CURO (US:CURO)2021-05-07 20:31Revenue Performance - Total revenues for the three months ended March 31, 2021, declined by $84.3 million, or 30.0%, to $196.6 million compared to the prior-year period[200]. - Revenue decreased by 30.0% to $196.6 million for the three months ended March 31, 2021, compared to $280.8 million for the same period in 2020[210]. - U.S. net revenue decreased by $85.3 million, or 38.5%, to $136.5 million for the three months ended March 31, 2021, primarily due to COVID-19 related declines in gross combined loans receivable[228]. - Net revenue in the U.S. segment decreased by $25.3 million or 18.6%, from $135.7 million in Q1 2020 to $110.4 million in Q1 2021[236]. - Canada Direct Lending revenue declined by $0.6 million or 1.0% year over year, attributed to COVID-19 impacts on Installment gross loans receivable[245]. - Net revenue for Canada Direct Lending was $49.2 million, an increase of 58.7% compared to the prior year[251]. - The Canada Direct Lending segment reported revenues of $55.2 million, a decrease of 6.4% from $59.0 million in the same period last year[278]. Loan Performance - U.S. gross combined loans receivable decreased by $125.8 million, or 36.6%, due to COVID-19 impacts and additional government stimulus in the first quarter of 2021[208]. - Gross combined loans receivable increased by $143.1 million, or 23.1%, to $763.5 million as of March 31, 2021, from $620.4 million as of March 31, 2020[206]. - Verge loan balances totaled $29.7 million as of March 31, 2021, with an expected orderly run-off over the next 24 months[199]. - U.S. Installment loan balances decreased by $72.0 million, or 33.6%, with revenue declining by $42.7 million, or 39.8% compared to the prior year[231]. - U.S. Installment loans Guaranteed by the Company declined by $23.5 million, or 42.0% year over year, primarily due to COVID-19 impacts[233]. - Canada Direct Lending gross loans receivable reached $343.7 million in Q1 2021, up from $330.2 million in Q4 2020[243]. - Canada Direct Lending Revolving LOC gross loans receivable increased by $79.0 million, or 32.9%, year over year, reaching a total of $317.0 million[247]. Expenses and Costs - Installment revenue decreased by $77.5 million, or 40.0%, compared to the prior-year period, primarily due to COVID-19 impacts[202]. - Non-advertising costs of providing services decreased by $5.0 million, or 9.1%, to $50.3 million for the three months ended March 31, 2021[212]. - Advertising costs decreased by $4.1 million, or 33.8%, year over year due to changes in product demand resulting from COVID-19[213]. - Corporate, district, and other expenses increased by $6.0 million, or 14.1%, to $48.8 million for the three months ended March 31, 2021, primarily due to acquisition-related costs[217]. - Interest expense increased by $2.2 million, or 12.8%, for the three months ended March 31, 2021, due to higher borrowings[219]. - Non-advertising costs of providing services decreased by $5.1 million or 13.7%, from $37.2 million in Q1 2020 to $32.2 million in Q1 2021, primarily due to lower variable costs related to COVID-19[238]. - Corporate, district, and other expenses increased by 59.8% year over year, totaling $8.2 million[251]. Profitability and Income - Net income from continuing operations decreased by $10.3 million, or 28.6%, to $25.7 million for the three months ended March 31, 2021[210]. - Adjusted net income was $30.1 million, a decrease of 6.5% from $32.3 million year-over-year[266]. - Diluted earnings per share from continuing operations fell to $0.59, a decline of 31.4% compared to $0.86 in the prior year[266]. - Adjusted diluted earnings per share decreased to $0.69, down 10.4% from $0.77 year-over-year[266]. - EBITDA for the period was $58.7 million, a slight decrease of 1.8% from $59.8 million in the previous year[268]. - Adjusted EBITDA was $63.8 million, down 3.0% from $65.8 million year-over-year[268]. - The company reported a net income from continuing operations of $25.7 million for Q1 2021[290]. Acquisitions and Mergers - The acquisition of Flexiti included cash at closing of $86.5 million and contingent cash consideration of up to $32.8 million based on revenue targets over the next two years[193]. - The market value of total consideration from the Katapult merger is estimated to be approximately $410 million in cash and stock[196]. - The merger with Katapult is expected to provide consideration valued at approximately $410 million, with an anticipated cash receipt of up to $130 million[223]. - The acquisition of Flexiti was completed for a total consideration of $86.5 million in cash, with additional contingent cash consideration of $20.6 million[312]. - The goodwill from the acquisition of Flexiti was recorded at $44.9 million, reflecting the excess purchase price over the fair value of net assets acquired[312]. Financial Position and Liquidity - The company has total liquidity of $233.2 million as of March 31, 2021, providing sufficient liquidity for at least the next 12 months[283]. - Total assets as of March 31, 2021, amounted to $1,407.6 million, with loans receivable net at $658.6 million[296]. - The company had total liabilities of $1,247.4 million as of March 31, 2021[296]. - Cash and cash equivalents totaled $135.4 million as of March 31, 2021[296]. - The balance of the 8.25% Senior Secured Notes as of March 31, 2021, was $680.4 million[287]. - The net cash at the end of the period was $215.8 million, down from $268.1 million at the beginning of the period[304]. - The company reported a gross margin of 51.8% for the quarter, reflecting strong operational efficiency[299]. Market and Economic Conditions - Uncertainty remains regarding macroeconomic factors that could impact reporting units, including the length of the economic downturn and recovery timing[316]. - Changes in market participant assumptions, such as increased discount rates or share price reductions, could heighten the risk of future goodwill impairment[316]. - There have been no significant developments in the regulatory environment and compliance since December 31, 2020[317]. - No material changes have occurred in the quantitative and qualitative disclosures about market risks since the 2020 Form 10-K[318].