CURO (US:CURO)2021-07-28 20:38Revenue Performance - Total revenue for the three months ended June 30, 2021, increased by $5.2 million, or 2.8%, to $187.7 million compared to the prior year period[213] - Canada Direct Lending revenue increased by $16.7 million, or 36.9%, while Canada POS Lending revenue contributed an additional $7.0 million from a full post-acquisition quarter for Flexiti[213] - U.S. revenue decreased by $18.5 million, or 13.5%, during the same period[213] - Total revenue for the six months ended June 30, 2021, declined by $79.1 million, or 17.1%, to $384.2 million, with U.S. revenues declining by 28.9%[218] - Canada Direct Lending revenues increased by $17.0 million, or 31.0%, while U.S. revenue decreased by $21.9 million, or 30.0%[219] - Total U.S. lending revenue for Q2 2021 was $114.9 million, down from $132.9 million in Q1 2021[252] - U.S. net revenue decreased by $18.5 million, or 13.5%, to $118.8 million for the three months ended June 30, 2021, primarily due to COVID-19 impacts and regulatory changes[255] - For the six months ended June 30, 2021, CURO reported consolidated revenue of $384,244,000, with net revenue of $302,934,000 after provisions for losses of $81,310,000[352] Loan Performance - Flexiti's second quarter 2021 originations increased by 117.8%, or C$56.2 million, to C$103.9 million, driven by new merchant partnerships[201] - Gross combined loans receivable increased by $315.7 million, or 64.4%, to $806.3 million as of June 30, 2021, driven by Canada Direct Lending growth of $104.5 million, or 40.7%[224] - Canada Direct Lending gross loans receivable grew by 5.1% sequentially, while Canada POS Lending gross loans receivable increased by 9.9%[209] - U.S. gross combined loans receivable declined by $10.2 million, or 4.4%, due to COVID-19 impacts and regulatory effects[224] - Canada Direct Lending Revolving LOC gross loans receivable increased by $105.8 million, or 45.6%, year over year, reaching a total of $338.5 million[287] - U.S. Revolving LOC loan balances decreased by $6.0 million, or 11.2%, leading to a revenue decrease of $6.8 million, or 22.1%[257] - U.S. Installment loan balances decreased by $7.3 million, or 5.0%, with revenue down by $9.2 million, or 14.1%[258] Expenses and Costs - Corporate, district, and other expenses increased by $22.8 million, or 62.1%, to $59.6 million for the three months ended June 30, 2021, primarily due to restructuring costs, transaction costs related to mergers, and Flexiti operating expenses[233] - Interest expense for the three months ended June 30, 2021, rose by $5.1 million, or 28.0%, mainly due to interest on debt from the Flexiti acquisition[235] - Advertising costs increased by $1.3 million, or 22.5%, year over year in response to product demand changes[230] - The total operating expense decreased by $828,000, or 8.9%, to $8.5 million for the three months ended June 30, 2021[292] - Non-advertising service costs for the six months ended June 30, 2021, were $64.0 million, a decrease of $6.9 million, or 9.7%, compared to the prior year[277] - Total operating expenses were $116,100,000, with corporate and other expenses at $79,588,000[354] Profitability and Income - Net income from continuing operations for the six months ended June 30, 2021, was $130.3 million, an increase of $73.2 million compared to the prior year[227] - Diluted earnings per share from continuing operations increased to $2.99 for the six months ended June 30, 2021, compared to $1.37 in the prior year[317] - The company reported a net income from continuing operations of $130.3 million for the six months ended June 30, 2021[339] - The net income attributable to CURO was $104.517 million, showcasing profitability despite challenges in the market[347] - The company recorded a gain of $135.4 million from the merger between Katapult and FinServ during Q2 2021, reflecting cash received net of the investment basis[274] 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[199] - The Flexiti acquisition allows access to nearly 6,600 locations in Canada, enhancing the company's credit card and POS financing capabilities[197] - The merger of Katapult and FinServ closed in June 2021, resulting in a cash consideration of $146.9 million and a retained ownership of 20.7% in the new public company[249] - The acquisition of Flexiti resulted in a cash outflow of $91,203,000[355] Cash Flow and Liquidity - As of June 30, 2021, total liquidity was $435.2 million, with cash on hand amounting to $276.4 million[333] - Net cash provided by operating activities from continuing operations for the six months ended June 30, 2021 was $162.9 million, down from $270.8 million for the same period in 2020[338] - Cash and cash equivalents totaled $276.4 million as of June 30, 2021[343] - The company recorded a net cash increase of $222,595,000 during the period, with cash and cash equivalents at the end of the period totaling $332,616,000[357] Regulatory and Legal Matters - The California District Court dismissed a class action lawsuit against Speedy Cash, which alleged violations of consumer protection statutes[370]