PRA Group Reports Third Quarter 2024 Results
Transformation in U.S. Business Clearly Visible
Company On Track to Achieve Financial and Operational Targets for 2024; Announces Targets for 2025
NORFOLK, Va., Nov. 4, 2024 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the third quarter of 2024 ("Q3 2024").
Q3 2024 Highlights
- Net income attributable to PRA Group, Inc. of $27.2 million, or diluted earnings per share of $0.69, including a tax benefit item of $7.7 million, or $0.20 per share.
- Total portfolio purchases of $350.0 million.
- Total cash collections of $477.1 million.
- Record estimated remaining collections (ERC)1 of $7.3 billion.
- Cash efficiency ratio2 of 60.1%.
- Adjusted EBITDA3 for the 12 months ended September 30, 2024 of $1.1 billion.
1. |
Refers to the sum of all future projected cash collections on the Company's nonperforming loan portfolios. |
2. |
Calculated by dividing cash receipts less operating expenses by cash receipts. Cash receipts refers to cash collections on the Company's nonperforming loan portfolios, fees and revenue recognized from the Company's class action claims recovery services. |
3. |
A reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA can be found at the end of this press release. |
Three Months Ended Sept 30, |
Nine Months Ended Sept 30, |
|||||||
($ in thousands, except per share amounts) |
2024 |
2023 |
2024 |
2023 |
||||
Net income/(loss) attributable to PRA Group, Inc. |
$ 27,154 |
$ (12,262) |
$ 52,145 |
$ (74,695) |
||||
Diluted earnings per share |
$ 0.69 |
$ (0.31) |
$ 1.32 |
$ (1.91) |
||||
"Our third quarter financial results reflected strong cash collections, robust portfolio buying, significant revenue increases and solid net income. Over the past 18 months, we have built out a highly experienced senior leadership team, capitalized on the rebound in U.S. portfolio supply, executed on our cash-generating and operational initiatives with intense focus, speed and discipline, and driven the financial and operational turnaround in our U.S. business, while continuing to differentiate ourselves in Europe at a time when certain of our competitors in that region have been under pressure," said Vikram Atal, president and chief executive officer.
"We invested $350 million during the quarter, which helped us achieve record ERC of $7.3 billion. Cash collections grew 14% year-over-year, reflecting both higher portfolio purchases and the positive impact of our operational initiatives. As we enter the fourth quarter, we are on track to exceed our 2024 targets. We are also announcing 2025 targets as we continue to gain momentum in our business and focus on driving growth, profitability, and shareholder value."
Cash Collections and Revenues
The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis:
Cash Collection Source |
2024 |
2023 |
||||||||
($ in thousands) |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
|||||
Americas and Australia Core |
$ 266,977 |
$ 263,828 |
$ 256,861 |
$ 220,127 |
$ 223,714 |
|||||
Americas Insolvency |
26,065 |
26,971 |
25,209 |
24,293 |
27,809 |
|||||
Europe Core |
158,242 |
156,739 |
145,933 |
144,361 |
144,402 |
|||||
Europe Insolvency |
25,826 |
26,344 |
21,515 |
21,502 |
23,639 |
|||||
Total cash collections |
$ 477,110 |
$ 473,882 |
$ 449,518 |
$ 410,283 |
$ 419,564 |
|||||
Cash Collection Source - |
||||||||||
Constant Currency-Adjusted |
2024 |
2023 |
||||||||
($ in thousands) |
Q3 |
Q3 |
||||||||
Americas and Australia Core |
$ 266,977 |
$ 218,303 |
||||||||
Americas Insolvency |
26,065 |
27,785 |
||||||||
Europe Core |
158,242 |
147,597 |
||||||||
Europe Insolvency |
25,826 |
24,255 |
||||||||
Total cash collections |
$ 477,110 |
$ 417,940 |
||||||||
- Total cash collections in Q3 2024 increased 13.7% to $477.1 million compared to $419.6 million in the third quarter of 2023 ("Q3 2023"). The increase was driven by higher cash collections in both the U.S. and Europe. For the nine months ended September 30, 2024, cash collections increased $150.3 million, or 12.0%, compared to the same period last year.
- Total portfolio revenue in Q3 2024 increased 30.5% to $276.7 million compared to $212.1 million in Q3 2023. For the nine months ended September 30, 2024, total portfolio revenue increased 42.9% to $813.1 million compared to $568.9 million in the same period last year.
Three Months Ended Sept 30, |
Nine Months Ended Sept 30, |
|||||||
($ in thousands) |
2024 |
2023 |
2024 |
2023 |
||||
Portfolio income |
$ 216,122 |
$ 189,960 |
$ 627,468 |
$ 562,492 |
||||
Recoveries received in excess of forecast |
$ 34,158 |
$ 18,090 |
$ 124,256 |
$ 47,276 |
||||
Changes in expected future recoveries |
26,456 |
4,066 |
61,352 |
(40,896) |
||||
Changes in expected recoveries |
$ 60,614 |
$ 22,156 |
$ 185,608 |
$ 6,380 |
||||
Total portfolio revenue |
$ 276,736 |
$ 212,116 |
$ 813,076 |
$ 568,872 |
||||
Expenses
- Operating expenses in Q3 2024 increased $18.1 million, or 10.4%, to $191.5 million compared to $173.4 million in Q3 2023.
- Legal collection costs increased $8.0 million, primarily due to increased investments in our U.S. legal collections channel, which are expected to drive future cash collections growth.
- Compensation and employee services expenses increased $6.6 million, primarily due to lower compensation accruals and benefits related expenses in Q3 2023 and higher wage costs in the current year period.
- Legal collection fees increased $4.6 million, primarily due to higher external legal collections in our U.S. Core portfolio.
- For the nine months ended September 30, 2024, operating expenses increased by $49.5 million, or 9.4%, compared to the same period last year, which included higher legal collection costs of $24.5 million related to increased investments in our U.S. legal collections channel.
- Interest expense, net in Q3 2024 was $61.1 million, an increase of $11.6 million, or 23.4%, compared to $49.5 million in Q3 2023, primarily reflecting higher debt balances to support portfolio investments.
- The effective tax rate for the nine months ended September 30, 2024 was 13.7%.
Portfolio Acquisitions
- The Company purchased $350.0 million in portfolios of nonperforming loans in Q3 2024.
- At the end of Q3 2024, the Company had in place estimated forward flow commitments1 of $491.1 million over the next 12 months, comprised of $406.3 million in the Americas and Australia and $84.8 million in Europe.
Portfolio Purchase Source |
2024 |
2023 |
||||||||
($ in thousands) |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
|||||
Americas & Australia Core |
$ 263,613 |
$ 198,761 |
$ 174,660 |
$ 143,052 |
$ 187,554 |
|||||
Americas Insolvency |
10,162 |
26,627 |
22,156 |
18,608 |
44,279 |
|||||
Europe Core |
71,507 |
127,991 |
43,997 |
110,780 |
60,628 |
|||||
Europe Insolvency |
4,696 |
25,990 |
5,004 |
12,476 |
18,722 |
|||||
Total portfolio acquisitions |
$ 349,978 |
$ 379,369 |
$ 245,817 |
$ 284,916 |
$ 311,183 |
|||||
Credit Availability
- Total availability under the Company's credit facilities as of September 30, 2024 was $1.0 billion, comprised of $412.7 million based on current ERC and subject to debt covenants, and $585.9 million of additional availability subject to borrowing base and debt covenants, including advance rates.
Financial and Operational Targets for 2024 and 2025
The Company is on track to achieve the following financial and operational targets for full year 2024:
- Strong portfolio investment levels
- Double-digit cash collections growth
- ~60% cash efficiency ratio
- 8%+ return on average tangible equity2 (up from 6% - 8% previously)
In addition, the Company announces the following financial and operational targets for full year 2025:
- Portfolio investment levels to exceed $1.0 billion
- Cash collections growth of 8% - 10%
- 60%+ cash efficiency ratio
- Double-digit return on average tangible equity2
1. |
Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place, based on projections and other factors, including sellers' estimates of future flow sales, and are dependent on actual delivery by the sellers. Accordingly, amounts purchased under these agreements may vary significantly. |
2. |
A reconciliation of total stockholders' equity – PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity can be found at the end of this press release. |
Conference Call Information
PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET to discuss its financial and operational results. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 646-357-8785 in the U.S. or 1-800-836-8184 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call, either visit the same website until November 4, 2025, or call 646-517-4150 in the U.S. or 1-888-660-6345 outside the U.S. and use access code 29879# until November 11, 2024.
About PRA Group, Inc.
As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas, Europe, and Australia. With thousands of employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.
About Forward Looking Statements
Statements made herein that are not historical in nature, including PRA Group, Inc.'s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.'s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that the Company's expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.'s filings with the Securities and Exchange Commission, including PRA Group, Inc.'s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.
Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.'s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.
PRA Group, Inc. Unaudited Consolidated Income Statements (Amounts in thousands, except per share amounts)
|
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2024 |
2023 |
2024 |
2023 |
||||
Revenues: |
|||||||
Portfolio income |
$ 216,122 |
$ 189,960 |
$ 627,468 |
$ 562,492 |
|||
Changes in expected recoveries |
60,614 |
22,156 |
185,608 |
6,380 |
|||
Total portfolio revenue |
276,736 |
212,116 |
813,076 |
568,872 |
|||
Other revenue |
4,741 |
4,314 |
8,216 |
12,264 |
|||
Total revenues |
281,477 |
216,430 |
821,292 |
581,136 |
|||
Operating expenses: |
|||||||
Compensation and employee services |
76,106 |
69,517 |
223,944 |
217,708 |
|||
Legal collection fees |
14,479 |
9,839 |
40,353 |
28,228 |
|||
Legal collection costs |
28,781 |
20,761 |
90,746 |
66,228 |
|||
Agency fees |
21,020 |
19,436 |
61,751 |
54,491 |
|||
Outside fees and services |
20,452 |
18,858 |
63,626 |
62,064 |
|||
Communication |
10,048 |
9,881 |
34,203 |
30,525 |
|||
Rent and occupancy |
4,175 |
4,426 |
12,455 |
13,193 |
|||
Depreciation and amortization |
2,469 |
3,273 |
7,826 |
10,344 |
|||
Impairment of real estate |
— |
5,037 |
— |
5,037 |
|||
Other operating expenses |
13,969 |
12,356 |
40,792 |
38,355 |
|||
Total operating expenses |
191,499 |
173,384 |
575,696 |
526,173 |
|||
Income from operations |
89,978 |
43,046 |
245,596 |
54,963 |
|||
Other income and (expense): |
|||||||
Interest expense, net |
(61,062) |
(49,473) |
(168,693) |
(130,778) |
|||
Foreign exchange gain, net |
10 |
564 |
138 |
984 |
|||
Other |
(676) |
(500) |
(836) |
(1,380) |
|||
Income/(loss) before income taxes |
28,250 |
(6,363) |
76,205 |
(76,211) |
|||
Income tax expense/(benefit) |
(672) |
1,788 |
10,416 |
(15,317) |
|||
Net income/(loss) |
28,922 |
(8,151) |
65,789 |
(60,894) |
|||
Adjustment for net income attributable to noncontrolling interests |
1,768 |
4,111 |
13,644 |
13,801 |
|||
Net income/(loss) attributable to PRA Group, Inc. |
$ 27,154 |
$ (12,262) |
$ 52,145 |
$ (74,695) |
|||
Net income/(loss) per common share attributable to PRA Group, Inc.: |
|||||||
Basic |
$ 0.69 |
$ (0.31) |
$ 1.33 |
$ (1.91) |
|||
Diluted |
$ 0.69 |
$ (0.31) |
$ 1.32 |
$ (1.91) |
|||
Weighted average number of shares outstanding: |
|||||||
Basic |
39,421 |
39,242 |
39,353 |
39,155 |
|||
Diluted |
39,492 |
39,242 |
39,495 |
39,155 |
|||
PRA Group, Inc. Consolidated Balance Sheets (Amounts in thousands)
|
|||
(unaudited) |
|||
September 30, |
December 31, |
||
Assets |
|||
Cash and cash equivalents |
$ 141,135 |
$ 112,528 |
|
Investments |
61,322 |
72,404 |
|
Finance receivables, net |
4,064,467 |
3,656,598 |
|
Income taxes receivable |
33,368 |
27,713 |
|
Deferred tax assets, net |
88,260 |
74,694 |
|
Right-of-use assets |
40,831 |
45,877 |
|
Property and equipment, net |
31,835 |
36,450 |
|
Goodwill |
423,011 |
431,564 |
|
Other assets |
51,841 |
67,526 |
|
Total assets |
$ 4,936,070 |
$ 4,525,354 |
|
Liabilities and Equity |
|||
Liabilities: |
|||
Accounts payable |
$ 8,176 |
$ 6,325 |
|
Accrued expenses |
108,926 |
131,893 |
|
Income taxes payable |
27,501 |
17,912 |
|
Deferred tax liabilities, net |
19,881 |
17,051 |
|
Lease liabilities |
45,222 |
50,300 |
|
Interest-bearing deposits |
128,594 |
115,589 |
|
Borrowings |
3,296,172 |
2,914,270 |
|
Other liabilities |
19,806 |
32,638 |
|
Total liabilities |
3,654,278 |
3,285,978 |
|
Equity: |
|||
Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding |
— |
— |
|
Common stock, $0.01 par value, 100,000 shares authorized, 39,426 shares issued and outstanding as of September 30, 2024; 100,000 shares authorized, 39,247 shares issued and outstanding as of December 31, 2023 |
394 |
392 |
|
Additional paid-in capital |
15,415 |
7,071 |
|
Retained earnings |
1,541,693 |
1,489,548 |
|
Accumulated other comprehensive loss |
(338,620) |
(329,899) |
|
Total stockholders' equity - PRA Group, Inc. |
1,218,882 |
1,167,112 |
|
Noncontrolling interests |
62,910 |
72,264 |
|
Total equity |
1,281,792 |
1,239,376 |
|
Total liabilities and equity |
$ 4,936,070 |
$ 4,525,354 |
|
Select Expenses (Income) Amounts in thousands, pre-tax |
||||||||
Three Months Ended |
||||||||
September 30, |
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
|
Noncash interest expense - amortization of debt issuance costs |
$ 3,795 |
$ 2,331 |
$ 2,200 |
$ 2,177 |
$ 2,220 |
$ 2,384 |
$ 2,441 |
$ 2,444 |
Change in fair value of derivatives |
(5,706) |
(5,628) |
(5,930) |
(6,734) |
(6,545) |
(6,960) |
(5,470) |
(3,309) |
Amortization of intangibles |
60 |
58 |
60 |
69 |
69 |
68 |
66 |
73 |
Impairment of real estate |
— |
— |
— |
202 |
5,037 |
— |
— |
— |
Stock-based compensation expense |
3,251 |
3,555 |
3,327 |
2,952 |
1,629 |
2,715 |
3,799 |
2,206 |
Purchase Price Multiples as of September 30, 2024 Amounts in thousands |
|||||
Purchase Period |
Purchase Price (1)(2) |
Total Estimated |
Estimated |
Current Purchase |
Original Purchase |
Americas and Australia Core |
|||||
1996-2013 |
$ 1,932,722 |
$ 5,754,451 |
$ 54,564 |
298 % |
233 % |
2014 |
404,117 |
899,280 |
30,956 |
223 % |
204 % |
2015 |
443,114 |
921,016 |
43,600 |
208 % |
205 % |
2016 |
455,767 |
1,094,043 |
60,873 |
240 % |
201 % |
2017 |
532,851 |
1,218,849 |
92,454 |
229 % |
193 % |
2018 |
653,975 |
1,520,429 |
128,845 |
232 % |
202 % |
2019 |
581,476 |
1,311,448 |
134,279 |
226 % |
206 % |
2020 |
435,668 |
956,953 |
150,536 |
220 % |
213 % |
2021 |
435,846 |
736,409 |
261,863 |
169 % |
191 % |
2022 |
406,082 |
708,712 |
334,578 |
175 % |
179 % |
2023 |
622,583 |
1,222,835 |
877,849 |
196 % |
197 % |
2024 |
638,147 |
1,339,929 |
1,261,602 |
210 % |
210 % |
Subtotal |
7,542,348 |
17,684,354 |
3,431,999 |
||
Americas Insolvency |
|||||
1996-2013 |
1,266,056 |
2,503,285 |
6 |
198 % |
159 % |
2014 |
148,420 |
218,963 |
30 |
148 % |
124 % |
2015 |
63,170 |
88,112 |
23 |
139 % |
125 % |
2016 |
91,442 |
118,378 |
188 |
129 % |
123 % |
2017 |
275,257 |
358,774 |
950 |
130 % |
125 % |
2018 |
97,879 |
136,385 |
692 |
139 % |
127 % |
2019 |
123,077 |
167,548 |
4,005 |
136 % |
128 % |
2020 |
62,130 |
91,718 |
16,018 |
148 % |
136 % |
2021 |
55,187 |
74,453 |
22,486 |
135 % |
136 % |
2022 |
33,442 |
47,352 |
26,688 |
142 % |
139 % |
2023 |
91,282 |
119,692 |
91,017 |
131 % |
135 % |
2024 |
58,945 |
87,085 |
79,949 |
148 % |
148 % |
Subtotal |
2,366,287 |
4,011,745 |
242,052 |
||
Total Americas and Australia |
9,908,635 |
21,696,099 |
3,674,051 |
||
Europe Core |
|||||
2012-2013 |
40,742 |
72,994 |
1 |
179 % |
153 % |
2014 |
773,811 |
2,584,292 |
423,498 |
334 % |
208 % |
2015 |
411,340 |
756,321 |
134,898 |
184 % |
160 % |
2016 |
333,090 |
581,121 |
156,172 |
174 % |
167 % |
2017 |
252,174 |
369,927 |
102,638 |
147 % |
144 % |
2018 |
341,775 |
559,571 |
187,631 |
164 % |
148 % |
2019 |
518,610 |
852,264 |
323,682 |
164 % |
152 % |
2020 |
324,119 |
574,755 |
242,053 |
177 % |
172 % |
2021 |
412,411 |
707,823 |
390,545 |
172 % |
170 % |
2022 |
359,447 |
586,297 |
445,461 |
163 % |
162 % |
2023 |
410,593 |
693,472 |
574,464 |
169 % |
169 % |
2024 |
251,874 |
453,608 |
430,252 |
180 % |
180 % |
Subtotal |
4,429,986 |
8,792,445 |
3,411,295 |
||
Europe Insolvency |
|||||
2014 |
10,876 |
19,038 |
— |
175 % |
129 % |
2015 |
18,973 |
29,429 |
— |
155 % |
139 % |
2016 |
39,338 |
57,983 |
598 |
147 % |
130 % |
2017 |
39,235 |
52,046 |
841 |
133 % |
128 % |
2018 |
44,908 |
52,881 |
2,335 |
118 % |
123 % |
2019 |
77,218 |
113,945 |
12,563 |
148 % |
130 % |
2020 |
105,440 |
159,030 |
26,032 |
151 % |
129 % |
2021 |
53,230 |
74,452 |
24,736 |
140 % |
134 % |
2022 |
44,604 |
62,450 |
38,756 |
140 % |
137 % |
2023 |
46,558 |
64,602 |
53,683 |
139 % |
138 % |
2024 |
37,783 |
54,855 |
48,388 |
145 % |
145 % |
Subtotal |
518,163 |
740,711 |
207,932 |
||
Total Europe |
4,948,149 |
9,533,156 |
3,619,227 |
||
Total PRA Group |
$ 14,856,784 |
$ 31,229,255 |
$ 7,293,278 |
||
(1) |
Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions. |
(2) |
Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase. |
(3) |
Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase. |
(4) |
Non-U.S. amounts are presented at the September 30, 2024 exchange rate. |
(5) |
The Original Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition. |
Portfolio Financial Information (1) |
||||||
Amounts in thousands |
||||||
September 30, 2024 (year-to-date) |
As of September 30, 2024 |
|||||
Purchase Period |
Cash |
Portfolio |
Change in |
Total Portfolio Revenue (2) |
Net Finance Receivables (3) |
|
Americas and Australia Core |
||||||
1996-2013 |
$ 26,786 |
$ 10,656 |
$ 17,243 |
$ 27,899 |
$ 16,771 |
|
2014 |
10,691 |
4,303 |
8,039 |
12,342 |
12,019 |
|
2015 |
13,258 |
5,305 |
11,778 |
17,083 |
18,918 |
|
2016 |
18,506 |
9,782 |
8,634 |
18,416 |
21,833 |
|
2017 |
30,470 |
13,521 |
11,941 |
25,462 |
38,195 |
|
2018 |
60,243 |
21,259 |
25,535 |
46,794 |
70,664 |
|
2019 |
62,311 |
24,744 |
13,609 |
38,353 |
75,355 |
|
2020 |
70,086 |
27,464 |
6,632 |
34,096 |
85,017 |
|
2021 |
79,282 |
39,444 |
(10,559) |
28,885 |
136,930 |
|
2022 |
116,142 |
49,024 |
(5,628) |
43,396 |
202,091 |
|
2023 |
221,800 |
126,913 |
7,595 |
134,508 |
494,772 |
|
2024 |
78,091 |
60,269 |
11,125 |
71,394 |
630,678 |
|
Subtotal |
787,666 |
392,684 |
105,944 |
498,628 |
1,803,243 |
|
Americas Insolvency |
||||||
1996-2013 |
756 |
85 |
672 |
757 |
— |
|
2014 |
216 |
68 |
151 |
219 |
— |
|
2015 |
153 |
24 |
103 |
127 |
13 |
|
2016 |
458 |
31 |
363 |
394 |
163 |
|
2017 |
2,105 |
153 |
1,800 |
1,953 |
854 |
|
2018 |
2,102 |
98 |
802 |
900 |
653 |
|
2019 |
13,129 |
825 |
(1,169) |
(344) |
3,827 |
|
2020 |
13,236 |
1,961 |
1,014 |
2,975 |
14,760 |
|
2021 |
11,963 |
2,352 |
679 |
3,031 |
19,901 |
|
2022 |
8,314 |
2,370 |
542 |
2,912 |
22,440 |
|
2023 |
18,678 |
8,407 |
(983) |
7,424 |
72,108 |
|
2024 |
7,134 |
4,419 |
189 |
4,608 |
55,878 |
|
Subtotal |
78,244 |
20,793 |
4,163 |
24,956 |
190,597 |
|
Total Americas and Australia |
865,910 |
413,477 |
110,107 |
523,584 |
1,993,840 |
|
Europe Core |
||||||
2012-2013 |
789 |
— |
789 |
789 |
— |
|
2014 |
75,739 |
46,494 |
22,135 |
68,629 |
95,353 |
|
2015 |
23,089 |
10,203 |
4,535 |
14,738 |
66,317 |
|
2016 |
20,460 |
9,757 |
3,067 |
12,824 |
88,047 |
|
2017 |
13,600 |
5,048 |
1,309 |
6,357 |
68,268 |
|
2018 |
28,500 |
10,315 |
4,879 |
15,194 |
120,450 |
|
2019 |
51,635 |
16,799 |
8,537 |
25,336 |
218,471 |
|
2020 |
38,069 |
14,275 |
6,685 |
20,960 |
148,879 |
|
2021 |
50,687 |
21,458 |
5,636 |
27,094 |
236,349 |
|
2022 |
57,408 |
22,884 |
2,696 |
25,580 |
280,574 |
|
2023 |
78,264 |
32,685 |
2,517 |
35,202 |
340,067 |
|
2024 |
22,674 |
9,521 |
2,574 |
12,095 |
240,351 |
|
Subtotal |
460,914 |
199,439 |
65,359 |
264,798 |
1,903,126 |
|
Europe Insolvency |
||||||
2014 |
138 |
— |
138 |
138 |
— |
|
2015 |
141 |
2 |
113 |
115 |
— |
|
2016 |
659 |
87 |
306 |
393 |
164 |
|
2017 |
1,246 |
97 |
44 |
141 |
669 |
|
2018 |
2,839 |
207 |
217 |
424 |
2,087 |
|
2019 |
10,653 |
1,083 |
1,620 |
2,703 |
10,971 |
|
2020 |
20,081 |
2,174 |
2,681 |
4,855 |
23,842 |
|
2021 |
11,540 |
2,041 |
1,546 |
3,587 |
21,779 |
|
2022 |
11,129 |
2,907 |
1,983 |
4,890 |
31,794 |
|
2023 |
9,057 |
3,827 |
449 |
4,276 |
42,090 |
|
2024 |
6,203 |
2,127 |
1,045 |
3,172 |
34,105 |
|
Subtotal |
73,686 |
14,552 |
10,142 |
24,694 |
167,501 |
|
Total Europe |
534,600 |
213,991 |
75,501 |
289,492 |
2,070,627 |
|
Total PRA Group |
$ 1,400,510 |
$ 627,468 |
$ 185,608 |
$ 813,076 |
$ 4,064,467 |
|
(1) |
Includes the nonperforming loan portfolios that were acquired through our business acquisitions. |
(2) |
Non-U.S. amounts are presented using the average exchange rates during the current reporting period. |
(3) |
Non-U.S. amounts are presented at the September 30, 2024 exchange rate. |
Cash Collections by Year, By Year of Purchase (1) as of September 30, 2024 Amounts in millions |
||||||||||||||
Cash Collections |
||||||||||||||
Purchase Period |
Purchase |
1996-2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
Total |
Americas and Australia Core |
||||||||||||||
1996-2013 |
$ 1,932.7 |
$ 3,618.9 |
$ 660.3 |
$ 474.4 |
$ 299.7 |
$ 197.0 |
$ 140.3 |
$ 99.7 |
$ 64.7 |
$ 46.5 |
$ 36.0 |
$ 28.4 |
$ 26.8 |
$ 5,692.7 |
2014 |
404.1 |
— |
92.7 |
253.4 |
170.3 |
114.2 |
82.2 |
55.3 |
31.9 |
22.3 |
15.0 |
11.8 |
10.7 |
859.8 |
2015 |
443.1 |
— |
— |
117.0 |
228.4 |
185.9 |
126.6 |
83.6 |
57.2 |
34.9 |
19.5 |
14.1 |
13.3 |
880.5 |
2016 |
455.8 |
— |
— |
— |
138.7 |
256.5 |
194.6 |
140.6 |
105.9 |
74.2 |
38.4 |
24.9 |
18.5 |
992.3 |
2017 |
532.9 |
— |
— |
— |
— |
107.3 |
278.7 |
256.5 |
192.5 |
130.0 |
76.3 |
43.8 |
30.5 |
1115.6 |
2018 |
654.0 |
— |
— |
— |
— |
— |
122.7 |
361.9 |
337.7 |
239.9 |
146.1 |
92.9 |
60.2 |
1361.4 |
2019 |
581.5 |
— |
— |
— |
— |
— |
— |
143.8 |
349.0 |
289.8 |
177.7 |
110.3 |
62.3 |
1132.9 |
2020 |
435.7 |
— |
— |
— |
— |
— |
— |
— |
132.9 |
284.3 |
192.0 |
125.8 |
70.1 |
805.1 |
2021 |
435.8 |
— |
— |
— |
— |
— |
— |
— |
— |
85.0 |
177.3 |
136.8 |
79.3 |
478.4 |
2022 |
406.1 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
67.7 |
195.4 |
116.1 |
379.2 |
2023 |
622.5 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
108.5 |
221.8 |
330.3 |
2024 |
638.1 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
78.1 |
78.1 |
Subtotal |
7,542.3 |
3,618.9 |
753.0 |
844.8 |
837.1 |
860.9 |
945.1 |
1,141.4 |
1,271.8 |
1,206.9 |
946.0 |
892.7 |
787.7 |
14,106.3 |
Americas Insolvency |
||||||||||||||
1996-2013 |
1,266.1 |
1,491.4 |
421.4 |
289.9 |
168.7 |
85.5 |
30.3 |
6.8 |
3.6 |
2.2 |
1.6 |
1.1 |
0.8 |
2,503.3 |
2014 |
148.4 |
— |
37.0 |
50.9 |
44.3 |
37.4 |
28.8 |
15.8 |
2.2 |
1.1 |
0.7 |
0.4 |
0.2 |
218.8 |
2015 |
63.2 |
— |
— |
3.4 |
17.9 |
20.1 |
19.8 |
16.7 |
7.9 |
1.3 |
0.6 |
0.3 |
0.2 |
88.2 |
2016 |
91.4 |
— |
— |
— |
18.9 |
30.4 |
25.0 |
19.9 |
14.4 |
7.4 |
1.8 |
0.9 |
0.5 |
119.2 |
2017 |
275.3 |
— |
— |
— |
— |
49.1 |
97.3 |
80.9 |
58.8 |
44.0 |
20.8 |
4.9 |
2.1 |
357.9 |
2018 |
97.9 |
— |
— |
— |
— |
— |
6.7 |
27.4 |
30.5 |
31.6 |
24.6 |
12.7 |
2.1 |
135.6 |
2019 |
123.1 |
— |
— |
— |
— |
— |
— |
13.4 |
31.4 |
39.1 |
37.8 |
28.7 |
13.1 |
163.5 |
2020 |
62.1 |
— |
— |
— |
— |
— |
— |
— |
6.5 |
16.1 |
20.4 |
19.5 |
13.2 |
75.7 |
2021 |
55.2 |
— |
— |
— |
— |
— |
— |
— |
— |
4.6 |
17.9 |
17.5 |
12.0 |
52.0 |
2022 |
33.4 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
3.2 |
9.2 |
8.3 |
20.7 |
2023 |
91.2 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
9.0 |
18.7 |
27.7 |
2024 |
59.0 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
7.0 |
7.0 |
Subtotal |
2,366.3 |
1,491.4 |
458.4 |
344.2 |
249.8 |
222.5 |
207.9 |
180.9 |
155.3 |
147.4 |
129.4 |
104.2 |
78.2 |
3,769.6 |
Total Americas and Australia |
9,908.6 |
5,110.3 |
1,211.4 |
1,189.0 |
1,086.9 |
1,083.4 |
1,153.0 |
1,322.3 |
1,427.1 |
1,354.3 |
1,075.4 |
996.9 |
865.9 |
17,875.9 |
Europe Core |
||||||||||||||
2012-2013 |
40.7 |
27.7 |
14.2 |
5.5 |
3.5 |
3.3 |
3.3 |
2.4 |
1.9 |
1.8 |
1.4 |
1.0 |
0.8 |
66.8 |
2014 |
773.8 |
— |
153.2 |
292.0 |
246.4 |
220.8 |
206.3 |
172.9 |
149.8 |
149.2 |
122.2 |
107.6 |
75.7 |
1,896.1 |
2015 |
411.3 |
— |
— |
45.8 |
100.3 |
86.2 |
80.9 |
66.1 |
54.3 |
51.4 |
40.7 |
33.8 |
23.1 |
582.6 |
2016 |
333.1 |
— |
— |
— |
40.4 |
78.9 |
72.6 |
58.0 |
48.3 |
46.7 |
36.9 |
29.7 |
20.5 |
432.0 |
2017 |
252.2 |
— |
— |
— |
— |
17.9 |
56.0 |
44.1 |
36.1 |
34.8 |
25.2 |
20.2 |
13.6 |
247.9 |
2018 |
341.8 |
— |
— |
— |
— |
— |
24.3 |
88.7 |
71.3 |
69.1 |
50.7 |
41.6 |
28.5 |
374.2 |
2019 |
518.6 |
— |
— |
— |
— |
— |
— |
48.0 |
125.7 |
121.4 |
89.8 |
75.1 |
51.6 |
511.6 |
2020 |
324.1 |
— |
— |
— |
— |
— |
— |
— |
32.3 |
91.7 |
69.0 |
56.1 |
38.1 |
287.2 |
2021 |
412.4 |
— |
— |
— |
— |
— |
— |
— |
— |
48.5 |
89.9 |
73.0 |
50.7 |
262.1 |
2022 |
359.4 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
33.9 |
83.8 |
57.4 |
175.1 |
2023 |
410.6 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
50.2 |
78.3 |
128.5 |
2024 |
252.0 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
22.6 |
22.6 |
Subtotal |
4,430.0 |
27.7 |
167.4 |
343.3 |
390.6 |
407.1 |
443.4 |
480.2 |
519.7 |
614.6 |
559.7 |
572.1 |
460.9 |
4,986.7 |
Europe Insolvency |
||||||||||||||
2014 |
10.9 |
— |
— |
4.3 |
3.9 |
3.2 |
2.6 |
1.5 |
0.8 |
0.3 |
0.2 |
0.2 |
0.1 |
17.1 |
2015 |
19.0 |
— |
— |
3.0 |
4.4 |
5.0 |
4.8 |
3.9 |
2.9 |
1.6 |
0.6 |
0.4 |
0.1 |
26.7 |
2016 |
39.3 |
— |
— |
— |
6.2 |
12.7 |
12.9 |
10.7 |
7.9 |
6.0 |
2.7 |
1.3 |
0.7 |
61.1 |
2017 |
39.2 |
— |
— |
— |
— |
1.2 |
7.9 |
9.2 |
9.8 |
9.4 |
6.5 |
3.8 |
1.2 |
49.0 |
2018 |
44.9 |
— |
— |
— |
— |
— |
0.6 |
8.4 |
10.3 |
11.7 |
9.8 |
7.2 |
2.8 |
50.8 |
2019 |
77.2 |
— |
— |
— |
— |
— |
— |
5.0 |
21.1 |
23.9 |
21.0 |
17.5 |
10.7 |
99.2 |
2020 |
105.4 |
— |
— |
— |
— |
— |
— |
— |
6.0 |
34.6 |
34.1 |
29.7 |
20.1 |
124.5 |
2021 |
53.2 |
— |
— |
— |
— |
— |
— |
— |
— |
5.5 |
14.4 |
14.7 |
11.5 |
46.1 |
2022 |
44.6 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
4.5 |
12.4 |
11.1 |
28.0 |
2023 |
46.7 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
4.2 |
9.1 |
13.3 |
2024 |
37.8 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
6.3 |
6.3 |
Subtotal |
518.2 |
— |
— |
7.3 |
14.5 |
22.1 |
28.8 |
38.7 |
58.8 |
93.0 |
93.8 |
91.4 |
73.7 |
522.1 |
Total Europe |
4,948.2 |
27.7 |
167.4 |
350.6 |
405.1 |
429.2 |
472.2 |
518.9 |
578.5 |
707.6 |
653.5 |
663.5 |
534.6 |
5,508.8 |
Total PRA Group |
$ 14,856.8 |
$ 5,138.0 |
$ 1,378.8 |
$ 1,539.6 |
$ 1,492.0 |
$ 1,512.6 |
$ 1,625.2 |
$ 1,841.2 |
$ 2,005.6 |
$ 2,061.9 |
$ 1,728.9 |
$ 1,660.4 |
$ 1,400.5 |
$ 23,384.7 |
(1) |
Non-U.S. amounts are presented using the average exchange rates during the cash collection period. |
(2) |
Includes the acquisition date finance receivables portfolios acquired through our business acquisitions. |
(3) |
Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the year-end exchange rate for the respective year of purchase. |
Use of Non-GAAP Financial Measures
The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management uses certain non-GAAP financial measures, including Adjusted EBITDA, internally to evaluate the Company's performance and to set performance goals. Adjusted EBITDA is calculated as net income (or loss) attributable to PRA Group, Inc. plus income tax expense (or less income tax benefit); plus foreign exchange loss (or less foreign exchange gain); plus interest expense, net; plus other expense (or less other income); plus depreciation and amortization; plus impairment of real estate; plus net income attributable to noncontrolling interests; and plus recoveries applied to negative allowance less changes in expected recoveries. Adjusted EBITDA is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. The Company presents Adjusted EBITDA because the Company considers it an important supplemental measure of its operational and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of the Company's operational and financial performance and is useful to investors as other companies in the industry report similar financial measures. Adjusted EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Set forth below is a reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA for the last twelve months (LTM) ended September 30, 2024 and for the year ended December 31, 2023. The calculation of Adjusted EBITDA below may not be comparable to the calculation of similarly titled measures reported by other companies.
Reconciliation of Non-GAAP Financial Measures |
||
LTM |
For the Year Ended |
|
Adjusted EBITDA for PRA Group ($ in millions) |
September 30, 2024 |
December 31, 2023 |
Net income/(loss) attributable to PRA Group, Inc. |
$ 43 |
$ (83) |
Adjustments: |
||
Income tax expense/(benefit) |
10 |
(16) |
Foreign exchange loss |
1 |
— |
Interest expense, net |
220 |
181 |
Other expense |
1 |
2 |
Depreciation and amortization |
11 |
13 |
Impairment of real estate |
— |
5 |
Net income attributable to noncontrolling interests |
17 |
17 |
Recoveries applied to negative allowance less changes in expected recoveries |
797 |
888 |
Adjusted EBITDA |
$ 1,100 |
$ 1,007 |
In addition, the Company uses return on average tangible equity (ROATE), which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating performance relative to the Company's equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of its long-term shareholder return. Average tangible equity (ATE) is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by ATE.
The following table displays the Company's ROATE and provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to ATE for the periods indicated (amounts in thousands, except for ratio data):
Average Balance |
||||||||||||
Balance as of Period End |
Third Quarter |
Year-to-Date |
||||||||||
September 30, 2024 |
September 30, 2023 |
2024 |
2023 |
2024 |
2023 |
|||||||
Total stockholders' equity - PRA Group, Inc. |
$ 1,218,882 |
$ 1,115,590 |
$ 1,182,173 |
$ 1,140,558 |
$ 1,165,196 |
$ 1,166,780 |
||||||
Less: Goodwill |
423,011 |
412,513 |
419,329 |
413,709 |
420,517 |
420,997 |
||||||
Less: Other intangible assets |
1,620 |
1,670 |
1,609 |
1,753 |
1,656 |
1,797 |
||||||
Average tangible equity |
$ 761,235 |
$ 725,096 |
$ 743,023 |
$ 743,986 |
||||||||
Net income/(loss) attributable to PRA Group, Inc. |
$ 27,154 |
$ (12,262) |
$ 52,145 |
$ (74,695) |
||||||||
Return on average tangible equity (1) |
14.3 % |
(6.8) % |
9.4 % |
(13.4) % |
||||||||
Investor Contact:
Najim Mostamand, CFA
Vice President, Investor Relations
757-431-7913
[email protected]
News Media Contact:
Elizabeth Kersey
Senior Vice President, Communications and Public Policy
(757) 641-0558
[email protected]
SOURCE PRA Group, Inc.
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