EX-99.1 2 ex991-q22023pressrelease.htm EX-99.1 Document

CURO Group Holdings Corp. Reports
Second Quarter 2023 Financial Results

-Gross loans receivables increased 3.7% sequentially to $2.1 billion-
-Total revenue of $209.2 million-
-Operating expenses declined 8.5% sequentially to $108.1 million-
-Net charge-off normalizes at 13%-



Chicago, Illinois--August 3, 2023 - CURO Group Holdings Corp. (NYSE: CURO) (“CURO” or the “Company”), a tech-enabled, omni-channel consumer finance company serving consumers in the U.S. and Canada, today announced financial results for its second quarter ended June 30, 2023.

“We delivered solid results in the second quarter as we continued to execute on all facets of our core business,” said Doug Clark, Chief Executive Officer. “Our fundamentals continued to gradually improve, with revenue, net charge-offs, gross loans receivable and expenses all matching or exceeding our expectations. As we look ahead, despite ongoing macro challenges, we are encouraged by opportunities present in both the U.S. and Canada while remaining mindful to balance future growth with further improving our bottom line. Our extensive industry experience, investments in automation and strong consumer demand for our products position us well for long term growth and shareholder value creation.”

Second Quarter 2023 Consolidated Summary Results

•Gross loans receivable increased 3.7% sequentially to $2.1 billion, primarily driven by sequential increases in Canada POS Lending and Direct Lending Revolving LOC Loans of 6.9% and 2.5%, respectively.

•Net revenue of $129.6 million, down 11.5% sequentially, primarily driven by a higher provision for loan loss expense related to the increase in charge offs and Allowance for loan loss build due to loans receivable growth and change in macroeconomic conditions.

•Total operating expenses declined 8.5% sequentially, to $108.1 million, primarily related to one-time restructuring charges of $10.0 million recognized in the first quarter of 2023.

•Net loss of $59.3 million ($1.45 per share) compared with Net loss of $59.5 million ($1.46 per share) for the first quarter of 2023. The $0.2 million improvement was primarily driven by favorable decreases of $18.4 million in provision for income taxes and $10.1 million in total operating expenses, partially offset by lower net revenue and a $7.2 million increase in Interest expense due to the new term loan secured in May 2023 as well as increased utilization of non-recourse revolving credit facilities and $8.9 million of extinguishment and modification costs arising from the second quarter's debt transactions.

•Net charge-off rate increased 150 bps, sequentially to 13.0%, returning to normalized rates from the temporary lower rates we saw in our Direct Lending brands in Canada after the policy change we made in the first quarter of 2023. The Company's 91+ days delinquency ratio remained flat sequentially at 3.2%.

As of or for the Quarter Ended
Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
Delinquency and Loss Ratios
20232023202220222022
31-60 days delinquency ratio1.9 %1.8 %1.9 %2.5 %2.4 %
61-90 days delinquency ratio1.3 %1.5 %1.3 %1.5 %1.8 %
91+ days delinquency ratio3.2 %3.2 %2.6 %2.6 %2.0 %
Net charge-offs13.0 %11.5 %14.8 %13.2 %24.0 %

Funding and Liquidity

As of June 30, 2023, principal debt balances outstanding were $2.8 billion, consisting of 69.2% of fixed rate or hedged variable rate debt and 30.8% of non-hedged variable rate debt.

As of June 30, 2023, available capital resources were approximately $361.9 million, comprised of $111.3 million in unrestricted Cash and cash equivalents, $176.7 million in unused borrowing capacity and $74.0 million of unencumbered Gross loans receivable.

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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®, Flexiti®, 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, August 3, 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 1-416-764-8658 (Toll free: 1-888-396-8049; Conference ID: 82661841). 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 six months ended June 30, 2023.

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Table 1 - Consolidated Statements of Operations
(in thousands, except per share data, unaudited)Three Months Ended,
Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
20232023202220222022
Revenue
Interest and fees revenue$178,986 $179,437 $181,605 $180,515 $278,331 
Insurance and other income30,257 30,036 35,593 33,605 26,073 
Total revenue209,243 209,473 217,198 214,120 304,404 
Provision for losses79,598 62,932 94,849 78,399 129,546 
Net revenue129,645 146,541 122,349 135,721 174,858 
Operating Expenses
Salaries and benefits61,346 64,805 66,067 53,413 82,427 
Occupancy11,267 11,672 12,114 12,827 17,507 
Advertising2,131 2,175 3,692 5,244 12,707 
Direct operations15,466 13,092 11,832 11,729 20,293 
Depreciation and amortization9,141 9,021 8,337 9,499 8,672 
Other operating expense8,796 17,433 24,002 23,645 18,787 
Total operating expenses108,147 118,198 126,044 116,357 160,393 
Other expense (income)
Interest expense66,101 58,943 54,978 50,149 42,193 
Loss from equity method investment2,134 3,413 1,932 2,309 1,328 
Goodwill impairment— — 145,241 — — 
Extinguishment or modification of debt costs8,864 — 689 3,702 — 
Loss on change in fair value of contingent consideration— 2,728 — (11,354)4,014 
Gain on sale of business— 2,027 — (68,443)— 
Miscellaneous expenses1,435 — — — — 
Total other expense (income)78,534 67,111 202,840 (23,637)47,535 
Income (loss) before income taxes(57,036)(38,768)(206,535)43,001 (33,070)
Provision (benefit) for income taxes2,291 20,703 (20,142)17,348 (6,990)
Net (loss) income$ (59,327)$ (59,471)$ (186,393)$ 25,653 $ (26,080)
Basic (loss) earnings per share$(1.45)$(1.46)$(4.60)$0.63 $(0.65)
Diluted (loss) earnings per share$(1.45)$(1.46)$(4.60)$0.63 $(0.65)
Weighted average common shares outstanding:
Basic41,002 40,783 40,488 40,479 40,376 
Diluted41,002 40,783 40,488 40,835 40,376 

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Table 2 - Consolidated Balance Sheets
As of
Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
(in thousands, unaudited)20232023202220222022
ASSETS
Cash and cash equivalents$ 112,531 $ 54,935 $ 73,932 $ 45,683 $ 37,394 
Restricted cash109,484 123,282 91,745 144,020 97,465 
Gross loans receivable 2,139,865 2,062,829 2,087,833 1,894,427 1,592,815 
Less: Allowance for loan losses(272,615)(259,959)(122,028)(102,743)(90,286)
Loans receivable, net1,867,250 1,802,870 1,965,805 1,791,684 1,502,529 
Income taxes receivable20,854 20,100 21,918 13,469 46,450 
Prepaid expenses and other44,518 47,295 53,057 65,167 25,370 
Property and equipment, net28,418 29,867 31,957 37,402 38,752 
Investment in Katapult18,368 20,502 23,915 25,848 28,157 
Right of use asset - operating leases56,021 54,597 61,197 64,683 64,602 
Deferred tax assets54,102 53,474 49,893 31,986 23,993 
Goodwill277,069 276,487 276,269 424,292 352,990 
Intangibles, net133,947 127,387 123,677 120,345 113,130 
Other assets22,275 10,991 15,828 12,774 8,558 
Assets held for sale (1)
— — — — 338,779 
Total Assets$ 2,744,837 $ 2,621,787 $ 2,789,193 $ 2,777,353 $ 2,678,169 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities $78,343 $85,875 $73,827 $66,723 $81,423 
Deferred revenue36,793 33,227 32,259 25,111 23,425 
Lease liability - operating leases56,585 55,468 62,847 66,370 67,339 
Contingent consideration related to acquisition18,499 18,128 16,884 15,770 30,354 
Income taxes payable788 — — — 4 
Accrued interest 39,306 20,090 38,460 18,048 34,970 
Debt2,772,872 2,627,263 2,607,314 2,449,316 2,189,431 
Other long-term liabilities10,016 10,552 11,736 11,563 12,146 
Deferred tax liabilities8 — — — 12,360 
Liabilities held for sale (1)
— — — — 111,137 
Total Liabilities$ 3,013,210 $ 2,850,603 $ 2,843,327 $ 2,652,901 $ 2,562,589 
Total Stockholders' (Deficit) Equity(268,373)(228,816)(54,134)124,452 115,580 
Total Liabilities and Stockholders' (Deficit) Equity$ 2,744,837 $ 2,621,787 $ 2,789,193 $ 2,777,353 $ 2,678,169 
(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 sale of the Legacy U.S. Direct Lending Business, which closed in July 2022.

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Table 3 - Consolidated Portfolio Performance
(in thousands, except percentages, unaudited)Q2 2023Q1 2023Q4 2022Q3 2022
Q2 2022(1)
Gross loans receivable
Revolving LOC$ 1,385,152$ 1,314,695$ 1,284,515$ 1,129,387$ 1,128,372
Installment loans754,713748,134803,318765,040652,468
Total gross loans receivable$2,139,865$2,062,829$2,087,833$1,894,427$1,780,840
Lending Revenue
Revolving LOC$ 86,703$ 84,225$ 81,170$ 77,037$ 96,582
Installment loans92,28395,212100,435103,478181,749
Total lending revenue$178,986$179,437$181,605$180,515$278,331
Lending Provision
Revolving LOC$ 42,932$ 30,106$ 46,745$ 41,787$ 40,435
Installment loans35,17131,13946,44233,51086,484
Total lending provision$78,103$61,245$93,187$75,297$126,919
NCOs (2)
Revolving LOC$ 32,786$ 17,953$ 35,387$ 30,907$ 33,945
Installment loans35,48341,07838,16831,37271,056
Total NCOs$68,269$59,031$73,555$62,279$105,001
NCO rate (annualized) (2) (3)
Revolving LOC9.7%5.6%11.6%10.8%12.8%
Installment loans 18.9%21.5%19.6%17.6%44.8%
Total NCO rate13.0%11.5%14.8%13.2%24.0%
ACL rate (4) (5)
Revolving LOC13.6%13.3%6.1%6.0%6.7%
Installment loans11.2%11.3%5.4%4.6%8.1%
Total ACL rate12.7%12.6%5.8%5.4%6.7%
31+ days past-due rate (4)
Revolving LOC5.6%5.5%3.3%4.1%4.1%
Installment loans 8.1%8.2%9.6%10.2%9.2%
Total past-due rate6.5%6.5%5.8%6.6%6.1%
(1) Includes loan balances and activity classified as Held for Sale.
(2) NCOs include $0.5 million and $10.3 million, for the three months ended September 30, 2022 and June 30, 2022, respectively, related to the purchase accounting fair value discount, which are excluded from provision.
(3) 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.
(4) We calculate (i) Allowance for credit losses ("ACL") rate and (ii) 31+ days past-due rate as the respective totals divided by gross loans receivable at each quarter end.
(5) 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.






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Table 4 - Direct Lending Segment - Operating Income / (Loss)
(in thousands, unaudited)Three Months Ended,
Jun 30,Mar 31,Dec 31,Sep 30,Jun 30,
20232023202220222022
Total revenue$167,016 $169,368 $181,925 $186,409 $281,251 
Provision for losses63,755 48,364 77,724 65,020 123,584 
Net revenue103,261 121,004 104,201 121,389 157,667 
Total operating expenses91,285 103,151 111,632 102,840 143,965 
Segment operating income (loss)$11,976 $17,853 $(7,431)$18,549 $13,702 






























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Table 5 - Direct Lending Segment - Portfolio Performance
(in thousands, except percentages, unaudited)Q2 2023Q1 2023Q4 2022Q3 2022
Q2 2022(1)
Gross loans receivable
Revolving LOC$ 472,902$ 461,443$ 451,077$ 439,117$ 501,209
Installment loans 754,713748,133803,318765,041652,467
Total gross loans receivable$ 1,227,615$ 1,209,576$ 1,254,395$ 1,204,158$ 1,153,676
Lending Revenue
Revolving LOC$ 49,483$ 49,092$ 49,915$ 52,461$ 75,736
Installment loans92,28395,212100,435103,478181,748
Total lending revenue$ 141,766$ 144,304$ 150,350$ 155,939$ 257,484
Lending Provision
Revolving LOC$ 27,089$ 15,539$ 29,620$ 28,408$ 34,472
Installment loans35,17131,13946,44233,51186,485
Total lending provision$ 62,260$ 46,678$ 76,062$ 61,919$ 120,957
NCOs (2)
Revolving LOC$ 21,780$ 6,234$ 26,715$ 24,793$ 30,408
Installment loans 35,48341,07838,16829,78343,661
Total NCOs$ 57,263$ 47,312$ 64,883$ 54,576$ 74,069
NCO rate (annualized) (2) (3)
Revolving LOC18.7%5.5%23.8%20.9%25.0%
Installment loans 18.9%21.5%19.3%16.7%27.7%
Total NCO rate18.8%15.6%20.9%18.4%26.5%
ACL rate (4) (5)
Revolving LOC26.6%25.6%8.4 %7.9 %9.3 %
Installment loans 11.2%11.3%5.4 %4.6 %6.9 %
Total ACL rate17.1%16.8%6.5 %5.8 %7.9 %
31+ days past-due rate (4)
Revolving LOC8.5%8.4%4.1 %5.1 %5.8 %
Installment loans 8.1%8.2%9.6 %10.2 %9.7 %
Total past-due rate8.3%8.3%7.6 %8.3 %8.0 %
(1) Includes loan balances and activity classified as Held for Sale.
(2) NCOs include $0.5 million and $10.3 million, for the three months ended September 30, 2022 and June 30, 2022, respectively, related to the purchase accounting fair value discount, which are excluded from provision.
(3) 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.
(4) 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.
(5) 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.
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Table 6 - Canada POS Lending Segment - Operating Income
(in thousands, unaudited)Three Months Ended,
Jun 30,Mar 31,Dec 31,Sept 30,Jun 30,
20232023202220222022
Total revenue$42,227 $40,105 $35,273 $27,711 $23,153 
Provision for losses15,843 14,568 17,125 13,379 5,962 
Net revenue26,384 25,537 18,148 14,332 17,191 
Total operating expenses16,862 15,047 14,412 13,518 16,428 
Segment operating income $9,522 $10,490 $3,736 $814 $763 

Table 7 - Canada POS Lending Segment - Portfolio Performance
(in thousands, except percentages, unaudited)Q2 2023Q1 2023Q4 2022Q3 2022Q2 2022
Revolving LOC
Gross loans receivable$ 912,250$ 853,253$ 833,438$ 690,270$ 627,163
Lending revenue$ 37,220$ 35,133$ 31,255$ 24,575$ 20,847
Lending provision$ 15,843$ 14,568$ 17,125$ 13,379$ 5,963
NCOs $ 11,006$ 11,719$8,672$6,114$3,537
NCO rate (annualized) (1)
5.0 %5.6 %4.4 %3.6 %2.4 %
ACL rate (2) (3)
6.8 %6.7 %4.9 %4.8 %4.5 %
31+ days past-due rate (2)
4.0 %3.9 %2.9 %3.6 %2.8 %
(1) We calculate NCO rate as total quarterly NCOs divided by Average gross loans receivable and then 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 respective 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 creating long term growth and shareholder value. 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 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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