Regional Managment Corp (RM) Tops Q3 EPS by 2c, Revenues Miss

Regional Managment Corp (NYSE: RM) reported Q3 EPS of $0.85, $0.02 better than the analyst estimate of $0.83. Revenue for the quarter came in at $77.9 million versus the consensus estimate of $78.34 million.

• Net income for the third quarter of 2018 was $7.4 million, an increase of 40.3% from the prior-year period, while non-GAAP net income was $10.3 million, an increase of 50.8% from the prior-year period.
  • Non-GAAP net income for the third quarter of 2018 excludes an estimated $2.9 million of impact related to Hurricane Florence, while non-GAAP net income for the prior-year period excludes an estimated $2.2 million of impact related to the 2017 hurricanes and $0.6 million of proceeds related to the bulk sale of the Company’s previously charged-off bankrupt accounts (“bulk sale”).
  • Diluted earnings per share for the third quarter of 2018 was $0.61, while non-GAAP diluted earnings per share for the third quarter of 2018 was $0.85.
• Total finance receivables as of September 30, 2018 were $888.1 million, an increase of 14.6%, or $113.2 million, from the prior-year period.
  • Fourteenth consecutive quarter of year-over-year double-digit finance receivables growth.
  • Total core small and large loan finance receivables increased $153.3 million, or 22.8%, compared to the prior-year period.
  • Large loan finance receivables of $410.8 million increased $102.2 million, or 33.1%, from the prior-year period and represented 46.3% of the total loan portfolio. Small loan finance receivables as of September 30, 2018 were $414.4 million, an increase of 14.1% over the prior-year period.
• Total revenue for the third quarter of 2018 was $77.9 million, an $8.7 million, or 12.6%, increase from the prior-year period.
  • Ninth consecutive quarter of year-over-year double-digit revenue growth.
  • Interest and fee income increased 13.4%, driven by a 14.6% increase in finance receivables compared to the prior-year period.

“We had a very strong third quarter and our performance drivers continue to be robust,” said Peter R. Knitzer, President and Chief Executive Officer of Regional Management. “We generated another quarter of year-over-year double-digit growth on our top and bottom lines as well as in our finance receivables. Credit performance remains stable, with the slight uptick in September 30 delinquencies on a year-over-year basis returning to year-ago levels as of the end of October.”

“In addition to another quarter of strong growth and stable credit, we continued to keep a firm control on our overall expenses, which should lead to additional margin expansion over time,” continued Mr. Knitzer. “We also began implementing custom scorecards in our branches, which we believe will further improve our credit profile in the mid- to long-term. Moving forward, we remain squarely focused on our hybrid growth strategy of increasing our receivables per branch within our existing network, coupled with de novo expansion in the Midwest. Overall, we remain well-positioned to generate long-term shareholder value.”

For earnings history and earnings-related data on Regional Managment Corp (RM) click here.

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