World Acceptance (US:WRLD)2021-08-06 20:16Financial Performance - Total revenues for the three months ended June 30, 2021, were $129.66 million, an increase of 4.8% compared to $123.87 million for the same period in 2020[15] - Net income for the three months ended June 30, 2021, was $15.77 million, compared to $15.51 million for the same period in 2020, reflecting a growth of 1.7%[15] - The company reported a diluted net income per share of $2.44 for the three months ended June 30, 2021, compared to $2.24 for the same period in 2020, reflecting an increase of 8.9%[15] - Basic net income per common share for the three months ended June 30, 2021, was $2.56, compared to $2.26 for the same period in 2020, reflecting an increase of 13.3%[15] - Net income for the three months ended June 30, 2021 increased to $15.8 million, a 1.7% increase from $15.5 million reported for the same period of the prior year[122] - Revenues increased by $5.8 million, or 4.7%, to $129.7 million during the three months ended June 30, 2021 from $123.9 million for the same period of the prior year[123] Credit Losses and Risk Management - The provision for credit losses increased to $30.27 million for the three months ended June 30, 2021, up from $25.66 million in the same period last year, indicating a rise of 18.5%[15] - The provision for credit losses rose to $30,265,811 in the current period compared to $25,660,660 in the previous year, marking an increase of 18.93%[21] - The allowance for credit losses is estimated based on expected losses within the company's gross loans receivable portfolio, reflecting ongoing credit risk management[52] - The company identified Customer Tenure as the strongest predictor of default risk, using metrics such as borrower type and prior loan performance[54] - The total amount of loans that are 91 or more days past due reached $43,232,540 as of June 30, 2021, highlighting the need for close monitoring of credit quality[48] - The company will continue to assess borrower risk metrics quarterly to ensure effective credit risk management[55] - The company monitors trends in 60-day delinquencies and FICO scores to adjust the allowance for credit losses as necessary[56] - The company considers its policies regarding the allowance for credit losses as critical due to significant management judgment involved[159] Loan Portfolio and Assets - Gross loans receivable as of June 30, 2021, reached $1.22 billion, an increase of 10.7% from $1.10 billion as of March 31, 2021[14] - Total gross loans receivable increased to $1,223,138,687 as of June 30, 2021, up from $1,104,746,261 as of March 31, 2021, indicating a growth of 10.75%[41] - The total gross loans receivable amounted to $1,223,138,687 as of June 30, 2021, with a total net loans of $900,385,286 after accounting for unearned interest, insurance, and fees[58] - The company reported a significant increase in loans receivable for the 60+ months category, which rose to $643,882,305 from $597,292,495, a growth of 7.77%[41] - The company reported a total of $1,220,648,350 in loans categorized by origination as of June 30, 2021, with a notable portion being current loans[48] Cash and Liquidity - The company’s cash and cash equivalents decreased to $8.39 million as of June 30, 2021, from $15.75 million as of March 31, 2021, a decline of 46.6%[14] - Cash and cash equivalents at the end of the period were $8,387,320, down from $9,960,153 in the previous year, reflecting a decrease of 15.83%[21] - Net cash provided by operating activities decreased to $49,527,222 from $51,839,284 year-over-year, reflecting a decline of 4.45%[21] - The Company had $467.7 million outstanding under its $685.0 million senior revolving credit facility as of June 30, 2021[102] - The unused amount available under the revolving credit facility was $182.5 million as of June 30, 2021[103] Expenses and Liabilities - General and administrative expenses totaled $73.35 million for the three months ended June 30, 2021, compared to $71.61 million in the same period last year, an increase of 2.4%[15] - Total liabilities rose to $618.21 million as of June 30, 2021, compared to $549.34 million as of March 31, 2021, marking an increase of 12.6%[14] - The company repurchased common stock amounting to $21.08 million during the three months ended June 30, 2021[18] - The Company authorized a share repurchase program of up to $30.0 million, with $20.3 million remaining as of June 30, 2021[153] Tax and Compliance - The Company's effective income tax rate decreased to 23.2% for Q2 2021 from 26.3% in the prior year quarter, primarily due to the recognition of Federal Historic Tax Credits[111] - The Company had $3.2 million in total gross unrecognized tax benefits as of June 30, 2021, with $2.6 million expected to be permanent[109] - The Company maintained compliance with its debt covenants, including a minimum consolidated net worth of $325 million and a maximum total debt to consolidated adjusted net worth ratio of 2.0 to 1.0[105] Market Trends and Future Outlook - The company experienced significant seasonal fluctuations in loan demand, with the highest demand typically occurring from October to December[29] - The Company expects inflation to increase loan demand, potentially leading to higher total loans receivable and revenue[155] - The overall increase in gross loans from March to June 2021 suggests a positive trend in loan origination and customer demand[48] - Continued monitoring of loan performance metrics will be essential for future financial planning and risk management[46][48]