CURO Group Holdings Corp. Reports First Quarter 2023 Financial Results

CURO Group Holdings Corp. (NYSE: CURO) (“CURO” or the “Company”), a tech-enabled, omni-channel consumer finance company serving consumers in the U.S. and Canada, today announced financial results for its first quarter ended March 31, 2023.

Highlights

  • Net revenue increased 19.8% sequentially to $146.5 million
  • Operating expenses declined 6.2% sequentially to $118.2 million, and $35.5 million and 23.1% year over year
  • Gross loans receivables of $2.1 billion were slightly lower by 1.2% sequentially
  • Net charge-off rate improved 326 bps sequentially to 11.5%, and 30 bps sequentially to 14.5% excluding the changes in the Direct Lending brands in Canada charge-off policies
  • On May 9, 2023, finalized a $150.0 million term loan and a C$110.0 million non-recourse revolving warehouse facility

“Our first quarter results highlight the emerging benefits of our business transformation and differentiated operating model,” said Doug Clark, Chief Executive Officer of CURO. “Subsequent to the quarter, we successfully raised over $230 million in gross capital, a key step to executing our plan to profitability and demonstrates continued access to capital markets and supportive lending partners. We also delivered results that were favorable relative to our guidance expectations, including solid revenue, well-managed operating expenses and stable credit quality. With a close eye on the various challenges presented by the macro environment, we will continue to execute on our business plan, support our customers and remain focused on generating long-term sustainable returns for our investors.”

Consolidated Summary Results

For the three months ended March 31, 2023, the Company had total revenue of $209.5 million compared with total revenue of $217.2 million sequentially, primarily driven by product mix shift. Net revenue was $146.5 million, an increase of $24.2 million, or 19.8% sequentially, primarily driven by a lower provision for loan loss expense related to the decrease in the net charge-off rate.

For the three months ended March 31, 2023, the Company had total operating expenses of $118.2 million, a decrease of $7.8 million, or 6.2%, sequentially. The decline reflected lower restructuring charges and operating expenses, in both cases related to store closures and headcount reductions in the U.S. and Canada. One-time restructuring charges recognized in the first quarter of 2023 and the fourth quarter of 2022 were $10.0 million and $13.1 million, respectively, representing $3.1 million of the sequential decrease.

Net loss of $59.5 million ($1.46 per share) for the three months ended March 31, 2023, compared with Net loss of $186.4 million ($4.60 per share) for the three months ended December 31, 2022. The $126.9 million improvement in Net loss in the first quarter of 2023 compared to the prior quarter was driven by a $24.2 million increase in net revenue quarter over quarter due to product mix shift, the decline in Provision for loan loss, a $7.8 million decrease in total Operating expenses related to store closures and restructuring activities completed in the fourth quarter of 2022 and the $145.2 million Goodwill impairment charge in the fourth quarter of 2022, with no such charge in the first quarter of 2023, partially offset by a $29.0 million Provision for income taxes to create a valuation allowance on U.S. deferred tax assets, and a $4.0 million increase in Interest expense.

Gross loans receivable of $2.1 billion at March 31, 2023 were slightly lower by 1.2% sequentially, primarily driven by a decrease of $55.2 million, or 6.9%, in Direct Lending Installment Loans, partially offset by an increase of $19.8 million, or 2.4%, in Canada POS Lending.

As of January 1, 2023, the Company adopted Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("CECL"). This adoption resulted in a onetime pre-tax increase to our Allowance for loan losses of $135.2 million, which was recorded to opening Accumulated deficit and did not impact the Statement of Operations.

The Company's Net charge-off rate in the first quarter improved 326 bps, sequentially, to 11.5%, primarily driven by a change in our Direct Lending brands in Canada charge-off policies during the quarter, as part of the alignment of charge-off policies across the Company, as well as improved recoveries as a result of improvements to our credit collection processes. The Company's 91+ days delinquency ratio increased by 60 bps, sequentially, to 3.2% primarily driven by these policy changes.

 

As of or for the Quarter Ended

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

Delinquency and Loss Ratios

2023

 

2022

 

2022

 

2022

 

2022

31-60 days delinquency ratio

1.8

%

1.9

%

2.5

%

2.4

%

2.1

%

61-90 days delinquency ratio

1.5

%

1.3

%

1.5

%

1.8

%

1.9

%

91+ days delinquency ratio

3.2

%

2.6

%

2.6

%

2.0

%

2.2

%

Net charge-offs

11.5

%

14.8

%

13.2

%

24.0

%

23.2

%

Funding and Liquidity

As of March 31, 2023, principal debt balances outstanding of $2.7 billion, which consisted of 65.5% of fixed rate or hedged variable rate debt and 34.5% of variable rate debt. We had $54.9 million of Cash and cash equivalents on the Consolidated Balance Sheet and available for general corporate purposes.

As of March 31, 2023, unrestricted cash and cash equivalents, together with $109.9 million in unused borrowing capacity and $140.1 million of unencumbered Gross loans receivable, provided approximately $303.6 million in available capital resources.

About CURO

CURO Group Holdings Corp. (NYSE: CURO) is a leading consumer credit lender serving U.S. and Canadian customers for over 25 years. Our roots in the consumer finance market run deep. We’ve worked diligently to provide customers a variety of convenient, easily accessible financial services. Our decades of diversified data power a hard-to-replicate underwriting and scoring engine, mitigating risk across the full spectrum of credit products. We operate a number of brands including Cash Money®, LendDirect®, Flexiti®, Heights Finance, Southern Finance, Covington Credit, Quick Credit and First Heritage Credit.

Conference Call

CURO will host a conference call to discuss these results at 8:30 a.m. Eastern Time on Wednesday, May 10, 2023. The live webcast of the call can be accessed at the CURO Investor Relations website at http://ir.curo.com/.

You may access the call at 1-833-953-2430 (1-412-317-5759 for international callers). Please ask to join the CURO Group Holdings call. A replay of the conference call will be available until May 17, 2023, at 5:00 p.m. Eastern Time. An archived version of the webcast will be available on the CURO Investors website for 90 days. You may access the conference call replay at 1-877-344-7529 (1-412-317-0088 for international callers). The replay access code is 1314764.

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 March 31, 2023.

Table 1 - Consolidated Statements of Operations

 

 

Three Months Ended,

 

Mar 31,

 

Dec 31,

 

Sept 30,

 

Jun 30,

 

Mar 31,

(in thousands, unaudited)

 

2023

 

2022

 

2022

 

2022

 

2022

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

Interest and fees revenue

 

$

179,437

 

$

181,605

 

$

180,515

 

$

278,331

 

$

264,956

 

Insurance and other income

 

 

30,036

 

 

35,593

 

 

33,605

 

 

26,073

 

 

25,240

 

Total revenue

 

 

209,473

 

 

217,198

 

 

214,120

 

 

304,404

 

 

290,196

 

Provision for losses

 

 

62,932

 

 

94,849

 

 

78,399

 

 

129,546

 

 

97,531

 

Net revenue

 

 

146,541

 

 

122,349

 

 

135,721

 

 

174,858

 

 

192,665

 

Operating Expenses

 

 

 

 

 

 

Salaries and benefits

 

 

64,805

 

 

66,067

 

 

53,413

 

 

82,427

 

 

79,729

 

Occupancy

 

 

11,672

 

 

12,114

 

 

12,827

 

 

17,507

 

 

17,037

 

Advertising

 

 

2,175

 

 

3,692

 

 

5,244

 

 

12,707

 

 

10,500

 

Direct operations

 

 

13,092

 

 

11,832

 

 

11,729

 

 

20,293

 

 

20,274

 

Depreciation and amortization

 

 

9,021

 

 

8,337

 

 

9,499

 

 

8,672

 

 

9,814

 

Other operating expense

 

 

17,433

 

 

24,002

 

 

23,645

 

 

18,787

 

 

16,377

 

Total operating expenses

 

 

118,198

 

 

126,044

 

 

116,357

 

 

160,393

 

 

153,731

 

Other expense (income)

 

 

 

 

 

 

Interest expense

 

 

58,943

 

 

54,978

 

 

50,149

 

 

42,193

 

 

38,341

 

Loss (income) from equity method investment

 

 

3,413

 

 

1,932

 

 

2,309

 

 

1,328

 

 

(1,584

)

Goodwill impairment

 

 

 

 

145,241

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

 

 

689

 

 

3,702

 

 

 

 

 

Loss (gain) on change in fair value of contingent consideration

 

 

2,728

 

 

 

 

(11,354

)

 

4,014

 

 

(265

)

Gain on sale of business

 

 

2,027

 

 

 

 

(68,443

)

 

 

 

 

Total other expense

 

 

67,111

 

 

202,840

 

 

(23,637

)

 

47,535

 

 

36,492

 

(Loss) income before income taxes

 

 

(38,768

)

 

(206,535

)

 

43,001

 

 

(33,070

)

 

2,442

 

Provision (benefit) for income taxes

 

 

20,703

 

 

(20,142

)

 

17,348

 

 

(6,990

)

 

1,106

 

Net (loss) income

 

$

(59,471

)

$

(186,393

)

$

25,653

 

$

(26,080

)

$

1,336

 

 

 

 

 

 

 

 

Basic (loss) earnings per share

 

$

(1.46

)

$

(4.60

)

$

0.63

 

$

(0.65

)

$

0.03

 

Diluted (loss) earnings per share

 

$

(1.46

)

$

(4.60

)

$

0.63

 

$

(0.65

)

$

0.03

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

Basic

 

 

40,783

 

 

40,488

 

 

40,479

 

 

40,376

 

 

40,368

 

Diluted

 

 

40,783

 

 

40,488

 

 

40,835

 

 

40,376

 

 

41,308

 

Table 2 - Consolidated Balance Sheets

 

 

As of

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(in thousands, unaudited)

2023

 

2022

 

2022

 

2022

 

2022

ASSETS

Cash and cash equivalents

$

54,935

 

$

73,932

 

$

45,683

 

$

37,394

 

$

60,209

 

Restricted cash

 

123,282

 

 

91,745

 

 

144,020

 

 

97,465

 

 

110,118

 

Gross loans receivable

 

2,062,829

 

 

2,087,833

 

 

1,894,427

 

 

1,592,815

 

 

1,628,568

 

Less: Allowance for loan losses

 

(259,959

)

 

(122,028

)

 

(102,743

)

 

(90,286

)

 

(98,168

)

Loans receivable, net

 

1,802,870

 

 

1,965,805

 

 

1,791,684

 

 

1,502,529

 

 

1,530,400

 

Income taxes receivable

 

20,100

 

 

21,918

 

 

13,469

 

 

46,450

 

 

28,664

 

Prepaid expenses and other

 

47,295

 

 

53,057

 

 

65,167

 

 

25,370

 

 

40,112

 

Property and equipment, net

 

29,867

 

 

31,957

 

 

37,402

 

 

38,752

 

 

54,865

 

Investment in Katapult

 

20,502

 

 

23,915

 

 

25,848

 

 

28,157

 

 

29,484

 

Right of use asset - operating leases

 

54,597

 

 

61,197

 

 

64,683

 

 

64,602

 

 

114,305

 

Deferred tax assets

 

53,474

 

 

49,893

 

 

31,986

 

 

23,993

 

 

20,066

 

Goodwill

 

276,487

 

 

276,269

 

 

424,292

 

 

352,990

 

 

430,967

 

Intangibles, net

 

127,387

 

 

123,677

 

 

120,345

 

 

113,130

 

 

113,640

 

Other assets

 

10,991

 

 

15,828

 

 

12,774

 

 

8,558

 

 

9,535

 

Assets held for sale (1)

 

 

 

 

 

 

 

338,779

 

 

 

Total Assets

$

2,621,787

 

$

2,789,193

 

$

2,777,353

 

$

2,678,169

 

$

2,542,365

 

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

 

 

 

 

 

Accounts payable and accrued liabilities

$

85,875

 

$

73,827

 

$

66,723

 

$

81,423

 

$

84,783

 

Deferred revenue

 

33,227

 

 

32,259

 

 

25,111

 

 

23,425

 

 

24,265

 

Lease liability - operating leases

 

55,468

 

 

62,847

 

 

66,370

 

 

67,339

 

 

120,593

 

Contingent consideration related to acquisition

 

18,128

 

 

16,884

 

 

15,770

 

 

30,354

 

 

26,687

 

Income taxes payable

 

 

 

 

 

 

 

4

 

 

 

Accrued interest

 

20,090

 

 

38,460

 

 

18,048

 

 

34,970

 

 

16,481

 

Liability for losses on CSO lender-owned consumer loans

 

 

 

 

 

 

 

 

 

7,166

 

Debt

 

2,627,263

 

 

2,607,314

 

 

2,449,316

 

 

2,189,431

 

 

2,090,085

 

Other long-term liabilities

 

10,552

 

 

11,736

 

 

11,563

 

 

12,146

 

 

13,679

 

Deferred tax liabilities

 

 

 

 

 

 

 

12,360

 

 

5,839

 

Liabilities held for sale (1)

 

 

 

 

 

 

 

111,137

 

 

 

Total Liabilities

$

2,850,603

 

$

2,843,327

 

$

2,652,901

 

$

2,562,589

 

$

2,389,578

 

Total Stockholders' (Deficit) Equity

 

(228,816

)

 

(54,134

)

 

124,452

 

 

115,580

 

 

152,787

 

Total Liabilities and Stockholders' (Deficit) Equity

$

2,621,787

 

$

2,789,193

 

$

2,777,353

 

$

2,678,169

 

$

2,542,365

 

 

 

 

 

 

 

(1) Assets held for sale and Liabilities held for sale represent the balance, as of June 30, 2022, for assets and liabilities, respectively, associated with the sale of the Legacy U.S. Direct Lending Business. The sale of the Legacy U.S. Direct Lending business closed in July 2022.

Table 3 - Consolidated Portfolio Performance

 

(in thousands, except percentages, unaudited)

 

Q1 2023

Q4 2022

Q3 2022

Q2 2022(1)

Q1 2022

Gross loans receivable (5)

 

 

 

 

 

 

Revolving LOC

 

$

1,314,695

 

$

1,284,515

 

$

1,129,387

 

$

1,128,372

 

$

1,015,338

 

Installment loans

 

 

748,134

 

 

803,318

 

 

765,040

 

 

652,468

 

 

613,230

 

Total gross loans receivable

 

$

2,062,829

 

$

2,087,833

 

$

1,894,427

 

$

1,780,840

 

$

1,628,568

 

 

 

 

 

 

 

 

Lending Revenue

 

 

 

 

 

 

Revolving LOC

 

$

84,225

 

$

81,170

 

$

77,037

 

$

96,582

 

$

91,023

 

Installment loans

 

 

95,212

 

 

100,435

 

 

103,478

 

 

181,749

 

 

173,933

 

Total lending revenue

 

$

179,437

 

$

181,605

 

$

180,515

 

$

278,331

 

$

264,956

 

 

 

 

 

 

 

 

Lending Provision

 

 

 

 

 

 

Revolving LOC

 

$

30,106

 

$

46,745

 

$

41,787

 

$

40,435

 

$

37,447

 

Installment loans

 

 

31,139

 

 

46,442

 

 

33,510

 

 

86,484

 

 

57,435

 

Total lending provision

 

$

61,245

 

$

93,187

 

$

75,297

 

$

126,919

 

$

94,882

 

 

 

 

 

 

 

 

NCOs (2) (6)

 

 

 

 

 

 

Revolving LOC

 

$

17,953

 

$

35,387

 

$

30,907

 

$

33,945

 

$

34,372

 

Installment loans (5)

 

 

41,078

 

 

38,168

 

 

31,372

 

 

71,056

 

 

60,386

 

Total NCOs

 

$

59,031

 

$

73,555

 

$

62,279

 

$

105,001

 

$

94,758

 

 

 

 

 

 

 

 

NCO rate (annualized) (2) (3) (5)

 

 

 

 

 

 

Revolving LOC

 

 

5.6

%

 

11.6

%

 

10.8

%

 

12.8

%

 

14.4

%

Installment loans

 

 

21.5

%

 

19.6

%

 

17.6

%

 

44.8

%

 

38.8

%

Total NCO rate

 

 

11.5

%

 

14.8

%

 

13.2

%

 

24.0

%

 

23.2

%

 

 

 

 

 

 

 

ACL rate (4) (5) (6)

 

 

 

 

 

 

Revolving LOC

 

 

13.3

%

 

6.1

%

 

6.0

%

 

6.7

%

 

7.0

%

Installment loans

 

 

11.3

%

 

5.4

%

 

4.6

%

 

8.1

%

 

5.5

%

Total ACL rate

 

 

12.6

%

 

5.8

%

 

5.4

%

 

6.7

%

 

6.0

%

 

 

 

 

 

 

 

31+ days past-due rate (4) (5)

 

 

 

 

 

 

Revolving LOC

 

 

5.5

%

 

3.3

%

 

4.1

%

 

4.1

%

 

3.7

%

Installment loans

 

 

8.2

%

 

9.6

%

 

10.2

%

 

9.2

%

 

9.0

%

Total past-due rate

 

 

6.5

%

 

5.8

%

 

6.6

%

 

6.1

%

 

5.8

%

 

 

 

 

 

 

 

(1) Includes loan balances and activity classified as Held for Sale.

(2) NCOs presented above include $0.0 million, $0.0 million, $0.5 million, $10.3 million, and $5.0 million for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, respectively, related to the purchase accounting fair value discount, which are excluded from provision.

(3) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable; then we annualize the rate. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications and the periodic sale of charged off loans.

(4) We calculate (i) Allowance for credit losses ("ACL") rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each respective quarter end.

(5) All balances in connection with the CSO program were disposed of on July 8, 2022 upon the completion of the divestiture of the Legacy U.S. Direct Lending business, as such these balances have been excluded from this amount.

(6) We adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments on January 1, 2023, which requires us to estimate the lifetime expected credit loss on financial instruments. Our previous model required the recognition of credit losses when it was probable that a loss had been incurred.

Table 4 - Direct Lending Segment - Operating (Loss)/Income

 

 

Three Months Ended,

 

Mar 31,

 

Dec 31,

 

Sep 30,

 

Jun 30,

 

Mar 31,

(in thousands, unaudited)

 

2023

 

2022

 

2022

 

2022

 

2022

 

 

 

 

 

 

 

Total revenue

 

$

169,368

$

181,925

 

$

186,409

$

281,251

$

269,887

Provision for losses

 

 

48,364

 

 

77,724

 

 

65,020

 

 

123,584

 

 

88,817

 

Net revenue

 

 

121,004

 

 

104,201

 

 

121,389

 

 

157,667

 

 

181,070

 

Total operating expenses

 

 

103,151

 

 

111,632

 

 

102,840

 

 

143,965

 

 

137,963

 

Segment operating (loss) income

 

$

17,853

 

$

(7,431

)

$

18,549

 

$

13,702

 

$

43,107

 

 

 

 

 

 

 

 

Table 5 - Direct Lending Segment - Portfolio Performance

 

(in thousands, except percentages, unaudited)

 

Q1 2023

Q4 2022

Q3 2022

Q2 2022(1)

Q1 2022

Gross loans receivable (5)

 

 

 

 

 

 

Revolving LOC

 

$

461,443

 

$

451,077

 

$

439,117

 

$

501,209

 

$

473,562

 

Installment loans

 

 

748,133

 

 

803,318

 

 

765,041

 

 

652,467

 

 

613,231

 

Total gross loans receivable

 

$

1,209,576

 

$

1,254,395

 

$

1,204,158

 

$

1,153,676

 

$

1,086,793

 

 

 

 

 

 

 

 

Lending Revenue

 

 

 

 

 

 

Revolving LOC

 

$

49,092

 

$

49,915

 

$

52,461

 

$

75,736

 

$

72,368

 

Installment loans

 

 

95,212

 

 

100,435

 

 

103,478

 

 

181,747

 

 

173,934

 

Total lending revenue

 

$

144,304

 

$

150,350

 

$

155,939

 

$

257,483

 

$

246,302

 

 

 

 

 

 

 

 

Lending Provision

 

 

 

 

 

 

Revolving LOC

 

$

15,539

 

$

29,620

 

$

28,408

 

$

34,472

 

$

28,734

 

Installment loans

 

 

31,139

 

 

46,442

 

 

33,511

 

 

86,485

 

 

57,435

 

Total lending provision

 

$

46,678

 

$

76,062

 

$

61,919

 

$

120,957

 

$

86,169

 

 

 

 

 

 

 

 

NCOs (2) (5)

 

 

 

 

 

 

Revolving LOC

 

$

6,234

 

$

26,715

 

$

24,793

 

$

30,408

 

$

31,645

 

Installment loans

 

 

41,078

 

 

38,168

 

 

29,783

 

 

43,661

 

 

38,894

 

Total NCOs

 

$

47,312

 

$

64,883

 

$

54,576

 

$

74,069

 

$

70,539

 

 

 

 

 

 

 

 

NCO rate (annualized) (2) (3) (5)

 

 

 

 

 

 

Revolving LOC

 

 

5.5

%

 

23.8

%

 

20.9

%

 

25.0

%

 

27.6

%

Installment loans

 

 

21.5

%

 

19.3

%

 

16.7

%

 

27.7

%

 

25.3

%

Total NCO rate

 

 

15.6

%

 

20.9

%

 

18.4

%

 

26.5

%

 

26.3

%

 

 

 

 

 

 

 

ACL rate (4) (5) (6)

 

 

 

 

 

 

Revolving LOC

 

 

25.6

%

 

8.4

%

 

7.9

%

 

9.3

%

 

9.2

%

Installment loans

 

 

11.3

%

 

5.4

%

 

4.6

%

 

6.9

%

 

4.4

%

Total ACL rate

 

 

16.8

%

 

6.5

%

 

5.8

%

 

7.9

%

 

6.5

%

 

 

 

 

 

 

 

31+ days past-due rate (4) (5)

 

 

 

 

 

 

Revolving LOC

 

 

8.4

%

 

4.1

%

 

5.1

%

 

5.8

%

 

5.8

%

Installment loans

 

 

8.2

%

 

9.6

%

 

10.2

%

 

9.7

%

 

9.3

%

Total past-due rate

 

 

8.3

%

 

7.6

%

 

8.3

%

 

8.0

%

 

7.8

%

 

 

 

 

 

 

 

(1) Includes loan balances and activity classified as Held for Sale.

(2) NCOs presented above include $0.0 million, $0.0 million, $0.5 million, $10.3 million and $5.0 million for the three months ended March 31, 2023, December 31, 2022, September 30, 2022, June 30, 2022 and March 31, 2022, respectively, related to the purchase accounting fair value discount, which are excluded from provision.

(3) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable, then we annualize the rate. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications and the periodic sale of charged off loans.

(4) We calculate (i) ACL rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each respective quarter end.

(5) All balances in connection with the CSO program were disposed of on July 8, 2022 upon the completion of the divestiture of the Legacy U.S. Direct Lending Business, as such these balances have been excluded from this amount.

(6) We adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments on January 1, 2023, which requires us to estimate the lifetime expected credit loss on financial instruments. Our previous model required the recognition of credit losses when it was probable that a loss had been incurred.

Table 6 - Canada POS Lending Segment - Operating Income/(Loss)

 

 

Three Months Ended,

 

Mar 31,

 

Dec 31,

 

Sept 30,

 

Jun 30,

 

Mar 31,

(in thousands, unaudited)

 

2023

 

2022

 

2022

 

2022

 

2022

 

 

 

 

 

 

 

Total revenue

 

$

40,105

$

35,273

$

27,710

$

23,154

$

20,309

 

Provision for losses

 

 

14,568

 

 

17,125

 

 

13,378

 

 

5,963

 

 

8,714

 

Net revenue

 

 

25,537

 

 

18,148

 

 

14,332

 

 

17,191

 

 

11,595

 

Total operating expenses

 

 

15,047

 

 

14,412

 

 

13,519

 

 

16,427

 

 

15,768

 

Segment operating income (loss)

 

$

10,490

 

$

3,736

 

$

813

 

$

764

 

$

(4,173

)

 

 

 

 

 

 

 

Table 7 - Canada POS Lending Segment - Portfolio Performance

 

(in thousands, except percentages, unaudited)

 

Q1 2023

Q4 2022

Q3 2022

Q2 2022

Q1 2022

Revolving LOC

 

 

 

 

 

 

Gross loans receivable

 

$

853,253

 

$

833,438

 

$

690,270

 

$

627,163

 

$

541,776

 

Lending revenue

 

$

35,133

 

$

31,255

 

$

24,575

 

$

20,846

 

$

18,655

 

Lending provision

 

$

14,568

 

$

17,125

 

$

13,379

 

$

5,963

 

$

8,714

 

NCOs

 

$

11,719

 

$

8,672

 

$

6,114

 

$

3,537

 

$

2,727

 

NCO rate (annualized) (1)

 

 

5.6

%

 

4.4

%

 

3.6

%

 

2.4

%

 

2.0

%

ACL rate (2) (3)

 

 

6.7

%

 

4.9

%

 

4.8

%

 

4.5

%

 

5.1

%

31+ days past-due rate (2)

 

 

3.9

%

 

2.9

%

 

3.6

%

 

2.8

%

 

1.8

%

(1) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable then we annualized the rate. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications and the periodic sale of charged off loans.

(2) We calculate (i) ACL rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each respective quarter end.

(3) We adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments on January 1, 2023, which requires us to estimate the lifetime expected credit loss on financial instruments. Our previous model required the recognition of credit losses when it was probable that a loss had been incurred.

Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements include projections, estimates and assumptions about various matters, such as future financial and operational performance, including our belief in the benefits of our business transformation and differentiated operating model, our ability to execute on our plan to profitability and demonstrate continued access to capital markets and our ability to execute on our business plan, support our customers and remain focused on generating long-term sustainable returns for our investors. In addition, words such as “guidance,” “estimate,” “anticipate,” “believe,” “forecast,” “step,” “plan,” “predict,” “focused,” “project,” “is likely,” “expect,” "anticipate," “intend,” “should,” “will,” “confident,” variations of such words and similar expressions are intended to identify forward-looking statements. Our ability to achieve these forward-looking statements is based on certain assumptions, judgments and other factors, both within and outside of our control, that could cause actual results to differ materially from those in the forward-looking statements, including: risks relating to the uncertainty of projected financial and operational information and forecasts, including errors in our internal forecasts; our ability to manage growth; our dependence on third-party lenders to provide the cash we need to fund our loans and our ability to affordably access third-party financing; our level of indebtedness; the effects of competition on our business; our ability to attract and retain customers; global economic, market, financial, political or health conditions or events; actions of regulators and the impact of those actions on our business; our ability to successfully integrate acquired businesses; our ability to protect our proprietary technology and analytics and keep up with that of our competitors; disruption of our information technology systems that adversely affect our business operations; ineffective pricing of the credit risk of our prospective or existing customers; inaccurate information supplied by customers or third parties that could lead to errors in judging customers’ qualifications to receive loans; improper disclosure of customer personal data; failure of third parties who provide products, services or support to us; disruption to our relationships with banks and other third-party electronic payment solutions providers as well as other factors discussed in our filings with the Securities and Exchange Commission. These projections, estimates and assumptions may prove to be inaccurate in the future. These forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. There may be additional risks that we presently do not know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future results. We undertake no obligation to update, amend or clarify any forward-looking statement for any reason.

(CURO-NWS)

Contacts

Investor Relations:

Phone: 844-200-0342

Email: IR@curo.com

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