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Sep 30, 2020
Credit Acceptance Q3 2020 Earnings Report
Credit Acceptance Corporation reported consolidated net income for Q3 2020, surpassing the income reported in the same period of the previous year.
Key Takeaways
Credit Acceptance Corporation announced consolidated net income of $242.1 million, or $13.56 per diluted share, for the three months ended September 30, 2020, compared to consolidated net income of $165.4 million, or $8.73 per diluted share, for the same period in 2019. However, the company acknowledges the ongoing impact of the COVID-19 pandemic on its business, with uncertainty remaining as to when economic conditions will return to normalcy.
Consolidated net income increased to $242.1 million, or $13.56 per diluted share, for the three months ended September 30, 2020, compared to $165.4 million, or $8.73 per diluted share, for the same period in 2019.
Adjusted net income, a non-GAAP financial measure, was $167.0 million, or $9.36 per diluted share, for the three months ended September 30, 2020, compared to $168.4 million, or $8.89 per diluted share, for the same period in 2019.
Forecasted collection rates improved for Consumer Loans assigned in 2017 through 2020 and were generally consistent with expectations at the start of the period for all other assignment years presented.
Unit and dollar volumes declined 8.8% and 4.7%, respectively, during the third quarter of 2020 as the number of active dealers declined 6.5% while average unit volume per active dealer declined 2.2%.
Credit Acceptance
Credit Acceptance
Credit Acceptance Revenue by Segment
Revenue by Segment
Finance Charges Revenue
CapyFin.comPremiums Earned Revenue
CapyFin.comOther Income Revenue
CapyFin.com Forward Guidance
The company refrains from providing specific forward guidance due to the uncertainty caused by the COVID-19 pandemic.
Positive Outlook
- Not applicable, no specific positives mentioned in the context of forward guidance.
- Not applicable, no specific positives mentioned in the context of forward guidance.
- Not applicable, no specific positives mentioned in the context of forward guidance.
- Not applicable, no specific positives mentioned in the context of forward guidance.
- Not applicable, no specific positives mentioned in the context of forward guidance.
Challenges Ahead
- Our inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
- We may be unable to execute our business strategy due to current economic conditions.
- We may be unable to continue to access or renew funding sources and obtain capital needed to maintain and grow our business.
- The terms of our debt limit how we conduct our business.
- A violation of the terms of our asset-backed secured financing facilities or revolving secured warehouse facilities could have a material adverse impact on our operations.
Revenue & Expenses
Visualization of income flow from segment revenue to net income