World Acceptance (WRLD)

Search documents
World Acceptance (WRLD) - 2023 Q2 - Earnings Call Transcript
2022-10-30 04:54
World Acceptance Corporation (NASDAQ:WRLD) Q2 2023 Earnings Conference Call October 27, 2022 10:00 AM ET Company Participants Chad Prashad - President and CEO Johnny Calmes - Chief Financial and Strategy Officer Conference Call Participants John Rowan - Janney Vincent Caintic - Stephens Operator Good morning. And welcome to the World Acceptance Corporation Second Quarter Press Release Conference Call. Today, this call is being recorded. At this time, all participants have been placed on listen-only mode. Be ...
World Acceptance (WRLD) - 2023 Q1 - Quarterly Report
2022-08-05 20:06
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________ Form 10-Q __________________________________ (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the transition period from ______________ to ______________ Commission File Number: 000-19599 WORLD ACCEPTANCE CORPORATION (Exact name of registrant as specified in its charter.) | South Carolina | | 57-0425114 | | --- | --- | --- | | (State or other jur ...
World Acceptance (WRLD) - 2023 Q1 - Earnings Call Transcript
2022-07-27 18:13
Financial Data and Key Metrics Changes - For the fourth consecutive quarter, the company experienced record growth in origination volumes, with gross originations increasing by approximately $175 million compared to the prior year, totaling over $930 million, surpassing the previous strongest first quarter of $762 million in fiscal year 2020 [5] - The provision for credit losses increased by 14.5% due to seasonal credit adjustments, which is unrelated to new originations or recent performance [9] Business Line Data and Key Metrics Changes - The number of new customers increased by 7% year-over-year during the first quarter, but declined by 27% to 30% compared to pre-pandemic levels in the first quarter of 2019 and 2020 [7] - Charge-offs have increased as prior delinquencies aged, with delinquencies normalizing but remaining elevated compared to the previous two years [8] Market Data and Key Metrics Changes - Demand for credit has increased across the industry due to inflationary and cost pressures, impacting both delinquencies and demand for new originations [6] - The book-to-look ratio declined by 28% to 31% for new customers compared to pre-pandemic levels [6] Company Strategy and Development Direction - The company is focused on protecting its growth from the previous year and aims to achieve a long-term earnings per share target of $25.40 by the end of fiscal year 2025 [9] - The company is adapting to regulatory changes, such as the 36% rate cap in New Mexico, by pivoting to larger loans and exploring acquisition opportunities [58] Management's Comments on Operating Environment and Future Outlook - Management expects charge-offs and delinquencies to decrease moving forward due to tightened underwriting and reduced new borrower growth [18] - The company is optimistic about its ability to manage charge-offs and delinquencies despite current economic pressures [18][29] Other Important Information - The company acquired a portfolio during the quarter, resulting in a $3.1 million bargain purchase gain, indicating potential for future acquisitions [36] - The company is in the process of exploring securitization of loans, which would involve building out necessary infrastructure [60] Q&A Session Summary Question: Charge-offs and delinquencies trajectory - Management indicated that charge-offs are expected to decrease as delinquencies have leveled off since March, with a focus on managing the situation [17][18] Question: Lifetime loss assumption change - The change in lifetime loss assumption resulted in a $16.8 million impact on the provision, with a significant portion attributed to seasonality [21][22] Question: Bargain purchase gain explanation - The $3.1 million bargain purchase gain was due to acquiring a portfolio at a significant discount [36] Question: Opportunities for portfolio acquisitions - Management noted that there are a few opportunities available for acquiring portfolios [37] Question: Securitization of loans - The company is in the process of preparing for securitization, focusing on longer-term loans with lower interest rates [60][62]
World Acceptance (WRLD) - 2022 Q4 - Annual Report
2022-05-27 00:55
OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________ Form 10-K __________________________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: March 31, 2022 For the transition period from _______________ to _____________ Commission file number: 000-19599 WORLD ACCEPTANCE CORPORATION (Exact nam ...
World Acceptance (WRLD) - 2022 Q4 - Earnings Call Transcript
2022-05-07 20:34
World Acceptance Corporation (NASDAQ:WRLD) Q4 2022 Results Conference Call May 5, 2022 10:00 AM ET Company Participants Chad Prashad - President & Chief Executive Officer Johnny Calmes - CFO & Strategy Officer Conference Call Participants Vincent Caintic - Stephens John Rowan - Janney Operator Good morning, and welcome to the World Acceptance Corporation sponsored fourth quarter press release conference call. This call is being recorded. [Operator Instructions] Before we begin, the corporation has requested ...
World Acceptance (WRLD) - 2022 Q3 - Quarterly Report
2022-02-04 21:39
[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) The unaudited consolidated financial statements for the period ended December 31, 2021, reflect significant asset growth, increased revenues, and a decline in net income due to higher credit loss provisions [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to $1.27 billion by December 31, 2021, driven by loan growth, while liabilities rose due to new debt issuance, and equity remained stable Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2021 | Mar 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $18,668 | $15,746 | | Loans receivable, net | $1,039,398 | $733,659 | | Total assets | $1,270,205 | $954,269 | | **Liabilities & Equity** | | | | Senior notes payable | $425,174 | $405,008 | | Senior unsecured notes payable, net | $295,143 | $0 | | Total liabilities | $860,799 | $549,342 | | Total shareholders' equity | $409,406 | $404,927 | | Total liabilities and shareholders' equity | $1,270,205 | $954,269 | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q3 FY2022 revenues increased to $148.6 million, but net income declined to $7.3 million due to a significant rise in the provision for credit losses Key Operating Results (in thousands, except per share data) | Metric | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | Nine Months Ended Dec 31, 2021 | Nine Months Ended Dec 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $148,572 | $130,946 | $416,058 | $379,254 | | Provision for credit losses | $56,459 | $28,857 | $128,768 | $80,608 | | Net income | $7,327 | $14,491 | $35,538 | $43,399 | | Diluted EPS | $1.14 | $2.25 | $5.53 | $6.44 | [Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity slightly increased to $409.4 million, driven by net income and stock option exercises, partially offset by share repurchases - Key activities impacting shareholders' equity in the first nine months of fiscal 2022 included common stock repurchases of **$50.5 million**, proceeds from stock option exercises of **$11.7 million**, and net income of **$35.5 million**[20](index=20&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $171.1 million, while investing activities used $438.9 million, largely offset by $270.8 million from financing activities Cash Flow Summary (Nine months ended Dec 31, in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $171,052 | $131,409 | | Net cash used in investing activities | ($438,922) | ($131,252) | | Net cash provided by (used in) financing activities | $270,791 | ($2,085) | | **Net change in cash and cash equivalents** | **$2,921** | **($1,928)** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, including CECL adoption, finance receivables, debt structure with a new $300 million senior note, and legal contingencies - The company adopted the **Current Expected Credit Loss (CECL) model** on April 1, 2020, which replaced the incurred loss methodology for determining the allowance for credit losses[35](index=35&type=chunk)[44](index=44&type=chunk) Allowance for Credit Losses Rollforward (Nine months ended Dec 31, in thousands) | Description | 2021 | 2020 | | :--- | :--- | :--- | | Beginning balance | $91,722 | $96,488 | | Impact of ASC 326 adoption | $0 | $28,628 | | Provision for credit losses | $128,768 | $80,608 | | Net charge-offs | ($87,209) | ($92,257) | | **Ending Balance** | **$133,281** | **$113,467** | - On September 27, 2021, the company issued **$300 million** in **7.0% senior unsecured notes** due 2026. Net proceeds were used to repay a portion of the outstanding debt under its revolving credit facility[109](index=109&type=chunk)[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 27.0% loan growth to $1.61 billion, revenue increases, and net income decline due to higher credit loss provisions, alongside liquidity and share repurchases [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Q3 FY2022 revenues rose 13.5% to $148.6 million, but net income dropped 49.4% to $7.3 million due to a 95.6% increase in credit loss provisions Q3 FY2022 vs Q3 FY2021 Performance | Metric | Q3 FY2022 | Q3 FY2021 | Change | | :--- | :--- | :--- | :--- | | Gross Loans Outstanding | $1.61B | $1.26B | +27.0% | | Total Revenues | $148.6M | $130.9M | +13.5% | | Provision for Credit Losses | $56.5M | $28.9M | +95.6% | | Net Income | $7.3M | $14.5M | -49.4% | - The increase in delinquencies and charge-offs was expected due to the growth in new and shorter-tenured customers in the portfolio[134](index=134&type=chunk) - For the nine months ended Dec 31, 2021, net income decreased **18.1%** to **$35.5 million**, while revenues increased **9.7%** to **$416.1 million** compared to the prior year period[145](index=145&type=chunk)[146](index=146&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by operations and a revolving credit facility, enhanced by a $300 million senior note issuance, with $46.1 million remaining for share repurchases - The company issued **$300 million** in **7.0% senior notes** due 2026 to repay a portion of its revolving credit facility and for general corporate purposes[165](index=165&type=chunk)[166](index=166&type=chunk) - As of December 31, 2021, the company had a **$685.0 million** revolving credit facility with **$425.2 million** outstanding and **$259.5 million** available for borrowing[106](index=106&type=chunk)[107](index=107&type=chunk) - The Board of Directors authorized a **$50.0 million** share repurchase program in December 2021. As of December 31, 2021, **$46.1 million** remained available for repurchase[177](index=177&type=chunk) [Critical Accounting Policies](index=43&type=section&id=Critical%20Accounting%20Policies) Management identifies Allowance for Credit Losses, Share-Based Compensation, and Income Taxes as critical accounting policies requiring significant judgment - The company's most critical accounting policies are considered to be the **allowance for credit losses**, **share-based compensation**, and **income taxes** due to the significant degree of management judgment involved[182](index=182&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure on its $425.2 million variable-rate debt, with a 1.0% rate change impacting annual interest expense by $4.3 million - The company's main market risk is **interest rate risk**. Based on the **$425.2 million** outstanding balance on its revolving credit facility at December 31, 2021, a **1.0%** change in the interest rate would cause an annual change in interest expense of approximately **$4.3 million**[189](index=189&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2021, with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of the end of the reporting period[191](index=191&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter[190](index=190&type=chunk) [PART II - OTHER INFORMATION](index=46&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is a nominal defendant in a shareholder derivative complaint filed in September 2020, stemming from a Mexico investigation - A shareholder derivative complaint was filed on September 25, 2020, against certain current and former directors and officers related to the company's resolution of an investigation in Mexico[120](index=120&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for fiscal year ended March 31, 2021 - **No material changes** to the risk factors from the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2021, have been reported[195](index=195&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q3 FY2022, the company repurchased 93,722 shares for $19.3 million, with $46.1 million remaining under its authorization Share Repurchases (Q3 FY2022) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | October 2021 | 6,000 | $160.66 | | November 2021 | 43,605 | $200.52 | | December 2021 | 44,117 | $218.45 | | **Total for the quarter** | **93,722** | **$206.41** | [Other Items (Items 3, 4, 5, 6)](index=46&type=section&id=Other%20Items) This section confirms no defaults on senior securities, no mine safety disclosures, and no other reportable information, referencing filed exhibits - The company reported **no defaults** upon senior securities (Item 3), **no mine safety disclosures** (Item 4), and **no other information** (Item 5)[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk)
World Acceptance (WRLD) - 2022 Q3 - Earnings Call Transcript
2022-01-25 16:44
Financial Data and Key Metrics Changes - The overall portfolio grew by $211 million, or 15.1% during the quarter, and $340 million, or 27% year-over-year, marking the largest single growth quarter on record [7][8] - Delinquency rates remain low and within expectations, with a shift to CECL provisioning expected to positively impact revenue and income in future quarters [8][9] Business Line Data and Key Metrics Changes - The company experienced broad expansion across all customer types, with significant increases in new and returning customer loan volume compared to last year and pre-pandemic levels [8] Market Data and Key Metrics Changes - Over 43% of the portfolio is below 36% APR, and 56% is below 54% APR, indicating the company's ability to offer attractive loan terms to retain customers [11] Company Strategy and Development Direction - The company aims to continue portfolio growth while reducing servicing costs, moving towards a fixed cost model [31][32] - The focus is on retaining high-quality customers and monitoring credit quality to manage expected losses and provisions effectively [32] Management's Comments on Operating Environment and Future Outlook - Management noted that the rapid growth in the portfolio is due to recovering demand post-pandemic, with expectations for continued growth but not necessarily at the same accelerated rate [20][21] - The company anticipates hitting its long-term EPS target before the end of fiscal year 2025 [10][32] Other Important Information - The tax rate was low due to windfall tax benefits from stock option exercises, with expectations of a normal tax rate between 21% and 23% going forward [27] Q&A Session Summary Question: Clarification on provisioning and net income - Management explained that the rapid growth in the portfolio has led to increased provisioning, which will ease as growth decelerates [19][21] Question: Charge-offs and portfolio composition - It was noted that larger loans typically have lower charge-off rates compared to smaller loans, and the current portfolio has seen record growth with a significant increase in new customers [25][26] Question: Tax rate and future expectations - The low tax rate was attributed to windfall benefits, with a normal rate expected in the future [27] Question: Medium-term loan growth and credit expectations - Management reiterated expectations for continued growth, with a focus on customer retention and credit quality monitoring [32][39] Question: Funding costs and future expectations - The increase in funding costs was linked to recent bond issuances and the growth in buybacks, with expectations for some natural deleveraging in the upcoming quarter [41][46]
World Acceptance (WRLD) - 2022 Q2 - Quarterly Report
2021-11-05 20:15
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________ Form 10-Q __________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the transition period from ______________ to ______________ Commission File Number: 000-19599 WORLD ACCEPTANCE ...
World Acceptance (WRLD) - 2022 Q2 - Earnings Call Transcript
2021-10-26 16:50
World Acceptance Corporation (NASDAQ:WRLD) Q2 2022 Earnings Conference Call October 26, 2021 10:00 AM ET Company Participants Chad Prashad - President & Chief Executive Officer John Calmes - Chief Financial & Strategy Officer Conference Call Participants Vincent Caintic - Stephens Inc. John Rowan - Janney Montgomery Scott Operator Good morning, and welcome to the World Acceptance Fiscal 2022 Second Quarter Earnings Call. All participants will be in listen-only mode. [Operator Instructions]. After today’s pr ...
World Acceptance (WRLD) - 2022 Q1 - Quarterly Report
2021-08-06 20:16
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 __________________________________ Form 10-Q __________________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 For the transition period from ______________ to ______________ Commission File Number: 000-19599 WORLD ACCEPTANCE CORPO ...