CURO Group Holdings Corp. Announces Second Quarter 2022 Financial Results
Consolidated Revenue Grew 62.2% in the Quarter Compared to 2021
WICHITA, Kan.–(BUSINESS WIRE)–CURO Group Holdings Corp. (NYSE: CURO) (“CURO” or the “Company”), a tech-enabled, omni-channel consumer finance company serving a full spectrum of non-prime and prime consumers in the U.S. and Canada, today announced financial results for its second quarter ended June 30, 2022.
“It was a very busy and productive quarter for CURO. In July, we successfully closed the transformative transactions that we announced in May 2022 – the sale of our legacy US Direct Lending business and acquisition of First Heritage Credit,” said Don Gayhardt, CURO’s Chief Executive Officer. “These transactions complete CURO’s strategic transition into longer term, higher balance and lower rate credit products, simplify and improve the future predictability of our business results, expand our access to lower cost funding, and focuses our capital on higher-growth, durable business lines. On the funding side, we also entered into new non-recourse revolving warehouse facilities to fund the loan portfolios and new originations for Heights Finance and First Heritage at lower spreads and higher advance rates.
“I am proud of what our team accomplished during these trying market conditions while still driving solid results in our Heights Finance, Canada Direct Lending, and Flexiti businesses. Excluding the sold U.S. Legacy Direct Lending business, loan balances grew 163.7% year-over-year and 9.4% sequentially compared to the first quarter of 2022. As expected, this solid sequential loan growth and normalization of net charge-off rates and loan loss provisions caused a meaningful reduction in year-over-year earnings for the quarter. As we enter the second half of the year, we will be laser-focused on execution – integrating and capitalizing on the Heights Finance and First Heritage acquisition synergies, careful credit risk management, liquidity and optimizing our cost structure in the wake of the sale of our U.S. Legacy Direct Lending business.”
Consolidated Summary Results
We reported a Net loss of $26.1 million ($0.65 loss per share) and Adjusted net loss of $11.3 million ($0.28 adjusted loss per share) on revenue of $304.4 million for the three months ended June 30, 2022, compared with Net income of $104.5 million ($2.39 per share) and Adjusted net income of $17.4 million ($0.40 adjusted diluted earnings per share) on total revenue of $187.7 million for the three months ended June 30, 2021.
The decline in Net income was primarily driven by (i) year-over-year comparisons for the provision for loan losses which continued to be affected by COVID-19 impacts during the second quarter of 2021 and (ii), higher interest expense. During the second quarter of 2021 Katapult became a public company via a SPAC merger, generating a pretax gain of $135.4 million. Government stimulus in March 2021 and pandemic-related consumer behavior reduced demand, increased payment rates and lowered loss rates in the second quarter of 2021, resulting in a provision for loan losses that was $4.6 million less than net charge-offs (NCOs). In this year’s second quarter, credit normalization and strong sequential loan growth resulted in a provision for loan losses that exceeded NCOs by $24.3 million (including the impact of purchase accounting for the Heights Finance portfolio acquired in December 2021). Interest expense increased because of our issuance of 7.50% Senior Secured Notes in the fourth quarter of 2021 to finance, in part, the Heights Finance acquisition, as well as the expansion of non-recourse asset-backed facility borrowing to support loan growth.
Below are additional highlights of our performance this year:
-
Revenue and Net Revenue
- Revenue increased $116.7 million, or 62.2%, year over year, primarily driven by our December 27, 2021 acquisition of Heights Finance, which accounted for $74.3 million of revenue for the second quarter of 2022. Revenue for Canada POS Lending and Canada Direct Lending grew 229.9% and 22.1%, respectively, year over year.
- Sequentially, revenue increased $14.2 million, or 4.9%, driven by growth of $2.8 million, or 14.0%, in Canada POS Lending, $4.1 million, or 5.7%, in Canada Direct Lending, and $7.3 million, or 3.7% in the U.S. Direct Lending.
- For the three months ended June 30, 2022, net revenue increased $32.3 million, or 22.7%, year over year, and $17.8 million sequentially. Excluding Heights Finance, net revenue decreased $54.1 million, or 28.1%, year over year, because of the aforementioned loan loss provision comparisons.
-
Loans Receivable
- Year-over-year growth in Company Owned gross loans receivable and combined gross loans receivable (gross loans receivable plus loans originated by third-party lenders which are guaranteed by the company) of $1,011.6 million, or 131.5%, and $1,025.8 million, or 127.2%, respectively, as a result of the acquisition of Heights Finance. Excluding Heights Finance, combined gross loans receivables increased $534.3 million, or 66.3%, year over year, primarily driven by $405.7 million, or 183.2%, for Canada POS Lending. Canada and U.S. Direct Lending (excluding Heights Finance) combined gross loans receivable grew 29.4% and 10.0%, respectively, versus the second quarter of 2021.
- Sequential loan growth in Company Owned gross loans receivable and combined gross loans receivable of $152.3 million, or 9.4%, and $159.2 million, or 9.5%, respectively, was primarily due to growth in Canada POS Lending of $85.4 million, or 15.8%, and U.S. Direct Lending of $54.3 million, or 7.9%.
-
NCOs and Delinquency Metrics
- Consolidated quarterly NCO rates improved by 60 bps year over year, primarily from the relative growth of Canada POS Lending and the acquisition of Heights Finance, which shifts our loan portfolio mix to lower loss-rate products offset by credit normalization in the U.S. Direct Lending business.
- Sequentially, consolidated quarterly NCO rates improved by 80 bps, largely driven by loan growth at Heights and Canada POS Lending, which have lower NCO rates, offset by credit normalization in the U.S. Direct Lending business.
- Consolidated past-due rates increased 300 bps year over year as credit continued to normalize compared to the first six months of 2021, which was affected by pandemic-related U.S. government stimulus.
- Consolidated past-due rates increased by 100 bps sequentially, primarily due to seasonality and credit normalization.
-
Other Highlights
- On July 8, 2022, we completed the sale of our U.S. Legacy Direct Lending business to Community Choice Financial, a consumer financial services company based in Dublin, Ohio, for total cash consideration of $345 million. The consideration included $310 million in cash paid at closing and $35 million payable in monthly installment payments over the subsequent 12 months.
- On July 13, 2022, we completed the acquisition of First Heritage Credit (“FHC”), a consumer lender that provides near-prime installment loans along with customary opt-in insurance and other financial products, based in Ridgeland, Mississippi, for a total purchase price of $140 million in cash.
- On July 13, 2022, concurrently with the closing of the FHC acquisition, we entered into a new $225 million non-recourse revolving warehouse facility to replace FHC’s incumbent lender’s facility and finance future loans originated by FHC.
- On July 15, 2022, we entered into a new $425 million non-recourse revolving warehouse facility to replace the incumbent lender’s facility and finance future loans originated by Heights Finance.
- On August 3, 2022 we declared the next quarterly dividend of $0.11 per share, payable on August 26, 2022 to stockholders of record as of August 15, 2022.
From the second quarter of 2020 through the first half of 2021, we experienced lower customer demand in the U.S. and Canada Direct Lending, relatively good credit performance, increased or accelerated repayments and favorable payment trends, as customers were aided by government stimulus programs while periodically enduring pandemic lockdowns as a result of COVID-19. From the third quarter of 2021 through the second quarter of 2022, our markets were less affected by COVID-19, resulting in positive growth trends in revenue and receivables, along with increases in charged off accounts as stimulus programs waned and credit normalized.
Results of Consolidated Operations
Beginning January 1, 2022, we began reporting “Interest and fees revenue,” “Insurance premiums and commissions” and “Other revenue” in place of our previously reported “Revenue” on our Statements of Operations. Prior period presentations have been revised to conform to the current period presentation.
|
Table 1 – Consolidated Statements of Operations |
||||||||||||||||||||||||
|
(in thousands, unaudited) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||||||||||
|
|
|
2022 |
|
|
2021 |
|
Change $ |
Change % |
|
|
2022 |
|
|
2021 |
|
Change $ |
Change % |
|||||||
|
Revenue |
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Interest and fees revenue |
|
$ |
278,331 |
|
$ |
169,403 |
|
$ |
108,928 |
|
64.3 |
% |
|
|
543,287 |
|
|
348,526 |
|
|
194,761 |
|
55.9 |
% |
|
Insurance premiums and commissions |
|
|
18,653 |
|
|
11,853 |
|
|
6,800 |
|
57.4 |
% |
|
|
36,913 |
|
|
23,422 |
|
|
13,491 |
|
57.6 |
% |
|
Other revenue |
|
|
7,420 |
|
|
6,437 |
|
|
983 |
|
15.3 |
% |
|
|
14,400 |
|
|
12,296 |
|
|
2,104 |
|
17.1 |
% |
|
Total revenue |
|
|
304,404 |
|
|
187,693 |
|
|
116,711 |
|
62.2 |
% |
|
|
594,600 |
|
|
384,244 |
|
|
210,356 |
|
54.7 |
% |
|
Provision for losses |
|
|
129,546 |
|
|
45,165 |
|
|
84,381 |
|
186.8 |
% |
|
|
227,077 |
|
|
81,310 |
|
|
145,767 |
|
# |
|
|
Net revenue |
|
|
174,858 |
|
|
142,528 |
|
|
32,330 |
|
22.7 |
% |
|
|
367,523 |
|
|
302,934 |
|
|
64,589 |
|
21.3 |
% |
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Salaries and benefits |
|
|
82,427 |
|
|
58,320 |
|
|
24,107 |
|
41.3 |
% |
|
|
162,156 |
|
|
113,237 |
|
|
48,919 |
|
43.2 |
% |
|
Occupancy |
|
|
17,507 |
|
|
13,783 |
|
|
3,724 |
|
27.0 |
% |
|
|
34,544 |
|
|
28,130 |
|
|
6,414 |
|
22.8 |
% |
|
Advertising |
|
|
12,707 |
|
|
7,043 |
|
|
5,664 |
|
80.4 |
% |
|
|
23,207 |
|
|
15,127 |
|
|
8,080 |
|
53.4 |
% |
|
Direct operations |
|
|
20,293 |
|
|
13,699 |
|
|
6,594 |
|
48.1 |
% |
|
|
40,567 |
|
|
25,668 |
|
|
14,899 |
|
58.0 |
% |
|
Depreciation and amortization |
|
|
8,672 |
|
|
7,435 |
|
|
1,237 |
|
16.6 |
% |
|
|
18,486 |
|
|
12,400 |
|
|
6,086 |
|
49.1 |
% |
|
Other operating expense |
|
|
22,801 |
|
|
17,218 |
|
|
5,583 |
|
32.4 |
% |
|
|
38,913 |
|
|
30,170 |
|
|
8,743 |
|
29.0 |
% |
|
Total operating expenses |
|
|
164,407 |
|
|
117,498 |
|
|
46,909 |
|
39.9 |
% |
|
|
317,873 |
|
|
224,732 |
|
|
93,141 |
|
41.4 |
% |
|
Other expense (income) |
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Interest expense |
|
|
42,193 |
|
|
23,440 |
|
|
18,753 |
|
80.0 |
% |
|
|
80,534 |
|
|
42,979 |
|
|
37,555 |
|
87.4 |
% |
|
Loss (income) from equity method investment |
|
|
1,328 |
|
|
(1,712 |
) |
|
3,040 |
|
# |
|
|
(256 |
) |
|
(2,258 |
) |
|
2,002 |
|
(88.7 |
)% |
|
|
Gain from equity method investment |
|
|
— |
|
|
(135,387 |
) |
|
135,387 |
|
# |
|
|
— |
|
|
(135,387 |
) |
|
135,387 |
|
# |
||
|
Total other expense (income) |
|
|
43,521 |
|
|
(113,659 |
) |
|
157,180 |
|
# |
|
|
80,278 |
|
|
(94,666 |
) |
|
174,944 |
|
# |
||
|
(Loss) income before income taxes |
|
|
(33,070 |
) |
|
138,689 |
|
|
(171,759 |
) |
# |
|
|
(30,628 |
) |
|
172,868 |
|
|
(203,496 |
) |
# |
||
|
(Benefit) Provision for incomes taxes |
|
|
(6,990 |
) |
|
34,172 |
|
|
(41,162 |
) |
# |
|
|
(5,884 |
) |
|
42,616 |
|
|
(48,500 |
) |
# |
||
|
Net (loss) income |
|
$ |
(26,080 |
) |
$ |
104,517 |
|
$ |
(130,597 |
) |
# |
|
($ |
24,744 |
) |
$ |
130,252 |
|
($ |
154,996 |
) |
# |
||
|
# – Variance greater than 100% or not meaningful |
||||||||||||||||||||||||
|
Table 2 – Consolidated Balance Sheets |
|||||||
|
|
June 30, 2022 |
|
December 31, 2021 |
||||
|
ASSETS |
|||||||
|
Cash and cash equivalents |
$ |
37,394 |
|
|
$ |
63,179 |
|
|
Restricted cash |
|
97,465 |
|
|
|
98,896 |
|
|
Gross loans receivable |
|
1,592,815 |
|
|
|
1,548,318 |
|
|
Less: Allowance for loan losses |
|
(90,286 |
) |
|
|
(87,560 |
) |
|
Loans receivable, net |
|
1,502,529 |
|
|
|
1,460,758 |
|
|
Income taxes receivable |
|
46,450 |
|
|
|
31,774 |
|
|
Prepaid expenses and other |
|
25,370 |
|
|
|
42,038 |
|
|
Property and equipment, net |
|
38,752 |
|
|
|
54,635 |
|
|
Investment in Katapult |
|
28,157 |
|
|
|
27,900 |
|
|
Right of use asset – operating leases |
|
64,602 |
|
|
|
116,300 |
|
|
Deferred tax assets |
|
23,993 |
|
|
|
15,639 |
|
|
Goodwill |
|
352,990 |
|
|
|
429,792 |
|
|
Intangibles, net |
|
113,130 |
|
|
|
109,930 |
|
|
Other assets |
|
8,558 |
|
|
|
9,755 |
|
|
Assets held for sale (1) |
|
338,779 |
|
|
|
— |
|
|
Total Assets |
$ |
2,678,169 |
|
|
$ |
2,460,596 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|||||||
|
Liabilities |
|
|
|
||||
|
Accounts payable and accrued liabilities |
$ |
81,423 |
|
|
$ |
121,434 |
|
|
Deferred revenue |
|
23,425 |
|
|
|
21,649 |
|
|
Lease liability – operating leases |
|
67,339 |
|
|
|
122,431 |
|
|
Contingent consideration related to acquisition |
|
30,354 |
|
|
|
26,508 |
|
|
Income taxes payable |
|
4 |
|
|
|
680 |
|
|
Accrued interest |
|
34,970 |
|
|
|
34,974 |
|
|
Liability for losses on CSO lender-owned consumer loans |
|
— |
|
|
|
6,908 |
|
|
Debt |
|
2,189,431 |
|
|
|
1,945,793 |
|
|
Other long-term liabilities |
|
12,146 |
|
|
|
13,845 |
|
|
Deferred tax liabilities |
|
12,360 |
|
|
|
6,044 |
|
|
Liabilities held for sale (1) |
|
111,137 |
|
|
|
— |
|
|
Total Liabilities |
|
2,562,589 |
|
|
|
2,300,266 |
|
|
Stockholders’ Equity |
|
|
|
||||
|
Total Stockholders’ Equity |
|
115,580 |
|
|
|
160,330 |
|
|
Total Liabilities and Stockholders’ Equity |
$ |
2,678,169 |
|
|
$ |
2,460,596 |
|
|
(1) Assets held for sale and Liabilities held for sale represent the balance, as of June 30, 2022, for assets and liabilities, respectively, associated with the announced sale of the U.S. Legacy Direct Lending Business. |
Table 3 – Consolidated Revenue by Product and Segment
The following table summarizes revenue by product, including revenue related to loans Held for Sale and revenue we earn from operating as a credit services organization (“CSO”) by charging customers a fee for arranging an unrelated third party to make a loan to that customer, which we refer to as “CSO fees,” for the period indicated:
|
|
|
Three Months Ended |
||||||||||||||||||||||||||
|
|
|
June 30, 2022 |
|
June 30, 2021 |
||||||||||||||||||||||||
|
(in thousands, unaudited) |
|
U.S. |
Canada |
Canada |
Total |
% of |
|
U.S. |
Canada |
Canada |
Total |
% of |
||||||||||||||||
|
Revolving LOC |
|
$ |
28,145 |
$ |
47,591 |
$ |
20,847 |
$ |
96,583 |
31.7 % |
|
$ |
24,091 |
$ |
37,450 |
$ |
6,495 |
$ |
68,036 |
36.2 % |
||||||||
|
Installment |
|
|
169,879 |
|
11,869 |
|
— |
|
181,748 |
59.7 % |
|
|
90,826 |
|
10,541 |
|
— |
|
101,367 |
54.0 % |
||||||||
|
Total interest and fees |
|
|
198,024 |
|
59,460 |
|
20,847 |
|
278,331 |
91.4 % |
|
|
114,917 |
|
47,991 |
|
6,495 |
|
169,403 |
90.3 % |
||||||||
|
Insurance premiums and commissions |
|
|
4,323 |
|
13,921 |
|
409 |
|
18,653 |
6.1 % |
|
|
— |
|
11,678 |
|
143 |
|
11,821 |
6.3 % |
||||||||
|
Other revenue |
|
|
3,363 |
|
2,161 |
|
1,896 |
|
7,420 |
2.4 % |
|
|
3,877 |
|
2,211 |
|
381 |
|
6,469 |
3.4 % |
||||||||
|
Total revenue |
|
$ |
205,710 |
$ |
75,542 |
$ |
23,152 |
$ |
304,404 |
100.0 % |
|
$ |
118,794 |
$ |
61,880 |
$ |
7,019 |
$ |
187,693 |
100.0 % |
||||||||
|
|
|
Six Months Ended |
|||||||||||||||||||||||||||
|
|
|
June 30, 2022 |
|
June 30, 2021 |
|||||||||||||||||||||||||
|
(in thousands, unaudited) |
|
U.S. |
Canada |
Canada |
Total |
% of |
|
U.S. |
Canada |
Canada |
Total |
% of |
|||||||||||||||||
|
Revolving LOC |
|
$ |
55,059 |
$ |
93,045 |
$ |
39,502 |
$ |
187,606 |
31.6 % |
|
$ |
51,014 |
$ |
71,818 |
$ |
7,939 |
$ |
130,771 |
34.0 % |
|||||||||
|
Installment |
|
|
332,703 |
|
22,978 |
|
— |
|
355,681 |
59.8 % |
|
|
196,767 |
|
20,988 |
|
— |
|
217,755 |
56.7 % |
|||||||||
|
Total interest and fees |
|
|
387,762 |
|
116,023 |
|
39,502 |
|
543,287 |
91.4 % |
|
|
247,781 |
|
92,806 |
|
7,939 |
|
348,526 |
90.7 % |
|||||||||
|
Insurance premiums and commissions |
|
|
9,324 |
|
26,943 |
|
646 |
|
36,913 |
6.2 % |
|
|
— |
|
23,247 |
|
175 |
|
23,422 |
6.1 % |
|||||||||
|
Other revenue |
|
|
7,024 |
|
4,062 |
|
3,314 |
|
14,400 |
2.4 % |
|
|
7,505 |
|
4,267 |
|
524 |
|
12,296 |
3.2 % |
|||||||||
|
Total revenue |
|
$ |
404,110 |
$ |
147,028 |
$ |
43,462 |
$ |
594,600 |
100.0 % |
|
$ |
255,286 |
$ |
120,320 |
$ |
8,638 |
$ |
384,244 |
100.0 % |
|||||||||
Table 4 – Consolidated Loans Receivable
The following table reconciles Company Owned gross loans receivable, a GAAP-basis balance sheet measure, to Gross combined loans receivable, a non-GAAP measure(1). Gross combined loans receivable includes loans originated by third-party lenders through CSO programs, which are not included in the Consolidated Financial Statements but from which we earn revenue by providing a guarantee to the unaffiliated lender.
|
|
|
|
|
As of |
|||||||||||
|
(in thousands, unaudited) |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|||||
|
U.S. |
|
|
|
|
|
|
|
|
|
|
|||||
|
Revolving LOC (2) |
|
$ |
58,471 |
|
$ |
49,077 |
|
$ |
52,532 |
|
$ |
51,196 |
|
$ |
47,277 |
|
Installment – Company Owned (2) |
|
|
627,651 |
|
|
589,652 |
|
|
609,413 |
|
|
137,987 |
|
|
139,234 |
|
Canada Direct Lending |
|
|
|
|
|
|
|
|
|
|
|||||
|
Revolving LOC |
|
|
442,738 |
|
|
424,485 |
|
|
402,405 |
|
|
366,509 |
|
|
337,700 |
|
Installment |
|
|
24,817 |
|
|
23,578 |
|
|
24,792 |
|
|
24,315 |
|
|
23,564 |
|
Canada POS Lending |
|
|
|
|
|
|
|
|
|
|
|||||
|
Revolving LOC |
|
|
627,163 |
|
|
541,776 |
|
|
459,176 |
|
|
302,349 |
|
|
221,453 |
|
Company Owned gross loans receivable |
|
$ |
1,780,840 |
|
$ |
1,628,568 |
|
$ |
1,548,318 |
|
$ |
882,356 |
|
$ |
769,228 |
|
Gross loans receivable Guaranteed by the Company |
|
|
51,323 |
|
|
44,420 |
|
|
46,317 |
|
|
43,422 |
|
|
37,093 |
|
Gross combined loans receivable (1) |
|
$ |
1,832,163 |
|
$ |
1,672,988 |
|
$ |
1,594,635 |
|
$ |
925,778 |
|
$ |
806,321 |
|
(1) See “Non-GAAP Financial Measures” at the end of this release for definition and more information. |
|||||||||||||||
|
(2) Includes loan balances classified as Held for Sale. |
|||||||||||||||
Segment Analysis
The following is a summary of segment operating (loss) income and portfolio performance for the segment and period indicated. Included are results related to the business classified as Held for Sale.
Table 5 – Summary of Segment Operating (Loss) Income
|
|
Three Months Ended June 30, 2022 |
|
Three Months Ended June 30, 2021 |
||||||||||||||
|
(dollars in thousands, unaudited) |
U.S. |
Canada |
Canada |
|
U.S. |
Canada |
Canada |
||||||||||
|
Total revenue |
$ |
205,711 |
|
$ |
75,540 |
$ |
23,153 |
|
|
$ |
118,794 |
|
$ |
61,880 |
$ |
7,019 |
|
|
Provision for losses |
|
97,563 |
|
|
26,021 |
|
5,962 |
|
|
|
33,622 |
|
|
8,556 |
|
2,987 |
|
|
Net revenue |
|
108,148 |
|
|
49,519 |
|
17,191 |
|
|
|
85,172 |
|
|
53,324 |
|
4,032 |
|
|
Total operating expenses |
|
115,633 |
|
|
28,332 |
|
20,442 |
|
|
|
81,656 |
|
|
25,483 |
|
10,359 |
|
|
Non-recourse interest expense |
|
7,544 |
|
|
6,147 |
|
8,223 |
|
|
|
2,503 |
|
|
2,498 |
|
3,604 |
|
|
Recourse interest expense |
|
20,279 |
|
|
— |
|
— |
|
|
|
14,835 |
|
|
— |
|
— |
|
|
Segment operating (loss) income |
$ |
(35,308 |
) |
$ |
15,040 |
$ |
(11,474 |
) |
|
$ |
(13,822 |
) |
$ |
25,343 |
$ |
(9,931 |
) |
|
|
Six Months Ended June 30, 2022 |
|
Six Months Ended June 30, 2021 |
|||||||||||||
|
(dollars in thousands, unaudited) |
U.S. |
Canada |
Canada |
|
U.S. |
Canada |
Canada |
|||||||||
|
Total revenue |
$ |
404,110 |
|
$ |
147,028 |
$ |
43,462 |
|
|
$ |
255,286 |
$ |
120,320 |
$ |
8,638 |
|
|
Provision for losses |
|
164,388 |
|
|
48,013 |
|
14,676 |
|
|
|
59,678 |
|
17,790 |
|
3,842 |
|
|
Net revenue |
|
239,722 |
|
|
99,015 |
|
28,786 |
|
|
|
195,608 |
|
102,530 |
|
4,796 |
|
|
Total operating expenses |
|
226,574 |
|
|
55,353 |
|
35,946 |
|
|
|
161,549 |
|
50,087 |
|
13,096 |
|
|
Non-recourse interest expense |
|
15,408 |
|
|
10,177 |
|
14,849 |
|
|
|
4,130 |
|
4,853 |
|
4,430 |
|
|
Recourse interest expense |
|
40,100 |
|
|
— |
|
— |
|
|
|
29,566 |
|
— |
|
— |
|
|
Segment operating (loss) income |
$ |
(42,360 |
) |
$ |
33,485 |
$ |
(22,009 |
) |
|
$ |
363 |
$ |
47,590 |
$ |
(12,730 |
) |
Table 6 – Summary of Adjusted Segment Operating (Loss) Income
|
|
Three Months Ended June 30, 2022 |
|
Three Months Ended June 30, 2021 |
||||||||||||||
|
(dollars in thousands, unaudited) |
U.S. |
Canada |
Canada |
|
U.S. |
Canada |
Canada |
||||||||||
|
Total revenue |
$ |
205,711 |
|
$ |
75,540 |
$ |
23,153 |
|
|
$ |
118,794 |
|
$ |
61,880 |
$ |
7,019 |
|
|
Provision for losses |
|
97,563 |
|
|
26,021 |
|
5,962 |
|
|
|
33,622 |
|
|
8,556 |
|
2,987 |
|
|
Net revenue |
|
108,148 |
|
|
49,519 |
|
17,191 |
|
|
|
85,172 |
|
|
53,324 |
|
4,032 |
|
|
Adjusted operating expense (1) |
|
107,477 |
|
|
28,267 |
|
15,426 |
|
|
|
69,404 |
|
|
25,376 |
|
4,881 |
|
|
Non-recourse interest expense |
|
7,544 |
|
|
6,147 |
|
8,223 |
|
|
|
2,503 |
|
|
2,498 |
|
3,604 |
|
|
Recourse interest expense |
|
20,279 |
|
|
— |
|
— |
|
|
|
14,835 |
|
|
— |
|
— |
|
|
Adjusted segment operating (loss) income (1) |
$ |
(27,152 |
) |
$ |
15,105 |
$ |
(6,458 |
) |
|
$ |
(1,570 |
) |
$ |
25,450 |
$ |
(4,453 |
) |
|
(1) These are non-GAAP metrics. For a description of each non-GAAP addback, see the applicable reconciliations and descriptions of each non-GAAP metric, see “Non-GAAP Financial Measures.” |
|||||||||||||||||
|
|
Six Months Ended June 30, 2022 |
|
Six Months Ended June 30, 2021 |
|||||||||||||
|
(dollars in thousands, unaudited) |
U.S. |
Canada |
Canada |
|
U.S. |
Canada |
Canada |
|||||||||
|
Total revenue |
$ |
404,110 |
|
$ |
147,028 |
$ |
43,462 |
|
|
$ |
255,286 |
$ |
120,320 |
$ |
8,638 |
|
|
Provision for losses |
|
164,388 |
|
|
48,013 |
|
14,676 |
|
|
|
59,678 |
|
17,790 |
|
3,842 |
|
|
Net revenue |
|
239,722 |
|
|
99,015 |
|
28,786 |
|
|
|
195,608 |
|
102,530 |
|
4,796 |
|
|
Adjusted operating expense (1) |
|
213,833 |
|
|
55,086 |
|
30,431 |
|
|
|
143,700 |
|
49,939 |
|
7,618 |
|
|
Non-recourse interest expense |
|
15,408 |
|
|
10,177 |
|
14,849 |
|
|
|
4,130 |
|
4,853 |
|
4,430 |
|
|
Recourse interest expense |
|
40,100 |
|
|
— |
|
— |
|
|
|
29,566 |
|
— |
|
— |
|
|
Adjusted segment operating (loss) income (1) |
$ |
(29,619 |
) |
$ |
33,752 |
$ |
(16,494 |
) |
|
$ |
18,212 |
$ |
47,738 |
$ |
(7,252 |
) |
|
(1) These are non-GAAP metrics. For a description of each non-GAAP addback, see the applicable reconciliations and descriptions of each non-GAAP metric, see “Non-GAAP Financial Measures.” |
||||||||||||||||
Table 7 – U.S. Portfolio Performance
|
(in thousands, except percentages) |
|
Q2 2022(6) |
Q1 2022 |
|
Q4 2021(1) |
Q3 2021 |
Q2 2021 |
||||||||||
|
Gross combined loans receivable (2) |
|
|
|
|
|
|
|
||||||||||
|
Revolving LOC |
|
$ |
58,471 |
|
$ |
49,077 |
|
|
$ |
52,532 |
|
$ |
51,196 |
|
$ |
47,277 |
|
|
Installment loans – Company Owned |
|
|
627,651 |
|
|
589,652 |
|
|
|
137,782 |
|
|
137,987 |
|
|
139,234 |
|
|
Total U.S. Company Owned gross loans receivable |
|
|
686,122 |
|
|
638,729 |
|
|
|
190,314 |
|
|
189,183 |
|
|
186,511 |
|
|
Installment loans – Guaranteed by the Company (3) |
|
|
51,323 |
|
|
44,420 |
|
|
|
46,317 |
|
|
43,422 |
|
|
37,093 |
|
|
Total U.S. gross combined loans receivable (2) |
|
$ |
737,445 |
|
$ |
683,149 |
|
|
$ |
236,631 |
|
$ |
232,605 |
|
$ |
223,604 |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Lending Revenue: |
|
|
|
|
|
|
|
||||||||||
|
Revolving LOC |
|
$ |
28,145 |
|
$ |
26,913 |
|
|
$ |
27,911 |
|
$ |
27,377 |
|
$ |
24,091 |
|
|
Installment loans – Company Owned |
|
|
121,595 |
|
|
113,833 |
|
|
|
56,820 |
|
|
57,659 |
|
|
55,918 |
|
|
Installment loans – Guaranteed by the Company (3) |
|
|
48,283 |
|
|
48,991 |
|
|
|
47,348 |
|
|
43,377 |
|
|
34,908 |
|
|
Total U.S. lending revenue |
|
$ |
198,023 |
|
$ |
189,737 |
|
|
$ |
132,079 |
|
$ |
128,413 |
|
$ |
114,917 |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Lending Provision: |
|
|
|
|
|
|
|
||||||||||
|
Revolving LOC |
|
$ |
11,831 |
|
$ |
9,577 |
|
|
$ |
11,592 |
|
$ |
8,140 |
|
$ |
6,621 |
|
|
Installment loans – Company Owned |
|
|
54,868 |
|
|
32,962 |
|
|
|
18,618 |
|
|
16,792 |
|
|
14,048 |
|
|
Installment loans – Guaranteed by the Company (3) |
|
|
28,313 |
|
|
21,749 |
|
|
|
25,967 |
|
|
23,146 |
|
|
12,583 |
|
|
Total U.S. lending provision |
|
$ |
95,012 |
|
$ |
64,288 |
|
|
$ |
56,177 |
|
$ |
48,078 |
|
$ |
33,252 |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NCOs (7) |
|
|
|
|
|
|
|
||||||||||
|
Revolving LOC |
|
$ |
10,248 |
|
$ |
10,055 |
|
|
$ |
11,481 |
|
$ |
8,329 |
|
$ |
7,271 |
|
|
Installment loans – Company Owned |
|
|
40,757 |
|
|
36,247 |
|
|
|
19,664 |
|
|
19,548 |
|
|
18,617 |
|
|
Installment loans – Guaranteed by the Company (3) |
|
|
27,395 |
|
|
21,492 |
|
|
|
26,065 |
|
|
21,404 |
|
|
12,044 |
|
|
Total U.S. NCOs |
|
$ |
78,400 |
|
$ |
67,794 |
|
|
$ |
57,210 |
|
$ |
49,281 |
|
$ |
37,932 |
|
|
|
|
|
|
|
|
|
|
||||||||||
|
NCO rate (4) (7) |
|
|
|
|
|
|
|
||||||||||
|
Revolving LOC |
|
|
19.1 |
% |
|
19.8 |
% |
|
|
22.1 |
% |
|
16.9 |
% |
|
16.0 |
% |
|
Installment loans – Company Owned |
|
|
6.7 |
% |
|
6.0 |
% |
|
|
14.3 |
% |
|
14.1 |
% |
|
13.2 |
% |
|
Total U.S. Company Owned NCO rate |
|
|
7.7 |
% |
|
7.1 |
% |
|
|
16.4 |
% |
|
14.8 |
% |
|
13.9 |
% |
|
Installment loans – Guaranteed by the Company (3) |
|
|
57.2 |
% |
|
47.4 |
% |
|
|
58.1 |
% |
|
53.2 |
% |
|
34.6 |
% |
|
Total U.S. NCO rate |
|
|
11.0 |
% |
|
14.7 |
% |
|
|
24.4 |
% |
|
21.6 |
% |
|
17.2 |
% |
|
|
|
|
|
|
|
|
|
||||||||||
|
ALL and CSO Liability for Losses rate (5) |
|
|
|
|
|
|
|
||||||||||
|
Revolving LOC |
|
|
25.1 |
% |
|
26.7 |
% |
|
|
25.9 |
% |
|
26.3 |
% |
|
28.9 |
% |
|
Installment loans – Company Owned |
|
|
6.8 |
% |
|
4.2 |
% |
|
|
12.7 |
% |
|
13.4 |
% |
|
15.3 |
% |
|
Total U.S. Company Owned ALL rate |
|
|
8.4 |
% |
|
5.9 |
% |
|
|
16.3 |
% |
|
16.9 |
% |
|
18.7 |
% |
|
Installment loans – Guaranteed by the Company (3) |
|
|
15.7 |
% |
|
16.1 |
% |
|
|
14.9 |
% |
|
16.1 |
% |
|
14.2 |
% |
|
Total ALL and CSO Liability for Losses rate |
|
|
8.9 |
% |
|
6.6 |
% |
|
|
16.0 |
% |
|
16.8 |
% |
|
18.0 |
% |
|
|
|
|
|
|
|
|
|
||||||||||
|
Past-due rate (5) |
|
|
|
|
|
|
|
||||||||||
|
Revolving LOC |
|
|
29.3 |
% |
|
29.7 |
% |
|
|
30.5 |
% |
|
30.5 |
% |
|
26.6 |
% |
|
Installment loans – Company Owned |
|
|
20.6 |
% |
|
19.1 |
% |
|
|
19.4 |
% |
|
20.1 |
% |
|
18.7 |
% |
|
Total U.S. Company Owned past-due rate |
|
|
21.3 |
% |
|
19.9 |
% |
|
|
22.5 |
% |
|
22.9 |
% |
|
20.7 |
% |
|
|
|
|
|
|
|
|
|
||||||||||
|
Installment loans – Guaranteed by the Company (3) |
|
|
19.0 |
% |
|
18.5 |
% |
|
|
17.7 |
% |
|
19.8 |
% |
|
17.4 |
% |
|
(1) On December 27, 2021, we acquired Heights Finance, which accounted for approximately $472 million of U.S. Installment loans as of December 31, 2021. As the period between December 27, 2021 and December 31, 2021 did not result in material loan performance, we have excluded Heights Finance from the table for the fourth quarter of 2021. |
|||||||
|
(2) Non-GAAP measure. For a description of each non-GAAP metric, see “Non-GAAP Financial Measures.” |
|||||||
|
(3) Includes loans originated by third-party lenders through CSO programs. Installment gross loans receivable Guaranteed by the Company are not included in the Consolidated Financial Statements. |
|||||||
|
(4) We calculate NCO rate as total NCOs divided by Average gross loans receivable. |
|||||||
|
(5) We calculate (i) Allowance for loan losses (ALL) and CSO Liability for losses rate and (ii) past-due rate as the respective totals divided by gross loans receivable at each respective quarter end. |
|||||||
|
(6) Includes loan balances and activity classified as Held for Sale. |
|||||||
|
(7) For the first and second quarters of 2022, NCOs presented above include $5.0 million and $10.3 million, respectively, of NCO’s related to the fair value discount, which are excluded from provision. |
Contacts
Investor Relations:
Roger Dean
Executive Vice President and Chief Financial Officer
Phone: 844-200-0342
Email: IR@curo.com