Slide 1: NASDAQ: WRLD September 2009
NASDAQ: WRLD September 2009 .
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements other than those of historical fact, as well as those identified by the use of words such as “anticipate,”
Slide 3: Agenda
• Company overview Credit & portfolio review Growth strategy Financial review 3
Slide 4: Company overview
•Leading small loan consumer finance company •Founded in 1962 in Greenville, Greenville South Carolina •Serves individuals with limited access to banks and other traditional credit sources •966 consumer loan offices in eleven states and Mexico as of September 30, 2009 •$1.94 billion gross loan volum
Slide 5: Revenue and pre-tax margin
Revenue (mm) PreTax Margin (%) 450 30% 400 25% 350 300 20% 250 15% 200 150 10% 100 5% 50 0 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 5
Slide 6: Rural America branch profile
Rural America – Typically downtown or small strip center 1,500 1 500 SS.F. F - $1,304 $1 304 per month lease 3.3 employees 788 accounts as of September 30 30, 2009 $800,000 gross loans receivable as of September 30,, 2009 Average loan made during fiscal 2009 - $1,028 Averageg revenue d
Slide 7: Medium to large cities branch profile
Medium M di to large l cities– ii Typically T i ll in i smallll strip i centers 1,725 S.F. - $1,709 per month lease 7.6 7 6 employees 1,100 accounts as of September 30, 2009 $417,000 gross loans receivable as of September 30, 2009 Average loan made during fiscal 2009 - $601 Average rev
Slide 8: Office locations: 966 offices
64 59 60 82 95 39 93 43 101 227 38 Mexico - 65 September 30, 2009: 966 offices 8
Slide 9: Loan portfolio by state
Alabama, 4.0% Kentucky, 8.7% New N Mexico, M i 2.5% 2 5% Georgia, 14.2% Missouri, 5.6% Illinois, 6.4% Texas, 20.8% Tennessee 13 Tennessee, 13.6% 6% Louisiana, 2.5% Oklahoma, 6.2% Mexico, Me ico 3.6% 3 6% South Carolina, Carolina 11.8% 11 8% As of September 30, 2009 9
Slide 10: Field employees
4 Sr. Vice ■ 74.4% Female Presidents ■ Average branch level salary of (15.0 years) $24,500 ■ Significant bonus opportunity 15 Vice Presidents of Operations in addition to salary (15.1 years) ■ Average Tenure 3.0 years 97 Supervisors (10.8 years) 3,333 Branch Employees (3.0 years) (Average Tenure) (1
Slide 11: Credit & portfolio review
Company overview • Credit & portfolio review Growth strategy Financial review 11
Slide 12: Lending and collections approach
pp Decentralized loan approval and collections Individual loan approval authority based on experience and position Local presence with strong emphasis on “relationship” relationship lending Consistent underwriting policies with objective credit evaluation l ti criteria it i Annual audits b
Slide 13: Delinquency trends
6% Recency Contractual QTD 5% 4.5% 4.6% 4 3% 4.3% 4.2% 4.2% 4.0% 4.1% 4.0% 4% 3.8% 3.8% 3.6% 3.6% 3.4% 3.3% 3.3% 3% 2.7% 2.5% 2.5% 2.5% 2.6% 2.2% 2.3% 2.3% 2.2% 2.1% 2.1% 2% 1% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sept. Sept. 2008 2009 13
Slide 14: Net charge-offs as of March 31
25% 20% 16.7% 14.8% 14.6% 14.7% 14.6% 14.8% 14.5% 15% 13.3% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 As of March 31 14
Slide 15: Net charge-offs as of September 30
25% 20% 15.8% 14.7% 15.0% 15.1% 15% 14.1% 14.0% 14.0% 12.7% 10% 5% 0% 2002 2003 2004 2005 2006 2007 2008 2009 As of September 30 15
Slide 16: Growth strategy
Company overview Credit & portfolio review • Growth strategy Financial review 16
Slide 17: Growth strategy
p 30 new offices in the US during Open g fiscal 2010 Open 15 new offices in Mexico during fiscal 2010 Increase marketing for tax preparation business Evaluate acquisitions as opportunities arise Continue development of World Class Buying Club Evaluate E l t new states t t withith favorab
Slide 18: Number of offices
1000 966 944 900 838 800 732 700 620 600 579 526 500 470 441 410 420 400 379 300 200 100 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Sept. 2009 *CAGR from Fiscal Year 1999 - 2009 18
Slide 19: Average net loans
800 700 $671 $600 600 $506 500 $416 400 $352 $310 300 $267 $226 $211 200 $174 $150 100 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 *CAGR from Fiscal Year 1999 - 2009 19
Slide 20: Gross loans receivable
2200 2000 $1,935 1800 $1,734 1600 $1,455 1400 $1,218 1200 $1,029 1000 $878 800 $764 $660 $620 600 $542 $483 $ 400 200 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 As of Fiscal Year Ended 20
Slide 21: New office performance by fiscal year
Number Retained Number Fiscal year offices offices Accounts Gross loans Fiscal 2002 36 15 15 771 15,771 $ 14 14,890,000 890 000 Fiscal 2003 42 21 19,931 $ 22,558,000 Fiscal 2004 68 39 28,888 $ 24,499,000 Fiscal 2005 60 30 26,969 $ 27,434,000 Fiscal 2006 25 3 11,096 $ 9,084,000 Fiscal 2007 86 50 41,9
Slide 22: Larger loan product
Introduced in Georgia in 1996, expanded in 1997 Provides additional service for new and existing g customers Extends lendingg life cycle y with customer base Represents 24.9% of loan portfolio as of September 30, 2009 Loans typically from $1,500 to $3,500 Lower losses and risks 22
Slide 23: World Class Buying Club
Program introduced in Texas in 1995 Provides additional services for new and existing customers Direct competition for “rent to own” business All name brand products: Sony Sony, Panasonic Panasonic, GE All new merchandise All closed end installment contracts 23
Slide 24: Tax preparation and refund anticipation loans
Piloted 39 offices in 1999, expanded to all in 2000 Provides additional service for existing customers RAL’s are provided through a third party bank Excellent fit for World’s World s customer demographics Excellent fit for World’s employees due to seasonality Excellent revenue potential
Slide 25: Why Mexico?
Whyy Mexico? Favorable regulatory climate Tremendous potential market Very V littl competition little titi Status at September 30, 2009 Sixty-five offices opened since September 2005 Approximately 72,000 accounts Approximately $27.1 $ million in gross ledger balance 13.6% net charge-of
Slide 26: Financial review
Company overview Credit & portfolio review Growth strategy • Financial review 26
Slide 27: Growth and return metrics
6 months Fiscal Year 2002 2003 2004 2005 2006 2007 (1) 2008 (1) 2009 (1) September 2008 vs. September S t b 2009 Revenue 13.3% 14.0% 15.1% 17.6% 15.4% 20.2% 18.4% 13.8% 13.5% Increase Net Income 24.0% 18.2% 28.2% 18.2% 13.3% 19.9% 8.8% 12.4% 37.4% Increase Avg. Net Loan 10.4% 12.0% 13.4% 18.1% 14.2%
Slide 28: Net income
70 60 $56 $50 50 $46 $39 40 $34 $29 30 $23 $19 20 $16 $14 10 $7 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 (2) 2008 (2) 2009 (2) (1) CAGR from fiscal year 1999 – 2009 (2) Restated in accordance with FSP APB14-1 “Accounting for convertible debt instruments that may be settled in cash upon convers
Slide 29: Earnings per share
$4.50 $4 00 $4.00 $3.43 $3.50 $3.00 $2.89 $2.51 $2.50 $2.02 $2.00 $1.74 $ $1.49 $1.50 $1.25 $1.00 $1.00 $0.74 $0.83 $ $0.50 $0 38 $0.38 $0.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 (2) (2) (2) (1) CAGR from fiscal year 1999 – 2009 (2) Restated in accordance with FSP APB14-1 “Accounti
Slide 30: Operating expense ratio
30% 25% 24 2% 24.2% 23.0% 23.3% 22.3% 22.4% 22.5% 21.8% 20.6% 20.7% 20.5% 20.7% 20% 15% 10% 5% 0% 1999 (1) 2000 2001 2002 2003 2004 2005 2006 2007 (2) 2008 (2) 2009 (2) (1) Excludes $5.4 million legal settlement (2) Restated in accordance with FSP APB14-1 “Accounting for convertible debt instruments
Slide 31: Return on assets and equity
35% ROA ROE 30% 25% 23.2% 22 2% 22.2% 21.3% 21.1% 21.2% 21.5% 21.2% 21.2% 20.9% 20.1% 19.9% 20% 15% 11.7% 11.8% 11.9% 12.2% 11.0% 10.9% 9.9% 10.4% 9.7% 10% 8.4% 8.8% 5% 0% 1999 2000 2001 2002 2003 2004 2005 2006 2007* 2008* 2009* * Restated in accordance with FSP APB14-1 “Accounting for convertible
Slide 32: Capital structure
Convertible Notes Notes, $85.0*, 15.2% Revolving Senior Notes, $145.4, Equity, $328.8, Equity $328 8 26.0% 58.8% *Face value of the convertible notes 32
Slide 33: Share repurchases
• Fiscal 1996 176,000 shares $10.00 • Fiscal 1997 1,810,000 shares $ 7.88 • Fiscal 2000 144,000 shares $ 5.03 • Fiscal 2001 275,000 shares $ 5.21 • Fiscal 2002 251 891 shares 251,891 $ 8 8.65 65 • Fiscal 2003 1,623,549 shares $ 7.39 • Fiscal 2005 486,000 shares $18.00 • Fiscal 2006 800,400 shares $2
Slide 34: Equity, debt and debt-to-total ratio
550 Equity Debt 500 450 $230 400 $208 350 $215 300 $171 250 $101 $84 200 $95 $ $103 $329 150 $83 $290 $92 $78 $215 $234 100 $190 $210 $72 $59 $64 $157 $38 $38 $116 50 $83 $102 $47 $55 $68 $36 $45 $39 - Sept. 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2009 D/T Ratio 51