World Acceptance Corporation Reports Decline in Revenues, Improved Profitability in Latest Quarter

World Acceptance Corporation, a small-loan consumer finance company based in Greenville, South Carolina, reported its financial results for the three and six months ended September 30, 2024. The company experienced a decline in total revenues, which amounted to $131.4 million for the three months, down 4.0% from $136.9 million in the same period of 2023. For the six months, revenues decreased by 5.5% to $260.9 million from $276.2 million year-over-year. This decline was attributed to a decrease in interest and fee income, which fell by $3.0 million (2.6%) due to lower loans outstanding, and a significant drop in insurance income, which decreased by approximately $3.2 million (20.5%).

Despite the revenue decline, the company reported improved profitability. Net income for the three months ended September 30, 2024, was $22.1 million, a 37.6% increase from $16.1 million in the prior year. For the six months, net income rose to $32.1 million from $25.6 million, reflecting a 25.5% increase. The operating income margin also improved, rising to 29.2% from 24.4% in the same quarter of the previous year.

Total expenses for the three months decreased to $103.5 million from $116.0 million, driven by a significant reduction in general and administrative (G&A) expenses, which fell by 26.4% to $46.2 million. Personnel expenses also decreased by 43.4% to $21.8 million, reflecting a 6.7% reduction in headcount compared to the previous year.

As of September 30, 2024, the company reported gross loans receivable of $1.296 billion, a 6.1% decrease from $1.380 billion a year earlier. Net loans receivable also declined to $842.7 million from $847.4 million. The provision for credit losses increased to $46.7 million, up 15.3% from the previous year, reflecting a rise in expected loss rates.

Strategically, World Acceptance Corporation made one acquisition during the six months, purchasing a loan portfolio for $56,294. The company also maintained a senior revolving credit facility of $580 million, with $265.6 million outstanding as of the reporting date. The effective interest rate on this facility was 10.1% annualized.

The company’s financial position remains stable, with total assets of $1.049 billion and total shareholders' equity of $417.5 million, resulting in a debt-to-equity ratio of 1.2:1.0. The effective income tax rate decreased to 20.8% for the three months ended September 30, 2024, down from 23.1% in the prior year, contributing to the improved net income.