Credit Acceptance Corporation (NASDAQ:CACC) Q2 2022 Earnings Conference Call August 1, 2022 5:00 PM ET
Company Participants
Doug Busk – Chief Treasurer Officer
Jay Martin – Senior Vice President, Finance and Accounting
Ken Booth – Chief Executive Officer
Conference Call Participants
Moshe Orenbuch – Credit Suisse
Ray Cheesman – Anfield Capital Management
John Hecht – Jefferies
Diogo Vaz da Silva – PSquared Asset Management
Robert Wildhack – Autonomous Research
John Rowan – Janney
Operator
Good day, everyone, and welcome to the Credit Acceptance Corporation’s Second Quarter 2022 Earnings Call. Today’s call is being recorded. A webcast and transcript of today’s earnings call will be made available on Credit Acceptance’s website.
At this time, I would like to turn the call over to Credit Acceptance’s Chief Treasurer Officer, Doug Busk.
Doug Busk
Thank you. Good afternoon and welcome to the Credit Acceptance Corporation’s second quarter 2022 earnings call. As you read our news release posted on the Investor Relations section of our website at ir.creditacceptance.com, and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of federal securities law. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements.
These risks and uncertainties include those spelled out in the cautionary statement regarding forward-looking information included in the news release. Consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, I should mention that to comply with the SEC’s Regulation G, please refer to the financial results section of our news release, which provides table showing how non-GAAP measures reconcile to GAAP measures.
Our GAAP and adjusted results for the quarter include: unit and dollar volumes grew 5.1% and 22% respectively as compared to the second quarter of 2021. A decrease in forecasted collection rates for loans originated in 2020 through 2022, which decreased forecasted net cash flows from our loan portfolio by $43 million. Adjusted net income decreased 18% from the second quarter of 2021 to $188 million. Adjusted earnings per share increased 1.5% from the second quarter of 2021 to $13.92.
Stock repurchases of approximately 404,000 shares, which represented 3% of the shares outstanding at the beginning of the quarter and a $12 million expense related to an agreement in principle to settle a previously-disclosed class action lawsuit, and a $20 million increase in stock-based compensation expense primarily due to the retirement of our former CEO in May 2021 and the timing of shareholder approval for 2020 and 2021 stock option grants.