WRLD 8-K

World Acceptance Corp (WRLD)

8-K 2021-10-26 For: 2021-10-26

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South Carolina	000-19599	57-0425114
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

104 S. Main Street, Greenville, South Carolina	29601
(Address of principal executive offices)	(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, No Par Value	WRLD	The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐

(d)	Exhibits.

	Exhibit Number	Description of Exhibit
	99.1	Press release issued October 26, 2021
	104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

WRLD 8-K

World Acceptance Corporation Reports Fiscal 2022 Second Quarter Results

Contacts

	WORLD ACCEPTANCE CORPORATION
	(Registrant)

Date: October 26, 2021
	By:	/s/ John Calmes, Jr.
		John Calmes, Jr.
		Chief Financial and Strategy Officer

	Q2 FY 2022 vs. Q2 FY 2021	Q2 FY 2021 vs. Q2 FY 2020	Q2 FY 2022 vs. Q2 FY 2020
New Customers	137.3%	(40.0)%	42.3%
Former Customers	37.7%	4.8%	44.3%
Refinance Customers	12.1%	(10.6)%	0.2%

Gross Loan Balance By Customer Tenure at Origination
As of	Less Than 2 Years	More Than 2 Years	Total
09/30/2016	$273,189,656	$718,891,904	$992,081,560
09/30/2017	$291,973,107	$731,951,643	$1,023,924,750
09/30/2018	$359,527,657	$767,262,482	$1,126,790,139
09/30/2019	$456,470,161	$817,738,336	$1,274,208,497
09/30/2020	$363,394,115	$746,030,781	$1,109,424,896
09/30/2021	$455,201,848	$939,669,804	$1,394,871,652

Year-Over-Year Growth (Decline) in Gross Loan Balance by Customer Tenure at Origination
12 Month Period Ended	Less Than 2 Years	More Than 2 Years	Total
9/30/2016	$(36,918,274)	$(37,730,200)	$(74,648,474)
9/30/2017	$18,783,451	$13,059,739	$31,843,190
9/30/2018	$67,554,550	$35,310,839	$102,865,389
9/30/2019	$96,942,504	$50,475,854	$147,418,358
9/30/2020	$(93,076,046)	$(71,707,555)	$(164,783,601)
9/30/2021	$91,807,733	$193,639,023	$285,446,756

Portfolio Mix by Customer Tenure at Origination
As of	Less Than 2 Years	More Than 2 Years
9/30/2016	27.5%	72.5%
9/30/2017	28.5%	71.5%
9/30/2018	31.9%	68.1%
9/30/2019	35.8%	64.2%
9/30/2020	32.8%	67.2%
9/30/2021	32.6%	67.4%

Actual Gross Charge-off Rate During Following 12 Months; Indexed to 9/30/2017 Vintage
12 Months Beginning	Less Than 2 Years	More Than 2 Years	Total
9/30/2016	1.92	0.98	1.24
9/30/2017	1.57	0.78	1.00
9/30/2018	1.70	0.77	1.07
9/30/2019	1.78	0.80	1.15
9/30/2020	1.43	0.63	0.89

WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share amounts)

	Three months ended September 30,				Six months ended September 30,
	2021		2020		2021		2020
Revenues:
Interest and fee income	$	118,113	$	108,886	$	227,288	$	218,746
Insurance income, net and other income	19,714		15,555		40,197		29,562
Total revenues	137,827		124,441		267,485		248,308

Expenses:
Provision for credit losses	42,044		26,090		72,309		51,751
General and administrative expenses:
Personnel	45,746		46,833		91,978		91,455
Occupancy and equipment	12,935		13,515		26,542		26,697
Advertising	5,295		5,256		9,055		7,868
Amortization of intangible assets	1,246		1,286		2,460		2,668
Other	9,767		8,402		18,304		18,213
Total general and administrative expenses	74,989		75,292		148,339		146,901

Interest expense	6,714		5,893		12,215		11,455
Total expenses	123,747		107,275		232,863		210,107

Income before income taxes	14,080		17,166		34,622		38,201

Income taxes	1,641		3,767		6,411		9,293

Net income	$	12,439	$	13,399	$	28,211	$	28,908

Net income per common share, diluted	$	1.94	$	1.96	$	4.38	$	4.20

Weighted average diluted shares outstanding	6,413		6,853		6,434		6,890

WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)

	September 30, 2021		March 31, 2021		September 30, 2020
ASSETS
Cash and cash equivalents	$	16,886	$	15,746	$	13,988
Gross loans receivable	1,394,827		1,104,746		1,109,366
Less:
Unearned interest, insurance and fees	(370,017)		(279,364)		(289,700)
Allowance for credit losses	(114,660)		(91,722)		(109,601)
Loans receivable, net	910,150		733,660		710,065
Operating lease right-of-use assets, net	88,197		90,056		95,335
Finance lease right-of-use assets, net	810		1,014		1,218
Property and equipment, net	25,067		25,326		24,692
Deferred income taxes, net	34,248		24,993		29,425
Other assets, net	35,544		31,422		26,123
Goodwill	7,371		7,371		7,371
Intangible assets, net	22,306		23,538		22,930
Assets held for sale	—		1,144		1,144
Total assets	$	1,140,579	$	954,270	$	932,291

LIABILITIES & SHAREHOLDERS' EQUITY
Liabilities:
Senior notes payable	$	275,706	$	405,008	$	424,900
Senior unsecured notes payable, net	294,897		—		—
Income taxes payable	8,258		11,576		4,723
Operating lease liability	89,754		91,133		95,595
Finance lease liability	284		585		887
Accounts payable and accrued expenses	52,673		41,040		38,911
Total liabilities	721,572		549,342		565,016

Shareholders' equity	419,007		404,928		367,275
Total liabilities and shareholders' equity	$	1,140,579	$	954,270	$	932,291

WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES

SELECTED CONSOLIDATED STATISTICS
(unaudited and in thousands, except percentages and branches)

	Three months ended September 30,						Six months ended September 30,
	2021			2020			2021			2020

Gross loans receivable	$	1,394,827		$	1,109,366		$	1,394,827		$	1,109,366
Average gross loans receivable ⁽¹⁾	1,314,397			1,088,191			1,230,307			1,105,573
Net loans receivable ⁽²⁾	1,024,810			819,666			1,024,810			819,666
Average net loans receivable ⁽³⁾	965,588			805,346			908,381			821,808

Expenses as a percentage of total revenue:
Provision for credit losses	30.5		%	21.0		%	27.0		%	20.8		%
General and administrative	54.4		%	60.5		%	55.5		%	59.2		%
Interest expense	4.9		%	4.7		%	4.6		%	4.6		%
Operating income as a % of total revenue ⁽⁴⁾	15.1		%	18.5		%	17.5		%	20.0		%

Loan volume ⁽⁵⁾	801,487			647,024			1,555,696			1,110,507

Net charge-offs as percent of average net loans receivable on an annualized basis	10.5		%	14.5		%	10.9		%	16.4		%

Return on average assets (trailing 12 months)	8.6		%	4.5		%	8.6		%	4.5		%

Return on average equity (trailing 12 months)	22.4		%	11.8		%	22.4		%	11.8		%

Branches opened or acquired (merged or closed), net	(3)			(8)			(3)			(11)

Branches open (at period end)	1,202			1,232			1,202			1,232

⁽¹⁾ Average gross loans receivable have been determined by averaging month-end gross loans receivable over the indicated period, excluding tax advances.
⁽²⁾ Net loans receivable is defined as gross loans receivable less unearned interest and deferred fees.
⁽³⁾Average net loans receivable have been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding tax advances.
⁽⁴⁾Operating income is computed as total revenues less provision for credit losses and general and administrative expenses.
⁽⁵⁾ Loan volume includes all loan balances originated by the Company. It does not include loans purchased through acquisitions.