Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_______________________________________________________________________

FORM 8-K

__________________________________________________________________________

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 13, 2023

________________________________________________________________________

CURO GROUP HOLDINGS CORP

(Exact Name of Registrant as Specified in Its Charter)

________________________________________________________________________


Delaware	001-38315	90-0934597
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

200 W Hubbard Street, 8th Floor, Chicago, IL		60654
(Address of Principal Executive Offices)		(Zip Code)

(312) 470-2000

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

________________________________________________________________________

Check the appropriate box below if the Form8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock	CURO	NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule12b-2of the Securities Exchange Act of 1934(§240.12b-2of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 7.01 Regulation FD Disclosure

CURO Group Holdings Corp. (the “Company”) has prepared updated information for use in connection with upcoming investor meetings, which includes certain projections, forecasts and assumptions about various matters such as future financial and operational performance. A copy of the investor presentation is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference. A copy of the investor presentation will be available at https://ir.curo.com/.

The information furnished pursuant to this Current Report on Form 8-K shall not be considered “filed” under the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference into future filings by the Company under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, unless the Company expressly sets forth in such future filing that such information is to be considered “filed” or incorporated by reference therein. The furnishing of the information in this Current Report on Form 8-K is not intended to, and does not, constitute a determination or admission by the Company that the information herein is material or complete, or that investors should consider this information before making an investment decision with respect to any security of the Company.

ITEM 9.01 Financial Statements and Exhibits

(d). Exhibits


Exhibit Number			Description
99.1			Presentation of CURO Group Holdings Corp., dated November 13, 2023
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized on this 13th day of November, 2023.

CURO Group Holdings Corp.

By: /s/ Ismail Dawood

Ismail Dawood

Chief Financial Officer

Investor Presentation November 2023

IMPORTANT: You must read the following information before continuing to the presentation, which is being provided to you for informational purposes only. NOTE: All financial information is presented on a continuing operations basis, which excludes the Canada POS Lending segment due to the sale of Flexiti on August 31, 2023. Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements include projections, estimates and assumptions about various matters such as our future financial and operational performance, including our fourth quarter 2023 and full year 2024 outlook, various target ranges, NIM inflection points and the drivers of our long-term path to profitability. In addition, words such as “estimate,” “believe,” “forecast,” “predict,” “project,” “intend,” “should,” "expect" and 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, judgments and other factors, both within and outside of our control, that could cause actual results to differ materially from those in the forward-looking statements, including, risks relating to the uncertainty of projected financial information and forecasts, our level of indebtedness; our dependence on third-party lenders to provide the cash we need to fund our indebtedness and our ability to affordably access third-party financing; the impact of regulations on our business; the effects of competition on our business; our ability to attract and retain customers; global economic, market, financial, political or public health conditions or events; our ability to integrate acquired businesses; our ability to protect our proprietary technology and analytics; disruption of our information technology systems; improper disclosure of customer personal data, as well as other factors discussed in our filings with the Securities and Exchange Commission. The foregoing factors, as well as other existing risk factors and new risk factors that emerge from time to time, may cause actual results to differ materially from those contained in any forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual future results. Furthermore, we undertake no obligation to update, amend or clarify forward-looking statements. Non-GAAP Financial Measures In addition to the financial information prepared in conformity with U.S. GAAP, we provide certain “non-GAAP financial measures.” Such measures are intended as a supplemental measure of our performance that are not required by or presented in accordance with GAAP. We present these non-GAAP financial measures because we believe that, when viewed with our GAAP results and the accompanying reconciliation, such measures provide useful information for comparing our performance over various reporting periods as they remove from our operating results the impact of items that we believe do not reflect our core operating performance. These non-GAAP financial measures are not substitutes for any GAAP financial measure and there are limitations to using them. Although the Company believes that these non-GAAP financial measures can make an evaluation of our operating performance more consistent because they remove items that do not reflect our core operations, other companies in the Company’s industry may define their own non-GAAP financial measures differently or use different measures. As a result, it may be difficult to use any non-GAAP financial measure to compare the performance of other companies to our performance. The non-GAAP financial measures presented in these slides should not be considered as measures of the income generated by our business or discretionary cash available to us to invest in the growth of our business. Our management compensates for these limitations by reference to GAAP results and using these non-GAAP financial measures as supplemental measures. Reconciliation of non-GAAP metrics to the closest comparable GAAP metrics are included in the Appendix. NOTE: All dollar amounts for Canada in this presentation are in USD. Unless otherwise noted, tables and charts may not sum due to rounding. Disclaimer 2

Key Management 3 Doug Clark Chief Executive Officer Izzy Dawood Chief Financial Officer Gary Fulk Chief Operating Officer ▪ Joined CURO in 2021 as President of North American Direct Lending through the acquisition of Heights, where he served as CEO ▪ Named CEO of CURO in 2022 ▪ Nearly 20 years of consumer finance experience driving organizational growth, including leadership roles at Heights and Axcess Financial ▪ Joined CURO in 2023 ▪ 20+ years of experience building and leading financial teams, including CFO roles at Santander Consumer and Paysafe, a global payments platform, and leadership roles at Branch International, Wageworks, Santander Consumer USA and BNY Mellon ▪ Joined CURO in 2021 as President through the acquisition of Heights where he served as COO ▪ Named COO of CURO in 2022 ▪ 28+ years of consumer finance experience including Heights Finance and OneMain Financial where he held numerous leadership and operational roles Shu Chen Chief Credit Risk Officer ▪ Joined CURO in 2023, and oversees risk and analytics ▪ 10+ years of experience in credit, fraud, risk monitoring, loss forecasting and marketing analytics, including prior role as Chief Risk and Analytics officer of CNG Holdings

4 Company Overview ▪ Omni-channel consumer finance company serving consumers in the U.S. and Canada ▪ Operates in almost 500 branches across 13 states in the U.S. and nearly 150 branches in Canada – eight provinces with retail locations and eight provinces and one territory online ▪ Secured and unsecured installment and open-end loan products to non-prime consumers as well as credit insurance and other ancillary financial products 4

Strategic Transformation 5 Acquisition of First Heritage Expands <36% APR lending capabilities, adding new strategic geographies Sale of Legacy U.S. Direct Lending Business Accelerated transition from and reduces exposure to high APR loan products Acquisition of Heights Entrance into the <36% APR loan market Refinanced and upsized Warehouse Facilities for Heights ($425M) and First Heritage ($225M) as part of the acquisitions Refinanced Senior Notes and upsized issue to $1B 2021 2022 2023 Issued $150M Sr Term Loan and executed uptier exchange on $1B Senior Notes Executed new C$110M Warehouse Facility in Canada CURO started as a U.S. short-term lender, but through investments and M&A, has repositioned the business to align with go-forward strategy of offering longer term, higher balance and lower risk credit products Sale of Flexiti Completes transformation allowing exclusive focus on our Direct Lending business Executed new $140M Warehouse Facility in U.S. and increased borrowing capacity of a Canadian SPV from C$110M to C$150M

U.S. DIRECT LENDING Secured and unsecured installment loan products to non-prime consumers as well as credit insurance and other ancillary financial products Direct Lending Brands by Geography 6 CANADA DIRECT LENDING Non-prime open-end loans and payment protection insurance

Direct Lending (U.S.) Overview 7 Overview: • Gross AR >$700M • Almost 500 branches across 13 states • Non-Prime, both secured and unsecured • Ongoing shift to larger, lower rate loans decreases regulatory risk • Typical customer: 46% homeowners and average net income of ~$28,000 Loan Characteristics1 < 36% APR > 36% APR % of Portfolio 54% 46% Avg Original Balance ~$6,900 ~$2,300 Avg Term 43 25 Avg FICO 639 614 Avg APR ~30% ~54% % Secured 37% 12% 1 As of 9/30/23, all values are rounded and exclude insurance and other ancillary fees

Direct Lending (Canada) Overview 8 Open-end Loan Characteristics1 Avg Original Balance ~C$3,400 Avg Term n/a2 Avg Credit Vision Score 625 Avg APR ~45% 1 As of 9/30/23, all values are rounded and exclude insurance and other ancillary fees 2 Our primary product in Canada is an open-ended product Overview: • Gross AR ~$500M • Nearly 150 branches in eight provinces with retail locations and eight provinces and one territory online • Open-End Loans and single-pay loans • Omni-channel solution (online and branch) • Typical customer: 33% homeowners, average net income of ~C$36,000, and nine years in current job

Continued Progress on Strategic Framework Strengthen our Foundation Execute with ExcellenceGrow Responsibly 9 • Recommenced receivables growth without sacrificing credit quality • Increased the secured mix of our U.S. portfolio 6% YTD, representing ~25% as of 3Q23 • Three consecutive quarters of declining recurring OpEx • Improved net charge-off ratios ~320bps YTD Sep-23 • Converted U.S. operations to a single loan management system • Strengthened liquidity by raising $230M of capital in May-23 and closed two non- recourse facilities in Nov-23 • Sold Flexiti and now exclusively focused on our Direct Lending business

Continued Responsible Receivables Growth 10 ($ Millions) Note: In 3Q23, Loans receivable in Canada grew 2% vs prior quarter on a constant currency basis

Credit Overview: Net Charge-offs Highlights: • Net charge-offs improved sequentially and YTD 3Q23 primarily driven by credit tightening, servicing optimization and continued strategic mix shift to larger dollar, longer duration loans ($ Millions) Direct Lending NCOs by Geography 11 1 1Q23 NCOs excluding policy change. Including the change in charge-off policy, reported 1Q23 Direct Lending NCOs and NCO % were $47M and 15.6%, respectively, and $10M and 8.0%, respectively, in Canada 1 1

Outlook Strengthen our Foundation Execute with ExcellenceGrow Responsibly Cost of funds: ~$60M $90-$140M of unrestricted cash 4Q23 Targets: EOP Receivables: $1.26-$1.28B Revenue: $165-$175M Net Charge-off %: 16.5-18.5% Operating Expenses: $85-$95M 12 $90-$140M quarterly unrestricted cash balance Full Year 20241 8-12% EOP receivables growth NIM, post charge-offs, excl. recourse interest2: 26-28% Maintain 4Q23 operating expense run rate 1 Based on management's expectations for business performance and current macro conditions; subject to change if macro conditions change 2Net Interest Margin, Post Charge-offs, excl. Recourse Interest Expense = (Net Interest Income, Post charge-offs, excluding Recourse Interest Expense) / (Average Receivables); annualized

13 Performance KPIs 3Q23 Annualized Inflection point1 Long-term Target Range NIM, post charge-offs (excl. recourse interest)2 27% 28-30% 28-31% OpEx Ratio 30% 20-24% 20-22% Pre-tax ROA3 (3)% 4-10% 6-11% Net Leverage n/a n/a 5.0x-6.0x Average Receivables $1.25B ~$1.5B Pro-forma Pre-tax Income (excl. recourse interest) $(41)M ~$100M Long-Term Path to Profitability • Increased margin due to higher secured loan mix • Lower NCOs Continue to scale while managing expenses Continue to build additional liquidity Key Drivers 1 Estimate of when CURO's NIM, post-charge offs excluding recourse interest expense, can cover 100% of our operating and interest expenses 2 Net Interest Margin, Post Charge-offs, excl. Recourse Interest Expense = (Net Interest Income, Post charge-offs, excluding Recourse Interest Expense) / (Average Receivables); annualized 3 Pre-tax ROA = (NIM post charge-offs excl. recourse interest) - (OpEx Ratio)

14 Debt and Funding Summary 56% 44% Fixed vs Variable of Funded Debt1 Fixed Variable 1 As of November 7, 2023 2 Refer to Quarterly Report on Form 10-Q, FN 6 - Debt for additional maturity date information 3 Borrowing Capacity amounts are denominated in CAD, but were converted to USD using a 09/30/23 exchange rate of 0.7365 ($Millions, rounded) Fixed / Variable Final Maturity Date2 Effective Interest Rate Borrowing Capacity1 Corporate Debt: 1.0L Term Loan Fixed Aug-27 18.0% n/a 1.5L Senior Notes Fixed Aug-28 7.5% n/a 2.0L Senior Notes Fixed Aug-28 7.5% n/a Funding Debt: Heights SPV I Variable Jul-25 1-Mo SOFR + 5.69% $375 Heights SPV II Variable Oct-26 1-Mo SOFR + 8.50% $140 First Heritage SPV Variable Jul-25 1-Mo SOFR + 4.35% $200 Canada SPV(3) Variable Aug-26 3-Mo CDOR + 6.00% $295 Canada SPV II(3) Variable Nov-25 3-Mo CDOR + 8.00% $110

Cover Page	Nov. 13, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Nov. 13, 2023
Entity Registrant Name	CURO GROUP HOLDINGS CORP
Entity Incorporation, State or Country Code	DE
Entity File Number	001-38315
Entity Tax Identification Number	90-0934597
Entity Address, Address Line One	200 W Hubbard Street
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60654
City Area Code	312
Local Phone Number	470-2000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common stock
Trading Symbol	CURO
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Amendment Flag	false
Entity Central Index Key	0001711291
Entity Address, Address Line Two	8th Floor