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Sep 30, 2021
Credit Acceptance Q3 2021 Earnings Report
Credit Acceptance reported consolidated net income for Q3 2021.
Key Takeaways
Credit Acceptance Corporation announced consolidated net income of $250.0 million, or $15.79 per diluted share, for the three months ended September 30, 2021, compared to consolidated net income of $242.1 million, or $13.56 per diluted share, for the same period in 2020. Adjusted net income, a non-GAAP financial measure, for the three months ended September 30, 2021 was $219.1 million, or $13.84 per diluted share, compared to $167.0 million, or $9.36 per diluted share, for the same period in 2020.
Forecasted collection rates for Consumer Loans assigned in 2018 through 2021 increased, which increased forecasted net cash flows from our loan portfolio by $82.3 million.
Forecasted profitability per Consumer Loan assignment is in excess of our initial estimate for Consumer Loans assigned in 2021 and significantly in excess of our initial estimates for Consumer Loans assigned in 2018 through 2020.
Consumer Loan assignment volume declined, as unit and dollar volumes declined 29.4% and 17.9%, respectively, as compared to the third quarter of 2020.
Stock repurchases of approximately 1.3 million shares, which represented 8.0% of the shares outstanding at the beginning of the quarter.
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
We claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of our forward-looking statements. Statements in this release that are not historical facts, such as those using terms like “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “assume,” “forecast,” “estimate,” “intend,” “plan,” “target” and those regarding our future results, plans and objectives, are “forward-looking statements” within the meaning of the federal securities laws.
Positive Outlook
- The company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all of their forward-looking statements.
- Statements in this release that are not historical facts, such as those using terms like “may,” “will,” “should,” “believe,” are forward-looking statements
- The company's financing programs are offered through a nationwide network of automobile dealers who benefit from sales of vehicles to consumers who otherwise could not obtain financing
- Credit Acceptance provides consumers with an opportunity to improve their lives by improving their credit score and move on to more traditional sources of financing.
- The company has been offering financing programs that enable automobile dealers to sell vehicles to consumers since 1972
Challenges Ahead
- The outbreak of COVID-19 has adversely impacted the company's business.
- The company's inability to accurately forecast and estimate the amount and timing of future collections could have a material adverse effect on results of operations.
- Due to competition from traditional financing sources and non-traditional lenders, the company may not be able to compete successfully.
- Reliance on third parties to administer the company's ancillary product offerings could adversely affect their business and financial results.
- The company is dependent on their senior management and the loss of any of these individuals or an inability to hire additional team members could adversely affect their ability to operate profitably.
Revenue & Expenses
Visualization of income flow from segment revenue to net income