Investor Presentation February 24-25, 2020 CONFIDENTIAL DO NOT DISTRIBUTE 1
Cautionary Note About Forward-Looking Statements Certain statements in this presentation constitute “forward looking- statements” under the Private Securities Litigation Reform Act of 1995. Statements other than those of historical fact, as well as those identified by the words “anticipate,” “estimate,” ”intend,” “plan,” “expect,” “believe,” “may,” “will,” and “should” or any variation of the foregoing and similar expressions are forward-looking statements. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include the following: recently enacted, proposed or future legislation and the manner in which it is implemented; the nature and scope of regulatory authority, particularly discretionary authority, that may be exercised by regulators having jurisdiction over the Company’s business or consumer financial transactions generically, including, but not limited to, the Consumer Financial Protection Bureau (the “CFPB”), having jurisdiction over the Company’s business or consumer financial transactions generically; the unpredictable nature of regulatory proceedings and litigation; and any determinations, findings, claims or actions made or taken by the CFPB, other regulators or third parties that assert or establish that the Company’s lending practices or other aspects of its business violate applicable laws or regulations; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported financial statements or necessitate material delays or changes in the issuance of the Company’s audited financial statements; the Company's assessment of its internal control over financial reporting, and the timing and effectiveness of the Company's efforts to remediate any reported material weakness in its internal control over financial reporting; changes in interest rates; risks related to expansion and foreign operations; risks inherent in making loans, including repayment risks and value of collateral; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquencies and charge-offs); and changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company). These and other factors are discussed in greater detail in Part I, Item 1A, “Risk Factors” in the Company’s most recent annual report on Form 10-K for the fiscal year ended March 31, 2019 filed with the Securities and Exchange Commission (“SEC”) and the Company’s other reports filed with, or furnished to, the SEC from time to time. World Acceptance Corporation does not undertake any obligation to update any forward-looking statements it makes. 2
Table of Contents Company Overview and Key Investment Highlights Business and Portfolio Overview Financial Summary 3
Company Overview and Key Investment Highlights 4
Overview 50+ year old small-loan consumer finance ▪ company Provides loans to individuals with limited ▪ access to credit 19 29 Well positioned to capitalize on favorable ▪ supply/demand imbalance within the non-prime 77 35 9 lending space 77 78 107 69 Originated over $27 billion dollars worth of loans ▪ 37 95 since 1994 65 27 124 47 298 Focused on relationship-lending business model ▪ Total: 1,193 Current portfolio size ~ $1 billion in net loans ▪ Weighted average on net proceeds: ▪ Branch nch Coun unt APR – 56.8% ▪ Term – 16 months ▪ 1,400 1,138 1,186 1,177 1,193 Loan amount - $1,194 ▪ 1,200 910 1,000 800 620 600 441 360 400 217 200 0 '94 '98 '02 '06 '10 '14 '16 '18 19 FY2019 Data is through 3/31/2019 CONFIDENTIAL DO NOT DISTRIBUTE 5
Consistent Profitability Includes operating with strong and stable margins in various economic environments Net Inco come e & Return n on Average age Assets 1 & 3 ($ in millions) $200 16.0% 14.4% 14.2% 13.4% 13.2% 12.6% 12.7% 12.4% 11.9% 11.8% 11.9% 11.8% 11.7% $160 11.1% 10.8% 10.5% 12.0% 10.4% 9.9% 9.7% 9.0% 8.8% 8.8% 8.4% 8.2% 8.2% 8.3% $120 $103 $101 $98 $99 7.2% $89 8.0% $83 $74 $80 $68 $64 $74 $57 $54 $48 $39 4.0% $34 $40 $29 $23 $19 $14 $16 $9 $11 $8 $8 $7 $6 $0 0.0% '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Net Charge-Offs fs 20+ Y Year Averag age NCOs 2 : 14.4% _________________ Note: Fiscal year-end is 3/31. (1) Return on Average Assets is calculated as net income over the Average Total Assets for the respective period. Average Total Assets are defined as a 5-quarter average, ending at the respective period end (2) 20+ Year Average represents average from 3/31/2000 to 3/31/2019 (3) FY2018 adjusted to remove $15.4 million of tax expense related to the one-time discrete revaluation of the deferred tax asset and the foreign transition tax recorded due to the passage of the Tax Cut and Jobs Act (TCJA) 6
Strong Balance Sheet and Cash Flow Stron rong g cash sh flows ows have e allo lowe wed opera erati tion ons at low w levera everage ge level evels Cash sh Flows ws From Opera erations ns ($ in millions) $300 $184 $200 $219 $232 $246 $242 $245 $206 $219 $218 $250 $200 $136 $154 $150 $110 $98 $88 $70 $100 $55 $48 $39 $32 $21 $19 $21 $50 $0 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 Lever erag age e Profile e (Debt bt/Eq /Equi uity) y) 4.5x 4.0x 3.5x 3.0x 20+ Y Year Averag age Leverage ge 2 : : .8x 2.5x 1.7x 1.6x 2.0x 1.5x 1.4x 1.3x 1.2x 1.1x 1.5x 1.1x 0.5x 0.8x 0.9x 0.7x 1.0x 0.8x 0.9x 0.6x 0.7x 1.0x 0.6x 0.5x 0.5x 0.4x 0.4x 0.4x 0.5x 0.0x '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 _________________ Note: Fiscal year-end is 3/31 (1) 20 - Year CAGR represents CAGR from 3/31/2000 to 3/31/2019 (2) 20+ Year Average Leverage represents average from 3/31/2000 to 3/31/2019 7
Traditional Loan Product Provider to Underserved Clients Simpl mple e and attr tracti tive e produc uct t to an unders erserv rved cus usto tome mer r base, se, focu cusing ng on the e cus usto tome mer' r's stabilit ity, y, abil ility ty and wil illi lingn ngness ss to pay Tradit itiona ional Auto Title Credit t Card Pawn Payday day Installm allment Loans Unde derwr writin iting g Ability to pay and Solely collateral Solely collateral Bank account and Ability to pay Approac oach credit history value value employment Past Due Centralized calling Sale of loan Auto debit bank Branch outreach Repo automobile Sale to a 3 rd party Resolution tion collateral account Revolving Fully amortizing Loan Balloon Balloon Balloon Low minimum Fixed, equal Amortiz ization ation payment monthly payments Average 0 – 3 Renewals ls Revolving Borrower’s option 8 renewals/year 1 9 renewals/year 2 renewals/year Averag age Large: 3-5 years Revolving 2 – 4 months 30 days 1 2 - 3 weeks 2 Term Small: 12-24 months Credit t Report to bureaus Report to bureaus No reporting No reporting No reporting Reportin ing _________________ Source: Company filings, CFPB, Center for Responsible Lending Report (Feb 2013), Wall Street Research (1) Center for Responsible Lending, “The State of Lending in America & its Impact on U.S. Households." Data represents 30-Day Balloon Payment Car-Title Loans (2) CFPB, “Payday Loans and Deposit Advance Products” 8
Business and Portfolio Overview 9
World Acceptance Branch Overview Branc nch h Mana nage gers rs have e full ll branc nch h P&L resp spon onsi sibili lity ty promoti moting ng an ownership nership atti titu tude e Typica ical l Bran anch ch Repre rese sentative ive Bran anch ch Charac racteristi ristics cs Bran anch ch Employees Portfo folio lio 1,500 square feet ▪ $950,000 gross loans ▪ 2.8 employees per ▪ receivables $1,470 per month ▪ branch lease 735 accounts ▪ Manager, Account ▪ Rural America – ▪ Specialists $456,000 avg. ▪ typically downtown revenue during fiscal or small strip 2019 center • Each Branch is operated by a state level company subsidiary. • Branches and personnel are licensed and insured as required by state law. 10 _________________ Note: Data as of 3/31/2019
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