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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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Trading Symbol(s)
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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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CURO
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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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Emerging growth company
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Smaller reporting company
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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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 customer account management online and via mobile devices.
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214 U.S. locations: Texas (89), California (37), Nevada (19), Arizona (13), Tennessee (11), Kansas (10), Illinois (8), Alabama (7), Missouri (5), Louisiana (5), Colorado (3), Oregon (3), Washington (2) and Mississippi (2); and
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202 Canadian locations: Ontario (133), Alberta (27), British Columbia (26), Saskatchewan (6), Nova Scotia (5), Manitoba (4) and New Brunswick (1).
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Shifting preference towards Installment and Open-End loans—Given our experience in offering Installment and Open-End loan products since 2008, we believe that Single-Pay loans are becoming less popular or less suitable for a growing portion of our customers. Our customers generally have shown a preference for Installment and Open-End loan products, which typically have longer terms, lower periodic payments and a lower relative cost than Single-Pay products. Offering more flexible terms and lower payments also significantly expands our addressable market by broadening our products’ appeal to a larger proportion of consumers. For example, our Installment and Open-End loans increased from 58.8% of total Company-Owned loans at the beginning of 2015 to 87.7% at December 31, 2019, with growth in Canada Installment and Open-End loans from $50.0 million in the third quarter of 2017 to $266.6 million in the fourth quarter of 2019.
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Increasing adoption of online channels—Our experience is that customers prefer service across multiple channels or touch points. For the year ended December 31, 2019, our consolidated total revenue generated through online channels totaled $521.0 million and represented 46% of our total revenues for the year, compared to $444.1 million and 42%, respectively, for the year ended December 31, 2018.
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Increasing adoption of mobile devices—With the proliferation of improved smartphone service plans, many of our underbanked customers have moved directly to mobile devices for loan origination and servicing. According to a 2019 study by the Pew Research Center covering the U.S. and Canada, smartphone penetration among adults was 81% and 66%, respectively. In 2012, less than 44% of our U.S. customers reached us via a mobile device, whereas in the fourth quarter of 2019, that percentage had grown to over 85%.
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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, whether 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 loan payment or manage their account. In addition, we have our “Site-to-Store” capability, for which customers that do not qualify for a loan online are directed to a store to complete a loan transaction. Our "Site-to-Store" program resulted in approximately 278,000 loans in the year ended December 31, 2019. 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 by enabling us to appeal to a wider array of borrowers.
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Leading analytics and information technology drives strong credit risk management—Curo is a bespoke, proprietary IT platform that seamlessly integrates activities related to customer acquisition, underwriting, scoring, servicing, collections, compliance and reporting. Our analytics team utilizes Curo to gather data and performance records for research and development purposes to assist in our continued development of new models. Curo is underpinned by nearly 20 years of continually updated customer data comprising over 85 million loan records (as of December 31, 2019) 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. This fully-integrated IT platform enables us to make real-time, data-driven changes to our customer 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 and other commonly used modes of marketing. Our Marketing, Risk and Credit Analytics team uses Curo to cross reference marketing spend, new customer account data and granular credit metrics to optimize our marketing budget across these channels in real time and to produce higher quality new loans. In addition to these diversified marketing programs, our stores play a critical role in creating brand awareness and driving new customer acquisition.
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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. We invest considerable time and resources on web design and mobile optimization to ensure our websites are quick and responsive, and support the mobile phone brands and sizes that our customers use. Our stores are branded with distinct and recognizable signage, are conveniently located and typically are open seven days a week. Furthermore, we employ highly-experienced store managers, which we believe are a critical component to driving customer retention while lowering acquisition costs and maximizing store-level margins. As of December 31, 2019, the average tenure for our U.S. store managers was approximately nine years, for district managers it was approximately 12 years, and for regional directors it was approximately 14 years.
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Strong compliance culture with centralized collections operations—We 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 systems, which are integrated into Curo. In addition to conducting semi-annual compliance audits, 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 nearly $2.2 billion of debt financing across nine separate offerings and various credit facilities since 2010, most recently in August 2018. This aggregate amount includes $690.0 million of 8.25% Senior Secured Notes due 2025 and a C$175.0 million Non-Recourse Canadian revolving facility due 2023 to support growth of multi‑pay products in Canada. We also have U.S. and Canadian bank revolving credit facilities to supplement intra‑period liquidity. Additionally, we raised over $90.0 million in our IPO. We also executed a non-binding letter of intent for an additional $200 million Non-Recourse Revolving Credit Facility to fund our growing U.S. portfolios in February 2020. We believe our access to the capital markets and diversified funding sources is an important significant differentiator as competitors may have trouble accessing capital 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—We believe our management team is among the most experienced in the industry with over a century of collective experience and an average tenure of nearly nine years. We also have deep bench strength across key functional areas including accounting, compliance, IT and legal.
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History of growth and profitability—Throughout our operating history we have maintained strong profitability and growth. Between 2010 and 2019 we grew revenue, Adjusted EBITDA and Adjusted Net Income at a compound annual growth rate of 21.1%, 20.5% and 21.6%, respectively. For more information on non-GAAP measures, see Item 6.
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Leverage our capabilities to continue growing Installment and Open-End loans—Installment and Open-End loans accounted for 77.6% of our consolidated revenue for the year ended December 31, 2019, up from 19% in 2010. We believe that the revenue growth for these products reflects our customers' preferences. 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 - for example, legacy Single-Pay storefront lenders. 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 are more affordable and provide better utility for customers but require increasingly sophisticated underwriting and decisioning to optimize customer acquisition cost while balancing credit risk with approval rates. Our analytics platform combines data from over 85 million records (as of December 31, 2019), supplemented with predictive data from third-party reporting agencies.
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Collections and Customer Service: Installment and Open-End products have longer terms than, for example, Single-Pay loans. Longer duration drives the need for a more comprehensive collection and a credit-default servicing strategy that emphasizes curing a default and returning the customer to good standing. We utilize a centralized collection model that eliminates the need for our store management personnel to contact customers to resolve a delinquency. We have also invested in building new contact centers in the countries in which we operate, each of which utilizes sophisticated dialer technologies to help us contact our customers in a scalable, efficient manner.
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Funding: The shift to larger balance loans with extended 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 transitions.
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Serve additional types of borrowers—In addition to growing our existing suite of loan products, we are focused on expanding the total number of customers that we serve through product, geographic and channel expansion. These efforts include expansion of our online channel and continued selective additions to our store footprint. We 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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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 continue to enhance the value of each customer relationship 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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Increase approval rates to our applicants—Growth and optimization of customer acquisition spending depends on maintaining high approval rates balanced with credit risk management. We continually improve our scoring models to optimize a profitable balance of application approval rates and portfolio performance.
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Expand credit for our borrowers—Through extensive testing and proprietary underwriting, we have successfully increased credit limits for customers, enabling us to offer “the right loan to the right customer.” The favorable customer acceptance rates and credit performance have improved overall loan-vintage and portfolio performance. For the year ended December 31, 2019, our average loan amount for Unsecured and Secured Installment loans was $607 and $1,326, respectively.
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Continue to improve the customer journey and experience—We continuously seek to enhance our “Call, Click or Come In” customer experience and execution, with projects ranging from continuous upgrades of our web and mobile app interfaces to enhanced service features to payment optimization.
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Enhance our network of strategic affiliate marketing partnerships—Our strategic affiliate partnership network generates customer applicants that we can close using 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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Marketing Expansion—We reach our customers using a multi-channel approach, including addressable TV, text to apply and enhanced digital ads utilizing our site-to-store concept to stay ahead of the continually developing landscape of our customers behavior and needs. These approaches are incorporated into our core marketing and we recently expanded our sponsorships by signing with certain major events, such as NASCAR auto racing, to expand our brand awareness.
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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 insufficient 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 some bank products (e.g., credit cards and overdrafts).
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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 2017 Final 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, ("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 2017 Final 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 2017 Final 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, is initiated on a date other than the date of a regularly scheduled payment or is initiated in a different channel that the immediately preceding payment attempt. A lender must also provide the borrower with a "consumer rights notice" in a prescribed form after two consecutive failed payment attempts.
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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 stockholders 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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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 2017 Final 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 debit card authorization requests, the 2017 Final Rule nevertheless treats card authorization requests as payment attempts subject to these limitations. While the CFPB has indicated it has received a formal request to revisit the treatment of debit cards under the Payment Provisions, it has not done so to date. If the CFPB determines that further action is warranted, it would likely need to commence a separate rulemaking initiative.
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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 than the immediately preceding payment attempt. A lender must also provide the borrower with a "consumer rights notice" in a CFPB-prescribed form after two consecutive failed payment attempts.
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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 CSOs or CABs;
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licensing, reporting and document retention;
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unfair, deceptive and abusive acts and practices;
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discrimination;
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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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requiring disgorgement of revenues or profits 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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revoking licenses required to operate in particular jurisdictions;
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ordering the closure of one or more stores; and
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other impactful consequences.
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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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our ability to accurately forecast our financial results;
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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 that are 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, health emergencies (such as the recent outbreak of coronavirus), 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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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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Plan Category
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(A)
Number of Securities to be Issued Upon Exercise of Outstanding Options and Vesting of Restricted Stock Units(1)
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(B)
Weighted Average Exercise Price of Outstanding Options(2)
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(C)
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column A)(3)
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Equity compensation plans approved by stockholders
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2,861,236
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$
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3.56
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2,874,978
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Equity compensation plans not approved by stockholders
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—
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$
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—
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—
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Total
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2,861,236
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$
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3.56
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2,874,978
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(1) This amount includes 1,404,622 shares of common stock to be issued for stock options and 1,456,614 shares of common stock to be issued upon the vesting of RSU's.
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(2) This amount represents only the stock options outstanding as of December 31, 2019, since RSU awards do not have an exercise price.
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(3) This amount represents securities issuable under the 2017 Incentive Plan which is comprised of only RSU's as of December 31, 2019.
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Period
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Total Number of Shares Purchased(1)
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Average Price Paid Per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Dollar Value of Shares that may yet be Purchased under the Plans or Programs(2)
(In millions) |
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October 2019
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853,800
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$
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13.01
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853,800
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$
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12.9
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November 2019
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275,900
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$
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14.46
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275,900
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$
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8.9
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December 2019
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515,606
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$
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12.77
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328,600
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$
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4.8
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Total
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1,645,306
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$
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11.72
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1,458,300
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$
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4.8
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(1) Includes shares withheld from employees as tax payments for shares issued under our stock-based compensation plans. See Note 10, "Share-Based Compensation" of the Notes to Consolidated Financial Statements for additional details on our stock-based compensation plans.
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(2) As of the end of the period.
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Adjusted Net Income and Adjusted Earnings Per Share, or the Adjusted Earnings Measures (net income from continuing operations plus or minus loss (gain) on extinguishment of debt, restructuring and other costs, certain legal and related costs, loss from equity method investment, goodwill and intangible asset impairments, certain costs related to the disposition of U.K., transaction-related costs, share-based compensation, intangible asset amortization and cumulative tax effect of applicable adjustments, on a total and per share basis);
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EBITDA (net income from continuing operations before interest, income taxes, depreciation and amortization);
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Adjusted EBITDA (EBITDA plus or minus certain non-cash and other adjusting items);
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Adjusted effective income tax rate (effective tax rate plus or minus certain non-cash and other adjusting items); and
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Gross Combined Loans Receivable (includes loans originated by third-party lenders through CSO programs which are not included in our Consolidated Financial Statements).
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they do not include cash expenditures or future requirements for capital expenditures or contractual commitments;
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they do not include changes in, or cash requirements for, working capital needs;
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they do not include the interest expense, or the cash requirements necessary to service interest or principal payments on debt;
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depreciation and amortization are non-cash expense items reported in the statements of cash flows; and
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other companies in our industry may calculate these measures differently, limiting their usefulness as comparative measures.
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Gross Combined Loans Receivable—balances in 2017 included Installment loans that were up to 90 days past-due with related accrued interest, while such balances periods prior to March 31, 2017 did not include these loans. Past-due Company-Owned Installment loans receivable as of December 31, 2019, 2018 and 2017 were $61.0 million, $66.9 million and $57.2 million, respectively.
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Revenues—for the year ended December 31, 2017, revenues included accrued interest on past-due loan balances, while revenues for periods prior to March 31, 2017 did not include these amounts.
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Provision for Losses—prospectively, loans charged off on day 91 included accrued interest. Thus, we adjusted allowance coverage rates in 2017 to include both principal and accrued interest.
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•
|
Salaries and Benefits—include personnel-related costs for our store operations, including salaries, benefits and bonuses and are driven by the number of employees.
|
•
|
Occupancy—includes rent expense for our leased facilities, as well as depreciation, maintenance, insurance and utility expense.
|
•
|
Office—includes expenses primarily related to bank service charges and credit scoring charges at store locations.
|
•
|
Other Costs of Providing Services—includes expenses related to operations such as processing fees, collections expense, security expense, taxes, repairs and professional fees incurred as part of store operations.
|
•
|
Advertising—costs are expensed as incurred. Advertising includes costs associated with attracting, retaining and/or reactivating customers as well as creating brand awareness. We have internal creative, web and print design capabilities and if we outsource these services, it is limited to mass-media production and placement. Advertising expense also includes costs for all marketing activities including paid search, advertising on social networking sites, affiliate programs, direct response television, radio air time and direct mail.
|
•
|
Corporate, District and Other Expenses—include costs such as salaries and benefits associated with our corporate and district-level employees, as well as other corporate-related costs such as rent, insurance, professional fees, utilities, travel and entertainment expenses and depreciation expense. Other income and expense includes the foreign currency impact to our intercompany balances, gains or losses on foreign currency exchanges and disposals of fixed assets and other miscellaneous income and expense amounts.
|
•
|
Interest Expense—includes interest primarily related to our Senior Secured Notes, our Non-Recourse SPV facilities and our Senior Revolver.
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||
|
|
U.S.
|
Canada
|
Total
|
|
U.S.
|
Canada
|
Total
|
||||||||||||
Unsecured Installment
|
|
$
|
523,979
|
|
$
|
6,751
|
|
$
|
530,730
|
|
|
$
|
509,883
|
|
$
|
13,399
|
|
$
|
523,282
|
|
Secured Installment
|
|
110,513
|
|
—
|
|
110,513
|
|
|
110,677
|
|
—
|
|
110,677
|
|
||||||
Open-End
|
|
147,794
|
|
97,462
|
|
245,256
|
|
|
106,230
|
|
35,733
|
|
141,963
|
|
||||||
Single-Pay
|
|
112,925
|
|
78,524
|
|
191,449
|
|
|
107,545
|
|
111,447
|
|
218,992
|
|
||||||
Ancillary
|
|
18,295
|
|
45,554
|
|
63,849
|
|
|
18,806
|
|
31,353
|
|
50,159
|
|
||||||
Total revenue
|
|
$
|
913,506
|
|
$
|
228,291
|
|
$
|
1,141,797
|
|
|
$
|
853,141
|
|
$
|
191,932
|
|
$
|
1,045,073
|
|
|
|
Year Ended
|
|
Year Ended
|
||||||||||||||||
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||||
|
|
U.S.
|
Canada
|
Total
|
|
U.S.
|
Canada
|
Total
|
||||||||||||
Unsecured Installment
|
|
$
|
509,883
|
|
$
|
13,399
|
|
$
|
523,282
|
|
|
$
|
435,745
|
|
$
|
19,013
|
|
$
|
454,758
|
|
Secured Installment
|
|
110,677
|
|
—
|
|
110,677
|
|
|
100,981
|
|
—
|
|
100,981
|
|
||||||
Open-End
|
|
106,230
|
|
35,733
|
|
141,963
|
|
|
73,308
|
|
188
|
|
73,496
|
|
||||||
Single-Pay
|
|
107,545
|
|
111,447
|
|
218,992
|
|
|
107,553
|
|
147,617
|
|
255,170
|
|
||||||
Ancillary
|
|
18,806
|
|
31,353
|
|
50,159
|
|
|
20,141
|
|
19,591
|
|
39,732
|
|
||||||
Total revenue
|
|
$
|
853,141
|
|
$
|
191,932
|
|
$
|
1,045,073
|
|
|
$
|
737,728
|
|
$
|
186,409
|
|
$
|
924,137
|
|
|
As of
|
|||||||||||||||||||||||
|
December 31, 2019
|
September 30, 2019
|
June 30, 2019
|
March 31, 2019
|
December 31, 2018
|
September 30, 2018
|
June 30, 2018
|
March 31, 2018
|
||||||||||||||||
Company-Owned gross loans receivable
|
$
|
665.8
|
|
$
|
657.6
|
|
$
|
609.6
|
|
$
|
553.2
|
|
$
|
571.5
|
|
$
|
537.8
|
|
$
|
420.6
|
|
$
|
369.3
|
|
Gross loans receivable guaranteed by the Company
|
76.7
|
|
73.1
|
|
67.3
|
|
61.9
|
|
80.4
|
|
78.8
|
|
69.2
|
|
57.1
|
|
||||||||
Gross combined loans receivable(1)
|
$
|
742.5
|
|
$
|
730.7
|
|
$
|
676.9
|
|
$
|
615.1
|
|
$
|
651.9
|
|
$
|
616.6
|
|
$
|
489.8
|
|
$
|
426.4
|
|
(1) See a description of non-GAAP Financial Measures in "Selected Financial Data —Supplemental Non-GAAP Financial Information."
|
•
|
Gross combined loans receivable: balances as of December 31, 2019 include $50.1 million of Open-End loans that are up to 90 days past-due with related accrued interest, while such balances for periods prior to March 31, 2019 do not include any past-due loans.
|
•
|
Revenues: for the three months and year ended December 31, 2019, gross revenues include interest earned on past-due loan balances of approximately $14 million and $49 million, respectively, while revenues in prior-year periods do not include comparable amounts.
|
•
|
Provision for Losses: prospectively from January 1, 2019, past-due, unpaid balances plus related accrued interest charge-off on day 91. Provision expense is affected by NCOs (total charge-offs less total recoveries) plus changes to the Allowance for loan losses. Because NCOs prospectively include unpaid principal and up to 90 days of related accrued interest, NCO amounts and rates are higher and the Open-End Allowance for loan losses as a percentage of Open-End gross loans receivable is higher. The Open-End Allowance for loan losses as a percentage of Open-End gross loans receivable increased to 16.4% at December 31, 2019, compared to 9.6% in the comparable prior-year period.
|
|
2019
|
|
2018
|
|||||||||||||
(dollars in thousands)
|
Fourth
Quarter
|
Third
Quarter
|
Second
Quarter
|
First
Quarter
|
|
Fourth
Quarter
|
||||||||||
Single-Pay loans:
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
49,844
|
|
$
|
49,312
|
|
$
|
45,528
|
|
$
|
46,761
|
|
|
$
|
49,696
|
|
Provision for losses
|
12,289
|
|
14,736
|
|
12,446
|
|
8,268
|
|
|
12,825
|
|
|||||
Net revenue
|
$
|
37,555
|
|
$
|
34,576
|
|
$
|
33,082
|
|
$
|
38,493
|
|
|
$
|
36,871
|
|
Net charge-offs
|
$
|
12,145
|
|
$
|
13,913
|
|
$
|
11,458
|
|
$
|
8,610
|
|
|
$
|
11,838
|
|
Single-Pay gross loan balances:
|
|
|
|
|
|
|
|
|||||||||
Single-Pay gross loans receivable
|
$
|
81,447
|
|
$
|
78,039
|
|
$
|
76,126
|
|
$
|
69,753
|
|
|
$
|
80,823
|
|
Average Single-Pay gross loans receivable (1)
|
$
|
78,787
|
|
$
|
77,083
|
|
$
|
72,940
|
|
$
|
75,288
|
|
|
$
|
79,107
|
|
Single-Pay Allowance for loan losses
|
$
|
5,869
|
|
$
|
5,662
|
|
$
|
4,941
|
|
$
|
3,897
|
|
|
$
|
4,189
|
|
Single-Pay Allowance for loan losses as a percentage of Single-Pay gross loans receivable
|
7.2
|
%
|
7.3
|
%
|
6.5
|
%
|
5.6
|
%
|
|
5.2
|
%
|
|||||
(1) Average gross loans receivable, utilized by us to calculate product yield and NCO rates, is calculated as the average of beginning of quarter and end of quarter gross loans receivable.
|
|
Year Ended December 31,
|
|||||||||||
|
2019
|
2018
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
1,141,797
|
|
$
|
1,045,073
|
|
|
$
|
96,724
|
|
9.3
|
%
|
Provision for losses
|
468,551
|
|
421,600
|
|
|
46,951
|
|
11.1
|
%
|
|||
Net revenue
|
673,246
|
|
623,473
|
|
|
49,773
|
|
8.0
|
%
|
|||
Advertising costs
|
53,398
|
|
59,363
|
|
|
(5,965
|
)
|
(10.0
|
)%
|
|||
Non-advertising costs of providing services
|
241,232
|
|
238,640
|
|
|
2,592
|
|
1.1
|
%
|
|||
Total cost of providing services
|
294,630
|
|
298,003
|
|
|
(3,373
|
)
|
(1.1
|
)%
|
|||
Gross margin
|
378,616
|
|
325,470
|
|
|
53,146
|
|
16.3
|
%
|
|||
|
|
|
|
|
|
|||||||
Operating expense
|
|
|
|
|
|
|
||||||
Corporate, district and other expenses
|
160,103
|
|
132,401
|
|
|
27,702
|
|
20.9
|
%
|
|||
Interest expense
|
69,763
|
|
84,382
|
|
|
(14,619
|
)
|
(17.3
|
)%
|
|||
Loss on extinguishment of debt
|
—
|
|
90,569
|
|
|
(90,569
|
)
|
#
|
|
|||
Loss from equity method investment
|
6,295
|
|
—
|
|
|
6,295
|
|
#
|
|
|||
Total operating expense
|
236,161
|
|
307,352
|
|
|
(71,191
|
)
|
(23.2
|
)%
|
|||
Net income from continuing operations before income taxes
|
142,455
|
|
18,118
|
|
|
124,337
|
|
#
|
|
|||
Provision for income taxes
|
38,557
|
|
1,659
|
|
|
36,898
|
|
#
|
|
|||
Net income from continuing operations
|
103,898
|
|
16,459
|
|
|
87,439
|
|
#
|
|
|||
Net (loss) income from discontinued operations, net of tax
|
7,590
|
|
(38,512
|
)
|
|
46,102
|
|
#
|
|
|||
Net income (loss)
|
$
|
111,488
|
|
$
|
(22,053
|
)
|
|
$
|
133,541
|
|
#
|
|
# - Variance greater than 100% or not meaningful.
|
U.S. Segment Results
|
Year Ended December 31,
|
|||||||||||
|
2019
|
2018
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
913,506
|
|
$
|
853,141
|
|
|
$
|
60,365
|
|
7.1
|
%
|
Provision for losses
|
392,105
|
|
348,611
|
|
|
43,494
|
|
12.5
|
%
|
|||
Net revenue
|
521,401
|
|
504,530
|
|
|
16,871
|
|
3.3
|
%
|
|||
Advertising costs
|
46,735
|
|
48,832
|
|
|
(2,097
|
)
|
(4.3
|
)%
|
|||
Non-advertising costs of providing services
|
171,714
|
|
170,870
|
|
|
844
|
|
0.5
|
%
|
|||
Total cost of providing services
|
218,449
|
|
219,702
|
|
|
(1,253
|
)
|
(0.6
|
)%
|
|||
Gross margin
|
302,952
|
|
284,828
|
|
|
18,124
|
|
6.4
|
%
|
|||
Corporate, district and other expenses
|
138,180
|
|
112,761
|
|
|
25,419
|
|
22.5
|
%
|
|||
Interest expense
|
59,325
|
|
80,381
|
|
|
(21,056
|
)
|
(26.2
|
)%
|
|||
Loss on extinguishment of debt
|
—
|
|
90,569
|
|
|
(90,569
|
)
|
#
|
|
|||
Loss from equity method investment
|
6,295
|
|
—
|
|
|
6,295
|
|
#
|
|
|||
Total operating expense
|
203,800
|
|
283,711
|
|
|
(79,911
|
)
|
(28.2
|
)%
|
|||
Segment operating income
|
99,152
|
|
1,117
|
|
|
98,035
|
|
#
|
|
|||
Interest expense
|
59,325
|
|
80,381
|
|
|
(21,056
|
)
|
(26.2
|
)%
|
|||
Depreciation and amortization
|
13,816
|
|
13,823
|
|
|
(7
|
)
|
(0.1
|
)%
|
|||
EBITDA (1)
|
172,293
|
|
95,321
|
|
|
76,972
|
|
80.8
|
%
|
|||
Loss on extinguishment of debt
|
—
|
|
90,569
|
|
|
(90,569
|
)
|
|
||||
Restructuring costs
|
1,617
|
|
—
|
|
|
1,617
|
|
|
||||
Legal and related costs
|
3,043
|
|
(408
|
)
|
|
3,451
|
|
|
||||
Other adjustments
|
(184
|
)
|
219
|
|
|
(403
|
)
|
|
||||
U.K. related costs
|
8,844
|
|
—
|
|
|
8,844
|
|
|
||||
Transaction related costs
|
—
|
|
—
|
|
|
—
|
|
|
||||
Share-based compensation
|
10,323
|
|
8,210
|
|
|
2,113
|
|
|
||||
Loss from equity method investment
|
6,295
|
|
—
|
|
|
6,295
|
|
|
||||
Adjusted EBITDA (1)
|
$
|
202,231
|
|
$
|
193,911
|
|
|
$
|
8,320
|
|
4.3
|
%
|
# - Variance greater than 100% or not meaningful.
|
||||||||||||
(1) For a detailed description of non-GAAP financial measures and how we use them, see "—Supplemental Non-GAAP Financial Information."
|
|
Year Ended December 31,
|
|||||||||||
|
2018
|
2017
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
1,045,073
|
|
$
|
924,137
|
|
|
$
|
120,936
|
|
13.1
|
%
|
Provision for losses
|
421,600
|
|
312,566
|
|
|
109,034
|
|
34.9
|
%
|
|||
Net revenue
|
623,473
|
|
611,571
|
|
|
11,902
|
|
1.9
|
%
|
|||
Advertising costs
|
59,363
|
|
46,563
|
|
|
12,800
|
|
27.5
|
%
|
|||
Non-advertising costs of providing services
|
238,640
|
|
229,843
|
|
|
8,797
|
|
3.8
|
%
|
|||
Total cost of providing services
|
298,003
|
|
276,406
|
|
|
21,597
|
|
7.8
|
%
|
|||
Gross margin
|
325,470
|
|
335,165
|
|
|
(9,695
|
)
|
(2.9
|
)%
|
|||
|
|
|
|
|
|
|||||||
Operating expense
|
|
|
|
|
|
|||||||
Corporate, district and other expenses
|
132,401
|
|
137,755
|
|
|
(5,354
|
)
|
(3.9
|
)%
|
|||
Interest expense
|
84,382
|
|
82,696
|
|
|
1,686
|
|
2.0
|
%
|
|||
Loss on extinguishment of debt
|
90,569
|
|
12,458
|
|
|
78,111
|
|
#
|
|
|||
Total operating expense
|
307,352
|
|
232,909
|
|
|
74,443
|
|
32.0
|
%
|
|||
Net income from continuing operations before income taxes
|
18,118
|
|
102,256
|
|
|
(84,138
|
)
|
(82.3
|
)%
|
|||
Provision for income taxes
|
1,659
|
|
41,647
|
|
|
(39,988
|
)
|
(96.0
|
)%
|
|||
Net income from continuing operations
|
16,459
|
|
60,609
|
|
|
(44,150
|
)
|
(72.8
|
)%
|
|||
Net loss from discontinued operations, net of tax
|
(38,512
|
)
|
(11,456
|
)
|
|
(27,056
|
)
|
#
|
|
|||
Net (loss) income
|
$
|
(22,053
|
)
|
$
|
49,153
|
|
|
$
|
(71,206
|
)
|
#
|
|
# - Variance greater than 100% or not meaningful.
|
U.S. Segment Results
|
Year Ended December 31,
|
|||||||||||
|
2018
|
2017
|
|
Change $
|
Change %
|
|||||||
Revenue
|
$
|
853,141
|
|
$
|
737,729
|
|
|
$
|
115,412
|
|
15.6
|
%
|
Provision for losses
|
348,611
|
|
267,491
|
|
|
81,120
|
|
30.3
|
%
|
|||
Net revenue
|
504,530
|
|
470,238
|
|
|
34,292
|
|
7.3
|
%
|
|||
Advertising costs
|
48,832
|
|
36,148
|
|
|
12,684
|
|
35.1
|
%
|
|||
Non-advertising costs of providing services
|
170,870
|
|
166,875
|
|
|
3,995
|
|
2.4
|
%
|
|||
Total cost of providing services
|
219,702
|
|
203,023
|
|
|
16,679
|
|
8.2
|
%
|
|||
Gross margin
|
284,828
|
|
267,215
|
|
|
17,613
|
|
6.6
|
%
|
|||
Corporate, district and other expenses
|
112,761
|
|
120,803
|
|
|
(8,042
|
)
|
(6.7
|
)%
|
|||
Interest expense
|
80,381
|
|
82,495
|
|
|
(2,114
|
)
|
(2.6
|
)%
|
|||
Loss on extinguishment of debt
|
90,569
|
|
12,458
|
|
|
78,111
|
|
#
|
|
|||
Total operating expense
|
283,711
|
|
215,756
|
|
|
67,955
|
|
31.5
|
%
|
|||
Segment operating income
|
1,117
|
|
51,459
|
|
|
(50,342
|
)
|
(97.8
|
)%
|
|||
Interest expense
|
80,381
|
|
82,495
|
|
|
(2,114
|
)
|
(2.6
|
)%
|
|||
Depreciation and amortization
|
13,823
|
|
13,639
|
|
|
184
|
|
1.3
|
%
|
|||
EBITDA (1)
|
95,321
|
|
147,593
|
|
|
(52,272
|
)
|
(35.4
|
)%
|
|||
Loss on extinguishment of debt
|
90,569
|
|
12,458
|
|
|
78,111
|
|
|
|
|||
Legal and related costs
|
(408
|
)
|
4,311
|
|
|
(4,719
|
)
|
|
||||
Other adjustments
|
219
|
|
(110
|
)
|
|
329
|
|
|
||||
Transaction-related costs
|
—
|
|
5,573
|
|
|
(5,573
|
)
|
|
||||
Share-based cash and non-cash compensation
|
8,210
|
|
10,290
|
|
|
(2,080
|
)
|
|
||||
Adjusted EBITDA (1)
|
$
|
193,911
|
|
$
|
180,115
|
|
|
$
|
13,796
|
|
7.7
|
%
|
# - Variance greater than 100% or not meaningful.
|
|
|
|
|
|
|||||||
(1) For a detailed description of non-GAAP financial measures and how we use them, see "Supplemental Non-GAAP Financial Information" herein Item 6.
|
|
Average Exchange Rates
Year Ended December 31, |
|
Change
|
|||||||||
|
2019
|
2018
|
|
$
|
%
|
|||||||
Canadian Dollar
|
$
|
0.7539
|
|
$
|
0.7720
|
|
|
|
($0.0181
|
)
|
(2.3
|
)%
|
|
Average Exchange Rates
Year Ended December 31, |
|
Change
|
|||||||||
|
2018
|
2017
|
|
$
|
%
|
|||||||
Canadian Dollar
|
$
|
0.7720
|
|
$
|
0.7710
|
|
|
|
$0.0010
|
|
0.1
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Canada - constant currency basis:
|
|
|
|
|
||||||||||
Revenues
|
$
|
233,739
|
|
|
$
|
191,932
|
|
|
$
|
41,807
|
|
|
21.8
|
%
|
Gross Margin
|
77,439
|
|
|
40,642
|
|
|
36,797
|
|
|
90.5
|
%
|
|
Year Ended December 31,
|
|
Change
|
|||||||||||
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Canada - constant currency basis:
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
191,908
|
|
|
$
|
186,408
|
|
|
$
|
5,500
|
|
|
3.0
|
%
|
Gross Margin
|
40,463
|
|
|
67,950
|
|
|
(27,487
|
)
|
|
(40.5
|
)%
|
|
|
December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
8.25% Senior Secured Notes (due 2025)
|
|
$
|
678,323
|
|
|
$
|
676,661
|
|
Non-Recourse Canada SPV Facility
|
|
112,221
|
|
|
107,479
|
|
||
Senior Revolver
|
|
—
|
|
|
20,000
|
|
||
Cash Money Revolving Credit Facility
|
|
—
|
|
|
—
|
|
||
Total Debt
|
|
$
|
790,544
|
|
|
$
|
804,140
|
|
(i)
|
Our subsidiary guarantors, which are comprised of its domestic subsidiaries, including CFTC as the issuer of the 12.00% Senior Secured Notes that were redeemed in August 2018, CURO Intermediate, and U.S. SPV as the issuer of the Non-Recourse U.S. SPV Facility that was extinguished in October 2018, and excluding Canada SPV (the “Subsidiary Guarantors”), on a consolidated basis, which are 100% owned by us, and which are guarantors of the 8.25% Senior Secured Notes issued in August 2018;
|
(ii)
|
Our other subsidiaries on a consolidated basis, which are not guarantors of the 8.25% Senior Secured Notes (the “Subsidiary Non-Guarantors”);
|
(iii)
|
The Non-recourse Canada SPV facility, a wholly-owned, bankruptcy-remote special purpose subsidiary;
|
(iv)
|
CURO as the issuer of the 8.25% Senior Secured Notes;
|
(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 subsidiaries;
|
(vi)
|
The Company and its subsidiaries on a consolidated basis.
|
|
December 31, 2019
|
|||||||||||||||||
(in thousands)
|
Subsidiary
Guarantors
|
Subsidiary
Non-Guarantors
|
Canada SPV
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||
Assets:
|
|
|
|
|
|
|
||||||||||||
Cash
|
$
|
44,727
|
|
$
|
30,515
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
75,242
|
|
Restricted cash
|
14,958
|
|
2,394
|
|
17,427
|
|
—
|
|
—
|
|
34,779
|
|
||||||
Loans receivable, net
|
286,881
|
|
52,045
|
|
220,067
|
|
—
|
|
—
|
|
558,993
|
|
||||||
Right of use asset - operating leases
|
74,845
|
|
42,608
|
|
—
|
|
—
|
|
—
|
|
117,453
|
|
||||||
Deferred income taxes
|
(3,506
|
)
|
—
|
|
—
|
|
8,561
|
|
—
|
|
5,055
|
|
||||||
Income taxes receivable
|
(8,987
|
)
|
723
|
|
—
|
|
19,690
|
|
—
|
|
11,426
|
|
||||||
Prepaid expenses and other
|
26,623
|
|
9,267
|
|
—
|
|
—
|
|
—
|
|
35,890
|
|
||||||
Property and equipment, net
|
43,618
|
|
27,193
|
|
—
|
|
—
|
|
—
|
|
70,811
|
|
||||||
Goodwill
|
91,131
|
|
29,478
|
|
—
|
|
—
|
|
—
|
|
120,609
|
|
||||||
Other intangibles, net
|
11,569
|
|
22,358
|
|
—
|
|
—
|
|
—
|
|
33,927
|
|
||||||
Intercompany receivable
|
113,599
|
|
—
|
|
—
|
|
—
|
|
(113,599
|
)
|
—
|
|
||||||
Investment in subsidiaries
|
—
|
|
—
|
|
—
|
|
84,514
|
|
(84,514
|
)
|
—
|
|
||||||
Other
|
17,006
|
|
704
|
|
—
|
|
—
|
|
—
|
|
17,710
|
|
||||||
Total assets
|
$
|
712,464
|
|
$
|
217,285
|
|
$
|
237,494
|
|
$
|
112,765
|
|
$
|
(198,113
|
)
|
$
|
1,081,895
|
|
Liabilities and Stockholders' equity (deficit):
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
48,333
|
|
$
|
(2,177
|
)
|
$
|
13,462
|
|
$
|
465
|
|
$
|
—
|
|
$
|
60,083
|
|
Deferred revenue
|
6,828
|
|
3,296
|
|
46
|
|
—
|
|
—
|
|
10,170
|
|
||||||
Lease liability - operating leases
|
82,593
|
|
42,406
|
|
—
|
|
—
|
|
—
|
|
124,999
|
|
||||||
Accrued interest
|
1
|
|
—
|
|
871
|
|
18,975
|
|
—
|
|
19,847
|
|
||||||
Payable to CURO
|
635,511
|
|
—
|
|
—
|
|
(635,511
|
)
|
—
|
|
—
|
|
||||||
Liability for losses on CSO lender-owned consumer loans
|
10,623
|
|
—
|
|
—
|
|
—
|
|
—
|
|
10,623
|
|
||||||
Debt
|
—
|
|
—
|
|
112,221
|
|
678,323
|
|
—
|
|
790,544
|
|
||||||
Intercompany payable
|
—
|
|
43,960
|
|
69,639
|
|
—
|
|
(113,599
|
)
|
—
|
|
||||||
Other long-term liabilities
|
10,285
|
|
379
|
|
—
|
|
—
|
|
—
|
|
10,664
|
|
||||||
Deferred tax liabilities
|
—
|
|
4,452
|
|
—
|
|
—
|
|
—
|
|
4,452
|
|
||||||
Total liabilities
|
794,174
|
|
92,316
|
|
196,239
|
|
62,252
|
|
(113,599
|
)
|
1,031,382
|
|
||||||
Stockholders' equity (deficit)
|
(81,710
|
)
|
124,969
|
|
41,255
|
|
50,513
|
|
(84,514
|
)
|
50,513
|
|
||||||
Total liabilities and stockholders' equity (deficit)
|
$
|
712,464
|
|
$
|
217,285
|
|
$
|
237,494
|
|
$
|
112,765
|
|
$
|
(198,113
|
)
|
$
|
1,081,895
|
|
|
December 31, 2018
|
|||||||||||||||||
(in thousands)
|
Subsidiary
Guarantors |
Subsidiary
Non-Guarantors |
Canada SPV
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||
Assets:
|
|
|
|
|
|
|
||||||||||||
Cash
|
$
|
42,403
|
|
$
|
18,772
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
61,175
|
|
Restricted cash
|
9,993
|
|
2,606
|
|
12,840
|
|
—
|
|
—
|
|
25,439
|
|
||||||
Loans receivable, net
|
304,542
|
|
56,805
|
|
136,187
|
|
—
|
|
—
|
|
497,534
|
|
||||||
Deferred income taxes
|
—
|
|
1,534
|
|
—
|
|
—
|
|
—
|
|
1,534
|
|
||||||
Income taxes receivable
|
7,190
|
|
—
|
|
—
|
|
9,551
|
|
—
|
|
16,741
|
|
||||||
Prepaid expenses and other
|
37,866
|
|
5,722
|
|
—
|
|
—
|
|
—
|
|
43,588
|
|
||||||
Property and equipment, net
|
47,918
|
|
28,832
|
|
—
|
|
—
|
|
—
|
|
76,750
|
|
||||||
Goodwill
|
91,131
|
|
28,150
|
|
—
|
|
—
|
|
—
|
|
119,281
|
|
||||||
Other intangibles, net
|
8,418
|
|
21,366
|
|
—
|
|
—
|
|
—
|
|
29,784
|
|
||||||
Intercompany receivable
|
77,009
|
|
—
|
|
—
|
|
—
|
|
(77,009
|
)
|
—
|
|
||||||
Investment in subsidiaries
|
—
|
|
—
|
|
—
|
|
(101,665
|
)
|
101,665
|
|
—
|
|
||||||
Other
|
12,253
|
|
677
|
|
—
|
|
—
|
|
—
|
|
12,930
|
|
||||||
Assets from discontinued operations
|
—
|
|
2,406
|
|
—
|
|
—
|
|
32,455
|
|
34,861
|
|
||||||
Total assets
|
$
|
638,723
|
|
$
|
166,870
|
|
$
|
149,027
|
|
$
|
(92,114
|
)
|
$
|
57,111
|
|
$
|
919,617
|
|
Liabilities and Stockholders' equity (deficit):
|
|
|
|
|
|
|
||||||||||||
Accounts payable and accrued liabilities
|
$
|
38,240
|
|
$
|
5,734
|
|
$
|
4,980
|
|
$
|
192
|
|
$
|
—
|
|
$
|
49,146
|
|
Deferred revenue
|
5,981
|
|
3,462
|
|
40
|
|
—
|
|
—
|
|
9,483
|
|
||||||
Income taxes payable
|
—
|
|
1,579
|
|
—
|
|
—
|
|
—
|
|
1,579
|
|
||||||
Accrued interest
|
149
|
|
—
|
|
831
|
|
19,924
|
|
—
|
|
20,904
|
|
||||||
Payable to CURO
|
768,345
|
|
—
|
|
—
|
|
(768,345
|
)
|
—
|
|
—
|
|
||||||
Liability for losses on CSO lender-owned consumer loans
|
12,007
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,007
|
|
||||||
Deferred rent
|
9,559
|
|
1,292
|
|
—
|
|
—
|
|
—
|
|
10,851
|
|
||||||
Debt
|
20,000
|
|
—
|
|
107,479
|
|
676,661
|
|
—
|
|
804,140
|
|
||||||
Subordinated shareholder debt
|
—
|
|
2,196
|
|
—
|
|
—
|
|
—
|
|
2,196
|
|
||||||
Intercompany payable
|
—
|
|
224
|
|
44,330
|
|
—
|
|
(44,554
|
)
|
—
|
|
||||||
Other long-term liabilities
|
4,967
|
|
833
|
|
—
|
|
—
|
|
—
|
|
5,800
|
|
||||||
Deferred tax liabilities
|
15,175
|
|
—
|
|
—
|
|
(1,445
|
)
|
—
|
|
13,730
|
|
||||||
Liabilities from discontinued operations
|
—
|
|
8,882
|
|
—
|
|
—
|
|
—
|
|
8,882
|
|
||||||
Total liabilities
|
874,423
|
|
24,202
|
|
157,660
|
|
(73,013
|
)
|
(44,554
|
)
|
938,718
|
|
||||||
Stockholders' equity (deficit)
|
(235,700
|
)
|
142,668
|
|
(8,633
|
)
|
(19,101
|
)
|
101,665
|
|
(19,101
|
)
|
||||||
Total liabilities and stockholders' equity (deficit)
|
$
|
638,723
|
|
$
|
166,870
|
|
$
|
149,027
|
|
$
|
(92,114
|
)
|
$
|
57,111
|
|
$
|
919,617
|
|
|
Year Ended December 31, 2019
|
|||||||||||||||||
(in thousands)
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
Canada SPV
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||
Revenue
|
$
|
913,506
|
|
$
|
113,717
|
|
$
|
114,574
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,141,797
|
|
Provision for losses
|
392,105
|
|
23,222
|
|
53,224
|
|
—
|
|
—
|
|
468,551
|
|
||||||
Net revenue
|
521,401
|
|
90,495
|
|
61,350
|
|
—
|
|
—
|
|
673,246
|
|
||||||
Cost of providing services:
|
|
|
|
|
|
|
||||||||||||
Salaries and benefits
|
73,606
|
|
35,374
|
|
—
|
|
—
|
|
—
|
|
108,980
|
|
||||||
Occupancy
|
32,083
|
|
23,904
|
|
—
|
|
—
|
|
—
|
|
55,987
|
|
||||||
Office
|
17,787
|
|
5,400
|
|
—
|
|
—
|
|
—
|
|
23,187
|
|
||||||
Other store operating expenses
|
48,238
|
|
4,840
|
|
—
|
|
—
|
|
—
|
|
53,078
|
|
||||||
Advertising
|
46,735
|
|
6,663
|
|
—
|
|
—
|
|
—
|
|
53,398
|
|
||||||
Total cost of providing services
|
218,449
|
|
76,181
|
|
—
|
|
—
|
|
—
|
|
294,630
|
|
||||||
Gross Margin
|
302,952
|
|
14,314
|
|
61,350
|
|
—
|
|
—
|
|
378,616
|
|
||||||
Operating (income) expense:
|
|
|
|
|
|
|
||||||||||||
Corporate, district and other
|
127,216
|
|
22,167
|
|
(244
|
)
|
10,964
|
|
—
|
|
160,103
|
|
||||||
Intercompany management fee
|
(14,774
|
)
|
14,725
|
|
49
|
|
—
|
|
—
|
|
—
|
|
||||||
Interest expense
|
1,024
|
|
38
|
|
10,400
|
|
58,301
|
|
—
|
|
69,763
|
|
||||||
Loss from equity method investment
|
6,295
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,295
|
|
||||||
Intercompany interest (income) expense
|
(5,316
|
)
|
3,557
|
|
1,759
|
|
—
|
|
—
|
|
—
|
|
||||||
Total operating expense
|
114,445
|
|
40,487
|
|
11,964
|
|
69,265
|
|
—
|
|
236,161
|
|
||||||
Net income (loss) before income taxes
|
188,507
|
|
(26,173
|
)
|
49,386
|
|
(69,265
|
)
|
—
|
|
142,455
|
|
||||||
Provision for income tax expense (benefit)
|
48,933
|
|
6,879
|
|
—
|
|
(17,255
|
)
|
—
|
|
38,557
|
|
||||||
Net income (loss) from continuing operations
|
139,574
|
|
(33,052
|
)
|
49,386
|
|
(52,010
|
)
|
—
|
|
103,898
|
|
||||||
Income from discontinued operations
|
—
|
|
7,590
|
|
—
|
|
—
|
|
—
|
|
7,590
|
|
||||||
Net income (loss)
|
139,574
|
|
(25,462
|
)
|
49,386
|
|
(52,010
|
)
|
—
|
|
111,488
|
|
||||||
Equity in net income (loss) of subsidiaries:
|
|
|
|
|
|
|
||||||||||||
CFTC
|
—
|
|
—
|
|
—
|
|
163,498
|
|
(163,498
|
)
|
—
|
|
||||||
Guarantor Subsidiaries
|
139,574
|
|
—
|
|
—
|
|
—
|
|
(139,574
|
)
|
—
|
|
||||||
Non-Guarantor Subsidiaries
|
(25,462
|
)
|
—
|
|
—
|
|
—
|
|
25,462
|
|
—
|
|
||||||
SPV Subs
|
49,386
|
|
—
|
|
—
|
|
—
|
|
(49,386
|
)
|
—
|
|
||||||
Net income (loss) attributable to CURO
|
$
|
303,072
|
|
$
|
(25,462
|
)
|
$
|
49,386
|
|
$
|
111,488
|
|
$
|
(326,996
|
)
|
$
|
111,488
|
|
|
Year Ended December 31, 2018
|
|||||||||||||||||
(in thousands)
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
Canada SPV
|
CURO
|
Eliminations
|
CURO
Consolidated |
||||||||||||
Revenue
|
$
|
853,141
|
|
$
|
163,467
|
|
$
|
28,465
|
|
$
|
—
|
|
$
|
—
|
|
$
|
1,045,073
|
|
Provision for losses
|
348,611
|
|
39,644
|
|
33,345
|
|
—
|
|
—
|
|
421,600
|
|
||||||
Net revenue
|
504,530
|
|
123,823
|
|
(4,880
|
)
|
—
|
|
—
|
|
623,473
|
|
||||||
Cost of providing services:
|
|
|
|
|
|
|
||||||||||||
Salaries and benefits
|
71,447
|
|
35,307
|
|
—
|
|
—
|
|
—
|
|
106,754
|
|
||||||
Occupancy
|
30,797
|
|
22,887
|
|
—
|
|
—
|
|
—
|
|
53,684
|
|
||||||
Office
|
21,285
|
|
5,248
|
|
—
|
|
—
|
|
—
|
|
26,533
|
|
||||||
Other store operating expenses
|
47,341
|
|
4,328
|
|
—
|
|
—
|
|
—
|
|
51,669
|
|
||||||
Advertising
|
48,832
|
|
10,531
|
|
—
|
|
—
|
|
—
|
|
59,363
|
|
||||||
Total cost of providing services
|
219,702
|
|
78,301
|
|
—
|
|
—
|
|
—
|
|
298,003
|
|
||||||
Gross Margin
|
284,828
|
|
45,522
|
|
(4,880
|
)
|
—
|
|
—
|
|
325,470
|
|
||||||
Operating (income) expense:
|
|
|
|
|
|
|
||||||||||||
Corporate, district and other
|
103,509
|
|
19,603
|
|
38
|
|
9,251
|
|
—
|
|
132,401
|
|
||||||
Intercompany management fee
|
(11,516
|
)
|
11,500
|
|
16
|
|
—
|
|
—
|
|
—
|
|
||||||
Interest expense
|
59,949
|
|
94
|
|
3,907
|
|
20,432
|
|
—
|
|
84,382
|
|
||||||
Loss on extinguishment of debt
|
90,569
|
|
—
|
|
—
|
|
—
|
|
—
|
|
90,569
|
|
||||||
Intercompany interest (income) expense
|
(4,126
|
)
|
4,126
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Total operating expense
|
238,385
|
|
35,323
|
|
3,961
|
|
29,683
|
|
—
|
|
307,352
|
|
||||||
Net income (loss) before income taxes
|
46,443
|
|
10,199
|
|
(8,841
|
)
|
(29,683
|
)
|
—
|
|
18,118
|
|
||||||
Provision for income tax expense (benefit)
|
5,805
|
|
2,471
|
|
—
|
|
(6,617
|
)
|
—
|
|
1,659
|
|
||||||
Net income (loss) from continuing operations
|
40,638
|
|
7,728
|
|
(8,841
|
)
|
(23,066
|
)
|
—
|
|
16,459
|
|
||||||
Loss from discontinued operations
|
—
|
|
(38,512
|
)
|
—
|
|
—
|
|
—
|
|
(38,512
|
)
|
||||||
Net income (loss)
|
40,638
|
|
(30,784
|
)
|
(8,841
|
)
|
(23,066
|
)
|
—
|
|
(22,053
|
)
|
||||||
Equity in net income (loss) of subsidiaries:
|
|
|
|
|
|
|
||||||||||||
CFTC
|
—
|
|
—
|
|
—
|
|
39,525
|
|
(39,525
|
)
|
—
|
|
||||||
Guarantor Subsidiaries
|
40,638
|
|
—
|
|
—
|
|
—
|
|
(40,638
|
)
|
—
|
|
||||||
Non-Guarantor Subsidiaries
|
(30,784
|
)
|
—
|
|
—
|
|
—
|
|
30,784
|
|
—
|
|
||||||
SPV Subs
|
(8,841
|
)
|
—
|
|
—
|
|
—
|
|
8,841
|
|
—
|
|
||||||
Net income (loss) attributable to CURO
|
$
|
41,651
|
|
$
|
(30,784
|
)
|
$
|
(8,841
|
)
|
$
|
16,459
|
|
$
|
(40,538
|
)
|
$
|
(22,053
|
)
|
|
Year Ended December 31, 2019
|
|||||||||||||||||
(in thousands)
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
Canada SPV
|
CURO
|
Eliminations
|
CURO Consolidated
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||||||||
Net cash provided by continuing operating activities
|
$
|
412,075
|
|
$
|
32,407
|
|
$
|
130,896
|
|
$
|
74,372
|
|
$
|
1,385
|
|
$
|
651,135
|
|
Net cash used in discontinued operating activities
|
—
|
|
(504
|
)
|
—
|
|
—
|
|
—
|
|
(504
|
)
|
||||||
Net cash provided by operating activities
|
412,075
|
|
31,903
|
|
130,896
|
|
74,372
|
|
1,385
|
|
650,631
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||||||||
Purchase of property, equipment and software
|
(12,356
|
)
|
(1,625
|
)
|
—
|
|
—
|
|
—
|
|
(13,981
|
)
|
||||||
Originations of loans, net
|
(364,412
|
)
|
(18,199
|
)
|
(125,500
|
)
|
—
|
|
—
|
|
(508,111
|
)
|
||||||
Cash paid for Katapult Investment
|
(8,168
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,168
|
)
|
||||||
Net cash used in continuing investing activities
|
(384,936
|
)
|
(19,824
|
)
|
(125,500
|
)
|
—
|
|
—
|
|
(530,260
|
)
|
||||||
Net cash used in discontinued investing activities
|
—
|
|
(14,213
|
)
|
—
|
|
—
|
|
—
|
|
(14,213
|
)
|
||||||
Net cash used in investing activities
|
(384,936
|
)
|
(34,037
|
)
|
(125,500
|
)
|
—
|
|
—
|
|
(544,473
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||||||||
Proceeds from Non-Recourse Canada SPV facility
|
—
|
|
—
|
|
23,558
|
|
—
|
|
—
|
|
23,558
|
|
||||||
Payments on Non-Recourse Canada SPV facility
|
—
|
|
—
|
|
(24,877
|
)
|
—
|
|
—
|
|
(24,877
|
)
|
||||||
Subordinated debt repayment
|
—
|
|
(2,256
|
)
|
—
|
|
—
|
|
—
|
|
(2,256
|
)
|
||||||
Debt issuance costs paid
|
—
|
|
—
|
|
(170
|
)
|
(30
|
)
|
—
|
|
(200
|
)
|
||||||
Proceeds from revolving credit facilities
|
140,000
|
|
70,346
|
|
—
|
|
—
|
|
—
|
|
210,346
|
|
||||||
Payments on revolving credit facilities
|
(160,000
|
)
|
(70,346
|
)
|
—
|
|
—
|
|
—
|
|
(230,346
|
)
|
||||||
Proceeds from exercise of stock options
|
149
|
|
—
|
|
—
|
|
—
|
|
—
|
|
149
|
|
||||||
Payments to net share settle RSU's
|
—
|
|
—
|
|
—
|
|
(2,400
|
)
|
—
|
|
(2,400
|
)
|
||||||
Repurchase of common stock
|
—
|
|
—
|
|
—
|
|
(71,942
|
)
|
—
|
|
(71,942
|
)
|
||||||
Net cash used in financing activities
|
(19,851
|
)
|
(2,256
|
)
|
(1,489
|
)
|
(74,372
|
)
|
—
|
|
(97,968
|
)
|
||||||
Effect of exchange rate changes on cash and restricted cash
|
—
|
|
2,679
|
|
680
|
|
—
|
|
(1,385
|
)
|
1,974
|
|
||||||
Net (decrease) increase in cash and restricted cash
|
7,288
|
|
(1,711
|
)
|
4,587
|
|
—
|
|
—
|
|
10,164
|
|
||||||
Cash and restricted cash at beginning of period
|
52,397
|
|
34,620
|
|
12,840
|
|
—
|
|
—
|
|
99,857
|
|
||||||
Cash and restricted cash of continuing operations at end of period
|
59,685
|
|
32,909
|
|
17,427
|
|
—
|
|
—
|
|
110,021
|
|
|
Year Ended December 31, 2018
|
|||||||||||||||||
(in thousands)
|
Subsidiary Guarantors
|
Subsidiary
Non-Guarantors
|
Canada SPV
|
CURO
|
Eliminations
|
CURO Consolidated
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Net cash (used in) provided by continuing operating activities
|
$
|
1,104,821
|
|
$
|
16,308
|
|
$
|
72,648
|
|
$
|
(674,290
|
)
|
$
|
4,169
|
|
$
|
523,656
|
|
Net cash provided by discontinued operating activities
|
—
|
|
10,808
|
|
—
|
|
—
|
|
—
|
|
10,808
|
|
||||||
Net cash (used in) provided by operating activities
|
1,104,821
|
|
27,116
|
|
72,648
|
|
(674,290
|
)
|
4,169
|
|
534,464
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Purchase of property, equipment and software
|
(11,105
|
)
|
(2,928
|
)
|
—
|
|
—
|
|
—
|
|
(14,033
|
)
|
||||||
Originations of loans, net
|
(398,542
|
)
|
(7,228
|
)
|
(172,193
|
)
|
—
|
|
—
|
|
(577,963
|
)
|
||||||
Cash paid for Katapult Investment
|
(958
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(958
|
)
|
||||||
Net cash used in continuing investing activities
|
(410,605
|
)
|
(10,156
|
)
|
(172,193
|
)
|
—
|
|
—
|
|
(592,954
|
)
|
||||||
Net cash used in discontinued investing activities
|
—
|
|
(27,891
|
)
|
—
|
|
—
|
|
—
|
|
(27,891
|
)
|
||||||
Net cash used in investing activities
|
(410,605
|
)
|
(38,047
|
)
|
(172,193
|
)
|
—
|
|
—
|
|
(620,845
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Proceeds from Non-Recourse U.S. SPV facility and ABL facility
|
17,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
17,000
|
|
||||||
Payments on Non-Recourse U.S. SPV facility and ABL facility
|
(141,590
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(141,590
|
)
|
||||||
Proceeds from Non-Recourse Canada SPV facility
|
—
|
|
—
|
|
117,157
|
|
—
|
|
—
|
|
117,157
|
|
||||||
Payments on 12.00% Senior Secured Notes
|
(605,000
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(605,000
|
)
|
||||||
Proceeds from issuance of 8.25% Senior Secured Notes
|
—
|
|
—
|
|
—
|
|
690,000
|
|
—
|
|
690,000
|
|
||||||
Payments of call premiums from early debt extinguishments
|
(69,650
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(69,650
|
)
|
||||||
Debt issuance costs paid
|
(232
|
)
|
—
|
|
(4,529
|
)
|
(13,848
|
)
|
—
|
|
(18,609
|
)
|
||||||
Proceeds from revolving credit facilities
|
87,000
|
|
44,902
|
|
—
|
|
—
|
|
—
|
|
131,902
|
|
||||||
Payments on revolving credit facilities
|
(67,000
|
)
|
(44,902
|
)
|
—
|
|
—
|
|
—
|
|
(111,902
|
)
|
||||||
Proceeds from exercise of stock options
|
559
|
|
—
|
|
—
|
|
—
|
|
—
|
|
559
|
|
||||||
Payments to net share settle RSU's
|
—
|
|
—
|
|
—
|
|
(1,942
|
)
|
—
|
|
(1,942
|
)
|
||||||
Net proceeds from issuance of common stock
|
11,167
|
|
—
|
|
—
|
|
—
|
|
—
|
|
11,167
|
|
||||||
Net cash (used in) provided by financing activities
|
(767,746
|
)
|
—
|
|
112,628
|
|
674,210
|
|
—
|
|
19,092
|
|
||||||
Effect of exchange rate changes on cash and restricted cash
|
—
|
|
(2,933
|
)
|
(243
|
)
|
—
|
|
(4,169
|
)
|
(7,345
|
)
|
||||||
Net (decrease) increase in cash and restricted cash
|
(73,530
|
)
|
(13,864
|
)
|
12,840
|
|
(80
|
)
|
—
|
|
(74,634
|
)
|
||||||
Cash and restricted cash at beginning of period
|
125,927
|
|
48,484
|
|
—
|
|
80
|
|
—
|
|
174,491
|
|
||||||
Cash and restricted cash at end of period
|
52,397
|
|
34,620
|
|
12,840
|
|
—
|
|
—
|
|
99,857
|
|
||||||
Cash and restricted cash of discontinued operations at end of period
|
—
|
|
13,243
|
|
—
|
|
—
|
|
—
|
|
13,243
|
|
||||||
Cash and restricted cash of continuing operations at end of period
|
$
|
52,397
|
|
$
|
21,377
|
|
$
|
12,840
|
|
$
|
—
|
|
$
|
—
|
|
$
|
86,614
|
|
|
Year Ended December 31,
|
||||||||
(dollars in thousands)
|
2019
|
2018
|
2017
|
||||||
Net cash provided by continuing operating activities
|
$
|
651,135
|
|
$
|
523,656
|
|
$
|
425,238
|
|
Net cash used in continuing investing activities
|
(530,260
|
)
|
(592,954
|
)
|
(417,090
|
)
|
|||
Net cash (used in) provided by continuing financing activities
|
(97,968
|
)
|
19,092
|
|
(36,691
|
)
|
|
Payments due by period
|
||||||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than 5 years
|
||||||||||
Debt obligations (1)
|
$
|
805,243
|
|
|
$
|
—
|
|
|
$
|
38,414
|
|
|
$
|
76,829
|
|
|
$
|
690,000
|
|
Interest on debt obligations (2)
|
332,860
|
|
|
67,210
|
|
|
113,850
|
|
|
113,850
|
|
|
37,950
|
|
|||||
Operating lease obligations (3)
|
170,402
|
|
|
34,720
|
|
|
59,457
|
|
|
36,520
|
|
|
39,705
|
|
|||||
Service contracts (4)
|
14,486
|
|
|
4,119
|
|
|
6,673
|
|
|
3,694
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
1,322,991
|
|
|
$
|
106,049
|
|
|
$
|
218,394
|
|
|
$
|
230,893
|
|
|
$
|
767,655
|
|
(1) Includes debt obligations under the 8.25% Senior Secured Notes due 2025 and the Non-Recourse Canada SPV Facility due 2023.
|
|||||||||||||||||||
(2) Certain debt obligations have variable interest rates. These interest obligations are estimated using the effective interest rate as of December 31, 2019. See Note 9, "Debt" to our Notes to Consolidated Financial Statements for additional information.
|
|||||||||||||||||||
(3) See Note 17, "Leases" to our Notes to Consolidated Financial Statements in Item 8 of this Annual Report for additional information.
|
|||||||||||||||||||
(4) Represents fixed or minimum amounts required under purchase obligations for support service contracts.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
||||
Cash
|
$
|
75,242
|
|
|
$
|
61,175
|
|
Restricted cash (includes restricted cash of consolidated VIEs of $17,427 and $12,840 as of December 31, 2019 and 2018, respectively)
|
34,779
|
|
|
25,439
|
|
||
Gross loans receivable (includes loans of consolidated VIEs of $244,492 and $148,876 as of December 31, 2019 and 2018, respectively)
|
665,828
|
|
|
571,531
|
|
||
Less: allowance for loan losses (includes allowance for losses of consolidated VIEs of $24,425 and $12,688 as of December 31, 2019 and 2018, respectively)
|
(106,835
|
)
|
|
(73,997
|
)
|
||
Loans receivable, net
|
558,993
|
|
|
497,534
|
|
||
Right of use asset - operating leases (Note 1 and Note 17)
|
117,453
|
|
|
—
|
|
||
Deferred tax assets
|
5,055
|
|
|
1,534
|
|
||
Income taxes receivable
|
11,426
|
|
|
16,741
|
|
||
Prepaid expenses and other
|
35,890
|
|
|
43,588
|
|
||
Property and equipment, net
|
70,811
|
|
|
76,750
|
|
||
Goodwill
|
120,609
|
|
|
119,281
|
|
||
Other intangibles assets, net
|
33,927
|
|
|
29,784
|
|
||
Other
|
17,710
|
|
|
12,930
|
|
||
Assets from discontinued operations (Note 22)
|
—
|
|
|
34,861
|
|
||
Total Assets
|
$
|
1,081,895
|
|
|
$
|
919,617
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities (includes accounts payable and accrued liabilities of consolidated VIEs of $13,462 and $4,980 as of December 31, 2019 and 2018, respectively)
|
$
|
60,083
|
|
|
$
|
49,146
|
|
Deferred revenue
|
10,170
|
|
|
9,483
|
|
||
Lease liability - operating leases (Note 1 and Note 17)
|
124,999
|
|
|
—
|
|
||
Income taxes payable
|
—
|
|
|
1,579
|
|
||
Accrued interest (includes accrued interest of consolidated VIEs of $871 and $831 as of December 31, 2019 and 2018, respectively)
|
19,847
|
|
|
20,904
|
|
||
Liability for losses on CSO lender-owned consumer loans
|
10,623
|
|
|
12,007
|
|
||
Deferred rent
|
—
|
|
|
10,851
|
|
||
Debt (includes debt and issuance costs of consolidated VIEs of $115,243 and $3,022 and $111,335 and $3,856 as of December 31, 2019 and 2018, respectively)
|
790,544
|
|
|
804,140
|
|
||
Subordinated stockholder debt
|
—
|
|
|
2,196
|
|
||
Other long-term liabilities
|
10,664
|
|
|
5,800
|
|
||
Deferred tax liabilities
|
4,452
|
|
|
13,730
|
|
||
Liabilities from discontinued operations (Note 22)
|
—
|
|
|
8,882
|
|
||
Total Liabilities
|
1,031,382
|
|
|
938,718
|
|
||
Commitments and contingencies (Note 16)
|
|
|
|
|
|
||
Stockholders' Equity
|
|
|
|
|
|
||
Preferred stock - $0.001 par value; 25,000,000 shares authorized; no shares were issued
|
—
|
|
|
—
|
|
||
Common stock - $0.001 par value; 225,000,000 shares authorized; 46,770,765 and 46,412,231 shares issued; and 41,156,224 and 46,412,231 shares outstanding at the respective period ends
|
9
|
|
|
9
|
|
||
Treasury stock, at cost - 5,614,541 as of December 31, 2019
|
(72,343
|
)
|
|
—
|
|
||
Paid-in capital
|
68,087
|
|
|
60,015
|
|
||
Retained earnings (accumulated deficit)
|
93,423
|
|
|
(18,065
|
)
|
||
Accumulated other comprehensive loss
|
(38,663
|
)
|
|
(61,060
|
)
|
||
Total Stockholders' Equity (Deficit)
|
50,513
|
|
|
(19,101)
|
|
||
Total Liabilities and Stockholders' Equity (Deficit)
|
$
|
1,081,895
|
|
|
$
|
919,617
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
$
|
1,141,797
|
|
|
$
|
1,045,073
|
|
|
$
|
924,137
|
|
Provision for losses
|
468,551
|
|
|
421,600
|
|
|
312,566
|
|
|||
Net revenue
|
673,246
|
|
|
623,473
|
|
|
611,571
|
|
|||
|
|
|
|
|
|
||||||
Cost of providing services
|
|
|
|
|
|
||||||
Salaries and benefits
|
108,980
|
|
|
106,754
|
|
|
104,103
|
|
|||
Occupancy
|
55,987
|
|
|
53,684
|
|
|
53,568
|
|
|||
Office
|
23,187
|
|
|
26,533
|
|
|
19,703
|
|
|||
Other costs of providing services
|
53,078
|
|
|
51,669
|
|
|
52,469
|
|
|||
Advertising
|
53,398
|
|
|
59,363
|
|
|
46,563
|
|
|||
Total cost of providing services
|
294,630
|
|
|
298,003
|
|
|
276,406
|
|
|||
Gross margin
|
378,616
|
|
|
325,470
|
|
|
335,165
|
|
|||
|
|
|
|
|
|
||||||
Operating expense
|
|
|
|
|
|
||||||
Corporate, district and other expenses
|
160,103
|
|
|
132,401
|
|
|
137,755
|
|
|||
Interest expense
|
69,763
|
|
|
84,382
|
|
|
82,696
|
|
|||
Loss on extinguishment of debt
|
—
|
|
|
90,569
|
|
|
12,458
|
|
|||
Loss from equity method investment
|
6,295
|
|
|
—
|
|
|
—
|
|
|||
Total operating expense
|
236,161
|
|
|
307,352
|
|
|
232,909
|
|
|||
Income from continuing operations before income taxes
|
142,455
|
|
|
18,118
|
|
|
102,256
|
|
|||
Provision for income taxes
|
38,557
|
|
|
1,659
|
|
|
41,647
|
|
|||
Net income from continuing operations
|
103,898
|
|
|
16,459
|
|
|
60,609
|
|
|||
Loss from discontinued operations, before income taxes
|
(39,048
|
)
|
|
(38,682
|
)
|
|
(10,527
|
)
|
|||
Income tax (benefit) expense related to disposition
|
$
|
(46,638
|
)
|
|
$
|
(170
|
)
|
|
$
|
929
|
|
Net income (loss) from discontinued operations
|
$
|
7,590
|
|
|
$
|
(38,512
|
)
|
|
$
|
(11,456
|
)
|
Net income (loss)
|
$
|
111,488
|
|
|
$
|
(22,053
|
)
|
|
$
|
49,153
|
|
|
|
|
|
|
|
||||||
Basic earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.33
|
|
|
$
|
0.36
|
|
|
$
|
1.58
|
|
Discontinued operations
|
0.17
|
|
|
(0.84
|
)
|
|
(0.30
|
)
|
|||
Basic earnings (loss) per share
|
$
|
2.50
|
|
|
$
|
(0.48
|
)
|
|
$
|
1.28
|
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.26
|
|
|
$
|
0.34
|
|
|
$
|
1.54
|
|
Discontinued operations
|
0.17
|
|
|
(0.80
|
)
|
|
(0.29
|
)
|
|||
Diluted earnings (loss) per share
|
$
|
2.43
|
|
|
$
|
(0.46
|
)
|
|
$
|
1.25
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
44,685
|
|
|
45,815
|
|
|
38,351
|
|
|||
Diluted
|
45,974
|
|
|
47,965
|
|
|
39,277
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net income (loss)
|
$
|
111,488
|
|
|
$
|
(22,053
|
)
|
|
$
|
49,153
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||
Cash flow hedges
|
—
|
|
|
—
|
|
|
333
|
|
|||
Foreign currency translation adjustment, net of $0 tax in all periods
|
22,397
|
|
|
(18,121
|
)
|
|
16,713
|
|
|||
Other comprehensive income (loss)
|
22,397
|
|
|
(18,121
|
)
|
|
17,046
|
|
|||
Comprehensive income (loss)
|
$
|
133,885
|
|
|
$
|
(40,174
|
)
|
|
$
|
66,199
|
|
|
Common Stock
|
|
Paid-in capital
|
|
Treasury Stock
|
|
Retained Earnings (Deficit)
|
|
AOCI (1)
|
|
Total Stockholders' Equity
|
|||||||||||||||
|
Shares Outstanding
|
|
Par Value
|
|
|
|
|
|||||||||||||||||||
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, Net Proceeds
|
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
|
|
|||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,053
|
)
|
|
—
|
|
|
(22,053
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,121
|
)
|
|
(18,121
|
)
|
||||||
Share based compensation expense
|
—
|
|
|
—
|
|
|
8,210
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,210
|
|
||||||
Proceeds from exercise of stock options
|
500,924
|
|
|
—
|
|
|
559
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
559
|
|
||||||
Common stock issued for RSU's vesting, net of shares withheld and withholding paid for employee taxes
|
349,888
|
|
|
—
|
|
|
(1,942
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,942
|
)
|
||||||
Initial Public Offering, Net Proceeds (underwriter shares)
|
1,000,000
|
|
|
1
|
|
|
7,109
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,110
|
|
||||||
Balances at December 31, 2018
|
46,412,231
|
|
|
$
|
9
|
|
|
$
|
60,015
|
|
|
$
|
—
|
|
|
$
|
(18,065
|
)
|
|
$
|
(61,060
|
)
|
|
$
|
(19,101
|
)
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
111,488
|
|
|
—
|
|
|
111,488
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,397
|
|
|
22,397
|
|
||||||
Share based compensation expense
|
—
|
|
|
—
|
|
|
10,323
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,323
|
|
||||||
Proceeds from exercise of stock options
|
40,014
|
|
|
—
|
|
|
149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149
|
|
||||||
Repurchase of common stock(2)
|
(5,614,541
|
)
|
|
—
|
|
|
—
|
|
|
(72,343
|
)
|
|
—
|
|
|
—
|
|
|
(72,343
|
)
|
||||||
Common stock issued for RSU's vesting, net of shares withheld and withholding paid for employee taxes
|
318,520
|
|
|
—
|
|
|
(2,400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,400
|
)
|
||||||
Balances at December 31, 2019
|
41,156,224
|
|
|
$
|
9
|
|
|
$
|
68,087
|
|
|
$
|
(72,343
|
)
|
|
$
|
93,423
|
|
|
$
|
(38,663
|
)
|
|
$
|
50,513
|
|
(1) Accumulated other comprehensive income (loss)
|
||||||||||||||||||||||||||
(2)Includes the repurchase of 2,000,000 shares of common stock from FFL for $13.55 per share. See Note 23 - "Share Repurchase Program" for additional information.
|
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
|
2019
|
2018
|
|
2017
|
|||||||
Cash flows from operating activities
|
|
|
|
|
|
|
||||||
Net income from continuing operations
|
|
$
|
103,898
|
|
|
$
|
16,459
|
|
|
$
|
60,609
|
|
Adjustments to reconcile net income to net cash provided by continuing operating activities:
|
|
|
|
|
||||||||
Depreciation and amortization
|
|
18,630
|
|
|
18,337
|
|
|
18,185
|
|
|||
Provision for loan losses
|
|
468,551
|
|
|
421,600
|
|
|
312,566
|
|
|||
Amortization of debt issuance costs and bond discount
|
|
2,971
|
|
|
3,658
|
|
|
4,554
|
|
|||
Deferred income taxes
|
|
(6,396
|
)
|
|
2,126
|
|
|
9,036
|
|
|||
Loss on disposal of property and equipment
|
|
85
|
|
|
889
|
|
|
2,278
|
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
90,569
|
|
|
12,458
|
|
|||
Loss from equity method investment
|
|
6,295
|
|
|
—
|
|
|
—
|
|
|||
Share-based compensation expense
|
|
10,323
|
|
|
8,210
|
|
|
965
|
|
|||
Realized loss on cash flow hedge
|
|
—
|
|
|
556
|
|
|
333
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
||||||
Accrued interest on loans receivable
|
|
(12,844
|
)
|
|
(11,096
|
)
|
|
(16,770
|
)
|
|||
Prepaid expenses and other assets
|
|
10,771
|
|
|
(2,578
|
)
|
|
(4,574
|
)
|
|||
Accounts payable and accrued liabilities
|
|
9,798
|
|
|
(5,085
|
)
|
|
6,232
|
|
|||
Deferred revenue
|
|
527
|
|
|
(1,630
|
)
|
|
(682
|
)
|
|||
Income taxes payable
|
|
34,102
|
|
|
1,636
|
|
|
529
|
|
|||
Income taxes receivable
|
|
9,798
|
|
|
(13,287
|
)
|
|
2,557
|
|
|||
Other assets and liabilities
|
|
(5,374
|
)
|
|
(6,708
|
)
|
|
16,962
|
|
|||
Net cash provided by continuing operating activities
|
|
651,135
|
|
|
523,656
|
|
|
425,238
|
|
|||
Net cash (used in) provided by discontinued operating activities
|
|
(504
|
)
|
|
10,808
|
|
|
9,666
|
|
|||
Net cash provided by operating activities
|
|
650,631
|
|
|
534,464
|
|
|
434,904
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
|
||||||
Purchase of property, equipment and software
|
|
(13,981
|
)
|
|
(14,033
|
)
|
|
(8,717
|
)
|
|||
Loans receivable originated or acquired
|
|
(1,835,301
|
)
|
|
(2,136,164
|
)
|
|
(2,063,213
|
)
|
|||
Loans receivable repaid
|
|
1,327,190
|
|
|
1,558,201
|
|
|
1,660,440
|
|
|||
Investments in Cognical Holdings, Inc. ("Katapult", formerly known as Zibby)
|
|
(8,168
|
)
|
|
(958
|
)
|
|
(5,600
|
)
|
|||
Net cash used in continuing investing activities
|
|
(530,260
|
)
|
|
(592,954
|
)
|
|
(417,090
|
)
|
|||
Net cash used in discontinued investing activities
|
|
(14,213
|
)
|
|
(27,891
|
)
|
|
(15,761
|
)
|
|||
Net cash used in investing activities
|
|
(544,473
|
)
|
|
(620,845
|
)
|
|
(432,851
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
|
||||||
Payments on 10.75% Senior Secured Notes
|
|
—
|
|
|
—
|
|
|
(426,034
|
)
|
|||
Payments on 12.00% Senior Cash Pay Notes
|
|
—
|
|
|
—
|
|
|
(125,000
|
)
|
|||
Proceeds from issuance of 12.00% Senior Secured Notes
|
|
—
|
|
|
—
|
|
|
601,054
|
|
|||
Payments on 12.00% Senior Secured Notes
|
|
—
|
|
|
(605,000
|
)
|
|
—
|
|
|||
Proceeds from Non-Recourse U.S. SPV facility and ABL facility
|
|
—
|
|
|
17,000
|
|
|
60,130
|
|
|||
Payments on Non-Recourse U.S. SPV facility and ABL facility
|
|
—
|
|
|
(141,590
|
)
|
|
(27,257
|
)
|
|||
Proceeds from Non-Recourse Canada SPV facility
|
|
23,558
|
|
|
117,157
|
|
|
—
|
|
|||
Payments on Non-Recourse Canada SPV facility
|
|
(24,877
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from 8.25% Senior Secured Notes
|
|
—
|
|
|
690,000
|
|
|
—
|
|
|||
Proceeds from credit facilities
|
|
210,346
|
|
|
131,902
|
|
|
43,084
|
|
|||
Payments on credit facilities
|
|
(230,346
|
)
|
|
(111,902
|
)
|
|
(43,084
|
)
|
|||
Payments on subordinated stockholder debt
|
|
(2,256
|
)
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs paid
|
|
(200
|
)
|
|
(18,609
|
)
|
|
(18,701
|
)
|
|||
Payments of call premiums from early debt extinguishments
|
|
—
|
|
|
(69,650
|
)
|
|
—
|
|
Net proceeds from issuance of common stock
|
|
—
|
|
|
11,167
|
|
|
81,117
|
|
|||
Payments to net share settle restricted stock units vesting
|
|
(2,400
|
)
|
|
(1,942
|
)
|
|
—
|
|
|||
Proceeds from exercise of stock options
|
|
149
|
|
|
559
|
|
|
—
|
|
|||
Repurchase of common stock
|
|
(71,942
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid to stockholders
|
|
—
|
|
|
—
|
|
|
(182,000
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(97,968
|
)
|
|
19,092
|
|
|
(36,691
|
)
|
|||
Effect of exchange rate changes on cash and restricted cash
|
|
1,974
|
|
|
(7,345
|
)
|
|
7,776
|
|
|||
Net increase (decrease) in cash and restricted cash
|
|
10,164
|
|
|
(74,634
|
)
|
|
(26,862
|
)
|
|||
Cash and restricted cash at beginning of period
|
|
99,857
|
|
|
174,491
|
|
|
201,353
|
|
|||
Cash and restricted cash at end of period
|
|
110,021
|
|
|
99,857
|
|
|
174,491
|
|
|||
Less: Cash and restricted cash of discontinued operations at end of period
|
|
—
|
|
|
13,243
|
|
|
12,460
|
|
|||
Cash and restricted cash of continuing operations at end of period
|
|
$
|
110,021
|
|
|
$
|
86,614
|
|
|
$
|
162,031
|
|
|
|
December 31,
|
||||||||||
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cash and cash equivalents
|
|
$
|
75,242
|
|
|
$
|
61,175
|
|
|
$
|
153,483
|
|
Restricted cash (includes restricted cash of consolidated VIEs of $17,427 and $12,840 as of December 31, 2019 and 2018, respectively)
|
|
34,779
|
|
|
25,439
|
|
|
8,548
|
|
|||
Total cash, cash equivalents and restricted cash from continuing operations
|
|
110,021
|
|
|
86,614
|
|
|
162,031
|
|
|||
Cash and restricted cash from discontinued operations
|
|
—
|
|
|
13,243
|
|
|
12,460
|
|
|||
Total cash, cash equivalents and restricted cash used in the Statements of Cash Flows
|
|
$
|
110,021
|
|
|
$
|
99,857
|
|
|
$
|
174,491
|
|
•
|
Gross combined loans receivable: balances as of December 31, 2019 include $50.1 million of Open-End loans that are up to 90 days past-due with related accrued interest, while such balances for periods prior to March 31, 2019 do not include any past-due loans.
|
•
|
Revenues: for the year ended December 31, 2019, gross revenues include interest earned on past-due loan balances of approximately $49 million, while revenues in prior-year periods do not include comparable amounts.
|
•
|
Provision for Losses: prospectively from January 1, 2019, past-due, unpaid balances plus related accrued interest charge-off on day 91. Provision for losses is affected by NCOs (total charge-offs less total recoveries) plus changes to the Allowance for loan losses. Because NCOs prospectively include unpaid principal and up to 90 days of related accrued interest, NCO amounts and rates are higher and the Open-End Allowance for loan losses as a percentage of Open-End gross loans receivable is higher. The Open-End Allowance for loan losses as a percentage of Open-End gross loans receivable increased to 16.4% at December 31, 2019, compared to 9.6% at December 31, 2018.
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Settlements and collateral due from third-party lenders
|
$
|
6,156
|
|
|
$
|
17,205
|
|
Fees receivable from customers under CSO programs
|
14,564
|
|
|
13,771
|
|
||
Prepaid expenses
|
4,546
|
|
|
6,456
|
|
||
Other assets
|
10,624
|
|
|
6,156
|
|
||
Total prepaid expenses and other
|
$
|
35,890
|
|
|
$
|
43,588
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Leasehold improvements
|
|
$
|
134,574
|
|
|
$
|
126,903
|
|
Furniture, fixtures and equipment
|
|
37,726
|
|
|
34,896
|
|
||
Property and equipment, gross
|
|
172,300
|
|
|
161,799
|
|
||
Accumulated depreciation and amortization
|
|
(101,489
|
)
|
|
(85,049
|
)
|
||
Property and equipment, net
|
|
$
|
70,811
|
|
|
$
|
76,750
|
|
|
U.S.
|
|
Canada
|
|
Total
|
||||||
Goodwill at December 31, 2017
|
$
|
91,131
|
|
|
$
|
30,516
|
|
|
$
|
121,647
|
|
Foreign currency translation - 2018
|
—
|
|
|
(2,366
|
)
|
|
(2,366
|
)
|
|||
Goodwill at December 31, 2018
|
91,131
|
|
|
28,150
|
|
|
119,281
|
|
|||
Foreign currency translation - 2019
|
—
|
|
|
1,328
|
|
|
1,328
|
|
|||
Goodwill at December 31, 2019
|
91,131
|
|
|
29,478
|
|
|
120,609
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Weighted-Average Remaining Life (Years)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
Assets not subject to amortization
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Trade name
|
—
|
|
$
|
22,357
|
|
|
$
|
—
|
|
|
$
|
22,357
|
|
|
$
|
21,350
|
|
|
$
|
—
|
|
|
$
|
21,350
|
|
Assets subject to amortization
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Customer relationships
|
—
|
|
8,982
|
|
|
(8,982
|
)
|
|
—
|
|
|
18,299
|
|
|
(17,643
|
)
|
|
656
|
|
||||||
Computer software
|
9.2
|
|
26,328
|
|
|
(14,758
|
)
|
|
11,570
|
|
|
24,051
|
|
|
(16,273
|
)
|
|
7,778
|
|
||||||
Balance, end of year
|
|
|
$
|
57,667
|
|
|
$
|
(23,740
|
)
|
|
$
|
33,927
|
|
|
$
|
63,700
|
|
|
$
|
(33,916
|
)
|
|
$
|
29,784
|
|
|
Year Ending December 31,
|
||
2020
|
$
|
2,065
|
|
2021
|
1,508
|
|
|
2022
|
838
|
|
|
2023
|
519
|
|
|
2024
|
519
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Assets
|
|
|
|
||||
Restricted cash
|
$
|
17,427
|
|
|
$
|
12,840
|
|
Loans receivable less allowance for loan losses
|
220,067
|
|
|
136,187
|
|
||
Total Assets
|
$
|
237,494
|
|
|
$
|
149,027
|
|
Liabilities
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
13,462
|
|
|
$
|
4,980
|
|
Deferred revenue
|
46
|
|
|
40
|
|
||
Accrued interest
|
871
|
|
|
831
|
|
||
Intercompany payable
|
69,639
|
|
|
44,330
|
|
||
Debt
|
112,221
|
|
|
107,479
|
|
||
Total Liabilities
|
$
|
196,239
|
|
|
$
|
157,660
|
|
|
|
December 31, 2019
|
|||||||||||
|
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Total
|
||||||||
Delinquent loans receivable
|
|
|
|
|
|
||||||||
0-30 days past-due
|
|
$
|
15,369
|
|
$
|
8,039
|
|
$
|
21,823
|
|
$
|
45,231
|
|
31-60 days past-due
|
|
12,403
|
|
4,885
|
|
13,191
|
|
30,479
|
|
||||
61 + days past-due
|
|
15,328
|
|
4,586
|
|
15,058
|
|
34,972
|
|
||||
Total delinquent loans receivable
|
|
$
|
43,100
|
|
$
|
17,510
|
|
$
|
50,072
|
|
$
|
110,682
|
|
|
|
December 31, 2018
|
||||||||||||||
|
|
Single-Pay(1)
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Total
|
||||||||||
Current loans receivable
|
|
$
|
80,823
|
|
$
|
141,318
|
|
$
|
75,583
|
|
$
|
207,333
|
|
$
|
505,057
|
|
Delinquent loans receivable
|
|
—
|
|
49,085
|
|
17,389
|
|
—
|
|
66,474
|
|
|||||
Total loans receivable
|
|
80,823
|
|
190,403
|
|
92,972
|
|
207,333
|
|
571,531
|
|
|||||
Less: allowance for losses
|
|
(4,189
|
)
|
(37,716
|
)
|
(12,191
|
)
|
(19,901
|
)
|
(73,997
|
)
|
|||||
Loans receivable, net
|
|
$
|
76,634
|
|
$
|
152,687
|
|
$
|
80,781
|
|
$
|
187,432
|
|
$
|
497,534
|
|
(1) Of the $80.8 million of Single-Pay receivables, $23.7 million relate to mandated extended payment options for certain Canada Single-Pay loans.
|
|
|
December 31, 2018
|
||||||||
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Delinquent loans receivable
|
|
|
|
|
||||||
0-30 days past-due
|
|
$
|
17,848
|
|
$
|
7,870
|
|
$
|
25,718
|
|
31-60 days past-due
|
|
14,705
|
|
4,725
|
|
19,430
|
|
|||
61 + days past-due
|
|
16,532
|
|
4,794
|
|
21,326
|
|
|||
Total delinquent loans receivable
|
|
$
|
49,085
|
|
$
|
17,389
|
|
$
|
66,474
|
|
|
|
December 31, 2019
|
||||||||
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Current loans receivable guaranteed by the Company
|
|
$
|
61,840
|
|
$
|
1,944
|
|
$
|
63,784
|
|
Delinquent loans receivable guaranteed by the Company
|
|
12,477
|
|
392
|
|
12,869
|
|
|||
Total loans receivable guaranteed by the Company
|
|
74,317
|
|
2,336
|
|
76,653
|
|
|||
Less: Liability for losses on CSO lender-owned consumer loans
|
|
(10,553
|
)
|
(70
|
)
|
(10,623
|
)
|
|||
Loans receivable guaranteed by the Company, net
|
|
$
|
63,764
|
|
$
|
2,266
|
|
$
|
66,030
|
|
|
|
December 31, 2019
|
||||||||
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Delinquent loans receivable
|
|
|
|
|
||||||
0-30 days past-due
|
|
$
|
10,392
|
|
$
|
326
|
|
$
|
10,718
|
|
31-60 days past-due
|
|
1,256
|
|
40
|
|
1,296
|
|
|||
61 + days past-due
|
|
829
|
|
26
|
|
855
|
|
|||
Total delinquent loans receivable
|
|
$
|
12,477
|
|
$
|
392
|
|
$
|
12,869
|
|
|
|
December 31, 2018
|
||||||||
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Current loans receivable guaranteed by the Company
|
|
$
|
65,743
|
|
$
|
2,504
|
|
$
|
68,247
|
|
Delinquent loans receivable guaranteed by the Company
|
|
11,708
|
|
446
|
|
12,154
|
|
|||
Total loans receivable guaranteed by the Company
|
|
77,451
|
|
2,950
|
|
80,401
|
|
|||
Less: Liability for losses on CSO lender-owned consumer loans
|
|
(11,582
|
)
|
(425
|
)
|
(12,007
|
)
|
|||
Loans receivable guaranteed by the Company, net
|
|
$
|
65,869
|
|
$
|
2,525
|
|
$
|
68,394
|
|
|
|
December 31, 2018
|
||||||||
|
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Delinquent loans receivable
|
|
|
|
|
||||||
0-30 days past-due
|
|
$
|
9,684
|
|
$
|
369
|
|
$
|
10,053
|
|
31-60 days past-due
|
|
1,255
|
|
48
|
|
1,303
|
|
|||
61 + days past-due
|
|
769
|
|
29
|
|
798
|
|
|||
Total delinquent loans receivable
|
|
$
|
11,708
|
|
$
|
446
|
|
$
|
12,154
|
|
|
Year Ended December 31, 2019
|
|||||||||||||||||
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
4,189
|
|
$
|
37,716
|
|
$
|
12,191
|
|
$
|
19,901
|
|
$
|
—
|
|
$
|
73,997
|
|
Charge-offs
|
(155,250
|
)
|
(158,251
|
)
|
(47,195
|
)
|
(108,319
|
)
|
(5,445
|
)
|
(474,460
|
)
|
||||||
Recoveries
|
109,124
|
|
23,660
|
|
10,744
|
|
19,061
|
|
3,284
|
|
165,873
|
|
||||||
Net charge-offs
|
(46,126
|
)
|
(134,591
|
)
|
(36,451
|
)
|
(89,258
|
)
|
(2,161
|
)
|
(308,587
|
)
|
||||||
Provision for losses
|
47,739
|
|
132,433
|
|
34,565
|
|
123,726
|
|
2,161
|
|
340,624
|
|
||||||
Effect of foreign currency translation
|
67
|
|
29
|
|
—
|
|
705
|
|
—
|
|
801
|
|
||||||
Balance, end of period
|
$
|
5,869
|
|
$
|
35,587
|
|
$
|
10,305
|
|
$
|
55,074
|
|
$
|
—
|
|
$
|
106,835
|
|
Allowance for loan losses as a percentage of gross loan receivables
|
7.2
|
%
|
22.1
|
%
|
11.7
|
%
|
16.4
|
%
|
N/A
|
|
16.0
|
%
|
|
Year Ended December 31, 2019
|
||||||||
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Balance, beginning of period
|
$
|
11,582
|
|
$
|
425
|
|
$
|
12,007
|
|
Charge-offs
|
(161,557
|
)
|
(3,610
|
)
|
(165,167
|
)
|
|||
Recoveries
|
33,248
|
|
2,608
|
|
35,856
|
|
|||
Net charge-offs
|
(128,309
|
)
|
(1,002
|
)
|
(129,311
|
)
|
|||
Provision for losses
|
127,280
|
|
647
|
|
127,927
|
|
|||
Balance, end of period
|
$
|
10,553
|
|
$
|
70
|
|
$
|
10,623
|
|
|
Year Ended December 31, 2019
|
|||||||||||||||||
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
4,189
|
|
$
|
49,298
|
|
$
|
12,616
|
|
$
|
19,901
|
|
$
|
—
|
|
$
|
86,004
|
|
Charge-offs
|
(155,250
|
)
|
(319,808
|
)
|
(50,805
|
)
|
(108,319
|
)
|
(5,445
|
)
|
(639,627
|
)
|
||||||
Recoveries
|
109,124
|
|
56,908
|
|
13,352
|
|
19,061
|
|
3,284
|
|
201,729
|
|
||||||
Net charge-offs
|
(46,126
|
)
|
(262,900
|
)
|
(37,453
|
)
|
(89,258
|
)
|
(2,161
|
)
|
(437,898
|
)
|
||||||
Provision for losses
|
47,739
|
|
259,713
|
|
35,212
|
|
123,726
|
|
2,161
|
|
468,551
|
|
||||||
Effect of foreign currency translation
|
67
|
|
29
|
|
—
|
|
705
|
|
—
|
|
801
|
|
||||||
Balance, end of period
|
$
|
5,869
|
|
$
|
46,140
|
|
$
|
10,375
|
|
$
|
55,074
|
|
$
|
—
|
|
$
|
117,458
|
|
|
Year Ended December 31, 2018
|
|||||||||||||||||
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
5,204
|
|
$
|
39,025
|
|
$
|
13,472
|
|
$
|
6,426
|
|
$
|
—
|
|
$
|
64,127
|
|
Charge-offs
|
(164,342
|
)
|
(141,963
|
)
|
(46,996
|
)
|
(113,150
|
)
|
(5,913
|
)
|
(472,364
|
)
|
||||||
Recoveries
|
115,118
|
|
20,175
|
|
10,041
|
|
41,457
|
|
3,603
|
|
190,394
|
|
||||||
Net charge-offs
|
(49,224
|
)
|
(121,788
|
)
|
(36,955
|
)
|
(71,693
|
)
|
(2,310
|
)
|
(281,970
|
)
|
||||||
Provision for losses
|
48,575
|
|
120,469
|
|
35,674
|
|
86,299
|
|
2,310
|
|
293,327
|
|
||||||
Effect of foreign currency translation
|
(366
|
)
|
10
|
|
—
|
|
(1,131
|
)
|
—
|
|
(1,487
|
)
|
||||||
Balance, end of period
|
$
|
4,189
|
|
$
|
37,716
|
|
$
|
12,191
|
|
$
|
19,901
|
|
$
|
—
|
|
$
|
73,997
|
|
Allowance for loan losses as a percentage of gross loan receivables
|
5.2
|
%
|
19.8
|
%
|
13.1
|
%
|
9.6
|
%
|
N/A
|
|
12.9
|
%
|
|
Year Ended December 31, 2018
|
||||||||
|
Unsecured Installment
|
Secured Installment
|
Total
|
||||||
Balance, beginning of period
|
$
|
17,073
|
|
$
|
722
|
|
$
|
17,795
|
|
Charge-offs
|
(165,266
|
)
|
(4,469
|
)
|
(169,735
|
)
|
|||
Recoveries
|
32,341
|
|
3,333
|
|
35,674
|
|
|||
Net charge-offs
|
(132,925
|
)
|
(1,136
|
)
|
(134,061
|
)
|
|||
Provision for losses
|
127,434
|
|
839
|
|
128,273
|
|
|||
Balance, end of period
|
$
|
11,582
|
|
$
|
425
|
|
$
|
12,007
|
|
|
Year Ended December 31, 2018
|
|||||||||||||||||
|
Single-Pay
|
Unsecured Installment
|
Secured Installment
|
Open-End
|
Other
|
Total
|
||||||||||||
Balance, beginning of period
|
$
|
5,204
|
|
$
|
56,098
|
|
$
|
14,194
|
|
$
|
6,426
|
|
$
|
—
|
|
$
|
81,922
|
|
Charge-offs
|
(164,342
|
)
|
(307,229
|
)
|
(51,465
|
)
|
(113,150
|
)
|
(5,913
|
)
|
(642,099
|
)
|
||||||
Recoveries
|
115,118
|
|
52,516
|
|
13,374
|
|
41,457
|
|
3,603
|
|
226,068
|
|
||||||
Net charge-offs
|
(49,224
|
)
|
(254,713
|
)
|
(38,091
|
)
|
(71,693
|
)
|
(2,310
|
)
|
(416,031
|
)
|
||||||
Provision for losses
|
48,575
|
|
247,903
|
|
36,513
|
|
86,299
|
|
2,310
|
|
421,600
|
|
||||||
Effect of foreign currency translation
|
(366
|
)
|
10
|
|
—
|
|
(1,131
|
)
|
—
|
|
(1,487
|
)
|
||||||
Balance, end of period
|
$
|
4,189
|
|
$
|
49,298
|
|
$
|
12,616
|
|
$
|
19,901
|
|
$
|
—
|
|
$
|
86,004
|
|
|
December 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
Trade accounts payable
|
$
|
25,972
|
|
|
$
|
24,463
|
|
Money orders payable
|
4,805
|
|
|
7,822
|
|
||
Accrued taxes, other than income taxes
|
295
|
|
|
944
|
|
||
Accrued payroll and fringe benefits
|
24,837
|
|
|
14,518
|
|
||
Other accrued liabilities
|
4,174
|
|
|
1,399
|
|
||
Total accounts payable and accrued liabilities
|
$
|
60,083
|
|
|
$
|
49,146
|
|
|
December 31,
|
|
December 31,
|
||||
|
2019
|
|
2018
|
||||
8.25% Senior Secured Notes (due 2025)
|
$
|
678,323
|
|
|
$
|
676,661
|
|
Non-Recourse Canada SPV Facility
|
112,221
|
|
|
107,479
|
|
||
Senior Revolver
|
—
|
|
|
20,000
|
|
||
Debt
|
$
|
790,544
|
|
|
$
|
804,140
|
|
|
Amount
|
||
2020
|
$
|
—
|
|
2021
|
—
|
|
|
2022
|
38,414
|
|
|
2023
|
76,829
|
|
|
2024
|
—
|
|
|
Thereafter
|
690,000
|
|
|
Debt (before deferred financing costs and discounts)
|
805,243
|
|
|
Less: deferred financing costs and discounts
|
14,699
|
|
|
Debt, net
|
$
|
790,544
|
|
|
Stock Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||||
Outstanding at January 1, 2017
|
1,879,308
|
|
|
$
|
2.73
|
|
|
|
|
4.6
|
|
$
|
2.1
|
|
||
Granted
|
99,396
|
|
|
$
|
8.86
|
|
|
$
|
4.11
|
|
|
|
|
|
||
Exercised
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||
Forfeited
|
(1,224
|
)
|
|
$
|
3.39
|
|
|
|
|
|
|
|
||||
Outstanding at December 31, 2017
|
1,977,480
|
|
|
$
|
3.04
|
|
|
|
|
5.2
|
|
$
|
21.8
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(500,924
|
)
|
|
$
|
1.46
|
|
|
|
|
|
|
$
|
4.0
|
|
||
Forfeited
|
(31,224
|
)
|
|
$
|
4.03
|
|
|
$
|
1.84
|
|
|
|
|
|
||
Outstanding at December 31, 2018
|
1,445,332
|
|
|
$
|
3.56
|
|
|
|
|
3.7
|
|
$
|
8.6
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||
Exercised
|
(40,014
|
)
|
|
$
|
3.71
|
|
|
|
|
|
|
$
|
0.3
|
|
||
Forfeited
|
(696
|
)
|
|
$
|
8.86
|
|
|
$
|
4.07
|
|
|
|
|
|
||
Outstanding at December 31, 2019
|
1,404,622
|
|
|
$
|
3.56
|
|
|
|
|
2.6
|
|
$
|
12.1
|
|
||
|
|
|
|
|
|
|
|
|
|
|||||||
Options exercisable at December 31, 2019
|
1,226,422
|
|
|
$
|
3.42
|
|
|
|
|
2.1
|
|
$
|
10.7
|
|
|
Number of RSUs
|
|
Weighted Average
Grant Date Fair Value per Share
|
|||||
|
Time-Based
|
Market-Based
|
|
|||||
January 1, 2017
|
—
|
|
—
|
|
|
$
|
—
|
|
Granted
|
1,516,241
|
|
—
|
|
|
$
|
14.00
|
|
Vested
|
—
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
—
|
|
—
|
|
|
$
|
—
|
|
December 31, 2017
|
1,516,241
|
|
—
|
|
|
$
|
14.00
|
|
Granted
|
73,663
|
|
—
|
|
|
$
|
18.20
|
|
Vested
|
(508,126
|
)
|
—
|
|
|
$
|
14.00
|
|
Forfeited
|
(21,428
|
)
|
—
|
|
|
$
|
14.00
|
|
December 31, 2018
|
1,060,350
|
|
—
|
|
|
$
|
14.29
|
|
Granted
|
598,114
|
|
397,752
|
|
|
$
|
10.08
|
|
Vested
|
(514,552
|
)
|
—
|
|
|
$
|
14.21
|
|
Forfeited
|
(82,159
|
)
|
(2,891
|
)
|
|
$
|
13.71
|
|
December 31, 2019
|
1,061,753
|
|
394,861
|
|
|
$
|
11.47
|
|
|
For the year ended,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Pre-tax share-based compensation expense
|
$
|
10,323
|
|
|
$
|
8,210
|
|
|
$
|
965
|
|
Income tax benefit
|
(2,632
|
)
|
|
(2,217
|
)
|
|
(386
|
)
|
|||
Total share-based compensation expense, net of tax
|
$
|
7,691
|
|
|
$
|
5,993
|
|
|
$
|
579
|
|
|
Year Ended December 31,
|
||||||||
(in thousands)
|
2019
|
2018
|
2017
|
||||||
Income (loss) before taxes:
|
|
|
|
||||||
U.S. tax jurisdictions
|
$
|
119,241
|
|
$
|
16,759
|
|
$
|
67,771
|
|
Non-U.S. tax jurisdictions
|
23,214
|
|
1,359
|
|
34,485
|
|
|||
Total income (loss) before taxes
|
$
|
142,455
|
|
$
|
18,118
|
|
$
|
102,256
|
|
Current tax provision (benefit)
|
|
|
|
||||||
Federal
|
$
|
3,160
|
|
$
|
(7,983
|
)
|
$
|
19,935
|
|
State
|
395
|
|
(1,518
|
)
|
2,409
|
|
|||
Foreign
|
930
|
|
7,748
|
|
10,542
|
|
|||
Total current provision (benefit)
|
4,485
|
|
(1,753
|
)
|
32,886
|
|
|||
Deferred tax provision (benefit)
|
|
|
|
||||||
Federal
|
22,978
|
|
7,471
|
|
6,283
|
|
|||
State
|
5,145
|
|
631
|
|
2,647
|
|
|||
Foreign
|
5,949
|
|
(4,690
|
)
|
(169
|
)
|
|||
Total deferred tax provision (benefit)
|
34,072
|
|
3,412
|
|
8,761
|
|
|||
Total provision for income taxes
|
$
|
38,557
|
|
$
|
1,659
|
|
$
|
41,647
|
|
|
Year Ended December 31,
|
|||||
(in thousands)
|
2019
|
2018
|
||||
Deferred tax assets related to:
|
|
|
||||
Accrued expenses and other reserves
|
$
|
2,092
|
|
$
|
3,267
|
|
Lease liability
|
32,009
|
|
—
|
|
||
Compensation accruals
|
6,354
|
|
4,954
|
|
||
Deferred revenue
|
461
|
|
78
|
|
||
Federal net operating loss and capital loss carryforwards
|
13,693
|
|
—
|
|
||
State and provincial net operating loss carryforwards
|
3,228
|
|
1,611
|
|
||
Foreign net operating loss and capital loss carryforwards
|
4,754
|
|
3,592
|
|
||
Tax credit carryforwards
|
158
|
|
—
|
|
||
Gross deferred tax assets
|
62,749
|
|
13,502
|
|
||
Less: Valuation allowance
|
(8,328
|
)
|
(6,996
|
)
|
||
Net deferred tax assets
|
$
|
54,421
|
|
$
|
6,506
|
|
Deferred tax liabilities related to:
|
|
|
||||
Property and equipment
|
$
|
(3,339
|
)
|
$
|
(3,870
|
)
|
Right of use asset
|
(29,251
|
)
|
—
|
|
||
Goodwill and other intangible assets
|
(14,986
|
)
|
(14,508
|
)
|
||
Prepaid expenses and other assets
|
(628
|
)
|
(197
|
)
|
||
Loans receivable
|
(5,614
|
)
|
(127
|
)
|
||
Gross deferred tax liabilities
|
(53,818
|
)
|
(18,702
|
)
|
||
Net deferred tax liabilities
|
$
|
603
|
|
$
|
(12,196
|
)
|
|
Year Ended December 31,
|
|||||
(in thousands)
|
2019
|
2018
|
||||
Net current deferred tax assets
|
$
|
5,055
|
|
$
|
1,534
|
|
Net long-term deferred tax liabilities
|
(4,452
|
)
|
(13,730
|
)
|
||
Net deferred tax liabilities
|
$
|
603
|
|
$
|
(12,196
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Income tax expense using the statutory federal rate in effect
|
$
|
29,916
|
|
|
$
|
3,805
|
|
|
$
|
35,790
|
|
Tax effect of:
|
|
|
|
|
|
||||||
Effects of foreign rates different than U.S. statutory rate
|
(1,393
|
)
|
|
(65
|
)
|
|
(6,993
|
)
|
|||
State, local and provincial income taxes, net of federal benefit
|
8,959
|
|
|
313
|
|
|
7,128
|
|
|||
Tax credits
|
(138
|
)
|
|
(116
|
)
|
|
(450
|
)
|
|||
Nondeductible expenses
|
33
|
|
|
77
|
|
|
409
|
|
|||
Valuation allowance
|
1,609
|
|
|
1,983
|
|
|
631
|
|
|||
Deferred remeasurement
|
—
|
|
|
—
|
|
|
683
|
|
|||
Repatriation tax
|
—
|
|
|
(1,610
|
)
|
|
8,100
|
|
|||
Deferred remeasurement due to the 2017 Tax Act
|
—
|
|
|
—
|
|
|
(4,162
|
)
|
|||
Share-based compensation
|
150
|
|
|
(2,944
|
)
|
|
—
|
|
|||
Other
|
(579
|
)
|
|
216
|
|
|
511
|
|
|||
Total provision for income taxes
|
$
|
38,557
|
|
|
$
|
1,659
|
|
|
$
|
41,647
|
|
Effective income tax rate
|
27.1
|
%
|
|
8.4
|
%
|
|
40.7
|
%
|
|||
Statutory federal income tax rate
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Balance at the beginning of year
|
$
|
6,996
|
|
|
$
|
4,375
|
|
|
$
|
3,717
|
|
Increase to balance charged as expense
|
1,609
|
|
|
1,983
|
|
|
631
|
|
|||
Effect of foreign currency translation
|
(277
|
)
|
|
638
|
|
|
27
|
|
|||
Balance at end of year
|
$
|
8,328
|
|
|
$
|
6,996
|
|
|
$
|
4,375
|
|
|
|
Estimated Fair Value
|
|||||||||||||
|
Carrying Value December 31,
2019 |
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash Surrender Value of Life Insurance
|
$
|
6,171
|
|
$
|
6,171
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,171
|
|
Financial liabilities:
|
|
|
|
|
|
||||||||||
Non-qualified deferred compensation plan
|
$
|
4,666
|
|
$
|
4,666
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,666
|
|
|
|
Estimated Fair Value
|
|||||||||||||
|
Carrying Value December 31,
2018 |
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash Surrender Value of Life Insurance
|
$
|
4,790
|
|
$
|
4,790
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,790
|
|
Financial liabilities:(1)
|
|
|
|
|
|
||||||||||
Non-qualified deferred compensation plan
|
$
|
3,639
|
|
$
|
3,639
|
|
$
|
—
|
|
$
|
—
|
|
$
|
3,639
|
|
|
|
Estimated Fair Value
|
|||||||||||||
|
Carrying Value December 31,
2019 |
Level 1
|
Level 2
|
Level 3
|
December 31, 2019
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash
|
$
|
75,242
|
|
$
|
75,242
|
|
$
|
—
|
|
$
|
—
|
|
$
|
75,242
|
|
Restricted cash
|
34,779
|
|
34,779
|
|
—
|
|
—
|
|
34,779
|
|
|||||
Loans receivable, net
|
558,993
|
|
—
|
|
—
|
|
558,993
|
|
558,993
|
|
|||||
Equity method investment
|
10,068
|
|
—
|
|
—
|
|
10,068
|
|
10,068
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
||||||||||
Liability for losses on CSO lender-owned consumer loans
|
$
|
10,623
|
|
$
|
—
|
|
$
|
—
|
|
$
|
10,623
|
|
$
|
10,623
|
|
8.25% Senior Secured Notes
|
678,323
|
|
—
|
|
596,924
|
|
—
|
|
596,924
|
|
|||||
Non-Recourse Canada SPV facility
|
112,221
|
|
—
|
|
—
|
|
115,243
|
|
115,243
|
|
|
|
Estimated Fair Value
|
|||||||||||||
|
Carrying Value December 31,
2018 |
Level 1
|
Level 2
|
Level 3
|
December 31, 2018
|
||||||||||
Financial assets:
|
|
|
|
|
|
||||||||||
Cash
|
$
|
61,175
|
|
$
|
61,175
|
|
$
|
—
|
|
$
|
—
|
|
$
|
61,175
|
|
Restricted cash
|
25,439
|
|
25,439
|
|
—
|
|
—
|
|
25,439
|
|
|||||
Loans receivable, net
|
497,534
|
|
—
|
|
—
|
|
497,534
|
|
497,534
|
|
|||||
Equity method investment
|
6,558
|
|
—
|
|
—
|
|
6,558
|
|
6,558
|
|
|||||
Financial liabilities:
|
|
|
|
|
|
||||||||||
Liability for losses on CSO lender-owned consumer loans
|
$
|
12,007
|
|
$
|
—
|
|
$
|
—
|
|
$
|
12,007
|
|
$
|
12,007
|
|
8.25% Senior Secured Notes
|
676,661
|
|
—
|
|
531,179
|
|
—
|
|
531,179
|
|
|||||
Non-Recourse Canada SPV facility
|
107,479
|
|
—
|
|
—
|
|
111,335
|
|
111,335
|
|
|||||
Senior Revolver
|
20,000
|
|
—
|
|
—
|
|
20,000
|
|
20,000
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash paid for:
|
|
|
|
|
|
||||||
Interest
|
$
|
69,134
|
|
|
$
|
84,823
|
|
|
$
|
60,054
|
|
Income taxes, net of refunds
|
2,355
|
|
|
16,311
|
|
|
26,863
|
|
|||
Non-cash investing activities:
|
|
|
|
|
|
||||||
Property and equipment accrued in accounts payable
|
631
|
|
|
1,718
|
|
|
1,631
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues by segment: (1)
|
|
|
|
|
|
||||||
U.S.
|
$
|
913,506
|
|
|
$
|
853,141
|
|
|
$
|
737,729
|
|
Canada
|
228,291
|
|
|
191,932
|
|
|
186,408
|
|
|||
Consolidated revenue
|
$
|
1,141,797
|
|
|
$
|
1,045,073
|
|
|
$
|
924,137
|
|
Net revenues by segment:
|
|
|
|
|
|
||||||
U.S.
|
$
|
521,401
|
|
|
$
|
504,530
|
|
|
$
|
470,238
|
|
Canada
|
151,845
|
|
|
118,943
|
|
|
141,333
|
|
|||
Consolidated net revenue
|
$
|
673,246
|
|
|
$
|
623,473
|
|
|
$
|
611,571
|
|
Gross margin by segment:
|
|
|
|
|
|
||||||
U.S.
|
$
|
302,952
|
|
|
$
|
284,828
|
|
|
$
|
267,215
|
|
Canada
|
75,664
|
|
|
40,642
|
|
|
67,950
|
|
|||
Consolidated gross margin
|
$
|
378,616
|
|
|
$
|
325,470
|
|
|
$
|
335,165
|
|
Segment operating income (loss):
|
|
|
|
|
|
||||||
U.S.
|
$
|
99,152
|
|
|
$
|
1,117
|
|
|
$
|
51,459
|
|
Canada
|
43,303
|
|
|
17,001
|
|
|
50,797
|
|
|||
Consolidated operating profit
|
$
|
142,455
|
|
|
$
|
18,118
|
|
|
$
|
102,256
|
|
Expenditures for long-lived assets by segment:
|
|
|
|
|
|
||||||
U.S.
|
$
|
12,733
|
|
|
$
|
11,105
|
|
|
$
|
7,406
|
|
Canada
|
1,879
|
|
|
2,928
|
|
|
1,311
|
|
|||
Consolidated expenditures for long-lived assets
|
$
|
14,612
|
|
|
$
|
14,033
|
|
|
$
|
8,717
|
|
(1) For revenue by product, see Note 6, "Loans Receivable and Revenue."
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
U.S.
|
$
|
363,453
|
|
|
$
|
361,473
|
|
Canada
|
302,375
|
|
|
210,058
|
|
||
Total gross loans receivable
|
$
|
665,828
|
|
|
$
|
571,531
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
U.S.
|
$
|
43,618
|
|
|
$
|
47,918
|
|
Canada
|
27,193
|
|
|
28,832
|
|
||
Total
|
$
|
70,811
|
|
|
$
|
76,750
|
|
|
|
Third-Party
|
|
Related-Party
|
|
Total
|
||||||
2020
|
|
$
|
30,965
|
|
|
$
|
3,754
|
|
|
$
|
34,719
|
|
2021
|
|
27,520
|
|
|
3,773
|
|
|
31,293
|
|
|||
2022
|
|
24,497
|
|
|
3,667
|
|
|
28,164
|
|
|||
2023
|
|
19,574
|
|
|
1,322
|
|
|
20,896
|
|
|||
2024
|
|
14,657
|
|
|
967
|
|
|
15,624
|
|
|||
Thereafter
|
|
36,170
|
|
|
3,536
|
|
|
39,706
|
|
|||
Total
|
|
153,383
|
|
|
17,019
|
|
|
170,402
|
|
|||
Less: Imputed interest
|
|
(41,237
|
)
|
|
(4,167
|
)
|
|
(45,404
|
)
|
|||
Operating lease liabilities
|
|
$
|
112,146
|
|
|
$
|
12,852
|
|
|
$
|
124,998
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017(1)
|
||||||
Net income from continuing operations
|
$
|
103,898
|
|
|
$
|
16,459
|
|
|
$
|
60,609
|
|
Income (loss) from discontinued operations, net of tax
|
7,590
|
|
|
(38,512
|
)
|
|
(11,456
|
)
|
|||
Net income (loss)
|
$
|
111,488
|
|
|
$
|
(22,053
|
)
|
|
$
|
49,153
|
|
|
|
|
|
|
|
||||||
Weighted average common shares - basic
|
44,685
|
|
|
45,815
|
|
|
38,351
|
|
|||
Dilutive effect of stock options and restricted stock units
|
1,289
|
|
|
2,150
|
|
|
926
|
|
|||
Weighted average common shares - diluted
|
45,974
|
|
|
47,965
|
|
|
39,277
|
|
|||
|
|
|
|
|
|
||||||
Basic earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.33
|
|
|
$
|
0.36
|
|
|
$
|
1.58
|
|
Discontinued operations
|
0.17
|
|
|
(0.84
|
)
|
|
(0.30
|
)
|
|||
Basic earnings (loss) per share
|
$
|
2.50
|
|
|
$
|
(0.48
|
)
|
|
$
|
1.28
|
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
2.26
|
|
|
$
|
0.34
|
|
|
$
|
1.54
|
|
Discontinued operations
|
0.17
|
|
|
(0.80
|
)
|
|
(0.29
|
)
|
|||
Diluted earnings (loss) per share
|
$
|
2.43
|
|
|
$
|
(0.46
|
)
|
|
$
|
1.25
|
|
(1) The per share information has been adjusted to give effect to the 36-to-1 stock split of the Company's common stock which was effective December 6, 2017.
|
|
2019
|
|||||||||||
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
||||||||
Revenue
|
$
|
277,939
|
|
$
|
264,300
|
|
$
|
297,264
|
|
$
|
302,294
|
|
Provision for losses
|
102,385
|
|
112,010
|
|
123,867
|
|
130,289
|
|
||||
Net revenue
|
$
|
175,554
|
|
$
|
152,290
|
|
$
|
173,397
|
|
$
|
172,005
|
|
Total cost of providing services
|
$
|
70,057
|
|
$
|
71,109
|
|
$
|
76,758
|
|
$
|
76,706
|
|
Gross margin
|
$
|
105,497
|
|
$
|
81,181
|
|
$
|
96,639
|
|
$
|
95,299
|
|
Net income from continuing operations
|
28,673
|
|
17,667
|
|
27,987
|
|
29,571
|
|
||||
Net income (loss) from discontinued operations, net of tax
|
$
|
8,375
|
|
$
|
(834
|
)
|
$
|
(598
|
)
|
$
|
647
|
|
Net income
|
$
|
37,048
|
|
$
|
16,833
|
|
$
|
27,389
|
|
$
|
30,218
|
|
Basic income (loss) per share:
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.62
|
|
$
|
0.38
|
|
$
|
0.63
|
|
$
|
0.71
|
|
Discontinued operations
|
0.18
|
|
(0.02
|
)
|
(0.01
|
)
|
0.02
|
|
||||
Basic income per share
|
$
|
0.80
|
|
$
|
0.36
|
|
$
|
0.62
|
|
$
|
0.73
|
|
Diluted income (loss) per share:
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.61
|
|
$
|
0.38
|
|
$
|
0.61
|
|
$
|
0.68
|
|
Discontinued operations
|
0.18
|
|
(0.02
|
)
|
(0.01
|
)
|
0.01
|
|
||||
Diluted income per share
|
$
|
0.79
|
|
$
|
0.36
|
|
$
|
0.60
|
|
$
|
0.69
|
|
Basic weighted average shares outstanding
|
46,424
|
|
46,451
|
|
44,422
|
|
41,500
|
|
||||
Diluted weighted average shares outstanding
|
47,319
|
|
47,107
|
|
46,010
|
|
43,243
|
|
|
2018
|
|||||||||||
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
||||||||
Revenue
|
$
|
250,843
|
|
$
|
237,169
|
|
$
|
269,482
|
|
$
|
287,579
|
|
Provision for losses
|
76,883
|
|
86,347
|
|
127,692
|
|
130,678
|
|
||||
Net revenue
|
$
|
173,960
|
|
$
|
150,822
|
|
$
|
141,790
|
|
$
|
156,901
|
|
Total cost of providing services
|
$
|
68,114
|
|
$
|
73,474
|
|
$
|
81,196
|
|
$
|
75,219
|
|
Gross margin
|
$
|
105,846
|
|
$
|
77,348
|
|
$
|
60,594
|
|
$
|
81,682
|
|
Net income (loss) from continuing operations
|
24,913
|
|
18,718
|
|
(42,590
|
)
|
15,418
|
|
||||
Net loss from discontinued operations, net of tax
|
$
|
(1,621
|
)
|
$
|
(2,743
|
)
|
$
|
(4,432
|
)
|
$
|
(29,716
|
)
|
Net income (loss)
|
$
|
23,292
|
|
$
|
15,975
|
|
$
|
(47,022
|
)
|
$
|
(14,298
|
)
|
Basic income (loss) per share:
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.55
|
|
$
|
0.41
|
|
$
|
(0.93
|
)
|
$
|
0.33
|
|
Discontinued operations
|
(0.04
|
)
|
(0.06
|
)
|
(0.10
|
)
|
(0.64
|
)
|
||||
Basic income (loss) per share
|
$
|
0.51
|
|
$
|
0.35
|
|
$
|
(1.03
|
)
|
$
|
(0.31
|
)
|
Diluted income (loss) per share:
|
|
|
|
|
||||||||
Continuing operations
|
$
|
0.53
|
|
$
|
0.39
|
|
$
|
(0.93
|
)
|
$
|
0.32
|
|
Discontinued operations
|
(0.03
|
)
|
(0.06
|
)
|
(0.10
|
)
|
(0.62
|
)
|
||||
Diluted income (loss) per share
|
$
|
0.50
|
|
$
|
0.33
|
|
$
|
(1.03
|
)
|
$
|
(0.30
|
)
|
Basic weighted average shares outstanding
|
45,506
|
|
45,650
|
|
45,853
|
|
46,158
|
|
||||
Diluted weighted average shares outstanding
|
47,416
|
|
47,996
|
|
45,853
|
|
47,773
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue
|
$
|
6,957
|
|
|
$
|
49,238
|
|
|
$
|
39,496
|
|
Provision for losses
|
1,703
|
|
|
21,632
|
|
|
13,660
|
|
|||
Net revenue
|
5,254
|
|
|
27,606
|
|
|
25,836
|
|
|||
|
|
|
|
|
|
||||||
Cost of providing services
|
|
|
|
|
|
||||||
Advertising
|
775
|
|
|
8,970
|
|
|
5,495
|
|
|||
Non-advertising costs of providing services
|
307
|
|
|
3,209
|
|
|
6,269
|
|
|||
Total cost of providing services
|
1,082
|
|
|
12,179
|
|
|
11,764
|
|
|||
Gross margin
|
4,172
|
|
|
15,427
|
|
|
14,072
|
|
|||
Operating expense (income)
|
|
|
|
|
|
||||||
Corporate, district and other
|
3,810
|
|
|
31,639
|
|
|
17,218
|
|
|||
Interest income
|
(4
|
)
|
|
(26
|
)
|
|
(12
|
)
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
7,393
|
|
|||
Goodwill impairment
|
—
|
|
|
22,496
|
|
|
—
|
|
|||
Loss on disposition
|
39,414
|
|
|
—
|
|
|
—
|
|
|||
Total operating expense
|
43,220
|
|
|
54,109
|
|
|
24,599
|
|
|||
Loss from operations of discontinued operations before income taxes
|
(39,048
|
)
|
|
(38,682
|
)
|
|
(10,527
|
)
|
|||
(Benefit) / provision for income tax
|
(46,638
|
)
|
|
(170
|
)
|
|
929
|
|
|||
Income (loss) from discontinued operations
|
$
|
7,590
|
|
|
$
|
(38,512
|
)
|
|
$
|
(11,456
|
)
|
|
December 31,
2019 |
|
December 31,
2018 |
||||
ASSETS
|
|||||||
Cash
|
$
|
—
|
|
|
$
|
9,859
|
|
Restricted cash
|
—
|
|
|
3,384
|
|
||
Gross loans receivable
|
—
|
|
|
25,256
|
|
||
Less: allowance for loan losses
|
—
|
|
|
(5,387
|
)
|
||
Loans receivable, net
|
—
|
|
|
19,869
|
|
||
Prepaid expenses and other
|
—
|
|
|
1,482
|
|
||
Other
|
—
|
|
|
267
|
|
||
Total assets classified as discontinued operations in the Consolidated Balance Sheets
|
$
|
—
|
|
|
$
|
34,861
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|||||||
Accounts payable and accrued liabilities
|
$
|
—
|
|
|
$
|
8,136
|
|
Deferred revenue
|
—
|
|
|
180
|
|
||
Accrued interest
|
—
|
|
|
(5
|
)
|
||
Deferred rent
|
—
|
|
|
149
|
|
||
Other long-term liabilities
|
—
|
|
|
422
|
|
||
Total liabilities classified as discontinued operations in the Consolidated Balance Sheets
|
$
|
—
|
|
|
$
|
8,882
|
|
|
Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net cash (used in) provided by discontinued operating activities
|
$
|
(504
|
)
|
|
$
|
10,808
|
|
|
$
|
9,666
|
|
Net cash used in discontinued investing activities
|
(14,213
|
)
|
|
(27,891
|
)
|
|
(15,761
|
)
|
|||
Net cash used in discontinued financing activities
|
—
|
|
|
—
|
|
|
—
|
|
|
|
Year Ended December 31, 2019
|
||
Total number of shares repurchased
|
|
3,614,541
|
|
|
Average price paid per share
|
|
$
|
12.52
|
|
Total value of shares repurchased
|
|
$
|
45,241
|
|
|
|
|
||
Total authorized repurchase amount for the period presented
|
|
$
|
50,000
|
|
Total value of shares repurchased
|
|
45,241
|
|
|
Total remaining authorized repurchase amount
|
|
$
|
4,759
|
|
|
|
January 1 - February 5
|
||
|
|
2020
|
||
Total number of shares repurchased
|
|
455,255
|
|
|
Average price paid per share
|
|
$
|
10.45
|
|
Total value of shares repurchased
|
|
$
|
4,759
|
|
|
|
February 24 - March 6
|
||
|
|
2020
|
||
Total number of shares repurchased
|
|
51,302
|
|
|
Average price paid per share
|
|
$
|
9.75
|
|
Total value of shares repurchased
|
|
$
|
500
|
|
(i)
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company's assets;
|
(ii)
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with US GAAP; and
|
(iii)
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.
|
(1)
|
Consolidated Financial Statements
|
|
|
|
The consolidated financial statements and related notes, together with the report of Deloitte & Touche LLP, appear in Part II, Item 8. "Financial Statements and Supplementary Data" of this Report.
The consolidated financial statements consist of the following:
|
|
|
|
Consolidated Balance Sheets as of December 31, 2019 and 2018
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Changes in Equity for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017
|
|
|
|
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
|
Description
|
Filed/Incorporated by Reference from Form
|
Incorporated by Reference from Exhibit Number
|
Filing Date
|
3.1
|
8-K
|
3.1
|
12/11/17
|
|
3.2
|
8-K
|
3.2
|
12/11/17
|
|
4.1
|
S-1
|
4.1
|
11/28/17
|
|
4.2
|
S-1
|
4.2
|
11/28/17
|
|
4.3
|
S-1
|
4.3
|
10/24/17
|
|
4.4
|
Filed herewith
|
|
|
|
10.1
|
8-K
|
10.1
|
8/6/18
|
|
10.2
|
8-K
|
10.2
|
8/6/18
|
|
10.3
|
8-K
|
10.3
|
8/6/18
|
|
10.4
|
8-K
|
10.4
|
8/6/18
|
|
10.5
|
8-K
|
4.1
|
8/6/18
|
|
10.6
|
S-1
|
10.53
|
10/24/17
|
|
10.7
|
10-Q
|
10.69
|
5/3/18
|
|
10.8
|
8-K
|
10.4
|
8/27/18
|
|
10.9
|
8-K
|
10.1
|
11/13/18
|
|
10.10
|
8-K
|
10.1
|
8/27/18
|
Exhibit
|
Description
|
Filed/Incorporated by Reference from Form
|
Incorporated by Reference from Exhibit Number
|
Filing Date
|
10.11
|
8-K
|
10.2
|
8/27/18
|
|
10.12
|
8-K
|
10.3
|
8/27/18
|
|
10.13
|
S-1
|
10.17
|
10/24/17
|
|
10.14
|
Filed herewith
|
|
|
|
10.15
|
S-1
|
10.19
|
10/24/17
|
|
10.16
|
S-1
|
10.20
|
10/24/17
|
|
10.17
|
S-1
|
10.21
|
10/24/17
|
|
10.18
|
Filed herewith
|
|
|
|
10.19
|
Filed herewith
|
|
|
|
10.20
|
S-1
|
10.25
|
10/24/17
|
|
10.21
|
Filed herewith
|
|
|
|
10.22
|
S-1
|
10.26
|
10/24/17
|
|
10.23
|
S-1
|
10.54
|
10/24/17
|
|
10.24
|
S-1
|
10.55
|
10/24/17
|
|
10.25
|
S-1
|
10.56
|
10/24/17
|
|
10.26
|
S-1
|
10.62
|
11/28/17
|
|
10.27
|
S-1
|
10.28
|
10/24/17
|
Exhibit
|
Description
|
Filed/Incorporated by Reference from Form
|
Incorporated by Reference from Exhibit Number
|
Filing Date
|
10.28
|
Filed herewith
|
|
|
|
10.29
|
S-1
|
10.31
|
11/1/17
|
|
10.30
|
S-1
|
10.7
|
10/24/17
|
|
10.31
|
S-1
|
10.57
|
10/24/17
|
|
10.32
|
S-1
|
10.6
|
11/28/17
|
|
10.33
|
S-1
|
10.4
|
11/1/17
|
|
10.34
|
S-1
|
10.5
|
11/28/17
|
|
10.35
|
8-K
|
10.1
|
2/5/20
|
|
10.36
|
8-K
|
10.2
|
2/5/20
|
|
10.37
|
8-K
|
10.3
|
2/5/20
|
|
10.38
|
8-K
|
10.4
|
2/5/20
|
|
10.39
|
10-Q
|
10.1
|
11/4/19
|
|
10.40
|
10-Q
|
10.2
|
11/4/19
|
|
10.41
|
10-Q
|
10.3
|
11/4/19
|
|
10.42
|
10-Q
|
10.4
|
11/4/19
|
|
10.43
|
10-Q
|
10.5
|
11/4/19
|
|
16.1
|
8-K
|
16.1
|
8/6/19
|
|
21.1
|
Filed herewith
|
|
|
|
23.1
|
Filed herewith
|
|
|
|
23.2
|
Filed herewith
|
|
|
|
24.1
|
Filed herewith
|
|
|
|
31.1
|
Filed herewith
|
|
|
|
31.2
|
Filed herewith
|
|
|
Exhibit
|
Description
|
Filed/Incorporated by Reference from Form
|
Incorporated by Reference from Exhibit Number
|
Filing Date
|
32.1
|
Filed herewith
|
|
|
+
|
Indicates management contract or compensatory plan, contract or arrangement.
|
/s/ Don Gayhardt
|
|
Don Gayhardt
|
|
President, Chief Executive Officer and a Director
|
|
(Principal Executive Officer)
|
|
March 9, 2020
|
|
|
|
/s/ Roger Dean
|
|
Roger Dean
|
|
Executive Vice President and Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
March 9, 2020
|
|
|
|
/s/ David Strano
|
|
David Strano
|
|
Vice President and Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
|
March 9, 2020
|
|
|
|
*
|
|
Doug Rippel
|
|
Executive Chairman of Board of Directors
|
|
March 9, 2020
|
|
|
|
*
|
|
Chad Faulkner
|
|
Director
|
|
March 9, 2020
|
|
|
|
*
|
|
Andrew Frawley
|
|
Director
|
|
March 9, 2020
|
|
|
|
|
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*
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David M. Kirchheimer
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Director
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March 9, 2020
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*
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Chris Masto
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Director
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March 9, 2020
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*
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Mike McKnight
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Director
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March 9, 2020
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*
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Gillian Van Schaick
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Director
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March 9, 2020
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*
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Elizabeth Webster
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Director
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March 9, 2020
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*
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Dale E. Williams
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Director
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March 9, 2020
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*
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Karen Winterhof
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Director
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March 9, 2020
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* /s/ Roger Dean
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Roger Dean
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Attorney-in-Fact
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March 9, 2020
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•
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restricting dividends on the common stock;
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•
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diluting the voting power of the common stock;
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•
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impairing the liquidation rights of the common stock; or
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•
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delaying or preventing changes in control or management of us.
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A.
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Tenant Name: Landlord hereby acknowledges that the name of the Tenant has changed from Tiger Financial Management, LLC to Curo Management, LLC.
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B.
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Term: Tenant hereby exercises the second of three options to extend the term of the Lease as specified in Section 3 of the Lease, as amended by the Letter. Accordingly, the term of the Lease, which commenced on January 1, 2008, is hereby extended such that the expiration date will be December 31, 2022.
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C.
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Rent: As stated in Section 4 of the Lease, rent shall increase three percent (3%) each year, compounded annually, on the anniversary of the Lease Commencement Date.
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D.
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Additional Option to Extend: Tenant is hereby granted one (1) additional five (5) year option to extend the lease under the terms and conditions specified in Section 3 of the Lease, such that Tenant will have two (2) options remaining. The terms of the remaining options will be:
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E.
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Hazardous Materials. Section 16 of the Lease is hereby modified by the insertion of the following paragraph between the second and third paragraphs: "Landlord and its successors and assigns shall indemnify, defend, reimburse and hold Tenant, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which are suffered as a direct result of Hazardous Substances on the Premises prior to Tenant taking possession or which are caused by the negligence or willful misconduct of Landlord, its agents or employees. Landlord's obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease "
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F.
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Landlord Default The following is hereby added to the Lease as Section 29:
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G.
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Indemnification of Tenant: The following provision is hereby added to the Lease as Section 30:
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a)
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Any willful, negligent or tortious act or omission on the part of Landlord, its agents, contractors, employees; or
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b)
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Any failure on the part of Landlord to perform or comply with any of the covenants, agreements, terms, provisions, conditions or limitations contained in this Lease on its part to be performed or complied with.
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To the Tenant:
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Curo Management, LLC
3527 North Ridge Road
Wichita, Kansas 67205
Phone #: (316)-722-3801
Fax #: (316)-494-6507
Attn: Real Estate Department
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Landlord: CDM Development, LLC
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Tenant: Curo Management, LLC
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By: /s/ Doug Rippel
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By: /s/ Chris Darnell
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Name: Doug Rippel
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Name: Chris Darnell
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Title: Member
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Title: SVP, Real Estate
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A.
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Tenant Name: Landlord hereby acknowledges that the name of the Tenant has changed from Tiger Financial Management, LLC to Curo Management, LLC.
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B.
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Term: Tenant hereby exercises the second of three options to extend the term of the Lease as specified in Section 3 of the Lease, as amended by the Letter. Accordingly, the term of the Lease, which commenced on January 1, 2008, is hereby extended such that the expiration date will be December 31, 2022.
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C.
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Rent: As stated in Section 4 of the Lease, rent shall increase three percent (3%) each year, compounded annually, on the anniversary of the Lease Commencement Date.
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D.
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Additional Option to Extend: Tenant is hereby granted one (1) additional five (5) year option to extend the lease under the terms and conditions specified in Section 3 of the Lease, such that Tenant will have two (2) options remaining. The terms of the remaining options will be:
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E.
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Hazardous Materials: Section 16 of the Lease is hereby modified by the insertion of the following paragraph between the second and third paragraphs: "Landlord and its successors and assigns shall indemnify, defend, reimburse and hold Tenant, its employees and lenders, harmless from and against any and all environmental damages, including the cost of remediation, which are suffered as a direct result of Hazardous Substances on the Premises prior to Tenant taking possession or which are caused by the negligence or willful misconduct of Landlord, its agents or employees. Landlord's obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease."
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F.
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Landlord Default: The following is hereby added to the Lease as Section 29:
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a)
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Any willful, negligent or tortious act or omission on the part of Landlord, its agents, contractors, employees; or
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b)
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Any failure on the part of Landlord to perform or comply with any of the covenants, agreements, terms, provisions, conditions or limitations contained in this Lease on its part to be performed or complied with.
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To the Landlord:
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Name: CDM Development, LLC
Address:
City: Wichita
State: KS
Zip Code: 67205
Phone #:
Fax #:
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To the Tenant:
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Curo Management, LLC
3527 North Ridge Road
Wichita, Kansas 67205
Phone #: (316)-722-3801
Fax #: (316)-494-6507
Attn: Real Estate Department
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Landlord: CDM Development, LLC
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Tenant: Curo Management, LLC
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By: /s/ Doug Rippel
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By: /s/ Chris Darnell
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Name: Doug Rippel
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Name: Chris Darnell
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Title: Member
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Title: SVP, Real Estate
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To the Landlord:
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Name:
Address:
City:
State:
Zip Code:
Phone #:
Fax #:
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To the Tenant:
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Curo Management, LLC
3527 North Ridge Road
Wichita, Kansas 67205
Phone #: (316)-722-3801
Fax #: (316)-494-6507
Attn: Real Estate Department
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LANDLORD: Douglas R. Rippel
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TENANT: Curo Management, LLC
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By: /s/ Douglas Rippel
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By: /s/ Chris Darnell
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Name: Chris Darnell
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Title: SVP, Real Estate
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LANDLORD: MCIB Partners
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TENANT: Curo Management, LLC
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By: /s/ Alfred A. Caro
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By: /s/ Chris Darnell
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Name: Alfred A. Cardo
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Name: Chris Darnell
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Title: Manager
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Title: SVP, Real Estate
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GUARANTOR: Curo Intermediate Holdings Corp.
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By: /s Chris Darnell
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Name: Chris Darnell
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Title: SVP, Real Estate
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Subsidiaries of CURO Group Holdings Corp.
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||
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Entity
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Jurisdiction of Incorporation/Organization
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Curo Financial Technologies Corp.
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Delaware
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Curo Intermediate Holdings Corp.
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Delaware
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Ad Astra Recovery Services, Inc.
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Nevada
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Advance Group Inc. (dba Rapid Cash)
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Nevada
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A Speedy Cash Car Title Loans, LLC (dba Speedy Cash)
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Nevada
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Attain Finance, LLC (dpa Opt+)
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Nevada
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Attain Finance Canada, Inc. (dba Opt +)
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Canada
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Avio Credit, Inc. (dba Avio Credit)
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Delaware
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Cash Colorado, LLC (Speedy Cash)
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Nevada
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Cash Money Cheque Cashing, Inc. (dba Cash Money)
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Canada
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Curo Canada Receivables GP, Inc.
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Canada
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Curo Canada Receivables Limited Partnership
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Canada
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Concord Finance, Inc. (dba Speedy Cash; Speedy Cash Title, in state of Tennessee)
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Nevada
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Curo Credit, LLC
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Delaware
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Curo Management, LLC
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Nevada
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Curo Receivables Holdings I, LLC
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Delaware
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Curo Receivables Finance I, LLC
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Delaware
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Ennoble Finance, LLC (dba Revolve Finance)
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Delaware
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LendDirect Corp. (dba LendDirect)
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Canada
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FMMR Investments, Inc. (dba Rapid Cash)
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Nevada
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Evergreen Financial Investments, Inc. (dba Rapid Cash; Rapid Cash Payday Loans, in state of Oregon)
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Nevada
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Galt Ventures, LLC (dba Speedy Cash; Speedy Cash Installment Loans, in state of California)
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Kansas
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Principal Investments, Inc. (dba Rapid Cash)
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Nevada
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SC Aurum, LLC
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Nevada
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SCIL, Inc. (dba Speedy Cash; Speedy Cash-SCIL, Inc. in state of Wyoming)
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Nevada
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SCIL Texas, LLC (dba Speedy Cash)
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Nevada
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Speedy Cash (dba Speedy Cash)
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Nevada
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Speedy Cash Illinois, Inc. (dba Speedy Cash)
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Nevada
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SRC Transatlantic Limited
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United Kingdom
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Curo Transatlantic Limited
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United Kingdom
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Todd Car Title, Inc. (dba A Speedy Cash Car Title Loans)
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Nevada
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Todd Financial, Inc. (dba Speedy Cash)
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Nevada
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SC Texas MB, Inc.
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Nevada
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The Money Store, LP (dba Speedy Cash)
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|
Texas
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/s/ Doug Rippel
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/s/ Chad Faulkner
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Doug Rippel
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Chad Faulkner
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February 14, 2020
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March 3, 2020
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/s/ Andrew Frawley
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/s/ David Kirchheimer
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Andrew Frawley
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David Kirchheimer
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March 9, 2020
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January 16, 2020
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/s/ Chris Masto
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/s/ Mike McKnight
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Chris Masto
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Mike McKnight
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January 16, 2020
|
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March 6, 2020
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/s/ Gillian Van Schaick
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/s/ Elizabeth Webster
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Gillian Van Schaick
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Elizabeth Webster
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January 17, 2020
|
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January 16, 2020
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/s/ Dale Williams
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/s/ Karen Winterhof
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Dale Williams
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Karen Winterhof
|
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February 24, 2020
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January 20, 2020
|
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1.
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I have reviewed this Annual Report on Form 10-K of CURO Group Holdings Corp. (the “registrant”);
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2.
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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;
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3.
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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;
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4.
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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.
|
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:
|
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;
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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
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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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