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World Acceptance Corporation Reports Fiscal 2025 Third Quarter Results

1. World Acceptance reported Q3 FY 2025 revenue of $138.6 million, up 0.6%. 2. Net income decreased to $13.4 million; per share income down to $2.45. 3. Gross loans outstanding were $1.38 billion, a 1.4% decrease year-over-year. 4. Delinquency improved: 90+ days past due dropped to 3.4% from 3.7%. 5. Customer base increased by 3.7%, reflecting improved customer engagement.

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WRLD
GREENVILLE, S.C.--(BUSINESS WIRE)--World Acceptance Corporation (NASDAQ: WRLD) today reported financial results for its third quarter of fiscal 2025. Third fiscal quarter highlights During its third fiscal quarter, World Acceptance Corporation achieved improved loan growth while continuing to focus on credit quality. Management believes that continuing to carefully invest in our best customers and closely monitoring performance has strengthened the Company's financial position and positioned us well for the remainder of the fiscal year. Highlights from the third quarter include: Increase in total revenues to $138.6 million, including a 208 basis point yield increase compared to the same quarter in the prior year Net income of $13.4 million Diluted net income per share of $2.45 Recency delinquency on accounts 90+ days past due improved to 3.4% at December 31, 2024, from 3.7% at December 31, 2023 Portfolio results Gross loans outstanding were $1.38 billion as of December 31, 2024, a 1.4% decrease from the $1.40 billion of gross loans outstanding as of December 31, 2023. During the most recent quarter, gross loans outstanding increased sequentially 6.6%, or $85.6 million, from $1.30 billion as of September 30, 2024, compared to an increase of 1.5%, or $21.1 million, in the comparable quarter of the prior year. During the most recent quarter, we saw improvement in borrowing from new, former and existing customers compared to the same quarter of fiscal year 2024. Specifically, new, former and refinance loan customer volume during the quarter increased 22.6%, 13.9% and 1.5%, respectively, compared to the same quarter of fiscal year 2024. Our customer base increased by 3.7% during the twelve-month period ended December 31, 2024, compared to a decrease of 2.4% for the comparable period ended December 31, 2023. During the quarter ended December 31, 2024, the number of unique borrowers in the portfolio increased by 6.2% compared to an increase of 2.4% during the quarter ended December 31, 2023. We continued to improve the gross yield to expected loss ratio for all new, former and refinance customer originations and will continue to monitor performance indicators and adjust underwriting accordingly. The following table includes the volume of gross loan origination balances by customer type for the following comparative quarterly periods: Q3 FY 2025 Q3 FY 2024 Q3 FY 2023 New Customers $57,332,913 $46,768,269 $28,909,629 Former Customers $109,982,248 $96,582,426 $94,505,522 Refinance Customers $609,851,426 $600,866,594 $664,382,650 As of December 31, 2024, the Company had 1,035 open branches. For branches open at least twelve months, same store gross loans decreased 0.2% in the twelve-month period ended December 31, 2024, compared to a decrease of 8.2% for the twelve-month period ended December 31, 2023. For branches open throughout both periods, the customer base over the twelve-month period ended December 31, 2024, increased 4.9% compared to a decrease of 0.8% for the twelve-month period ended December 31, 2023. Three-month financial results Net income for the third quarter of fiscal 2025 decreased to $13.4 million compared to $16.7 million for the same quarter of the prior year. Net income per diluted share decreased to $2.45 per share in the third quarter of fiscal 2025 compared to $2.84 per share for the same quarter of the prior year. Although net income was negatively impacted by an increase in provision for credit losses, primarily related to our new growth, we expect solid returns on our third quarter originations given early payment performance and yield. Total revenues for the third quarter of fiscal 2025 increased to $138.6 million, a 0.6% increase from $137.7 million for the same quarter of the prior year. Interest and fee income increased 3.1%, from $118.7 million in the third quarter of fiscal 2024 to $122.4 million in the third quarter of fiscal 2025. Insurance income decreased by 14.1% to $12.5 million in the third quarter of fiscal 2025 compared to $14.5 million in the third quarter of fiscal 2024. The large loan portfolio decreased from 55.2% of the overall portfolio as of December 31, 2023, to 48.2% as of December 31, 2024. Interest and insurance yields for the quarter ended December 31, 2024, increased 332 and 208 basis points compared to the quarters ended March 31, 2024 and December 31, 2023, respectively. Other income decreased $0.8 million, or 17.3%, to $3.8 million in the third quarter of fiscal 2025 compared to $4.6 million in the third quarter of fiscal 2024. The decrease in other income is the result of lower motor club sales driven by fewer large loan customers. The Company accrues for expected losses with a current expected credit loss ("CECL") methodology, which requires us to create a provision for credit losses on the day we originate the loan. The provision for credit losses increased $3.5 million to $44.1 million from $40.6 million when comparing the third quarter of fiscal 2025 to the third quarter of fiscal 2024. The table below itemizes the key components of the CECL allowance and provision impact during the quarter. CECL Allowance and Provision (Dollars in millions) Q3 FY 2025 Q3 FY 2024 Difference Reconciliation Beginning Allowance - September 30 $114.5 $128.9 $(14.4) Change due to Growth $7.6 $2.0 $5.6 $5.6 Change due to Expected Loss Rate on Performing Loans $(5.6) $(10.0) $4.4 $4.4 Change due to 90 day past due $(0.3) $0.2 $(0.5) $(0.5) Ending Allowance - December 31 $116.2 $121.1 $(4.9) $9.5 Net Charge-offs $42.4 $48.4 $(6.0) $(6.0) Provision $44.1 $40.6 $3.5 $3.5 Note: The change in allowance for the quarter plus net charge-offs for the quarter equals the provision for the quarter (see above reconciliation). The provision was negatively impacted by higher growth and a smaller decrease in expected loss rates compared to the same quarter of the prior year. Specifically, expected loss rates were negatively impacted by an increase in our 0-5 month customers, our riskiest customers, as a percentage of the portfolio during the current quarter. Net charge-offs for the quarter decreased $6.0 million, from $48.4 million in the third quarter of fiscal 2024 to $42.4 million in the third quarter of fiscal 2025. Net charge-offs as a percentage of average net loan receivables on an annualized basis decreased to 17.2% in the third quarter of fiscal 2025 from 19.1% in the third quarter of fiscal 2024. Accounts 61 days or more past due decreased to 5.7% on a recency basis at December 31, 2024, compared to 5.8% at December 31, 2023. Our allowance for credit losses as a percent of net loans receivable was 11.4% at December 31, 2024, compared to 11.8% at December 31, 2023. We also experienced improvement in recency delinquency on accounts at least 90 days past due, improving from 3.7% at December 31, 2023, to 3.4% at December 31, 2024. The table below is updated to use the customer tenure-based methodology that aligns with our CECL methodology. After experiencing rapid portfolio growth during fiscal years 2019 and 2020, primarily in new customers, our gross loan balance experienced pandemic related declines in fiscal 2021 before rebounding during fiscal 2022. Over the last two and a half years, we have tightened our lending to new customers substantially. The tables below illustrate the changes in the portfolio weighting. Gross Loan Balance By Customer Tenure at Origination As of Less Than 2 Years More Than 2 Years Total 12/31/2019 $489,940,306 $882,877,242 $1,372,817,548 12/31/2020 $413,509,916 $851,073,804 $1,264,583,720 12/31/2021 $527,433,398 $1,078,703,853 $1,606,137,251 12/31/2022 $421,291,725 $1,132,819,599 $1,554,111,324 12/31/2023 $315,059,832 $1,085,605,652 $1,400,665,484 12/31/2024 $310,926,501 $1,070,584,174 $1,381,510,675 Year-Over-Year Growth (Decline) in Gross Loan Balance by Customer Tenure at Origination 12 Month Period Ended Less Than 2 Years More Than 2 Years Total 12/31/2019 $63,055,397 $50,856,512 $113,911,909 12/31/2020 $(76,430,390) $(31,803,438) $(108,233,828) 12/31/2021 $113,923,482 $227,630,049 $341,553,531 12/31/2022 $(106,141,673) $54,115,746 $(52,025,927) 12/31/2023 $(106,231,893) $(47,213,947) $(153,445,840) 12/31/2024 $(4,133,331) $(15,021,478) $(19,154,809) Portfolio Mix by Customer Tenure at Origination As of Less Than 2 Years More Than 2 Years 12/31/2019 35.7% 64.3% 12/31/2020 32.7% 67.3% 12/31/2021 32.8% 67.2% 12/31/2022 27.1% 72.9% 12/31/2023 22.5% 77.5% 12/31/2024 22.5% 77.5% General and administrative (“G&A”) expenses increased $1.3 million, or 2.0%, to $67.2 million in the third quarter of fiscal 2025 compared to $65.9 million in the same quarter of the prior fiscal year. As a percentage of revenues, G&A expenses increased from 47.8% during the third quarter of fiscal 2024 to 48.5% during the third quarter of fiscal 2025. G&A expenses per average open branch increased by 3.3% when comparing the third quarter of fiscal 2025 to the third quarter of fiscal 2024. Personnel expense increased $1.2 million, or 3.0%, during the third quarter of fiscal 2025 as compared to the third quarter of fiscal 2024. Salary expense increased approximately $0.4 million, or 1.1%, during the quarter ended December 31, 2024, compared to the quarter ended December 31, 2023. Our headcount as of December 31, 2024, decreased 3.1% compared to December 31, 2023. Benefit expense decreased approximately $0.7 million, or 8.8%, when comparing the quarterly periods ended December 31, 2024 and 2023. Incentive expense increased $1.9 million, in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024. The increase in incentive expense is mostly due to an increase in bonuses paid. Occupancy and equipment expense increased $0.2 million, or 1.7%, when comparing the quarterly periods ended December 31, 2024 and 2023. Advertising expense increased $0.7 million, or 19.5%, in the third quarter of fiscal 2025 compared to the third quarter of fiscal 2024 due to increased spending on customer acquisition programs. Interest expense for the quarter ended December 31, 2024, decreased by $0.4 million, or 3.4%, from the corresponding quarter of the previous year. Interest expense decreased due to a 5.8% decrease in average debt outstanding for the quarter and a 2.4% decrease in the effective interest rate from 8.6% to 8.4%. The average debt outstanding decreased from $567.1 million to $534.0 million when comparing the quarters ended December 31, 2024 and 2023. The Company’s debt to equity ratio decreased to 1.3:1 at December 31, 2024, compared to 1.4:1 at December 31, 2023. As of December 31, 2024, the Company had $559.9 million of debt outstanding, net of unamortized debt issuance costs related to the unsecured senior notes payable. The Company repurchased and canceled $15.7 million of its previously issued bonds for a purchase price of $15.6 million during the third quarter of fiscal 2025. Other key return ratios for the third quarter of fiscal 2025 included a 7.5% return on average assets and a return on average equity of 19.2% (both on a trailing twelve-month basis). The Company repurchased 9,465 shares of its common stock on the open market at an aggregate purchase price of approximately $1.0 million during the third quarter of fiscal 2025. This is in addition to repurchases of 165,167 shares during the first half of fiscal 2025 at an aggregate purchase price of approximately $21.1 million. As of December 31, 2024, the Company had $9.0 million in aggregate remaining repurchase capacity under its current share repurchase program and approximately $32.2 million under the terms of our debt facilities (subject to further board approval). The Company repurchased 295,201 shares during fiscal 2024 at an aggregate purchase price of approximately $36.2 million. The Company had approximately 5.4 million common shares outstanding, excluding 352,620 unvested restricted shares, as of December 31, 2024. Nine-Month Results Net income for the nine months ended December 31, 2024, increased $3.2 million to $45.5 million compared to $42.3 million for the same period of the prior year. This resulted in a net income of $8.23 per diluted share for the nine months ended December 31, 2024, compared to $7.17 per diluted share in the prior-year period. Total revenues for the first nine months of fiscal 2025 decreased 3.5% to $399.6 million, compared to $413.9 million during the corresponding period of the previous year due to a decrease in loans outstanding. Annualized net charge-offs as a percent of average net loans decreased from 17.4% during the first nine months of fiscal 2024 to 17.1% for the first nine months of fiscal 2025. About World Acceptance Corporation (World Finance) Founded in 1962, World Acceptance Corporation (NASDAQ: WRLD), is a people-focused finance company that provides personal installment loan solutions and personal tax preparation and filing services to over one million customers each year. Headquartered in Greenville, South Carolina, the Company operates more than 1,000 community-based World Finance branches across 16 states. The Company primarily serves a segment of the population that does not have ready access to credit; however, unlike many other lenders in this segment, we strive to work with our customers to understand their broader financial pictures, ensure they have the ability and stability to make payments, and help them achieve their financial goals. For more information, visit www.loansbyworld.com. Third quarter conference call The senior management of World Acceptance Corporation will be discussing these results in its quarterly conference call to be held at 10:00 a.m. Eastern Time today. A simulcast of the conference call will be available on the Internet at https://event.choruscall.com/mediaframe/webcast.html?webcastid=1DhfUuWc. The call will be available for replay on the Internet for approximately 30 days. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously. Cautionary Note Regarding Forward-looking Information This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, that represent the Company’s current expectations or beliefs concerning future events. Statements other than those of historical fact, as well as those identified by words such as “anticipate,” “estimate,” intend,” “plan,” “expect,” “project,” “believe,” “may,” “will,” “should,” “would,” “could,” “probable” and any variation of the foregoing and similar expressions are forward-looking statements. Such forward-looking statements are inherently subject to risks and uncertainties. The Company’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include the following: recently enacted, proposed or future legislation and the manner in which it is implemented, including pursuant to policies of the new U.S. administration; changes in the U.S. tax code; the nature and scope of regulatory authority, particularly discretionary authority, that is or may be exercised by regulators, including, but not limited to, U.S. Consumer Financial Protection Bureau, and individual state regulators having jurisdiction over the Company; the unpredictable nature of regulatory examinations, proceedings and litigation; employee misconduct or misconduct by third parties; uncertainties associated with management turnover and the effective succession of senior management; media and public characterization of consumer installment loans; labor unrest; the impact of changes in accounting rules and regulations, or their interpretation or application, which could materially and adversely affect the Company’s reported consolidated financial statements or necessitate material delays or changes in the issuance of the Company’s audited consolidated financial statements; the Company's assessment of its internal control over financial reporting; changes in interest rates; the impact of inflation; risks relating to the acquisition or sale of assets or businesses or other strategic initiatives, including increased loan delinquencies or net charge-offs, the loss of key personnel, integration or migration issues, the failure to achieve anticipated synergies, increased costs of servicing, incomplete records, and retention of customers; risks inherent in making loans, including repayment risks and value of collateral; cybersecurity threats or incidents, including the potential or actual misappropriation of assets or sensitive information, corruption of data or operational disruption and the cost of the associated response thereto; our dependence on debt and the potential impact of limitations in the Company’s amended revolving credit facility or other impacts on the Company's ability to borrow money on favorable terms, or at all; the timing and amount of revenues that may be recognized by the Company; changes in current revenue and expense trends (including trends affecting delinquency and charge-offs); the impact of extreme weather events and natural disasters; changes in the Company’s markets and general changes in the economy (particularly in the markets served by the Company). These and other factors are discussed in greater detail in Part I, Item 1A,“Risk Factors” in the Company’s most recent annual report on Form 10-K for the fiscal year ended March 31, 2024, as filed with the SEC and the Company’s other reports filed with, or furnished to, the SEC from time to time. World Acceptance Corporation does not undertake any obligation to update any forward-looking statements it makes. The Company is also not responsible for updating the information contained in this press release beyond the publication date, or for changes made to this document by wire services or Internet services. WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share amounts) Three months ended December 31, Nine months ended December 31, 2024 2023 2024 2023 Revenues: Interest and fee income $ 122,390 $ 118,665 $ 347,457 $ 352,237 Insurance and other income, net 16,242 19,084 52,113 61,711 Total revenues 138,632 137,749 399,570 413,948 Expenses: Provision for credit losses 44,103 40,632 136,191 127,697 General and administrative expenses: Personnel 41,075 39,890 99,805 120,120 Occupancy and equipment 12,293 12,090 36,794 37,138 Advertising 4,448 3,721 8,926 8,712 Amortization of intangible assets 938 1,051 2,903 3,183 Other 8,469 9,157 26,564 27,829 Total general and administrative expenses 67,223 65,909 174,992 196,982 Interest expense 11,294 11,690 31,520 36,475 Total expenses 122,620 118,231 342,703 361,154 Income before income taxes 16,012 19,518 56,867 52,794 Income tax expense 2,624 2,853 11,404 10,508 Net income $ 13,388 $ 16,665 $ 45,463 $ 42,286 Net income per common share, diluted $ 2.45 $ 2.84 $ 8.23 $ 7.17 Weighted average diluted shares outstanding 5,464 5,860 5,527 5,897 WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited and in thousands) December 31, 2024 March 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $ 15,583 $ 11,839 $ 12,776 Gross loans receivable 1,381,462 1,277,149 1,400,622 Less: Unearned interest, insurance and fees (361,444 ) (326,746 ) (372,311 ) Allowance for credit losses (116,111 ) (102,963 ) (121,082 ) Loans receivable, net 903,907 847,440 907,229 Income taxes receivable 7,188 3,091 1,717 Operating lease right-of-use assets, net 78,857 79,501 80,049 Property and equipment, net 20,551 22,897 23,196 Deferred income taxes, net 31,967 30,943 37,048 Other assets, net 36,775 42,199 38,045 Goodwill 7,371 7,371 7,371 Intangible assets, net 8,301 11,070 12,107 Total assets $ 1,110,500 $ 1,056,351 $ 1,119,538 LIABILITIES & SHAREHOLDERS' EQUITY Liabilities: Senior notes payable $ 335,949 $ 223,419 $ 305,089 Senior unsecured notes payable, net 223,910 272,610 279,916 Operating lease liability 81,207 81,921 82,471 Accounts payable and accrued expenses 41,264 53,974 45,043 Total liabilities 682,330 631,924 712,519 Shareholders' equity 428,170 424,427 407,019 Total liabilities and shareholders' equity $ 1,110,500 $ 1,056,351 $ 1,119,538 WORLD ACCEPTANCE CORPORATION AND SUBSIDIARIES SELECTED CONSOLIDATED STATISTICS (unaudited and in thousands, except percentages and branches) Three months ended December 31, Nine months ended December 31, 2024 2023 2024 2023 Gross loans receivable $ 1,381,462 $ 1,400,622 $ 1,381,462 $ 1,400,622 Average gross loans receivable (1) 1,336,375 1,383,194 1,299,519 1,388,752 Net loans receivable (2) 1,020,018 1,028,311 1,020,018 1,028,311 Average net loans receivable (3) 987,833 1,014,113 961,767 1,015,237 Expenses as a percentage of total revenue: Provision for credit losses 31.8 % 29.5 % 34.1 % 30.8 % General and administrative 48.5 % 47.8 % 43.8 % 47.6 % Interest expense 8.1 % 8.5 % 7.9 % 8.8 % Operating income as a % of total revenue (4) 19.7 % 22.7 % 22.1 % 21.6 % Loan volume (5) 777,197 744,193 2,161,632 2,133,642 Net charge-offs as percent of average net loans receivable on an annualized basis 17.2 % 19.1 % 17.1 % 17.4 % Return on average assets (trailing 12 months) 7.5 % 6.0 % 7.5 % 6.0 % Return on average equity (trailing 12 months) 19.2 % 17.3 % 19.2 % 17.3 % Branches opened or acquired (merged or closed), net (10 ) (1 ) (13 ) (21 ) Branches open (at period end) 1,035 1,052 1,035 1,052 _______________________________________________________ (1) Average gross loans receivable is determined by averaging month-end gross loans receivable over the indicated period, excluding tax advances. (2) Net loans receivable is defined as gross loans receivable less unearned interest and deferred fees. (3) Average net loans receivable is determined by averaging month-end gross loans receivable less unearned interest and deferred fees over the indicated period, excluding tax advances. (4) Operating income is computed as total revenues less provision for credit losses and general and administrative expenses. (5) Loan volume includes all loan balances originated by the Company. It does not include loans purchased through acquisitions.

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