WORLD ACCEPTANCE CORP Q2 FY2026 earnings call

• One-off items: There was a $3.7 million onetime expense from the early redemption of bonds with a $0.57 earnings per share impact after tax. A $1.3 million discrete tax-related expense from Mexico operations with a $0.26 per share after tax impact. A $5 million increase in provision solely due to new customer growth with a $0.78 per share after tax impact, totaling around $1.61 per share after tax impact for the quarter. - New customer origination volume: Up around 40% year-over-year at end of Q2, YTD up 35% and back to pre-COVID levels. - Originations: Including returning former customers, originations increased 15% year-over-year in Q2, the highest volume second quarter on record except fiscal year 2020 - 2022. YTD first half had 14% higher loan volume than last year. - Portfolio: Grew nominally 5.5% more this year relative to last year. - Capital position: Repurchased and canceled $170 million of bonds, stood up a $175 million warehouse facility, completed a new credit agreement with increased commitments and stock repurchase allowance. YTD repurchased 9.1% of shares, with potential to repurchase around 17.7% of outstanding shares.

New customer origination volume was up around 40% year-over-year at the end of Q2. Year-to-date, new customer origination volume was up 35% and back to pre-COVID levels. The portfolio was up 1.5% year-over-year at the end of the second quarter, compared to being down 4% at the beginning of the year. The new customer portfolio at the end of Q2 was 35% larger year-over-year, with a provision increase of approximately $5 million solely due to new customers, representing approximately $0.78 per share after tax.

• Long-term incentive comp: Front-loaded, around $5.8 million for the third quarter, then reducing by around $2 million in the fourth quarter and following 2 quarters, and further reductions thereafter. - Share repurchase: Already repurchased 9.1% of shares YTD, with additional capacity for approximately 8.6% more, totaling potential repurchase of around 17.7% of outstanding shares.

• Forward-looking statements are subject to risks and uncertainties, with additional information regarding these in the earnings press release and the Risk Factors section of the corporation's most recent Form 10-K and subsequent SEC filings.

Q: Asked about the $1.61 per share after tax impact from the three discrete items.

A: $0.26 from Mexico, $0.57 from the early redemption of bonds, and approximately $0.78 from the provision increase due to new customer growth.

Q: Asked about operating expenses and long-term incentive comp.

A: Confirmed the net difference in personnel expense and the front-loading of long-term incentive expenses.

Q: Asked about consumer health and marketing efforts.

A: Consumer performance hasn't shown major weakness, proactively tightened credit box; marketing efforts include in-house modeling, successful tests reducing cost of acquisition, aiming for modest growth in marketing budget.