CURO (US:CURO)2022-11-02 22:06Financial Performance - For the three months ended September 30, 2022, total revenue increased by 2.3% to $214.1 million compared to $209.3 million in the same period of 2021[181]. - Interest and fees revenue for the nine months ended September 30, 2022, rose by 34.2% to $723.8 million, up from $539.2 million in the prior year[181]. - Net income for the three months ended September 30, 2022, improved by $67.7 million, primarily due to a $68.4 million gain on the sale of the Legacy U.S. Direct Lending business[185]. - Total revenue for the three months ended September 30, 2022, increased by $4.8 million, or 2.3%, to $214.1 million, driven by significant growth in Canada POS Lending (142.7%) and Canada Direct Lending (19.3%)[187]. - For the nine months ended September 30, 2022, total revenue rose by $215.2 million, or 36.3%, to $808.7 million, primarily due to acquisitions and growth in Canada Direct Lending[188]. - U.S. revenue for the nine months increased by $124.6 million, or 32.2%, mainly from Heights Finance and First Heritage acquisitions, despite a decline from the divestiture of the Legacy U.S. Direct Lending business[188]. - Net revenue for the nine months ended September 30, 2022, was $315.1 million, an increase of 13.0% from $278.9 million in the same period of 2021[237]. Operating Expenses - Operating expenses for the three months ended September 30, 2022, decreased by 5.1% to $116.4 million compared to $122.6 million in the same period of 2021[181]. - Total operating expenses for the nine months ended September 30, 2022, increased by 23.2% to $302.6 million, compared to $245.6 million in the same period of 2021[243]. - Operating expenses for the three months ended September 30, 2022, were $76.1 million, a decrease of 9.5% from $84.1 million in the same period of 2021[240]. - Total operating expenses for the nine months ended September 30, 2022, were $82.1 million, an increase of 7.9% from $76.1 million in the same period of 2021[260]. Provision for Losses - The provision for losses for the nine months ended September 30, 2022, increased by 100.9% to $305.5 million, compared to $152.0 million in the same period of 2021[181]. - Provision for losses for the three months ended September 30, 2022, increased by $7.7 million, or 10.9%, due to loan growth and credit normalization post-COVID-19[201]. - The provision for losses decreased by $19.0 million, or 39.6% year over year, primarily due to the divestiture of the Legacy U.S. Direct lending business[231]. - The provision for losses increased significantly to $32.9 million in Q3 2022, compared to $14.0 million in Q3 2021, reflecting a substantial rise in credit risk[254]. Acquisitions and Divestitures - The company completed the divestiture of its Legacy U.S. Direct Lending business in July 2022, which contributed to the financial results for the third quarter[185]. - The acquisition of Heights Finance in December 2021 and First Heritage in July 2022 is expected to broaden the company's position in the near-prime consumer lending market[176]. - Recent acquisitions of First Heritage and Heights Finance are expected to enhance product offerings and expand market reach in the U.S. and Canada[299]. Loans and Receivables - Gross loans receivable increased by $1,012.1 million, or 114.7%, to $1,894.4 million as of September 30, 2022, from $882.4 million as of September 30, 2021[225]. - Total U.S. gross combined loans receivable reached $739.1 million in Q3 2022, compared to $737.4 million in Q2 2022[227]. - Canada Direct Lending revenue increased by $11.3 million, or 22.0%, year over year for the three months ended September 30, 2022, driven by the growth of Revolving LOC loans[248]. - Total gross loans receivable for Canada POS Lending reached $690.3 million in Q3 2022, up 128.3% year-over-year[262]. Interest and Fees - The company recorded a 94.3% increase in interest expense for the three months ended September 30, 2022, totaling $50.1 million, compared to $25.8 million in the same period of 2021[181]. - Interest and fees revenue for Q3 2022 was $62.9 million, up 22.0% from $51.6 million in Q3 2021[254]. - Interest expense for Q3 2022 was $7.2 million, a significant increase from $2.4 million in Q3 2021, driven by higher utilization of the Canada SPV facility[259]. Regulatory Environment - The CFPB is expanding its supervisory authority over non-bank financial entities, which may affect compliance and operational strategies[315]. - The CFPB issued a compliance bulletin warning against practices that restrict consumer reviews, which could lead to violations of the Consumer Review Fairness Act[316]. - The CFPB is focusing on anti-discrimination efforts across consumer finance markets, which may influence company policies and practices[317]. - A recent court ruling invalidated parts of the CFPB's 2017 and 2020 Final Rules, which may have implications for regulatory compliance and operational strategies[319]. Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2022, was $295.7 million, compared to $220.7 million for the same period in 2021[304]. - As of September 30, 2022, the company had available cash on hand of $45.7 million, providing sufficient liquidity for at least the next 12 months[298]. - The company has a $25.0 million share repurchase program authorized in February 2022, with no shares repurchased to date[296].