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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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90-0934597
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3527 North Ridge Road, Wichita, KS
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67205
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.001 par value per share
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New York Stock Exchange
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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Emerging growth company
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Item 9A
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we are not required to present selected financial data for any period prior to the earliest audited period presented in our initial registration statement;
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we are not required to engage an auditor to report on the effectiveness of our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act;
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we are not required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding a supplement to the auditor’s report providing additional information about the audit and the financial statements (
i.e.
, an auditor discussion and analysis);
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we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes”;
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we are not required to disclose certain executive compensation-related items, such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation, or to include a compensation committee report, provided we comply with the scaled compensation disclosure rules applicable to smaller reporting companies; and
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we may take advantage of an extended transition period for complying with new or revised accounting standards, allowing us to delay the adoption of some accounting standards until those standards would otherwise apply to private companies.
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Shifting preference towards installment loans
—We believe from our experience in offering installment loan products since 2008 that single-pay loans are becoming less popular or less suitable for a growing portion of our customers. Customers generally have shown a preference for our Installment Loan products, which typically have longer terms, lower periodic payments and a lower relative cost. Offering more flexible terms and lower payments also significantly expands our addressable market by broadening our products’ appeal to a larger proportion of consumers in the market.
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Increasing adoption of online channels
—Our experience is that customers prefer service across multiple channels or touch points. Approximately 63% of respondents in a recent study by CFI Group said they conducted more than half of their banking activities electronically. That same group of respondents reported an overall level of satisfaction that met or exceeded the average. Our 2017 online revenue of
$367.2 million
represented
38%
of our total revenues for the year.
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Increasing adoption of mobile apps and devices
—With the proliferation of pay-as-you-go and other smartphone plans, many of our underbanked customers have moved directly to mobile devices for loan origination and servicing. According to a 2016 study by the Pew Research Center involving the United States, the United Kingdom and Canada, smartphone penetration is 72%, 68% and 67%, respectively. Additionally, 43% of respondents to a study by CFI Group said they conduct transactions using a mobile banking app. Five years ago, less than 30% of our U.S. customers reached us via a mobile device. In the fourth quarter of 2017, that percentage was over 80%.
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Unique omni-channel platform / site-to-store capability
—
We believe we have the only fully-integrated store, online, mobile and contact center platform to support omni-channel customer engagement. We offer a seamless “Call, Click or Come In” capability for customers to apply for loans, receive loan proceeds, make loan payments and otherwise manage their accounts in store, online or over the phone. Customers can utilize any of our three channels at any time and in any combination to obtain a loan, make a payment or manage their account. In addition, we have our “Site-to-Store” capability in which online customers that do not qualify for a loan online are referred to a store to complete a loan transaction with one of our associates. These aspects of our platform enable us to source a larger number of customers, serve a broader range of customers and continue serving these customers for longer periods of time.
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Industry leading product and geographic diversification
—In addition to channel diversification, we have increased our diversification by product and geography allowing us to serve a broader range of customers with a flexible product offering. As part of this effort, we have also developed and launched new brands and will continue to develop new brands with differentiated marketing messages. These initiatives have helped diversify our revenue streams, enabling us to appeal to a wider array of borrowers.
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Leading analytics and information technology drives strong credit risk management
—We have developed a bespoke, proprietary IT platform, referred to as the Curo Platform, which is a unified, centralized platform that seamlessly integrates activities related to customer acquisition, underwriting, scoring, servicing, collections, compliance and reporting. Our IT platform is underpinned by over 15 years of continually updated customer data comprising over 74 million loan records (as of December 31, 2017) used to formulate our robust, proprietary underwriting algorithms. This platform then automatically applies multi-algorithmic analysis to a customer’s loan application to produce a “Curo Score” which drives our underwriting decision. Globally, as of December 31, 2017, we have approximately
185
employees who write code and manage our networks and infrastructure for our IT platform. This fully-integrated IT platform enables us to make real-time, data-driven changes to our acquisition and risk models which yield significant benefits in terms of customer acquisition costs and credit performance.
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Multi-faceted marketing strategy drives low customer acquisition costs
—Our marketing strategy includes a combination of strategic direct mail, television advertisements and online and mobile-based digital campaigns, as well as strategic partnerships. Our global Marketing, Risk and Credit Analytics team, consisting of approximately
74
professionals as of December 31, 2017, uses our integrated IT platform to cross reference marketing spend, new customer account data and granular credit metrics to optimize our marketing budget across these channels in real time to produce higher quality new loans. Besides these diversified marketing programs, our stores play a critical role in creating brand awareness and driving new customer acquisition. From January 2015 through the end of December 2017, we acquired nearly
2.0 million
new customers in North America.
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Focus on customer experience
—We focus on customer service and experience and have designed our stores, website and mobile application interfaces to appeal to our customers’ needs. We continue to augment our web and mobile app interfaces to enhance our “Call, Click or Come In” strategy, with a focus on adding functionality across all our channels. Our stores are branded with distinctive and recognizable signage, conveniently located and typically open seven days a week. Furthermore, we have highly experienced managers in our stores, which we believe is a critical component to driving customer retention, lowering acquisition costs and driving store-level margins. For example, the average tenure for our U.S. store managers is over
seven
years, for district managers is over
11
years, and for regional directors it is over
12
years.
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Strong compliance culture with centralized collections operations
—We seek to consistently engage in proactive and constructive dialogue with regulators in each of our jurisdictions and have made significant investments in best-practice automated tools for monitoring, training and compliance management. As of December 31, 2017 our compliance group consisted of
27
individuals based in all of the countries in which we operate, and our compliance management systems are integrated into our proprietary IT platform. Additionally, our in-house centralized collections strategy, supported by our proprietary back-end customer database and analytics team, drives an effective, compliant and highly-scalable model.
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Demonstrated access to capital markets and diversified funding sources
—We have raised over $1.1 billion of debt financing in six separate offerings since 2008, most recently in October 2017. We also closed a $150 million nonrecourse installment loan financing facility in 2016 and have routinely accessed banks and other lenders for revolving credit capacity. We believe this is a significant differentiator from our peers who may have trouble accessing capital markets to fund their business models if credit markets tighten. For more information, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”
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Experienced and innovative management team and sponsor
—Our senior leadership team is among the most experienced in the industry with over a century of collective experience and an average tenure at CURO of over eight years. We also have deep bench strength across key functional areas including accounting, compliance, IT and legal. Our equity sponsor, FFL Partners, has been our partner since 2008 and has contributed significant resources to helping define our growth strategy.
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History of growth and profitability
—Throughout our operating history we have maintained strong profitability and growth. Between 2010 and 2017 we grew revenue, Adjusted EBITDA, Net income and Adjusted Net Income at a CAGR of
24.8%
,
25.0%
,
13.8%
and
19.8%
, respectively. At the same time, we have grown our product offerings to better serve our growing and expanding customer base.
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Leverage our capabilities to continue growing installment and open-end products
—Installment and open-end products accounted for
68%
of our consolidated revenue for the year ending December 31, 2017, up from 19% in 2010, and we believe that our customers greatly prefer these products. We anticipate that these products will continue to account for a greater share of our revenue and provide us a competitive advantage versus other consumer lenders with narrower product focus. We believe that our ability to continue to be successful in developing and managing new products is based upon our capabilities in three key areas:
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Underwriting:
Installment and open-end products generally have lower yields than single-pay products, which necessitates more stringent credit criteria supported by more sophisticated credit analytics. Our industry leading analytics platform combines data from over 74 million records (as of December 31, 2017) associated with loan information from third-party reporting agencies.
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Collections and Customer Service:
Installment and open-end products have longer terms than single-pay loans, in some cases up to 48 months. These longer terms drive the need for a more comprehensive collection and default servicing strategy that emphasizes curing a default and putting the customer back on a track to repay the loan. We utilize a centralized collection model that prevents our branch management personnel from ever having to contact customers to resolve a delinquency. We have also invested in building new contact centers in all of the countries in which we operate, each of which utilize sophisticated dialer technologies to help us contact our customers in a scalable, efficient manner.
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Funding:
The shift to larger balance installment loans with extended terms and open-end loans with revolving terms requires more substantial and more diversified funding sources. Given our deep and successful track record in accessing diverse sources of capital, we believe that we are well-positioned to support future new product transition.
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Serve additional types of borrowers
—In addition to growing our existing suite of installment and open-end lending products, we are focused on expanding the total number of customers that we are able to serve through product, geographic and channel expansion. This includes expansion of our online channel, particularly in the United Kingdom, as well as continued targeted additions to our physical store footprint. We also continue to introduce additional products to address our customers’ preference for longer term products that allow for greater flexibility in managing their monthly payments.
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In the second quarter of 2017, we launched Avio Credit, a new online product branded in the United States targeting individuals in the 600-675 FICO band. This product is structured as an Unsecured Installment Loan with varying principal amounts and loan terms up to 48 months. As of April 2017, 10% of U.S. consumers had FICO scores between 600 and 649. A further 13.2% of U.S. consumers had FICO scores between 650 and 699, a portion of whom would fall into the credit profile targeted by our Avio Credit product.
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We expect to expand our LendDirect brand in Canada to include additional provinces and increase acquisition efforts in existing markets. We opened three LendDirect stores in Canada during the fourth quarter of 2017 and plan to open more in 2018. Seven million Canadians have a FICO score below 700. We estimate that the consumer credit opportunity for this customer
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In the United Kingdom, we launched online longer-term loans in November 2017 with our Juo Loans brand. According to a study by the Financial Conduct Authority, the U.K. guarantor market in 2016 comprised £300 million in loans outstanding and had annual originations of approximately £200 million. A report by L.E.K. Consulting found that this market experienced double digit percentage growth from 2008 to 2017. We believe the U.K. guarantor loan market is currently dominated by one lender but otherwise largely made up of smaller participants with growth challenges.
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Continue to bolster our core business through enhancement of our proprietary risk scoring models
— We continuously refine and update our credit models to drive additional improvements in our performance metrics. By regularly updating our credit underwriting algorithms we can continue to expand the value of each of our customer relationships through improved credit performance. By combining these underwriting improvements with data driven marketing spend, we believe our optimization efforts will produce margin expansion and earnings growth.
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Expand credit for our borrowers
—Through extensive testing and our proprietary underwriting, we have successfully increased credit limits for customers, enabling us to offer “the right loan to the right customer.” The favorable take rates and successful credit performance have improved overall vintage and portfolio performance. For 2017, our average loan amount for Unsecured and Secured Installment Loans rose by
$106
(a
21%
increase) and
$207
(a
19%
increase), respectively, versus 2016.
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Continue to improve the customer journey and experience
—We have projects in our development pipeline to enhance our “Call, Click or Come In” customer experience and execution, ranging from redesign of web and app interfaces to enhanced service features to payments optimization.
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Enhance our network of strategic partnerships
—Our strategic partnership network generates applicants that we then close through our diverse array of marketing channels. By further leveraging these existing networks and expanding the reach of our partnership platform to include new relationships, we can increase the number of overall leads we receive.
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average age of 39 for applicants and 41 for borrowers;
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applicants are 47% male and 53% female;
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41% are homeowners;
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45% have a bachelor’s degree or higher; and
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the top five employment segments are Retail, Food Service, Government, Banking/Finance and Business Services.
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have immediate need for cash between paychecks;
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have been rejected for traditional banking services;
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maintain sufficient account balances to make a bank account economically efficient;
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prefer and trust the simplicity, transparency and convenience of our products;
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need access to financial services outside of normal banking hours; and
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reject complicated fee structures in bank products (e.g., credit cards and overdrafts).
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transparent approval process;
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flexible loan structure, providing greater ability to manage monthly payments;
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simple, clearly communicated pricing structure; and
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full account management online and via mobile devices.
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214
United States locations: Texas (
91
), California (
36
), Nevada (
18
), Arizona (
13
), Tennessee (
11
), Kansas (
10
), Illinois (
8
), Alabama (
7
), Missouri (
5
), Louisiana (
5
), Colorado (
3
), Oregon (
3
), Washington (
2
) and Mississippi (
2
);
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193
Canadian locations: Ontario (
124
), Alberta (
27
), British Columbia (
26
), Saskatchewan (
6
), Nova Scotia (
5
), Manitoba (
4
) and New Brunswick (
1
).
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Installment Unsecured
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Installment Secured
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Open-End
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Single-Pay
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Channel
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Online and in-store: 15 U.S. States, Canada and the U.K.
(1)
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Online and in-store: 7 U.S. States
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Online: KS, TN, ID, UT, RI, VA, DE and Canada. In-Store: KS, TN and Canada.
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Online and in-store: 12 U.S. States, Canada and the U.K.
(1)
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Average Loan Size
(2)
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$629
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$1,303
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$579
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$334
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Duration
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Up to 48 months
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Up to 42 months
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Revolving/Open-Ended
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Up to 62 days
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Pricing
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15.1% average monthly interest rate
(3)
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11.4% average monthly interest rate
(3)
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Daily interest rates ranging from 0.74% to 0.99%
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Fees ranging from $13 to $25 per $100 borrowed
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(1) Online only in the United Kingdom
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(2) Includes CSO loans
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(3) Weighted average of the contractual interest rates for the portfolio as of December 31, 2017. Excludes CSO fees
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range of services;
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flexibility of product offering;
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convenience;
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reliability;
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fees; and
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speed.
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A “full payment test,” under which the lender must make a reasonable determination of the consumer’s ability to repay the loan and cover major financial obligations and living expenses over the term of the loan and the succeeding 30 days. Under this test, the lender must take account of the consumer’s basic living expenses and obtain and generally verify evidence of the consumer’s income and major financial obligations. However, in circumstances where a lender determines that a reliable income record is not reasonably available, such as when a consumer receives and spends income in cash, the lender may reasonably rely on the consumer’s statements alone as evidence of income. Further, unless a housing debt obligation appears on a national consumer report, the lender may reasonably rely on the consumer's written statement. As part of the ATR determination, the CFPB Rule permits lenders and consumers to rely on income from third parties, such as spouses, to which the consumer has a reasonable expectation of access and permits lenders in certain circumstances to consider whether another person is regularly contributing to the payment of major financial obligations or basic living expenses. A 30-day cooling off period applies after a sequence of three covered short-term or longer-term balloon payment loans.
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A “principal-payoff option,” under which the lender may make up to three sequential loans, or Section 1041.6 Loans, without engaging in an ATR analysis. The first Section 1041.6 Loan in any sequence of Section 1041.6 Loans without a 30-day cooling off period between loans is limited to $500, the second is limited to a principal amount that is at least one-third smaller than the principal amount of the first, and the third is limited to a principal amount that is at least two-thirds smaller than the principal amount of the first. A lender may not use this option if (i) the consumer had in the past 30 days an outstanding covered short-term loan or an outstanding longer-term balloon payment loan that is not a Section 1041.6 Loan, or (ii) the new Section 1041.6 Loan would result in the consumer having more than six covered short-term loans (including Section 1041.6 Loans) during a consecutive 12-month period or being in debt for more than 90 days on such loans during a consecutive 12-month period. For Section 1041.6 Loans, the lender cannot take vehicle security or structure the loan as open-end credit.
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If two consecutive attempts to collect money from a particular account of the borrower, made through any channel (e.g., paper check, ACH, prepaid card) are returned for insufficient funds, the lender cannot make any further attempts to collect from such account unless the borrower has provided a new and specific authorization for additional payment transfers. The CFPB Rule contains specific requirements and conditions for the authorization. While the CFPB has explained that these provisions are designed to limit bank penalty fees to which consumers may be subject, and while banks do not charge penalty fees on card authorization requests, the CFPB Rule nevertheless treats card authorization requests as payment attempts subject to these limitations.
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A lender generally must give the consumer at least three business days advance notice before attempting to collect payment by accessing a consumer’s checking, savings, or prepaid account. The notice must include information such as the date of the payment request, payment channel and payment amount (broken down by principal, interest, fees, and other charges), as well as additional information for “unusual attempts,” such as when the payment is for a different amount than the regular payment, initiated on a date other than the date of a regularly scheduled payment or initiated in a different channel that the immediately preceding payment attempt.
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to secure an appropriate degree of protection for consumers;
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to protect and enhance the integrity of the U.K. financial system; and
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to promote effective competition in the interests of consumers for regulated financial services or services carried out by regulated investment exchanges.
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online lenders must provide details of their products on at least one FCA authorized price comparison website, or PCW, and include a hyperlink from their website to the relevant PCW; and
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payday lenders must provide existing customers with a summary of their cost of borrowing.
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The FCA may take enforcement action against a firm which could result in fines and/or remediation action for consumers. Any such enforcement action would be publicly known and would involve severe reputational damage, with vendors of debt portfolios and creditors outsourcing collection activity likely to remove their business from a debt collector that is the subject of such enforcement action.
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Firms can be subject to a section 166 notice by the FCA, which may ensue where the FCA has identified issues within the firm regarding compliance with the FCA rules and guidance and commissions a “skilled persons” report. A “skilled persons” report is performed by an independent firm, usually one of the five large accountancy firms or a law firm that is deemed by the FCA to have the necessary skills and expertise to review the areas of concern. The report is shared with the firm being reviewed and the FCA. Remedial action highlighted is tracked by the FCA through close liaison with the firm. Failure to remedy points raised and/or do so in sufficient time can lead to further enforcement action, including fines. The cost of such a review is borne by the firm. Any enforcement proceeding that might follow from the issue of a section 166 notice may become public at the stage of issuance of a final notice. If our U.K. operations become subject to such a notice, originators that currently do business with us may cease to do so, and our ability to conduct our U.K. operations, along with our reputation, and consequently, our ability to win future business may be adversely affected. We might also have to introduce changes to our business practices in the United Kingdom in response to enforcement action taken against certain of our competitors.
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it may be more difficult for us to satisfy our financial obligations;
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our ability to obtain additional financing for working capital, capital expenditures, strategic acquisitions or general corporate purposes may be impaired;
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we must use a substantial portion of our cash flow from operations to pay interest on our debt, which reduces funds available to use for operations, invest in our business, pay dividends to our shareholders and use for other purposes;
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we could be at a competitive disadvantage compared to those of our competitors that may have proportionately less debt;
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the terms of our debt restricts our ability to pay dividends; and
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our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited.
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our operating and financial performance and prospects and the performance of other similar companies;
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our quarterly or annual earnings or those of other companies in our industry;
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conditions that impact demand for our products and services;
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the public’s reaction to our press releases, financial guidance and other public announcements, and filings with the SEC;
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changes in earnings estimates or recommendations by securities or research analysts who track our common stock;
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market and industry perception of our level of success in pursuing our growth strategy;
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strategic actions by us or our competitors, such as acquisitions or restructurings;
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changes in government and other regulations;
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changes in accounting standards, policies, guidance, interpretations or principles;
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arrival or departure of members of senior management or other key personnel;
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the number of shares to be publicly traded;
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sales of common stock by us, our investors or members of our management team;
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factors affecting the industry in which we operate, including competition, innovation, regulation, the economy and other factors; and
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changes in general market, economic and political conditions in the U.S. and global economies or financial markets, including those resulting from natural disasters, telecommunications failures, cyber-attacks, civil unrest in various parts of the world, acts of war, terrorist attacks or other catastrophic events.
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prepare and file periodic reports, and distribute other stockholder communications, in compliance with the federal securities laws and the NYSE rules;
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define and expand the roles and the duties of our board of directors and its committees and adopt a set of corporate governance guidelines;
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maintain a majority independent board of directors and fully independent audit, compensation and nominating and corporate governance committees, in compliance with the federal securities laws and the NYSE rules;
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institute more comprehensive compliance, investor relations and internal audit functions; and
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evaluate and maintain our system of internal control over financial reporting, and report on management’s assessment thereof, in compliance with rules and regulations of the SEC and PCAOB.
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permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships;
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authorize the issuance of “blank check” preferred stock that our board of directors could use to implement a stockholder rights plan;
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provide that our board of directors is expressly authorized to amend or repeal any provision of our bylaws;
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restrict the forum for certain litigation against us to Delaware;
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establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at annual stockholder meetings;
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establish a classified board of directors with three staggered classes of directors, where directors may only be removed for cause (unless we de-classify our board of directors);
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require that actions to be taken by our stockholders be taken only at an annual or special meeting of our stockholders, and not by written consent; and
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establish certain limitations on convening special stockholder meetings.
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A “full payment test,” under which the lender must make a reasonable determination of the consumer’s ability to repay the loan in full and cover major financial obligations and living expenses over the term of the loan and the succeeding 30 days. Under this test, the lender must take account of the consumer’s basic living expenses and obtain and generally verify evidence of the consumer’s income and major financial obligations.
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A “principal-payoff option,” under which the lender may make up to three sequential loans, without engaging in an ATR analysis. The first of these so-called Section 1041.6 Loans in any sequence of Section 1041.6 Loans without a 30-day cooling off period between them is limited to $500, the second is limited to two-thirds of the first and the third is limited to one-third of the first. A lender may not use this option if (1) the consumer had in the past 30 days an outstanding covered short-term loan or an outstanding longer-term balloon-payment loan that is not a Section 1041.6 Loan, or (2) the new Section 1041.6 Loan would result in the consumer having more than six covered short-term loans (including Section 1041.6 Loans) during a consecutive 12-month period or being in debt for more than 90 days on such loans during a consecutive 12-month period. For Section 1041.6 Loans, the lender cannot take vehicle security or structure the loan as open-end credit.
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the amount we may charge in interest rates and fees;
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the terms of our loans (such as maximum and minimum durations), repayment requirements and limitations, number and frequency of loans, maximum loan amounts, renewals and extensions, required repayment plans and reporting and use of state-wide databases;
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underwriting requirements;
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collection and servicing activity, including initiation of payments from consumer accounts;
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the establishment and operation of credit services organizations or credit access businesses, which we refer to as CSOs and CABs in this Annual Report;
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licensing, reporting and document retention;
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unfair, deceptive and abusive acts and practices;
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non-discrimination requirements;
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disclosures, notices, advertising and marketing;
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loans to members of the military and their dependents;
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requirements governing electronic payments, transactions, signatures and disclosures;
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check cashing;
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money transmission;
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currency and suspicious activity recording and reporting;
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privacy and use of personally identifiable information and consumer data, including credit reports;
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anti-money laundering and counter-terrorist financing requirements, including currency and suspicious transaction recording and reporting;
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posting of fees and charges; and
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repossession practices in certain jurisdictions where we operate as a title lender, including requirements regarding notices and prompt remittance of excess proceeds for the sale of repossessed automobiles.
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ordering remedial or corrective actions, including changes to compliance systems, product terms, and other business operations;
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imposing fines or other monetary penalties, including for substantial amounts;
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ordering the payment of restitution, damages or other amounts to customers, including multiples of the amounts charged;
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disgorgement of revenue or profit from certain activities;
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imposing cease and desist orders, including orders requiring affirmative relief, targeting specific business activities;
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subjecting our operations to additional regulatory examinations during a remediation period;
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changes to our U.K. business practices in response to the requirements of the Financial Conduct Authority;
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revocation of licenses to operate in a particular jurisdiction;
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ordering the closure of one or more stores; and
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•
|
other consequences.
|
|
High
|
|
Low
|
||||
Fourth Quarter 2017 (from December 7, 2017)
|
$
|
14.99
|
|
|
$
|
13.50
|
|
•
|
Adjusted Net Income and Adjusted Earnings Per Share, or the Adjusted Earnings Measures (net income plus or minus gain (loss) on extinguishment of debt, restructuring and other costs, goodwill and intangible asset impairments, transaction-related costs, share-based compensation, intangible asset amortization and cumulative tax effect of adjustments, on a total and per share basis);
|
•
|
EBITDA (earnings before interest, income taxes, depreciation and amortization);
|
•
|
Adjusted EBITDA (EBITDA plus or minus certain non-cash and other adjusting items); and
|
•
|
Gross Combined Loans Receivable (includes loans originated by third-party lenders through CSO programs which are not included in our consolidated financial statements).
|
•
|
they do not include our cash expenditures or future requirements for capital expenditures or contractual commitments;
|
•
|
they do not include changes in, or cash requirements for our working capital needs;
|
•
|
they do not include the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
|
•
|
depreciation and amortization are non-cash expense items reported in our statements of cash flows; and
|
•
|
other companies in our industry may calculate these measures differently, limiting their usefulness as comparative measures.
|
•
|
Gross Combined Loans Receivable
—
balances in
2017
include Installment Loans that are up to 90 days past-due with related accrued interest, while balances in prior periods do not include these loans.
|
•
|
Revenues
—
for the
year
ended
December 31,
2017
, revenues include accrued interest on past-due loan balances, while revenues in prior periods do not include these amounts.
|
•
|
Provision for Losses
—
prospectively, loans charged off on day 91 include accrued interest. Thus, provision rates in 2017 have been adjusted to include both principal and accrued interest. Additionally, because loss provision rates are applied to originations while charge-offs and recoveries are applied to the allowance for loan losses, provisioning is less affected by seasonality for the first quarter income tax refunds in the United States, which increases recoveries of delinquent balances.
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||||||||
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||||
(in thousands)
|
|
U.S.
|
Canada
|
U.K.
|
Total
|
|
U.S.
|
Canada
|
U.K.
|
Total
|
||||||||||||||||
Unsecured Installment
|
|
$
|
435,745
|
|
$
|
19,013
|
|
$
|
25,485
|
|
$
|
480,243
|
|
|
$
|
318,460
|
|
$
|
1,143
|
|
$
|
11,110
|
|
$
|
330,713
|
|
Secured Installment
|
|
100,981
|
|
—
|
|
—
|
|
100,981
|
|
|
81,453
|
|
—
|
|
—
|
|
81,453
|
|
||||||||
Open-End
|
|
73,308
|
|
188
|
|
—
|
|
73,496
|
|
|
66,945
|
|
—
|
|
3
|
|
66,948
|
|
||||||||
Single-Pay
|
|
107,553
|
|
147,617
|
|
13,624
|
|
268,794
|
|
|
117,609
|
|
173,779
|
|
21,888
|
|
313,276
|
|
||||||||
Ancillary
|
|
20,142
|
|
19,591
|
|
386
|
|
40,119
|
|
|
22,332
|
|
13,155
|
|
719
|
|
36,206
|
|
||||||||
Total revenue
|
|
$
|
737,729
|
|
$
|
186,409
|
|
$
|
39,495
|
|
$
|
963,633
|
|
|
$
|
606,799
|
|
$
|
188,077
|
|
$
|
33,720
|
|
$
|
828,596
|
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||||||||
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||||
(in thousands)
|
|
U.S.
|
Canada
|
U.K.
|
Total
|
|
U.S.
|
Canada
|
U.K.
|
Total
|
||||||||||||||||
Unsecured Installment
|
|
$
|
318,460
|
|
$
|
1,143
|
|
$
|
11,110
|
|
$
|
330,713
|
|
|
$
|
295,007
|
|
$
|
322
|
|
$
|
19,054
|
|
$
|
314,383
|
|
Secured Installment
|
|
81,453
|
|
—
|
|
—
|
|
81,453
|
|
|
86,307
|
|
—
|
|
18
|
|
86,325
|
|
||||||||
Open-End
|
|
66,945
|
|
—
|
|
3
|
|
66,948
|
|
|
51,304
|
|
—
|
|
7
|
|
51,311
|
|
||||||||
Single-Pay
|
|
117,609
|
|
173,779
|
|
21,888
|
|
313,276
|
|
|
116,714
|
|
170,852
|
|
34,031
|
|
321,597
|
|
||||||||
Ancillary
|
|
22,332
|
|
13,155
|
|
719
|
|
36,206
|
|
|
24,331
|
|
13,686
|
|
1,498
|
|
39,515
|
|
||||||||
Total revenue
|
|
$
|
606,799
|
|
$
|
188,077
|
|
$
|
33,720
|
|
$
|
828,596
|
|
|
$
|
573,663
|
|
$
|
184,860
|
|
$
|
54,608
|
|
$
|
813,131
|
|
|
Three Months Ended
|
|||||||||||||||||||||||
(in millions)
|
December 31, 2017
|
September 30, 2017
|
June 30, 2017
|
March 31, 2017
|
December 31, 2016
|
September 30, 2016
|
June 30, 2016
|
March 31, 2016
|
||||||||||||||||
Company-owned gross loans receivable
|
$
|
432.8
|
|
$
|
393.4
|
|
$
|
350.3
|
|
$
|
304.8
|
|
$
|
286.2
|
|
$
|
244.6
|
|
$
|
233.1
|
|
$
|
220.7
|
|
Gross loans receivable guaranteed by the Company
|
78.8
|
|
71.2
|
|
62.1
|
|
57.8
|
|
68.0
|
|
58.7
|
|
52.6
|
|
45.4
|
|
||||||||
Gross combined loans receivable
|
$
|
511.6
|
|
$
|
464.6
|
|
$
|
412.4
|
|
$
|
362.6
|
|
$
|
354.2
|
|
$
|
303.3
|
|
$
|
285.7
|
|
$
|
266.1
|
|
|
2017
|
2016
|
|||||||||||||
(dollars in thousands, except average loan amount, unaudited)
|
Fourth Quarter
|
Third Quarter
|
Second Quarter
|
First Quarter
|
Fourth Quarter
|
||||||||||
Unsecured Installment loans:
|
|
|
|
|
|
||||||||||
Revenue - Company Owned
|
$
|
67,800
|
|
$
|
61,653
|
|
$
|
52,550
|
|
$
|
51,206
|
|
$
|
39,080
|
|
Provision for losses - Company Owned
|
29,917
|
|
29,079
|
|
17,845
|
|
19,309
|
|
24,557
|
|
|||||
Net revenue - Company Owned
|
$
|
37,883
|
|
$
|
32,574
|
|
$
|
34,705
|
|
$
|
31,897
|
|
$
|
14,523
|
|
Net charge-offs - Company Owned
|
$
|
32,894
|
|
$
|
23,858
|
|
$
|
18,858
|
|
$
|
(4,918
|
)
|
$
|
18,836
|
|
Revenue - Guaranteed by the Company
|
$
|
69,078
|
|
$
|
67,132
|
|
$
|
52,599
|
|
$
|
58,225
|
|
$
|
55,234
|
|
Provision for losses - Guaranteed by the Company
|
32,915
|
|
36,212
|
|
23,575
|
|
19,940
|
|
22,364
|
|
|||||
Net revenue - Guaranteed by the Company
|
$
|
36,163
|
|
$
|
30,920
|
|
$
|
29,024
|
|
$
|
38,285
|
|
$
|
32,870
|
|
Net charge-offs - Guaranteed by the Company
|
$
|
31,898
|
|
$
|
34,904
|
|
$
|
27,309
|
|
$
|
17,088
|
|
$
|
21,144
|
|
Unsecured Installment gross combined loans receivable:
|
|
|
|
|
|
||||||||||
Company owned
|
$
|
196,306
|
|
$
|
181,831
|
|
$
|
156,075
|
|
$
|
131,386
|
|
$
|
102,090
|
|
Guaranteed by the Company
(1) (2)
|
75,156
|
|
67,438
|
|
58,289
|
|
53,978
|
|
62,360
|
|
|||||
Unsecured Installment gross combined loans
receivable (1) (2) |
$
|
271,462
|
|
$
|
249,269
|
|
$
|
214,364
|
|
$
|
185,364
|
|
$
|
164,450
|
|
Unsecured Installment Allowance for loan losses
(3)
|
$
|
43,755
|
|
$
|
46,938
|
|
$
|
41,406
|
|
$
|
42,040
|
|
$
|
17,775
|
|
Unsecured Installment CSO guarantee liability
(3)
|
$
|
17,072
|
|
$
|
16,056
|
|
$
|
14,748
|
|
$
|
18,482
|
|
$
|
15,630
|
|
Unsecured Installment Allowance for loan losses as a percentage of Unsecured Installment gross loans receivable
|
22.3
|
%
|
25.8
|
%
|
26.5
|
%
|
32.0
|
%
|
17.4%
|
||||||
Unsecured Installment CSO guarantee liability as a percentage of Unsecured Installment gross loans guaranteed by the Company
|
22.7
|
%
|
23.8
|
%
|
25.3
|
%
|
34.2
|
%
|
25.1%
|
|
Year Ended December 31,
|
|||||||||||
(dollars in thousands)
|
2017
|
2016
|
|
Change $
|
Change %
|
|||||||
Consolidated Statements of Income Data:
|
|
|
|
|
|
|||||||
Revenue
|
$
|
963,633
|
|
$
|
828,596
|
|
|
$
|
135,037
|
|
16.3
|
%
|
Provision for losses
|
326,226
|
|
258,289
|
|
|
67,937
|
|
26.3
|
%
|
|||
Net revenue
|
637,407
|
|
570,307
|
|
|
67,100
|
|
11.8
|
%
|
|||
Advertising costs
|
52,058
|
|
43,921
|
|
|
8,137
|
|
18.5
|
%
|
|||
Non-advertising costs of providing services
|
236,112
|
|
233,130
|
|
|
2,982
|
|
1.3
|
%
|
|||
Total cost of providing services
|
288,170
|
|
277,051
|
|
|
11,119
|
|
4.0
|
%
|
|||
Gross margin
|
349,237
|
|
293,256
|
|
|
55,981
|
|
19.1
|
%
|
|||
Operating (income) expense
|
|
|
|
|
|
|
||||||
Corporate, district and other
|
154,973
|
|
124,274
|
|
|
30,699
|
|
24.7
|
%
|
|||
Interest expense
|
82,684
|
|
64,334
|
|
|
18,350
|
|
28.5
|
%
|
|||
Loss (gain) on extinguishment of debt
|
12,458
|
|
(6,991
|
)
|
|
19,449
|
|
#
|
|
|||
Restructuring costs
|
7,393
|
|
3,618
|
|
|
3,775
|
|
#
|
|
|||
Total operating expense
|
257,508
|
|
185,235
|
|
|
72,273
|
|
39.0
|
%
|
|||
Net income before taxes
|
91,729
|
|
108,021
|
|
|
(16,292
|
)
|
(15.1
|
)%
|
|||
Provision for income taxes
|
42,576
|
|
42,577
|
|
|
(1
|
)
|
—
|
%
|
|||
Net income
|
$
|
49,153
|
|
$
|
65,444
|
|
|
$
|
(16,291
|
)
|
(24.9
|
)%
|
# - Variance greater than 100% or not meaningful.
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
(in thousands except per share data)
|
2017
|
2016
|
|
Change $
|
Change %
|
|||||||
Net income
|
$
|
49,153
|
|
$
|
65,444
|
|
|
$
|
(16,291
|
)
|
(24.9
|
)%
|
Adjustments:
|
|
|
|
|
|
|||||||
Loss (gain) on extinguishment of debt
(1)
|
12,458
|
|
(6,991
|
)
|
|
|
|
|||||
Restructuring costs
(2)
|
7,393
|
|
3,618
|
|
|
|
|
|||||
Legal settlement costs
(3)
|
4,311
|
|
—
|
|
|
|
|
|||||
Transaction-related costs
(4)
|
5,573
|
|
329
|
|
|
|
|
|||||
Share-based cash and non-cash compensation
(5)
|
10,446
|
|
1,148
|
|
|
|
|
|||||
Intangible asset amortization
|
2,502
|
|
3,492
|
|
|
|
|
|||||
Impact of tax law changes
(6)
|
4,635
|
|
—
|
|
|
|
|
|||||
Cumulative tax effect of adjustments
|
(17,397
|
)
|
(629
|
)
|
|
|
|
|||||
Adjusted Net Income
|
$
|
79,074
|
|
$
|
66,411
|
|
|
$
|
12,663
|
|
19.1
|
%
|
|
|
|
|
|
|
|||||||
Net income
|
$
|
49,153
|
|
$
|
65,444
|
|
|
|
|
|||
Diluted Weighted Average Shares Outstanding
|
39,277
|
|
38,803
|
|
|
|
|
|||||
Diluted Earnings per Share
|
$
|
1.25
|
|
$
|
1.69
|
|
|
$
|
(0.44
|
)
|
(26.0
|
)%
|
Per Share impact of adjustments to Net Income
|
0.76
|
|
0.02
|
|
|
|
|
|||||
Adjusted Diluted Earnings per Share
|
$
|
2.01
|
|
$
|
1.71
|
|
|
$
|
0.30
|
|
17.5
|
%
|
U.S. Segment Results
|
||||||||||||
|
Year Ended December 31,
|
|||||||||||
(dollars in thousands)
|
2017
|
2016
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
737,729
|
|
$
|
606,798
|
|
|
$
|
130,931
|
|
21.6
|
%
|
Provision for losses
|
267,491
|
|
207,748
|
|
|
59,743
|
|
28.8
|
%
|
|||
Net revenue
|
470,238
|
|
399,050
|
|
|
71,188
|
|
17.8
|
%
|
|||
Advertising costs
|
36,148
|
|
30,340
|
|
|
5,808
|
|
19.1
|
%
|
|||
Non-advertising costs of providing services
|
166,875
|
|
164,382
|
|
|
2,493
|
|
1.5
|
%
|
|||
Total cost of providing services
|
203,023
|
|
194,722
|
|
|
8,301
|
|
4.3
|
%
|
|||
Gross margin
|
267,215
|
|
204,328
|
|
|
62,887
|
|
30.8
|
%
|
|||
Corporate, district and other
|
120,803
|
|
88,539
|
|
|
32,264
|
|
36.4
|
%
|
|||
Interest expense
|
82,495
|
|
64,276
|
|
|
18,219
|
|
28.3
|
%
|
|||
Loss (gain) on extinguishment of debt
|
12,458
|
|
(6,991
|
)
|
|
19,449
|
|
#
|
|
|||
Restructuring and other costs
|
—
|
|
1,726
|
|
|
(1,726
|
)
|
#
|
|
|||
Total operating expense
|
215,756
|
|
147,550
|
|
|
68,206
|
|
46.2
|
%
|
|||
Segment operating income
|
51,459
|
|
56,778
|
|
|
(5,319
|
)
|
(9.4
|
)%
|
|||
Interest expense
|
82,495
|
|
64,276
|
|
|
18,219
|
|
28.3
|
%
|
|||
Depreciation and amortization
|
13,643
|
|
13,196
|
|
|
447
|
|
3.4
|
%
|
|||
EBITDA
|
147,597
|
|
134,250
|
|
|
13,347
|
|
9.9
|
%
|
|||
Loss (gain) on extinguishment of debt
|
12,458
|
|
(6,991
|
)
|
|
19,449
|
|
|
||||
Restructuring and other costs
|
—
|
|
1,726
|
|
|
(1,726
|
)
|
|
||||
Legal settlement cost
|
4,311
|
|
—
|
|
|
4,311
|
|
|
||||
Other adjustments
|
(110
|
)
|
128
|
|
|
(238
|
)
|
|
||||
Transaction related costs
|
5,573
|
|
329
|
|
|
5,244
|
|
|
||||
Share-based cash and non-cash compensation
|
10,290
|
|
1,148
|
|
|
9,142
|
|
|
||||
Adjusted EBITDA
|
$
|
180,119
|
|
$
|
130,590
|
|
|
$
|
49,529
|
|
37.9
|
%
|
# - Variance greater than 100% or not meaningful.
|
|
|
|
|
|
U.K. Segment Results
|
|
|
|
|
|
|||||||
|
Year Ended December 31,
|
|||||||||||
(dollars in thousands)
|
2017
|
2016
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
39,496
|
|
$
|
33,720
|
|
|
$
|
5,776
|
|
17.1
|
%
|
Provision for losses
|
13,660
|
|
10,624
|
|
|
3,036
|
|
28.6
|
%
|
|||
Net revenue
|
25,836
|
|
23,096
|
|
|
2,740
|
|
11.9
|
%
|
|||
Advertising costs
|
5,495
|
|
4,886
|
|
|
609
|
|
12.5
|
%
|
|||
Non-advertising costs of providing services
|
6,269
|
|
7,921
|
|
|
(1,652
|
)
|
(20.9
|
)%
|
|||
Total cost of providing services
|
11,764
|
|
12,807
|
|
|
(1,043
|
)
|
(8.1
|
)%
|
|||
Gross margin
|
14,072
|
|
10,289
|
|
|
3,783
|
|
36.8
|
%
|
|||
Corporate, district and other
|
17,218
|
|
18,561
|
|
|
(1,343
|
)
|
(7.2
|
)%
|
|||
Interest income
|
(12
|
)
|
(27
|
)
|
|
15
|
|
(55.6
|
)%
|
|||
Restructuring and other costs
|
7,393
|
|
994
|
|
|
6,399
|
|
#
|
|
|||
Total operating expense
|
24,599
|
|
19,528
|
|
|
5,071
|
|
26.0
|
%
|
|||
Segment operating loss
|
(10,527
|
)
|
(9,239
|
)
|
|
(1,288
|
)
|
13.9
|
%
|
|||
Interest income
|
(12
|
)
|
(27
|
)
|
|
15
|
|
(55.6
|
)%
|
|||
Depreciation and amortization
|
648
|
|
882
|
|
|
(234
|
)
|
(26.5
|
)%
|
|||
EBITDA
|
(9,891
|
)
|
(8,384
|
)
|
|
(1,507
|
)
|
(18.0
|
)%
|
|||
Other adjustments
|
(35
|
)
|
242
|
|
|
(277
|
)
|
|
||||
Restructuring and other costs
|
7,393
|
|
994
|
|
|
6,399
|
|
|
||||
Adjusted EBITDA
|
$
|
(2,533
|
)
|
$
|
(7,148
|
)
|
|
$
|
4,615
|
|
64.6
|
%
|
# - Variance greater than 100% or not meaningful
|
|
|
|
|
|
|
Year Ended December 31,
|
|||||||||||
(dollars in thousands)
|
2016
|
2015
|
|
Change $
|
Change %
|
|||||||
Consolidated Statements of Income Data:
|
|
|
|
|
|
|||||||
Revenue
|
$
|
828,596
|
|
$
|
813,131
|
|
|
$
|
15,465
|
|
1.9
|
%
|
Provision for losses
|
258,289
|
|
281,210
|
|
|
(22,921
|
)
|
(8.2
|
)%
|
|||
Net revenue
|
570,307
|
|
531,921
|
|
|
38,386
|
|
7.2
|
%
|
|||
Advertising costs
|
43,921
|
|
65,664
|
|
|
(21,743
|
)
|
(33.1
|
)%
|
|||
Non-advertising costs of providing services
|
233,130
|
|
227,656
|
|
|
5,474
|
|
2.4
|
%
|
|||
Total cost of providing services
|
277,051
|
|
293,320
|
|
|
(16,269
|
)
|
(5.5
|
)%
|
|||
Gross margin
|
293,256
|
|
238,601
|
|
|
54,655
|
|
22.9
|
%
|
|||
Operating expense
|
|
|
|
|
|
|||||||
Corporate, district and other
|
124,274
|
|
130,534
|
|
|
(6,260
|
)
|
(4.8
|
)%
|
|||
Interest expense
|
64,334
|
|
65,020
|
|
|
(686
|
)
|
(1.1
|
)%
|
|||
Gain on extinguishment of debt
|
(6,991
|
)
|
—
|
|
|
(6,991
|
)
|
#
|
|
|||
Restructuring costs
|
3,618
|
|
4,291
|
|
|
(673
|
)
|
(15.7
|
)%
|
|||
Goodwill and intangible asset impairment
|
—
|
|
2,882
|
|
|
(2,882
|
)
|
#
|
|
|||
Total operating expense
|
185,235
|
|
202,727
|
|
|
(17,492
|
)
|
(8.6
|
)%
|
|||
Net income before taxes
|
108,021
|
|
35,874
|
|
|
72,147
|
|
#
|
|
|||
Provision for income taxes
|
42,577
|
|
18,105
|
|
|
24,472
|
|
#
|
|
|||
Net income
|
$
|
65,444
|
|
$
|
17,769
|
|
|
$
|
47,675
|
|
#
|
|
# - Variance greater than 100% or not meaningful.
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands except per share data)
|
2016
|
2015
|
|
Change $
|
Change %
|
||||||
Net income
|
$
|
65,444
|
|
$
|
17,769
|
|
|
$
|
47,675
|
|
#
|
Adjustments:
|
|
|
|
|
|
||||||
Gain on extinguishment of debt
(1)
|
(6,991
|
)
|
—
|
|
|
|
|
||||
Restructuring costs
(2)
|
3,618
|
|
4,291
|
|
|
|
|
||||
Goodwill and intangible asset impairment
(3)
|
—
|
|
2,882
|
|
|
|
|
||||
Transaction-related costs
(4)
|
329
|
|
824
|
|
|
|
|
||||
Share-based cash and non-cash compensation
(5)
|
1,148
|
|
1,271
|
|
|
|
|
||||
Intangible asset amortization
|
3,492
|
|
4,645
|
|
|
|
|
||||
Cumulative tax effect of adjustments
|
(629
|
)
|
(7,026
|
)
|
|
|
|
||||
Adjusted Net Income
|
$
|
66,411
|
|
$
|
24,656
|
|
|
$
|
41,755
|
|
#
|
|
|
|
|
|
|
||||||
Net income
|
$
|
65,444
|
|
$
|
17,769
|
|
|
|
|
||
Diluted Weighted Average Shares Outstanding
|
38,803
|
|
38,895
|
|
|
|
|
||||
Diluted Earnings per Share
|
$
|
1.69
|
|
$
|
0.46
|
|
|
$
|
1.23
|
|
#
|
Per Share impact of adjustments to Net Income
|
$
|
0.02
|
|
$
|
0.17
|
|
|
|
|
||
Adjusted Diluted Earnings per Share
|
$
|
1.71
|
|
$
|
0.63
|
|
|
$
|
1.08
|
|
#
|
# - Variance greater than 100% or not meaningful.
|
|
|
|
|
|
U.S. Segment Results
|
|
|
|
|
|
|||||||
|
Year Ended December 31,
|
|||||||||||
(dollars in thousands)
|
2016
|
2015
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
606,798
|
|
$
|
573,664
|
|
|
$
|
33,134
|
|
5.8
|
%
|
Provision for losses
|
207,748
|
|
222,867
|
|
|
(15,119
|
)
|
(6.8
|
)%
|
|||
Net revenue
|
399,050
|
|
350,797
|
|
|
48,253
|
|
13.8
|
%
|
|||
Advertising costs
|
30,340
|
|
42,986
|
|
|
(12,646
|
)
|
(29.4
|
)%
|
|||
Non-advertising costs of providing services
|
164,382
|
|
156,183
|
|
|
8,199
|
|
5.2
|
%
|
|||
Total cost of providing services
|
194,722
|
|
199,169
|
|
|
(4,447
|
)
|
(2.2
|
)%
|
|||
Gross margin
|
204,328
|
|
151,628
|
|
|
52,700
|
|
34.8
|
%
|
|||
Corporate, district and other
|
88,539
|
|
82,518
|
|
|
6,021
|
|
7.3
|
%
|
|||
Interest expense
|
64,276
|
|
64,910
|
|
|
(634
|
)
|
(1.0
|
)%
|
|||
Gain on extinguishment of debt
|
(6,991
|
)
|
—
|
|
|
(6,991
|
)
|
#
|
|
|||
Restructuring and other costs
|
1,726
|
|
—
|
|
|
1,726
|
|
#
|
|
|||
Total operating expense
|
147,550
|
|
147,428
|
|
|
122
|
|
0.1
|
%
|
|||
Segment operating income
|
56,778
|
|
4,200
|
|
|
52,578
|
|
#
|
|
|||
Interest expense
|
64,276
|
|
64,910
|
|
|
(634
|
)
|
(1.0
|
)%
|
|||
Depreciation and amortization
|
13,196
|
|
12,110
|
|
|
1,086
|
|
9.0
|
%
|
|||
EBITDA
|
134,250
|
|
81,220
|
|
|
53,030
|
|
65.3
|
%
|
|||
Gain on extinguishment of debt
|
(6,991
|
)
|
—
|
|
|
(6,991
|
)
|
|
|
|||
Restructuring and other costs
|
1,726
|
|
—
|
|
|
1,726
|
|
|
|
|||
Other adjustments
|
128
|
|
561
|
|
|
(433
|
)
|
|
||||
Transaction-related costs
|
329
|
|
824
|
|
|
(495
|
)
|
|
||||
Share-based cash and non-cash compensation
|
1,148
|
|
1,271
|
|
|
(123
|
)
|
|
||||
Adjusted EBITDA
|
$
|
130,590
|
|
$
|
83,876
|
|
|
$
|
46,714
|
|
55.7
|
%
|
# - Variance greater than 100% or not meaningful.
|
|
|
|
|
|
U.K. Segment Results
|
|
|
|
|
|
|||||||
|
Year Ended December 31,
|
|||||||||||
(dollars in thousands)
|
2016
|
2015
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
33,720
|
|
$
|
54,608
|
|
|
$
|
(20,888
|
)
|
(38.3
|
)%
|
Provision for losses
|
10,624
|
|
21,026
|
|
|
(10,402
|
)
|
(49.5
|
)%
|
|||
Net revenue
|
23,096
|
|
33,582
|
|
|
(10,486
|
)
|
(31.2
|
)%
|
|||
Advertising costs
|
4,886
|
|
10,824
|
|
|
(5,938
|
)
|
(54.9
|
)%
|
|||
Non-advertising costs of providing services
|
7,921
|
|
13,254
|
|
|
(5,333
|
)
|
(40.2
|
)%
|
|||
Total cost of providing services
|
12,807
|
|
24,078
|
|
|
(11,271
|
)
|
(46.8
|
)%
|
|||
Gross margin
|
10,289
|
|
9,504
|
|
|
785
|
|
8.3
|
%
|
|||
Corporate, district and other
|
18,561
|
|
26,904
|
|
|
(8,343
|
)
|
(31.0
|
)%
|
|||
Interest income
|
(27
|
)
|
(39
|
)
|
|
12
|
|
30.8
|
%
|
|||
Goodwill and impairment charges
|
—
|
|
2,882
|
|
|
(2,882
|
)
|
#
|
|
|||
Restructuring and other costs
|
994
|
|
4,291
|
|
|
(3,297
|
)
|
76.8
|
%
|
|||
Total operating expense
|
19,528
|
|
34,038
|
|
|
(14,510
|
)
|
42.6
|
%
|
|||
Segment operating loss
|
(9,239
|
)
|
(24,534
|
)
|
|
15,295
|
|
62.3
|
%
|
|||
Interest income
|
(27
|
)
|
(39
|
)
|
|
12
|
|
(30.8
|
)%
|
|||
Depreciation and amortization
|
882
|
|
1,799
|
|
|
(917
|
)
|
(51.0
|
)%
|
|||
EBITDA
|
(8,384
|
)
|
(22,774
|
)
|
|
14,390
|
|
63.2
|
%
|
|||
Other adjustments
|
242
|
|
(173
|
)
|
|
415
|
|
|
||||
Goodwill and impairment charges
|
—
|
|
2,882
|
|
|
(2,882
|
)
|
|
||||
Restructuring and other costs
|
994
|
|
4,291
|
|
|
(3,297
|
)
|
|
||||
Adjusted EBITDA
|
$
|
(7,148
|
)
|
$
|
(15,774
|
)
|
|
$
|
8,626
|
|
54.7
|
%
|
# - Variance greater than 100% or not meaningful
|
|
|
|
|
|
•
|
214
U.S. locations: Texas (
91
), California (
36
), Nevada (
18
), Arizona (
13
), Tennessee (
11
), Kansas (
10
), Illinois (
8
), Alabama (
7
), Missouri (
5
), Louisiana (
5
), Colorado (
3
), Oregon (
3
), Washington (
2
), and Mississippi (
2
)
|
•
|
193
Canadian locations: Ontario (
124
), Alberta (
27
), British Columbia (
26
), Saskatchewan (
6
), Nova Scotia (
5
), Manitoba (
4
), and New Brunswick (
1
)
|
|
Average Exchange Rates
Year Ended December 31, |
|
Change
|
|||||||||
|
2017
|
2016
|
|
$
|
%
|
|||||||
Canadian Dollar
|
$
|
0.7710
|
|
$
|
0.7551
|
|
|
|
$0.0159
|
|
2.1
|
%
|
British Pound Sterling
|
$
|
1.2884
|
|
$
|
1.3552
|
|
|
|
($0.0668
|
)
|
(4.9
|
)%
|
|
Average Exchange Rates
Year Ended December 31, |
|
Change
|
|||||||||
|
2016
|
2015
|
|
$
|
%
|
|||||||
Canadian Dollar
|
$
|
0.7551
|
|
$
|
0.7832
|
|
|
|
($0.0281
|
)
|
(3.6
|
)%
|
British Pound Sterling
|
$
|
1.3552
|
|
$
|
1.5282
|
|
|
|
($0.1730
|
)
|
(11.3
|
)%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Revenues – constant currency basis:
|
|
|
|
|
|
|
|
|||||||
Canada
|
$
|
182,295
|
|
|
$
|
188,078
|
|
|
$
|
(5,783
|
)
|
|
(3.1
|
)%
|
United Kingdom
|
41,486
|
|
|
33,720
|
|
|
7,766
|
|
|
23.0
|
%
|
|||
Gross margin - constant currency basis:
|
|
|
|
|
|
|
|
|||||||
Canada
|
$
|
66,456
|
|
|
$
|
78,639
|
|
|
$
|
(12,183
|
)
|
|
(15.5
|
)%
|
United Kingdom
|
14,788
|
|
|
10,289
|
|
|
4,499
|
|
|
43.7
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
(dollars in thousands)
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
Revenues – constant currency basis:
|
|
|
|
|
|
|
|
|||||||
Canada
|
$
|
194,974
|
|
|
$
|
184,859
|
|
|
$
|
10,115
|
|
|
5.5
|
%
|
United Kingdom
|
38,110
|
|
|
54,608
|
|
|
(16,498
|
)
|
|
(30.2
|
)%
|
|||
Gross margin - constant currency basis:
|
|
|
|
|
|
|
|
|||||||
Canada
|
$
|
81,447
|
|
|
$
|
77,469
|
|
|
$
|
3,978
|
|
|
5.1
|
%
|
United Kingdom
|
11,518
|
|
|
9,504
|
|
|
2,014
|
|
|
21.2
|
%
|
|
December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
12.00% Senior Secured Notes (due 2022)
|
$
|
585,823
|
|
|
$
|
—
|
|
May 2011 Senior Secured Notes (due 2018)
|
—
|
|
|
223,164
|
|
||
May 2012 Senior Secured Notes (due 2018)
|
—
|
|
|
89,734
|
|
||
February 2013 Senior Secured Notes (due 2018)
|
—
|
|
|
101,184
|
|
||
February 2013 Cash Pay Notes (due 2017)
|
—
|
|
|
124,365
|
|
||
Non-Recourse U.S. SPV Facility
|
120,402
|
|
|
63,054
|
|
||
ABL Facility
|
—
|
|
|
23,406
|
|
||
Senior Revolver
|
—
|
|
|
—
|
|
||
Total long-term debt, including current portion
|
706,225
|
|
|
624,907
|
|
||
Less: current maturities of long-term debt
|
—
|
|
|
147,771
|
|
||
Long-term debt
|
$
|
706,225
|
|
|
$
|
477,136
|
|
|
Year Ended December 31,
|
||||||||
(dollars in thousands)
|
2017
|
2016
|
2015
|
||||||
Net cash provided by operating activities
|
$
|
17,410
|
|
$
|
47,712
|
|
$
|
17,114
|
|
Net cash used in investing activities
|
(19,332
|
)
|
(12,922
|
)
|
(26,255
|
)
|
|||
Net cash (used in) provided by financing activities
|
(36,691
|
)
|
59,382
|
|
(12,321
|
)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Cash
|
$
|
162,374
|
|
|
$
|
193,525
|
|
Restricted cash (includes restricted cash of consolidated VIEs of $6,871 and $2,770 as of December 31, 2017 and 2016, respectively)
|
12,117
|
|
|
7,828
|
|
||
Gross loans receivable (includes loans of consolidated VIEs of $213,846 and $130,199 as of December 31, 2017 and 2016, respectively)
|
432,837
|
|
|
286,196
|
|
||
Less: allowance for loan losses (includes allowance for losses of consolidated VIEs of $46,140 and $22,134 as of December 31, 2017 and 2016, respectively)
|
(69,568
|
)
|
|
(39,192
|
)
|
||
Loans receivable, net
|
363,269
|
|
|
247,004
|
|
||
Deferred income taxes
|
772
|
|
|
12,635
|
|
||
Income taxes receivable
|
3,455
|
|
|
9,378
|
|
||
Prepaid expenses and other
|
42,512
|
|
|
39,248
|
|
||
Property and equipment, net
|
87,086
|
|
|
95,896
|
|
||
Goodwill
|
145,607
|
|
|
141,554
|
|
||
Other intangibles, net of accumulated amortization of $41,156 and $36,985
|
32,769
|
|
|
30,901
|
|
||
Other
|
9,770
|
|
|
2,829
|
|
||
Total Assets
|
$
|
859,731
|
|
|
$
|
780,798
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
55,792
|
|
|
$
|
42,663
|
|
Deferred revenue
|
11,984
|
|
|
12,342
|
|
||
Income taxes payable
|
4,120
|
|
|
1,372
|
|
||
Current maturities of long-term debt
|
—
|
|
|
147,771
|
|
||
Accrued interest (includes accrued interest of consolidated VIEs of $1,266 and $775 as of December 31, 2017 and 2016, respectively)
|
25,467
|
|
|
8,183
|
|
||
Credit services organization guarantee liability
|
17,795
|
|
|
17,052
|
|
||
Deferred rent
|
11,577
|
|
|
11,868
|
|
||
Long-term debt (includes long-term debt and issuance costs of consolidated VIEs of $124,590 and $4,188 and $68,311 and $5,257 as of December 31, 2017 and 2016, respectively)
|
706,225
|
|
|
477,136
|
|
||
Subordinated shareholder debt
|
2,381
|
|
|
2,227
|
|
||
Other long-term liabilities
|
5,768
|
|
|
5,016
|
|
||
Deferred tax liabilities
|
11,486
|
|
|
14,313
|
|
||
Total Liabilities
|
852,595
|
|
|
739,943
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Stockholders' Equity
|
|
|
|
|
|
||
Preferred stock - $0.001 par value; 25,000,000 and no shares authorized, respectively, and no shares were issued at either period end
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value; 225,000,000 and 72,000,000 shares authorized, and 44,561,419 and 37,894,752 issued and outstanding at the respective period ends
|
8
|
|
|
1
|
|
||
Dividends in excess of paid-in capital
|
46,079
|
|
|
(35,996
|
)
|
||
Retained earnings
|
3,988
|
|
|
136,835
|
|
||
Accumulated other comprehensive loss
|
(42,939
|
)
|
|
(59,985
|
)
|
||
Total Stockholders' Equity
|
7,136
|
|
|
40,855
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
859,731
|
|
|
$
|
780,798
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenue
|
$
|
963,633
|
|
|
$
|
828,596
|
|
|
$
|
813,131
|
|
Provision for losses
|
326,226
|
|
|
258,289
|
|
|
281,210
|
|
|||
Net revenue
|
637,407
|
|
|
570,307
|
|
|
531,921
|
|
|||
|
|
|
|
|
|
||||||
Cost of providing services
|
|
|
|
|
|
||||||
Salaries and benefits
|
105,196
|
|
|
104,541
|
|
|
107,059
|
|
|||
Occupancy
|
54,612
|
|
|
54,509
|
|
|
53,288
|
|
|||
Office
|
21,402
|
|
|
20,463
|
|
|
19,929
|
|
|||
Other costs of providing services
|
54,902
|
|
|
53,617
|
|
|
47,380
|
|
|||
Advertising
|
52,058
|
|
|
43,921
|
|
|
65,664
|
|
|||
Total cost of providing services
|
288,170
|
|
|
277,051
|
|
|
293,320
|
|
|||
Gross margin
|
349,237
|
|
|
293,256
|
|
|
238,601
|
|
|||
|
|
|
|
|
|
||||||
Operating (income) expense
|
|
|
|
|
|
||||||
Corporate, district and other
|
154,973
|
|
|
124,274
|
|
|
130,534
|
|
|||
Interest expense
|
82,684
|
|
|
64,334
|
|
|
65,020
|
|
|||
Loss (Gain) on extinguishment of debt
|
12,458
|
|
|
(6,991
|
)
|
|
—
|
|
|||
Restructuring costs
|
7,393
|
|
|
3,618
|
|
|
4,291
|
|
|||
Goodwill and intangible asset impairment charges
|
—
|
|
|
—
|
|
|
2,882
|
|
|||
Total operating expense
|
257,508
|
|
|
185,235
|
|
|
202,727
|
|
|||
Net income before income taxes
|
91,729
|
|
|
108,021
|
|
|
35,874
|
|
|||
Provision for income taxes
|
42,576
|
|
|
42,577
|
|
|
18,105
|
|
|||
Net income
|
$
|
49,153
|
|
|
$
|
65,444
|
|
|
$
|
17,769
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
38,351
|
|
|
37,908
|
|
|
37,908
|
|
|||
Diluted
|
39,277
|
|
|
38,803
|
|
|
38,895
|
|
|||
Net income per common share:
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
1.28
|
|
|
$
|
1.73
|
|
|
$
|
0.47
|
|
Diluted earnings per share
|
$
|
1.25
|
|
|
$
|
1.69
|
|
|
$
|
0.46
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
$
|
49,153
|
|
|
$
|
65,444
|
|
|
$
|
17,769
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
Cash flow hedges, net of $0 tax in all periods
|
333
|
|
|
(333
|
)
|
|
—
|
|
|||
Foreign currency translation adjustment, net of $0 tax in all periods
|
16,713
|
|
|
(6,022
|
)
|
|
(30,512
|
)
|
|||
Other comprehensive income (loss)
|
17,046
|
|
|
(6,355
|
)
|
|
(30,512
|
)
|
|||
Comprehensive income (loss)
|
$
|
66,199
|
|
|
$
|
59,089
|
|
|
$
|
(12,743
|
)
|
|
Common Stock
|
|
Dividends in excess of paid-in capital
|
|
Retained Earnings
|
|
AOCI
(1)
|
|
Total Stockholders' Equity
|
|||||||||||||
|
Shares Outstanding
|
|
Par Value
|
|
|
|
|
|||||||||||||||
Balances at December 31, 2014
|
37,894,752
|
|
|
$
|
1
|
|
|
$
|
(38,044
|
)
|
|
$
|
53,622
|
|
|
$
|
(23,118
|
)
|
|
$
|
(7,539
|
)
|
Net income
|
|
|
|
|
|
|
|
|
|
17,769
|
|
|
|
|
|
17,769
|
|
|||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
|
|
|
|
(30,512
|
)
|
|
(30,512
|
)
|
|||||
Repurchase of equity award
|
|
|
|
|
|
|
(371
|
)
|
|
|
|
|
|
|
|
(371
|
)
|
|||||
Share based compensation expense
|
|
|
|
|
|
|
1,271
|
|
|
|
|
|
|
|
|
1,271
|
|
|||||
Balances at December 31, 2015
|
37,894,752
|
|
|
1
|
|
|
(37,144
|
)
|
|
71,391
|
|
|
(53,630
|
)
|
|
(19,382
|
)
|
|||||
Net income
|
|
|
|
|
|
|
65,444
|
|
|
|
|
65,444
|
|
|||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
(6,022
|
)
|
|
(6,022
|
)
|
|||||||||
Cash flow hedge
|
|
|
|
|
|
|
|
|
(333
|
)
|
|
(333
|
)
|
|||||||||
Share based compensation expense
|
|
|
|
|
1,148
|
|
|
|
|
|
|
1,148
|
|
|||||||||
Balances at December 31, 2016
|
37,894,752
|
|
|
1
|
|
|
(35,996
|
)
|
|
136,835
|
|
|
(59,985
|
)
|
|
40,855
|
|
|||||
Net income
|
|
|
|
|
|
|
49,153
|
|
|
|
|
49,153
|
|
|||||||||
Foreign currency translation adjustment
|
|
|
|
|
|
|
|
|
16,713
|
|
|
16,713
|
|
|||||||||
Cash flow hedge expiration
|
|
|
|
|
|
|
|
|
333
|
|
|
333
|
|
|||||||||
Initial Public Offering
|
6,666,667
|
|
|
7
|
|
|
81,110
|
|
|
|
|
|
|
81,117
|
|
|||||||
Dividends
|
|
|
|
|
—
|
|
|
(182,000
|
)
|
|
|
|
(182,000
|
)
|
||||||||
Share based compensation expense
|
|
|
|
|
965
|
|
|
|
|
|
|
965
|
|
|||||||||
Balances at December 31, 2017
|
44,561,419
|
|
|
$
|
8
|
|
|
$
|
46,079
|
|
|
$
|
3,988
|
|
|
$
|
(42,939
|
)
|
|
$
|
7,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
(1)
Accumulated other comprehensive income (loss)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
2016
|
|
2015
|
|||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
49,153
|
|
|
$
|
65,444
|
|
|
$
|
17,769
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
18,837
|
|
|
18,905
|
|
|
19,112
|
|
|||
Provision for loan losses
|
326,226
|
|
|
258,289
|
|
|
281,210
|
|
|||
Goodwill and intangible asset impairment charges
|
—
|
|
|
—
|
|
|
2,882
|
|
|||
Restructuring costs
|
3,161
|
|
|
523
|
|
|
2,249
|
|
|||
Amortization of debt issuance costs
|
3,329
|
|
|
3,289
|
|
|
3,221
|
|
|||
Amortization of bond discount/(premium)
|
1,225
|
|
|
(1,541
|
)
|
|
(1,404
|
)
|
|||
Deferred income taxes
|
9,036
|
|
|
(680
|
)
|
|
(2,190
|
)
|
|||
Loss on disposal of property and equipment
|
2,278
|
|
|
217
|
|
|
628
|
|
|||
Loss (gain) on extinguishment of debt
|
12,458
|
|
|
(6,991
|
)
|
|
—
|
|
|||
Increase in cash surrender value of life insurance
|
(1,308
|
)
|
|
(918
|
)
|
|
—
|
|
|||
Share-based compensation expense
|
965
|
|
|
1,148
|
|
|
1,271
|
|
|||
Realized loss on cash flow hedge
|
333
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Loans receivable
|
(435,458
|
)
|
|
(287,827
|
)
|
|
(301,581
|
)
|
|||
Prepaid expenses and other assets
|
(3,264
|
)
|
|
(5,733
|
)
|
|
(3,152
|
)
|
|||
Accounts payable and accrued liabilities
|
8,896
|
|
|
2,010
|
|
|
(2,168
|
)
|
|||
Deferred revenue
|
(752
|
)
|
|
(2,080
|
)
|
|
4,644
|
|
|||
Income taxes payable
|
1,213
|
|
|
6,852
|
|
|
(4,278
|
)
|
|||
Income taxes receivable
|
3,486
|
|
|
(7,154
|
)
|
|
(1,713
|
)
|
|||
Other assets and liabilities
|
17,596
|
|
|
3,959
|
|
|
614
|
|
|||
Net cash provided by operating activities
|
17,410
|
|
|
47,712
|
|
|
17,114
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchase of property, equipment and software
|
(9,757
|
)
|
|
(16,026
|
)
|
|
(19,832
|
)
|
|||
Cash paid for Cognical Holdings preferred shares
|
(5,600
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in restricted cash
|
(3,975
|
)
|
|
3,104
|
|
|
(6,423
|
)
|
|||
Net cash (used in) investing activities
|
(19,332
|
)
|
|
(12,922
|
)
|
|
(26,255
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Net proceeds from issuance of common stock
|
81,117
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from Non-Recourse U.S. SPV facility and ABL facility
|
60,130
|
|
|
91,717
|
|
|
—
|
|
|||
Payments on Non-Recourse U.S. SPV facility and ABL facility
|
(27,257
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from issuance of 12.00% Senior Secured Notes
|
601,054
|
|
|
—
|
|
|
—
|
|
|||
Payments on 10.75% Senior Secured Notes
|
(426,034
|
)
|
|
(18,939
|
)
|
|
—
|
|
|||
Payments on 12.00% Senior Cash Pay Notes
|
(125,000
|
)
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs paid
|
(18,701
|
)
|
|
(5,346
|
)
|
|
—
|
|
|||
Proceeds from credit facilities
|
43,084
|
|
|
30,000
|
|
|
57,050
|
|
|||
Payments on credit facilities
|
(43,084
|
)
|
|
(38,050
|
)
|
|
(69,000
|
)
|
|||
Payment for cash settlement of equity award
|
—
|
|
|
—
|
|
|
(371
|
)
|
|||
Dividends paid to stockholders
|
(182,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash (used in) provided by financing activities
|
(36,691
|
)
|
|
59,382
|
|
|
(12,321
|
)
|
|||
Effect of exchange rate changes on cash
|
7,462
|
|
|
(1,208
|
)
|
|
(8,064
|
)
|
|||
Net (decrease) increase in cash
|
(31,151
|
)
|
|
92,964
|
|
|
(29,526
|
)
|
|||
Cash at beginning of period
|
193,525
|
|
|
100,561
|
|
|
130,087
|
|
|||
Cash at end of period
|
$
|
162,374
|
|
|
$
|
193,525
|
|
|
$
|
100,561
|
|
•
|
we are not required to present selected financial data for any period prior to the earliest audited period presented in our initial registration statement;
|
•
|
we are not required to engage an auditor to report on the effectiveness of our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, or Sarbanes-Oxley Act;
|
•
|
we are not required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board, or PCAOB, regarding a supplement to the auditor’s report providing additional information about the audit and the financial statements (
i.e.
, an auditor discussion and analysis);
|
•
|
we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes”;
|
•
|
we are not required to disclose certain executive compensation-related items, such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation, or to include a compensation committee report, provided we comply with the scaled compensation disclosure rules applicable to smaller reporting companies; and
|
•
|
we may take advantage of an extended transition period for complying with new or revised accounting standards, allowing us to delay the adoption of some accounting standards until those standards would otherwise apply to private companies.
|
|
December 31
|
||||||
(in thousands)
|
2017
|
|
2016
|
||||
Foreign currency translation adjustment
|
$
|
(42,939
|
)
|
|
$
|
(59,652
|
)
|
Cash flow hedge
|
—
|
|
|
(333
|
)
|
||
Total
|
$
|
(42,939
|
)
|
|
$
|
(59,985
|
)
|
(dollars in thousands)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Settlements and collateral due from third-party lenders
|
$
|
17,943
|
|
|
$
|
18,576
|
|
Fees receivable for third-party loans
|
15,059
|
|
|
9,181
|
|
||
Prepaid expenses
|
6,728
|
|
|
5,892
|
|
||
Other assets
|
2,782
|
|
|
5,599
|
|
||
Total
|
$
|
42,512
|
|
|
$
|
39,248
|
|
(dollars in thousands)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Leasehold improvements
|
$
|
126,897
|
|
|
$
|
122,419
|
|
Furniture, fixtures and equipment
|
36,488
|
|
|
35,060
|
|
||
Property and equipment, gross
|
163,385
|
|
|
157,479
|
|
||
Accumulated depreciation
|
(76,299
|
)
|
|
(61,583
|
)
|
||
Property and equipment, net
|
$
|
87,086
|
|
|
$
|
95,896
|
|
(dollars in thousands)
|
U.S.
|
|
U.K.
|
|
Canada
|
|
Total
|
||||||||
Balance as of December 31, 2015
|
$
|
91,131
|
|
|
$
|
54,275
|
|
|
$
|
27,707
|
|
|
$
|
173,113
|
|
Accumulated Impairment Charges
|
—
|
|
|
(28,078
|
)
|
|
—
|
|
|
(28,078
|
)
|
||||
Goodwill at December 31, 2015
|
91,131
|
|
|
26,197
|
|
|
27,707
|
|
|
145,035
|
|
||||
Foreign currency translation - 2016
|
—
|
|
|
(4,315
|
)
|
|
834
|
|
|
(3,481
|
)
|
||||
Balance as of December 31, 2016
|
91,131
|
|
|
49,960
|
|
|
28,541
|
|
|
169,632
|
|
||||
Accumulated Impairment Charges
|
—
|
|
|
(28,078
|
)
|
|
—
|
|
|
(28,078
|
)
|
||||
Goodwill at December 31, 2016
|
91,131
|
|
|
21,882
|
|
|
28,541
|
|
|
141,554
|
|
||||
Foreign currency translation - 2017
|
—
|
|
|
2,078
|
|
|
1,975
|
|
|
4,053
|
|
||||
Balance as of December 31, 2017
|
91,131
|
|
|
52,038
|
|
|
30,516
|
|
|
173,685
|
|
||||
Accumulated Impairment Charges
|
—
|
|
|
(28,078
|
)
|
|
—
|
|
|
(28,078
|
)
|
||||
Goodwill at December 31, 2017
|
91,131
|
|
|
23,960
|
|
|
30,516
|
|
|
145,607
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(dollars in thousands)
|
Weighted-Average Remaining Life (Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Trade name
|
8.2
|
|
$
|
26,872
|
|
|
$
|
(20
|
)
|
|
$
|
25,046
|
|
|
$
|
(12
|
)
|
Customer relationships
|
1.3
|
|
27,823
|
|
|
(26,137
|
)
|
|
26,411
|
|
|
(23,603
|
)
|
||||
Computer software
|
9.6
|
|
19,230
|
|
|
(14,999
|
)
|
|
16,429
|
|
|
(13,370
|
)
|
||||
Balance, end of year
|
|
|
$
|
73,925
|
|
|
$
|
(41,156
|
)
|
|
$
|
67,886
|
|
|
$
|
(36,985
|
)
|
(dollars in thousands)
|
Year Ending December 31,
|
||
2018
|
$
|
2,641
|
|
2019
|
1,889
|
|
|
2020
|
555
|
|
|
2021
|
128
|
|
|
2022
|
128
|
|
(in thousands)
|
December 31, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Restricted Cash
|
$
|
6,871
|
|
|
$
|
2,770
|
|
Loans receivable less allowance for loan losses
|
167,706
|
|
|
108,065
|
|
||
Total Assets
|
$
|
174,577
|
|
|
$
|
110,835
|
|
Liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
12
|
|
|
$
|
—
|
|
Accrued interest
|
1,266
|
|
|
775
|
|
||
Long-term debt
|
120,402
|
|
|
63,054
|
|
||
Total Liabilities
|
$
|
121,680
|
|
|
$
|
63,829
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Unsecured Installment
|
$
|
480,243
|
|
$
|
330,713
|
|
$
|
314,383
|
|
Secured Installment
|
100,981
|
|
81,453
|
|
86,325
|
|
|||
Open-End
|
73,496
|
|
66,948
|
|
51,311
|
|
|||
Single-Pay
|
268,794
|
|
313,276
|
|
321,597
|
|
|||
Ancillary
|
40,119
|
|
36,206
|
|
39,515
|
|
|||
Total revenue
|
$
|
963,633
|
|
$
|
828,596
|
|
$
|
813,131
|
|
|
|
December 31, 2017
|
||||||||||||||
(in thousands)
|
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Total
|
||||||||||
Current loans receivable
|
|
$
|
99,400
|
|
$
|
151,343
|
|
$
|
73,165
|
|
$
|
47,949
|
|
$
|
371,857
|
|
Delinquent loans receivable
|
|
—
|
|
44,963
|
|
16,017
|
|
—
|
|
60,980
|
|
|||||
Total loans receivable
|
|
99,400
|
|
196,306
|
|
89,182
|
|
47,949
|
|
432,837
|
|
|||||
Less: allowance for losses
|
|
(5,916
|
)
|
(43,754
|
)
|
(13,472
|
)
|
(6,426
|
)
|
(69,568
|
)
|
|||||
Loans receivable, net
|
|
$
|
93,484
|
|
$
|
152,552
|
|
$
|
75,710
|
|
$
|
41,523
|
|
$
|
363,269
|
|
|
|
December 31, 2017
|
||||||||
(in thousands)
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Delinquent loans receivable
|
|
|
|
|
||||||
0-30 days past due
|
|
$
|
18,358
|
|
$
|
8,116
|
|
$
|
26,474
|
|
31-60 days past due
|
|
12,836
|
|
3,628
|
|
16,464
|
|
|||
61-90 days past due
|
|
13,769
|
|
4,273
|
|
18,042
|
|
|||
Total delinquent loans receivable
|
|
$
|
44,963
|
|
$
|
16,017
|
|
$
|
60,980
|
|
|
|
December 31, 2016
|
||||||||||||||
(in thousands)
|
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Total
|
||||||||||
Current loans receivable
|
|
$
|
90,487
|
|
$
|
102,090
|
|
$
|
63,157
|
|
$
|
30,462
|
|
$
|
286,196
|
|
Delinquent loans receivable
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Total loans receivable
|
|
90,487
|
|
102,090
|
|
63,157
|
|
30,462
|
|
286,196
|
|
|||||
Less: allowance for losses
|
|
(5,501
|
)
|
(17,775
|
)
|
(10,737
|
)
|
(5,179
|
)
|
(39,192
|
)
|
|||||
Loans receivable, net
|
|
$
|
84,986
|
|
$
|
84,315
|
|
$
|
52,420
|
|
$
|
25,283
|
|
$
|
247,004
|
|
|
|
December 31, 2017
|
||||||||
(in thousands)
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Current loans receivable guaranteed by the Company
|
|
$
|
62,676
|
|
$
|
3,098
|
|
$
|
65,774
|
|
Delinquent loans receivable guaranteed by the Company
|
|
12,480
|
|
537
|
|
13,017
|
|
|||
Total loans receivable guaranteed by the Company
|
|
75,156
|
|
3,635
|
|
78,791
|
|
|||
Less: CSO guarantee liability
|
|
(17,073
|
)
|
(722
|
)
|
(17,795
|
)
|
|||
Loans receivable guaranteed by the Company, net
|
|
$
|
58,083
|
|
$
|
2,913
|
|
$
|
60,996
|
|
|
|
December 31, 2017
|
||||||||
(in thousands)
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Delinquent loans receivable
|
|
|
|
|
||||||
0-30 days past due
|
|
$
|
10,477
|
|
$
|
459
|
|
$
|
10,936
|
|
31-60 days past due
|
|
1,364
|
|
41
|
|
1,405
|
|
|||
61-90 days past due
|
|
639
|
|
37
|
|
676
|
|
|||
Total delinquent loans receivable
|
|
$
|
12,480
|
|
$
|
537
|
|
$
|
13,017
|
|
|
|
December 31, 2016
|
|||||||||||
(in thousands)
|
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||||
Current loans receivable guaranteed by the Company
|
|
$
|
1,092
|
|
$
|
62,360
|
|
$
|
4,581
|
|
$
|
68,033
|
|
Delinquent loans receivable guaranteed by the Company
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||
Total loans receivable guaranteed by the Company
|
|
1,092
|
|
62,360
|
|
4,581
|
|
68,033
|
|
||||
Less: CSO guarantee liability
|
|
(274
|
)
|
(15,630
|
)
|
(1,148
|
)
|
(17,052
|
)
|
||||
Loans receivable guaranteed by the Company, net
|
|
$
|
818
|
|
$
|
46,730
|
|
$
|
3,433
|
|
$
|
50,981
|
|
|
Year Ended December 31, 2017
|
|||||||||||||||||
(in thousands)
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
5,501
|
|
$
|
17,775
|
|
$
|
10,737
|
|
$
|
5,179
|
|
$
|
—
|
|
$
|
39,192
|
|
Charge-offs
|
(190,623
|
)
|
(88,694
|
)
|
(30,005
|
)
|
(39,752
|
)
|
(5,254
|
)
|
(354,328
|
)
|
||||||
Recoveries
|
127,184
|
|
18,002
|
|
9,517
|
|
18,743
|
|
3,291
|
|
176,737
|
|
||||||
Net charge-offs
|
(63,439
|
)
|
(70,692
|
)
|
(20,488
|
)
|
(21,009
|
)
|
(1,963
|
)
|
(177,591
|
)
|
||||||
Provision for losses
|
63,760
|
|
96,150
|
|
23,223
|
|
22,245
|
|
1,963
|
|
207,341
|
|
||||||
Effect of foreign currency translation
|
93
|
|
522
|
|
—
|
|
11
|
|
—
|
|
626
|
|
||||||
Balance, end of period
|
$
|
5,915
|
|
$
|
43,755
|
|
$
|
13,472
|
|
$
|
6,426
|
|
$
|
—
|
|
$
|
69,568
|
|
Allowance for loan losses as a percentage of gross loan receivables
|
6.0
|
%
|
22.3
|
%
|
15.1
|
%
|
13.4
|
%
|
N/A
|
|
16.1
|
%
|
|
Year Ended December 31, 2017
|
|||||||||||
(in thousands)
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||||
Balance, beginning of period
|
$
|
274
|
|
$
|
15,630
|
|
$
|
1,148
|
|
$
|
17,052
|
|
Charge-offs
|
(2,121
|
)
|
(141,429
|
)
|
(10,551
|
)
|
(154,101
|
)
|
||||
Recoveries
|
1,335
|
|
30,230
|
|
4,394
|
|
35,959
|
|
||||
Net charge-offs
|
(786
|
)
|
(111,199
|
)
|
(6,157
|
)
|
(118,142
|
)
|
||||
Provision for losses
|
512
|
|
112,642
|
|
5,731
|
|
118,885
|
|
||||
Balance, end of period
|
$
|
—
|
|
$
|
17,073
|
|
$
|
722
|
|
$
|
17,795
|
|
|
Year Ended December 31, 2017
|
|||||||||||||||||
(in thousands)
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
5,775
|
|
$
|
33,405
|
|
$
|
11,885
|
|
$
|
5,179
|
|
$
|
—
|
|
$
|
56,244
|
|
Charge-offs
|
(192,744
|
)
|
(230,123
|
)
|
(40,556
|
)
|
(39,752
|
)
|
(5,254
|
)
|
(508,429
|
)
|
||||||
Recoveries
|
128,519
|
|
48,232
|
|
13,911
|
|
18,743
|
|
3,291
|
|
212,696
|
|
||||||
Net charge-offs
|
(64,225
|
)
|
(181,891
|
)
|
(26,645
|
)
|
(21,009
|
)
|
(1,963
|
)
|
(295,733
|
)
|
||||||
Provision for losses
|
64,272
|
|
208,792
|
|
28,954
|
|
22,245
|
|
1,963
|
|
326,226
|
|
||||||
Effect of foreign currency translation
|
93
|
|
522
|
|
—
|
|
11
|
|
—
|
|
626
|
|
||||||
Balance, end of period
|
$
|
5,915
|
|
$
|
60,828
|
|
$
|
14,194
|
|
$
|
6,426
|
|
$
|
—
|
|
$
|
87,363
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||
(in thousands)
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
8,313
|
|
$
|
10,603
|
|
$
|
9,209
|
|
$
|
4,823
|
|
$
|
—
|
|
$
|
32,948
|
|
Charge-offs
|
(225,066
|
)
|
(165,843
|
)
|
(145,160
|
)
|
(86,586
|
)
|
(5,786
|
)
|
(628,441
|
)
|
||||||
Recoveries
|
157,398
|
|
120,446
|
|
128,886
|
|
62,859
|
|
3,671
|
|
473,260
|
|
||||||
Net charge-offs
|
(67,668
|
)
|
(45,397
|
)
|
(16,274
|
)
|
(23,727
|
)
|
(2,115
|
)
|
(155,181
|
)
|
||||||
Provision for losses
|
64,919
|
|
52,776
|
|
17,802
|
|
24,083
|
|
2,115
|
|
161,695
|
|
||||||
Effect of foreign currency translation
|
(63
|
)
|
(207
|
)
|
—
|
|
—
|
|
—
|
|
(270
|
)
|
||||||
Balance, end of period
|
$
|
5,501
|
|
$
|
17,775
|
|
$
|
10,737
|
|
$
|
5,179
|
|
$
|
—
|
|
$
|
39,192
|
|
Allowance for loan losses as a percentage of gross loan receivables
|
6.1
|
%
|
17.4
|
%
|
17.0
|
%
|
17.0
|
%
|
N/A
|
13.7
|
%
|
|
Year Ended December 31, 2016
|
|||||||||||
(in thousands)
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||||
Balance, beginning of period
|
$
|
334
|
|
$
|
15,910
|
|
$
|
1,507
|
|
$
|
17,751
|
|
Charge-offs
|
(17,379
|
)
|
(164,853
|
)
|
(16,930
|
)
|
(199,162
|
)
|
||||
Recoveries
|
4,807
|
|
83,112
|
|
13,950
|
|
101,869
|
|
||||
Net charge-offs
|
(12,572
|
)
|
(81,741
|
)
|
(2,980
|
)
|
(97,293
|
)
|
||||
Provision for losses
|
12,512
|
|
81,461
|
|
2,621
|
|
96,594
|
|
||||
Balance, end of period
|
$
|
274
|
|
$
|
15,630
|
|
$
|
1,148
|
|
$
|
17,052
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||
(in thousands)
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
8,647
|
|
$
|
26,513
|
|
$
|
10,716
|
|
$
|
4,823
|
|
$
|
—
|
|
$
|
50,699
|
|
Charge-offs
|
(242,445
|
)
|
(330,696
|
)
|
(162,090
|
)
|
(86,586
|
)
|
(5,786
|
)
|
(827,603
|
)
|
||||||
Recoveries
|
162,205
|
|
203,558
|
|
142,836
|
|
62,859
|
|
3,671
|
|
575,129
|
|
||||||
Net charge-offs
|
(80,240
|
)
|
(127,138
|
)
|
(19,254
|
)
|
(23,727
|
)
|
(2,115
|
)
|
(252,474
|
)
|
||||||
Provision for losses
|
77,431
|
|
134,237
|
|
20,423
|
|
24,083
|
|
2,115
|
|
258,289
|
|
||||||
Effect of foreign currency translation
|
(63
|
)
|
(207
|
)
|
—
|
|
—
|
|
—
|
|
(270
|
)
|
||||||
Balance, end of period
|
$
|
5,775
|
|
$
|
33,405
|
|
$
|
11,885
|
|
$
|
5,179
|
|
$
|
—
|
|
$
|
56,244
|
|
|
December 31,
|
|
December 31,
|
||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Trade accounts payable
|
$
|
22,483
|
|
|
$
|
18,588
|
|
Money orders payable
|
8,131
|
|
|
7,356
|
|
||
Accrued taxes, other than income taxes
|
678
|
|
|
447
|
|
||
Accrued payroll and fringe benefits
|
18,890
|
|
|
14,621
|
|
||
Reserve for store closure costs
|
4,419
|
|
|
1,258
|
|
||
Other accrued liabilities
|
1,191
|
|
|
393
|
|
||
Total
|
$
|
55,792
|
|
|
$
|
42,663
|
|
|
Year Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Lease obligations and related costs
|
$
|
5,883
|
|
|
1,620
|
|
|
1,711
|
|
||
Write-down and loss on disposal of fixed assets
|
1,510
|
|
|
772
|
|
|
2,253
|
|
|||
Severance costs
|
—
|
|
|
1,226
|
|
|
327
|
|
|||
Total restructuring costs
|
$
|
7,393
|
|
|
$
|
3,618
|
|
|
$
|
4,291
|
|
|
Year Ended December 31,
|
||||||
(dollars in thousands)
|
2017
|
|
2016
|
||||
Beginning balance - January 1
|
$
|
1,258
|
|
|
$
|
1,972
|
|
Additions and adjustments
|
7,393
|
|
|
3,618
|
|
||
Payments and write-downs
|
(4,232
|
)
|
|
(4,332
|
)
|
||
Ending balance - December 31
|
$
|
4,419
|
|
|
$
|
1,258
|
|
|
December 31,
|
|
December 31,
|
||||
(in thousands)
|
2017
|
|
2016
|
||||
12.00% Senior Secured Notes (due 2022)
|
$
|
585,823
|
|
|
$
|
—
|
|
May 2011 Senior Secured Notes (due 2018)
|
—
|
|
|
223,164
|
|
||
May 2012 Senior Secured Notes (due 2018)
|
—
|
|
|
89,734
|
|
||
February 2013 Senior Secured Notes (due 2018)
|
—
|
|
|
101,184
|
|
||
February 2013 Cash Pay Notes (due 2017)
|
—
|
|
|
124,365
|
|
||
Non-Recourse U.S. SPV Facility
|
120,402
|
|
|
63,054
|
|
||
ABL Facility
|
—
|
|
|
23,406
|
|
||
Senior Revolver
|
—
|
|
|
—
|
|
||
Total long-term debt, including current portion
|
706,225
|
|
|
624,907
|
|
||
Less: current maturities of long-term debt
|
—
|
|
|
147,771
|
|
||
Long-term debt
|
$
|
706,225
|
|
|
$
|
477,136
|
|
(in thousands)
|
Amount
|
||
2018
|
$
|
—
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
2021
|
124,590
|
|
|
2022
|
605,000
|
|
|
|
$
|
729,590
|
|
|
Stock Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Contractual Term (years)
|
|
Aggregate Intrinsic Value (in thousands)
|
||||||
Outstanding at December 31, 2016
|
1,879,308
|
|
|
$
|
2.73
|
|
|
|
|
|
|||
Granted
|
99,396
|
|
|
$
|
8.86
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|
|
||
Forfeited
|
(1,224
|
)
|
|
$
|
3.39
|
|
|
|
|
|
|||
Outstanding at December 31, 2017
|
1,977,480
|
|
|
$
|
3.04
|
|
|
5.2
|
|
|
$
|
21,831
|
|
Options exercisable at December 31, 2017
|
1,520,688
|
|
|
$
|
2.52
|
|
|
4.2
|
|
|
$
|
17,579
|
|
Non-vested Restricted Stock
|
Shares
|
|
Weighted
Average
Grant Date
Fair Value
|
|||
December 31, 2016
|
—
|
|
|
—
|
|
|
Granted
|
1,516,241
|
|
|
$
|
14.00
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
December 31, 2017
|
1,516,241
|
|
|
$
|
14.00
|
|
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Pre-tax share-based compensation expense
|
$
|
965
|
|
|
$
|
1,148
|
|
|
$
|
1,271
|
|
Income tax benefit
|
(386
|
)
|
|
(459
|
)
|
|
(508
|
)
|
|||
Total share-based compensation expense, net of tax
|
$
|
579
|
|
|
$
|
689
|
|
|
$
|
763
|
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Current tax provision
|
|
|
|
||||||
Federal
|
$
|
20,829
|
|
$
|
24,508
|
|
$
|
8,716
|
|
State
|
2,445
|
|
5,495
|
|
486
|
|
|||
Foreign
|
10,542
|
|
13,254
|
|
11,146
|
|
|||
Total current provision
|
33,816
|
|
43,257
|
|
20,348
|
|
|||
Deferred tax provision (benefit)
|
|
|
|
||||||
Federal
|
6,283
|
|
186
|
|
(1,167
|
)
|
|||
State
|
2,647
|
|
(134
|
)
|
(221
|
)
|
|||
Foreign
|
(170
|
)
|
(732
|
)
|
(855
|
)
|
|||
Total deferred tax provision (benefit)
|
8,760
|
|
(680
|
)
|
(2,243
|
)
|
|||
Total provision for income taxes
|
$
|
42,576
|
|
$
|
42,577
|
|
$
|
18,105
|
|
Tax Period
|
Payment Due
(in thousands)
|
||
2017
|
$
|
644
|
|
2018
|
644
|
|
|
2019
|
644
|
|
|
2020
|
644
|
|
|
2021
|
644
|
|
|
2022
|
1,208
|
|
|
2023
|
1,610
|
|
|
2024
|
2,013
|
|
|
Total
|
$
|
8,051
|
|
(in thousands)
|
2017
|
2016
|
||||
Deferred tax assets related to:
|
|
|
||||
Loans receivable
|
$
|
1,027
|
|
$
|
8,142
|
|
Accrued expenses and other reserves
|
3,668
|
|
8,630
|
|
||
Compensation accruals
|
3,921
|
|
4,387
|
|
||
Deferred revenue
|
86
|
|
247
|
|
||
State and provincial net operating loss carryforwards
|
822
|
|
516
|
|
||
Foreign net operating loss and capital loss carryforwards
|
15,847
|
|
12,953
|
|
||
Tax credit carryforwards
|
—
|
|
284
|
|
||
Gross deferred tax assets
|
25,371
|
|
35,159
|
|
||
Less: Valuation allowance
|
(17,570
|
)
|
(14,072
|
)
|
||
Net deferred tax assets
|
$
|
7,801
|
|
$
|
21,087
|
|
Deferred tax liabilities related to:
|
|
|
||||
Property and equipment
|
$
|
(2,776
|
)
|
$
|
(5,564
|
)
|
Goodwill and other intangible assets
|
(15,395
|
)
|
(17,015
|
)
|
||
Prepaid expenses and other assets
|
(344
|
)
|
(186
|
)
|
||
Gross deferred tax liabilities
|
(18,515
|
)
|
(22,765
|
)
|
||
Net deferred tax liabilities
|
$
|
(10,714
|
)
|
$
|
(1,678
|
)
|
(in thousands)
|
2017
|
2016
|
||||
Net current deferred tax assets
|
$
|
772
|
|
$
|
12,635
|
|
Net long-term deferred tax liabilities
|
(11,486
|
)
|
(14,313
|
)
|
||
Net deferred tax liabilities
|
$
|
(10,714
|
)
|
$
|
(1,678
|
)
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Income tax expense using the statutory federal rate in effect
|
$
|
32,105
|
|
$
|
37,807
|
|
$
|
12,556
|
|
Tax effect of:
|
|
|
|
||||||
State, local and provincial income taxes, net of federal benefit
|
7,164
|
|
9,045
|
|
4,373
|
|
|||
Tax credits
|
(450
|
)
|
(713
|
)
|
—
|
|
|||
Nondeductible expenses
|
536
|
|
521
|
|
263
|
|
|||
Impact of goodwill impairment charges
|
—
|
|
—
|
|
310
|
|
|||
Nontaxable income
|
—
|
|
—
|
|
—
|
|
|||
Foreign exchange gain/loss on intercompany loan
|
899
|
|
—
|
|
(1,423
|
)
|
|||
Valuation allowance for foreign and state net operating loss and capital loss carryforwards
|
2,393
|
|
3,129
|
|
5,827
|
|
|||
Effects of foreign rates different than U.S. statutory rate
|
(5,370
|
)
|
(7,569
|
)
|
(3,350
|
)
|
|||
Deferred remeasurement
|
886
|
|
205
|
|
62
|
|
|||
Repatriation tax
|
8,100
|
|
—
|
|
—
|
|
|||
Deferred remeasurement due to the TCJA
|
(4,162
|
)
|
—
|
|
—
|
|
|||
Other
|
476
|
|
152
|
|
(513
|
)
|
|||
Total provision for income taxes
|
$
|
42,577
|
|
$
|
42,577
|
|
$
|
18,105
|
|
Effective tax rate
|
46.4
|
%
|
39.4
|
%
|
50.5
|
%
|
|||
Statutory federal tax rate
|
35.0
|
%
|
35.0
|
%
|
35.0
|
%
|
(in thousands)
|
2017
|
2016
|
2015
|
||||||
Balance at the beginning of year
|
$
|
14,072
|
|
$
|
13,097
|
|
$
|
5,447
|
|
Revaluation of valuation allowance due to change in statutory rates
|
—
|
|
(1,234
|
)
|
—
|
|
|||
Increase to balance charged as expense
|
2,393
|
|
3,129
|
|
5,827
|
|
|||
(Decrease) increase to balance charged to Other Comprehensive Income
|
(101
|
)
|
1,627
|
|
2,099
|
|
|||
Effect of foreign currency translation
|
1,209
|
|
(2,547
|
)
|
(276
|
)
|
|||
Balance at end of year
|
$
|
17,573
|
|
$
|
14,072
|
|
$
|
13,097
|
|
|
|
Estimated Fair Value
|
|||||||||||||
(dollars in thousands)
|
Carrying Value December 31,
2017 |
Level 1
|
Level 2
|
Level 3
|
December 31, 2017
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash
|
$
|
162,374
|
|
$
|
162,374
|
|
$
|
—
|
|
$
|
—
|
|
$
|
162,374
|
|
Restricted cash
|
12,117
|
|
12,117
|
|
—
|
|
—
|
|
12,117
|
|
|||||
Loans receivable, net
|
363,269
|
|
—
|
|
—
|
|
363,269
|
|
363,269
|
|
|||||
Investment
|
5,600
|
|
—
|
|
—
|
|
5,600
|
|
5,600
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
||||||||||
Credit services organization guarantee liability
|
$
|
17,795
|
|
$
|
—
|
|
$
|
—
|
|
$
|
17,795
|
|
$
|
17,795
|
|
2017 Senior Secured Notes
|
585,823
|
|
—
|
|
—
|
|
663,475
|
|
663,475
|
|
|||||
Non-Recourse U.S. SPV facility
|
120,402
|
|
—
|
|
—
|
|
124,590
|
|
124,590
|
|
|
|
Estimated Fair Value
|
|||||||||||||
(dollars in thousands)
|
Carrying Value December 31,
2016 |
Level 1
|
Level 2
|
Level 3
|
December 31, 2016
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash
|
$
|
193,525
|
|
$
|
193,525
|
|
$
|
—
|
|
$
|
—
|
|
$
|
193,525
|
|
Restricted cash
|
7,828
|
|
7,828
|
|
—
|
|
—
|
|
7,828
|
|
|||||
Loans receivable, net
|
247,004
|
|
—
|
|
—
|
|
247,004
|
|
247,004
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
||||||||||
Credit services organization guarantee liability
|
$
|
17,052
|
|
$
|
—
|
|
$
|
—
|
|
$
|
17,052
|
|
$
|
17,052
|
|
May 2011 Senior Secured Notes
|
223,164
|
|
216,449
|
|
—
|
|
—
|
|
216,449
|
|
|||||
May 2012 Senior Secured Notes
|
89,734
|
|
86,625
|
|
—
|
|
—
|
|
86,625
|
|
|||||
February 2013 Senior Secured Notes
|
101,184
|
|
96,250
|
|
—
|
|
—
|
|
96,250
|
|
|||||
February 2013 Cash Pay Notes
|
124,365
|
|
118,301
|
|
—
|
|
—
|
|
118,301
|
|
|||||
Non-Recourse U.S. SPV facility
|
63,054
|
|
—
|
|
—
|
|
68,311
|
|
68,311
|
|
|||||
ABL facility
|
23,406
|
|
—
|
|
—
|
|
23,406
|
|
23,406
|
|
|
Year Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Cash paid for:
|
|
|
|
|
|
||||||
Interest
|
$
|
60,054
|
|
|
$
|
61,019
|
|
|
$
|
61,802
|
|
Income taxes
|
26,863
|
|
|
43,650
|
|
|
26,001
|
|
|||
Non-cash investing activities:
|
|
|
|
|
|
||||||
Payment for repurchase of May 2011 Senior Secured Notes accrued in accounts payable
|
—
|
|
|
18,939
|
|
|
—
|
|
|||
Property and equipment accrued in accounts payable
|
1,631
|
|
|
3,338
|
|
|
4,758
|
|
|
Year Ended December 31,
|
||||||||||
(dollars in thousands)
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues by segment:
|
|
|
|
|
|
||||||
U.S.
|
$
|
737,729
|
|
|
$
|
606,798
|
|
|
$
|
573,664
|
|
Canada
|
186,408
|
|
|
188,078
|
|
|
184,859
|
|
|||
U.K.
|
39,496
|
|
|
33,720
|
|
|
54,608
|
|
|||
Consolidated revenue
|
$
|
963,633
|
|
|
$
|
828,596
|
|
|
$
|
813,131
|
|
Gross margin by segment:
|
|
|
|
|
|
||||||
U.S.
|
$
|
267,215
|
|
|
$
|
204,328
|
|
|
$
|
151,628
|
|
Canada
|
67,950
|
|
|
78,639
|
|
|
77,469
|
|
|||
U.K.
|
14,072
|
|
|
10,289
|
|
|
9,504
|
|
|||
Consolidated gross margin
|
$
|
349,237
|
|
|
$
|
293,256
|
|
|
$
|
238,601
|
|
Segment operating income (loss):
|
|
|
|
|
|
||||||
U.S.
|
$
|
51,459
|
|
|
$
|
56,778
|
|
|
$
|
4,200
|
|
Canada
|
50,797
|
|
|
60,482
|
|
|
56,208
|
|
|||
U.K.
|
(10,527
|
)
|
|
(9,239
|
)
|
|
(24,534
|
)
|
|||
Consolidated operating profit
|
$
|
91,729
|
|
|
$
|
108,021
|
|
|
$
|
35,874
|
|
Expenditures for long-lived assets by segment:
|
|
|
|
|
|
||||||
U.S.
|
$
|
7,405
|
|
|
$
|
10,125
|
|
|
$
|
8,642
|
|
Canada
|
1,309
|
|
|
5,872
|
|
|
11,062
|
|
|||
U.K.
|
1,043
|
|
|
29
|
|
|
128
|
|
|||
Consolidated expenditures for long-lived assets
|
$
|
9,757
|
|
|
$
|
16,026
|
|
|
$
|
19,832
|
|
(dollars in thousands)
|
December 31,
2017 |
|
December 31,
2016 |
||||
U.S.
|
$
|
308,696
|
|
|
$
|
206,215
|
|
Canada
|
104,551
|
|
|
66,988
|
|
||
U.K.
|
19,590
|
|
|
12,993
|
|
||
Total gross loans receivable
|
$
|
432,837
|
|
|
$
|
286,196
|
|
(dollars in thousands)
|
December 31, 2017
|
|
December 31, 2016
|
||||
U.S.
|
$
|
52,627
|
|
|
$
|
58,733
|
|
Canada
|
32,924
|
|
|
34,310
|
|
||
U.K.
|
1,535
|
|
|
2,853
|
|
||
Total
|
$
|
87,086
|
|
|
$
|
95,896
|
|
|
Third Party
|
|
Related Party
|
|
Total
|
||||||
2018
|
$
|
22,920
|
|
|
$
|
3,396
|
|
|
$
|
26,316
|
|
2019
|
20,046
|
|
|
3,241
|
|
|
23,286
|
|
|||
2020
|
16,335
|
|
|
3,242
|
|
|
19,578
|
|
|||
2021
|
13,212
|
|
|
3,278
|
|
|
16,489
|
|
|||
2022
|
10,665
|
|
|
3,266
|
|
|
13,931
|
|
|||
Thereafter
|
18,532
|
|
|
784
|
|
|
19,316
|
|
|||
Total
|
$
|
101,709
|
|
|
$
|
17,207
|
|
|
$
|
118,916
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Basic:
(1)
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
49,153
|
|
|
$
|
65,444
|
|
|
$
|
17,769
|
|
Weight average common shares
|
|
38,351
|
|
|
37,908
|
|
|
37,908
|
|
|||
Basic earnings per share
|
|
$
|
1.28
|
|
|
$
|
1.73
|
|
|
$
|
0.47
|
|
(1) The per share information has been adjusted to give effect to the 36-to-1 stock split of our common stock which was effective December 6, 2017.
|
Year ended December 31, 2017
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Fiscal Year
|
||||||||||
Net Revenue
|
$
|
162,844
|
|
|
$
|
151,498
|
|
|
$
|
155,778
|
|
|
$
|
167,287
|
|
|
$
|
637,407
|
|
Gross Margin
|
94,905
|
|
|
82,002
|
|
|
80,166
|
|
|
92,164
|
|
|
349,237
|
|
|||||
Net income before income taxes
|
26,088
|
|
|
26,961
|
|
|
19,682
|
|
|
18,998
|
|
|
91,729
|
|
|||||
Net Income
|
16,638
|
|
|
16,342
|
|
|
9,762
|
|
|
6,411
|
|
|
49,153
|
|
|||||
Net Income per share - Basic
|
$
|
0.44
|
|
|
$
|
0.43
|
|
|
$
|
0.26
|
|
|
$
|
0.15
|
|
|
$
|
1.28
|
|
Net Income per share - Diluted
|
$
|
0.43
|
|
|
$
|
0.42
|
|
|
$
|
0.25
|
|
|
$
|
0.15
|
|
|
$
|
1.25
|
|
Year ended December 31, 2016
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
|
Fiscal Year
|
||||||||||
Net Revenue
|
$
|
160,212
|
|
|
$
|
136,278
|
|
|
$
|
135,900
|
|
|
$
|
137,917
|
|
|
$
|
570,307
|
|
Gross Margin
|
94,173
|
|
|
68,851
|
|
|
67,035
|
|
|
63,197
|
|
|
293,256
|
|
|||||
Net income before income taxes
|
44,006
|
|
|
21,034
|
|
|
25,860
|
|
|
17,121
|
|
|
108,021
|
|
|||||
Net Income
|
26,910
|
|
|
13,172
|
|
|
15,777
|
|
|
9,585
|
|
|
65,444
|
|
|||||
Net Income per share - Basic
|
$
|
0.71
|
|
|
$
|
0.35
|
|
|
$
|
0.42
|
|
|
$
|
0.25
|
|
|
$
|
1.73
|
|
Net Income per share - Diluted
|
$
|
0.70
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
|
$
|
0.24
|
|
|
$
|
1.69
|
|
(i)
|
CFTC as the issuer of the 12.00% senior secured notes;
|
(ii)
|
CURO Intermediate as the issuer of the 10.75% senior secured notes that were redeemed in February 2017;
|
(iii)
|
Our subsidiary guarantors, which are comprised of our domestic subsidiaries, excluding CFTC and CURO Intermediate (the “Subsidiary Guarantors”), on a consolidated basis, which are 100% owned by CURO, and which are guarantors of the 12.00% senior secured notes issued in February 2017 and the 10.75% senior secured notes redeemed in February 2017;
|
(iv)
|
Our other subsidiaries on a consolidated basis, which are not guarantors of the 12.00% senior secured notes or the 10.75% senior secured notes (the “Subsidiary Non-Guarantors”)
|
(v)
|
Consolidating and eliminating entries representing adjustments to:
|
a.
|
eliminate intercompany transactions between or among us, the Subsidiary Guarantors and the Subsidiary Non-Guarantors; and
|
b.
|
eliminate the investments in our subsidiaries;
|
(vi)
|
Us and our subsidiaries on a consolidated basis.
|
|
December 31, 2017
|
|||||||||||||||||||||||||||||
(dollars in thousands)
|
CFTC
|
CURO Intermediate
|
Subsidiary
Guarantors
|
Subsidiary
Non-Guarantors
|
SPV Subs
|
Eliminations
|
Consolidated
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash
|
$
|
—
|
|
$
|
—
|
|
$
|
117,379
|
|
$
|
44,915
|
|
$
|
—
|
|
$
|
—
|
|
$
|
162,294
|
|
$
|
80
|
|
$
|
—
|
|
$
|
162,374
|
|
Restricted cash
|
—
|
|
—
|
|
1,677
|
|
3,569
|
|
6,871
|
|
—
|
|
12,117
|
|
—
|
|
—
|
|
$
|
12,117
|
|
|||||||||
Loans receivable, net
|
—
|
|
—
|
|
84,912
|
|
110,651
|
|
167,706
|
|
—
|
|
363,269
|
|
—
|
|
—
|
|
$
|
363,269
|
|
|||||||||
Deferred income taxes
|
—
|
|
2,154
|
|
(4,646
|
)
|
3,502
|
|
—
|
|
—
|
|
1,010
|
|
(238
|
)
|
—
|
|
$
|
772
|
|
|||||||||
Income taxes receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,455
|
|
—
|
|
$
|
3,455
|
|
|||||||||
Prepaid expenses and other
|
—
|
|
—
|
|
38,277
|
|
3,353
|
|
—
|
|
—
|
|
41,630
|
|
882
|
|
—
|
|
$
|
42,512
|
|
|||||||||
Property and equipment, net
|
—
|
|
—
|
|
52,627
|
|
34,459
|
|
—
|
|
—
|
|
87,086
|
|
—
|
|
—
|
|
$
|
87,086
|
|
|||||||||
Goodwill
|
—
|
|
—
|
|
91,131
|
|
54,476
|
|
—
|
|
—
|
|
145,607
|
|
—
|
|
—
|
|
$
|
145,607
|
|
|||||||||
Other intangibles, net
|
16
|
|
—
|
|
5,418
|
|
27,335
|
|
—
|
|
—
|
|
32,769
|
|
—
|
|
—
|
|
$
|
32,769
|
|
|||||||||
Intercompany receivable
|
—
|
|
37,877
|
|
33,062
|
|
(30,588
|
)
|
—
|
|
(40,351
|
)
|
—
|
|
—
|
|
—
|
|
$
|
—
|
|
|||||||||
Investment in subsidiaries
|
(14,504
|
)
|
899,371
|
|
—
|
|
—
|
|
—
|
|
(884,867
|
)
|
—
|
|
(84,889
|
)
|
84,889
|
|
$
|
—
|
|
|||||||||
Other
|
5,713
|
|
—
|
|
3,017
|
|
1,040
|
|
—
|
|
—
|
|
9,770
|
|
—
|
|
—
|
|
$
|
9,770
|
|
|||||||||
Total assets
|
$
|
(8,775
|
)
|
$
|
939,402
|
|
$
|
422,854
|
|
$
|
252,712
|
|
$
|
174,577
|
|
$
|
(925,218
|
)
|
$
|
855,552
|
|
$
|
(80,710
|
)
|
$
|
84,889
|
|
$
|
859,731
|
|
Liabilities and Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Accounts payable and accrued liabilities
|
$
|
2,606
|
|
$
|
13
|
|
$
|
35,753
|
|
$
|
15,954
|
|
$
|
12
|
|
$
|
—
|
|
$
|
54,338
|
|
$
|
1,454
|
|
$
|
—
|
|
$
|
55,792
|
|
Deferred revenue
|
—
|
|
—
|
|
6,529
|
|
5,455
|
|
—
|
|
—
|
|
11,984
|
|
—
|
|
—
|
|
11,984
|
|
||||||||||
Income taxes payable
|
(49,738
|
)
|
70,231
|
|
(18,450
|
)
|
2,077
|
|
—
|
|
—
|
|
4,120
|
|
—
|
|
—
|
|
4,120
|
|
||||||||||
Accrued interest
|
24,201
|
|
—
|
|
—
|
|
—
|
|
1,266
|
|
—
|
|
25,467
|
|
—
|
|
—
|
|
25,467
|
|
||||||||||
Payable to CURO
|
184,348
|
|
—
|
|
(95,048
|
)
|
—
|
|
—
|
|
—
|
|
89,300
|
|
(89,300
|
)
|
—
|
|
—
|
|
||||||||||
CSO guarantee liability
|
—
|
|
—
|
|
17,795
|
|
—
|
|
—
|
|
—
|
|
17,795
|
|
—
|
|
—
|
|
17,795
|
|
||||||||||
Deferred rent
|
—
|
|
—
|
|
9,896
|
|
1,681
|
|
—
|
|
—
|
|
11,577
|
|
—
|
|
—
|
|
11,577
|
|
||||||||||
Long-term debt (excluding current maturities)
|
585,823
|
|
—
|
|
—
|
|
—
|
|
120,402
|
|
—
|
|
706,225
|
|
—
|
|
—
|
|
706,225
|
|
||||||||||
Subordinated shareholder debt
|
—
|
|
—
|
|
—
|
|
2,381
|
|
—
|
|
—
|
|
2,381
|
|
—
|
|
—
|
|
2,381
|
|
||||||||||
Intercompany payable
|
(668,536
|
)
|
876,869
|
|
(124,332
|
)
|
40,351
|
|
(84,001
|
)
|
(40,351
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Other long-term liabilities
|
—
|
|
—
|
|
3,969
|
|
1,799
|
|
—
|
|
—
|
|
5,768
|
|
—
|
|
—
|
|
5,768
|
|
||||||||||
Deferred tax liabilities
|
(2,590
|
)
|
6,793
|
|
(143
|
)
|
7,426
|
|
—
|
|
—
|
|
11,486
|
|
—
|
|
—
|
|
11,486
|
|
||||||||||
Total liabilities
|
76,114
|
|
953,906
|
|
(164,031
|
)
|
77,124
|
|
37,679
|
|
(40,351
|
)
|
940,441
|
|
(87,846
|
)
|
—
|
|
852,595
|
|
||||||||||
Stockholders' equity
|
(84,889
|
)
|
(14,504
|
)
|
586,885
|
|
175,588
|
|
136,898
|
|
(884,867
|
)
|
(84,889
|
)
|
7,136
|
|
84,889
|
|
7,136
|
|
||||||||||
Total liabilities and stockholders' equity
|
$
|
(8,775
|
)
|
$
|
939,402
|
|
$
|
422,854
|
|
$
|
252,712
|
|
$
|
174,577
|
|
$
|
(925,218
|
)
|
$
|
855,552
|
|
$
|
(80,710
|
)
|
$
|
84,889
|
|
$
|
859,731
|
|
|
December 31, 2016
|
|||||||||||||||||||||||||||||
(dollars in thousands)
|
CFTC
|
CURO Intermediate
|
Subsidiary
Guarantors |
Subsidiary
Non-Guarantors |
SPV Subs
|
Eliminations
|
Consolidated
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Cash
|
$
|
—
|
|
$
|
1,954
|
|
$
|
127,712
|
|
$
|
63,779
|
|
$
|
—
|
|
$
|
—
|
|
$
|
193,445
|
|
$
|
80
|
|
$
|
—
|
|
$
|
193,525
|
|
Restricted cash
|
—
|
|
459
|
|
1,223
|
|
3,376
|
|
2,770
|
|
—
|
|
7,828
|
|
—
|
|
—
|
|
7,828
|
|
||||||||||
Loans receivable, net
|
—
|
|
—
|
|
67,558
|
|
71,381
|
|
108,065
|
|
—
|
|
247,004
|
|
—
|
|
—
|
|
247,004
|
|
||||||||||
Deferred income taxes
|
2,833
|
|
8,802
|
|
2,925
|
|
2,768
|
|
—
|
|
(4,693
|
)
|
12,635
|
|
—
|
|
—
|
|
12,635
|
|
||||||||||
Income taxes receivable
|
34,667
|
|
—
|
|
—
|
|
6,151
|
|
—
|
|
(37,710
|
)
|
3,108
|
|
6,270
|
|
—
|
|
9,378
|
|
||||||||||
Prepaid expenses and other
|
—
|
|
—
|
|
32,964
|
|
4,205
|
|
—
|
|
—
|
|
37,169
|
|
4,735
|
|
(2,656
|
)
|
39,248
|
|
||||||||||
Property and equipment, net
|
—
|
|
—
|
|
58,733
|
|
37,163
|
|
—
|
|
—
|
|
95,896
|
|
—
|
|
—
|
|
95,896
|
|
||||||||||
Goodwill
|
—
|
|
—
|
|
91,131
|
|
50,423
|
|
—
|
|
—
|
|
141,554
|
|
—
|
|
—
|
|
141,554
|
|
||||||||||
Other intangibles, net
|
19
|
|
—
|
|
5,616
|
|
25,266
|
|
—
|
|
—
|
|
30,901
|
|
—
|
|
—
|
|
30,901
|
|
||||||||||
Intercompany receivable
|
—
|
|
55,444
|
|
383,887
|
|
—
|
|
—
|
|
(439,331
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Investment in subsidiaries
|
187,473
|
|
830,443
|
|
—
|
|
—
|
|
—
|
|
(1,017,916
|
)
|
—
|
|
155,964
|
|
(155,964
|
)
|
—
|
|
||||||||||
Other
|
—
|
|
|
1,745
|
|
1,084
|
|
—
|
|
—
|
|
2,829
|
|
|
|
—
|
|
2,829
|
|
|||||||||||
Total assets
|
$
|
224,992
|
|
$
|
897,102
|
|
$
|
773,494
|
|
$
|
265,596
|
|
$
|
110,835
|
|
$
|
(1,499,650
|
)
|
$
|
772,369
|
|
$
|
167,049
|
|
$
|
(158,620
|
)
|
$
|
780,798
|
|
Liabilities and Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Accounts payable and accrued liabilities
|
$
|
253
|
|
$
|
3
|
|
$
|
32,528
|
|
$
|
9,900
|
|
$
|
—
|
|
$
|
—
|
|
$
|
42,684
|
|
$
|
(21
|
)
|
$
|
—
|
|
$
|
42,663
|
|
Deferred revenue
|
—
|
|
—
|
|
6,520
|
|
5,822
|
|
—
|
|
—
|
|
12,342
|
|
|
|
—
|
|
12,342
|
|
||||||||||
Income taxes payable
|
—
|
|
23,087
|
|
12,952
|
|
3,043
|
|
—
|
|
(37,710
|
)
|
1,372
|
|
|
|
—
|
|
1,372
|
|
||||||||||
Current maturities of long-term debt
|
—
|
|
23,406
|
|
—
|
|
—
|
|
—
|
|
—
|
|
23,406
|
|
124,365
|
|
—
|
|
147,771
|
|
||||||||||
Accrued interest
|
—
|
|
5,575
|
|
—
|
|
—
|
|
775
|
|
—
|
|
6,350
|
|
1,833
|
|
—
|
|
8,183
|
|
||||||||||
Payable to CURO
|
2,656
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,656
|
|
|
|
(2,656
|
)
|
—
|
|
||||||||||
CSO guarantee liability
|
—
|
|
—
|
|
17,052
|
|
—
|
|
—
|
|
—
|
|
17,052
|
|
|
|
—
|
|
17,052
|
|
||||||||||
Deferred rent
|
—
|
|
—
|
|
10,006
|
|
1,862
|
|
—
|
|
—
|
|
11,868
|
|
|
|
—
|
|
11,868
|
|
||||||||||
Long-term debt (excluding current maturities)
|
—
|
|
414,082
|
|
—
|
|
—
|
|
63,054
|
|
—
|
|
477,136
|
|
|
|
—
|
|
477,136
|
|
||||||||||
Subordinated shareholder debt
|
—
|
|
—
|
|
—
|
|
2,227
|
|
—
|
|
—
|
|
2,227
|
|
|
|
—
|
|
2,227
|
|
||||||||||
Intercompany payable
|
65,822
|
|
233,537
|
|
—
|
|
85,346
|
|
54,626
|
|
(439,331
|
)
|
—
|
|
|
|
—
|
|
—
|
|
||||||||||
Other long-term liabilities
|
299
|
|
—
|
|
1,741
|
|
2,976
|
|
—
|
|
—
|
|
5,016
|
|
|
|
—
|
|
5,016
|
|
||||||||||
Deferred tax liabilities
|
(2
|
)
|
9,914
|
|
2,495
|
|
6,582
|
|
—
|
|
(4,693
|
)
|
14,296
|
|
17
|
|
—
|
|
14,313
|
|
||||||||||
Total liabilities
|
69,028
|
|
709,604
|
|
83,294
|
|
117,758
|
|
118,455
|
|
(481,734
|
)
|
616,405
|
|
126,194
|
|
(2,656
|
)
|
739,943
|
|
||||||||||
Stockholders' equity
|
155,964
|
|
187,498
|
|
690,200
|
|
147,838
|
|
(7,620
|
)
|
(1,017,916
|
)
|
155,964
|
|
40,855
|
|
(155,964
|
)
|
40,855
|
|
||||||||||
Total liabilities and stockholders' equity
|
$
|
224,992
|
|
$
|
897,102
|
|
$
|
773,494
|
|
$
|
265,596
|
|
$
|
110,835
|
|
$
|
(1,499,650
|
)
|
$
|
772,369
|
|
$
|
167,049
|
|
$
|
(158,620
|
)
|
$
|
780,798
|
|
|
Year Ended December 31, 2017
|
|||||||||||||||||||||||||||||
(dollars in thousands)
|
CFTC
|
CURO Intermediate
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
SPV Subs
|
Eliminations
|
CFTC
Consolidated
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||||||||||
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
465,170
|
|
$
|
225,904
|
|
$
|
272,559
|
|
$
|
—
|
|
$
|
963,633
|
|
$
|
—
|
|
$
|
—
|
|
$
|
963,633
|
|
Provision for losses
|
—
|
|
—
|
|
164,068
|
|
58,735
|
|
103,423
|
|
—
|
|
326,226
|
|
—
|
|
—
|
|
326,226
|
|
||||||||||
Net revenue
|
—
|
|
—
|
|
301,102
|
|
167,169
|
|
169,136
|
|
—
|
|
637,407
|
|
—
|
|
—
|
|
637,407
|
|
||||||||||
Cost of providing services:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Salaries and benefits
|
—
|
|
—
|
|
69,927
|
|
35,269
|
|
—
|
|
—
|
|
105,196
|
|
—
|
|
—
|
|
105,196
|
|
||||||||||
Occupancy
|
—
|
|
—
|
|
31,393
|
|
23,219
|
|
—
|
|
—
|
|
54,612
|
|
—
|
|
—
|
|
54,612
|
|
||||||||||
Office
|
—
|
|
—
|
|
16,884
|
|
4,518
|
|
—
|
|
—
|
|
21,402
|
|
—
|
|
—
|
|
21,402
|
|
||||||||||
Other store operating expenses
|
—
|
|
—
|
|
48,163
|
|
6,231
|
|
508
|
|
—
|
|
54,902
|
|
—
|
|
—
|
|
54,902
|
|
||||||||||
Advertising
|
—
|
|
—
|
|
36,148
|
|
15,910
|
|
—
|
|
—
|
|
52,058
|
|
—
|
|
—
|
|
52,058
|
|
||||||||||
Total cost of providing services
|
—
|
|
—
|
|
202,515
|
|
85,147
|
|
508
|
|
—
|
|
288,170
|
|
—
|
|
—
|
|
288,170
|
|
||||||||||
Gross Margin
|
—
|
|
—
|
|
98,587
|
|
82,022
|
|
168,628
|
|
—
|
|
349,237
|
|
—
|
|
—
|
|
349,237
|
|
||||||||||
Operating (income) expense:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate, district and other
|
7,549
|
|
(25
|
)
|
108,901
|
|
34,170
|
|
451
|
|
—
|
|
151,046
|
|
3,927
|
|
—
|
|
154,973
|
|
||||||||||
Intercompany management fee
|
—
|
|
—
|
|
(23,741
|
)
|
13,970
|
|
9,771
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Interest expense
|
55,809
|
|
9,613
|
|
(124
|
)
|
189
|
|
13,887
|
|
—
|
|
79,374
|
|
3,310
|
|
—
|
|
82,684
|
|
||||||||||
Loss on extinguishment of debt
|
—
|
|
11,884
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,884
|
|
574
|
|
—
|
|
12,458
|
|
||||||||||
Restructuring costs
|
—
|
|
—
|
|
—
|
|
7,393
|
|
—
|
|
—
|
|
7,393
|
|
—
|
|
—
|
|
7,393
|
|
||||||||||
Intercompany interest (income) expense
|
—
|
|
(4,216
|
)
|
(678
|
)
|
4,894
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Total operating expense
|
63,358
|
|
17,256
|
|
84,358
|
|
60,616
|
|
24,109
|
|
—
|
|
249,697
|
|
7,811
|
|
—
|
|
257,508
|
|
||||||||||
Net income (loss) before income taxes
|
(63,358
|
)
|
(17,256
|
)
|
14,229
|
|
21,406
|
|
144,519
|
|
—
|
|
99,540
|
|
(7,811
|
)
|
—
|
|
91,729
|
|
||||||||||
Provision for income tax expense (benefit)
|
(24,077
|
)
|
73,218
|
|
(13,752
|
)
|
10,372
|
|
—
|
|
—
|
|
45,761
|
|
(3,185
|
)
|
—
|
|
42,576
|
|
||||||||||
Net income (loss)
|
(39,281
|
)
|
(90,474
|
)
|
27,981
|
|
11,034
|
|
144,519
|
|
—
|
|
53,779
|
|
(4,626
|
)
|
—
|
|
49,153
|
|
||||||||||
Equity in net income (loss) of subsidiaries:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
CFTC
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
53,779
|
|
(53,779
|
)
|
—
|
|
||||||||||
CURO Intermediate
|
(90,474
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
90,474
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Guarantor Subsidiaries
|
27,981
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(27,981
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Non-Guarantor Subsidiaries
|
11,034
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(11,034
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
SPV Subs
|
144,519
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(144,519
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Net income (loss) attributable to CURO
|
$
|
53,779
|
|
$
|
(90,474
|
)
|
$
|
27,981
|
|
$
|
11,034
|
|
$
|
144,519
|
|
$
|
(93,060
|
)
|
$
|
53,779
|
|
$
|
49,153
|
|
$
|
(53,779
|
)
|
$
|
49,153
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||||||||||||||
(dollars in thousands)
|
CFTC
|
CURO Intermediate
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
SPV Subs
|
Eliminations
|
CFTC
Consolidated
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||||||||||
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
581,820
|
|
$
|
221,799
|
|
$
|
24,977
|
|
$
|
—
|
|
$
|
828,596
|
|
$
|
—
|
|
$
|
—
|
|
$
|
828,596
|
|
Provision for losses
|
—
|
|
—
|
|
176,546
|
|
50,540
|
|
31,203
|
|
—
|
|
258,289
|
|
—
|
|
—
|
|
258,289
|
|
||||||||||
Net revenue
|
—
|
|
—
|
|
405,274
|
|
171,259
|
|
(6,226
|
)
|
—
|
|
570,307
|
|
—
|
|
—
|
|
570,307
|
|
||||||||||
Cost of providing services:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Salaries and benefits
|
—
|
|
—
|
|
69,549
|
|
34,992
|
|
—
|
|
—
|
|
104,541
|
|
—
|
|
—
|
|
104,541
|
|
||||||||||
Occupancy
|
—
|
|
—
|
|
31,451
|
|
23,058
|
|
—
|
|
—
|
|
54,509
|
|
—
|
|
—
|
|
54,509
|
|
||||||||||
Office
|
—
|
|
—
|
|
15,883
|
|
4,580
|
|
—
|
|
—
|
|
20,463
|
|
—
|
|
—
|
|
20,463
|
|
||||||||||
Other store operating expenses
|
—
|
|
—
|
|
47,491
|
|
6,120
|
|
6
|
|
—
|
|
53,617
|
|
—
|
|
—
|
|
53,617
|
|
||||||||||
Advertising
|
—
|
|
—
|
|
30,340
|
|
13,581
|
|
—
|
|
—
|
|
43,921
|
|
—
|
|
—
|
|
43,921
|
|
||||||||||
Total cost of providing services
|
—
|
|
—
|
|
194,714
|
|
82,331
|
|
6
|
|
—
|
|
277,051
|
|
—
|
|
—
|
|
277,051
|
|
||||||||||
Gross Margin
|
—
|
|
—
|
|
210,560
|
|
88,928
|
|
(6,232
|
)
|
—
|
|
293,256
|
|
—
|
|
—
|
|
293,256
|
|
||||||||||
Operating (income) expense:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Corporate, district and other
|
1,898
|
|
338
|
|
85,452
|
|
36,140
|
|
—
|
|
—
|
|
123,828
|
|
446
|
|
—
|
|
124,274
|
|
||||||||||
Intercompany management fee
|
—
|
|
—
|
|
(12,632
|
)
|
12,632
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
—
|
|
||||||||||
Interest expense
|
—
|
|
47,684
|
|
2
|
|
58
|
|
864
|
|
—
|
|
48,608
|
|
15,726
|
|
—
|
|
64,334
|
|
||||||||||
Loss on extinguishment of debt
|
—
|
|
(4,961
|
)
|
(1,319
|
)
|
5,741
|
|
539
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Restructuring costs
|
—
|
|
(6,991
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(6,991
|
)
|
—
|
|
—
|
|
(6,991
|
)
|
||||||||||
Intercompany interest (income) expense
|
—
|
|
—
|
|
1,726
|
|
1,892
|
|
—
|
|
—
|
|
3,618
|
|
—
|
|
—
|
|
3,618
|
|
||||||||||
Total operating expense
|
1,898
|
|
36,070
|
|
73,229
|
|
56,463
|
|
1,403
|
|
—
|
|
169,063
|
|
16,172
|
|
—
|
|
185,235
|
|
||||||||||
Net income (loss) before income taxes
|
(1,898
|
)
|
(36,070
|
)
|
137,331
|
|
32,465
|
|
(7,635
|
)
|
—
|
|
124,193
|
|
(16,172
|
)
|
—
|
|
108,021
|
|
||||||||||
Provision for income tax expense (benefit)
|
(682
|
)
|
22,788
|
|
14,543
|
|
12,522
|
|
—
|
|
—
|
|
49,171
|
|
(6,594
|
)
|
—
|
|
42,577
|
|
||||||||||
Net income (loss)
|
(1,216
|
)
|
(58,858
|
)
|
122,788
|
|
19,943
|
|
(7,635
|
)
|
—
|
|
75,022
|
|
(9,578
|
)
|
—
|
|
65,444
|
|
||||||||||
Equity in net income (loss) of subsidiaries:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
CFTC
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
75,022
|
|
(75,022
|
)
|
—
|
|
||||||||||
CURO Intermediate
|
(58,858
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
58,858
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Guarantor Subsidiaries
|
122,788
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(122,788
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Non-Guarantor Subsidiaries
|
19,943
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(19,943
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
SPV Subs
|
(7,635
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
7,635
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||||||
Net income (loss) attributable to CURO
|
$
|
75,022
|
|
$
|
(58,858
|
)
|
$
|
122,788
|
|
$
|
19,943
|
|
$
|
(7,635
|
)
|
$
|
(76,238
|
)
|
$
|
75,022
|
|
$
|
65,444
|
|
$
|
(75,022
|
)
|
$
|
65,444
|
|
|
Year Ended December 31, 2015
|
||||||||||||||||||||||||||
(dollars in thousands)
|
CFTC
|
CURO Intermediate
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
Eliminations
|
CFTC
Consolidated
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||||||||
Revenue
|
$
|
—
|
|
$
|
—
|
|
$
|
573,664
|
|
$
|
239,467
|
|
$
|
—
|
|
$
|
813,131
|
|
$
|
—
|
|
$
|
—
|
|
$
|
813,131
|
|
Provision for losses
|
—
|
|
—
|
|
222,868
|
|
58,342
|
|
—
|
|
281,210
|
|
—
|
|
—
|
|
281,210
|
|
|||||||||
Net revenue
|
—
|
|
—
|
|
350,796
|
|
181,125
|
|
—
|
|
531,921
|
|
—
|
|
—
|
|
531,921
|
|
|||||||||
Cost of providing services:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Salaries and benefits
|
—
|
|
—
|
|
68,928
|
|
38,131
|
|
—
|
|
107,059
|
|
—
|
|
—
|
|
107,059
|
|
|||||||||
Occupancy
|
—
|
|
—
|
|
30,504
|
|
22,784
|
|
—
|
|
53,288
|
|
—
|
|
—
|
|
53,288
|
|
|||||||||
Office
|
—
|
|
—
|
|
15,089
|
|
4,840
|
|
—
|
|
19,929
|
|
—
|
|
—
|
|
19,929
|
|
|||||||||
Other store operating expenses
|
—
|
|
—
|
|
41,661
|
|
5,719
|
|
—
|
|
47,380
|
|
—
|
|
—
|
|
47,380
|
|
|||||||||
Advertising
|
—
|
|
—
|
|
42,986
|
|
22,678
|
|
—
|
|
65,664
|
|
—
|
|
—
|
|
65,664
|
|
|||||||||
Total cost of providing services
|
—
|
|
—
|
|
199,168
|
|
94,152
|
|
—
|
|
293,320
|
|
—
|
|
—
|
|
293,320
|
|
|||||||||
Gross Margin
|
—
|
|
—
|
|
151,628
|
|
86,973
|
|
—
|
|
238,601
|
|
—
|
|
—
|
|
238,601
|
|
|||||||||
Operating (income) expense:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Corporate, district and other
|
2,035
|
|
178
|
|
79,155
|
|
48,017
|
|
—
|
|
129,385
|
|
1,149
|
|
—
|
|
130,534
|
|
|||||||||
Intercompany management fee
|
—
|
|
1
|
|
(13,064
|
)
|
13,063
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Interest expense
|
—
|
|
49,167
|
|
17
|
|
111
|
|
—
|
|
49,295
|
|
15,725
|
|
—
|
|
65,020
|
|
|||||||||
Intercompany interest (income) expense
|
—
|
|
(5,583
|
)
|
(265
|
)
|
5,848
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Goodwill and intangible asset impairment charges
|
—
|
|
—
|
|
—
|
|
2,882
|
|
—
|
|
2,882
|
|
—
|
|
—
|
|
2,882
|
|
|||||||||
Restructuring costs
|
—
|
|
—
|
|
—
|
|
4,291
|
|
—
|
|
4,291
|
|
—
|
|
—
|
|
4,291
|
|
|||||||||
Total operating expense
|
2,035
|
|
43,763
|
|
65,843
|
|
74,212
|
|
—
|
|
185,853
|
|
16,874
|
|
—
|
|
202,727
|
|
|||||||||
Net income (loss) before income taxes
|
(2,035
|
)
|
(43,763
|
)
|
85,785
|
|
12,761
|
|
—
|
|
52,748
|
|
(16,874
|
)
|
—
|
|
35,874
|
|
|||||||||
Provision for income tax (benefit) expense
|
(673
|
)
|
10,704
|
|
4,164
|
|
10,291
|
|
—
|
|
24,486
|
|
(6,381
|
)
|
—
|
|
18,105
|
|
|||||||||
Net income (loss)
|
(1,362
|
)
|
(54,467
|
)
|
81,621
|
|
2,470
|
|
—
|
|
28,262
|
|
(10,493
|
)
|
—
|
|
17,769
|
|
|||||||||
Equity in net income (loss) of subsidiaries:
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
CFTC
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
28,262
|
|
(28,262
|
)
|
—
|
|
|||||||||
CURO Intermediate
|
(54,467
|
)
|
—
|
|
—
|
|
—
|
|
54,467
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Guarantor Subsidiaries
|
81,621
|
|
—
|
|
—
|
|
—
|
|
(81,621
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Non-Guarantor Subsidiaries
|
2,470
|
|
—
|
|
—
|
|
—
|
|
(2,470
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||||
Net income (loss) attributable to CURO
|
$
|
28,262
|
|
$
|
(54,467
|
)
|
$
|
81,621
|
|
$
|
2,470
|
|
$
|
(29,624
|
)
|
$
|
28,262
|
|
$
|
17,769
|
|
$
|
(28,262
|
)
|
$
|
17,769
|
|
|
Year Ended December 31, 2017
|
|||||||||||||||||||||||||||||
(dollars in thousands)
|
CFTC
|
CURO Intermediate
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
SPV Subs
|
Eliminations
|
CFTC
Consolidated |
CURO
|
Eliminations
|
CURO Consolidated
|
||||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net cash provided (used)
|
$
|
(264,670
|
)
|
$
|
447,027
|
|
$
|
(2,472
|
)
|
$
|
(20,583
|
)
|
$
|
(52,178
|
)
|
$
|
(3,514
|
)
|
103,610
|
|
(86,200
|
)
|
|
|
17,410
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Purchase of property, equipment and software
|
—
|
|
—
|
|
(7,406
|
)
|
(2,351
|
)
|
—
|
|
—
|
|
(9,757
|
)
|
—
|
|
—
|
|
(9,757
|
)
|
||||||||||
Cash paid for Zibby Investment
|
(5,600
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,600
|
)
|
—
|
|
—
|
|
(5,600
|
)
|
||||||||||
Change in restricted cash
|
—
|
|
459
|
|
(454
|
)
|
121
|
|
(4,101
|
)
|
—
|
|
(3,975
|
)
|
—
|
|
—
|
|
(3,975
|
)
|
||||||||||
Net cash provided (used)
|
(5,600
|
)
|
459
|
|
(7,860
|
)
|
(2,230
|
)
|
(4,101
|
)
|
—
|
|
(19,332
|
)
|
—
|
|
—
|
|
(19,332
|
)
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Proceeds from Non-Recourse U.S. SPV facility and ABL facility
|
—
|
|
1,590
|
|
—
|
|
—
|
|
58,540
|
|
—
|
|
60,130
|
|
—
|
|
—
|
|
60,130
|
|
||||||||||
Payments on Non-Recourse U.S. SPV facility and ABL facility
|
—
|
|
(24,996
|
)
|
—
|
|
—
|
|
(2,261
|
)
|
—
|
|
(27,257
|
)
|
—
|
|
—
|
|
(27,257
|
)
|
||||||||||
Proceeds from issuance of 12.00% Senior Secured Notes
|
601,054
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
601,054
|
|
—
|
|
—
|
|
601,054
|
|
||||||||||
Proceeds from revolving credit facilities
|
35,000
|
|
—
|
|
—
|
|
8,084
|
|
—
|
|
—
|
|
43,084
|
|
—
|
|
—
|
|
43,084
|
|
||||||||||
Payments on revolving credit facilities
|
(35,000
|
)
|
—
|
|
—
|
|
(8,084
|
)
|
—
|
|
—
|
|
(43,084
|
)
|
—
|
|
—
|
|
(43,084
|
)
|
||||||||||
Payments on 10.75% Senior Secured Notes
|
—
|
|
(426,034
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(426,034
|
)
|
—
|
|
—
|
|
(426,034
|
)
|
||||||||||
Dividends (paid) received to/from CURO Group Holdings Corp.
|
(312,083
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(312,083
|
)
|
312,083
|
|
—
|
|
—
|
|
||||||||||
Payments on Cash Pay Senior Notes
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(125,000
|
)
|
—
|
|
(125,000
|
)
|
||||||||||
Dividends paid to stockholders
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(182,000
|
)
|
—
|
|
(182,000
|
)
|
||||||||||
Proceeds from issuance of common stock
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
81,117
|
|
—
|
|
81,117
|
|
||||||||||
Debt issuance costs paid
|
(18,701
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(18,701
|
)
|
—
|
|
—
|
|
(18,701
|
)
|
||||||||||
Net cash provided (used)
|
270,270
|
|
(449,440
|
)
|
—
|
|
—
|
|
56,279
|
|
—
|
|
(122,891
|
)
|
86,200
|
|
—
|
|
(36,691
|
)
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
—
|
|
3,948
|
|
—
|
|
3,514
|
|
7,462
|
|
—
|
|
—
|
|
7,462
|
|
||||||||||
Net increase (decrease) in cash
|
—
|
|
(1,954
|
)
|
(10,332
|
)
|
(18,865
|
)
|
—
|
|
—
|
|
(31,151
|
)
|
—
|
|
—
|
|
(31,151
|
)
|
||||||||||
Cash at beginning of period
|
—
|
|
1,954
|
|
127,712
|
|
63,779
|
|
—
|
|
—
|
|
193,445
|
|
80
|
|
|
193,525
|
|
|||||||||||
Cash at end of period
|
$
|
—
|
|
$
|
—
|
|
$
|
117,380
|
|
$
|
44,914
|
|
$
|
—
|
|
$
|
—
|
|
$
|
162,294
|
|
$
|
80
|
|
$
|
—
|
|
$
|
162,374
|
|
|
Year Ended December 31, 2016
|
|||||||||||||||||||||||||||||
(dollars in thousands)
|
CFTC
|
CURO Intermediate
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
SPV Subs
|
Eliminations
|
CFTC
Consolidated
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Net cash provided (used)
|
$
|
20
|
|
$
|
29,400
|
|
$
|
76,191
|
|
$
|
27,731
|
|
$
|
(83,601
|
)
|
$
|
(627
|
)
|
49,114
|
|
(1,402
|
)
|
—
|
|
47,712
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Purchase of property, equipment and software
|
(20
|
)
|
—
|
|
(10,105
|
)
|
(5,901
|
)
|
—
|
|
—
|
|
(16,026
|
)
|
—
|
|
—
|
|
(16,026
|
)
|
||||||||||
Change in restricted cash
|
—
|
|
(459
|
)
|
4,477
|
|
1,856
|
|
(2,770
|
)
|
—
|
|
3,104
|
|
—
|
|
—
|
|
3,104
|
|
||||||||||
Net cash used
|
(20
|
)
|
(459
|
)
|
(5,628
|
)
|
(4,045
|
)
|
(2,770
|
)
|
—
|
|
(12,922
|
)
|
—
|
|
—
|
|
(12,922
|
)
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Proceeds from credit facility
|
—
|
|
30,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
30,000
|
|
—
|
|
—
|
|
30,000
|
|
||||||||||
Payments on credit facility
|
—
|
|
(38,050
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(38,050
|
)
|
—
|
|
—
|
|
(38,050
|
)
|
||||||||||
Deferred financing costs
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,346
|
)
|
—
|
|
(5,346
|
)
|
—
|
|
—
|
|
(5,346
|
)
|
||||||||||
Proceeds from Non-Recourse U.S. SPV Facility and ABL facility
|
—
|
|
—
|
|
—
|
|
—
|
|
91,717
|
|
—
|
|
91,717
|
|
—
|
|
—
|
|
91,717
|
|
||||||||||
Purchase of May 2011 Senior Secured notes
|
—
|
|
(18,939
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(18,939
|
)
|
—
|
|
—
|
|
(18,939
|
)
|
||||||||||
Net cash provided (used)
|
—
|
|
(26,989
|
)
|
—
|
|
—
|
|
86,371
|
|
—
|
|
59,382
|
|
—
|
|
—
|
|
59,382
|
|
||||||||||
Effect of exchange rate changes on cash
|
—
|
|
—
|
|
—
|
|
(1,835
|
)
|
—
|
|
627
|
|
(1,208
|
)
|
—
|
|
—
|
|
(1,208
|
)
|
||||||||||
Net increase in cash
|
—
|
|
1,952
|
|
70,563
|
|
21,851
|
|
—
|
|
—
|
|
94,366
|
|
(1,402
|
)
|
—
|
|
92,964
|
|
||||||||||
Cash at beginning of period
|
—
|
|
2
|
|
57,149
|
|
41,928
|
|
—
|
|
—
|
|
99,079
|
|
1,482
|
|
—
|
|
100,561
|
|
||||||||||
Cash at end of period
|
$
|
—
|
|
$
|
1,954
|
|
$
|
127,712
|
|
$
|
63,779
|
|
$
|
—
|
|
$
|
—
|
|
$
|
193,445
|
|
$
|
80
|
|
$
|
—
|
|
$
|
193,525
|
|
(1)
|
Consolidated Financial Statements
|
|
|
|
The consolidated financial statements and related notes, together with the report of Grant Thornton LLP, appear in Part II, Item 8, Financial Statements and Supplementary Data, of this Form 10-K.
The consolidated financial statements consist of the following:
|
|
|
|
Consolidated Balance Sheets as of December 31, 2017 and 2016
|
|
|
|
Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015
|
|
|
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015
|
|
|
|
Consolidated Statements of Changes in Equity for the years ended December 31, 2017, 2016 and 2015
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
|
|
|
Notes to Consolidated Financial Statements
|
|
|
(2)
|
Consolidated Financial Statement Schedules
|
|
|
|
All schedules have been omitted because they are not applicable, are insignificant or the required information is shown in the consolidated financial statements or notes thereto.
|
|
|
(3)
|
Exhibits
|
|
|
|
The exhibits are listed on the Exhibit Index.
|
Exhibit Number
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28
|
|
|
10.29
|
|
|
10.30
|
|
|
10.31
|
|
|
10.32
|
|
|
10.33
|
|
|
10.34
|
|
|
10.35
|
|
|
10.36
|
|
|
10.37
|
|
|
10.38
|
|
|
10.39
|
|
|
10.40
|
|
|
10.41
|
|
|
10.42
|
|
|
10.43
|
|
|
10.44
|
|
|
10.45
|
|
|
10.46
|
|
|
10.47
|
|
10.48
|
|
|
10.49
|
|
|
10.50
|
|
|
10.51
|
|
|
10.52
|
|
|
10.53
|
|
|
10.54
|
|
|
10.55
|
|
|
10.56
|
|
|
10.57
|
|
|
10.58
|
|
|
10.59
|
|
|
10.60
|
|
|
10.61
|
|
|
10.62
|
|
|
10.63
|
|
|
10.64
|
|
|
10.65
|
|
|
10.66
|
|
|
10.67
|
|
|
10.68
|
|
|
21.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
|
|
|
*
|
|
Filed herewith.
|
**
|
|
Furnished herewith.
|
#
|
|
Previously filed.
|
+
|
|
Indicates management contract or compensatory plan, contract or arrangement
|
¥
|
|
Confidential treatment pursuant to Rule 406 under the Securities Act has been requested as to certain portions of this exhibit, which portions have been omitted and submitted separately to the Securities and Exchange Commission.
|
Signature
|
|
Title
|
/s/ Don Gayhardt
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
Don Gayhardt
|
|
|
|
|
|
/s/ Roger Dean
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
Roger Dean
|
|
|
|
|
|
/s/ David Strano
|
|
Vice President and Chief Accounting Officer (Principal Accounting Officer)
|
David Strano
|
|
|
|
|
|
/s/ Doug Rippel
|
|
Executive Chairman of Board of Directors
|
Doug Rippel
|
|
|
|
|
|
/s/ Chad Faulkner
|
|
Director
|
Chad Faulkner
|
|
|
|
|
|
/s/ Mike McKnight
|
|
Director
|
Mike McKnight
|
|
|
|
|
|
/s/ Chris Masto
|
|
Director
|
Chris Masto
|
|
|
|
|
|
/s/ Karen Winterhof
|
|
Director
|
Karen Winterhof
|
|
|
|
|
|
/s/ Andrew Frawley
|
|
Director
|
Andrew Frawley
|
|
|
|
|
|
/s/ Dale Williams
|
|
Director
|
Dale E. Williams
|
|
|
Name of Participant:
|
|
Date of Grant:
|
|
Number of Restricted Stock Units
|
|
Vesting Schedule:
|
Provided that the Participant has not experienced a Termination prior to such date, the Award shall vest as follows: one-half of the Restricted Stock Units shall vest at the 2018 annual meeting of the Company’s stockholders and the remainder of the Restricted Stock Units shall vest at the 2019 annual meeting of the Company’s stockholders.
|
Issuance Schedule:
|
Subject to any change in respect of a capitalization adjustment (as provided in Section 11 of the Plan), one share of Stock will be issued for each Restricted Stock Unit that vests at the time set forth in Section 6 of the Award Agreement.
|
Restrictive Covenants:
|
As a condition of the grant of Restricted Stock Units hereunder, the undersigned Participant hereby affirms all confidentiality, non-interference, invention assignment or similar covenants previously made by the Participant in favor of the Company and acknowledges that such covenants are independent obligations of the Participant (such covenants, the “
Restrictive Covenant Agreement
”). The Participant hereby acknowledges and agrees that this Grant Notice and the Restrictive Covenant Agreement will be considered separate contracts, and the Restrictive Covenant Agreement will survive the termination of this Grant Notice for any reason.
|
Name of Participant:
|
|
Date of Grant:
|
|
Vesting Commencement Date:
|
|
Number of Restricted Stock Units
|
|
Vesting Schedule:
|
Provided that the Participant has not experienced a Termination prior to such date, the Award shall vest as follows: on each anniversary of the Vesting Commencement Date, one-third of the Restricted Stock Units shall vest.
|
Issuance Schedule:
|
Subject to any change in respect of a capitalization adjustment (as provided in Section 11 of the Plan), one share of Stock will be issued for each Restricted Stock Unit that vests at the time set forth in Section 6 of the Award Agreement.
|
Restrictive Covenants:
|
As a condition of the grant of Restricted Stock Units hereunder, the undersigned Participant hereby affirms all confidentiality, non-interference, invention assignment or similar covenants previously made by the Participant in favor of the Company and acknowledges that such covenants are independent obligations of the Participant (such covenants, the “
Restrictive Covenant Agreement
”). The Participant hereby acknowledges and agrees that this Grant Notice and the Restrictive Covenant Agreement will be considered separate contracts, and the Restrictive Covenant Agreement will survive the termination of this Grant Notice for any reason.
|
Subsidiaries of CURO Group Holdings Corp.
|
||
as of December 31, 2017
|
||
|
|
|
Entity Name
|
|
Jurisdiction of Incorporation/Organization
|
CURO Financial Technology Corp.
|
|
Delaware
|
CURO Intermediate Holdings Corp.
|
|
Delaware
|
A Speedy Cash Car Title Loans, LLC
|
|
Nevada
|
Advance Group, Inc.
|
|
Nevada
|
Attain Finance, LLC
|
|
Nevada
|
Attain Finance Canada, Inc.
|
|
Canada
|
Avio Credit, Inc.
|
|
Delaware
|
Cash Colorado, LLC.
|
|
Nevada
|
Cash Money Cheque Cashing, Inc.
|
|
Canada
|
Concord Finance, Inc.
|
|
Nevada
|
CFTC Finance, Inc.
|
|
Delaware
|
Evergreen Financial Investments, Inc.
|
|
Nevada
|
FMMR Investments, Inc.
|
|
Nevada
|
Galt Ventures, LLC
|
|
Kansas
|
LendDirect Corp.
|
|
Canada
|
Principal Investments, Inc.
|
|
Nevada
|
SCIL Texas, LLC
|
|
Nevada
|
SC Aurum, LLC
|
|
Nevada
|
SCIL, Inc.
|
|
Nevada
|
Speedy Cash
|
|
Nevada
|
Speedy Cash Illinois, Inc.
|
|
Nevada
|
SRC Transatlantic Limited
|
|
United Kingdom
|
SC Texas MB, Inc.
|
|
Nevada
|
The Money Store, L.P.
|
|
Texas
|
CURO Management LLC
|
|
Nevada
|
Todd Car Title, Inc.
|
|
Nevada
|
Todd Financial, Inc.
|
|
Nevada
|
CURO Transatlantic Limited
|
|
United Kingdom
|
Ennoble Finance, Inc.
|
|
Delaware
|
CURO Receivables Holdings I, LLC
|
|
Delaware
|
CURO Receivables Finance I, LLC
|
|
Delaware
|
1.
|
I have reviewed this
annual
report on Form
10-K
of CURO Group Holdings Corp. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
I have reviewed this
annual
report on Form
10-K
of CURO Group Holdings Corp. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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