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PRA Group Reports First Quarter 2023 Results

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May 8, 2023 4:05 PM EDT

NORFOLK, Va., May 8, 2023 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the first quarter of 2023 ("Q1 2023").

Q1 2023 Highlights

  • Total portfolio purchases of $230.2 million.
  • Total cash collections were $411.3 million.
  • Estimated remaining collections (ERC)1 of $5.7 billion.
  • Cash efficiency ratio2 of 54.3%.
  • Diluted earnings per share were $(1.50).
  • Debt to Adjusted EBITDA3 for the 12 months ended March 31, 2023 was 2.89x.
  • Pro forma Debt to Adjusted EBITDA3 for the 12 months ended March 31, 2023 was 2.55x, considering prefunding of 2023 convertible notes maturity.
  • Available capacity under the Company's credit facilities of $1.6 billion; $436.8 million after considering borrowing base restrictions.
  • Appointed Vikram Atal as president and chief executive officer in March 2023 and Owen James as global investments officer in April 2023.








Three Months Ended Mar 31,


($ in thousands, except per share amounts)


2023


2022


Net (loss)/income attributable to PRA Group, Inc.


$        (58,629)


$         39,972


Diluted earnings per share


$            (1.50)


$              0.97








"While the first quarter earnings presented some challenges, including a softer-than-expected U.S. tax season, we met our collections expectations on a consolidated basis, delivering total cash collections of $411 million globally. We also had another strong purchasing quarter, investing $230 million in portfolios, which was up 56% year-over-year, as we further capitalize on what we believe to be an increasingly improving supply environment," said Vikram Atal, president and chief executive officer. "We continue to have a solid base of deeply experienced employees, business fundamentals that remain strong, and a financial profile and global presence that provide the flexibility to invest across markets as opportunities become available. Looking ahead, our strategy remains intact, and I am committed to accelerating the pace and intensity of our efforts to deliver sustained performance and create value for our shareholders."

1.

Refers to the sum of all future projected cash collections on the Company's nonperforming loan portfolios.

2.

Calculated by dividing cash receipts less operating expenses by cash receipts. Cash receipts refers to cash collections on the Company's nonperforming loan portfolios, fees and revenue recognized from the Company's class action claims recovery services.

3.

A reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA can be found at the end of this press release.

Cash Collections and Revenues
The following table presents cash collections by quarter and by source on an as reported and constant currency-adjusted basis:












Cash Collection Source


2023


2022

($ in thousands)


Q1


Q4


Q3


Q2


Q1

Americas and Australia Core


$       227,960


$       205,619


$       225,775


$       244,377


$       270,284

Americas Insolvency


25,751


27,971


31,911


34,278


35,209

Europe Core


134,005


134,016


132,072


142,470


151,162

Europe Insolvency


23,568


24,051


22,586


22,935


24,325

Total Cash Collections


$       411,284


$       391,657


$       412,344


$       444,060


$       480,980


































Cash Collection Source -











Constant Currency-Adjusted


2023








2022

($ in thousands)


Q1








Q1

Americas and Australia Core


$       227,960








$       269,430

Americas Insolvency


25,751








35,176

Europe Core


134,005








138,585

Europe Insolvency


23,568








22,091

Total Cash Collections


$       411,284








$       465,282












  • Total cash collections in Q1 2023 decreased 14.5% (or 11.6% on a constant currency-adjusted basis) to $411.3 million, compared to $481.0 million in the first quarter of 2022 ("Q1 2022"). The decrease was primarily due to a 30.2% decrease in U.S. call center and other collections, which was driven by lower levels of portfolio purchases. Europe cash collections decreased by 10.2%, and 1.9% on a constant currency-adjusted basis.
  • Total portfolio revenue in Q1 2023 was $151.3 million compared to $237.4 million in Q1 2022. The decrease was primarily due to a softer-than-expected U.S. tax season, which prompted a reduction in forward-looking ERC.

Expenses

  • Operating expenses in Q1 2023 increased by $20.5 million, or 12.1%, compared to Q1 2022. The increase was primarily driven by:
    • an $11.3 million increase in compensation and employee services expenses primarily due to $7.5 million in severance expenses;
    • a $7.3 million increase in legal collections costs due to the higher volume of accounts placed into the legal channel in the U.S; and
    • a $5.5 million increase in outside fees and services due to $7.6 million in certain case-specific litigation expenses.
  • The effective tax rate for Q1 2023 was 25.7%.

Portfolio Acquisitions

  • The Company purchased $230.2 million in portfolios of nonperforming loans in Q1 2023.
  • At the end of Q1 2023, the Company had in place maximum forward flow commitments1 of up to $622.4 million, comprised of $344.6 million in the Americas and Australia and $277.8 million in Europe.

1.

Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices.












Portfolio Purchase Source


2023


2022

($ in thousands)


Q1


Q4


Q3


Q2


Q1

Americas and Australia Core


$       116,867


$         118,581


$         100,780


$           99,962


$           90,639

Americas Insolvency


15,701


8,967


8,988


6,369


9,118

Europe Core


90,454


140,011


59,426


123,814


38,764

Europe Insolvency


7,203


20,535


13,910


1,202


8,929

Total Portfolio Acquisitions


$       230,225


$         288,094


$         183,104


$         231,347


$         147,450












Conference Call Information
PRA Group, Inc. will hold a conference call today at 5:00 p.m. Eastern time to discuss its financial and operational results. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations. To listen by phone, call 844-835-9982 in the U.S. or 412-317-5267 outside the U.S., and ask the operator for the PRA Group conference call.  To listen to a replay of the call, either visit the same website until May 8, 2024, or call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 1921134 until May 15, 2023.                             

About PRA Group, Inc.
As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas, Europe and Australia. With thousands of employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.

About Forward Looking Statements
Statements made herein that are not historical in nature, including PRA Group, Inc.'s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.'s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that the Company's expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.'s filings with the Securities and Exchange Commission, including PRA Group, Inc.'s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.

Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.'s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.

 

PRA Group, Inc.

Unaudited Consolidated Income Statements

(Amounts in thousands, except per share amounts)



Three Months Ended March 31,


2023


2022

Revenues:




Portfolio income

$               188,242


$                207,532

Changes in expected recoveries

(36,912)


29,914

Total portfolio revenue

151,330


237,446

Other revenue

4,140


3,159

Total revenues

155,470


240,605

Operating expenses:




Compensation and employee services

82,403


71,096

Legal collection fees

8,838


10,873

Legal collection costs

23,945


16,557

Agency fees

17,378


17,388

Outside fees and services

24,944


19,378

Communication

10,527


12,583

Rent and occupancy

4,448


4,987

Depreciation and amortization

3,589


3,778

Other operating expenses

13,042


11,998

Total operating expenses

189,114


168,638

   (Loss)/income from operations

(33,644)


71,967

Other income and (expense):




Interest expense, net

(38,283)


(31,748)

Foreign exchange loss, net

(9)


(532)

Other

(650)


(490)

(Loss)/income before income taxes

(72,586)


39,197

Income tax (benefit)/expense

(18,683)


4,579

Net (loss)/income

(53,903)


34,618

Adjustment for net income/(loss) attributable to
noncontrolling interests

4,726


(5,354)

Net (loss)/income attributable to PRA Group, Inc.

$                (58,629)


$                   39,972

Net (loss)/income per common share attributable to PRA Group, Inc.:




Basic

$                    (1.50)


$                       0.98

Diluted

$                    (1.50)


$                       0.97

Weighted average number of shares outstanding:




Basic

39,033


40,777

Diluted

39,033


41,304

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)



(unaudited)




March 31,
2023


December 31,
2022

Assets




Cash and cash equivalents

$                116,471


$                  83,376

Restricted cash and cash equivalents

359,208


1,382

Investments

77,877


79,948

Finance receivables, net

3,286,497


3,295,008

Income taxes receivable

41,398


31,774

Deferred tax assets, net

57,551


56,908

Right-of-use assets

53,187


54,506

Property and equipment, net

48,500


51,645

Goodwill

420,647


435,921

Other assets

82,293


85,206

Total assets

$             4,543,629


$             4,175,674

Liabilities and Equity




Liabilities:




Accounts payable

$                     4,837


$                     7,329

Accrued expenses

120,640


111,395

Income taxes payable

19,809


25,693

Deferred tax liabilities, net

29,324


42,918

Lease liabilities

57,939


59,384

Interest-bearing deposits

108,779


112,992

Borrowings

2,937,895


2,494,858

Other liabilities

39,697


34,355

Total liabilities

3,318,920


2,888,924

Equity:




Preferred stock, $0.01 par value, 2,000 shares authorized, 0 shares issued and
outstanding

—


—

Common stock, $0.01 par value, 100,000 shares authorized, 39,170 shares issued
and outstanding at March 31, 2023; 100,000 shares authorized, 38,980 shares
issued and outstanding at December 31, 2022

392


390

Additional paid-in capital

285


2,172

Retained earnings

1,514,396


1,573,025

Accumulated other comprehensive loss

(356,730)


(347,926)

Total stockholders' equity - PRA Group, Inc.

1,158,343


1,227,661

Noncontrolling interest

66,366


59,089

Total equity

1,224,709


1,286,750

Total liabilities and equity

$             4,543,629


$             4,175,674

 

Select Expenses (Income)

Amounts in thousands, pre-tax











Three Months Ended


March 31,
2023

December 31,
2022

September 30,
2022

June 30,
2022

March 31,
2022

December 31,
2021

September 30,
2021

June 30,
2021

Noncash interest
expense -
amortization of debt
issuance costs

2,441

2,444

2,555

2,471

2,627

2,455

2,406

2,391

Change in fair value
of derivatives

(5,470)

(3,309)

(1,042)

1,525

2,726

3,115

2,982

2,911

Amortization of
intangibles

66

73

73

77

83

(269)

104

105

Stock-based
compensation
expense

3,799

2,206

3,101

3,849

3,891

3,470

4,317

4,040

 

Purchase Price Multiples

as of March 31, 2023

Amounts in thousands

Purchase Period

Purchase Price (2)(3)

Total Estimated
Collections (4)

Estimated
Remaining
Collections (5)

Current Purchase
Price Multiple

Original Purchase
Price Multiple (6)

Americas and Australia Core






1996-2012

$                  1,541,896

$              4,797,375

$                  36,563

311 %

238 %

2013

390,826

905,829

14,434

232 %

211 %

2014

404,117

872,324

23,500

216 %

204 %

2015

443,114

899,293

45,410

203 %

205 %

2016

455,767

1,075,915

81,221

236 %

201 %

2017

532,851

1,200,467

135,622

225 %

193 %

2018

653,975

1,464,662

199,190

224 %

202 %

2019

581,476

1,294,091

256,184

223 %

206 %

2020

435,668

947,844

299,252

218 %

213 %

2021

435,846

781,115

486,989

179 %

191 %

2022

406,082

721,791

610,010

178 %

179 %

2023

117,160

204,528

201,535

175 %

175 %

Subtotal

6,398,778

15,165,234

2,389,910



Americas Insolvency





1996-2012

1,038,223

2,146,434

203

207 %

165 %

2013

227,834

355,606

103

156 %

133 %

2014

148,420

218,685

280

147 %

124 %

2015

63,170

87,919

201

139 %

125 %

2016

91,442

117,460

433

128 %

123 %

2017

275,257

355,158

2,686

129 %

125 %

2018

97,879

137,184

11,869

140 %

127 %

2019

123,077

168,061

38,651

137 %

128 %

2020

62,130

89,842

41,929

145 %

136 %

2021

55,187

72,875

46,009

132 %

136 %

2022

33,442

46,205

41,226

138 %

139 %

2023

15,701

21,079

20,811

134 %

134 %

Subtotal

2,231,762

3,816,508

204,401



Total Americas and Australia

8,630,540

18,981,742

2,594,311



Europe Core






2012

20,409

43,973

—

215 %

187 %

2013

20,334

27,039

1

133 %

119 %

2014 (1)

773,811

2,365,846

385,266

306 %

208 %

2015

411,340

727,491

146,999

177 %

160 %

2016

333,090

567,548

179,801

170 %

167 %

2017

252,174

358,180

115,098

142 %

144 %

2018

341,775

540,907

215,509

158 %

148 %

2019

518,610

805,423

366,897

155 %

152 %

2020

324,119

557,152

292,626

172 %

172 %

2021

412,411

698,282

472,516

169 %

170 %

2022

359,447

580,548

534,007

162 %

162 %

2023

91,945

157,933

155,919

172 %

172 %

Subtotal

3,859,465

7,430,322

2,864,639



Europe Insolvency





2014 (1)

10,876

18,669

—

172 %

129 %

2015

18,973

29,000

70

153 %

139 %

2016

39,338

57,076

1,156

145 %

130 %

2017

39,235

51,169

3,700

130 %

128 %

2018

44,908

52,454

9,681

117 %

123 %

2019

77,218

110,875

31,642

144 %

130 %

2020

105,440

156,589

62,485

149 %

129 %

2021

53,230

71,526

42,227

134 %

134 %

2022

44,604

61,034

54,759

137 %

137 %

2023

7,352

10,087

10,011

137 %

137 %

Subtotal

441,174

618,479

215,731



Total Europe

4,300,639

8,048,801

3,080,370



Total PRA Group

$                12,931,179

$            27,030,543

$              5,674,681





(1)

Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 Form 10-K")).

(2)

Includes the acquisition date finance receivables portfolios that were acquired through our business acquisitions.

(3)

Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased. In addition, any purchase price adjustments that occur throughout the life of the portfolio are presented at the year-end exchange rate for the respective year of purchase.

(4)

Non-U.S. amounts are presented at the year-end exchange rate for the respective year of purchase.

(5)

Non-U.S. amounts are presented at the March 31, 2023 exchange rate.

(6)

The Original Purchase Price Multiple represents the purchase price multiple at the end of the year of acquisition.

 

Portfolio Financial Information

Year-to-date as of March 31, 2023

Amounts in thousands

Purchase Period

Cash

Collections (2)

Portfolio
Income (2)

Change in
Expected
Recoveries (2)

Total Portfolio
Revenue (2)

Net Finance
Receivables as of
March 31, 2023(3)

Americas and Australia Core






1996-2012

$                     4,930

$              3,132

$                         345

$                      3,477

$                          8,799

2013

2,590

1,119

429

1,548

6,395

2014

3,117

1,429

161

1,590

8,983

2015

3,789

2,453

(1,852)

601

18,065

2016

6,740

4,712

(3,078)

1,634

26,353

2017

13,064

7,622

(5,636)

1,986

57,300

2018

27,614

11,442

(1,040)

10,402

108,717

2019

33,145

14,841

(2,958)

11,883

138,869

2020

38,142

16,845

(6,426)

10,419

167,501

2021

40,213

23,087

(22,356)

731

260,663

2022

51,622

26,692

937

27,629

360,224

2023

2,994

1,811

378

2,189

116,249

Subtotal

227,960

115,185

(41,096)

74,089

1,278,118

Americas Insolvency






1996-2012

234

83

153

236

—

2013

67

39

28

67

—

2014

123

66

12

78

—

2015

106

40

29

69

102

2016

190

47

9

56

348

2017

1,605

181

(123)

58

2,424

2018

4,401

455

(133)

322

11,128

2019

7,705

1,036

57

1,093

35,596

2020

4,919

1,226

145

1,371

35,750

2021

4,339

1,309

(20)

1,289

37,812

2022

1,794

1,018

(27)

991

31,722

2023

268

215

(31)

184

15,614

Subtotal

25,751

5,715

99

5,814

170,496

Total Americas and Australia

253,711

120,900

(40,997)

79,903

1,448,614

Europe Core






2012

191

—

191

191

—

2013

95

—

95

95

—

2014 (1)

25,462

18,404

109

18,513

107,836

2015

8,748

4,274

(408)

3,866

80,755

2016

7,515

4,040

(807)

3,233

105,983

2017

5,322

1,963

(558)

1,405

79,388

2018

10,568

3,930

(123)

3,807

142,505

2019

19,118

6,210

4,178

10,388

250,616

2020

14,641

5,794

(994)

4,800

179,990

2021

19,176

8,685

(2,405)

6,280

284,941

2022

21,193

8,965

(124)

8,841

334,594

2023

1,976

397

816

1,213

91,123

Subtotal

134,005

62,662

(30)

62,632

1,657,731

Europe Insolvency






2014 (1)

49

—

49

49

—

2015

98

12

41

53

61

2016

454

83

86

169

864

2017

1,295

90

237

327

3,436

2018

1,942

216

(122)

94

8,864

2019

4,714

736

330

1,066

27,828

2020

8,233

1,307

3,089

4,396

55,042

2021

3,745

976

156

1,132

34,889

2022

2,963

1,201

131

1,332

41,786

2023

75

59

118

177

7,382

Subtotal

23,568

4,680

4,115

8,795

180,152

Total Europe

157,573

67,342

4,085

71,427

1,837,883

Total PRA Group

$                 411,284

$          188,242

$                   (36,912)

$                  151,330

$                    3,286,497



(1)

Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).

(2)

Non-U.S. amounts are presented using the average exchange rates during the current reporting period.

(3)

Non-U.S. amounts are presented at the March 31, 2023 exchange rate.

 

Cash Collections by Year, By Year of Purchase (1)

as of March 31, 2023

Amounts in millions



Cash Collections

Purchase Period

Purchase
Price (3)(4)

1996-2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Total

Americas and Australia Core














1996-2012

$       1,541.9

$  2,962.4

$ 554.9

$ 412.5

$ 280.3

$ 178.9

$ 118.1

$   83.8

$   62.9

$   41.5

$   29.9

$   23.5

$     5.1

$ 4,753.8

2013

390.8

—

101.6

247.9

194.0

120.8

78.9

56.5

36.9

23.2

16.7

12.5

2.6

891.6

2014

404.1

—

—

92.7

253.5

170.3

114.2

82.2

55.3

31.9

22.3

15.0

3.1

840.5

2015

443.1

—

—

—

117.0

228.4

185.9

126.6

83.6

57.2

34.9

19.5

3.8

856.9

2016

455.8

—

—

—

—

138.7

256.5

194.6

140.6

105.9

74.2

38.4

6.7

955.6

2017

532.9

—

—

—

—

—

107.3

278.7

256.5

192.5

130.0

76.3

13.1

1054.4

2018

654.0

—

—

—

—

—

—

122.7

361.9

337.7

239.9

146.1

27.6

1235.9

2019

581.5

—

—

—

—

—

—

—

143.8

349.0

289.8

177.7

33.1

993.4

2020

435.7

—

—

—

—

—

—

—

—

132.9

284.3

192.0

38.1

647.3

2021

435.9

—

—

—

—

—

—

—

—

—

85.0

177.3

40.2

302.5

2022

406.1

—

—

—

—

—

—

—

—

—

—

67.7

51.6

119.3

2023

117.2

—

—

—

—

—

—

—

—

—

—

—

3.0

3.0

Subtotal

6,399.0

2,962.4

656.5

753.1

844.8

837.1

860.9

945.1

1,141.5

1,271.8

1,207.0

946.0

228.0

12,654.2

Americas Insolvency














1996-2012

1,038.2

1,021.6

417.3

338.8

208.3

105.4

37.7

8.3

3.9

2.3

1.4

1.1

0.2

2,146.3

2013

227.8

—

52.5

82.6

81.7

63.4

47.8

22.0

2.9

1.3

0.8

0.5

0.1

355.6

2014

148.4

—

—

37.1

50.9

44.3

37.4

28.8

15.8

2.2

1.1

0.7

0.1

218.4

2015

63.2

—

—

—

3.4

17.9

20.1

19.8

16.7

7.9

1.3

0.6

0.1

87.8

2016

91.4

—

—

—

—

18.9

30.4

25.1

19.9

14.4

7.4

1.8

0.2

118.1

2017

275.3

—

—

—

—

—

49.1

97.3

80.9

58.8

44.0

20.8

1.6

352.5

2018

97.9

—

—

—

—

—

—

6.7

27.4

30.5

31.6

24.6

4.4

125.2

2019

123.1

—

—

—

—

—

—

—

13.5

31.4

39.1

37.8

7.7

129.5

2020

62.1

—

—

—

—

—

—

—

—

6.5

16.1

20.4

4.9

47.9

2021

55.2

—

—

—

—

—

—

—

—

—

4.6

17.9

4.3

26.8

2022

33.4

—

—

—

—

—

—

—

—

—

—

3.2

1.8

5.0

2023

15.7

—

—

—

—

—

—

—

—

—

—

—

0.3

0.3

Subtotal

2,231.7

1,021.6

469.8

458.5

344.3

249.9

222.5

208.0

181.0

155.3

147.4

129.4

25.7

3,613.4

Total Americas and Australia

8,630.7

3,984.0

1,126.3

1,211.6

1,189.1

1,087.0

1,083.4

1,153.1

1,322.5

1,427.1

1,354.4

1,075.4

253.7

16,267.6

Europe Core














2012

20.4

11.6

9.0

5.6

3.2

2.2

2.0

2.0

1.5

1.2

1.2

0.9

0.1

40.5

2013

20.3

—

7.1

8.5

2.4

1.3

1.2

1.3

0.9

0.7

0.7

0.5

0.1

24.7

2014 (2)

773.8

—

—

153.2

292.0

246.4

220.8

206.3

172.9

149.8

149.3

122.2

25.5

1,738.4

2015

411.3

—

—

—

45.8

100.3

86.2

80.9

66.1

54.3

51.4

40.7

8.8

534.5

2016

333.1

—

—

—

—

40.4

78.9

72.6

58.0

48.3

46.7

36.9

7.5

389.3

2017

252.2

—

—

—

—

—

17.9

56.0

44.1

36.1

34.8

25.2

5.3

219.4

2018

341.8

—

—

—

—

—

—

24.3

88.7

71.3

69.1

50.7

10.6

314.7

2019

518.6

—

—

—

—

—

—

—

48.0

125.7

121.4

89.8

19.1

404.0

2020

324.1

—

—

—

—

—

—

—

—

32.3

91.7

69.1

14.6

207.7

2021

412.4

—

—

—

—

—

—

—

—

—

48.5

89.9

19.2

157.6

2022

359.5

—

—

—

—

—

—

—

—

—

—

33.9

21.2

55.1

2023

91.9

—

—

—

—

—

—

—

—

—

—

—

2.0

2.0

Subtotal

3,859.4

11.6

16.1

167.3

343.4

390.6

407.0

443.4

480.2

519.7

614.8

559.8

134.0

4,087.9

Europe Insolvency













2014 (2)

10.9

—

—

—

4.3

3.9

3.2

2.6

1.6

0.8

0.3

0.2

0.1

17.0

2015

19.0

—

—

—

3.0

4.4

5.0

4.8

3.9

2.9

1.6

0.7

0.1

26.4

2016

39.3

—

—

—

—

6.2

12.7

12.9

10.7

8.0

6.0

2.7

0.5

59.7

2017

39.2

—

—

—

—

—

1.2

7.9

9.2

9.8

9.4

6.5

1.3

45.3

2018

44.9

—

—

—

—

—

—

0.6

8.4

10.3

11.7

9.8

1.9

42.7

2019

77.2

—

—

—

—

—

—

—

5.0

21.1

23.9

21.0

4.7

75.7

2020

105.4

—

—

—

—

—

—

—

—

6.1

34.7

34.1

8.2

83.1

2021

53.2

—

—

—

—

—

—

—

—

—

5.5

14.4

3.7

23.6

2022

44.6

—

—

—

—

—

—

—

—

—

—

4.5

3.0

7.5

2023

7.4

—

—

—

—

—

—

—

—

—

—

—

0.1

0.1

Subtotal

441.1

—

—

—

7.3

14.5

22.1

28.8

38.8

59.0

93.1

93.9

23.6

381.1

Total Europe

4,300.5

11.6

16.1

167.3

350.7

405.1

429.1

472.2

519.0

578.7

707.9

653.7

157.6

4,469.0

Total PRA Group

$     12,931.2

$  3,995.6

$  1,142.4

$  1,378.9

$  1,539.8

$  1,492.1

$  1,512.5

$  1,625.3

$  1,841.5

$  2,005.8

$  2,062.3

$  1,729.1

$ 411.3

$  20,736.6



(1)

Non-U.S. amounts are presented using the average exchange rates during the cash collection period.

(2)

Includes finance receivables portfolios that were acquired through the acquisition of Aktiv Kapital AS in 2014 (as described in our 2022 Form 10-K).

(3)

Includes the nonperforming loan portfolios that were acquired through our business acquisitions.

(4)

Non-U.S. amounts are presented at the exchange rate at the end of the year in which the portfolio was purchased.  In addition, any purchase price adjustments that occur throughout the life of the pool are presented at the year-end exchange rate for the respective year of purchase.

Use of Non-GAAP Financial Measures

PRA Group, Inc. reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). However, management uses certain non-GAAP financial measures, including  Adjusted EBITDA, internally to evaluate the Company's performance and to set performance goals.  Adjusted EBITDA is calculated as net income attributable to PRA Group, Inc. plus income tax expense; less foreign exchange gain (or plus foreign exchange loss); plus interest expense, net; plus other expense (or less other income); plus depreciation and amortization; plus adjustment for net income attributable to noncontrolling interests; and plus recoveries applied to negative allowance less changes in expected recoveries. Adjusted EBITDA is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP. PRA Group, Inc. presents Adjusted EBITDA because the Company considers it an important supplemental measure of operations and financial performance. Management believes Adjusted EBITDA helps provide enhanced period-to-period comparability of operations and financial performance and is useful to investors as other companies in the industry report similar financial measures. Adjusted EBITDA should not be considered as an alternative to net income determined in accordance with GAAP. Set forth below is a reconciliation of net income, the most directly comparable financial measure calculated and reported in accordance with GAAP, to Adjusted EBITDA for the last twelve months (LTM) ended March 31, 2023 and for the year ended December 31, 2022. The calculation of Adjusted EBITDA below may not be comparable to the calculation of similarly titled measures reported by other companies.

Reconciliation of Non-GAAP Financial Measures






LTM

For the Year Ended

Adjusted EBITDA for PRA Group ($ in millions)

March 31, 2023

December 31, 2022

Net income attributable to PRA Group, Inc.

$                                    19

$                                  117

Adjustments:







Income tax expense

14

37

Foreign exchange gains

(2)

(1)

Interest expense, net

137

131

Other expense/(income)

1

1

Depreciation and amortization

15

15

Adjustment for net income attributable to noncontrolling interests

11

1

Recoveries applied to negative allowance less Changes in expected
recoveries

820

806

Adjusted EBITDA

$                              1,015

$                              1,107

Additionally, the Company evaluates its business using certain ratios that use Adjusted EBITDA.  Debt to Adjusted EBITDA is calculated by dividing borrowings by Adjusted EBITDA. The following table reflects the Company's Debt to Adjusted EBITDA for the LTM as of March 31, 2023, for the LTM as of March 31, 2023 assuming repayment of our 2023 convertible notes on March 31, 2023, and for the year ended December 31, 2022 (amounts in millions):

Debt to Adjusted EBITDA


LTM

LTM

For the Year Ended


March 31, 2023

March 31, 2023(1)

December 31, 2022

Borrowings

$                              2,938

$                              2,593

$                              2,495

LTM Adjusted EBITDA

1,015

1,015

1,107

Debt to LTM Adjusted EBITDA

2.89

2.55

2.25

(1)

For the LTM as of March 31, 2023, as adjusted, assuming repayment of our 2023 Notes on March 31, 2023.

Investor Contact:
Najim Mostamand, CFA
Vice President, Investor Relations
757-431-7913
[email protected]

News Media Contact:
Elizabeth Kersey
Senior Vice President, Communications and Public Policy
(757) 431-3398
[email protected]

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/pra-group-reports-first-quarter-2023-results-301818604.html

SOURCE PRA Group


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