CURO (US:CURO)2022-05-02 22:38Revenue Growth - Total revenue for Q1 2022 increased by $93.6 million, or 47.6%, to $290.2 million compared to Q1 2021, driven by acquisitions and growth in Canada Direct Lending [153]. - U.S. revenue rose by $61.9 million, or 45.4%, primarily due to the Heights Finance acquisition, which contributed $65.7 million to total revenue [153]. - Installment revenue for Q1 2022 increased by $57.5 million, or 49.4%, largely due to the Heights Finance acquisition, which accounted for $60.4 million of this revenue [157]. - Canada POS Lending revenue reached $20.3 million, an increase of $18.7 million compared to Q1 2021, reflecting the full quarter of Flexiti's results post-acquisition [155]. - Total revenue for the three months ended March 31, 2022, was $198.4 million, an increase of $61.9 million or 45.4% compared to $136.5 million in the same period of 2021 [182]. - Interest and fees revenue rose to $189.7 million, up $56.9 million or 42.8% from $132.9 million year-over-year [182]. - Canada Direct Lending revenues increased by 22.4% to $71.515 million in Q1 2022, compared to $58.440 million in Q1 2021 [228]. Expenses and Loss Provisions - Provision for losses increased by $61.4 million, or 169.8%, for Q1 2022 compared to the prior year, reflecting normalization of loan growth and higher NCO rates [160]. - Operating expenses for Q1 2022 totaled $153.5 million, an increase of 43.1% compared to $107.2 million in Q1 2021, driven by higher salaries and benefits, occupancy, and advertising costs [152]. - Interest expense increased by 96.2% to $38.3 million in Q1 2022, attributed to the issuance of additional Senior Secured Notes for acquisitions and loan growth support [152]. - The provision for losses increased by $40.8 million, or 156.5%, year over year, driven by normalized provisioning on loan growth and higher NCO and past-due rates [176]. - Operating expenses totaled $110.9 million, an increase of $31.0 million or 38.9% from $79.9 million in the same quarter of 2021, primarily due to expenses associated with Heights Finance [184]. - The provision for losses in Canada Direct Lending rose to $22.0 million, an increase of $12.8 million or 138.2% compared to $9.2 million in the prior-year period [189]. Income and Profitability - Net income for Q1 2022 was $1.3 million, a decline of 94.8% from $25.7 million in Q1 2021, primarily due to increased provisions for loan losses and higher interest expenses [152]. - The company reported an adjusted EBITDA of $29.8 million, down $9.5 million or 24.2% from $39.3 million in the previous year [182]. - Adjusted Net Income for the same period was $6.275 million, down 79.2% from $30.128 million year-over-year [217]. - Adjusted EBITDA for the three months ended March 31, 2022, was $54.299 million, reflecting a 14.9% decrease from $63.775 million in the prior year [219]. Loan Growth and Receivables - Gross combined loans receivable increased by $909.5 million, or 119.1%, to $1,673.0 million as of March 31, 2022, compared to $763.5 million a year earlier [170]. - Canada POS Lending experienced growth of $340.2 million, or 168.8%, contributing significantly to the overall increase in gross combined loans receivable [170]. - Total gross loans receivable for Canada POS Lending reached $541.8 million, reflecting a significant increase from previous quarters [202]. - U.S. Installment loan balances increased by $447.3 million, or 314.1%, with revenue rising by $49.3 million, or 76.4%, year over year [178]. - Gross loans receivable reached $448.1 million, an increase of $57.9 million or 14.5% from $390.8 million in the same quarter of 2021 [188]. Operational Metrics - The company operated 550 locations across 20 U.S. states and provided online services in 27 states as of March 31, 2022 [145]. - The effective income tax rate for the three months ended March 31, 2022, was 45.3%, higher than the statutory rate of approximately 26% due to lower income before tax and non-deductible expenses [167]. - The NCO rate for Total U.S. Company Owned was 7.1%, down from 16.4% in Q4 2021 [173]. - The past-due rate for Total U.S. Company Owned was 19.9%, down from 22.5% in Q4 2021 [174]. - The NCO rate for Canada POS Lending was 0.5%, consistent with the previous quarter, while the past-due rate improved year over year by 140 basis points to 4.2% [200]. Cash Flow and Liquidity - Net cash provided by operating activities for the three months ended March 31, 2022, was $83.7 million, driven by net income of $1.3 million and non-cash reconciling items of $107.5 million [241]. - Net cash used in investing activities for the same period was $187.7 million, primarily due to net loan origination of $176.3 million and $11.4 million spent on property, equipment, and software [242]. - Net cash provided by financing activities for the three months ended March 31, 2022, was $110.3 million, including $111.2 million from non-recourse debt facilities and a $20.0 million draw on the Senior Revolver [243]. - The company reported a total liquidity of $117.7 million as of March 31, 2022, with cash on hand of $60.2 million [235]. Strategic Initiatives - Recent acquisitions of Flexiti and Heights Finance have expanded product offerings to near-prime and prime customers, potentially increasing access to subprime customers [236]. - The acquisition of Heights Finance supports a strategic transition towards longer-term, higher balance, and lower rate credit products, enhancing market access and mitigating regulatory risks [236]. - A new $25 million share repurchase program was authorized in February 2022, following the completion of a $50 million program [233]. - The quarterly dividend was increased to $0.11 per share, marking a 100% increase from previous levels [231]. Regulatory Environment - The regulatory environment remains stable, with no significant developments since December 31, 2021, except for the CFPB expanding its supervisory authority over non-bank financial entities [250]. - The company has no additional material commitments or demands likely to affect liquidity [237].