CURO Group Holdings Corp. (NYSE:CURO) Q3 2018 Earnings Conference Call Transcript

Oct 25, 2018 • 08:15 am ET


CURO Group Holdings Corp. (NYSE:CURO) Q3 2018 Earnings Conference Call Transcript


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Good morning, and welcome to the CURO Group Holdings Third Quarter 2018 Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Gar Jackson, IR for CURO. Please go ahead.

Gar Jackson

Thank you, and good morning, everyone. After the market closed yesterday evening CURO released results for the third quarter of 2018 and revised its outlook for the reminder of the year. You may obtain a copy of our earnings release from the IR section of our website at

With me on today's call are CURO's President and CEO, Don Gayhardt; COO, Bill Baker; CFO, Roger Dean and CAO, Dave Strano. This call is being webcast and will be archived on the IR section of our website.

(Forward-Looking Cautionary Statements)

These statements relate to our expectations regarding bringing new products to markets and the timing of transition of certain stores to LOC products, revenue and earnings for our Canadian operations, ad spend, NCOs and loan growth, timing of contributions from the MetaBank product, LendDirect brand loan offices currently piloted in Ontario, substance and timing of regulatory activity and expected impact on us, use of our revolver and timing of repayment, our financial outlook for the reminder of the year.

(Forward looking cautionary statement)

In addition to U.S. GAAP reporting, we report certain financial measures that do not conform to generally accepted accounting principles. We believe these non-GAAP measures enhance the understanding of our performance. Reconciliations between these GAAP and non-GAAP measures are included in the tables found in our earnings release. As noted in our earnings release, we have posted supplemental financial information on the IR portion of our website.

With that, I would like to turn the call over to Don.

Don Gayhardt

Thanks, Gar. Good morning everyone, and thanks for joining us today. In general, this call will follow our usual format. I'll offer some high-level thoughts in the quarter, a few strategy notes and few brief comments on the regulatory environment and Roger will give you much more detail on numbers. And then we'll take a few questions.

From the top I think it's important to acknowledge that this quarter fell short of our expectations and probably your expectations and quite simply not up to our standards. While most of this shortfall is related to issues that will be resolved rather quickly meaning this quarter, some will persist as we go into 2019.

There's a lot of detail in the release and Roger will review that with you. But from the standpoint of operating earnings we're about $17 million or $18 million short of our expectations and approximately $12 million of that relates to our ongoing Canadian product migration and increased loan loss provisions related to higher than expected loan growth.

The remainder relates primarily to higher than expected charge-offs but here it is important to note that our