COMPUCREDIT CORP - 10-Q Quarterly Report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

For the quarterly period ended March 31, 2005



COMPUCREDIT CORPORATION


a Georgia Corporation
IRS Employer Identification No. 58-2336689
SEC File Number 0-25751

245 Perimeter Center Parkway, Suite 600
Atlanta, Georgia 30346
(770) 206-6200

CompuCredit’s Common Stock, no par value per share, is registered pursuant to Section 12(g) of the Securities Exchange Act of 1934.

CompuCredit has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) been subject to such filing requirements for the past 90 days.

CompuCredit is an accelerated filer (as defined in Exchange Act Rule 12b-2).

As of April 30, 2005, 51,507,157 shares of Common Stock, no par value, of the registrant were outstanding.

CompuCredit Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

	March 31, 2005			December 31, 2004
	(Unaudited)
	(Dollars in thousands)
Assets
Cash and cash equivalents (including restricted cash of $11,776 at March 31, 2005 and $11,615 at December 31, 2004)	$	90,400		$	68,240
Securitized earning assets	473,367			536,718
Non-securitized earning assets, net	176,730			158,430
Deferred costs, net	31,081			34,920
Software, furniture, fixtures and equipment, net	34,298			31,552
Investments in equity-method investees	60,744			42,059
Intangibles, net	10,699			10,643
Goodwill	108,465			100,552
Prepaid expenses and other assets	22,789			20,412
Total assets	$	1,008,573		$	1,003,526

Liabilities
Accounts payable and accrued expenses	$	38,724		$	36,088
Notes payable	79,547			83,624
Deferred revenue	5,735			6,390
Deferred gain on Fingerhut receivables	17,635			23,440
Current and deferred income tax liabilities	77,060			115,786
Total liabilities	218,701			265,328

Minority interests	55,671			54,308

Shareholders’ equity
Common stock, no par value, 150,000,000 shares authorized: 53,352,938 and 53,159,253 issued at March 31, 2005 and December 31, 2004, respectively	—			—
Additional paid-in capital	309,379			303,356
Treasury stock, at cost, 1,845,781 and 1,914,646 shares at March 31, 2005 and December 31, 2004	(26,358		)	(26,721		)
Deferred compensation	(6,177		)	(922		)
Warrant	25,610			25,610
Retained earnings	431,747			382,567
Total shareholders’ equity	734,201			683,890
Total liabilities and shareholders’ equity	$	1,008,573		$	1,003,526

See accompanying notes.

CompuCredit Corporation and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

	For the three months ended March 31,
	2005			2004
	(In thousands, except per share data)
Interest Income:
Consumer loans, including past due fees	$	14,037		$	6,032
Other	2,912			1,673
Total interest income	16,949			7,705
Interest expense	(2,422		)	(91		)
Net interest income before fees and other income on non-securitized earning assets and provision for loan losses	14,527			7,614
Fees and other income on non-securitized earning assets	100,766			30,775
Provision for loan losses	(19,224		)	(9,115		)
Net interest income, fees and other income on non-securitized earning assets	96,069			29,274
Other operating income:
Fees and other income on securitized earning assets	43,492			40,643
Servicing income	30,459			25,298
Ancillary and interchange revenues	5,533			4,238
Equity in income of equity-method investees	18,819			(214		)
Total other operating income	98,303			69,965
Other operating expense:
Salaries and benefits	7,107			6,245
Card and loan servicing	59,335			37,018
Marketing and solicitation	18,050			5,699
Depreciation	4,213			3,993
Other	19,058			9,915
Total other operating expense	107,763			62,870
Income before minority interests and income taxes	86,609			36,369
Minority interests	(9,161		)	(6,293		)
Income before income taxes	77,448			30,076
Income taxes	(28,268		)	(11,288

PART I.	FINANCIAL INFORMATION		Page
	Item 1.	Financial Statements (Unaudited)
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Operations	2
		Condensed Consolidated Statement of Shareholders’ Equity	3
		Condensed Consolidated Statements of Cash Flows	4
		Notes to Condensed Consolidated Financial Statements	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
	Item 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION
	Item 1.	Legal Proceedings	36
	Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	36
	Item 3.	Defaults Upon Senior Securities	36
	Item 4.	Submission of Matters to a Vote of Security Holders	36
	Item 5.	Other Information	36
	Item 6.	Exhibits	36
		Signatures	37