CURO Group Holdings Corp. Reports Preliminary Fourth Quarter and Full Year 2023 Financial Results

-Gross loans receivables increased 3.3%, year-over-year, and 3.3%, sequentially, to $1.3 billion-

-Total fourth quarter revenue of $168.2 million-

-Net charge-off improvement of 440 bps, year-over-year, and 120 bps, sequentially, to 16.5%-

-Cancels earnings conference call previously scheduled for Wednesday, February 7, 2024-

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 preliminary financial results for its fourth quarter and full year ended December 31, 2023.

"Throughout 2023, we executed on our plan to enhance our underwriting and credit performance and simplify our overall operations, including consolidating our U.S. footprint onto one loan management system and further scaling our data and technological capabilities," said Doug Clark, Chief Executive Officer at CURO. "As a result, we showed improvement in our delinquency and charge-off performance, as well as a marked reduction in our operating expenses. As we continue to execute on our long-term U.S. and Canadian strategy, we are engaged in constructive dialogue with our lenders to strengthen our balance sheet and better position CURO for growth and success. We are proud of the foundation we laid in 2023 and look forward to building on this momentum in 2024. We thank our CURO employees for their dedication and hard work as we move forward."

Preliminary Fourth Quarter 2023 Consolidated Summary Results

Current and prior period financial information is presented on a continuing operations basis, which excludes the Canada POS Lending segment due to the sale of Flexiti on August 31, 2023.

• Gross loans receivable of $1.3 billion increased $41.3 million, or 3.3%, sequentially, and $41.3 million, or 3.3%, year-over-year.
  • Gross loans receivable in the U.S. were stable year-over-year, with increases in larger balance and longer-term loans offset by reductions in smaller balance and shorter-term loans. Sequentially, Gross loans receivable in the U.S. increased $23.1 million, or 3.1%, due to increases in larger balance and longer-term loans.
  • Gross loans receivable in Canada increased by $39.7 million, or 8.3%, year-over-year, and $18.2 million, or 3.6%, sequentially, driven by increases in Canadian Revolving LOC loans and favorable foreign currency exchange rates.
• Total revenue of $168.2 million declined $13.7 million, or 7.6%, year-over-year, primarily related to the mix shift to larger, longer-term, higher credit and lower yielding loans. Sequentially, total revenue increased by $0.3 million, or 0.2%.
• Net revenue of $110.5 million increased $6.3 million, or 6.0%, year-over-year, primarily driven by a $20.0 million, or 25.8%, decrease in provision for credit loss expense related to the mix shift to larger and longer-term loans to higher credit quality customers and enhanced collections efforts, partially offset by the reduction in Total revenue. Sequentially, Net revenue decreased $8.4 million, or 7.0%, primarily driven by additional provision for credit loss expense due to new loans originated during the fourth quarter, partially offset by the improvement in net charge-off rate.
• Net charge-off rate of 16.5% improved 440 bps, year-over-year, and improved 120 bps sequentially, driven by increased credit quality as a result of the product mix shift, credit tightening and servicing optimization.
• Total operating expenses of $91.2 million decreased $20.4 million, or 18.3%, year-over-year, and $3.0 million, or 3.1%, sequentially.

 

As of or for the Quarter Ended

(unaudited)

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

Delinquency and Loss Ratios

2023

2023

2023

2023

2022

31-60 days delinquency ratio

2.2%

2.4%

2.5%

2.1%

2.4%

61-90 days delinquency ratio

1.6%

1.7%

1.7%

1.8%

1.8%

91+ days delinquency ratio

4.6%

4.4%

4.1%

4.4%

3.4%

Net charge-offs

16.5%

17.7%

18.8%

15.6%

20.9%

Conference Call Cancellation and Consent Solicitation

In a separate press release issued today, CURO announced the commencement of a consent solicitation from the holders of its 7.500% Senior 1.5 Lien Senior Secured Notes Due 2028. As a result, CURO has cancelled its earnings conference call previously scheduled for 8:00 a.m. Eastern Time on Wednesday, February 7, 2024.

Preliminary Results

The financial results presented and discussed herein are on a preliminary and unaudited basis; final audited data will be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

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. For more information, please visit http://www.curo.com.

Table 1 - Consolidated Statements of Operations

(in thousands, except per share data, unaudited)

 

Three Months Ended,

 

 

Year Ended,

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

 

 

Dec 31,

 

2023

2023

2023

2023

2022

 

 

2023

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

Interest and fees revenue

 

$

142,239

 

$

143,493

 

$

141,766

 

$

144,304

 

$

150,350

 

 

 

 

571,802

 

Insurance and other income

 

 

25,940

 

 

24,370

 

 

25,250

 

 

25,064

 

 

31,575

 

 

 

 

100,624

 

Total revenue

 

 

168,179

 

 

167,863

 

 

167,016

 

 

169,368

 

 

181,925

 

 

 

 

672,426

 

Provision for losses

 

 

57,689

 

 

49,009

 

 

63,755

 

 

48,364

 

 

77,724

 

 

 

 

218,817

 

Net revenue

 

 

110,490

 

 

118,854

 

 

103,261

 

 

121,004

 

 

104,201

 

 

 

 

453,609

 

Operating Expenses

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

49,537

 

 

52,148

 

 

53,144

 

 

56,619

 

 

60,149

 

 

 

 

211,448

 

Occupancy

 

 

11,277

 

 

10,454

 

 

10,885

 

 

11,344

 

 

11,785

 

 

 

 

43,960

 

Advertising

 

 

2,435

 

 

2,819

 

 

1,967

 

 

1,999

 

 

3,383

 

 

 

 

9,220

 

Direct operations

 

 

11,496

 

 

12,176

 

 

12,032

 

 

9,745

 

 

7,921

 

 

 

 

45,449

 

Depreciation and amortization

 

 

5,578

 

 

5,390

 

 

5,339

 

 

5,390

 

 

5,329

 

 

 

 

21,697

 

Other operating expense

 

 

10,915

 

 

11,207

 

 

7,918

 

 

18,054

 

 

23,065

 

 

 

 

48,094

 

Total operating expenses

 

 

91,238

 

 

94,194

 

 

91,285

 

 

103,151

 

 

111,632

 

 

 

 

379,868

 

Other expense

 

 

 

 

 

 

 

 

 

Interest expense

 

 

58,341

 

 

55,798

 

 

50,460

 

 

44,045

 

 

41,180

 

 

 

 

208,644

 

Loss from equity method investment

 

 

3,310

 

 

1,453

 

 

2,134

 

 

3,413

 

 

1,932

 

 

 

 

10,310

 

Goodwill Impairment

 

 

—

 

 

—

 

 

—

 

 

—

 

 

107,827

 

 

 

 

—

 

Extinguishment or modification of debt costs

 

 

—

 

 

—

 

 

8,864

 

 

—

 

 

24

 

 

 

 

8,864

 

Gain on sale of business

 

 

—

 

 

—

 

 

—

 

 

2,027

 

 

—

 

 

 

 

2,027

 

Miscellaneous expenses

 

 

—

 

 

—

 

 

1,435

 

 

—

 

 

—

 

 

 

 

1,435

 

Total other expense

 

 

61,651

 

 

57,251

 

 

62,893

 

 

49,485

 

 

150,963

 

 

 

 

231,280

 

Loss from continuing operations before income taxes

 

 

(42,399

)

 

(32,591

)

 

(50,917

)

 

(31,632

)

 

(158,394

)

 

 

 

(157,539

)

Provision (benefit) for income taxes from continuing operations

 

 

1,094

 

 

1,021

 

 

3,147

 

 

23,277

 

 

(15,970

)

 

 

 

28,539

 

Net loss from continuing operations

 

$

(43,493

)

$

(33,612

)

$

(54,064

)

$

(54,909

)

$

(142,424

)

 

 

$

(186,078

)

Net loss from discontinued operations

 

 

—

 

 

(70,830

)

 

(5,263

)

 

(4,562

)

 

(43,969

)

 

 

 

(80,655

)

Net loss

 

$

(43,493

)

$

(104,442

)

$

(59,327

)

$

(59,471

)

$

(186,393

)

 

 

$

(266,733

)

 

 

 

 

 

 

 

 

 

 

Basic loss per share:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(1.05

)

$

(0.81

)

$

(1.32

)

$

(1.35

)

$

(3.52

)

 

 

$

(4.53

)

Discontinued operations

 

$

—

 

$

(1.72

)

$

(0.13

)

$

(0.11

)

$

(1.09

)

 

 

$

(1.96

)

 

 

 

 

 

 

 

 

 

 

Diluted loss per share:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(1.05

)

$

(0.81

)

$

(1.32

)

$

(1.35

)

$

(3.52

)

 

 

$

(4.53

)

Discontinued operations

 

$

—

 

$

(1.72

)

$

(0.13

)

$

(0.11

)

$

(1.09

)

 

 

$

(1.96

)

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

 

41,317

 

 

41,267

 

 

41,002

 

 

40,783

 

 

40,428

 

 

 

 

41,093

 

Diluted

 

 

41,317

 

 

41,267

 

 

41,002

 

 

40,783

 

 

40,428

 

 

 

 

41,093

 

Table 2 - Consolidated Balance Sheets

 

As of

 

Dec 31,

Sep 30,

Jun 30,

Mar 31,

Dec 31,

(in thousands, unaudited)

2023

2023

2023

2023

2022

ASSETS

Cash and cash equivalents

$

84,594

 

$

82,550

 

$

101,033

 

$

40,449

 

$

50,856

 

Restricted cash

 

48,008

 

 

53,818

 

 

76,375

 

 

90,211

 

 

59,645

 

Gross loans receivable

 

1,295,660

 

 

1,254,401

 

 

1,227,615

 

 

1,209,576

 

 

1,254,395

 

Less: Allowance for credit losses

 

(206,227

)

 

(199,739

)

 

(210,292

)

 

(202,757

)

 

(81,185

)

Loans receivable, net

 

1,089,433

 

 

1,054,662

 

 

1,017,323

 

 

1,006,819

 

 

1,173,210

 

Income taxes receivable

 

54,986

 

 

58,064

 

 

20,854

 

 

22,737

 

 

23,984

 

Prepaid expenses and other

 

45,221

 

 

61,441

 

 

42,131

 

 

45,592

 

 

51,081

 

Property and equipment, net

 

22,206

 

 

23,903

 

 

25,826

 

 

27,244

 

 

29,232

 

Investment in Katapult

 

13,605

 

 

16,915

 

 

18,368

 

 

20,502

 

 

23,915

 

Right of use asset - operating leases

 

49,606

 

 

51,413

 

 

53,042

 

 

51,615

 

 

58,177

 

Deferred tax assets

 

13,248

 

 

14,194

 

 

15,304

 

 

13,623

 

 

18,138

 

Goodwill

 

276,951

 

 

276,269

 

 

277,069

 

 

276,487

 

 

276,269

 

Intangibles, net

 

75,301

 

 

74,336

 

 

74,007

 

 

71,798

 

 

70,913

 

Other assets

 

9,745

 

 

9,387

 

 

6,673

 

 

6,785

 

 

8,370

 

Assets, discontinued operations

 

—

 

 

—

 

 

1,016,832

 

 

947,925

 

 

945,403

 

Total Assets

$

1,782,904

 

$

1,776,952

 

$

2,744,837

 

$

2,621,787

 

$

2,789,193

 

LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Liabilities

 

 

 

 

 

Accounts payable and accrued liabilities

$

56,800

 

$

62,992

 

$

54,169

 

$

60,890

 

$

45,595

 

Deferred revenue

 

2,298

 

 

2,358

 

 

3,370

 

 

3,493

 

 

3,467

 

Lease liability - operating leases

 

51,715

 

 

51,579

 

 

53,182

 

 

52,061

 

 

59,396

 

Income taxes payable

 

3,552

 

 

2,537

 

 

(1,242

)

 

—

 

 

—

 

Accrued interest

 

40,792

 

 

20,953

 

 

39,306

 

 

20,090

 

 

38,460

 

Debt

 

2,055,853

 

 

2,024,934

 

 

1,988,173

 

 

1,888,407

 

 

1,882,608

 

Other long-term liabilities

 

7,595

 

 

9,620

 

 

10,017

 

 

10,045

 

 

11,736

 

Liabilities, discontinued operations

 

—

 

 

—

 

 

866,235

 

 

815,617

 

 

802,065

 

Total Liabilities

$

2,218,605

 

$

2,174,973

 

$

3,013,210

 

$

2,850,603

 

$

2,843,327

 

Total Stockholders' Deficit

 

(435,701

)

 

(398,021

)

 

(268,373

)

 

(228,816

)

 

(54,134

)

Total Liabilities and Stockholders' (Deficit) Equity

$

1,782,904

 

$

1,776,952

 

$

2,744,837

 

$

2,621,787

 

$

2,789,193

 

Table 3 - Consolidated Portfolio Performance

(in thousands, except percentages, unaudited)

 

Q4 2023

Q3 2023

Q2 2023

Q1 2023

Q4 2022

Gross loans receivable

 

 

 

 

 

 

Revolving LOC

 

$

488,932

 

$

469,041

 

$

472,902

 

$

461,443

 

$

451,077

 

Installment loans

 

 

806,728

 

 

785,360

 

 

754,713

 

 

748,133

 

 

803,318

 

Total gross loans receivable

 

$

1,295,660

 

$

1,254,401

 

$

1,227,615

 

$

1,209,576

 

$

1,254,395

 

 

 

 

 

 

 

 

Lending Revenue

 

 

 

 

 

 

Revolving LOC

 

$

50,794

 

$

51,039

 

$

49,483

 

$

49,092

 

$

49,915

 

Installment loans

 

 

91,445

 

 

92,454

 

 

92,283

 

 

95,212

 

 

100,435

 

Total lending revenue

 

$

142,239

 

$

143,493

 

$

141,766

 

$

144,304

 

$

150,350

 

 

 

 

 

 

 

 

Lending Provision

 

 

 

 

 

 

Revolving LOC

 

$

20,131

 

$

19,031

 

$

27,089

 

$

15,539

 

$

29,620

 

Installment loans

 

 

36,269

 

 

28,464

 

 

35,171

 

 

31,139

 

 

46,442

 

Total lending provision

 

$

56,400

 

$

47,495

 

$

62,260

 

$

46,678

 

$

76,062

 

 

 

 

 

 

 

 

NCOs

 

 

 

 

 

 

Revolving LOC

 

$

19,989

 

$

22,023

 

$

21,780

 

$

6,234

 

$

26,715

 

Installment loans

 

 

32,908

 

 

33,342

 

 

35,483

 

 

41,078

 

 

38,168

 

Total NCOs

 

$

52,897

 

$

55,365

 

$

57,263

 

$

47,312

 

$

64,883

 

 

 

 

 

 

 

 

NCO rate (annualized) (1)

 

 

 

 

 

 

Revolving LOC

 

 

16.6

%

 

18.6

%

 

18.7

%

 

5.5

%

 

23.8

%

Installment loans

 

 

16.4

%

 

17.2

%

 

18.9

%

 

21.5

%

 

19.3

%

Total NCO rate

 

 

16.5

%

 

17.7

%

 

18.8

%

 

15.6

%

 

20.9

%

 

 

 

 

 

 

 

ACL rate (2) (3)

 

 

 

 

 

 

Revolving LOC

 

 

25.0

%

 

25.4

%

 

26.6

%

 

25.6

%

 

8.4

%

Installment loans

 

 

10.4

%

 

10.3

%

 

11.2

%

 

11.3

%

 

5.4

%

Total ACL rate

 

 

15.9

%

 

15.9

%

 

17.1

%

 

16.8

%

 

6.5

%

 

 

 

 

 

 

 

31+ days past-due rate (2)

 

 

 

 

 

 

Revolving LOC

 

 

8.0

%

 

8.6

%

 

8.5

%

 

8.4

%

 

4.1

%

Installment loans

 

 

8.6

%

 

8.5

%

 

8.1

%

 

8.2

%

 

9.6

%

Total past-due rate

 

 

8.3

%

 

8.5

%

 

8.3

%

 

8.3

%

 

7.6

%

 

 

 

 

 

 

 

(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 plans to address our liquidity and debt obligations and executing on our long-term U.S. and Canadian 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 protect our proprietary technology and analytics and keep up with that of our competitors; disruption of our information technology systems that 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.

(CURO-NWS)

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