WRLD - Earnings call 2 2024 | World Acceptance Corporation

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Operator

Good morning, and welcome to World Acceptance Corporation's Second Quarter 2024 Earnings 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 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. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. any of words as expect, forward-looking anticipate, will should those identified as believe, statements. than foregoing and the the by estimate, or other historical expressions well fact those may, and Statements similar of are variation intend, plan,

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

Chad Prashad

morning, you for joining earnings call. our Good and XXXX second fiscal thank quarter

year open as were like are that there Before to to tightened economic increasing. we a areas highlight. In few up we uncertainty questions, and concerns fiscal XXXX, underwriting I'd inflation

calls. primarily yields overall more well growth. and due very and portfolio of in several our delinquency, extraordinary heightened continue operational underwriting an earnings mostly on rates into are the and as in delinquency that economic lower year, early of expect to followed and and a to outcomes 'XX credit focus see by period efficiencies, yields these low delinquency our For and normalization discussed prior induced remainder increasing to XXXX, we These portfolio marketing for we we've after trends normalizing weather adjustments as stimulus, continue by quality This to months.

for and customer Therefore, flow potential both and impacts their been as our approval uncertainties have negative positive cash cautiously to while rates horizon profitably We ways year, low on booking both this rates, our serve base. approval customer booking higher and norms. see and we to compared explore economic for and to continue last applicants. than the best credit Today, more and continue to remain increasing time historical histories, outcomes to our our of applicants potential

approximately as prior quarter, customer and increase, be of our a new second compared rate. returning percentage each continues over the originations continued loan X/X The by The number increased quarter to also the grow year. the originations new customer quarter portfolio a to During with the be declined outstanding of as increased number historical lower to last our to quarter customer year-over-year, base of volumes. or important to remained current balance growth both stable All and historical of closer base of former this have and customers XX% and quarter percent yield. compared made as to is to customer our relatively loan continues it growth a of balance above base, originations average discussed nominally second year. the slightly This the X%. and last average balance quarter the That's has rightsized and overall as we've around our number return versus and normal same risk increased the has we're

likely fiscal target, vesting to credit year. share. year. continues and primarily $XX.XX While credit to accrue the for $XX.XX with to risk growth the earnings persist a for the new the longer quality. accruing of long-term move were $XX.XX for We Bad long-term uncertainty customer stretch incentive potential some health the tiers prudent on is plan for investment, growth We EPS growth of reduces of as which and tempered economic earnings hinder are highest remains our for believe investment new lack due the customer power for next and focused company uncertainties still would or exist, reduced fiscal and time, management this economic overall per no this

credit see Strategy We forward for we fiscal up yields and EPS to ] to [ you look stabilizing to I quality our continue and questions operational as and would Chief Calmes, target time, any have. open improving this the accrue Financial conditions for XXXX. At year like $XX.XX and and Jhonny Officer,

Operator

from Vincent is Instructions] Our [Operator Caintic Stephens. first question with

Vincent Caintic

pullback $XX the by the EPS. XXXX of fiscal on one First

Just looking of to know couple there the will wondering in the you're I EPS. -- there's in you if operating business? to thinking focus drive that business any any $XX, change changes that that what order how way? I'm at if driving $XX were with of of at variables the a just was all how you're thinking achieve about out wondering

John Calmes

No.

haven't right? else would happened change new to everything we're where for we result, the we'll tighter same. need longer, that see yet. and EPS. to allow some that I of that next growth is year, -- see this performance remains potentially which for just we're start point have some allowed still hit won't We So we gotten that could we hopeful think were But our improvement the to be growth. we of the big that for higher that would year just and us a And going higher to in underwriting, as customer kind pattern loosen

Vincent Caintic

to the the that conditions get EPS the Is Okay. needs That's to I environment change to $XX EPS? to then, there happen need guess, to for get basically, target. Or $XX there? the relatedly, current we anything in helpful. And what

John Calmes

need significantly credit the levels. we the needs $XX, current mean to to change nothing quality get the I maintain to right? to Yes,

that in hit the $XX to I place environment if hit have spike that, the it macro $XX. to make something difficult unemployment if something to we next now obviously But allow change obviously, were would were that So rates things drastically, would think like year. or to that us in

Vincent Caintic

one hop Okay. and one And last I guess for off. I'll me,

sounds shrinking encouraging portfolio of it hold. the underwriting but like seen seems recently, taking kind have be in you we've to signals and other delinquencies rightsizing So

start portfolio what going grow terms should to sense Just expecting forward? balances wondering Or in to if we portfolio of is the again? be your

Chad Prashad

Yes.

we'll think decline. for the portfolio we've We're past growth. shooting to a I portfolio more some on muted or or working continue continue forecasting will the growth credit We've quality. year do on certainly that certainly X, about expect now. balances seen average much year not towards in that higher mild see and been focused to We

having seeing beginning overall to with well. to balances, X beginning as portfolio quarters increase that, through over So yields, see overall In portfolio come the conjunction new the see higher whole yields customers. you're we're the not you're those lower that also for for just and last with

year. this So we that would continue throughout the rest anticipate seeing of

Operator

question [Operator Instructions] with Janney. John is The Rowan next from

John Rowan

item, As reduction personnel not ongoing line to That's as prior that an expense. -- an correct? there Because far of accrual obviously, was expenses, accruals, a like accrued reversal from that's ongoing prior that's million $X-ish of correct? reversal a

John Calmes

It is, expense going accruing right, no also but the longer we're forward, because for will reduce it that tranche.

John Rowan

$X not million per But Right. quarter, right? less

John Calmes

no. no, No,

John Rowan

up you when Any your if you -- you've any change I repurchase there it will know plans authorization look you facility. renegotiated credit can? start change? Or for Okay. again, any to was Was basically got in -- there repurchases?

John Calmes

Yes.

back agreement shy should quarter, and ratio that of the we're X, for to So next the of QX. we will to quarter, once and the be but just credit current by X in starting repurchases fixed this that for fiscal allows X, charge end gets allow there coverage repurchases

John Rowan

go while September. June but something was said you in March Okay. it seasonality from on trying and up to The December to And the calculate loan typically go before, loans the then also typically loans I quarter, I quarter. think in But in the you usually obviously, touched it. up down portfolio,

the just that should out we about we're if forward? loans going September of and in sequential what's Like and tightening decline to to then how think quarter abnormal up a trying here I'm little parse quarter. So how Like March? go that? Are next credit an down the affects is going bit seeing what in

John Calmes

do same not yes, the Yes. No, on new would We we that in growth show historically. we the to quarter We're I flow, see September December originations have we've as but still customer than the ever same obviously, to our think growth, the some show quarter, tighter still expect strong seasonality. level substantially. we the is we Typically, in we quarter. reduced history substantially the been. But rates are approval versus December change big application still the seeing very expect

Chad Prashad

did and actually important point last we it's accounts, base number average but customer that is lower. think the grow quarter, I Yes, our during out balance the to of

overall the portfolio do quality it's overall loan sizes the overall something the that the in mentioned And rightsizing And we've it's lower. increase helped to well. important as us conjunction also in before with yield. is So size credit

John Rowan

here gigantic, the just mid-XXs you out material trying even that together. get rate yet don't goals have a get rate at to. I not been Okay. to -- next highest the the bigger $X.XX, there get year, you we've we're I'm in mind for a talked just accrual a question. needing pieces been really mean where nowhere next $XX.XX us place get mean the a need because said. run accrue you that And hit to looking earnings in I'm now, even it. in single Obviously, are to or obviously to rate? about for then nothing big with $XX.XX $XX.XX. number that we reversal to just nowhere to credit those when one near in the changed digit, for number? I'm charge-off the before just near How you're even which charge-off consensus near to needs but comment now -- would the how about John, you've little we estimates curious digit for the saying year although said single have to rate. the $XX.XX, run quality. of versus marrying change from this, next just near we're $XX.XX. trouble nowhere change you needs is I mean, I but XX% low do I high think past, to bit the is includes improved in figure Obviously, I'm high in material having have you pieces obviously, your reach I big what maybe nothing I'm double-digit -- to to earlier, place obviously what not the reversal. to that We're lower year. paraphrasing there you type comments

John Calmes

Yes.

bit, going higher see from continuing quality other little improve trend the macro level So we -- And portfolio, of -- we at continue But right? We loans events higher the right? yields, new where and to a the are better. credit we the portfolio So and forward, XX adding should hopefully happen, growth, we that economy the things to get a will healthier performing the existing right, is right? XX of absent quality with will as at any to as we the have quality more take forward, continue yields. expect be to -- move existing of $XX two standpoint customers expect we higher you'll some the the that credit with performance much So to point there a to portfolio expect the credit able months. it so will over happen. better And months, clarity at that, continue -- the to to One, right? next credit to that quality improve, customers we next should we take the losing on on EPS start And expect some the expect have over be right? move new and are to much

John Rowan

confused nothing to with needs to certain there. we Okay. reported I from not little the what change nothing continue -- to Am I it's major that have of to just now But you we get but from correctly? was kind needs trends. this quarter, a said that -- have change comment we to major interpreting

John Calmes

Yes. Right.

Operator

back like Mr. over session. conference Prashad for remarks. I would to any This concludes turn to the our closing question-and-answer

Chad Prashad

and quarter Corporation. Acceptance today, for fiscal taking for you World our year to the us XXXX call time concludes this earnings second join Thank

Operator

has you Thank conference The presentation. now for attending concluded. today's

You may now disconnect.

World Acceptance (WRLD) 20 Oct 232024 Q2 Earnings call transcript