PRA (PRAA)2023-11-06 23:00Financial Performance - Total cash collections for Q3 2023 were $419.6 million, an increase of $7.3 million, or 1.8%, compared to $412.3 million in Q3 2022[157]. - Total revenues for the three months ended September 30, 2023, were $216.4 million, a decrease of $28.4 million, or 11.6%, compared to $244.8 million for the same period in 2022[158]. - Total revenues for the nine months ended September 30, 2023, were $581.1 million[155]. - Cash collections for the nine months ended September 30, 2023, totaled $1,250.2 million, a decrease of $87.2 million, or 6.5%, from $1,337.4 million in the same period in 2022[170]. - Net loss attributable to PRA Group, Inc. for Q3 2023 was $12.3 million, or 5.5% of total revenues[155]. - Total portfolio revenue was $212.1 million for the three months ended September 30, 2023, down $22.1 million, or 9.4%, from $234.2 million in the prior year, primarily due to lower cash overperformance and a lack of certain recoveries[159]. - Other revenue decreased to $4.3 million for the three months ended September 30, 2023, a decline of $6.3 million, or 59.4%, compared to $10.6 million in 2022, mainly due to timing of settlements[160]. Cash Collections - Cash collections in Brazil increased by $20.9 million, or 87.8%, in Q3 2023 compared to Q3 2022[157]. - Cash collections in Europe rose by $13.4 million, or 8.7%, in Q3 2023 compared to Q3 2022[157]. - U.S. legal cash collections decreased by $6.1 million, or 8.5%, in Q3 2023 due to lower volumes of accounts placed in the legal channel[157]. - The overall subtotal for cash collections across all segments was $1,615,204 million, indicating a robust performance in the financial year[195]. - The company reported cash collections of $475.5 million for the year 2023, showing a significant increase compared to previous years[199]. - The total cash collections for Europe from 2012 to 2023 amounted to $4,808.3 million, with a subtotal of $4,381.2 million[199]. Portfolio Acquisitions - Total portfolio purchases for Q3 2023 amounted to $311.2 million[154]. - Total portfolio acquisitions in Q3 2023 amounted to $311,183, an increase from $183,104 in Q3 2022[212]. - Major credit card acquisitions in Q3 2023 were $57,045, representing 33.2% of total U.S. portfolio acquisitions[214]. - Fresh accounts, typically past due 120 to 270 days, accounted for $103,432 or 66.0% of total core acquisitions in Q3 2023[215]. - The company invested $850.0 million in portfolio acquisitions in 2022, which generated $109.4 million of cash collections, representing only 6.3% of 2022 cash collections[224]. Operating Expenses and Interest - Operating expenses for the three months ended September 30, 2023, were $173.4 million, a slight decrease of $0.6 million, or 0.4%, from $174.0 million in the same period last year[161]. - Interest expense, net increased to $49.5 million for the three months ended September 30, 2023, up $17.0 million, or 52.4%, compared to $32.5 million in 2022, reflecting a higher average debt balance and interest rates[166]. - Operating expenses for the nine months ended September 30, 2023, were $526.2 million, an increase of $9.0 million, or 1.7%, compared to $517.2 million in the prior year[175]. - Interest expense, net for the nine months ended September 30, 2023, was $130.8 million, an increase of $35.0 million, or 36.6%, compared to $95.8 million in 2022, primarily due to higher debt and interest rates[181]. Cash Efficiency and Ratios - Cash efficiency ratio for Q3 2023 was 58.9%[154]. - The cash efficiency ratio for Q3 2023 was 58.9%, slightly up from 58.4% in Q2 2023[209]. - The Debt to Adjusted EBITDA ratio increased to 2.84x as of September 30, 2023, compared to 2.25x for the year ended December 31, 2022[219]. Goodwill and Impairment - As of September 30, 2023, the company reported goodwill of $412.5 million, primarily from the Debt Buying and Collection (DBC) reporting unit, which accounted for $385.6 million[248]. - The company performed its most recent annual goodwill impairment review on October 1, 2022, concluding that goodwill was not impaired, with the DBC reporting unit's fair value exceeding its carrying value by a substantial margin[249]. - The company identified a heightened risk for future impairment of goodwill allocated to the DBC reporting unit due to macroeconomic conditions, higher interest rates, and recent financial performance[250]. Future Projections - The estimated remaining collections (ERC) as of September 30, 2023, amount to $5,975.6 million, categorized by geographical region[202]. - Total ERC for 2024 is projected at $1,474,521, with a significant contribution from the Americas and Australia Core at $822,339[205]. - The total ERC for 2033 is projected to be $145,548, indicating a declining trend over the years[205]. International Operations - The company generated $111.0 million in revenues from operations outside the U.S. during the three months ended September 30, 2023, using 12 functional currencies[260]. - The company actively monitors the value of finance receivables by currency and may execute re-balancing foreign exchange contracts to align funding and portfolio acquisitions by currency[264].