WRLD - Earnings call transcript Q1 2019 | World Acceptance Corporation

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Operator

Good morning and welcome to the World Acceptance Corporation sponsored First Quarter Press Release Conference Call. This call is been recorded. At this time, all participants have been placed on a listen-only mode.

Before we begin the corporation has requested that I make the following announcements.

The comments made during this conference call may contain certain following-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represents 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 facts 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

the or results to Risk recent differ in furnished from Additional undertake information statements to any discussing and update fiscal and the are Factors The the performance the statements paragraph such it section XX, factors that statements expectations reports in or press any expressed implied obligation statements makes. regarding forward-looking subsequent of could time-to-time. corporation's in not forward-looking use with Form XX-K XXXX the today's does actual forward-looking March ending most and any release forward-looking the SEC included earnings for or filed in from year Corporation

to the it time, is this over Officer. Executive and At Chad to my turn Prashad Chief President floor your pleasure host,

Chad Prashad

as filed This Officer, this we're Good Strategy by as At Chief review joined may our Prashad. chance you've and press also glad script X-K to this had have. I'm and to the release Chad that open trust the you a Calmes. Financial all with I Johnny questions the is that time, well morning. morning. any

Operator

Janney. will Please Instructions] [Operator We take Rowan now go ahead. our from of you. Thank question first John

John Rowan

Hello.

Chad Prashad

John. Hey,

John Rowan

Hi.

Okay.

same historical to script growth that going is they're the for you there But trying seems look So and new be in and just at continue old in wanted to the I'm here customers charge-offs charge-offs on forward. versus like the charging-off quarter dollars here. you're still look was acceleration into rate. dig though up it and at of what indicating about up bit the guidance and basis to a Obviously, to

-- portfolio loan these defaulting? these within mean, these were out look loans, are to right? into they what's seeing you shorter in I'm first making longer-dated -- have So go up And not we any the the customers trying loans -- default? frankly other shorter-term the they default when like right? of low I'm timing the products. too didn't are there so are you new you quick a relative of seeing in more change to of out to they mean, Are customers, the are trying I if I delinquency upfront. rates how some What payment longer-term on whether figure or numbers didn't look is figure like much. payments put

you that appreciate if can just it. would I So address

Chad Prashad

Yeah. question Great John.

The anything seeing in or perspective So increase driver perspective. difference overall prior charge-offs customer of and mostly has in just large delinquency we're World quarter a main to like past to versus charge-offs credit in not customers overall weighting in quality the rates newer the that from tenure or an well as our been increase for in quarter overall years. prior and due in a low

customer at end year years. past negative of to of top company customer that's quarter. four of a XX% terms preceding a flat in experienced that quarter, than less origination year-over-year in a the been we last for had increase the growth had the mostly increased at and on XX% year new the This that year-over-year been the over Previously, World with has the same time of

the customers. weighing towards portfolio a large newer shift in rather So it's

to historically their XX%. been these our the that's Today, approximately XX% portfolio of closer XX% at who been of origination a with have customers World than year is to less and time

are their the customers, terms also of within So or overall in loss of of particular of newer and in but have terms rate customers group it's delinquency increase a in riskiest any customers not legers, weighting we in generally it's portfolio. -- them, the just it more is both that

John Rowan

expect Right. longer-dated But and loan be surge you part would are of there delay actual defaults, you're little that a the giving see right? of the a lot bit a a question in was that given between that see also payment shouldn't I first Because charge-offs, in shouldn't that, loans, right? growth you growth longer-dated these -- of

customers, is really I changing existing last year, But X cohort off the timing minus they're month charging of at heart where right? timing Not now charge-offs for the loan charge-off on all? new customers. this the should X off to they're So, new The of at the one months say, charging that's at new year, question.

Chad Prashad

Yes.

that, anything seen of any shorter-term origination most mind start an the with, our And of but on in haven't that. seen times haven't do amount customers like for to necessarily in loans we keep customers. and increase begin new newer We charge-off

John Rowan

Okay. Thank you. it. That’s

Chad Prashad

Yes.

Operator

Vincent ahead. of Please Caintic We go our from take question Stephens. will now next

open. Your line is

Vincent Caintic

down, future this Or first more Maybe, front-loading the just fiscal the you just back Good color quarters the and one-time and to first seasonality, happened morning. for where at quarter? that -- would see, earnings the being quarter just Hey. that say, first script. growth appreciate anything for there there's that the the things out taking fiscal quarter? call in just the of on is terms given earnings was Thanks. looking step But in

Johnny Calmes

it we it it's what health loaded. -- long-term manageable but running -- still it's very well, is real, in recent so it as this higher call, higher Which right? our investing, it it's quarters. It's Obviously, a front-end the one-time great than higher quarter than no recent history. benefits, plan run did has have in things. The expense, place, in I has are was been There's which

right? to now, That is QX $X million, $X.X Starting million for quarters, down million and will we've then be two the $X.X expense, to with million shared to So QX in right the drop that in and running schedule going quarter. everybody. $X.X QX, that's it around next a around --

expense forward. personnel should decreasing going see So you that

did of another have quarter, this increase sizable in acquisition. we going that decent acquisition have but we a headcount, expect increase we course, or forward, the to stabilize With unless

and personnel actually should year you into year see fiscal the the second we move second -- So, as long-term calendar stabilize as of plan. -- expense or decrease

Vincent Caintic

Okay, new strategy. about customers just and that's talking helpful. And the the then maybe

So, sort than appreciate a when you that this your -- there your where year-over-year, sort relative expenses revenues grew you and slow -- to -- XX of provision the to Is grew fee your basically would expect normalize? revenue expenses credit build double-digit higher versus your there that Or is when -- should that growth? a that timeframe expense, see down we provision the can would and of having timeframe grow but your -- you started your the revenue or that -- expect when on that.

Johnny Calmes

our think relative -- the we expense Yes to level we it the reacts off increases new provision, for to. continue right? accelerate I the growth, So, Sure. regards should going to just in if provision the it'll reasons to continue I to G&A was see In growth, speaking forward. customer our

those during customer quarter, average loans So, the in it's in long to growth million was a portfolio, due right? do of that $X.X to -- we continue the lot of provision million obviously growth right? outstanding, charge-offs and may new $X.X the of function a our the simply just the So, increased we a goal our is increase that, as is increases. growth But relative see to accelerate as so hopefully our

during -- in grew all reserve million just quarter So that because was $XX million $X.X right? provision our versus we the of almost to and increased and million another we year, the $X.X increase million apply last $XX.X general quarter loans this

due to Chad riskiest rest So, mix the a lot is customers. simply are our increase growth. is new of as And are provision in which change to and customers said the that related building the then in

Vincent Caintic

the And years? you. the does of do sort next see in we customers how new think lot growth that? new Are customers for the Got year a two or about how looks? of pipeline Just going you guess to I for

a there more where to throttle or the call, but more And then growth maybe way of Thanks. pace a try customers? have customers, is way maybe like and those a to is strategic there new is charge to you in this you if that level --

Chad Prashad

Yes.

two couple in growth view the basically in we So, next channels. of years

organic two we've experienced again see is years. steady -- growth foreseeable to we as for future growth side the acquisition quarter we We continue have the continued for as. which And have organic last this experienced that we've growth the well and on

continued place growth. to through And report seems well in company organic it that operations, all the we throughout processes have as continued our channels the throughout our field of acquisition as

On the opportunistic. positioned be just very acquisition side, ourselves to we've

down. think in near of present portfolios -- take just to close we what And that potential doesn't of future it acquisitions number within deals are do accounts think to are existing quality that our themselves always we the so increase we might We we portfolio. and into the translate prepared company, when work the those in the on that see accretive an the based how

I potential So short well. term term in there more is in the see as for still the do the short acquisitions

Vincent Caintic

rates? your to acquisitions the of buybacks, give capital, I'm you you. about your in Got get spread what when about question more queue. think is sorry But one Okay. And buying Thank -- versus acquisitions, a how you these thinking back about framework stock think of hurdle when of sort there that? you're you. I'll in and you back share versus say terms us your could

Chad Prashad

Sure. Yes.

yes, internally it actually with have right So to we don't well use We comfortable we feel share hurdle acquisitions the as we well now want our use acquisitions and -- as most that a as that. program. repurchase price acquisitions. But we rate both

with should today comfortable future. is So where price in share that and the we're the return generate

Vincent Caintic

very Got much. it. Thanks

Operator

Joseph next Instructions] our We question go take will now Jefferies. of ahead. Kyle Please from [Operator

is line open. Your

Kyle Joseph

morning. good Hey,

your the branch or that openings? Looks grew acquisition Just novo are the questions. up was those following acquisition-driven de quarter like in on count

Johnny Calmes

that It it both, an bit through growth was little was majority was of a of -- acquisition. but

and think XX and during the open. I'm quarter I XXX the around we So locations locations sorry had XX around we kept those of -- was acquisition

few new as in result well. of some vast that closures were -- we there locations the the during also majority So acquisition. But the but quarter de novos and the a had of

Kyle Joseph

guys talking Okay. come are about portfolio thinking And acquisitions when just as or stores Are acquisitions? you about those well? you with

Johnny Calmes

were Both, either of this in XX the locations of part ideally, an case their in from least existing we areas the had roll locations. right? at are ours. they that -- way But into can currently location were there that quarter or existing So past locations during we

those to sense keep open. makes it So

Kyle Joseph

by kind what's just of impressive I it your want same-store growth that? -- marketing get and driving point? the thoughts very on Got acquisitions, it driving but your very has Is it. right you Obviously, been call obviously but around, what's market growth. outpacing are the growth hands of level guys my And growth? aided impressive, then it to Is on this your obviously on your is

Chad Prashad

things. Yes. several It's a combination of

So portfolio mindset collaboration field acquisitions towards growth marketing operations have definitely same-store also and a our and growth as very as growth. continued improvement within towards that refinement our growth. contributed throughout channels receptive new customer year-over-year further contributed to been has well operations our But with

Kyle Joseph

of me. evolving the then performance then give can And a credit I right. us growth for new last how of of All credit a you're reserve sense that, credit customers? borrowers, And to and sense performance? sort sort the but you understand the Any performance there? your in of one addition given from envision give us changes for existing seeing you

Chad Prashad

Yes.

is -- mentioned more weighting but old. -- new that customers in were which increased there the customers I earlier tenured the on So the

at who have year us least us been out came continually for customers a So with off and been us with at for their through a then year, account paid if several have with or whether to us back been look and they years. you

to actually same areas. some in improved Overall their the -- performance has is

portfolio, So the strength really of ages. about the we feel good portfolio our especially as

to have we -- of due overall newer of customers. experienced increase weighting to just just in what increased due of the is an the their So portfolio rating risk recently just

charge-off for the in But any rates tenured delinquency. experienced haven't more or we softness customers their

Kyle Joseph

Got it. Thanks very my question. much answering

Chad Prashad

you. Thank

Operator

Investment from final CAS Partners. go And we take our question Sosin ahead. of Clifford will Please now

Your line open. is

Clifford Sosin

thanks guys, question. my Hey taking for

more moment that you get you a to just looking is with just newer comfortable higher you charge-offs So towards really consequence end you mix that that get the the borrowers. rate data less are of us -- Maybe that can just the if you're spend the walk of this tenured that comfortable doing your maybe is through at walking on analyses shift that just -- statement? through a

Chad Prashad

Chad. is Thanks this question. Hey Cliff, for the

mindset, couple way it's monitor of in the in strategy we've to unnecessary folks has of the in years somewhat that a evolved past been bringing So and analytics evolvement with my brought as to some new in acquisition it's activity and over in just change and department. our time we of this the position been perspectives the due move some CEO increase and over new it and

we is, rates that now well over a customer at by and charge-off our things few So stratify as and the as attributes tenures, other time. delinquency way look we basically monitor portfolio their

of So that lot confidence. gives us a

when we customers, see of in portfolio, the And used with them and in acquisitions basically terms customers former out and existing of we it some customers. takes to bring portfolio mesh new weirdness that repeat our

So existing methodology stratify and now customers with we way. look so tenure at that that overall those customer we melt this the into World

We allows turn stratified through in them us out we have And perform rates analysis. comfort as a the to what-if of lot charge-off also it overall the portfolio.

gives what we're portfolio portfolio. with to mix which most and new size, that see mix would have of look credit the today risk tenure the of today's year same not -- of the of is were like we lot seeing if customers last compared weighting actual profile in the today, So confidence and a portfolio credit the from have risk we entire we what that have change can customer due portfolio that that we to to basically

Clifford Sosin

rate? rate the you. Is the you how XX.X% helpful. the how Just way rose newer That's us of much higher mix charge-off less XX% a portfolio. as Thank customers to can quantify, is mix there the charge-off chance those impacts for mentioned to to customers? tenured any triangulate overall And of newer from year that try one than you to the of for customers

Chad Prashad

that's Yes. than changed typically we the portfolio a hasn't average is We just typically don't share don't that. It But number and share. know, over you higher it as time. dramatically

Clifford Sosin

figure What dollars [indiscernible] about provide that of of bridge try terms if mix [indiscernible] that terms for if you of you a the in the can provided in to charge-offs? done

Chad Prashad

didn't I sorry, end of very I'm the catch Cliff. that

Clifford Sosin

in chance to provided rise drove baked the is estimate I you way the screaming wondering the And back-end. you mix any what provide other a apologize. Is effect that said there there a of of the overall being versus and dollar charge-offs performance effect? My daughter helpful could -- that. if John charge-offs in mix -- was I was the was

Chad Prashad

the Cliff, overall due of portfolio asking mix the are you increase the increase or that's versus… for in charge-offs to

Clifford Sosin

Yeah.

-- on $X roughly portfolio charge-offs other there related much larger few that and charge-offs I million wondering million other said quantify of That's John all. of could more $X So if were was how factors. -- higher and then new were larger just to customers. account the you dollars, in higher

John Calmes

Right. We look we But doing in that future. right the can now. that us front don't in of have into

Clifford Sosin

I Thank you right. much. it. very appreciate That’s

Chad Prashad

Thanks, Yeah. Cliff.

Operator

Prasad call further And this to or at it appears Mr. would questions there time. the additional turn no I remarks. like back to closing for are any

Chad Prashad

quarter fiscal joining our XXXX call second earnings today Thanks to for for concludes for earnings forward October. the Look call. this you us call. joining first the us conference And quarter in

Operator

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

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World Acceptance (WRLD) 25 Jul 192019 Q1 Earnings call transcript