Announces Closing of $200 Million
Asset-Backed Revolving Credit Facility
CURO Group Holdings Corp. (NYSE: CURO) (“CURO”), a market leader
in providing short-term credit to underbanked consumers, today
announced its response to the COVID-19 pandemic and provided an
update on other important business and financial matters. This
update is not intended as a full business and financial update and
the Company currently expects to report earnings for the first
quarter ended March 31, 2020 in a timeframe consistent with its
past practices.
Financing and Cash: The Company
closed today an incremental Asset-Backed Revolving Credit Facility
(the “Credit Facility”) to provide financing for U.S. installment
and line-of-credit receivables, including those generated under its
technology, marketing and servicing relationship with Stride Bank.
The Credit Facility provides for $100.0 million of initial
borrowing capacity and, subject to obtaining additional
commitments, the ability to expand borrowing capacity up to $200.0
million. Concurrent with the closing, the Company drew $35.2
million on the facility. The Company had $180.3 million of cash at
March 31, 2020, including $41.5 million of restricted cash. On a
pro forma basis, assuming the closing of the Credit Facility as of
March 31, 2020, the Company had $215.5 million of cash, including
$41.5 million of restricted cash.
Customer Care Program: In light of
the COVID-19 pandemic, in mid-March, the Company established an
enhanced Customer Care Program, which re-focused its efforts to
help the Company’s customers during this unprecedented time. CURO
has responded to over 35,000 calls and emails from customers who
report varying degrees of impact and hardship related to COVID-19.
CURO’s Customer Care Program enables our team members to provide
relief to customers in various ways, ranging from due date changes,
interest or fee forgiveness, payment waivers, or extended payment
plans, depending on a customer’s individual circumstances. The
Company has also temporarily suspended all returned item fees.
Store Operations and Employees: The
Company’s 416 stores in the United States and Canada have remained
open and, where applicable, have been designated as an essential
service by local regulations. In an effort to keep its employees
and customers safe, CURO has reduced store hours, with all stores
now open Monday to Saturday from 10am to 6pm, while adhering to
strict social distance guidelines throughout the store. The Company
has committed to pay all of its store personnel their full-time
wages through May 2, 2020, regardless of staff scheduling changes
that have resulted from COVID-19. The Company also implemented an
emergency leave pay plan to ensure that employees are paid when
they are unable to work due to COVID-19. In light of the impact
this pandemic has on the Company’s front-line teammates, CURO has
committed to pay a bonus to all working store teammates to provide
additional relief.
Contact Center and Corporate Support
Operations: Virtually all 1,100 of the Company’s contact
center and corporate support personnel in Wichita, Toronto and
Chicago are now successfully working from home.
Underwriting and Originations: CURO
has adjusted its credit underwriting models to tighten approval
rates and enhance its employment and income verification practices
for both the store and on-line lending platforms. CURO has seen a
significant reduction in new customer applications and originations
and the Company expects this trend to continue until the public
health crisis abates. The Company has also recently seen an
increase in delinquencies and net charge-off rates when compared to
prior year periods.
In light of the uncertainties surrounding the negative business,
financial and other impacts of COVID-19:
Guidance: The Company is
withdrawing its full-year 2020 guidance.
Short-Term Incentive Program: On
April 2, 2020, the Company’s Board of Directors cancelled the 2020
Short-Term Incentive Program, an annual cash bonus program covering
approximately 200 corporate support managers and executives. The
Company believes it is important at this time to focus its
resources on support of customers and front-line personnel in its
store and contact centers.
Share Repurchase Program: On March
15, 2020, the Company’s Board of Directors suspended its
previously-announced $25 million share repurchase program.
ABOUT CURO
CURO Group Holdings Corp. (NYSE: CURO), operating in the U.S.
and Canada and powered by its fully integrated technology platform,
is a market leader by revenues in providing short-term credit to
underbanked consumers. In 1997, the Company was founded in
Riverside, California by three Wichita, Kansas childhood friends to
meet the growing consumer need for short-term loans. Their success
led to opening stores across the United States and expanding to
offer online loans and financial services across two countries.
Today, CURO combines its market expertise with a fully integrated
technology platform, omni-channel approach and advanced credit
decisioning to provide an array of short-term credit products
across all mediums. CURO operates under a number of brands
including Speedy Cash®, Rapid Cash®, Cash Money®, LendDirect®, Avío
Credit®, Opt+®, and Revolve Finance®. With over 20 years of
operating experience, CURO provides financial freedom to the
underbanked.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements. These
forward-looking statements include statements related to actions we
have undertaken in response to COVID-19, the effectiveness of these
actions and our cash position, and our expectations regarding the
timing of reporting earnings for the quarter ended March 31, 2020.
In addition, words such as “guidance,” “estimate,” “anticipate,”
“believe,” “forecast,” “step,” “plan,” “predict,” “focused,”
“project,” “is likely,” “expect,” “intend,” “should,” “will,”
“confident,” variations of such words and similar expressions are
intended to identify forward-looking statements. Our ability to
achieve these forward-looking statements is based on certain
assumptions and judgments, including the effects on our business of
the COVID-19 pandemic, its impact on our ability to continue to
service our customers, our revenue and overall financial
performance and the manner in which we are able to conduct our
operations, increases in charge-offs in light of the impact of the
COVID-19 pandemic and our ability to execute on our business
strategy and accurately predict our future financial results. These
assumptions and judgments may prove to be inaccurate in the future.
These forward-looking statements are not guarantees of future
performance and involve known and unknown risks and uncertainties
that are difficult to predict with regard to timing, extent,
likelihood and degree of occurrence. There are important factors
both within and outside of our control that could cause our actual
results to differ materially from those in the forward-looking
statements. These factors include the impact of COVID-19 on the
macro-economic environment and how that impacts our customers, our
dependence on third-party lenders to provide the cash we need to
fund our loans and our ability to affordably access third-party
financing; errors in our internal forecasts; our level of
indebtedness; our ability to integrate acquired businesses; actions
of regulators and the negative impact of those actions on our
business; our ability to protect our proprietary technology and
analytics and keep up with that of our competitors; disruption of
our information technology systems that adversely affect our
business operations; ineffective pricing of the credit risk of our
prospective or existing customers; inaccurate information supplied
by customers or third parties could lead to errors in judging
customers’ qualifications to receive loans; improper disclosure of
customer personal data; failure of third parties who provide
products, services or support to us; any failure of third-party
lenders upon whom we rely to conduct business in certain states;
disruption to our relationships with banks and other third-party
electronic payment solutions providers; disruption caused by
employee or third-party theft and errors in our stores as well as
other factors discussed in our filings with the Securities and
Exchange Commission. Given these risks and uncertainties, investors
should not place undue reliance on forward-looking statements as a
prediction of actual future results. We undertake no obligation to
update, amend or clarify any forward-looking statement for any
reason.
(CURO-NWS)
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version on businesswire.com: https://www.businesswire.com/news/home/20200408005758/en/
Investor Relations: CURO Group Holdings Corp. Roger Dean
Executive Vice President & Chief Financial Officer 844-200-0342
IR@curo.com or Global IR Group Gar Jackson 949-873-2789
gar@globalirgroup.com
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