Fourth Quarter Highlights The company's fourth quarter saw a focus on credit quality, a slowdown in customer base decline, and improved net income and diluted EPS despite slightly lower revenues Operational Overview World Acceptance Corporation maintained a focus on credit quality and conservative lending, with gross loans outstanding decreasing but the customer base decline slowing significantly - Gross loans outstanding were $1.28 billion as of March 31, 2024, an 8.1% decrease from $1.39 billion as of March 31, 2023, with a sequential decrease of 8.8% ($123.5 million) from December 31, 20233 - The customer base decreased by 1.5% during the twelve-month period ended March 31, 2024, a significant improvement compared to a 15.9% decrease in the comparable prior-year period4 Volume of Gross Loan Origination Balances (excluding tax advance loans) by Customer Type | Customer Type | Q4 FY 2024 (USD) | Q4 FY 2023 (USD) | | :--- | :--- | :--- | | New Customers | $26,511,522 | $25,669,834 | | Former Customers | $58,583,919 | $62,965,426 | | Refinance Customers | $432,270,234 | $449,571,142 | - The Company operated 1,048 open branches as of March 31, 2024, with same-store gross loans decreasing 6.7% for branches open at least twelve months5 Key Financial Metrics (Q4 FY2024) The fourth fiscal quarter saw a notable increase in net income and diluted EPS, despite a slight decline in total revenues, with improved credit quality evidenced by reduced delinquency rates - Net income for the fourth fiscal quarter was $35.1 million6 - Diluted net income per share was $6.096 - Recency delinquency on accounts 90+ days past due improved to 3.1% at March 31, 2024, from 3.5% at March 31, 20236 - Total revenues were $159.3 million, including a 34 basis point yield increase compared to the same quarter in the prior year6 Detailed Fourth Quarter Financial Results (Three Months Ended March 31, 2024) This section provides an in-depth analysis of the company's Q4 FY2024 financial performance, covering income, credit quality, loan portfolio, operating expenses, and capital management Income and Revenue Analysis Net income and diluted EPS significantly increased in Q4 FY2024 compared to the prior year, despite a slight decrease in total revenues, driven by a decline in interest and insurance income partially offset by strong growth in other income Q4 Financial Performance (Three Months Ended March 31) | Metric | Q4 FY 2024 (USD) | Q4 FY 2023 (USD) | Change | | :--- | :--- | :--- | :--- | | Net income | $35.1 million | $24.6 million | +42.7% | | Diluted net income per share | $6.09 | $4.20 | +45.0% | | Total revenues | $159.3 million | $160.8 million | -1.0% | Revenue Breakdown (Q4 FY2024 vs. Q4 FY2023) | Revenue Type | Q4 FY 2024 (USD) | Q4 FY 2023 (USD) | Change | | :--- | :--- | :--- | :--- | | Interest and fee income | $116.3 million | $121.5 million | -4.3% | | Insurance income | $13.2 million | $16.0 million | -17.8% | | Other income | $29.8 million | $23.3 million | +27.7% | - Revenues from the tax return preparation business increased by $6.2 million, or 30.5%, due to a 13.6% increase in the number of tax returns prepared and an increase in the average preparation fee per return9 Credit Quality and Provision for Credit Losses The company experienced significant improvements in credit quality during Q4 FY2024, with a substantial decrease in the provision for credit losses and net charge-offs, alongside lower delinquency rates - The provision for credit losses decreased $16.1 million to $29.3 million in Q4 FY2024 from $45.4 million in Q4 FY202310 - Net charge-offs for the quarter decreased $17.0 million, from $64.4 million in Q4 FY2023 to $47.4 million in Q4 FY202412 - Net charge-offs as a percentage of average net loan receivables on an annualized basis decreased to 18.8% in Q4 FY2024 from 23.9% in Q4 FY202312 - Accounts 61 days or more past due decreased to 5.0% on a recency basis at March 31, 2024, compared to 5.5% at March 31, 2023, while allowance for credit losses as a percent of net loans receivable was 10.8% at March 31, 2024, compared to 12.4% at March 31, 202313 Loan Portfolio Composition and Management The company has strategically tightened lending to new customers over the past two years, resulting in a shift in the loan portfolio mix towards customers with more than two years of tenure Gross Loan Balance By Customer Tenure at Origination (As of March 31) | As of | Less Than 2 Years (USD) | More Than 2 Years (USD) | Total (USD) | | :--- | :--- | :--- | :--- | | 03/31/2024 | $270,069,839 | $1,007,164,462 | $1,277,234,301 | | 03/31/2023 | $348,513,335 | $1,041,619,563 | $1,390,132,898 | Portfolio Mix by Customer Tenure at Origination (As of March 31) | As of | Less Than 2 Years (%) | More Than 2 Years (%) | | :--- | :--- | :--- | | 03/31/2024 | 21.1% | 78.9% | | 03/31/2023 | 25.1% | 74.9% | Year-Over-Year Growth (Decline) in Gross Loan Balance by Customer Tenure at Origination (12 Month Period Ended March 31, 2024) | 12 Month Period Ended | Less Than 2 Years (USD) | More Than 2 Years (USD) | Total (USD) | | :--- | :--- | :--- | :--- | | 03/31/2024 | $(78,443,496) | $(34,455,101) | $(112,898,597) | Operating Expenses Analysis General and administrative (G&A) expenses decreased in Q4 FY2024, primarily due to lower personnel and advertising costs, leading to a slight improvement in G&A expenses as a percentage of revenues - General and administrative (G&A) expenses decreased $1.6 million, or 2.1%, to $71.6 million in Q4 FY2024 compared to $73.2 million in the same quarter of the prior fiscal year16 - As a percentage of revenues, G&A expenses decreased from 45.5% during Q4 FY2023 to 45.0% during Q4 FY202416 - Personnel expense decreased $2.2 million, or 4.7%, during Q4 FY2024, with headcount decreasing 6.6% compared to March 31, 202317 - Advertising expense decreased $0.3 million, or 21.5%, in Q4 FY2024 due to decreased spending on customer acquisition programs18 Debt and Capital Management Interest expense decreased in Q4 FY2024, driven by a significant reduction in average debt outstanding, which also contributed to an improved debt-to-equity ratio - Interest expense for Q4 FY2024 decreased by $0.4 million, or 3.5%, from the corresponding quarter of the previous year19 - Average debt outstanding decreased 17.2% from $674.5 million to $558.3 million when comparing Q4 FY2024 and Q4 FY2023, despite a 5.7% increase in the effective interest rate20 - The Company's debt to equity ratio decreased to 1.2:1 at March 31, 2024, compared to 1.6:1 at March 31, 202320 - The Company repurchased and canceled $7.6 million of its previously issued bonds for a purchase price of $7.1 million during the quarter20 Shareholder Returns and Performance Ratios The company demonstrated strong financial performance with improved return on average assets and equity on a trailing twelve-month basis, alongside continued share repurchase activities - Key return ratios for Q4 FY2024 included a 7.0% return on average assets and a 19.1% return on average equity (both on a trailing twelve-month basis)21 - The Company repurchased 146,436 shares of its common stock for approximately $19.0 million during Q4 FY202422 - For the full fiscal year 2024, a total of 295,201 shares were repurchased for approximately $36.2 million22 Full Fiscal Year 2024 Results (Twelve Months Ended March 31, 2024) For the full fiscal year 2024, World Acceptance Corporation reported a substantial increase in net income and diluted EPS, despite a decrease in total revenues, and achieved a significant improvement in annualized net charge-offs Full Fiscal Year Performance (Twelve Months Ended March 31) | Metric | FY 2024 (USD) | FY 2023 (USD) | Change | | :--- | :--- | :--- | :--- | | Net income | $77.3 million | $21.2 million | +264.6% | | Diluted net income per share | $13.19 | $3.60 | +266.4% | | Total revenues | $573.2 million | $616.5 million | -7.0% | - Annualized net charge-offs as a percent of average net loans decreased from 23.7% during fiscal 2023 to 17.7% for fiscal 202423 Company Information This section provides an overview of World Acceptance Corporation's business model and details regarding its upcoming financial results conference call About World Acceptance Corporation World Acceptance Corporation, operating as World Finance, is a people-focused finance company established in 1962, providing personal installment loans and tax preparation services through over 1,000 branches - Founded in 1962, World Acceptance Corporation (NASDAQ: WRLD) provides personal installment loan solutions and personal tax preparation and filing services24 - The Company operates more than 1,000 community-based World Finance branches across 16 states, headquartered in Greenville, South Carolina24 - It primarily serves a segment of the population that does not have ready access to credit, focusing on understanding customers' financial pictures and ensuring their ability to make payments24 Conference Call Details World Acceptance Corporation's senior management will host a conference call to discuss the financial results, with a live simulcast and replay available online - A quarterly conference call will be held at 10:00 a.m. Eastern Time on May 2, 202425 - A simulcast of the conference call will be available on the Internet at https://event.choruscall.com/mediaframe/webcast.html?webcastid=jzCjKJe2 and will be available for replay for approximately 30 days25 Legal Disclosures This section outlines important legal disclaimers regarding forward-looking statements, emphasizing inherent risks and the company's non-obligation to update such information Cautionary Note Regarding Forward-Looking Information This section advises that the press release contains forward-looking statements subject to inherent risks and uncertainties, which could cause actual results to differ materially from those projected - The press release may contain 'forward-looking statements' subject to risks and uncertainties, including legislative changes, regulatory authority, litigation, employee misconduct, management turnover, economic factors, interest rates, inflation, cybersecurity threats, and dependence on debt28 - The Company's actual results and financial condition may differ materially from those indicated in the forward-looking statements, and readers should not rely on them28 - World Acceptance Corporation does not undertake any obligation to update any forward-looking statements29 Consolidated Financial Statements This section provides the unaudited consolidated financial statements, including statements of operations, balance sheets, and selected key statistics for the reported periods Consolidated Statements of Operations This section presents the unaudited consolidated statements of operations for the three and twelve months ended March 31, 2024, and 2023, detailing revenues, expenses, and net income Consolidated Statements of Operations (unaudited, in thousands, except per share amounts) | Metric | Three months ended March 31, 2024 (USD) | Three months ended March 31, 2023 (USD) | Twelve months ended March 31, 2024 (USD) | Twelve months ended March 31, 2023 (USD) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $159,265 | $160,837 | $573,214 | $616,546 | | Provision for credit losses | $29,276 | $45,412 | $156,973 | $259,463 | | Total general and administrative expenses | $71,619 | $73,178 | $268,600 | $279,475 | | Interest expense | $11,757 | $12,185 | $48,232 | $50,463 | | Total expenses | $112,652 | $130,775 | $473,805 | $589,401 | | Income before income taxes | $46,613 | $30,062 | $99,409 | $27,145 | | Net income | $35,058 | $24,632 | $77,346 | $21,231 | | Net income per common share, diluted | $6.09 | $4.20 | $13.19 | $3.60 | Consolidated Balance Sheets This section provides the unaudited consolidated balance sheets as of March 31, 2024, 2023, and 2022, detailing the company's assets, liabilities, and shareholders' equity Consolidated Balance Sheets (unaudited, in thousands) | Metric | March 31, 2024 (USD) | March 31, 2023 (USD) | March 31, 2022 (USD) | | :--- | :--- | :--- | :--- | | Total assets | $1,056,351 | $1,117,319 | $1,218,296 | | Gross loans receivable | $1,277,149 | $1,390,016 | $1,522,789 | | Allowance for credit losses | $(102,963) | $(125,553) | $(134,243) | | Loans receivable, net | $847,440 | $887,788 | $985,515 | | Total liabilities | $631,924 | $732,092 | $845,272 | | Senior notes payable | $223,419 | $307,911 | $396,973 | | Senior unsecured notes payable, net | $272,610 | $287,353 | $295,394 | | Shareholders' equity | $424,427 | $385,227 | $373,024 | Selected Consolidated Statistics This section provides selected unaudited consolidated statistics for the three and twelve months ended March 31, 2024, and 2023, including loan metrics, expense ratios, and key performance indicators Selected Consolidated Statistics (unaudited, in thousands, except percentages and branches) | Metric | Q4 FY24 (USD) | Q4 FY23 (USD) | FY24 (USD) | FY23 (USD) | | :--- | :--- | :--- | :--- | :--- | | Gross loans receivable | $1,277,149 | $1,390,016 | $1,277,149 | $1,390,016 | | Average gross loans receivable | $1,357,845 | $1,481,111 | $1,378,329 | $1,555,655 | | Net charge-offs as percent of average net loans receivable on an annualized basis | 18.8% | 23.9% | 17.7% | 23.7% | | Return on average assets (trailing 12 months) | 7.0% | 1.7% | 7.0% | 1.7% | | Return on average equity (trailing 12 months) | 19.1% | 5.8% | 19.1% | 5.8% | | Branches open (at period end) | 1,048 | 1,073 | 1,048 | 1,073 | | Provision for credit losses as % of total revenue | 18.4% | 28.2% | 27.4% | 42.1% | | General and administrative as % of total revenue | 45.0% | 45.5% | 46.9% | 45.3% | | Operating income as a % of total revenue | 36.7% | 26.3% | 25.8% | 12.6% |
World Acceptance (WRLD) - 2024 Q4 - Annual Results