CURO Group Holdings Corp. Announces First Quarter 2022 Financial Results
CURO Group Holdings Corp. (NYSE: CURO) reported a 47.6% year-over-year increase in consolidated revenue for Q1 2022, totaling $290.2 million. The company's gross loans receivable exceeded $1.6 billion, more than double from the previous year, aided by the acquisition of Heights Finance, contributing $462.9 million. Net income dropped to $1.3 million ($0.03 per share) compared to $25.7 million ($0.59 per share) in 2021, primarily due to higher provision for loan losses and increased interest expenses. Despite these challenges, loan charge-off rates improved by 90 bps compared to Q1 2021.
- Consolidated revenue increased by 47.6% to $290.2 million compared to Q1 2021.
- Gross loans receivable surpassed $1.6 billion, more than doubling year-over-year.
- Loan growth of 59.5% in company-owned businesses, excluding Heights Finance.
- Improved net charge-off rates by 90 bps year-over-year due to a shift to lower-risk loans.
- Declared a quarterly dividend of $0.11 per share.
- Net income decreased by 94.8%, from $25.7 million to $1.3 million year-over-year.
- Adjusted Net Income fell by 79.2% to $6.3 million from $30.1 million in Q1 2021.
- Higher interest expenses increased by 96.2% to $38.3 million due to additional debt from the Heights Finance acquisition.
- Provision for loan losses exceeded net charge-offs by $12.1 million, impacting profitability.
Consolidated Revenue Grew
“We are very pleased to end the first quarter with over
“Consolidated net charge-off rates improved 90bps compared to the first quarter of 2021 because of our managed portfolio mix shift to larger, longer-term, lower-yielding loans with lower loss rates. Credit performance continues to normalize with portfolio-level net charge-off and past-due rates up year-over-year but improved versus the fourth quarter of 2021.”
“We are very pleased so far with our business results and the talent we added with the acquisition of Heights in December and our combined teams will continue to be intensely focused in the coming months to ensure we execute on the growth and value-creation opportunities."
"Finally, while we are pleased that we are moving into a more manageable phase of the pandemic in both the US and
Consolidated Summary Results
We reported Net income of
The decline in Net income was primarily driven by year-over-year comparisons for the provision for loan losses and, secondarily, higher interest expense. Government stimulus and other pandemic-related behavior reduced demand, increased payment rates and lowered loss rates in the first quarter of 2021, resulting in a provision for loan losses that was
Below are additional highlights of our performance during the three months ended
-
Revenue and Net Revenue
-
Revenue increased
, or$93.6 million 47.6% , year over year, primarily driven by ourDecember 27, 2021 acquisition of Heights Finance, which accounted for of revenue for the first quarter of 2022, as well as a full quarter of Canada POS Lending revenue of$65.7 million , compared to a partial quarter of$20.3 million in the prior-year period.$1.6 million -
Sequentially, revenue increased
, or$65.9 million 29.4% , driven by growth of , or$59.4 million 42.7% in theU.S. due to our acquisition of Heights Finance, , or$5.5 million 37.3% , inCanada POS Lending and , or$1.0 million 1.4% , inCanada Direct Lending. -
For the three months ended
March 31, 2022 , net revenue increased , or$32.3 million 20.1% , year over year, and , or$62.0 million 47.4% , sequentially. The sequential increase was due to seasonality and our acquisition of Heights Finance. Excluding Heights Finance, net revenue increased sequentially , or$17.0 million 13.0% .
-
Revenue increased
-
Loans Receivable
-
Sequential loan growth in Company Owned gross loans receivable and combined gross loans receivable of
, or$80.3 million 5.2% , and , or$78.4 million 4.9% , respectively, was primarily due to growth inCanada POS Lending of , or$82.6 million 18.0% . -
Year-over-year growth in Company Owned gross loans receivable and combined gross loans receivable of
, or$897.6 million 122.8% , and , or$909.5 million 119.1% , respectively, which included Heights Finance. Excluding Heights Finance, combined gross loans receivables increased , or$446.7 million 58.5% , year over year, primarily driven by , or$340.2 million 168.8% , for Canada POS Lending.
-
Sequential loan growth in Company Owned gross loans receivable and combined gross loans receivable of
-
NCOs and Delinquency Metrics
- Consolidated quarterly NCO rates improved year over year by 90 bps, primarily from the relative growth of Canada POS Lending and the acquisition of Heights Finance, which shifts portfolio mix to lower loss-rate products.
- Sequentially, consolidated quarterly NCO rates improved 70 bps.
-
Consolidated past-due rates increased 190 bps year over year as credit continued to normalize compared to the first quarter of 2021 which was abnormally affected by pandemic-related
U.S. government stimulus. Consolidated past-due rates improved by 110 bps sequentially, primarily due to our acquisition of Heights Finance.
-
Other Highlights
-
Declaration of the next quarterly dividend of
per share, payable on$0.11 May 23, 2022 to stockholders of record as ofMay 10, 2022 . -
On
March 31, 2022 , we expanded our Non-Recourse Canada SPV Facility fromC to$350.0 million C , with the ability to expand its committed capacity by an additional$400.0 million C to support loan growth within Canada Direct Lending and Canada POS Lending.$50 million
-
Declaration of the next quarterly dividend of
From the second quarter of 2020 through the first half of 2021, we experienced lower customer demand in the
Results of Consolidated Operations
Beginning
Table 1 - Consolidated Statements of Operations |
||||||||||||||
(in thousands, unaudited) |
|
Three Months Ended |
||||||||||||
|
2022 |
2021 |
Change $ |
Change % |
||||||||||
Revenue |
|
|
|
|
|
|||||||||
Interest and fees revenue |
|
$ |
264,956 |
|
$ |
179,123 |
|
$ |
85,833 |
|
|
|||
Insurance premiums and commissions |
|
|
18,260 |
|
|
11,569 |
|
|
6,691 |
|
|
|||
Other revenue |
|
|
6,980 |
|
|
5,859 |
|
|
1,121 |
|
|
|||
Total revenue |
|
|
290,196 |
|
|
196,551 |
|
|
93,645 |
|
|
|||
Change in allowance for loan losses |
|
|
12,112 |
|
|
(16,545 |
) |
|
28,657 |
|
# |
|||
Net-charge offs |
|
|
85,419 |
|
|
52,690 |
|
|
32,729 |
|
|
|||
Provision for losses |
|
|
97,531 |
|
|
36,145 |
|
|
61,386 |
|
|
|||
Net revenue |
|
|
192,665 |
|
|
160,406 |
|
|
32,259 |
|
|
|||
Operating Expenses |
|
|
|
|
|
|||||||||
Salaries and benefits |
|
|
79,729 |
|
|
54,917 |
|
|
24,812 |
|
|
|||
Occupancy |
|
|
17,037 |
|
|
14,347 |
|
|
2,690 |
|
|
|||
Advertising |
|
|
10,500 |
|
|
8,084 |
|
|
2,416 |
|
|
|||
Direct operations |
|
|
20,274 |
|
|
11,969 |
|
|
8,305 |
|
|
|||
Depreciation and amortization |
|
|
9,814 |
|
|
4,965 |
|
|
4,849 |
|
|
|||
Other operating expense |
|
|
16,112 |
|
|
12,952 |
|
|
3,160 |
|
|
|||
Total operating expenses |
|
|
153,466 |
|
|
107,234 |
|
|
46,232 |
|
|
|||
Other expense (income) |
|
|
|
|
|
|||||||||
Interest expense |
|
|
38,341 |
|
|
19,539 |
|
|
18,802 |
|
|
|||
Income from equity method investment |
|
|
(1,584 |
) |
|
(546 |
) |
|
(1,038 |
) |
# |
|||
Total other expense (income) |
|
|
36,757 |
|
|
18,993 |
|
|
17,764 |
|
|
|||
Income before income taxes |
|
|
2,442 |
|
|
34,179 |
|
|
(31,737 |
) |
(92.9) % |
|||
Provision for incomes taxes |
|
|
1,106 |
|
|
8,444 |
|
|
(7,338 |
) |
(86.9) % |
|||
Net income |
|
$ |
1,336 |
|
$ |
25,735 |
|
$ |
(24,399 |
) |
(94.8) % |
|||
# - Variance greater than |
Table 2 - Consolidated Balance Sheets (in thousands) |
|||||||
|
|
|
|
||||
ASSETS |
|||||||
Cash and cash equivalents |
$ |
60,209 |
|
|
$ |
63,179 |
|
Restricted cash |
|
110,118 |
|
|
|
98,896 |
|
Gross loans receivable |
|
1,628,568 |
|
|
|
1,548,318 |
|
Less: Allowance for loan losses |
|
(98,168 |
) |
|
|
(87,560 |
) |
Loans receivable, net |
|
1,530,400 |
|
|
|
1,460,758 |
|
Income taxes receivable |
|
28,664 |
|
|
|
31,774 |
|
Prepaid expenses and other |
|
40,112 |
|
|
|
42,038 |
|
Property and equipment, net |
|
54,865 |
|
|
|
54,635 |
|
Investments in Katapult |
|
29,484 |
|
|
|
27,900 |
|
Right of use asset - operating leases |
|
114,305 |
|
|
|
116,300 |
|
Deferred tax assets |
|
20,066 |
|
|
|
15,639 |
|
|
|
430,967 |
|
|
|
429,792 |
|
Intangibles, net |
|
113,640 |
|
|
|
109,930 |
|
Other assets |
|
9,535 |
|
|
|
9,755 |
|
Total Assets |
$ |
2,542,365 |
|
|
$ |
2,460,596 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|||||||
Liabilities |
|
|
|
||||
Accounts payable and accrued liabilities |
$ |
84,783 |
|
|
$ |
121,434 |
|
Deferred revenue |
|
24,265 |
|
|
|
21,649 |
|
Lease liability - operating leases |
|
120,593 |
|
|
|
122,431 |
|
Contingent consideration related to acquisition |
|
26,687 |
|
|
|
26,508 |
|
Income taxes payable |
|
— |
|
|
|
680 |
|
Accrued interest |
|
16,481 |
|
|
|
34,974 |
|
Liability for losses on CSO lender-owned consumer loans |
|
7,166 |
|
|
|
6,908 |
|
Debt |
|
2,090,085 |
|
|
|
1,945,793 |
|
Other long-term liabilities |
|
13,679 |
|
|
|
13,845 |
|
Deferred tax liabilities |
|
5,839 |
|
|
|
6,044 |
|
Total Liabilities |
|
2,389,578 |
|
|
|
2,300,266 |
|
Stockholders' Equity |
|
|
|
||||
Total Stockholders' Equity |
|
152,787 |
|
|
|
160,330 |
|
Total Liabilities and Stockholders' Equity |
$ |
2,542,365 |
|
|
$ |
2,460,596 |
|
Table 3 - Consolidated Revenue by Product and Segment
The following table summarizes revenue by product, including revenue we earn from operating as a credit services organization ("CSO") by charging customers a fee for arranging an unrelated third party to make a loan to that customer, which we refer to as "CSO fees," for the period indicated:
|
|
Three Months Ended |
||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||
(in thousands, unaudited) |
|
|
|
|
Total |
% of
|
|
|
|
|
Total |
% of
|
||||||||||
Revolving LOC |
|
$ |
26,913 |
$ |
45,455 |
$ |
18,655 |
$ |
91,023 |
31.4 |
% |
|
$ |
26,923 |
$ |
34,368 |
$ |
1,444 |
$ |
62,735 |
31.9 |
% |
Installment |
|
|
162,824 |
|
11,109 |
|
— |
|
173,933 |
59.9 |
% |
|
|
105,941 |
|
10,447 |
|
— |
|
116,388 |
59.2 |
% |
Total interest and fees |
|
|
189,737 |
|
56,564 |
|
18,655 |
|
264,956 |
91.3 |
% |
|
|
132,864 |
|
44,815 |
|
1,444 |
|
179,123 |
91.1 |
% |
Insurance premiums and commissions |
|
|
5,001 |
|
13,023 |
|
236 |
|
18,260 |
6.3 |
% |
|
|
— |
|
11,569 |
|
32 |
|
11,601 |
5.9 |
% |
Other revenue |
|
|
3,661 |
|
1,901 |
|
1,418 |
|
6,980 |
2.4 |
% |
|
|
3,628 |
|
2,056 |
|
143 |
|
5,827 |
3.0 |
% |
Total revenue |
|
$ |
198,399 |
$ |
71,488 |
$ |
20,309 |
$ |
290,196 |
100.0 |
% |
|
$ |
136,492 |
$ |
58,440 |
$ |
1,619 |
$ |
196,551 |
100.0 |
% |
Table 4 - Consolidated Loans Receivable
The following table reconciles Company Owned gross loans receivable, a GAAP-basis balance sheet measure, to Gross combined loans receivable, a non-GAAP measure(1). Gross combined loans receivable includes loans originated by third-party lenders through CSO programs, which are not included in the Consolidated Financial Statements but from which we earn revenue by providing a guarantee to the unaffiliated lender.
|
|
As of |
|||||||||||||
(in thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|||||
Revolving LOC |
|
$ |
49,077 |
|
$ |
52,532 |
|
$ |
51,196 |
|
$ |
47,277 |
|
$ |
43,387 |
Installment - Company Owned |
|
|
589,652 |
|
|
609,413 |
|
|
137,987 |
|
|
139,234 |
|
|
142,396 |
Canada Direct Lending |
|
|
|
|
|
|
|
|
|
|
|||||
Revolving LOC |
|
|
424,485 |
|
|
402,405 |
|
|
366,509 |
|
|
337,700 |
|
|
319,307 |
Installment |
|
|
23,578 |
|
|
24,792 |
|
|
24,315 |
|
|
23,564 |
|
|
24,385 |
Canada POS Lending |
|
|
|
|
|
|
|
|
|
|
|||||
Revolving LOC |
|
|
541,776 |
|
|
459,176 |
|
|
302,349 |
|
|
221,453 |
|
|
201,539 |
Company Owned gross loans receivable |
|
$ |
1,628,568 |
|
$ |
1,548,318 |
|
$ |
882,356 |
|
$ |
769,228 |
|
$ |
731,014 |
Gross loans receivable Guaranteed by the Company |
|
|
44,420 |
|
|
46,317 |
|
|
43,422 |
|
|
37,093 |
|
|
32,439 |
Gross combined loans receivable (1) |
|
$ |
1,672,988 |
|
$ |
1,594,635 |
|
$ |
925,778 |
|
$ |
806,321 |
|
$ |
763,453 |
(1) See "Non-GAAP Financial Measures" at the end of this release for definition and more information. |
Segment Analysis
The following is a summary of segment operating (loss) income and portfolio performance for the segment and period indicated (all periods unaudited except for Q4 2021).
Table 5 - Summary of Segment Operating (Loss) Income
|
Three Months Ended |
|
Three Months Ended |
||||||||||||||
(dollars in thousands, unaudited) |
|
Canada Direct
|
Canada POS
|
|
|
Canada Direct
|
Canada POS
|
||||||||||
Total revenue |
$ |
198,399 |
|
$ |
71,488 |
$ |
20,309 |
|
|
$ |
136,492 |
|
$ |
58,440 |
$ |
1,619 |
|
Provision for losses |
|
66,825 |
|
|
21,992 |
|
8,714 |
|
|
|
26,056 |
|
|
9,234 |
|
855 |
|
Net revenue |
|
131,574 |
|
|
49,496 |
|
11,595 |
|
|
|
110,436 |
|
|
49,206 |
|
764 |
|
Total operating expenses |
|
110,941 |
|
|
27,021 |
|
15,504 |
|
|
|
79,893 |
|
|
24,604 |
|
2,737 |
|
Non-recourse interest expense |
|
7,864 |
|
|
4,030 |
|
6,626 |
|
|
|
1,627 |
|
|
2,355 |
|
826 |
|
Recourse interest expense |
|
19,821 |
|
|
— |
|
— |
|
|
|
14,731 |
|
|
— |
|
— |
|
Income from equity method investment |
|
(1,584 |
) |
|
— |
|
— |
|
|
|
(546 |
) |
|
— |
|
— |
|
Segment operating (loss) income |
$ |
(5,468 |
) |
$ |
18,445 |
$ |
(10,535 |
) |
|
$ |
14,731 |
|
$ |
22,247 |
$ |
(2,799 |
) |
Table 6 - Summary of Adjusted Segment Operating (Loss) Income
|
Three Months Ended |
|
Three Months Ended |
||||||||||||||
(dollars in thousands, unaudited) |
|
Canada Direct
|
Canada POS
|
|
|
Canada Direct
|
Canada POS
|
||||||||||
Total revenue |
$ |
198,399 |
|
$ |
71,488 |
$ |
20,309 |
|
|
$ |
136,492 |
|
$ |
58,440 |
$ |
1,619 |
|
Provision for losses |
|
66,825 |
|
|
21,992 |
|
8,714 |
|
|
|
26,056 |
|
|
9,234 |
|
855 |
|
Net revenue |
|
131,574 |
|
|
49,496 |
|
11,595 |
|
|
|
110,436 |
|
|
49,206 |
|
764 |
|
Adjusted operating expense (1) |
|
106,356 |
|
|
26,819 |
|
15,005 |
|
|
|
74,296 |
|
|
24,563 |
|
2,737 |
|
Non-recourse interest expense |
|
7,864 |
|
|
4,030 |
|
6,626 |
|
|
|
1,627 |
|
|
2,355 |
|
826 |
|
Recourse interest expense |
|
19,821 |
|
|
— |
|
— |
|
|
|
14,731 |
|
|
— |
|
— |
|
Income from equity method investment |
|
(1,584 |
) |
|
— |
|
— |
|
|
|
(546 |
) |
|
— |
|
— |
|
Adjusted segment operating (loss) income (1) |
$ |
(883 |
) |
$ |
18,647 |
$ |
(10,036 |
) |
|
$ |
20,328 |
|
$ |
22,288 |
$ |
(2,799 |
) |
(1) These are non-GAAP metrics. For a description of each non-GAAP addback, see the applicable reconciliations and descriptions of each non-GAAP metric, see "Non-GAAP Financial Measures." |
Table 7 -
(in thousands, except percentages) |
|
Q1 2022 |
|
Q4 2021(1) |
Q3 2021 |
Q2 2021 |
Q1 2021 |
||||||||||
Gross combined loans receivable (2) |
|
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
$ |
49,077 |
|
|
$ |
52,532 |
|
$ |
51,196 |
|
$ |
47,277 |
|
$ |
43,387 |
|
Installment loans - Company Owned |
|
|
589,652 |
|
|
|
137,782 |
|
|
137,987 |
|
|
139,234 |
|
|
142,396 |
|
Total |
|
|
638,729 |
|
|
|
190,314 |
|
|
189,183 |
|
|
186,511 |
|
|
185,783 |
|
Installment loans - Guaranteed by the Company (3) |
|
|
44,420 |
|
|
|
46,317 |
|
|
43,422 |
|
|
37,093 |
|
|
32,439 |
|
Total |
|
$ |
683,149 |
|
|
$ |
236,631 |
|
$ |
232,605 |
|
$ |
223,604 |
|
$ |
218,222 |
|
|
|
|
|
|
|
|
|
||||||||||
Lending Revenue: |
|
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
$ |
26,913 |
|
|
$ |
27,911 |
|
$ |
27,377 |
|
$ |
24,091 |
|
$ |
26,923 |
|
Installment loans - Company Owned |
|
|
113,833 |
|
|
|
56,820 |
|
|
57,659 |
|
|
55,918 |
|
|
64,516 |
|
Installment loans - Guaranteed by the Company (3) |
|
|
48,991 |
|
|
|
47,348 |
|
|
43,377 |
|
|
34,908 |
|
|
41,425 |
|
Total |
|
$ |
189,737 |
|
|
$ |
132,079 |
|
$ |
128,413 |
|
$ |
114,917 |
|
$ |
132,864 |
|
|
|
|
|
|
|
|
|
||||||||||
Lending Provision: |
|
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
$ |
9,577 |
|
|
$ |
11,592 |
|
$ |
8,140 |
|
$ |
6,621 |
|
$ |
5,039 |
|
Installment loans - Company Owned |
|
|
32,962 |
|
|
|
18,618 |
|
|
16,792 |
|
|
14,048 |
|
|
11,159 |
|
Installment loans - Guaranteed by the Company (3) |
|
|
21,749 |
|
|
|
25,967 |
|
|
23,146 |
|
|
12,583 |
|
|
9,648 |
|
Total |
|
$ |
64,288 |
|
|
$ |
56,177 |
|
$ |
48,078 |
|
$ |
33,252 |
|
$ |
25,846 |
|
|
|
|
|
|
|
|
|
||||||||||
NCO rate (4) |
|
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
|
19.8 |
% |
|
|
22.1 |
% |
|
16.9 |
% |
|
16.0 |
% |
|
20.0 |
% |
Installment loans - Company Owned |
|
|
6.0 |
% |
|
|
14.3 |
% |
|
14.1 |
% |
|
13.2 |
% |
|
11.2 |
% |
Total |
|
|
7.1 |
% |
|
|
16.4 |
% |
|
14.8 |
% |
|
13.9 |
% |
|
13.3 |
% |
Installment loans - Guaranteed by the Company (3) |
|
|
47.4 |
% |
|
|
58.1 |
% |
|
53.2 |
% |
|
34.6 |
% |
|
31.7 |
% |
Total |
|
|
14.7 |
% |
|
|
24.4 |
% |
|
21.6 |
% |
|
17.2 |
% |
|
16.2 |
% |
|
|
|
|
|
|
|
|
||||||||||
ALL and CSO Liability for Losses rate (4) |
|
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
|
26.7 |
% |
|
|
25.9 |
% |
|
26.3 |
% |
|
28.9 |
% |
|
33.0 |
% |
Installment loans - Company Owned |
|
|
4.2 |
% |
|
|
12.7 |
% |
|
13.4 |
% |
|
15.3 |
% |
|
18.1 |
% |
Total |
|
|
5.9 |
% |
|
|
16.3 |
% |
|
16.9 |
% |
|
18.7 |
% |
|
21.6 |
% |
Installment loans - Guaranteed by the Company (3) |
|
|
16.1 |
% |
|
|
14.9 |
% |
|
16.1 |
% |
|
14.2 |
% |
|
14.6 |
% |
Total ALL and CSO Liability for Losses rate |
|
|
6.6 |
% |
|
|
16.0 |
% |
|
16.8 |
% |
|
18.0 |
% |
|
20.6 |
% |
|
|
|
|
|
|
|
|
||||||||||
Past-due rate (5) |
|
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
|
29.7 |
% |
|
|
30.5 |
% |
|
30.5 |
% |
|
26.6 |
% |
|
26.3 |
% |
Installment loans - Company Owned |
|
|
19.1 |
% |
|
|
19.4 |
% |
|
20.1 |
% |
|
18.7 |
% |
|
18.0 |
% |
Total |
|
|
19.9 |
% |
|
|
22.5 |
% |
|
22.9 |
% |
|
20.7 |
% |
|
19.9 |
% |
|
|
|
|
|
|
|
|
||||||||||
Installment loans - Guaranteed by the Company (3) |
|
|
18.5 |
% |
|
|
17.7 |
% |
|
19.8 |
% |
|
17.4 |
% |
|
12.8 |
% |
|
|
|
|
|
|
|
|
||||||||||
(1) On |
|||||||||||||||||
(2) Non-GAAP measure. For a description of each non-GAAP metric, see "Non-GAAP Financial Measures." |
|||||||||||||||||
(3) Includes loans originated by third-party lenders through CSO programs. Installment gross loans receivable Guaranteed by the Company are not included in the Consolidated Financial Statements. |
|||||||||||||||||
(4) We calculate NCO rate as total NCOs divided by Average gross loans receivables. |
|||||||||||||||||
(5) We calculate (i) ALL and CSO Liability for losses rate and (ii) past-due rate as the respective totals divided by gross loans receivable at each respective quarter end. |
Table 8 - Canada Direct Lending Portfolio Performance
(in thousands, except percentages) |
|
Q1 2022 |
Q4 2021 |
Q3 2021 |
Q2 2021 |
Q1 2021 |
||||||||||
Gross loans receivable |
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
$ |
424,485 |
|
$ |
402,405 |
|
$ |
366,509 |
|
$ |
337,700 |
|
$ |
319,307 |
|
Installment loans |
|
|
23,578 |
|
|
24,792 |
|
|
24,315 |
|
|
23,564 |
|
|
24,385 |
|
Total gross loans receivable |
|
$ |
448,063 |
|
$ |
427,197 |
|
$ |
390,824 |
|
$ |
361,264 |
|
$ |
343,692 |
|
|
|
|
|
|
|
|
||||||||||
Lending Revenue: |
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
$ |
45,455 |
|
$ |
43,943 |
|
$ |
40,239 |
|
$ |
37,450 |
|
$ |
34,368 |
|
Installment loans |
|
|
11,109 |
|
|
11,416 |
|
|
11,331 |
|
|
10,541 |
|
|
10,447 |
|
Total lending revenue |
|
$ |
56,564 |
|
$ |
55,359 |
|
$ |
51,570 |
|
$ |
47,991 |
|
$ |
44,815 |
|
|
|
|
|
|
|
|
||||||||||
Lending Provision: |
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
$ |
19,156 |
|
$ |
20,080 |
|
$ |
11,375 |
|
$ |
7,066 |
|
$ |
7,909 |
|
Installment loans |
|
|
2,723 |
|
|
2,945 |
|
|
2,512 |
|
|
1,438 |
|
|
1,234 |
|
Total lending provision |
|
$ |
21,879 |
|
$ |
23,025 |
|
$ |
13,887 |
|
$ |
8,504 |
|
$ |
9,143 |
|
|
|
|
|
|
|
|
||||||||||
NCO rate (1) |
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
|
5.2 |
% |
|
3.9 |
% |
|
2.8 |
% |
|
3.3 |
% |
|
3.6 |
% |
Installment loans |
|
|
10.9 |
% |
|
11.2 |
% |
|
10.2 |
% |
|
6.3 |
% |
|
6.5 |
% |
Total NCO rate |
|
|
5.5 |
% |
|
4.4 |
% |
|
3.3 |
% |
|
3.5 |
% |
|
3.8 |
% |
|
|
|
|
|
|
|
||||||||||
ALL rate (2) |
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
|
7.2 |
% |
|
8.0 |
% |
|
7.5 |
% |
|
7.9 |
% |
|
9.4 |
% |
Installment loans |
|
|
8.8 |
% |
|
8.0 |
% |
|
7.4 |
% |
|
7.5 |
% |
|
7.5 |
% |
Total ALL rate |
|
|
7.3 |
% |
|
8.0 |
% |
|
7.5 |
% |
|
7.9 |
% |
|
9.2 |
% |
|
|
|
|
|
|
|
||||||||||
Past-due rate (2) |
|
|
|
|
|
|
||||||||||
Revolving LOC |
|
|
8.0 |
% |
|
8.9 |
% |
|
6.8 |
% |
|
5.8 |
% |
|
6.4 |
% |
Installment loans |
|
|
2.0 |
% |
|
2.2 |
% |
|
2.0 |
% |
|
2.3 |
% |
|
2.1 |
% |
Total past-due rate |
|
|
7.7 |
% |
|
8.5 |
% |
|
6.5 |
% |
|
5.5 |
% |
|
6.1 |
% |
|
|
|
|
|
|
|
||||||||||
(1) We calculate NCO rate as total NCOs divided by Average gross loans receivables. |
||||||||||||||||
(2) We calculate ALL rate and past-due rate as the respective totals divided by gross loans receivable at each respective quarter end. |
Table 9 - Canada POS Lending Portfolio Performance
(in thousands, except percentages) |
|
Q1 2022 |
Q4 2021 |
Q3 2021 |
Q2 2021 |
Q1 2021 |
||||||||||
Revolving LOC |
|
|
|
|
|
|
||||||||||
Total gross loans receivable |
|
$ |
541,776 |
|
$ |
459,176 |
|
$ |
302,349 |
|
$ |
221,453 |
|
$ |
201,539 |
|
Total lending revenue |
|
$ |
18,655 |
|
$ |
13,704 |
|
$ |
10,646 |
|
$ |
6,495 |
|
$ |
1,383 |
|
Total lending provision |
|
$ |
8,714 |
|
$ |
12,511 |
|
$ |
8,285 |
|
$ |
2,986 |
|
$ |
855 |
|
NCO rate (1)(2) |
|
|
0.5 |
% |
|
0.5 |
% |
|
0.7 |
% |
|
0.7 |
% |
NM (3) |
||
ALL rate (4) |
|
|
5.1 |
% |
|
4.8 |
% |
|
3.8 |
% |
|
2.1 |
% |
|
0.3 |
% |
Past-due rate (4)(5) |
|
|
4.2 |
% |
|
4.1 |
% |
|
4.8 |
% |
|
5.4 |
% |
|
5.7 |
% |
|
|
|
|
|
|
|
||||||||||
(1) For the second, third and fourth quarters of 2021, NCOs presented above include |
||||||||||||||||
(2) We calculate NCO rate as total NCOs divided by Average gross loans receivables. |
||||||||||||||||
(3) Not material or not meaningful. |
||||||||||||||||
(4) We calculate ALL rate and past-due rate as the respective totals divided by gross loans receivable (excluding the fair value discount on acquired loans) at each respective quarter end. |
||||||||||||||||
(5) The past-due rate for Canada POS Lending for loans 31+ days past-due were |
Non-GAAP Financial Measures
In addition to the financial information prepared in conformity with
- Adjusted Net Income ("ANI") and Adjusted Earnings Per Share, or the Adjusted Earnings Measures (net income plus or minus certain legal and other costs, income or loss from equity method investment, goodwill and intangible asset impairments, transaction-related costs, restructuring costs, loss on extinguishment of debt, adjustments related to acquisition accounting, share-based compensation, intangible asset amortization, certain tax adjustments and impacts from tax law changes and cumulative tax effect of applicable adjustments, on a total and per share basis);
- EBITDA (earnings before interest, income taxes, depreciation and amortization);
- Adjusted EBITDA (EBITDA plus or minus certain non-cash and other adjusting items); and
- Gross Combined Loans Receivable (includes loans originated by third-party lenders through CSO programs which are not included in the Consolidated Financial Statements).
We believe that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of the Company's operations. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of the business that, when viewed with the Company's
We believe that investors regularly rely on non-GAAP financial measures, to assess operating performance and that such measures may highlight trends in the business that may not otherwise be apparent when relying on financial measures calculated in accordance with
In addition to reporting loans receivable information in accordance with
We provide non-GAAP financial information for informational purposes and to enhance understanding of the
Description and Reconciliations of Non-GAAP Financial Measures
Non-GAAP financial measures have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our income or cash flows as reported under
- they do not include cash expenditures or future requirements for capital expenditures or contractual commitments;
- they do not include changes in, or cash requirements for, working capital needs;
- they do not include the interest expense, or the cash requirements necessary to service interest or principal payments on debt;
- depreciation and amortization are non-cash expense items reported in the statements of cash flows; and
- other companies in our industry may calculate these measures differently, limiting their usefulness as comparative measures.
We calculate Adjusted Earnings per Share utilizing diluted shares outstanding at year-end. If we record a loss under
As noted above, Gross Combined Loans Receivable includes loans originated by third-party lenders through CSO programs which are not included in the consolidated financial statements but from which we earn revenue and for which we provide a guarantee to the lender. Management believes this analysis provides investors with important information needed to evaluate overall lending performance.
We believe investors use the non-GAAP measures we present to analyze operating performance and to evaluate our ability to incur and service debt and the capacity for making capital expenditures. Adjusted EBITDA is also useful to investors to help assess our estimated enterprise value.
Table 10 - Reconciliation of Net Income and Diluted Earnings per Share to Adjusted Net Income and Adjusted Diluted Earnings per Share, non-GAAP measures
(in thousands, except per share data, unaudited) |
|
Three Months Ended
|
||||||||||
|
2022 |
2021 |
Change $ |
Change % |
||||||||
Net income |
|
$ |
1,336 |
|
$ |
25,735 |
|
$ |
(24,399 |
) |
(94.8 |
) % |
Adjustments: |
|
|
|
|
|
|||||||
Restructuring costs (1) |
|
|
1,069 |
|
|
— |
|
|
|
|||
Legal and other costs (2) |
|
|
87 |
|
|
— |
|
|
|
|||
Income from equity method investment (3) |
|
|
(1,584 |
) |
|
(546 |
) |
|
|
|||
Transaction costs (4) |
|
|
168 |
|
|
3,160 |
|
|
|
|||
Acquisition-related adjustments (5) |
|
|
221 |
|
|
— |
|
|
|
|||
Change in fair value of contingent consideration (6) |
|
|
(264 |
) |
|
— |
|
|
|
|||
Share-based compensation (7) |
|
|
4,093 |
|
|
2,683 |
|
|
|
|||
Intangible asset amortization (8) |
|
|
2,977 |
|
|
831 |
|
|
|
|||
Cumulative tax effect of adjustments (9) |
|
|
(1,828 |
) |
|
(1,735 |
) |
|
|
|||
Adjusted Net Income |
|
$ |
6,275 |
|
$ |
30,128 |
|
$ |
(23,853 |
) |
(79.2 |
) % |
|
|
|
|
|
|
|||||||
Net income |
|
$ |
1,336 |
|
$ |
25,735 |
|
|
|
|||
Diluted Weighted Average Shares Outstanding |
|
|
41,308 |
|
|
43,596 |
|
|
|
|||
Adjusted Diluted Average Shares Outstanding |
|
|
41,308 |
|
|
43,596 |
|
|
|
|||
Diluted Earnings per Share |
|
$ |
0.03 |
|
$ |
0.59 |
|
$ |
(0.56 |
) |
(94.9 |
) % |
Per Share impact of adjustments to Net income |
|
|
0.12 |
|
|
0.10 |
|
|
|
|||
Adjusted Diluted Earnings per Share |
|
$ |
0.15 |
|
$ |
0.69 |
|
$ |
(0.54 |
) |
(78.3 |
) % |
Note: Footnotes follow Reconciliation of Net income table on the next page |
Table 11 - Reconciliation of Net Income to EBITDA and Adjusted EBITDA, Non-GAAP Measures
|
|
Three Months Ended
|
||||||||||
(in thousands, unaudited) |
|
2022 |
2021 |
Change $ |
Change % |
|||||||
Net income |
|
$ |
1,336 |
|
$ |
25,735 |
|
$ |
(24,399 |
) |
(94.8 |
) % |
Provision for income taxes |
|
|
1,106 |
|
|
8,444 |
|
|
(7,338 |
) |
(86.9 |
) % |
Interest expense |
|
|
38,341 |
|
|
19,539 |
|
|
18,802 |
|
96.2 |
% |
Depreciation and amortization |
|
|
9,814 |
|
|
4,965 |
|
|
4,849 |
|
97.7 |
% |
EBITDA |
|
|
50,597 |
|
|
58,683 |
|
|
(8,086 |
) |
(13.8 |
) % |
Restructuring costs (1) |
|
|
1,069 |
|
|
— |
|
|
|
|||
Legal and other costs (2) |
|
|
87 |
|
|
— |
|
|
|
|||
Income from equity method investment (3) |
|
|
(1,584 |
) |
|
(546 |
) |
|
|
|||
Transaction costs (4) |
|
|
168 |
|
|
3,160 |
|
|
|
|||
Acquisition-related adjustments (5) |
|
|
221 |
|
|
— |
|
|
|
|||
Change in fair value of contingent consideration (6) |
|
|
(264 |
) |
|
— |
|
|
|
|||
Share-based compensation (7) |
|
|
4,093 |
|
|
2,683 |
|
|
|
|||
Other adjustments (10) |
|
|
(88 |
) |
|
(205 |
) |
|
|
|||
Adjusted EBITDA |
|
$ |
54,299 |
|
$ |
63,775 |
|
$ |
(9,476 |
) |
(14.9 |
) % |
Adjusted EBITDA Margin |
|
|
18.7 |
% |
|
32.4 |
% |
|
|
|||
# - Change greater than |
Table 12 - Reconciliation of Total Operating Expense to Adjusted Operating Expense
|
Three Months Ended |
|
Three Months Ended |
|||||||||||||
(dollars in thousands, unaudited) |
|
Canada Direct
|
Canada POS
|
|
|
Canada Direct
|
Canada POS
|
|||||||||
Total operating expense |
$ |
110,941 |
|
$ |
27,021 |
$ |
15,504 |
|
|
$ |
79,893 |
|
$ |
24,604 |
$ |
2,737 |
Less: |
|
|
|
|
|
|
|
|||||||||
Restructuring costs (1) |
|
1,069 |
|
|
— |
|
— |
|
|
|
— |
|
|
— |
|
— |
Legal and other costs (2) |
|
87 |
|
|
— |
|
— |
|
|
|
— |
|
|
— |
|
— |
Transaction costs (4) |
|
168 |
|
|
— |
|
— |
|
|
|
3,160 |
|
|
— |
|
— |
Acquisition-related adjustments (5) |
|
3 |
|
|
— |
|
218 |
|
|
|
— |
|
|
— |
|
— |
Change in fair value of contingent consideration (6) |
|
— |
|
|
— |
|
(264 |
) |
|
|
— |
|
|
— |
|
— |
Share-based compensation (7) |
|
3,503 |
|
|
115 |
|
475 |
|
|
|
2,683 |
|
|
— |
|
— |
Other adjustments (10) |
|
(245 |
) |
|
87 |
|
70 |
|
|
|
(246 |
) |
|
41 |
|
— |
Adjusted operating expense |
$ |
106,356 |
|
$ |
26,819 |
$ |
15,005 |
|
|
$ |
74,296 |
|
$ |
24,563 |
$ |
2,737 |
(1) |
Restructuring costs for the three months ended |
(2) |
Legal and other costs for the three months ended
|
(3) |
The amount reported is our share of Katapult's |
(4) |
Transaction costs for the three months ended
Transaction costs for the three months ended |
(5) |
During the three months ended |
(6) |
In connection with our acquisition of Flexiti, we recorded a |
(7) |
The estimated fair value of share-based awards was recognized as non-cash compensation expense on a straight-line basis over the vesting period. |
(8) |
Intangible asset amortization in determining ANI for the three months ended |
(9) |
Cumulative tax effect of adjustments included in Reconciliation of Net income to Adjusted Net Income table is calculated using the estimated incremental tax rate by country. |
(10) |
Other adjustments primarily reflect the intercompany foreign-currency exchange impact. |
Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements include projections, estimates and assumptions about our business results and growth trends and our ability to create value; our ability to accelerate our transition into longer-term, higher-balance and lower-rate credit products; our belief that recent acquisitions will solidify our position as a full spectrum non-prime and prime consumer lender in the
All product names, logos, brands, trademarks and registered trademarks are property of their respective owners.
About CURO
Conference Call
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You may access the call at 1-833-953-2430 (1-412-317-5759 for international callers). Please ask to join the
Final Results
The financial results presented and discussed herein are on a preliminary and unaudited basis; final unaudited data will be included in the Company’s Quarterly Report on Form 10-Q for the three months ended
(CURO-NWS)
View source version on businesswire.com: https://www.businesswire.com/news/home/20220502005594/en/
Investor Relations:
Executive Vice President and Chief Financial Officer
Phone: 844-200-0342
Email: IR@curo.com
Or
Curo@finprofiles.com
Source:
FAQ
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