35.3 million, down from $51.3 million in the previous quarter, a decline of 31.1%[37]. - Basic net income per share rose to $8.79 in Q1 2025, compared to $5.15 in Q1 2024, representing an increase of 70.5%[62]. Revenue and Expenses - Adjusted revenue reached $571.1 million for the quarter, up from $565.9 million in the prior quarter, indicating a growth of 0.4%[33]. - Total revenue for Q1 2025 was $571.1 million, an increase of 12.4% compared to $508.0 million in Q1 2024[62]. - Finance charges increased to $526.7 million in Q1 2025 from $469.2 million in Q1 2024, reflecting a growth of 12.2%[62]. - Adjusted interest expense (after-tax) rose by 24.0% to $88.3 million in Q1 2025 from $71.2 million in Q1 2024[29]. - Interest expenses increased to $114.7 million in Q1 2025, up from $92.5 million in Q1 2024, marking a rise of 24.0%[62]. - Operating expenses grew by 7.5% year-over-year, impacting adjusted return on capital positively by 50 basis points[29]. Loan Portfolio and Credit Losses - The average balance of the loan portfolio increased by 11.0% year-over-year to $7.9 billion, the largest in company history[2]. - Consumer Loan assignment unit and dollar volumes declined by 10.1% and 15.5%, respectively, compared to Q1 2024[2]. - The provision for credit losses decreased by 13.0% ($24.1 million) due to a smaller decline in consumer loan performance and a decrease in new consumer loan assignments[27]. - Total provision for credit losses decreased to $161.9 million in Q1 2025 from $186.0 million in Q1 2024, a reduction of 12.9%[62]. - The GAAP provision for credit losses (after-tax) was $124.6 million, compared to $95.0 million in the previous quarter, indicating an increase of 31.6%[33]. Capital and Shareholder Equity - The average capital increased by 17.1% to $8,180.3 million for the three months ended March 31, 2025, compared to $6,985.3 million in 2024[27]. - Adjusted average capital increased by 18.3% to $8,882.6 million from $7,507.8 million year-over-year[29]. - The adjusted average capital was $8,882.6 million, compared to $8,633.3 million in the prior quarter, showing an increase of 2.9%[33]. - Shareholders' equity decreased to $1,710.9 million from $1,749.6 million, showing a decline of 2.2%[64]. - Paid-in capital increased to $351.7 million from $335.1 million, indicating a growth of 4.0%[64]. Dealer and Consumer Loans - The company enrolled 1,617 new dealers, bringing the total to 10,789 active dealers during the quarter[2]. - The percentage of consumer loans assigned as dealer loans decreased to 77.0% for the three months ended March 31, 2025, from 78.2% in the previous year[25]. - Consumer loan assignment volumes are influenced by overall demand and available capital, with a focus on maximizing economic profit[21]. - The average volume per active dealer decreased by 9.7% to 9.3 units for the three months ended March 31, 2025[23]. Cash and Assets - As of March 31, 2025, the company maintained over $2.2 billion in unrestricted cash and cash equivalents[2]. - Total assets increased to $9,258.0 million as of March 31, 2025, up from $8,854.6 million on December 31, 2024, representing a growth of 4.5%[64]. - Cash and cash equivalents increased to $528.8 million, up from $343.7 million, marking a significant increase of 53.8%[64]. - Loans receivable, net rose to $7,978.2 million, compared to $7,850.3 million, indicating an increase of 1.6%[64]. Debt and Financing - The company redeemed $250.0 million of 2023 senior notes on March 15, 2020, using proceeds from the 2024 senior notes[44]. - The company plans to issue 9.250% senior notes due 2028 in December 2023 and 6.625% senior notes due 2030 in February 2025[49].

Financial Performance - Credit Acceptance Corporation reported consolidated net income of $106.3 million, or $8.66 per diluted share, for the three months ended March 31, 2025, compared to $64.3 million, or $5.08 per diluted share, for the same period in 2024, representing a 65.3% increase [1][27] - Adjusted net income for the same period was $114.8 million, or $9.35 per diluted share, slightly down from $117.4 million, or $9.28 per diluted share, in the prior year [1][29] - The average balance of the loan portfolio increased by 11.0% to $7.9 billion, the highest ever recorded [5] Consumer Loan Metrics - The forecasted collection rates for Consumer Loans assigned in 2020 improved, while those for loans assigned in 2022, 2024, and 2025 declined [4] - The overall forecasted collection rates as of March 31, 2025, showed a modest decline, impacting forecasted net cash flows from the loan portfolio by $20.9 million, or 0.2% [5][4] - Consumer Loan assignment unit and dollar volumes decreased by 10.1% and 15.5%, respectively, compared to the first quarter of 2024 [5][21] Dealer Activity - The company enrolled 1,617 new dealers, bringing the total to 10,789 active dealers during the quarter [5] - The average volume per active dealer decreased by 9.7%, indicating a decline in dealer activity [22] Economic Profit and Capital - Economic profit decreased by 31.3% year-over-year, primarily due to a decrease in adjusted return on capital and an increase in the cost of capital [29] - Adjusted average capital rose by 18.3% compared to the same period in 2024, reflecting the company's investment in growth [29] Shareholder Returns - The company repurchased approximately 329,000 shares, or 2.7% of the shares outstanding at the beginning of the quarter [5] - The diluted weighted average shares outstanding decreased by 2.9% from the previous year [29]

Core Viewpoint - The Consumer Financial Protection Bureau (CFPB) has filed an unopposed motion to withdraw from a lawsuit against Credit Acceptance Corporation, which may limit the case to New York consumers only [1][2]. Group 1: Legal Developments - The CFPB's withdrawal from the lawsuit initiated with the New York State Attorney General is seen as a significant step for Credit Acceptance, potentially preventing the case from imposing broad regulatory changes [1][2]. - Credit Acceptance's motion to dismiss the case remains pending, and if granted, the lawsuit would only involve the New York Attorney General as the remaining plaintiff [1]. Group 2: Company Operations and Impact - Credit Acceptance provides financing solutions that enable consumers with non-prime credit to purchase vehicles, which is essential for their mobility and access to work, healthcare, and other necessities [2][4]. - The company has facilitated vehicle ownership for over five million people through its dealer network, emphasizing its commitment to compliance and integrity in operations [3][5]. Group 3: Industry Context - The lawsuit is viewed as an attempt to create new legal precedents that could negatively impact companies providing financing to consumers with limited credit options, which could harm many Americans [2]. - The financing programs offered by Credit Acceptance are crucial for consumers who might otherwise be unable to purchase reliable vehicles, thereby improving their credit scores and financial situations [5].