WRLD - Earnings call transcript Q4 2018 | World Acceptance Corporation

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Operator

Good morning, and welcome to the World Acceptance Corporation's Sponsored Fourth Quarter Press Release Conference call. This call is being recorded. [Operator Instructions].

Before we begin, the corporation has requested that I make the following announcement. The comments made during this conference call may contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represent the corporation's expectations and beliefs concerning future events. about are are risks subject statements uncertainties. and forward-looking matters inherently that to Such those fact statements. plan, of those than similar any other Statements historical foregoing the the will should and anticipate, variation may, of identified are as words estimate, believe, intend, forward-looking expect, expressions and or by as well

time and the or reports At does results to XX, XX-K differ in host, year from corporation Additional information any pleasure discussing Jim Wanserski, or to and to not are over performance March undertake statements paragraph fiscal President the such any factors from that statements CEO. it your any expectations time, filed section to makes. time. recent in or press subsequent expressed implied the it statements ended regarding forward-looking turn forward-looking could in statements forward-looking floor Form and cause obligation the corporation's The most the furnished XXXX today's my with actual is and update release forward-looking this the of Risk SEC to included for Interim earnings the Factors in to

James Wanserski

my Acceptance I’m of Great. Q&A to morning, welcome to in call. Jim and team participate for fourth management joined the my session. is World and earnings quarter Again, here Good with members name Wanserski. Corporation two this call

of couple Q&A. a introductory Just the get remarks we on before started

Greenville ideas to system customers activities bank quarter metrics initiative, media in we’ve working increase, which display other provided, yet driven you World types no our that know some these one press Among are regulators, results could we fourth on loans with to of our what The what legislators, earnings described published all are the as within customers release dollar our segments morning from largest, mischaracterizations offered certain the provide of despite installment we’ve as results. of our out quarter. produced in and quarter working is base on positive differences been of call host time. financing many small say granularity script. for components associations this loan have some other the this deal our customary, functions contributions all and providers within and various we’ve worked secondly to upgrades, their increased We from By in us top some driving from to again combination improvements for improvement and time for bottom our on continuing our converting service another sum our we’ve customer It’s can our organizations acknowledge embracing the see or with and field into portfolio closely then summary be easily with loan of loan headquarters, continuing that number us our seasoned selling, industries. some and momentum. documents and is well script. those those along the but a by the tenacity with of display yet along this as be the As decrease the two these lending website sales implementing to and purposes one of I’d data where led with industry installment day enthusiasm branches between first operations earnings has changes things some other

employees all and associates. to thanks our of So

Chad call time are at Analytics Prashad me and quarter Officer, on with this fourth are pleased about our Strategy, VP this As Chief Calmes I this indicated to Financial Senior and and John earnings we results. accept of morning questions

Operator

from John question first with Rowan our And Instructions] [Operator you. come Janney. Thank will

John Rowan

guys. morning, Good

James Wanserski

John. morning, Good

John Rowan

for rate, I course number you the it rate? that was have flap, just find gave guys couldn’t Mexican U.S. the You the of charge-off U.S. the charge-off

James Wanserski

which slightly XX%, same under down just last from – consistent quarter Yes, the it year. is was

John Rowan

and Okay the business in $XXX growth advance how business that out growth is the down that’s the or much XXX you’ve and or in last non-payroll payroll Mexico? contraction year, Mexico non-payroll have payroll deduct in passed million of a in is Mexico advance million in there versus just receivables payroll then you versus deduct and advance

James Wanserski

deduct the in of then gross after Sure, after in so an exposure we is that the loan $XX.X payroll loans $XX.X gross business left deduct in million and allowance million -- have loans loan portfolio payroll portfolio. $XX.X million net

traditional Mexico in of year-over-year. in concentrated that in and the advanced of that is payroll business or portion run-off the business, up So is the pay business that

John Rowan

is are but million net business out but after of have other million your loans still $XX take you – the Mexico, in are growing you $XX.X if you $XX.X million correct? left saying you Okay, or allowance

James Wanserski

Correct.

John Rowan

XX you in correct that Now closed is stores also? Mexico,

James Wanserski

That’s right. the the quarter the were XX those actually but year, the the quarter We in deduct payroll the closed business. in in XX XX and in all

John Rowan

obviously one asset advance growing know Mexican other portfolio business. out we the traditional Okay. called is is contracting, payroll Mexico, problems the you all And issues, quality was that lending deterioration there all a in is as one improvement and that far in as or the quality asset or

James Wanserski

a there traditional a delinquency – in slight standpoint. was business is There the a Mexican improvement from

the in all issues yes, So deduct the are business. payroll concentrated

John Rowan

to unique and up your X%, like customers the the U.S. are Okay. looks in weakness why down is And obviously for then, your for unique the quarter fourth means that explain quarter? were fourth there the customers year in

John Calmes

questions. the the Chad -- of the have can year, some decrease more run just is quarter that seasonal handle for we But can the seasonal off detailed right. decrease I every

recurring season. with line the is which tax So the

John Rowan

not Which that year-over-year? is sequential, X%

John Calmes

right, That’s sequential.

John Rowan

Okay. one its a the tax, repatriation million in so And calculated time kind $X.X all correct? sure tax down, just of items for have unusual make then

John Calmes

Correct.

John Rowan

million $X.X And then severance. at

John Calmes

Correct.

John Rowan

Mexican in million $X.X fees? legal

John Rowan

$X.X time million paid and the change a in off policy?

John Calmes

Correct.

John Rowan

rate let’s use the out would issue? once I repatriation a tax adjustment you rate then And tax the adjust the XX% a to say for

John Calmes

is effective You I the said – the think ex transition rate XX.X% tax tax.

John Rowan

very you know. much. Thank to needed I what that’s Okay,

John Calmes

Thanks, John.

Operator

Hecht. we’ll on Moving from John Instructions] [Operator go to Jefferies,

John Hecht

lot actually credit it the about and performance guys. charge-off talk in there wondering Morning different getting is if asked different a questions. or back of your prior those is I’m customers. the levels. you of those delinquency customers, -- versus cohorts recurring fairly there three is some thanks does very How versus much patents new consistent of on John

Chad Prashad

this is Chad. John, Hey

comment different has fairly the levels, between So consistent. the been

Over couple but in customers the past increased the for of customers the former of couple especially, slightly over years, new years, and customers have former volume. improving last originations for new

John Hecht

of some Okay. just seasonal Mexico in what’s sort ALL bag been it mixed percentage loans consistent. going fairly about Yes, the think on performance some There as of I And performance fluctuations. flat the then has the are the clean. perspective the a should is of we pretty we ALL and is then Should any changes kind still percentage forward? from kind of a like is a domestic modeling anticipate going being there year-over-year loans sounds as of of of think about

James Wanserski

expect business the that of continues a delinquencies [ph] off, I that weakness and come are that roll to given ratio to the as in loan that, that payroll to So deduct that X% that the lot allowance down with portfolio.

John Hecht

two And Okay, thanks. that’s actually helpful – related to Mexico. questions final well

pertaining pretax you some profits given credit from segment? talked -- information any have Do you've the of to You us contribution information. that guys

James Wanserski

the during that XX-K sharing total been out we as the we and in in can share So business there and the breaking well. in more we’ll the Mexico around have consider past, information

John Hecht

we to some do pointed you general the strategy Okay, strategy the to are of lending Mexico, down business, tied just shut guess you about the are solely deduction those traditional question related you out how the tied but business is just the forward? optimizing branches, payroll Mexican branches or I just to going think

James Wanserski

to solely loan -- businesses business the deduct network. In the branch the their has are we sort branches there Mexico, Sure, advance yes in business. the still of been traditional those tied so payroll branch, don't co-mingle – one expanding is

John Hecht

All me, right. from That’s thanks it guys.

Operator

Stephens. on, to Moving Vincent with Caintic go Instructions] [Operator we’ll

Vincent Caintic

Hey thanks, morning good guys.

runs the they and a payroll ones are sort one is some – on, maybe grows point quick three just that $XX overtime, But be first but on we Just net should and or from holds business, case follow remaining should of stabilizes million that the should that loans ups, just expect up. base Mexican at that our follow really we deduct just again. me off

James Wanserski

originating portfolio, time. expectation that stopped winds be in so down the that every we portfolio to seems So

Vincent Caintic

it. got Okay,

call your thought what XX% is then we and year-over-year other marketing something personal Secondly, kind some around and for just that expenses, advertising up of out forward is advertising going expense should your and expect rolling forward?

Chad Prashad

and our little in to shown some in what as Yes, things former pretty XX%. think so in There volume we far changes have campaign that’s and increases We’ve been over marketing are up use. new QX, QX channel impressive results also as that of a in that. customers. couple customers, are a There the we contributing

some of from in of branches. previously mail also the middle the are in we phasing that of centralization a was sent our Secondly,

of branches are from you budget. And expenses, expenses to so some see move these going advertising the to central the

that see over probably increase will you continue of couple So quarters. the to next

James Wanserski

But is think recently. had Right. we’ve we our reasonable some don't positive, in next increases in we expect increases quite year, given expect the marketing which do it's budget that of [Indiscernible] to success budget we some marketing

Vincent Caintic

two like some And would the got – the well to this have group the if could general of other lot seeing with – subprime previous lenders you trends like actions, out? quarter a those Okay, sub-prime just seen attribute are it we’ve done you consumer or it. a of the attribute kind as favorable just you of this in pass of data, with would you a of lot your

James Wanserski

our is the last market, a a lot year to changes certainly know procedures over have two hard practices half of marketing to on the going what exactly regarding internal and then It’s years. made in we to but and

success customer certainly and we’ve And led have well that changes down those those a of here. figure to things a of higher obviously have things helped we charge-offs in quality lot the the So road. some made as to

So segment. to success scores we’ve falling like credit – our on despite back had lower the in the we actually the lending

Chad Prashad

time, At our acquisition. think I the decreasing same

Vincent Caintic

from go on there any in wondering Got Thanks. me, through your I thanks. update one think just last the typically just you credit just that spring discussed it, quarter you that? facility, last following up John And from if is renegotiation,

John Calmes

and negotiations facility that expect spring. we this don’t issues extending Those on are credit any Sure. ongoing with

Vincent Caintic

Okay, got it. Thank much. very you

Operator

you teleconference. Thank Acceptance quarterly World your Corporation This for participation. the concludes

may now disconnect. You

World Acceptance (WRLD) 10 May 182018 Q4 Earnings call transcript