World Acceptance Corporation (WRLD) Q4 2014 Earnings Report, Transcript and Summary

Good morning. And welcome to the World Acceptance Corporation-Sponsored Fourth Quarter Press Release Conference Call. This call is being recorded. At this time, all participants have been placed on listen-only mode. A question-and-answer session will follow the presentation by the Corporation’s CEO and other officers. Before we begin, the Corporation has requested that I make the following announcements. The comments made during the conference call may contain certain forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act that represents the Corporation’s expectations and beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Statements other than those of historical fact, as well as those identified by the words anticipate, estimate, intend, plan, expect, believe, may, will and should or any variation of the foregoing and similar expressions are forward-looking statements. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include the factors discussed in today’s earnings press release and in the Risk Factors section of the Corporation’s most recent Form 10-K/A and other reports filed or furnished to the SEC from time-to-time. The Corporation does not undertake any obligation to update any forward-looking statements it makes. At this time, it is my pleasure to turn the floor over to your host, Sandy McLean, CEO.

Thank you, Kathy and good morning everyone. Fiscal 2014 is as I stated in the narrative that was issued along with the press release was A challenge in many ways, however I feel like we have made many accomplishes. I hope that all of you had a chance to see the press release and the narrative. And with that being said, I’d be more than happy to open the floor to questions? Kathy?

One moment and thank you. (Operator Instructions) And our first question comes from Bob Ramsey with FBR Capital Markets.

I wanted to talk for us a little bit about loan growth. Obviously our loan growth does continue to decelerate. And I know you mentioned in the prepared remarks that system changes to discourage small dollar renewals did have some impact on loan balances and overall yields. And I was just wondering, if you could quantify that a little bit.

I think, I can elaborate a much or I can quantify it to your satisfaction. But, there is couple of things going on that have had an impact on both the loan growth as well as the yields. And to certain extent, these have been going on throughout the year. As you know, we stated our number one priority and our number concern is loan growth and loan volume in the U.S. And we have been experiencing a decline in our new customer loans throughout the year and we've mentioned it in all the conference calls and so forth. And while we saw a slight improvement in that during the most recent quarter, we feel year-to-date our loans to new borrowers was down about 5.7%. And that is an area of extreme focus. And combined with that, we have also continued to see a shift in our mix between our smaller group of loans and our larger group of loans. In Mexico for instance which is the payroll developed loans, so we now consider in the large category, that’s our highest growing group of loans at this point. And they grew about almost somewhere around 70% on the year-over-year basis. And those are still fairly high yielding and that growth is greatly appreciated but they now have raised from 2% of our overall portfolio to 3.3%. Additionally, our average loan made, our overall gross loan made has risen from 2013 to 2014 from $1,246 to $1,330 which is 6.8% increase. And basically all of our growth of year-over-year basis came from increase in average balances and we were pretty much flat on the number of loans outstanding. Now the other thing that’s been taking place is ever since, we became aware of the accounting issues surrounding less than 10% loans at the end of last year, we have been addressing that and making sure that we -- that certain offices and so forth worked pushing these type of renewals and so forth. To the extent most -- I mean, almost all renewals are as a result, all renewals as a result of the customer wanting to get additional funding and so forth. But to more, better monitor this, we’ve decided to make some system changes that went into effect at the beginning of this quarter whereby we would no long -- well, let me just back up one sec. On our receipt statements and other type of paper that is given to the customer, the amount of money that’s available to that customer in the event that they would like to refinance a loan to show them what they would get back under that transaction, this has been there for quite some time; and it shows up on the screen so that our branch personnel can tell them if they would like to renew it at any point in time that this was the amount of money they get back if they have the same transaction. So, we decided to suppress that information until such time as that -- the amount that they could get back, exceeded that 10% threshold. Now, we anticipated that this would have an impact on volume, and it turned out it had a fairly substantial impact on the volume in the fourth quarter. We also anticipate going forward that this is not necessarily a disruption to the relationship we have with the customers, but it will -- at least in the fourth quarter, some of those renewals will probably get pushed back a month or so. And we do not believe that the impact on an ongoing basis will be as dramatic as it was during the fourth quarter. However, it is extremely hard to quantify the impact of these type of changes. But we are sure about our Senior Vice Presidents in the field that they are very comfortable with what we are doing and it’s been well received at the branch level and I think it will be a benefit to the customers, so when they do renew that they will get more money back. But should they chose to won’t renew sooner and it’s less than 10%, we will certainly accommodate them because it can still be less than 10% but a significant amount of money for that individual. So, I hope that wasn’t rambling too much, but there is a lot of things impacting what took place in the fourth quarter and we had a lot of changes during the course of the year. And to a certain extent, there has been some confusion in the field that is beginning to now settle down and I think that we will see things settling down as we go forward into fiscal 2015.

Great. Do you know Sandy roughly what percent of originations are small dollar renewals after you all have implemented these changes as compared to before?

It’s dropped dramatically. It’s somewhere around in terms if you look at number or dollars but we measure it most of the time on a rolling basis. And it’s dropped down to the 7% or 8% range from the 20% range that we announced last year, so it’s dropped down dramatically.

Great. And then I am curious too, I know you said that the big impact sort of this quarter and less of an impact on a go forward basis is when you kind of put together all of these moving pieces, is your expectation that loan yields fall on a year-over-year basis as we go through 2015, just given the ongoing shift makes and larger loans or do you still get a little bit of tail impact from the fee structure changes in Texas and Georgia that could medicate that?

Well, the fee structure, changes that we anticipated did in fact take place, it was just offset by the impact of reduced loan volume and the change in mix and so forth. We have seen a continuing decline in our yields on a slightly year-over-year basis for quite some time, but that’s historically been offset somewhat by reduction in our losses. And I hope that we'll get back to a similar type of arrangement going forward, but the impact of reduced loan volume to a certain extent was somewhat of a surprise to us, but it's something that we're monitoring and addressing from an operational basis and I certainly don’t believe, it will be as dramatic as we saw fourth quarter last year compared to the fourth quarter of this year.

Okay. And then last question and then I'll hop back out in the queue. But I know you’ve said that loan growth is an area of extreme focus for you guys or World and that the pace of lending to new borrowers while still is a challenge, maybe as not as bad as recent quarters. I'm just curious what you guys are doing to try and simulate a little bit better loan demand?

We are looking at additional products to offer through our marketing programs and looking at different felicitation methods. We are hopefully, we're going to become use technology to a further extent, we have not further extent, because technically we really haven't used technology for felicitation purposes in the past. But we hope them to be moving in that direction as quickly as we can. And once you saw it utilizing the technology that's available, branded [growth] has been slowed to move in that direction. But we believe once we move in that direction, it will be tremendous benefit to all areas of operation.

Okay, great. Thank you Sandy.

Okay.

And our next caller is John Hecht with Stephens.

Morning guys, thanks for taking my questions. Just a little bit more on volumes, I guess I'd be interested in your commentary and what you see going on with consumer demand, you have mentioned for a couple of quarters or more that you are getting new customers, it’s been challenging, do you think if this is changing competitive environment, is there lower need or lower desire at this consumer level for borrowing?

Well, this, I don’t, I really can’t give you a very good answer. I know that some of our competitors are doing extremely well in growth and so far. And others from what I have told to are experiencing some of the same problems that we're having. So I certainly believe that the competition in certain of areas where we operate is getting greater, but we are continuing to move into new areas and I believe there still a tremendous amount of opportunity going forward. So I’m not, we're not discouraged or that would be outlook, whatsoever.

Okay. And then just to get a sense for the transition or impact of not refinancing somebody who hasn’t paid 10% of their principal down, what time or how many months does it take on average for small dollar loan for someone to hit that 10% threshold?

(Inaudible). That depends on the state, the size of the loan, or the term, I don’t know, I mean it would two months or three months or, on a real-real small dollar loan you probably could get their activate second payment or something.

Okay. That’s helpful. In terms of just the credit when you exclude the changing loan volumes and the changes with the refinancings how would you describe credit trends?

Loan volume dropped dramatically and our loss ratios relative to the previous three quarters improved dramatically also, I mean so thank goodness that didn’t appear to be a direct correlation between the two.

So is it, I mean in your opinion it is generally stable credit trends or any diversion to the mean or how do you just think about the environment as we go through this year?

Well for the first three quarters our annualized quarterly charge off ratios were up from the prior year quarter, they were up also at the fourth quarter but only up a couple of basis points, we attempt to, what was it John, 3…….?

13.7 and 13.9.

13.9 versus 13.7 which is a dramatic improvement from what we have seen in the previous three quarters. Now we would expect and we would hope going forward that we would return to the trend of 16 quarters that we had in a row up until this year of having year-over-year declines because as you change mix and you get into a larger loan situation then you should expect lower loss ratios. But we had a lot of transitions with this company. We have addressed collection procedures as a result of our customer complaint resolution system that we put into place, we recognize certain things that we needed to improve on. We’ve had changes in management, we’ve had there’s been quite a few things going on in World. So there is some distractions, but hopefully we can get some of these distractions behind us and get back to the do that we’ve been for many, many years.

Okay. And then last question I know you’re very limited on what you can talk about but with respect to the Civil Investigative Demand, can you tell us are there ongoing information requests or are you just getting them all the initial requests? And then can you…I am sorry.

I have them provided an answer that I am supposed to give to that question, so if you bear with me.

Okay.

This is the creation of CFTB. We will publically and repeatedly discuss the expensive scope of the regulatory powers over consumer financial transactions and the possibility of the bureau might exercise those powers and why it directly or indirectly affects our company and its business. So it was not completely a surprise that the CFTB has decided to take a look at our operations. We have intended to cooperate fully with the bureau in response to CID and recently provided them with all of the information we believe they have asked for and that’s where we stand. At this point we have not heard anything bad to our submission of the information provided [on to thereby] that we provided.

Okay, thanks. And then last question. You mention going into a new state, are you able to tell us what state that is?

I think probably it would not be appropriate today to do so because before enter any state, we make a point of going to visit with the regulators to make sure that we are welcome in that state and that they happily provide us licensing and so forth and we have not done that yet.

Okay, thanks very much for the color.

Okay.

Our next question is from John Rowan with Sidoti & Company. John Rowan - Sidoti & Company: Good morning.

Hey. John Rowan - Sidoti & Company: Why is the allowance ratio down on the sequential basis?

As you know we go through an analysis every single quarter as part of the quarter end process. And we at the end of the third quarter because the trend of rising losses and so forth -- in the second quarter, thanks John, we added an addition of $1.5 million up to the allowance. And then as we saw the reversal of the trends and so forth the model indicated that it was appropriate to reverse that $1.5 million. John Rowan - Sidoti & Company: Okay. So the reversal is actually a positive commentary on your outlook for credit then…?

That is correct. John Rowan - Sidoti & Company: Okay. When you look at the stage where there has been a change in the fee structure. Can you give us idea of what percentage of loans in that state are now operating under higher yields because of the fee structure? And then secondarily to the question, now you're gaining some experience with the new fee structure, has there been any change in the credit performance within those states?

I would say given that we started doing this in the middle of, we implemented these new fees in the middle of September that most of the loans in those states are have paid renewed or come into the office for as a new borrower or a former borrower and was subject to the new fees. That doesn't mean they are recognized, because they’re recognized over the life of the loan. And to this, to my knowledge so far, I can't answer 100% certainly because I'm not looking at the loss ratios by product and by state. But it appears that they have not dramatically changed. John Rowan - Sidoti & Company: Okay. Thank you very much.

(Operator Instructions). And our next question comes from David Horn with Kiron Advisors.

Hi, thank you so much for taking my question. So, you discussed a little bit, I just want to go through the mention of the loans, the 10% loans that I guess. So if there is a $1,000 loan, they haven’t paid down 10% of it, they can't get refinanced correct?

They can. And that’s not the way you measure it, it is the proceeds to the customer in the new transaction has to exceed 10% of the loan that’s been paid off with the proceeds of the new loan. And note, we do not prohibit them; we just do not make the amount known and so forth. As I said, if in fact that customer has a need that lesser amount was a beneficial to them then certainly we will accommodate that need. There is nothing, there is no probation against making these types of loan anywhere; this is just accounting impact of which we are in100% full compliance with all accounting rules and regulations surrounding this type loan.

Okay. And then can you repeat, you said what percentage of refis to this certain rule effect?

It’s a lowering percentage. As of March it was like 7%.

Okay. You said, it used to be 20. And so what’s the loss rate on these loans, the ones that are not refi?

I mean similar to the loss rate or otherwise. I mean we can’t identify the loss on that much detail of a loan; I don’t know the answer to that question.

Okay. And I guess the challenge people have or some of the scrutiny that your business comes under is because three quarters, if you make 100 loans, 75 doesn’t come back in and refinance. So, how can you know what the loss rate would be if they didn’t refinance, how do you assess that?

Well, I mean it’s very difficult to assess, we're dealing with the million customers that have different behavior. Some of them refinanced more frequently, others pay us all in the entirety. So that is the challenge that we work with our auditors on a quarterly basis and especially at year-end to determine that our allowance is adequate based on the stats and circumstances surrounding the behavior and the performance of our portfolio.

But you had a material weakness in this; I guess starting last year. And so, what have you changed or have you changed the assumptions at all based on the material -- I mean I guess, I was thinking a material weakness that you are not doing a sufficient job of measuring this?

That is not exactly what the material weakness did; it’s consisted of multiple things that combined the auditors felt rose to a level of a material weakness. Number one, it says that we were not properly accounting for those loans with proceeds of less than 10%. Although we proved that it did not have a material impact on our financial statements, we have since put procedures into place to monitor these loans and to make sure that they are properly accounted for. The second area of that weakness [bill] was the documentation of our allowance. They felt that although we had documented this allowance in the same way for the past 30 years, they came to the conclusion that that documentation was not sufficient. That combined with our not detailing the impact on our losses from renewals and so forth, which we have been doing the same for the last 20 plus years also that combined with the other two factors they felt rose to a level of a material weakness. And those things have been addressed.

And where are we on that now, the material weakness?

We can’t speak for -- but we’ve been into the process of typing and we saw we’ve addressed those issues.

We cannot for our accountants, but we believe that everything has been addressed and that we will not have a material weakness when these financial statements are issued. But that is not officially decided until the accountants sign off on our financial statements.

Okay. So, I guess I will find out when the K is filed, thanks. And then you give insurance as a percentage of revenue, how much of net income is a function. So, what thoughts for the bottom-line and what are the margins on insurance and other income?

I don’t know the answer right off of that exactly John. But -- all right just talk with that (inaudible) $75 million dollars represented insurance and other income, roughly half of that is insurance submission of sale, therefore about 5% of our revenue comes from insurance and other income and because there is not a lot of incremental cost associated with that, a great deal of that falls to the bottom-line. Does that help with?

Yes. Thank you. I appreciate it. And then you mentioned the debt level in your comments I guess 1.6 quarter one, sort of obviously you are buying back a lot of stock, I mean you’re taking on some leverage to do it. What’s your appetite for this?

Well, we believe that any level of 3 to 1 debt to equity is certainly not inappropriate for this company. However, we have been working with our banks and we have a lot of seasonal needs and so forth. So, whatever level we got, we have to allow us to access the credit markets from November and December when our loan demand is the greatest, but then it's paid back dramatically between the end of December and March. So, we're certainly very comfortable at this level and we will continue to repurchase shares from cash flow and additional debt going forward until the rates from level as the Board will determine.

Okay, because I guess the -- because of loan growth is slowing to some degree, you are really getting all of your EPS growth from share buybacks and because it’s not from free cash flow, because it’s from the leverage, I guess do you have any concerns that you will, your stock is still near multiyear highs, I mean levels reached within same for last year that you can put yourself in a position like some other companies where you over spend and then if your loan growth continues to decline sort of in a tough position with too much leverage. Is there any concern for that or not at this time?

Well, the quality is concerned of all aspects of your financing arrangements and everything else. But as I have stated, I hope very much that we can reverse the trend of slowing loan growth. We're entering new states and we have lots of opportunities in Mexico and we're looking at a lot of different things from a marketing standpoint. I don't believe that this company is now has been a company that’s going just no longer increases loan growth and so forth, I believe the opportunities going forward are very positive. But that being said, we are certainly not going put ourselves in a position of over leverage where we can’t meet our financial obligations.

Well then I guess that’s what I’m asking. I understand that one point from free cash flow business that you didn’t to, money that you didn’t have to invest in the business but in doing that, I guess the question is in taking on the debt, I mean what’s the urgency to buy back stock and to take on then, and the off of chance that even if business flat lines, the leverage becomes a problem?

As it comes to that point and it’s something, we will be monitoring as we go forward.

Okay.

And I believe the benefit of buying back the stock is why you say it’s an all time high, I think it’s extremely inexpensive at this point in time to where it could and should be in the future, possibly.

How you think about that? How do you -- I guess when you buy back stock, if you go whatever, you can think all of the things you can do it with your free cash flow, so how do you define cheapness with your stock or how do you think about it versus other alternatives?

Well, I think our best alternatives are excess funds whether it’d being internally generated or with external debt is the fund, new loans, and going to new locations and so forth but our limit to growth has never been the funding of those but it’s having disqualified people to go in and open these offices and run in them in manner that we’re expecting going forward. So that being said, if it’s back, we cannot utilize those funds to that extent and the cash flow is such that we begin to see leverage, I think it would be more appropriate to continue to repurchase shares than delever the company.

Right. But and again I understand, I guess what’s the math when you take out further debt, what’s the math in your head that says it’s worthwhile to, for example we (inaudible) tomorrow in the stock with a 250, is that too expensive would you not buy stock there?

I am not going to discuss the individual models and thoughts and so forth. We’ve been very prudent in this process over a long period of time and we will continue to do so going forward. And that’s about all I have got there.

Okay, great. Well, I appreciate you answering the questions. Thank you very much.

And our next question is Bill Dezellem with Tieton Capital Management.

Thank you. a couple of questions, first of all, would you please discuss the timing issues with the loans in Mexico please that you referenced in the commentary?

Sure. Because these are payroll deduct loans and they are with unions in Mexico, the unions actually collect the payments on our behalf. And sometime the timing of these payments can cross over months and it’s happened in the past and we expect it to happen going forward, especially when there may be times when we won’t get a payment for two months when those unions, when schools out and unions are on vacation or whatever. So, but the good thing is that likelihood of receiving payments without a great deal of collection effort is extremely high and the expected loss rates on these loans are substantially lower than other group to loans.

And given that we are now in April, may we presume that you have already received those payments that slip passed end of March.

We have.

All right, thank you. The next question is you’d mentioned in response to a previous question that you have indicators that you are seeing that tell you the credit trends are improving. And I apologize that I don’t believe that I had enough time this morning to analyze the release to fully grasp what you might be referring to there. So would you please highlight those improving credit trends and the indicators that you are looking at?

The primary trend that we look at is the current quarter annualized charge-offs as a percent of average net loans outstanding, and you compare that to the same quarter of the prior year. As John has just told us, it was 13.7 for the March of ‘13 quarter, it was 13.9 for the March of ‘14 quarter which represents only a 0.2% increase which is dramatically better than the previous four quarters.

Understood. And given what you are seeing, would it be your expectation, or did we hear you correctly earlier that your expectation is that that comparison in the June quarter actually would be down, meaning lower in Q1 of fiscal ‘15 versus Q1 of ‘14?

No, you did not hear that correctly. I said generally speaking as we grow and our mix changes to a mix that has obtained more larger loan balances that are better credit that you would expect that these year-over-year charge-offs would continue to decline as they did for 16 quarters in a row up until the December of ‘12 quarter. And we have experienced -- we have not continued to experience that year-over-year improvement for the last 4 or 5 quarters, but it appears to be leveling off. I don't know what's going to happen in the June quarter or the September quarter.

Thank you for the time.

And our next question is from Jordan Hymowitz with Philadelphia Financial.

Thanks guys. I'm just wondering your employee’s incentive in any way to make a refinance?

One, not -- all employees to a certain extent are incentive for refinancing, because it's very important that we maintain relationships with our customers and so forth. But there is only one employee level anywhere that it has any impact, direct impact from refinancing and that's the CSR who does get some small dollar bonus on a monthly basis for encouraging renewals, because encouraging renewals is a very important part of our business, just like credit cards, people to the pay the minimum. Because we want to maintain balances and we want to maintain relationship with these customers. But no other incentives are geared towards incentive.

So, if someone -- if I'm a CSR and you are my client, and I encourage you to renew you on your own renewal, I do get some sort of additional compensation?

Not on a per loan basis.

Okay. Thank you.

And our next call is from Clifford Sosin with CAS Investment Partners.

Hi guys, thank you very much for taking my call. I wanted to ask just a couple of questions about the change in marketing refinancing to your customers. When did you make the system change?

In February.

And I can imagine that people can do store and they didn’t see that they could refinance, they might not be aware was available and so they wouldn’t do it and so that probably was that you seem to have described an immediate drop off in the level of the smaller cash back refinancing. As some customers who might have been, who might not have had the amount that could refinance on their receipt last quarter, had that amount -- as the months have gone by into March and then April, have you seen, I guess for a lack of a better term, a recovery in the year-on-year level of gross origination by the branches that were impacted by this?

I’m not sure what the question was?

So, presumably, you made this change and there were immediately some portion of customers wouldn’t be aware that they could refinance? And so, there was drop off.

That’s correct.

And then my question is if the change was in February, you’ve been able to watch it through the month of February, March and now into April. And when I’m asking is as those customers have made more payments and now they do get a number on their receipt that says what they can refinance because it’s more than 10%, have you seen a recovery in dollar volume originated sort of subsequent to the initial change?

At this point I would say we have not but I believe that that will be the case because in many aspect the customers just delaying [bond] back they don’t get additional [bonds] back.

Got it. And just on a different topic, historically you guys have provided an estimate for your store count growth for the next year is that something you are still going to do?

Sure and I think it may have been in the script but (inaudible) it’s 50 offices in the U.S. and 20 in Mexico and plus acquisitions have not been as significant in the past but we’re continuing look, we continue to look for potential acquisitions but that’s just not been available likely.

Thank you guys very much.

Thanks.

(Operator Instructions). We will have a follow-up question from Bob Ramsey with FBR Capital Markets.

Hey thanks for taking the follow-up. I just was wondering do you have the end of period remaining share repurchase authorization handy [running chance]?

Yes, give me one second.

And I sort of roughed into it, it looks like you guys hadn’t done much with the most recent authorization in mid March. I am curious as well how blackout periods may have affected your activity over the last month?

First of all what you’ve….

Or a month and a half.

50 million left from authorization in the current authorization.

53 million, yes.

And then the question about blackout periods. I just can’t remember when your blackout periods around earnings begin, was it pretty soon after that authorization was announced?

It started on March 20th.

Okay. And then I know you all mentioned in the release as well that debt to equity is somewhere in line or closer to in line with company targets now. As we think about the pace of repurchases this year and the year ahead, will it I guess more closely match free cash flow then it did last year. I know that you have got some flexibility on leverage, but just kind of curious is it going to be closer this year than last?

The [loan] ratio is higher than it was historically, so as we get closer to Q1 obviously in that we use increasing leverage then that amount will go down.

Okay. Fair enough. And then last question, just curious you guys obviously had the terms of your revolver recently amended. I am curious if you could share any color of how your lenders are thinking about either the CID or the selling growth or leverage are obviously they are comfortable amending the terms, but just sort of how those discussions with your lenders went?

We have great relationship with our lenders and if they were having those concerns, they would not have been as flexible in adjusting those covenants as they did.

Okay, very good. Thank you.

And we’ll take our next call from Calvin Hotrum with Sterne Agee.

Yes, good morning. I was wondering if you can give any color behind the drop in SG&A specifically with compensation.

I can’t quantify it, but the combination of the reversal of some long-term equity compensation that Mark and Kelly both did when they left combined with a very substantial reduction in management bonuses this year would account for most of that.

Got you, got you. Okay. Thank you. That's all I had.

And we’ll take a follow-up question from Bill Dezellem with Tieton Capital Management.

Thank you. I actually want to expand on a question from a couple of participants ago. When do you expect the renewals to show that anticipated improvement given what you know about the loan pay down process?

This is -- we’re experiencing something that I’ve never experienced before. So, I can't really tell you exactly how this is going to play out. We knew that we would see a reduction in renewal volume when we started monitoring and not necessarily discouraging, but not making it overly easy to have these less than 10% renewals. So, starting it, we’re learning as we go along. And that’s early, a big part of what’s operational management is the effects what’s going on and that’s accordingly.

Allow me to phrase a question slightly different, would you anticipate by the next quarter’s conference call that you would have seen initial signs of that improvement?

That I don't know. I mean Bill, I don't know. We believe we’ve always done. I mean I believe that we’ll continue to have refinancing activity because our customers rely on this credit to meet those unanticipated needs. But they don’t renew this month than may choose to pay us out in full or they may choose to renew next month, I don’t know. So I am saying in, we will obviously monitoring this on a ongoing basis, but I think it’s too early tell exactly what level of impact this is going have on an ongoing basis.

Great, thank you.

It appears that there are no further questions at this time. Mr. McLean I’d like to turn the conference back to you for any additional or closing remarks.

Well, I really don’t have any except I appreciate your interest and support in World Acceptance Corporation and we’ll continue to do as good as we can on behalf of our shareholders. Thank you and have a great day.

Thank you for your participation. This concludes the World Acceptance Corporation quarterly teleconference.