World Acceptance Corporation (NASDAQ:WRLD) Q4 2020 Earnings Conference Call May 7, 2020 10:00 AM ET Company Participants Chad Prashad – President and Chief Executive Officer John Calmes – Chief Financial and Strategy Officer Conference Call Participants John Rowan – Janney Morgan O’Donovan – Stephens Lance Jessurun – Jefferies Operator Good morning, and welcome to the World Acceptance Corporation-sponsored fourth quarter press release conference call. This call is being recorded. [Operator Instructions] Be ...

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 December 31, 2019 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 C ...

World Acceptance Corporation (NASDAQ:WRLD) Q3 2020 Earnings Conference Call January 30, 2020 10:00 AM ET Company Participants Chad Prashad - President & Chief Executive Officer John Calmes - Chief Financial & Strategy Officer Conference Call Participants John Rowan - Janney Vincent Caintic - Stephens Kyle Joseph - Jefferies Operator Good morning and welcome to the World Acceptance Corporation sponsored Third Quarter Press Release Conference Call. This call is being recorded. At this time, all participants h ...

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, 2019 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 Corp. (NASDAQ:WRLD) Q2 2020 Earnings Conference Call October 31, 2019 10:00 AM ET Company Participants Chad Prashad - President and Chief Executive Officer John Calmes - Chief Financial and Strategy Officer Conference Call Participants John Rowan - Janney Kyle Joseph - Jefferies Operator Good morning and welcome to the World Acceptance Corporation Sponsored Second Quarter Press Release Conference Call. This conference is being recorded. At this time, all participants have been placed on lis ...

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section presents the company's consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) Consolidated financial statements show asset and liability growth from loans and new lease accounting, with declining net income from continuing operations due to higher provisions and expenses [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (as of June 30, 2019 vs. March 31, 2019) | Account | June 30, 2019 (Millions $) | March 31, 2019 (Millions $) | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$1,040.7** | **$855.0** | **+21.7%** | | Loans receivable, net | $814.6 | $755.6 | +7.8% | | Right-of-use asset | $117.3 | — | N/A | | **Total Liabilities** | **$491.0** | **$302.9** | **+62.1%** | | Senior notes payable | $326.4 | $251.9 | +29.6% | | Lease liability | $117.9 | — | N/A | | **Total Shareholders' Equity** | **$549.7** | **$552.1** | **-0.4%** | - The significant increase in assets and liabilities is primarily due to the adoption of the new lease accounting standard (Topic 842), which resulted in the recognition of a Right-of-use asset and a corresponding Lease liability[13](index=13&type=chunk)[14](index=14&type=chunk)[36](index=36&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations (Three months ended June 30) | Metric | 2019 (Millions $) | 2018 (Millions $) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenues | $138.4 | $122.8 | +12.7% | | Provision for loan losses | $41.3 | $30.6 | +35.0% | | Total G&A expenses | $81.8 | $67.8 | +20.7% | | **Income from continuing operations** | **$8.6** | **$15.6** | **-45.0%** | | Loss from discontinued operations | — | $(37.1) | N/A | | **Net Income (Loss)** | **$8.6** | **$(21.5)** | **N/A** | | **Diluted EPS (Continuing Ops)** | **$0.97** | **$1.69** | **-42.6%** | - The decrease in income from continuing operations was primarily driven by a **35.0% increase** in the provision for loan losses and a **20.7% increase** in general and administrative expenses, which outpaced the **12.7% growth** in total revenues[16](index=16&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary (Three months ended June 30) | Activity | 2019 (Millions $) | 2018 (Millions $) | | :--- | :--- | :--- | | Net cash provided by operating activities | $58.2 | $55.5 | | Net cash used in investing activities | $(111.8) | $(66.2) | | Net cash provided by (used in) financing activities | $54.1 | $(3.9) | | **Net change in cash and cash equivalents** | **$0.4** | **$(15.4)** | - Investing activities primarily consisted of a **$69.6 million** increase in loans receivable and **$40.3 million** for acquisitions. Financing activities were driven by net borrowings of **$74.5 million** from senior notes, partially offset by **$21.8 million** in common stock repurchases[24](index=24&type=chunk) [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - The company sold its Mexico operations (WAC de Mexico and SWAC) effective July 1, 2018, for approximately **$44.36 million**. These operations are classified as discontinued, with a reported loss on disposal of **$39.0 million** in the prior-year period[29](index=29&type=chunk)[30](index=30&type=chunk) - On April 1, 2019, the company adopted the new lease accounting standard (ASU No. 2016-02, Topic 842), resulting in the initial recognition of a **$92.3 million** right-of-use asset and a **$92.7 million** lease liability[35](index=35&type=chunk)[36](index=36&type=chunk) - The company is subject to an ongoing investigation by the SEC and DOJ regarding its former operations in Mexico, focusing on the legality of certain payments under the FCPA between 2010 and 2017. The ultimate outcome and potential liability are not yet determinable[104](index=104&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk) - In June 2019, the company amended its revolving credit agreement, increasing total commitments from **$480.0 million** to **$685.0 million** and extending the maturity date to June 7, 2022[93](index=93&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses revenue growth from loan expansion, offset by higher loan loss provisions and G&A expenses, leading to a decline in continuing operations income, alongside enhanced liquidity and share repurchases [Results of Operations](index=28&type=section&id=Results%20of%20Operations) - Gross loans outstanding from continuing operations grew **15.1% YoY** to **$1.22 billion** as of June 30, 2019[119](index=119&type=chunk) - The provision for loan losses increased by **$10.7 million (35.0%) YoY**, primarily due to a **$6.8 million** increase in net charge-offs and faster loan growth[125](index=125&type=chunk) - Net charge-offs as a percentage of average net loans (annualized) increased to **16.3%** for the quarter, compared to **15.1%** in the prior-year quarter[116](index=116&type=chunk)[125](index=125&type=chunk) - G&A expenses rose by **$14.0 million (20.7%) YoY**, with personnel expense increasing by **$11.7 million**. Of this, approximately **$6.5 million** was due to additional share-based compensation from the long-term incentive program[127](index=127&type=chunk)[128](index=128&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) - In June 2019, the company amended its revolving credit facility, increasing aggregate commitments to **$685.0 million** and extending the maturity to June 2022[149](index=149&type=chunk) - As of June 30, 2019, the company had **$326.4 million** outstanding under its revolving credit facility, with **$351.5 million** of unused availability[94](index=94&type=chunk)[153](index=153&type=chunk) - The Board of Directors approved a new share repurchase program authorizing up to **$200.0 million** on June 7, 2019. During the quarter, the company repurchased **141,077 shares** for **$21.8 million**[160](index=160&type=chunk)[182](index=182&type=chunk) [Regulatory Matters](index=31&type=section&id=Regulatory%20Matters) - The company continues to cooperate with an ongoing SEC and DOJ investigation into potential FCPA violations related to its former Mexico operations between 2010 and 2017[135](index=135&type=chunk)[136](index=136&type=chunk) - The CFPB has delayed the compliance date for the 'ability to repay' requirements of its rule on short-term and installment loans to November 19, 2020. The company does not believe these requirements will have a material impact on its existing lending procedures[141](index=141&type=chunk)[142](index=142&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk associated with its variable-rate revolving credit facility, with a 1.0% change impacting annual interest expense by $3.3 million, and no foreign currency risk after selling Mexico operations - The company's outstanding debt of **$326.4 million** is subject to variable interest rates based on LIBOR. A **1.0%** change in interest rates would cause an approximate **$3.3 million** change in annual interest expense[174](index=174&type=chunk) - As a result of the sale of its foreign subsidiaries effective July 1, 2018, the company is not currently subject to foreign currency exchange rate risk[175](index=175&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2019[177](index=177&type=chunk) - There were no material changes to the company's internal control over financial reporting during the quarter[176](index=176&type=chunk) [PART II - OTHER INFORMATION](index=38&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, unregistered sales of equity securities, and a list of exhibits filed with the report [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 12 of its financial statements, detailing the ongoing SEC and DOJ investigation into former Mexico operations regarding potential FCPA violations, with an undetermined outcome - The primary legal proceeding discussed is the ongoing investigation by the SEC and DOJ concerning potential FCPA violations in the company's former Mexico operations, as detailed in Note 12 to the financial statements[180](index=180&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended March 31, 2019, were reported - No material changes to the risk factors from the Annual Report on Form 10-K for the fiscal year ended March 31, 2019 were reported[181](index=181&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 141,077 shares for $21.8 million during the quarter and approved a new $200.0 million share repurchase program, with $178.2 million remaining available Share Repurchase Activity (Three months ended June 30, 2019) | Period | Total Shares Purchased | Average Price Paid per Share ($) | Approx. Dollar Value Remaining for Repurchase (Millions $) | | :--- | :--- | :--- | :--- | | April 2019 | — | — | $0.5 | | May 2019 | — | — | $0.5 | | June 2019 | 141,077 | $154.61 | $178.2 | | **Total** | **141,077** | **$154.61** | **$178.2** | - A new share repurchase program authorizing up to **$200.0 million** was approved by the Board of Directors on June 7, 2019[182](index=182&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including amendments to employment agreements, the amended and restated revolving credit agreement, and required CEO/CFO certifications - The exhibits filed with this report include the Amended and Restated Revolving Credit Agreement dated June 7, 2019, and CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906[186](index=186&type=chunk)[188](index=188&type=chunk)

World Acceptance Corporation (NASDAQ:WRLD) Q1 2019 Earnings Conference Call July 25, 2019 10:00 AM ET Company Participants Chad Prashad - President & Chief Executive Officer Johnny Calmes - Chief Financial & Strategy Officer Conference Call Participants John Rowan - Janney Vincent Caintic - Stephens Kyle Joseph - Jefferies Clifford Sosin - CAS Investment Partners Operator Good morning and welcome to the World Acceptance Corporation sponsored First Quarter Press Release Conference Call. This call is been rec ...

PART I [Business](index=5&type=section&id=Item%201.%20Business) World Acceptance Corporation operates **1,193 branches** across **sixteen states**, providing small installment loans and ancillary services, with interest and fee income comprising **86.2%** of fiscal 2019 revenues, while expanding branches and divesting its Mexico segment - The company operates a small-loan consumer finance business with **1,193 branches** in **sixteen states**, offering installment loans generally between **$300 and $4,000**[15](index=15&type=chunk) Category | Fiscal 2019 | Fiscal 2018 | Fiscal 2017 | :--- | :--- | :--- | :--- | | **Interest & Fee Income (% of Total Revenue)** | **86.2%** | **86.7%** | **87.2%** | | **Tax Preparation Revenue** | **$21.5 million** | **$16.8 million** | **$14.7 million** | | **Tax Returns Prepared** | **91,000** | **77,000** | **72,000** | - In fiscal 2019, the company opened **25 new branches**, purchased **17, and consolidated 26** existing branches, and plans to open or acquire approximately **50 new branches** in fiscal 2020[19](index=19&type=chunk) - On **August 3, 2018**, the company completed the sale of its entire Mexico operating segment, which is now presented as discontinued operations[24](index=24&type=chunk) - Approximately **78.7%** of the company's loans in fiscal 2019 were generated through refinancings of outstanding loans and new loans to previous customers[41](index=41&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from potential federal and state regulatory changes, particularly interest rate caps, ongoing FCPA investigation liabilities, dependence on its credit facility, and substantial credit losses due to its customer base - Federal legislative or regulatory actions, particularly the imposition of a **36%** or similar annualized credit rate cap, would almost certainly eliminate the company's ability to continue its current operations[77](index=77&type=chunk)[83](index=83&type=chunk) - The company is exposed to significant liabilities under the Foreign Corrupt Practices Act (FCPA) due to an ongoing investigation into certain payments made in its former Mexico operations, and an adverse finding could result in fines, penalties, and a potential event of default under its credit facility[91](index=91&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk) - The business is substantially dependent on its **$480.0 million** revolving credit agreement for liquidity, and a breach of covenants or failure of lenders to perform could materially impact operations[110](index=110&type=chunk) - The company's lending activities expose it to significant credit risk, as its ability to collect on loans depends on the willingness and ability of borrowers with limited credit access to repay, which is influenced by economic conditions beyond the company's control[125](index=125&type=chunk) - The upcoming change in accounting standards to an "expected credit loss" model (ASU 2016-13) may require earlier recognition of credit losses and could have a material effect on the consolidated financial statements[129](index=129&type=chunk)[156](index=156&type=chunk) [Unresolved Staff Comments](index=31&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[164](index=164&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) The company owns its Greenville, SC headquarters and leases its **1,193** branch locations, incurring approximately **$26.9 million** in total lease expense for fiscal 2019 - The company owns its headquarters in Greenville, SC, and leases its **1,193** branches under operating leases, with total lease expense of **$26.9 million** in fiscal 2019[165](index=165&type=chunk) [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) The company is under ongoing investigation by the SEC and DOJ for potential FCPA violations related to improper payments in its former Mexico operations, with the ultimate financial impact currently not estimable - An ongoing investigation addresses whether improper payments were made between **2010 and 2017** by the former Mexico subsidiary to government officials, potentially violating the FCPA[167](index=167&type=chunk) - The company voluntarily contacted the SEC and DOJ in **June 2017** and is cooperating with their investigations; the SEC has issued a formal order of investigation[167](index=167&type=chunk) - Potential consequences include fines, civil and criminal penalties, profit disgorgement, and injunctive relief, and the company cannot reasonably estimate the amount of any fine or penalty at this time[168](index=168&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[172](index=172&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under WRLD, has not paid dividends since **1989**, and recently repurchased **626,198** shares for approximately **$71.9 million** under a **$75.0 million** program - The company has not declared or paid any cash dividends on its common stock since **April 1989**[175](index=175&type=chunk) Period | Total Shares Purchased | Average Price Paid | Value of Shares Remaining for Repurchase | :--- | :--- | :--- | :--- | | **Jan 2019** | **223,469** | **$109.27** | **$46,822,817** | | **Feb 2019** | **316,959** | **$113.08** | **$10,982,640** | | **Mar 2019** | **85,770** | **$122.22** | **$500,087** | | **Total for Quarter** | **626,198** | **$114.85** | **$500,087** | [Selected Financial Data](index=35&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of key financial and operational data, highlighting fiscal 2019 total revenues of **$544.5 million**, net income of **$37.2 million**, and total assets of **$855.0 million** Metric (Amounts in thousands) | 2019 | 2018 | 2017 | 2016 | 2015 | :--- | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $544,543 | $502,669 | $490,822 | $515,301 | $557,818 | | **Income from continuing operations** | $73,898 | $49,093 | $67,790 | $83,344 | $102,914 | | **Net income** | $37,235 | $53,690 | $73,600 | $87,396 | $110,833 | | **Diluted EPS from continuing ops** | $8.03 | $5.48 | $7.72 | $9.59 | $11.05 | | **Total assets** | $854,988 | $840,987 | $800,589 | $806,219 | $866,131 | | **Total debt** | $251,940 | $244,900 | $295,136 | $374,685 | $501,150 | | **Shareholders' equity** | $552,117 | $541,108 | $461,064 | $391,902 | $315,568 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Fiscal 2019 income from continuing operations increased **50.5%** to **$73.9 million** due to a lower tax rate, while total revenues grew **8.3%** to **$544.5 million**, though provision for loan losses rose **26.2%** to **$148.4 million** due to portfolio growth and higher charge-offs, with liquidity maintained via operations and a **$480 million** credit facility [Comparison of Fiscal 2019 Versus Fiscal 2018](index=37&type=section&id=Comparison%20of%20Fiscal%202019%20Versus%20Fiscal%202018) Fiscal 2019 income from continuing operations increased **50.5%** to **$73.9 million** due to lower taxes, while revenues grew **8.3%** to **$544.5 million**, offset by a **26.2%** rise in loan loss provision and higher charge-off rates Metric | Fiscal 2019 | Fiscal 2018 | Change | :--- | :--- | :--- | :--- | | **Total Revenues (Continuing Ops)** | $544.5M | $502.7M | +8.3% | | **Provision for Loan Losses** | $148.4M | $117.6M | +26.2% | | **Net Charge-off Ratio** | **16.1%** | **14.9%** | +120 bps | | **G&A Expenses** | $288.3M | $269.1M | +7.1% | | **Income from Continuing Ops** | $73.9M | $49.1M | +50.5% | | **Effective Tax Rate** | 17.8% | 49.3% | -31.5 pps | - The increase in the provision for loan losses was attributed to portfolio growth (**$17.4 million**) and an increase in charge-off and delinquency rates (**$13.4 million**)[193](index=193&type=chunk) - The proportion of new borrowers (less than 6 months tenure) in the portfolio grew **39.4%** year-over-year, accounting for **17%** of the portfolio, up from **13.7%** last year, contributing to higher overall delinquency and charge-off rates[194](index=194&type=chunk) [Credit Quality](index=43&type=section&id=Credit%20Quality) The company's credit quality deteriorated in fiscal 2019, with 61+ day delinquencies rising to **7.8%** and the allowance for loan losses increasing to **9.7%** of net loans receivable Delinquency (61+ days past due) | March 31, 2019 | March 31, 2018 | March 31, 2017 | :--- | :--- | :--- | :--- | | **Contractual Basis (% of Gross Loans)** | **7.8%** | **7.5%** | 7.0% | | **Recency Basis (% of Gross Loans)** | **6.3%** | **5.8%** | 5.3% | Allowance for Loan Losses | March 31, 2019 | March 31, 2018 | :--- | :--- | :--- | | **Ending Balance** | **$81.5 million** | **$66.1 million** | | **As a % of Net Loans Receivable** | **9.7%** | **8.9%** | - The allowance for loan losses calculation includes a general reserve of **4.25%** of the gross loan portfolio and a specific reserve representing **100%** of loans **91 days or more past due** on a recency basis[243](index=243&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity through **$244.7 million** in operating cash flow and a **$480 million** revolving credit facility, with **$227.8 million** available and a **0.5 to 1.0** debt-to-equity ratio, remaining compliant with covenants - The company has a revolving credit facility with aggregate commitments of **$480.0 million**, maturing in **June 2020**[257](index=257&type=chunk) Liquidity Metric (as of March 31, 2019) | Amount | :--- | :--- | | **Outstanding Debt** | **$251.9 million** | | **Unused Borrowing Availability** | **$227.8 million** | | **Debt-to-Equity Ratio** | **0.5 to 1.0** | - The credit agreement contains financial covenants including a minimum consolidated net worth, a minimum fixed charge coverage ratio, and maximum debt-to-net worth ratios, with which the company was in compliance[261](index=261&type=chunk)[262](index=262&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk from its LIBOR-based revolving credit facility, where a **1%** LIBOR change impacts annual interest expense by **$2.5 million**, and it no longer faces foreign currency risk after divesting Mexico operations - The company's outstanding debt of **$251.9 million** is subject to variable interest rates based on LIBOR, and a **1%** change in LIBOR would cause an annual change in interest expense of approximately **$2.5 million**[271](index=271&type=chunk)[272](index=272&type=chunk) - As a result of the sale of its foreign subsidiaries, the company is not currently subject to foreign currency exchange rate risk[273](index=273&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal year 2019, including balance sheets, income statements, cash flow statements, and related notes, along with management's report on internal control [Consolidated Financial Statements](index=49&type=section&id=Consolidated%20Financial%20Statements) For fiscal year 2019, the company reported total assets of **$855.0 million**, total liabilities of **$302.9 million**, total revenues of **$544.5 million**, and net income of **$37.2 million**, with **$244.7 million** in operating cash flow Consolidated Balance Sheet Highlights (as of March 31, 2019) | Amount (in millions) | :--- | :--- | | **Total Assets** | **$855.0 million** | | Loans receivable, net | **$755.6 million** | | **Total Liabilities** | **$302.9 million** | | Senior notes payable | **$251.9 million** | | **Total Shareholders' Equity** | **$552.1 million** | Consolidated Statement of Operations Highlights (for FY ended March 31, 2019) | Amount (in millions) | :--- | :--- | | **Total Revenues** | **$544.5 million** | | Provision for loan losses | **$148.4 million** | | Income from continuing operations | **$73.9 million** | | Loss from discontinued operations | **($36.7 million)** | | **Net Income** | **$37.2 million** | Consolidated Statement of Cash Flows Highlights (for FY ended March 31, 2019) | Amount (in millions) | :--- | :--- | | **Net cash provided by operating activities** | **$244.7 million** | | **Net cash used in investing activities** | **($207.0 million)** | | **Net cash used in financing activities** | **($63.1 million)** | [Notes to Consolidated Financial Statements](index=57&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail significant accounting policies, including the allowance for loan losses methodology, the **$480 million** senior revolving credit facility, executive long-term incentive programs, and the **$38.4 million** pre-tax loss from the Mexico operations sale - The allowance for loan losses is calculated using a general reserve of **4.25%** of the gross loan portfolio plus a specific reserve of **100%** for loans **91 days or more past due** on a recency basis[301](index=301&type=chunk) - The company's debt is a **$480 million** senior revolving credit facility maturing **June 15, 2020**, with interest based on LIBOR plus a margin of **3.0% to 4.0%**[351](index=351&type=chunk) - A new long-term incentive program was adopted, granting service options, performance options, restricted stock, and performance shares tied to specific trailing 4-quarter EPS targets[385](index=385&type=chunk)[387](index=387&type=chunk)[391](index=391&type=chunk) - The sale of the Mexico operating segment was completed on **August 3, 2018**, for a purchase price of approximately **$44.36 million**, resulting in a loss on disposal of **$38.4 million** before taxes[425](index=425&type=chunk)[427](index=427&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=88&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no disagreements with its independent registered public accounting firm on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure - The Company had no disagreements on accounting or financial disclosure matters with its independent registered public accounting firm[447](index=447&type=chunk) [Controls and Procedures](index=88&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of **March 31, 2019**, with no material changes during the quarter, an assessment concurred by the independent auditor - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[448](index=448&type=chunk) - There were no changes to internal control over financial reporting during the period that have materially affected, or are reasonably likely to materially affect, these controls[449](index=449&type=chunk) - Management concluded that internal control over financial reporting was effective as of **March 31, 2019**, and the independent registered public accounting firm issued an unqualified opinion on its effectiveness[452](index=452&type=chunk)[453](index=453&type=chunk) [Other Information](index=89&type=section&id=Item%209B.%20Other%20Information) There is no other information to report under this item - None[456](index=456&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=90&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2019 Annual Meeting Proxy Statement, with executive officer details in Part I, Item 1 - Information is incorporated by reference from the Registrant's definitive Proxy Statement[458](index=458&type=chunk) [Executive Compensation](index=90&type=section&id=Item%2011.%20Executive%20Compensation) Information required by this item concerning executive and director compensation is incorporated by reference from the company's definitive Proxy Statement for the 2019 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's definitive Proxy Statement[459](index=459&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=90&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information required by this item regarding security ownership and equity compensation plans is incorporated by reference from the company's definitive Proxy Statement for the 2019 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's definitive Proxy Statement[460](index=460&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=90&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2019 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's definitive Proxy Statement[461](index=461&type=chunk) [Principal Accountant Fees and Services](index=90&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information required by this item regarding principal accountant fees and services is incorporated by reference from the company's definitive Proxy Statement for the 2019 Annual Meeting of Shareholders - Information is incorporated by reference from the Registrant's definitive Proxy Statement[462](index=462&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=91&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements filed under Item 8 and references the Exhibit Index for a complete list of all exhibits filed as part of the Form 10-K - This section lists the financial statements filed with the report and incorporates the Exhibit Index by reference[464](index=464&type=chunk)[466](index=466&type=chunk) [Form 10-K Summary](index=92&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company has not provided a summary under this item - None[470](index=470&type=chunk)

World Acceptance Corporation (NASDAQ:WRLD) Q4 2019 Earnings Conference Call May 9, 2019 10:00 AM ET Company Participants Chad Prashad - President and CEO John Calmes - CFO Conference Call Participants Kyle Joseph - Jefferies 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 that I make the following announcements. ...

[PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Consolidated Financial Statements](index=5&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including balance sheets, statements of operations, cash flows, and detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The balance sheets show total assets increased to $927.5 million, driven by higher net loans receivable, with corresponding increases in liabilities and equity Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2018 | Mar 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $11,132 | $12,474 | | Loans receivable, net | $829,470 | $679,154 | | Total assets | $927,513 | $840,987 | | **Liabilities & Equity** | | | | Senior notes payable | $308,040 | $244,900 | | Total liabilities | $353,444 | $299,879 | | Total shareholders' equity | $574,069 | $541,108 | - Assets and liabilities of discontinued operations, related to the Mexico business, were present on the March 31, 2018 balance sheet ($79.5M in assets, $7.4M in liabilities) but were zero as of December 31, 2018, following the sale[10](index=10&type=chunk)[11](index=11&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For Q3 FY2019, revenues grew to $137.6 million, but increased provisions and expenses led to lower pre-tax income, while the nine-month period saw a net loss due to discontinued operations Three Months Ended December 31, (in thousands) | Account | 2018 | 2017 | | :--- | :--- | :--- | | Total revenues | $137,639 | $125,703 | | Provision for loan losses | $48,944 | $40,456 | | Total expenses | $130,545 | $110,306 | | Income from continuing operations | $6,260 | $193 | | Net income (loss) | $6,260 | $1,680 | | Diluted EPS from continuing operations | $0.67 | $0.02 | Nine Months Ended December 31, (in thousands) | Account | 2018 | 2017 | | :--- | :--- | :--- | | Total revenues | $387,545 | $361,270 | | Provision for loan losses | $119,893 | $100,990 | | Income from continuing operations | $35,957 | $23,437 | | Loss from discontinued operations | ($36,662) | $1,110 (income) | | Net income (loss) | ($705) | $24,547 | | Diluted EPS (loss) | ($0.08) | $2.76 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating activities provided $164.2 million, investing activities used $248.4 million (primarily for loans), and financing activities provided $60.6 million, resulting in a $21.0 million decrease in cash Cash Flow Summary for Nine Months Ended Dec 31, (in thousands) | Category | 2018 | 2017 | | :--- | :--- | :--- | | Net cash provided by operating activities | $164,154 | $145,574 | | Net cash used in investing activities | ($248,383) | ($219,461) | | Net cash provided by financing activities | $60,606 | $84,458 | | Net change in cash and cash equivalents | ($20,955) | $9,771 | - The sale of the Mexico business provided **$37.5 million** in cash, which was a significant investing cash inflow during the nine-month period ended December 31, 2018[22](index=22&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies, the sale of Mexico operations, loan loss allowance, debt facilities, and the ongoing FCPA investigation - **Discontinued Operations (Note 2):** The company sold its Mexico operations (WAC de Mexico and SWAC) effective July 1, 2018, for approximately **$44.36 million**, resulting in a pre-tax loss on disposal of **$38.4 million** for the nine months ended Dec 31, 2018[27](index=27&type=chunk)[29](index=29&type=chunk) - **Allowance for Loan Losses (Note 5):** The allowance for loan losses increased to **$91.3 million** at Dec 31, 2018, from **$66.1 million** at March 31, 2018, reflecting growth in the loan portfolio and higher provisions[48](index=48&type=chunk) - **Stock-Based Compensation (Note 7):** A new long-term incentive program was adopted in October 2018, comprising service options, performance options, restricted stock, and performance shares, leading to a significant increase in stock-based compensation expense[56](index=56&type=chunk)[57](index=57&type=chunk) - **Commitments and Contingencies (Note 11):** The company is under investigation by the SEC and DOJ regarding potential improper payments in its former Mexico operations between 2010 and 2017, which may violate the FCPA, with the ultimate financial impact not yet reasonably estimable[93](index=93&type=chunk)[94](index=94&type=chunk)[97](index=97&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong U.S. loan growth driving revenues, offset by increased loan loss provisions and G&A expenses, alongside the Mexico operations sale, liquidity, and regulatory matters - Gross loans receivable in the U.S. increased **11.7%** year-over-year to **$1.26 billion** as of December 31, 2018[108](index=108&type=chunk) - For the nine months ended Dec 31, 2018, the company recognized a **~$38.4 million** loss on the disposal of its Mexico operations, leading to a net loss of **$0.7 million** for the period[124](index=124&type=chunk) - Personnel expense for Q3 FY19 increased by **$10.6 million** (**29.2%**) year-over-year, primarily due to **$6.2 million** in share-based compensation from a new long-term incentive program[116](index=116&type=chunk) - The company's debt-to-equity ratio decreased from **0.8:1** at Dec 31, 2017 to **0.5:1** at Dec 31, 2018[120](index=120&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) Q3 FY2019 revenues rose 9.5% due to loan growth, but higher loan loss provisions and G&A expenses impacted profitability, with a nine-month net loss from the Mexico operations sale Key Operating Metrics (Three Months Ended Dec 31) | Metric | 2018 | 2017 | | :--- | :--- | :--- | | Gross Loans Receivable | $1.26B | $1.13B | | Total Revenues | $137.6M | $125.7M | | Provision for Loan Losses | $48.9M | $40.5M | | G&A Expenses | $77.0M | $64.8M | | Net Charge-offs as % of Avg. Net Loans | 17.0% | 15.4% | - Delinquencies on a contractual basis for accounts 61+ days past due increased slightly to **7.5%** at Dec 31, 2018, from **7.3%** at Dec 31, 2017[113](index=113&type=chunk) [Regulatory Matters](index=32&type=section&id=Regulatory%20Matters) The company continues to cooperate with SEC and DOJ investigations into potential FCPA violations by its former Mexico subsidiary, while the CFPB rule is not expected to materially impact lending - An ongoing investigation addresses potential improper payments by the former Mexico subsidiary to government officials, which could violate the FCPA, with the company cooperating with the SEC and DOJ[139](index=139&type=chunk)[140](index=140&type=chunk) - Potential consequences of the investigation include fines, civil and criminal penalties, profit disgorgement, and injunctive relief, though the company cannot reasonably estimate the potential liability[141](index=141&type=chunk) - The company believes the CFPB's final rule from October 2017 will not have a material impact on its existing lending procedures as it does not make the types of loans subject to the rule's most stringent requirements[145](index=145&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Operations are financed by cash flow and a $480.0 million revolving credit facility, with a new $75.0 million share repurchase program authorized and an improved debt-to-equity ratio - The company has a **$480.0 million** senior revolving credit facility, with **$308.0 million** outstanding as of Dec 31, 2018[152](index=152&type=chunk)[154](index=154&type=chunk) - In December 2018, the credit agreement was amended to permit a maximum commitment of **$600 million** and modify the interest rate to one-month LIBOR plus a margin of 3.0% to 4.0%[153](index=153&type=chunk) - On December 16, 2018, the Board authorized a new share repurchase program of up to **$75.0 million**, with **$73.1 million** remaining available under this authorization as of Dec 31, 2018[161](index=161&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate risk on variable-rate debt, with foreign currency risk eliminated after the Mexico business sale - The company is exposed to interest rate risk on its **$308.0 million** of outstanding variable-rate debt, where a **1.0%** change in rates would result in a **$3.1 million** annual change in interest expense[175](index=175&type=chunk) - Foreign currency exchange rate risk was eliminated following the sale of the company's Mexico subsidiaries, effective July 1, 2018[176](index=176&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of December 31, 2018, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2018[178](index=178&type=chunk) - No material changes were made to the internal control over financial reporting during the quarter[177](index=177&type=chunk) [PART II - OTHER INFORMATION](index=39&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings, including the FCPA investigation, is detailed in Note 11 to the consolidated financial statements - Information regarding legal proceedings is detailed in Note 11 to the unaudited Consolidated Financial Statements[181](index=181&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported during this quarter beyond those disclosed in the prior quarterly report - There were no material changes to risk factors during this quarter, beyond those disclosed in the Q1 FY19 report[182](index=182&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) A new $75.0 million share repurchase program was authorized in December 2018, with 38,822 shares repurchased during the quarter Share Repurchases for Quarter Ended Dec 31, 2018 | Month | Total Shares Purchased | Average Price Paid | Value Remaining in Program | | :--- | :--- | :--- | :--- | | October 2018 | 0 | $0.00 | $1,906,179 | | November 2018 | 0 | $0.00 | $1,906,179 | | December 2018 | 38,822 | $96.83 | $73,147,034 | - A new **$75.0 million** share repurchase program was authorized on December 17, 2018, which includes amounts remaining from a prior authorization[183](index=183&type=chunk) [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with or incorporated by reference into the Quarterly Report on Form 10-Q, including certifications and XBRL data - The exhibit index lists all documents filed with or incorporated by reference into the 10-Q report[186](index=186&type=chunk)[188](index=188&type=chunk)