WORLD ACCEPTANCE CORP
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
WRLD$149.08-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000108385-24-000038
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000108385-24-000062
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 75 previous paragraphs and 93 current paragraphs.
44 unchanged; 28 reworded; 17 added; 3 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 2 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
The provision was negatively impacted by loan growth and an increase in expected loss rates during the quarter. Specifically, expected loss rates were negatively impacted by an increase in our 0-5 month customers, our riskiest customers, during the current quarter.
Current report
$18.5 million reversal of the expense associated with the $20.45 Performance Shares since the Company is no longer expected to achieve the target required to vest.
Current report
The Company’s effective income tax rate decreased to 20.8% for the three months ended September 30, 2024 compared to 23.1% for the corresponding period of the previous year. The decrease is primarily due to the effects of pretax book earnings relative to the effects of various permanent items including a decrease in the disallowed executive compensation under Section 162(m) and the recognition of additional HTCs when compared to the prior year.
Current report
Comparison of six months ended September 30, 2024 versus six months ended September 30, 2023
Current report
Net income for the six months ended September 30, 2024 increased to $32.1 million from the $25.6 million net income reported for the same period of the prior year. Operating income, which is revenue less provision for credit losses and general and administrative expenses, increased by $3.0 million, or 5.2%.
Current report
Revenues decreased by $15.3 million, or 5.5%, to $260.9 million during the six months ended September 30, 2024 from $276.2 million for the same period of the prior year. The decrease was primarily due to a decrease in average net loans outstanding.
Current report
Interest and fee income for the six months ended September 30, 2024 decreased by $8.5 million, or 3.6%, from the same period of the prior year. Net loans outstanding at September 30, 2024 decreased by 5.2% over the balance at September 30, 2023. Average net loans outstanding decreased by 6.8% for the six months ended September 30, 2024 compared to the six-month period ended September 30, 2023.
Current report
Insurance commissions and other income for the six months ended September 30, 2024 decreased by $6.8 million, or 15.9%, from the same period of the prior year. Insurance commissions decreased by approximately $6.3 million, or 19.9%, during the six months ended September 30, 2024 when compared to the six months ended September 30, 2023. Other income decreased by $0.5 million. Sales of our motor club product decreased by $1.2 million as sales opportunities decreased with lower originations. This decrease was offset by a $0.8 million increase in revenue from the Company's tax preparation.
Current report
The provision for credit losses increased $5.0 million, or 5.8%, to $92.1 million from $87.1 million when comparing the first two quarters of fiscal 2025 to the first two quarters of fiscal 2024. Net charge-offs as a percentage of average net loans receivable on an annualized basis increased from 16.5% in the first two quarters of fiscal 2024 to 17.0% in the first two quarters of fiscal 2025.
Current report
Personnel expense totaled $58.7 million for the six months ended September 30, 2024, a $21.5 million, or 26.8%, decrease over the six months ended September 30, 2023. Salary expense decreased approximately $0.8 million, or 1.3%, when comparing the six month periods ended September 30, 2024 and 2023. Our headcount as of September 30, 2024, decreased 6.7% compared to September 30, 2023. Benefit expense decreased approximately $2.0 million, or 11.7%, when comparing the six month periods ended September 30, 2024 and 2023. Incentive expense decreased $18.1 million, mostly due to the $18.5 million reversal of the expense associated with the $20.45 Performance Shares since the Company is no longer expected to achieve the target required to vest.
Current report
Advertising expense totaled $4.5 million for the six months ended September 30, 2024, a $0.5 million, or 10.3%, decrease over the six months ended September 30, 2023 due to decreased spending on customer acquisition programs.
Current report
Amortization of intangible assets totaled $2.0 million for the six months ended September 30, 2024, a $0.2 million, or 7.8%, decrease over the six months ended September 30, 2023.
Current report
Other expense totaled $18.1 million for the six months ended September 30, 2024, a $0.6 million, or 3.1% decrease over the six months ended September 30, 2023.
Current report
Interest expense for the six months ended September 30, 2024 decreased by $4.6 million, or 18.4%, from the corresponding six months of the previous year. The decrease in interest expense was due to a 16.1% decrease in the average debt outstanding, from $586.5 million to $492.3 million, and a $0.6 million increase in gain recognized on Notes repurchased and extinguished during the six months ended September 30, 2024. The Company repurchased and extinguished $33.7 million of its Notes, net of $0.3 unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $32.5 million, during the six months ended September 30, 2024.
Current report
The Company’s effective income tax rate decreased to 21.5% for the six months ended September 30, 2024 compared to 23.0% for the corresponding period of the previous year. The decrease is primarily due to the effects of pretax book earnings relative to the effects of various permanent items including a decrease in the disallowed executive compensation under Section 162(m) and the recognition of additional HTCs when compared to the prior year.
Current report
During the six months ended September 30, 2024, the Company repurchased and extinguished $33.7 million of its Notes, net of
Current report
$0.3 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $32.5 million.
Removed paragraphs (3)
Previous report
The provision benefited from lower net charge-offs during the current quarter. This was partially offset by a seasonally driven increase in expected loss rates.
Previous report
The Company’s effective income tax rate increased to 23.1% for the three months ended June 30, 2024 compared to 22.8% for the corresponding period of the previous year. The effective tax rate remained substantially unchanged from the prior year quarter with the slight increase related to return to provision adjustments recorded as discrete items in the prior year quarter.
Previous report
During the first quarter of fiscal 2025, the Company repurchased and extinguished $21.8 million of its Notes, net of $0.2 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $21.0 million.
Reworded paragraphs (28)
Previous wording
Among the key factors that could cause our actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements are the following: recently enacted, proposed or future legislation and the manner in which it is implemented; changes in the U.S. tax code; the nature and scope of regulatory authority, particularly discretionary authority, that is or may be exercised by regulators, including, but not limited to, the U.S. Consumer Financial Protection Bureau, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory proceedings and litigation; employee misconduct or misconduct by third parties; uncertainties associated with management turnover and the effective succession of senior management; media and public characterization of consumer installment loans; labor unrest; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported consolidated financial statements or necessitate material delays or changes in the issuance of the Company’s audited consolidated financial statements; the Company's assessment of its internal control over financial reporting; changes in interest rates; the impact of inflation; risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats or incidents, including the potential or actual misappropriation of assets or sensitive information, corruption of data or operational disruption and the costs of the associated response thereto; our dependence on debt and the potential impact of limitations in the Company’s amended revolving credit facility or other impacts on the Company's ability to borrow money on favorable terms, or at all; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); the impact of extreme weather events and natural disasters; changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company).
Current wording
Among the key factors that could cause our actual financial results, performance or condition to differ from the expectations expressed or implied in such forward-looking statements are the following: recently enacted, proposed or future legislation and the manner in which it is implemented; changes in the U.S. tax code; the nature and scope of regulatory authority, particularly discretionary authority, that is or may be exercised by regulators, including, but not limited to, the U.S. Consumer Financial Protection Bureau, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory examinations, proceedings and litigation; employee misconduct or misconduct by third parties; uncertainties associated with management turnover and the effective succession of senior management; media and public characterization of consumer installment loans; labor unrest; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported consolidated financial statements or necessitate material delays or changes in the issuance of the Company’s audited consolidated financial statements; the Company's assessment of its internal control over financial reporting; changes in interest rates; the impact of inflation; risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats or incidents, including the potential or actual misappropriation of assets or sensitive information, corruption of data or operational disruption and the costs of the associated response thereto; our dependence on debt and the potential impact of limitations in the Company’s amended revolving credit facility or other impacts on the Company's ability to borrow money on favorable terms, or at all; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); the impact of extreme weather events and natural disasters; changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company).
Previous wording
These and other risks are discussed in more detail in Part I, Item 1A “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024 filed with the SEC, and in the Company’s other reports filed with, or furnished to, the SEC from time to time. The Company does not undertake any obligation to update any forward-looking statements it may make, except to the extent required by law.
Current wording
These and other risks are discussed in more detail in Part I, Item 1A “Risk Factors” in the Company's fiscal 2024 Annual Report, and in the Company’s other reports filed with, or furnished to, the SEC from time to time. The Company does not undertake any obligation to update any forward-looking statements it may make, except to the extent required by law.
Previous wording
(3) Average net loans receivable has been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding tax TALs.
Current wording
(3) Average net loans receivable has been determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding TALs.
Previous wording
Gross loans outstanding decreased to $1.275 billion as of June 30, 2024, an 8.8% decrease from the $1.398 billion of gross loans outstanding as of June 30, 2023. During the most recent quarter, gross loans outstanding decreased sequentially 0.2%, from $1.277 million as of March 31, 2024, compared to an increase of 0.6%, or $8.0 million, in the comparable quarter of the prior year. Our customer base decreased by 2.6% during the twelve-month period ended June 30, 2024, compared to a decrease of 14.8% for the comparable period ended June 30, 2023. During the three months ended June 30, 2024 our unique borrowers increased by 0.5% compared to an increase of 1.5% during the three months ended June 30, 2023. We continued to improve the gross yield to expected loss ratio for all new, former and refinance customer originations and will continue to monitor performance indicators and intend to adjust underwriting accordingly.
Current wording
Gross loans outstanding decreased to $1.296 billion as of September 30, 2024, a 6.1% decrease from the $1.380 billion of gross loans outstanding as of September 30, 2023. During the most recent quarter, gross loans outstanding increased 1.7%, from $1.275 million as of June 30, 2024, compared to a decrease of 1.3%, or $18.5 million, in the comparable quarter of the prior year. During the most recent quarter, we saw improvement in borrowing from new, former and existing customers compared to the same quarter of fiscal year 2024. Specifically, new, former and refinance loan customer volume during the quarter increased 20.8%, 11.5% and 2.9%, respectively, compared to the same quarter of fiscal year 2024. Our customer base decreased by 0.1% during the twelve-month period ended September 30, 2024, compared to a decrease of 9.4% for the comparable period ended September 30, 2023. During the three months ended September 30, 2024 our unique borrowers increased by 3.6% compared to an increase of 1.0% during the three months ended September 30, 2023. We continued to improve the gross yield to expected loss ratio for all new, former and refinance customer originations and will continue to monitor performance indicators and intend to adjust underwriting accordingly.
Previous wording
Net income for the three months ended June 30, 2024 increased to $9.9 million, a 4.3% increase from net income of $9.5 million for the same period of the prior year. Operating income, which is revenue less provision for credit losses and general and administrative expenses, decreased by $1.9 million, or 7.7%, compared to the same period of the prior year.
Current wording
Net income for the three months ended September 30, 2024 increased to $22.1 million, a 37.6% increase from net income of $16.1 million for the same period of the prior year. Operating income, which is revenue less provision for credit losses and general and administrative expenses, increased by $4.9 million, or 14.7%, compared to the same period of the prior year.
Previous wording
Revenues for the three months ended June 30, 2024 decreased by $9.8 million, or 7.0%, to $129.5 million from $139.3 million for the same period of the prior year. Interest and fee income for the three months ended June 30, 2024 decreased by $5.5 million, or 4.7%, from the same period of the prior year due to a decrease in loans outstanding. The large loan portfolio decreased from 57.4% of the overall portfolio as of June 30, 2023, to 54.5% as of June 30, 2024.
Current wording
Revenues for the three months ended September 30, 2024 decreased by $5.5 million, or 4.0%, to $131.4 million from $136.9 million for the same period of the prior year. Interest and fee income for the three months ended September 30, 2024 decreased by $3.0 million, or 2.6%, from the same period of the prior year due to a decrease in loans outstanding. The large loan portfolio decreased from 56.7% of the overall portfolio as of September 30, 2023, to 52.1% as of September 30, 2024.
Previous wording
Insurance and other income for the three months ended June 30, 2024 decreased by $4.3 million, or 19.1%, from the same period of the prior year. Insurance income decreased by approximately $3.1 million, or 19.4%, during the three months ended June 30, 2024 when compared to the three months ended June 30, 2023. Insurance commissions decreased primarily due to a decrease in loans where our insurance products are available to our customer. Other income decreased by $1.2 million, primarily due to a decrease in revenue from the Company's motor club product and tax preparations.
Current wording
Insurance and other income for the three months ended September 30, 2024 decreased by $2.4 million, or 12.1%, from the same period of the prior year. Insurance income decreased by approximately $3.2 million, or 20.5%, during the three months ended September 30, 2024 when compared to the three months ended September 30, 2023. Insurance commissions decreased primarily due to a decrease in loans where our insurance products are available to our customer. Other income increased by $0.8 million.
Previous wording
The provision for credit losses decreased $1.2 million, or 2.5%, to $45.4 million from $46.6 million when comparing the first quarter of fiscal 2025 to the first quarter of fiscal 2024. The table below itemizes the key components of the CECL allowance and provision impact during the quarter.
Current wording
The provision for credit losses increased $6.2 million, or 15.3%, to $46.7 million from $40.5 million when comparing the second quarter of fiscal 2025 to the second quarter of fiscal 2024. The table below itemizes the key components of the CECL allowance and provision impact during the quarter.
Previous wording
Net charge-offs for the quarter decreased $4.1 million, from $42.8 million in the first quarter of fiscal 2024 to $38.7 million in the first quarter of fiscal 2025. Net charge-offs as a percentage of average net loan receivables on an annualized basis decreased from 16.9% in the first quarter of fiscal 2024 to 16.4% in the first quarter of fiscal 2025. Net charge-offs during the current quarter include $2.6 million in proceeds related to recurring sales of charge-offs.
Current wording
Net charge-offs for the quarter increased $1.0 million, from $40.9 million in the second quarter of fiscal 2024 to $41.9 million in the second quarter of fiscal 2025. Net charge-offs as a percentage of average net loan receivables on an annualized basis increased from 16.1% in the second quarter of fiscal 2024 to 17.6% in the second quarter of fiscal 2025. The prior year quarter's net charge-offs benefited from a $4.9 million bulk sale of charge-offs from prior periods.
Previous wording
The Company's allowance for credit losses as a percentage of net loans was 11.6% at June 30, 2024 compared to 12.7% at June 30, 2023. Accounts that were 61 days or more past due on a recency basis remained flat at 5.6% at June 30, 2024 and June 30, 2023.
Current wording
The Company's allowance for credit losses as a percentage of net loans was 12.0% at September 30, 2024 compared to 12.8% at September 30, 2023. Accounts that were 61 days or more past due on a recency basis decreased to 5.6% at September 30, 2024 compared to 5.9% at September 30, 2023.
Previous wording
We experienced a slight improvement in recency delinquency on accounts at least 90 days past due, improving from 3.5% at June 30, 2023, to 3.4% at June 30, 2024.
Current wording
We experienced an improvement in recency delinquency on accounts at least 90 days past due, improving from 3.7% at September 30, 2023, to 3.4% at September 30, 2024.
Previous wording
G&A expenses for the three months ended June 30, 2024 decreased by $6.7 million, or 9.9%, from the corresponding period of the previous year. As a percentage of revenues, G&A expenses decreased from 48.9% during the three months ended June 30, 2023 to 47.4% during the three months ended June 30, 2024. G&A expenses per average open branch increased by 8.6% when comparing the two three-month periods. The change in G&A expense is explained in greater detail below.
Current wording
G&A expenses for the three months ended September 30, 2024 decreased by $16.6 million, or 26.4%, from the corresponding period of the previous year. As a percentage of revenues, G&A expenses decreased from 46.0% during the three months ended September 30, 2023 to 35.3% during the three months ended September 30, 2024. G&A expenses per average open branch increased by 25.9% when comparing the two three-month periods. The change in G&A expense is explained in greater detail below.
Previous wording
Personnel expense totaled $37.0 million for the three months ended June 30, 2024, a $4.8 million, or 11.5%, decrease over the three months ended June 30, 2023. Salary expense decreased approximately $0.3 million, or 0.9%, during the quarter ended June 30, 2024, compared to the quarter ended June 30, 2023. Our headcount as of June 30, 2024, decreased 5.4% compared to June 30, 2023. Benefit expense decreased approximately $0.9 million, or 11.1%, when comparing the quarterly periods ended June 30, 2024 and 2023. Incentive expense decreased $3.5 million, or 54.8%. The decrease in incentive expense is mostly due to a decrease in share-based compensation.
Current wording
Personnel expense totaled $21.8 million for the three months ended September 30, 2024, a $16.7 million, or 43.4%, decrease over the three months ended September 30, 2023. Salary expense decreased approximately $0.5 million, or 1.7%, during the quarter ended September 30, 2024, compared to the quarter ended September 30, 2023. Our headcount as of September 30, 2024, decreased 6.7% compared to September 30, 2023. Benefit expense decreased approximately $1.1 million, or 12.2%, when comparing the quarterly periods ended September 30, 2024 and 2023. Incentive expense decreased $14.6 million in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024. The decrease in incentive expense is mostly due to a decrease in share-based compensation as a result of an
Previous wording
Advertising expense decreased $1.1 million, or 39.8%, in the first quarter of fiscal 2025 compared to the first quarter of fiscal 2024 due to decreased spending on customer acquisition programs.
Current wording
Advertising expense increased $0.6 million, or 25.9%, in the second quarter of fiscal 2025 compared to the second quarter of fiscal 2024 due to increased spending on customer acquisition programs.
Previous wording
Amortization of intangible assets totaled $1.0 million for the three months ended June 30, 2024, a $63.6 thousand, or 5.9%, decrease over the three months ended June 30, 2023.
Current wording
Amortization of intangible assets totaled $1.0 million for the three months ended September 30, 2024, a $103.5 thousand, or 9.7%, decrease over the three months ended September 30, 2023.
Previous wording
Other expense totaled $9.6 million for the three months ended June 30, 2024, a $0.3 million, or 2.9%, decrease over the three months ended June 30, 2023.
Current wording
Other expense totaled $8.5 million for the three months ended September 30, 2024, a $0.3 million, or 3.3%, decrease over the three months ended September 30, 2023.
Previous wording
Interest expense for the three months ended June 30, 2024 decreased by $2.5 million, or 20.2%, from the corresponding three months of the previous year. The decrease in interest expense was due to a 17.5% decrease in the average debt outstanding from $593.2 million to $489.2 million partially offset by a 1.4% increase in the effective interest rate from 8.5% to 8.6%. The Company’s debt-to-equity ratio decreased from 1.5:1 at June 30, 2023 to 1.2:1 at June 30, 2024. The Company repurchased and extinguished $21.8 million of its Notes, net of $0.2 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $21.0 million during the first quarter of fiscal 2025.
Current wording
Interest expense for the three months ended September 30, 2024 decreased by $2.1 million, or 16.6%, from the corresponding three months of the previous year. The decrease in interest expense was due to a 14.5% decrease in the average debt outstanding from $580.4 million to $496.0 million and a 0.6% decrease in the effective interest rate from 8.71% to 8.66%. The Company’s debt-to-equity ratio decreased from 1.4:1 at September 30, 2023 to 1.2:1 at September 30, 2024. The Company repurchased and extinguished $11.9 million of its Notes, net of $0.1 million unamortized debt issuance costs related to the extinguished debt, on the open market for a reacquisition price of $11.5 million during the second quarter of fiscal 2025.
Previous wording
Other key return ratios for the three months ended June 30, 2024 included a 7.1% return on average assets and a return on average equity of 18.9% (both on a trailing 12-month basis), as compared to a 3.3% return on average assets and a return on average equity of 10.7% (both on a trailing 12-month basis) for the three months ended June 30, 2023.
Current wording
Other key return ratios for the three months ended September 30, 2024 included a 7.8% return on average assets and a return on average equity of 20.1% (both on a trailing 12-month basis), as compared to a 5.0% return on average assets and a return on average equity of 15.2% (both on a trailing 12-month basis) for the three months ended September 30, 2023.
Previous wording
Occupancy and equipment expense totaled $12.2 million for the three months ended June 30, 2024, a $0.5 million, or 3.6%, decrease over the three months ended June 30, 2023. Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period. The prior year's first quarter includes $0.3 million in expense related to the merger of branches during the quarter. For the three months ended June 30, 2024, the average open branches decreased 1.4% compared to the three months ended June 30, 2023.
Current wording
Occupancy and equipment expense totaled $24.5 million for the six months ended September 30, 2024, a $0.5 million, or 2.2%, decrease over the six months ended September 30, 2023. Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period. For the six months ended September 30, 2024, the average occupancy and equipment expense per branch totaled $23.4 thousand, a 0.3 thousand, or 1.3% decrease when compared to the six months ended September 30, 2023.
Previous wording
See Part I, Item 1, “Business Government Regulation Federal legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations are subject and Part I, Item 1A, “Risk Factors,” in each case, in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024 for more information regarding these regulatory and related risks.
Current wording
See Part I, Item 1, “Business Government Regulation Federal legislation,” for a further discussion of these matters and the federal regulations to which the Company’s operations are subject and Part I, Item 1A, “Risk Factors,” in each case, in the Company’s fiscal 2024 Annual Report for more information regarding these regulatory and related risks.
Previous wording
The Company has historically financed and continues to finance its operations, acquisitions and branch expansion primarily through a combination of cash flows from operations and borrowings from its institutional lenders. As discussed below, the Company has also issued debt securities to finance its operations and repay a portion of its outstanding indebtedness. The Company has generally applied its cash flows from operations to fund its loan volume, fund acquisitions, repay long-term indebtedness, and repurchase its common stock. Net cash provided by operating activities for the three months ended June 30, 2024 was $48.4 million.
Current wording
The Company has historically financed and continues to finance its operations, acquisitions and branch expansion primarily through a combination of cash flows from operations and borrowings from its institutional lenders. As discussed below, the Company has also issued debt securities to finance its operations and repay a portion of its outstanding indebtedness. The Company has generally applied its cash flows from operations to fund its loan volume, fund acquisitions, repay long-term indebtedness, and repurchase its common stock. Net cash provided by operating activities for the six months ended September 30, 2024 was $102.1 million.
Previous wording
For the three months ended June 30, 2024 and 2023, the Company recognized a $0.8 million and $0.4 million gain on extinguishment, respectively. In accordance with ASC 470, the Company recognized the gain on extinguishment as a component of interest expense in the Company's Consolidated Statements of Operations.
Current wording
For the three months ended September 30, 2024 and 2023, the Company recognized a $0.4 million and $0.2 million gain on extinguishment, respectively. For the six months ended September 30, 2024 and 2023, the Company recognized a $1.2 million and $0.6 million gain on extinguishment, respectively. In accordance with ASC 470, the Company recognized the gain on extinguishment as a component of interest expense in the Company's Consolidated Statements of Operations.
Previous wording
The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. However, our revolving credit facility and the Notes limit share repurchases to up to 50% of consolidated adjusted net income for the period commencing January 1, 2019. As of June 30, 2024, subject to further approval from our Board of Directors, we could repurchase approximately $23.6 million of shares under the terms of our debt facilities. Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the revolving credit facility and the Notes.
Current wording
The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. However, our revolving credit facility and the Notes limit share repurchases to up to 50% of consolidated adjusted net income for the period commencing January 1, 2019. As of September 30, 2024, subject to further approval from our Board of Directors, we could repurchase approximately $24.7 million of shares under the terms of our debt facilities. Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the revolving credit facility and the Notes.
Previous wording
For the three months ended June 30, 2024 and fiscal year ended March 31, 2024, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the revolving credit facility was 10.1% annualized and 9.9%, respectively. At June 30, 2024, the unused amount available under the revolving credit facility was $337.5 million. Borrowings under the revolving credit facility mature on June 7, 2026.
Current wording
For the six months ended September 30, 2024 and fiscal year ended March 31, 2024, the Company’s effective interest rate, including the commitment fee and amortization of debt issuance costs, as it relates to the revolving credit facility was 10.1% annualized and 9.9%, respectively. At September 30, 2024, the unused amount available under the revolving credit facility was $313.6 million. Borrowings under the revolving credit facility mature on June 7, 2026.
Previous wording
As of June 30, 2024, the Company's debt outstanding was $492.7 million, net of $2.0 million unamortized debt issuance costs related to the unsecured senior notes payable, and its shareholders' equity was $422.6 million resulting in a debt-to-equity ratio of 1.2:1.0. Management will continue to monitor the Company's debt-to-equity ratio and is committed to maintaining a debt level that will allow the Company to continue to execute its business objectives, while not putting undue stress on its consolidated balance sheet.
Current wording
As of September 30, 2024, the Company's debt outstanding was $504.9 million, net of $1.7 million unamortized debt issuance costs related to the unsecured senior notes payable, and its shareholders' equity was $417.5 million resulting in a debt-to-equity ratio of 1.2:1.0. Management will continue to monitor the Company's debt-to-equity ratio and is committed to maintaining a debt level that will allow the Company to continue to execute its business objectives, while not putting undue stress on its consolidated balance sheet.
Previous wording
The Company believes that cash flow from operations and borrowings under its revolving credit facility or other sources will be adequate to fund the expected cost of opening or acquiring new branches, including funding initial operating losses of new branches and funding loans receivable originated by those branches and the Company's other branches (for the next 12 months and for the foreseeable future beyond that). Except as otherwise discussed in this report including, but not limited to, any discussions in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and Part I, Item 1A, "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024 (as supplemented by any subsequent disclosures in information the Company files with or furnishes to the SEC from time to time), management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or could result in, or are or could be reasonably likely to result in, any material adverse effect on the Company’s liquidity.
Current wording
The Company believes that cash flow from operations and borrowings under its revolving credit facility or other sources will be adequate to fund the expected cost of opening or acquiring new branches, including funding initial operating losses of new branches and funding loans receivable originated by those branches and the Company's other branches (for the next 12 months and for the foreseeable future beyond that). Except as otherwise discussed in (i) this report including, but not limited to, any discussions in Part II, Item 1A, "Risk Factors" in this Quarterly Report on Form 10-Q and (ii) Part I, Item 1A, "Risk Factors" in the Company's fiscal 2024 Annual Report (as supplemented by any subsequent disclosures in information the Company files with or furnishes to the SEC from time to time), management is not currently aware of any trends, demands, commitments, events or uncertainties that it believes will or could result in, or are or could be reasonably likely to result in, any material adverse effect on the Company’s liquidity.
Previous wording
On May 15, 2024, the Board of Directors authorized the Company to repurchase up to $20.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations. As of June 30, 2024, the Company had $20.0 million in aggregate remaining repurchase capacity under its current share repurchase program. The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, available funds, alternative uses of capital, restrictions under the revolving credit agreement, and other market and economic conditions. The Company’s stock repurchase program may be suspended or discontinued at any time.
Current wording
On May 15, 2024, the Board of Directors authorized the Company to repurchase up to $20.0 million of the Company’s outstanding common stock, inclusive of the amount that remained available for repurchase under prior repurchase authorizations. As of September 30, 2024, the Company had $10.0 million in aggregate remaining repurchase capacity under its current share repurchase program. The timing and actual number of shares repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements, available funds, alternative uses of capital, restrictions under the revolving credit agreement, and other market and economic conditions. The Company’s stock repurchase program may be suspended or discontinued at any time.
Previous wording
The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the revolving credit facility and the Notes. Our first priority is to ensure we have enough capital to fund loan growth. As of June 30, 2024, subject to further approval from our Board of Directors, we could repurchase approximately $23.6 million of shares under the terms of our debt facilities. To the extent we have excess capital, we may repurchase stock, if appropriate and as authorized by our Board of Directors.
Current wording
The Company continues to believe stock repurchases are a viable component of the Company’s long-term financial strategy and an excellent use of excess cash when the opportunity arises. Additional share repurchases can be made subject to compliance with, among other things, applicable restricted payment covenants under the revolving credit facility and the Notes. Our first priority is to ensure we have enough capital to fund loan growth. As of September 30, 2024, subject to further approval from our Board of Directors, we could repurchase approximately $24.7 million of shares under the terms of our debt facilities. To the extent we have excess capital, we may repurchase stock, if appropriate and as authorized by our Board of Directors.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Occupancy and equipment expense totaled $12.3 million for the three months ended September 30, 2024, a $0.1 million, or 0.7%, decrease over the three months ended September 30, 2023. Occupancy and equipment expense is generally a function of the number of branches the Company has open throughout the period.
Current report — wording carried from elsewhere
Gross loans outstanding decreased to $1.296 billion as of September 30, 2024, a 6.1% decrease from the $1.380 billion of gross loans outstanding as of September 30, 2023.
Current report — wording carried from elsewhere
G&A expenses for the six months ended September 30, 2024 decreased by $23.3 million, or 17.8%, from the corresponding period of the previous year. As a percentage of revenues, G&A expenses decreased from 47.5% during the first six months of fiscal 2024 to 41.3% during the first six months of fiscal 2025. G&A expenses per average open branch decreased by 16.9% when comparing the two six-month periods. The change in G&A expense is explained in greater detail below.
Current report — wording carried from elsewhere
Other key return ratios for the first six months of fiscal 2025 included a 7.8% return on average assets and a return on average equity of 20.1% (both on a trailing 12-month basis), as compared to a 5.0% return on average assets and a return on average equity of 15.2% (both on a trailing 12-month basis) for the first six months of fiscal 2024.