EX-99.1 2 ex991-q32023pressrelease.htm EX-99.1 Document

CURO Group Holdings Corp. Reports
Third Quarter 2023 Financial Results

-Gross loans receivables increased 2% sequentially to $1.25 billion-
-Total revenue of $167.9 million-
-Net charge-off improvement of 110 bps to 17.7%-



Chicago, Illinois--November 2, 2023 - CURO Group Holdings Corp. (NYSE: CURO) (“CURO” or the “Company”), an omni-channel consumer finance company serving consumers in the U.S. and Canada, today announced financial results for its third quarter ended September 30, 2023.

“The third quarter marked another significant milestone with the sale of the Flexiti business which allows us to focus on being an industry leader in Direct Lending in the U.S. and Canada,” said Doug Clark, Chief Executive Officer at CURO. “We completed our conversion to a single loan management system across our U.S. footprint and continue to invest in our technology infrastructure which we believe will accelerate our path to profitability. We continue to execute on our plan outlined at the beginning of the year, which resulted in meeting our expectations for the third consecutive quarter. Our disciplined underwriting, prudent originations and enhanced servicing have resulted in improved credit quality metrics while at the same time allowing us to grow our loan portfolio. We diligently monitor challenges presented by the macro environment and will remain vigilant on executing our long-term strategy which has exciting opportunities in both the U.S and Canada.”

Third Quarter 2023 Consolidated Summary Results
Current and prior period financial information is presented on a continuing operations basis, which excludes the results and positions of the Canada POS Lending segment due to the sale of the Flexiti business effective on August 31, 2023.
•Gross loans receivable increased $26.8 million, or 2%, sequentially, to $1.25 billion.
◦Gross loans receivable in the U.S. increased by 5%, driven by growth in the Company's larger dollar, longer term products.
◦Gross loans receivable in Canada decreased by 1%, due to fluctuations in foreign currency. On a constant currency basis, gross loans receivable in Canada increased by 2%.

•Net charge-off rate improved 110 bps sequentially, to 17.7%, and 70 bps year-over-year.
◦The improvement was primarily driven by increased credit quality as a result of credit tightening and servicing optimization, as well as the Company's continued product mix shift toward better credit quality, larger balance and longer duration loans.

•31+ Days past due delinquencies as of September 30, 2023 remained stable vs prior quarter.

•Revenue for the quarter of $167.9 million increased slightly vs the prior quarter.

•Provision for credit losses for the quarter was $49.0 million, a decrease of $14.7 million, or 23%, compared to the prior quarter.
◦The reduction in provision for credit losses was driven by a reduction in allowance for credit losses of $10.6 million primarily due to improving late-stage roll rates and estimated future macroeconomic impacts on credit losses, partially offset by portfolio growth during the quarter and lower net charge-offs.

•Total operating expenses for the quarter were $94.2 million, an increase of $2.9 million, or 3%, sequentially, and the operating expense to receivables ratio was 30.4% for the quarter, a slight increase from prior quarter.
◦The increase includes non-recurring charges of $6.5 million recognized during the third quarter of 2023.

•Interest expense for the quarter was $55.8 million, an increase of $5.3 million, or 10.6%, compared to the prior quarter.
◦The increase was primarily related to higher interest rates as well as an increased level of average debt due to the May 2023 capital raise.


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As of or for the Quarter Ended
Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
Delinquency and Loss Ratios
20232023202320222022
31-60 days delinquency ratio2.4 %2.5 %2.1 %2.4 %2.8 %
61-90 days delinquency ratio1.7 %1.7 %1.8 %1.8 %2.0 %
91+ days delinquency ratio4.4 %4.1 %4.4 %3.4 %3.5 %
Net charge-offs17.7 %18.8 %15.6 %20.9 %18.4 %

Funding and Liquidity

As of September 30, 2023, principal debt balances outstanding were $2.0 billion, consisting of 57% of fixed rate debt and 43% of variable rate debt.

As of September 30, 2023, available capital resources were approximately $285.3 million, comprised of $82.6 million in unrestricted Cash and cash equivalents, $127.9 million in unused borrowing capacity for growth and $74.8 million of unencumbered Gross loans receivable.

About CURO
CURO Group Holdings Corp. (NYSE: CURO) is a leading consumer credit lender serving U.S. and Canadian customers for over 25 years. Our roots in the consumer finance market run deep. We’ve worked diligently to provide customers a variety of convenient, easily accessible financial services. Our decades of diversified data power a hard-to-replicate underwriting and scoring engine, mitigating risk across the full spectrum of credit products. We operate under a number of brands including Cash Money®, LendDirect®, Heights Finance, Southern Finance, Covington Credit, Quick Credit and First Heritage Credit.
Conference Call
CURO will host a conference call to discuss these results at 8:30 a.m. Eastern Time on Thursday, November 2, 2023. The live webcast of the call can be accessed at the CURO Investor Relations website at http://ir.curo.com/.
You may access the call at 1-416-764-8624 (Toll free: 1-888-259-6580). Please ask to join the CURO Group Holdings call. An archived version of the webcast will be available on the CURO Investors website for 90 days.

Final Results
The financial results presented and discussed herein are on a preliminary and unaudited basis; final unaudited data will be included in the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023.

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Table 1 - Consolidated Statements of Operations
(in thousands, except per share data, unaudited)Three Months Ended,
Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
20232023202320222022
Revenue
Interest and fees revenue$143,493 $141,766 $144,304 $150,350 $155,940 
Insurance and other income24,370 25,250 25,064 31,575 30,469 
Total revenue167,863 167,016 169,368 181,925 186,409 
Provision for losses49,009 63,755 48,364 77,724 65,020 
Net revenue118,854 103,261 121,004 104,201 121,389 
Operating Expenses— 
Salaries and benefits52,148 53,144 56,619 60,149 49,179 
Occupancy10,454 10,885 11,344 11,785 12,419 
Advertising2,819 1,967 1,999 3,383 4,676 
Direct operations12,176 12,032 9,745 7,921 8,288 
Depreciation and amortization5,390 5,339 5,390 5,329 5,683 
Other operating expense11,207 7,918 18,054 23,065 22,595 
Total operating expenses94,194 91,285 103,151 111,632 102,840 
Other expense (income)
Interest expense55,798 50,460 44,045 41,180 38,155 
Loss from equity method investment1,453 2,134 3,413 1,932 2,309 
Goodwill impairment— — — 107,827 — 
Extinguishment or modification of debt costs— 8,864 — 24 3,702 
Gain on sale of business— — 2,027 — (68,443)
Miscellaneous expenses— 1,435 — — — 
Total other expense (income)57,251 62,893 49,485 150,963 (24,277)
(Loss) income from continuing operations before income taxes(32,591)(50,917)(31,632)(158,394)42,826 
Provision for income taxes from continuing operations1,021 3,147 23,277 (15,970)21,709 
Net (loss) income from continuing operations$ (33,612)$ (54,064)$ (54,909)$ (142,424)$ 21,117 
Net (loss) income from discontinued operations(70,830)(5,263)(4,562)(43,969)4,536 
Net (loss) income$ (104,442)$ (59,327)$ (59,471)$ (186,393)$ 25,653 
Basic (loss) earnings per share:
Continuing operations$ (0.81)$(1.32)$(1.35)$(3.52)$0.52 
Discontinued operations$ (1.72)$(0.13)$(0.11)$(1.09)$0.11 
Diluted (loss) earnings per share:
Continuing operations$(0.81)$(1.32)$(1.35)$(3.52)$0.52 
Discontinued operations$(1.72)$(0.13)$(0.11)$(1.09)$0.11 
Weighted average common shares outstanding:
Basic41,267 41,002 40,783 40,428 40,479 
Diluted41,267 41,002 40,783 40,428 40,835 

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Table 2 - Consolidated Balance Sheets
As of
Sep 30,Jun 30,Mar 31,Dec 31,Sep 30,
(in thousands, unaudited)20232023202320222022
ASSETS
Cash and cash equivalents$ 82,550 $ 101,033 $ 40,449 $ 50,856 $ 40,068 
Restricted cash53,818 76,375 90,211 59,645 66,962 
Gross loans receivable 1,254,401 1,227,615 1,209,576 1,254,395 1,204,157 
Less: Allowance for loan losses(199,739)(210,292)(202,757)(81,185)(69,535)
Loans receivable, net1,054,662 1,017,323 1,006,819 1,173,210 1,134,622 
Income taxes receivable58,064 20,854 22,737 23,984 13,561 
Prepaid expenses and other61,441 42,131 45,592 51,081 62,685 
Property and equipment, net23,903 25,826 27,244 29,232 34,715 
Investment in Katapult16,915 18,368 20,502 23,915 25,848 
Right of use asset - operating leases51,413 53,042 51,615 58,177 61,642 
Deferred tax assets14,194 15,304 13,623 18,138 4,817 
Goodwill276,269 277,069 276,487 276,269 387,298 
Intangibles, net74,336 74,007 71,798 70,913 69,989 
Other assets9,387 6,673 6,785 8,370 8,207 
Assets, discontinued operations— 1,016,832 947,925 945,403 866,939 
Total Assets$ 1,776,952 $ 2,744,837 $ 2,621,787 $ 2,789,193 $ 2,777,353 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities $62,992 $54,169 $60,890 $45,595 $46,666 
Deferred revenue2,358 3,370 3,493 3,467 3,256 
Lease liability - operating leases51,579 53,182 52,061 59,396 62,893 
Income taxes payable2,537 (1,242)— — — 
Accrued interest 20,953 39,306 20,090 38,460 18,048 
Debt2,024,934 1,988,173 1,888,407 1,882,608 1,804,946 
Other long-term liabilities9,620 10,017 10,045 11,736 11,563 
Liabilities, discontinued operations — 866,235 815,617 802,065 705,529 
Total Liabilities$ 2,174,973 $ 3,013,210 $ 2,850,603 $ 2,843,327 $ 2,652,901 
Total Stockholders' (Deficit) Equity(398,021)(268,373)(228,816)(54,134)124,452 
Total Liabilities and Stockholders' (Deficit) Equity$ 1,776,952 $ 2,744,837 $ 2,621,787 $ 2,789,193 $ 2,777,353 

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Table 3 - Consolidated Portfolio Performance
(in thousands, except percentages, unaudited)Q3 2023Q2 2023Q1 2023Q4 2022Q3 2022
Gross loans receivable
Revolving LOC$ 469,041$ 472,902$ 461,443$ 451,077$ 439,117
Installment loans 785,360754,713748,133803,318765,041
Total gross loans receivable$ 1,254,401$ 1,227,615$ 1,209,576$ 1,254,395$ 1,204,158
Lending Revenue
Revolving LOC$ 51,039$ 49,483$ 49,092$ 49,915$ 52,461
Installment loans92,45492,28395,212100,435103,478
Total lending revenue$ 143,493$ 141,766$ 144,304$ 150,350$ 155,939
Lending Provision
Revolving LOC$ 19,031$ 27,089$ 15,539$ 29,620$ 28,408
Installment loans28,46435,17131,13946,44233,511
Total lending provision$ 47,495$ 62,260$ 46,678$ 76,062$ 61,919
NCOs
Revolving LOC$ 22,023$ 21,780$ 6,234$ 26,715$ 24,793
Installment loans 33,34235,48341,07838,16829,783
Total NCOs$ 55,365$ 57,263$ 47,312$ 64,883$ 54,576
NCO rate (annualized) (1)
Revolving LOC18.6%18.7%5.5%23.8%20.9%
Installment loans 17.2%18.9%21.5%19.3%16.7%
Total NCO rate17.7%18.8%15.6%20.9%18.4%
ACL rate (2) (3)
Revolving LOC25.4%26.6%25.6 %8.4 %7.9 %
Installment loans 10.3%11.2%11.3 %5.4 %4.6 %
Total ACL rate15.9%17.1%16.8 %6.5 %5.8 %
31+ days past-due rate (2)
Revolving LOC8.6%8.5%8.4 %4.1 %5.1 %
Installment loans 8.5%8.1%8.2 %9.6 %10.2 %
Total past-due rate8.5%8.3%8.3 %7.6 %8.3 %
(1) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable, then we annualize the rate. The amount and timing of recoveries are impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications and the periodic sale of charged off loans.
(2) We calculate (i) ACL rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each quarter end.
(3) We adopted ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" on January 1, 2023, which requires us to estimate the lifetime expected credit loss on financial instruments. Our previous model required the recognition of credit losses when it was probable that a loss had been incurred.

Forward-Looking Statements
This press release contains forward-looking statements. These forward-looking statements include projections, estimates and assumptions about various matters, such as future financial and operational performance, including our belief in the drivers of accelerating our path to profitability and executing on our long-term strategy. In addition, words such as “guidance,” “estimate,” “anticipate,” “believe,” “forecast,” “step,” “plan,” “predict,” “focused,” “project,” “is likely,” “expect,” "anticipate," “intend,” “should,” “will,” “confident,” variations of such words and similar expressions are intended to identify forward-looking statements. Our ability to achieve these forward-looking statements is based on certain assumptions, judgments and other factors, both within and outside of our control, that could cause actual results to differ materially from those in the forward-looking statements, including: risks relating to the uncertainty of projected financial and operational information and forecasts, including errors in our internal forecasts; our ability to manage growth; our dependence on third-party lenders to provide the cash we need to fund our loans and our ability to affordably access third-party financing; our level of indebtedness; the effects of competition on our business; our ability to attract and retain customers; global economic, market, financial, political or health conditions or events; actions of regulators and the impact of those actions on our business; our ability to successfully integrate acquired businesses; our ability to protect our proprietary technology and analytics and keep up with that of our competitors; disruption of our information technology systems that
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adversely affect our business operations; ineffective pricing of the credit risk of our prospective or existing customers; inaccurate information supplied by customers or third parties that could lead to errors in judging customers’ qualifications to receive loans; improper disclosure of customer personal data; failure of third parties who provide products, services or support to us; disruption to our relationships with banks and other third-party electronic payment solutions providers as well as other factors discussed in our filings with the Securities and Exchange Commission. These projections, estimates and assumptions may prove to be inaccurate in the future. These forward-looking statements are not guarantees of future performance and involve known and unknown risks and uncertainties that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. There may be additional risks that we presently do not know or that we currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future results. We undertake no obligation to update, amend or clarify any forward-looking statement for any reason.

Investor Relations:
Email: IR@curo.com
(CURO-NWS)
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