World Acceptance (US:WRLD)2025-04-29 15:02Financial Data and Key Metrics Changes - The company ended the fiscal year with an outstanding letter of $1,220,000,000, representing a 4% decrease year over year, while the customer base increased by 3.5%, marking the first year of customer growth since fiscal year 2022 [3][4] - The average balance per customer decreased by 7.3% year over year, following a 7.1% decrease in the previous year [4] - The fourth quarter EPS benefited from a $2,800,000 after-tax accrual release of share-based compensation expense, equating to approximately $0.38 per share [7] Business Line Data and Key Metrics Changes - Non-refinance loan volume increased by 12.6% year over year, following a 10% increase in the previous year, while maintaining high credit quality and low first payment default rates [8] - Refinance loan volume improved slightly by 3% year over year, with a temporary dip in March that rebounded in April [10] - The portfolio composition shifted towards small loans, with large loans decreasing from nearly 60% two years ago to 48% at the end of fiscal year 2025 [11][12] Market Data and Key Metrics Changes - The company experienced a 25% increase in tax return revenue, amounting to nearly $7,000,000 in the fourth quarter [7] - The approval rates for new customers increased by around 50% compared to the third and fourth quarters of fiscal year 2024 [12] Company Strategy and Development Direction - The company is focusing on returning to its roots by emphasizing small loans, which historically made up a larger portion of its portfolio [11][17] - A new credit card product is being piloted internally, with plans for wider testing and eventual customer offering later in the fiscal year [12][13] - The strategy aims to align yield with risk, manage both installment and revolving credit, and expand market reach [13] Management's Comments on Operating Environment and Future Outlook - Management has not observed significant changes in consumer demand or payment behavior despite external economic factors [16] - There is optimism regarding the impact of improved training and loan servicing management on delinquency rates [6] - The company expects natural reductions in annualized charge-off rates with normal portfolio growth [4] Other Important Information - The company has repurchased over $115,000,000 of bonds, with plans for more repurchases depending on negotiations with banks [24][25] Q&A Session Summary Question: Any shift in consumer behavior since mid to late February? - Management indicated no significant increase or decrease in demand or change in payments [16] Question: Is the shift to smaller loans due to underwriting or consumer demand? - The shift is primarily a return to the company's historical focus on small loans rather than a change in consumer demand [17][18] Question: What is driving the strong revenue growth in tax preparation? - The growth is attributed to market research, increased pricing, and minimal reduction in demand during tax season [19]