CURO (US:CURO)2022-08-08 21:55Revenue Growth - Total revenue for the three months ended June 30, 2022, increased by $116.7 million, or 62.2%, to $304.4 million compared to the prior-year period, primarily driven by acquisitions of Flexiti and Heights Finance [173]. - U.S. revenue increased by $86.9 million, or 73.2%, with Heights Finance contributing $74.3 million to total revenue for the second quarter of 2022 [173]. - Canada POS Lending revenue reached $23.2 million, an increase of $16.1 million, or 230%, compared to the three months ended June 30, 2021 [173]. - Total revenue for the six months ended June 30, 2022, increased by $210.4 million, or 54.7%, to $594.6 million, driven by acquisitions and growth in Canada Direct Lending [174]. - U.S. revenue increased by $148.8 million, or 58.3%, with Heights Finance contributing $140.0 million; excluding Heights Finance, U.S. revenue grew by $8.8 million, or 3.5% [174]. - Canada POS Lending revenue surged by $34.8 million, or 403%, totaling $43.5 million, reflecting a full quarter of Flexiti's results post-acquisition [174]. - Total revenue for the three months ended June 30, 2022, was $205.7 million, an increase of 73.2% compared to $118.8 million for the same period in 2021 [1]. - Interest and fees revenue rose to $198.0 million, up 72.3% from $114.9 million year-over-year [1]. Expenses and Losses - Operating expenses for the three months ended June 30, 2022, totaled $164.4 million, a 39.9% increase from $117.5 million in the prior year [169]. - Net loss for the three months ended June 30, 2022, was $26.1 million, compared to a net income of $104.5 million in the same period of 2021 [169]. - Provision for losses for the three months ended June 30, 2022, was $129.5 million, a significant increase of 186.8% from $45.2 million in the prior year [169]. - Operating expenses for the six months ended June 30, 2022, were $317.9 million, reflecting a 41.4% increase from the prior year [187]. - Operating expenses for the three months ended June 30, 2022, were $115.6 million, a 41.6% increase from $81.7 million in the same period last year [11]. - The provision for losses increased significantly to $97.6 million, compared to $33.6 million in the prior year [1]. - The company reported a net loss of $26,080,000 for the three months ended June 30, 2022, compared to a net income of $104,517,000 for the same period in 2021, representing a change of $130,597,000 [251]. Acquisitions and Market Position - The company acquired Heights Finance in December 2021, which contributed to revenue and expenses during the three-month period ended June 30, 2022 [170]. - The company sold its U.S. Legacy Direct Lending Business in July 2022 and acquired First Heritage Credit, enhancing its position in the near-prime consumer lending market [163]. - Recent acquisitions of Flexiti and Heights Finance are expected to enhance product offerings and expand market reach in the U.S. and Canada [268]. Loans and Receivables - Gross combined loans receivable increased by $1,025.8 million, or 127.2%, to $1,832.2 million as of June 30, 2022, compared to $806.3 million as of June 30, 2021 [193]. - Canada POS Lending growth contributed $405.7 million, or 183.2%, to the increase in gross combined loans receivable [193]. - U.S. Installment loan balances increased by $488.4 million, or 350.8%, with revenue rising by $65.7 million, or 117.5%, compared to the prior year [205]. - Total U.S. gross combined loans receivable reached $737,445 thousand in Q2 2022, up from $683,149 thousand in Q1 2022 [199]. - Total gross loans receivable for Canada POS Lending reached $627.2 million in Q2 2022, a 15.8% increase from Q1 2022 [232]. Financial Ratios and Compliance - The effective income tax rate for the six months ended June 30, 2022 was 19.2%, compared to a statutory rate of approximately 26% [192]. - The company remains in compliance with all financial ratios and covenants in its debt agreements as of June 30, 2022 [265]. Cash Flow and Liquidity - Net cash provided by operating activities was $201.2 million for the six months ended June 30, 2022, despite a net loss of $24.7 million [274]. - Total cash used in investing activities was $485.5 million for the six months ended June 30, 2022, primarily due to net loan origination of $463.2 million [275]. - The company reported net cash provided by financing activities of $273.9 million for the six months ended June 30, 2022, mainly from $300.0 million of net proceeds from non-recourse debt facilities [276]. - As of June 30, 2022, the company had available cash on hand of $47.6 million, indicating sufficient liquidity for at least the next 12 months [267]. Regulatory Environment - The CFPB is expanding its supervisory authority to include non-bank financial entities, indicating potential regulatory changes affecting the industry [284]. - CFPB issued a compliance bulletin warning against practices that restrict consumer reviews, which could violate the Consumer Review Fairness Act [285]. - CFPB is enhancing anti-discrimination efforts across consumer finance markets, indicating a broader scope for UDAAP violations [286].