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PRA Group Reports Second Quarter 2024 Results

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August 5, 2024 4:05 PM EDT

Executing Successful Turnaround in U.S. Business

NORFOLK, Va., Aug. 5, 2024 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA) (the "Company"), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2024 ("Q2 2024").

Q2 2024 Highlights

  • Net income attributable to PRA Group, Inc. of $21.5 million, or diluted earnings per share of $0.54.
  • Total portfolio purchases of $379.4 million.
  • Total cash collections of $473.9 million.
  • Estimated remaining collections (ERC)1 of $6.8 billion.
  • Cash efficiency ratio2 of 58.9%.
  • Adjusted EBITDA3 for the 12 months ended June 30, 2024 of $1.1 billion.











Three Months Ended June 30,


Six Months Ended June 30,

($ in thousands, except per share amounts)


2024


2023


2024


2023

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


$              21,516


$             (3,804)


$              24,991


$           (62,433)

Diluted earnings per share


$                  0.54


$                (0.10)


$                  0.63


$                (1.60)

"The second quarter was another important step in demonstrating the turnaround in our U.S. business, delivering against our financial and operational targets for 2024, and positioning the Company for future growth," said Vikram Atal, president and chief executive officer. "We invested $379 million during the quarter, which represents our third highest quarterly level of purchases over the past five years. This was driven by the continued strength of U.S. portfolio supply coupled with stronger supply in Europe this quarter, with pricing remaining attractive globally. Cash collections grew 13% year-over-year, primarily reflecting higher recent purchases and the positive impact of our cash-generating and operational initiatives in our U.S. business, particularly in our legal collections channel where we have been investing for growth. We also experienced continued cash collections growth in our European business. Our net income for the quarter reflects the progress we have made in executing the turnaround with speed across a broad set of initiatives. Looking ahead, we remain focused on sustaining profitability and positioning the Company for attractive growth in the years to come."

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


2024


2023

($ in thousands)


Q2


Q1


Q4


Q3


Q2

Americas and Australia Core


$       263,828


$       256,861


$       220,127


$       223,714


$       220,886

Americas Insolvency


26,971


25,209


24,293


27,809


26,384

Europe Core


156,739


145,933


144,361


144,402


149,324

Europe Insolvency


26,344


21,515


21,502


23,639


22,725

Total cash collections


$       473,882


$       449,518


$       410,283


$       419,564


$       419,319


































Cash Collection Source -











Constant Currency-Adjusted


2024








2023

($ in thousands)


Q2








Q2

Americas and Australia Core


$       263,828








$       219,118

Americas Insolvency


26,971








26,377

Europe Core


156,739








149,889

Europe Insolvency


26,344








22,888

Total Cash collections


$       473,882








$       418,272












  • Total cash collections in Q2 2024 increased 13.0% to $473.9 million compared to $419.3 million in the second quarter of 2023 ("Q2 2023"). The increase was primarily driven by higher cash collections in the U.S. and Europe. For the six months ended June 30, 2024, cash collections increased $92.8 million, or 11.2%, compared to the same period last year.
  • Total portfolio revenue in Q2 2024 increased 37.6% to $282.6 million compared to $205.4 million in Q2 2023. For the six months ended June 30, 2024, total portfolio revenue increased 50.3% to $536.3 million compared to $356.8 million in the same period last year.











Three Months Ended June 30,


Six Months Ended June 30,

($ in thousands)


2024


2023


2024


2023

Portfolio income


$           209,290


$          184,290


$        411,346


$         372,532

Recoveries received in excess of forecast


$              54,260


$            25,348


$           90,098


$            29,186

Changes in expected future recoveries


19,060


(4,212)


34,896


(44,962)

Changes in expected recoveries


$              73,320


$            21,136


$        124,994


$          (15,776)

Total portfolio revenue


$           282,610


$          205,426


$        536,340


$         356,756










Expenses 

  • Operating expenses in Q2 2024 increased $31.3 million, or 19.1%, to $195.0 million compared to $163.7 million in Q2 2023.
    • Legal collection costs increased $13.8 million, primarily due to increased investments in our U.S. legal channel to drive future cash growth, as well as expansion of legal collections activities in Europe.
    • Compensation and employee services expenses increased $8.5 million, primarily due to lower compensation accruals in Q2 2023.
    • Legal collection fees increased $4.2 million, due to higher external legal collections in our U.S. Core portfolio.
  • For the six months ended June 30, 2024, operating expenses increased by $31.4 million, or 8.9%, compared to the same period last year.
  • Interest expense, net in Q2 2024 was $55.4 million, an increase of $12.3 million, or 28.7%, compared to $43.0 million in Q2 2023, reflecting increased interest rates and a higher average debt balance.
  • The effective tax rate for the six months ended June 30, 2024 was 23.1%.

Portfolio Acquisitions

  • The Company purchased $379.4 million in portfolios of nonperforming loans in Q2 2024.
  • At the end of Q2 2024, the Company had in place estimated forward flow commitments1 of $385.6 million over the next 12 months, comprised of $272.1 million in the Americas and Australia and $113.5 million in Europe.











Portfolio Purchase Source


2024


2023

($ in thousands)


Q2


Q1


Q4


Q3


Q2

Americas & Australia Core


$       198,761


$         174,660


$         143,052


$         187,554


$         171,440

Americas Insolvency


26,627


22,156


18,608


44,279


12,189

Europe Core


127,991


43,997


110,780


60,628


136,834

Europe Insolvency


25,990


5,004


12,476


18,722


7,296

Total portfolio acquisitions


$       379,369


$         245,817


$         284,916


$         311,183


$         327,759












Credit Availability

  • Total availability under the Company's credit facilities as of June 30, 2024 was $1.4 billion, comprised of $741.9 million based on current ERC and $706.6 million of additional availability subject to borrowing base and debt covenants, including advance rates.
  • The Company intends to borrow $298.0 million under its North American revolving credit agreement on or about September 1, 2024 to redeem its Senior Notes due 2025, which, all other effects being equal, would cause a corresponding decrease to the availability under its credit facilities.

2024 Financial and Operational Targets
The Company expects to achieve the following financial and operational targets for full year 2024:

  • Strong portfolio investment levels
  • Double-digit cash collections growth
  • ~60% cash efficiency ratio
  • 6% - 8% return on average tangible equity2

Conference Call Information
PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET 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 646-357-8785 in the U.S. or 1-800-836-8184 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call, either visit the same website until August 5, 2025, or call 646-517-4150 in the U.S. or 1-888-660-6345 outside the U.S. and use access code 71248# until August 12, 2024.       

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.

1.

Contractual agreements with sellers of nonperforming loans that allow for the purchase of nonperforming portfolios at pre-established prices. These amounts represent our estimated forward flow purchases over the next 12 months under the agreements in place, based on projections and other factors, including sellers' estimates of future flow sales, and are dependent on actual delivery by the sellers. Accordingly, amounts purchased under these agreements may vary significantly.

2.

A reconciliation of total stockholders' equity – PRA Group, Inc., the most directly comparable financial measure calculated and reported in accordance with GAAP, to average tangible equity can be found at the end of this press release.

 

PRA Group, Inc.

Unaudited Consolidated Income Statements

(Amounts in thousands, except per share amounts)



Three Months Ended June 30,


Six Months Ended June 30,


2024


2023


2024


2023

Revenues:








Portfolio income

$          209,290


$         184,290


$         411,346


$           372,532

Changes in expected recoveries

73,320


21,136


124,994


(15,776)

Total portfolio revenue

282,610


205,426


536,340


356,756

Other revenue

1,619


3,810


3,475


7,950

Total revenues

284,229


209,236


539,815


364,706

Operating expenses:








Compensation and employee services

74,241


65,788


147,838


148,191

Legal collection fees

13,762


9,551


25,874


18,389

Legal collection costs

35,274


21,522


61,965


45,467

Agency fees

21,008


17,677


40,731


35,055

Outside fees and services

18,124


18,262


43,174


43,206

Communication

11,577


10,117


24,155


20,644

Rent and occupancy

4,136


4,319


8,280


8,767

Depreciation and amortization

2,637


3,482


5,357


7,071

Other operating expenses

14,248


12,957


26,823


25,999

Total operating expenses

195,007


163,675


384,197


352,789

    Income from operations

89,222


45,561


155,618


11,917

Other income and (expense):








Interest expense, net

(55,353)


(43,022)


(107,631)


(81,305)

Foreign exchange gain/(loss), net

(99)


429


128


420

Other

46


(230)


(160)


(880)

Income/(loss) before income taxes

33,816


2,738


47,955


(69,848)

Income tax expense/(benefit)

8,702


1,578


11,088


(17,105)

Net income/(loss)

25,114


1,160


36,867


(52,743)

Adjustment for net income attributable to noncontrolling interests

3,598


4,964


11,876


9,690

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

$            21,516


$           (3,804)


$            24,991


$            (62,433)

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








Basic

$                0.55


$              (0.10)


$                0.64


$                (1.60)

Diluted

$                0.54


$              (0.10)


$                0.63


$                (1.60)

Weighted average number of shares outstanding:








Basic

39,364


39,190


39,319


39,111

Diluted

39,546


39,190


39,497


39,111

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)



(unaudited)




June 30,
2024


December 31,
2023

Assets




Cash and cash equivalents

$                118,865


$                112,528

Investments

59,619


72,404

Finance receivables, net

3,820,186


3,656,598

Income taxes receivable

34,813


27,713

Deferred tax assets, net

76,486


74,694

Right-of-use assets

42,374


45,877

Property and equipment, net

32,827


36,450

Goodwill

415,646


431,564

Other assets

61,124


67,526

Total assets

$             4,661,940


$             4,525,354

Liabilities and Equity




Liabilities:




Accounts payable

$                  10,198


$                     6,325

Accrued expenses

114,260


131,893

Income taxes payable

23,583


17,912

Deferred tax liabilities, net

18,423


17,051

Lease liabilities

46,746


50,300

Interest-bearing deposits

114,991


115,589

Borrowings

3,113,777


2,914,270

Other liabilities

16,684


32,638

Total liabilities

3,458,662


3,285,978

Equity:




Preferred stock, $0.01 par value, 2,000 shares authorized, no shares issued and outstanding         

—


—

Common stock, $0.01 par value, 100,000 shares authorized, 39,417 shares issued and
outstanding as of June 30, 2024; 100,000 shares authorized, 39,247 shares issued and
outstanding as of December 31, 2023

394


392

Additional paid-in capital

12,339


7,071

Retained earnings

1,514,539


1,489,548

Accumulated other comprehensive loss

(381,809)


(329,899)

Total stockholders' equity - PRA Group, Inc.

1,145,463


1,167,112

Noncontrolling interests

57,815


72,264

Total equity

1,203,278


1,239,376

Total liabilities and equity

$             4,661,940


$             4,525,354

 

Select Expenses (Income)

Amounts in thousands, pre-tax











Three Months Ended


June 30,
2024

March 31,
2024

December 31,
2023

September 30,
2023

June 30,
2023

March 31,
2023

December 31,
2022

September 30,
2022

Noncash interest expense - amortization of debt issuance costs

$       2,331

$       2,200

$             2,177

$             2,220

$       2,384

$       2,441

$            2,444

$             2,555

Change in fair value of derivatives

(5,628)

(5,930)

(6,734)

(6,545)

(6,960)

(5,470)

(3,309)

(1,042)

Amortization of intangibles

58

60

69

69

68

66

73

73

Impairment of real estate

—

—

202

5,037

—

—

—

—

Stock-based compensation expense

3,555

3,327

2,952

1,629

2,715

3,799

2,206

3,101

 

Purchase Price Multiples

as of June 30, 2024

Amounts in thousands







Purchase Period

Purchase Price (1)(2)

Total Estimated
Collections (3)

Estimated
Remaining
Collections (4)

Current Purchase
Price Multiple

Original Purchase
Price Multiple (5)

Americas and Australia Core                 






1996-2013

$                  1,932,722

$              5,745,296

$                  54,130

297 %

233 %

2014

404,117

893,611

28,903

221 %

204 %

2015

443,114

912,525

39,549

206 %

205 %

2016

455,767

1,088,320

60,856

239 %

201 %

2017

532,851

1,209,023

92,474

227 %

193 %

2018

653,975

1,508,340

134,993

231 %

202 %

2019

581,476

1,302,954

143,944

224 %

206 %

2020

435,668

952,248

165,787

219 %

213 %

2021

435,846

740,020

286,888

170 %

191 %

2022

406,082

707,943

364,784

174 %

179 %

2023

622,583

1,224,773

948,003

197 %

197 %

2024

373,421

787,310

759,217

211 %

211 %

Subtotal

7,277,622

17,072,363

3,079,528



Americas Insolvency





1996-2013

1,266,056

2,503,066

26

198 %

159 %

2014

148,420

218,933

46

148 %

124 %

2015

63,170

88,083

35

139 %

125 %

2016

91,442

118,282

232

129 %

123 %

2017

275,257

358,452

1,185

130 %

125 %

2018

97,879

136,147

942

139 %

127 %

2019

123,077

168,485

7,765

137 %

128 %

2020

62,130

91,590

20,018

147 %

136 %

2021

55,187

74,273

26,054

135 %

136 %

2022

33,442

47,143

29,305

141 %

139 %

2023

91,282

120,038

97,797

132 %

135 %

2024

48,783

71,770

68,932

147 %

147 %

Subtotal

2,356,125

3,996,262

252,337



Total Americas and Australia

9,633,747

21,068,625

3,331,865



Europe Core






2012-2013

40,742

72,662

1

178 %

153 %

2014

773,811

2,564,807

415,481

331 %

208 %

2015

411,340

755,061

134,415

184 %

160 %

2016

333,090

579,777

156,278

174 %

167 %

2017

252,174

369,070

101,373

146 %

144 %

2018

341,775

557,913

185,378

163 %

148 %

2019

518,610

848,086

321,430

164 %

152 %

2020

324,119

568,114

237,561

175 %

172 %

2021

412,411

701,265

387,655

170 %

170 %

2022

359,447

584,036

440,058

162 %

162 %

2023

410,593

692,794

574,106

169 %

169 %

2024

170,988

312,073

304,681

183 %

183 %

Subtotal

4,349,100

8,605,658

3,258,417



Europe Insolvency





2014

10,876

18,979

—

175 %

129 %

2015

18,973

29,381

—

155 %

139 %

2016

39,338

57,841

617

147 %

130 %

2017

39,235

51,992

1,116

133 %

128 %

2018

44,908

52,649

2,887

117 %

123 %

2019

77,218

113,418

14,448

147 %

130 %

2020

105,440

157,743

29,880

150 %

129 %

2021

53,230

73,783

26,655

139 %

134 %

2022

44,604

61,840

39,949

139 %

137 %

2023

46,558

64,255

53,764

138 %

138 %

2024

30,994

45,761

42,648

147 %

147 %

Subtotal

511,374

727,642

211,964



Total Europe

4,860,474

9,333,300

3,470,381



Total PRA Group

$                14,494,221

$            30,401,925

$              6,802,246





(1)

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

(2)

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.

(3)

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

(4)

Non-U.S. amounts are presented at the June 30, 2024 exchange rate.

(5)

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

 

Portfolio Financial Information (1)

Amounts in thousands


June 30, 2024 (year-to-date)


As of June 30, 2024

Purchase Period

Cash
Collections (2)

Portfolio
Income (2)

Change in
Expected
Recoveries (2)

Total Portfolio
Revenue (2)


Net Finance
Receivables (3)

Americas and Australia Core                       







1996-2013

$                 18,065

$                 7,042

$                 11,887

$               18,929


$                       16,523

2014

7,024

2,805

4,887

7,692


11,018

2015

8,806

3,405

7,303

10,708


16,993

2016

12,623

6,530

5,537

12,067


21,359

2017

20,755

9,295

6,625

15,920


38,305

2018

41,881

14,656

17,007

31,663


73,826

2019

43,863

17,389

7,800

25,189


80,381

2020

50,041

19,482

2,557

22,039


92,936

2021

56,615

27,707

(5,049)

22,658


152,803

2022

82,963

34,964

(3,612)

31,352


221,981

2023

149,967

87,582

13,175

100,757


531,229

2024

28,086

22,132

6,431

28,563


373,386

Subtotal

520,689

252,989

74,548

327,537


1,630,740

Americas Insolvency







1996-2013

518

65

454

519


—

2014

170

52

122

174


—

2015

112

19

74

93


20

2016

317

22

269

291


201

2017

1,548

104

1,493

1,597


1,060

2018

1,613

73

570

643


886

2019

10,306

663

(212)

451


7,445

2020

9,106

1,419

889

2,308


18,223

2021

8,214

1,670

501

2,171


22,789

2022

5,489

1,637

336

1,973


24,327

2023

11,945

5,781

(790)

4,991


76,235

2024

2,841

1,912

294

2,206


47,843

Subtotal

52,179

13,417

4,000

17,417


199,029

Total Americas and Australia               

572,868

266,406

78,548

344,954


1,829,769

Europe Core







2012-2013

525

—

525

525


—

2014

50,594

35,965

13,941

49,906


97,962

2015

15,663

6,867

4,052

10,919


66,674

2016

13,878

6,576

2,459

9,035


88,195

2017

9,368

3,410

1,057

4,467


67,454

2018

19,334

6,884

3,837

10,721


118,792

2019

34,697

11,337

5,331

16,668


216,535

2020

25,522

9,654

2,912

12,566


146,420

2021

34,155

14,494

3,181

17,675


235,125

2022

39,130

15,455

755

16,210


276,388

2023

52,395

22,109

910

23,019


338,599

2024

7,411

2,770

1,803

4,573


167,839

Subtotal

302,672

135,521

40,763

176,284


1,819,983

Europe Insolvency







2014

86

—

86

86


—

2015

99

2

70

72


—

2016

468

64

166

230


184

2017

874

73

(5)

68


928

2018

1,919

155

(14)

141


2,599

2019

7,495

782

1,100

1,882


12,648

2020

13,446

1,559

1,011

2,570


27,211

2021

7,542

1,420

910

2,330


23,263

2022

7,167

1,984

915

2,899


32,264

2023

5,656

2,578

50

2,628


41,559

2024

3,108

802

1,394

2,196


29,778

Subtotal

47,860

9,419

5,683

15,102


170,434

Total Europe

350,532

144,940

46,446

191,386


1,990,417

Total PRA Group

$               923,400

$             411,346

$               124,994

$              536,340


$                  3,820,186



(1)

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

(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 June 30, 2024 exchange rate.

 

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

as of June 30, 2024

Amounts in millions



Cash Collections

Purchase Period

Purchase
Price (2)(3)

1996-2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

Total

Americas and Australia Core














1996-2013

$       1,932.7

$  3,618.9

$ 660.3

$ 474.4

$ 299.7

$ 197.0

$ 140.3

$   99.7

$   64.7

$   46.5

$   36.0

$   28.4

$   18.1

$ 5,684.0

2014

404.1

—

92.7

253.4

170.3

114.2

82.2

55.3

31.9

22.3

15.0

11.8

7.0

856.1

2015

443.1

—

—

117.0

228.4

185.9

126.6

83.6

57.2

34.9

19.5

14.1

8.8

876.0

2016

455.8

—

—

—

138.7

256.5

194.6

140.6

105.9

74.2

38.4

24.9

12.6

986.4

2017

532.9

—

—

—

—

107.3

278.7

256.5

192.5

130.0

76.3

43.8

20.8

1105.9

2018

654.0

—

—

—

—

—

122.7

361.9

337.7

239.9

146.1

92.9

41.9

1343.1

2019

581.5

—

—

—

—

—

—

143.8

349.0

289.8

177.7

110.3

43.9

1114.5

2020

435.7

—

—

—

—

—

—

—

132.9

284.3

192.0

125.8

50.0

785.0

2021

435.8

—

—

—

—

—

—

—

—

85.0

177.3

136.8

56.6

455.7

2022

406.1

—

—

—

—

—

—

—

—

—

67.7

195.4

83.0

346.1

2023

622.5

—

—

—

—

—

—

—

—

—

—

108.5

150.0

258.5

2024

373.4

—

—

—

—

—

—

—

—

—

—

—

28.0

28.0

Subtotal

7,277.6

3,618.9

753.0

844.8

837.1

860.9

945.1

1,141.4

1,271.8

1,206.9

946.0

892.7

520.7

13,839.3

Americas Insolvency














1996-2013

1,266.1

1,491.4

421.4

289.9

168.7

85.5

30.3

6.8

3.6

2.2

1.6

1.1

0.5

2,503.0

2014

148.4

—

37.0

50.9

44.3

37.4

28.8

15.8

2.2

1.1

0.7

0.4

0.2

218.8

2015

63.2

—

—

3.4

17.9

20.1

19.8

16.7

7.9

1.3

0.6

0.3

0.1

88.1

2016

91.4

—

—

—

18.9

30.4

25.0

19.9

14.4

7.4

1.8

0.9

0.3

119.0

2017

275.3

—

—

—

—

49.1

97.3

80.9

58.8

44.0

20.8

4.9

1.5

357.3

2018

97.9

—

—

—

—

—

6.7

27.4

30.5

31.6

24.6

12.7

1.6

135.1

2019

123.1

—

—

—

—

—

—

13.4

31.4

39.1

37.8

28.7

10.3

160.7

2020

62.1

—

—

—

—

—

—

—

6.5

16.1

20.4

19.5

9.1

71.6

2021

55.2

—

—

—

—

—

—

—

—

4.6

17.9

17.5

8.2

48.2

2022

33.4

—

—

—

—

—

—

—

—

—

3.2

9.2

5.5

17.9

2023

91.2

—

—

—

—

—

—

—

—

—

—

9.0

11.9

20.9

2024

48.8

—

—

—

—

—

—

—

—

—

—

—

2.9

2.9

Subtotal

2,356.1

1,491.4

458.4

344.2

249.8

222.5

207.9

180.9

155.3

147.4

129.4

104.2

52.1

3,743.5

Total Americas and Australia          

9,633.7

5,110.3

1,211.4

1,189.0

1,086.9

1,083.4

1,153.0

1,322.3

1,427.1

1,354.3

1,075.4

996.9

572.8

17,582.8

Europe Core














2012-2013

40.7

27.7

14.2

5.5

3.5

3.3

3.3

2.4

1.9

1.8

1.4

1.0

0.5

66.5

2014

773.8

—

153.2

292.0

246.4

220.8

206.3

172.9

149.8

149.2

122.2

107.6

50.6

1,871.0

2015

411.3

—

—

45.8

100.3

86.2

80.9

66.1

54.3

51.4

40.7

33.8

15.7

575.2

2016

333.1

—

—

—

40.4

78.9

72.6

58.0

48.3

46.7

36.9

29.7

13.9

425.4

2017

252.2

—

—

—

—

17.9

56.0

44.1

36.1

34.8

25.2

20.2

9.4

243.7

2018

341.8

—

—

—

—

—

24.3

88.7

71.3

69.1

50.7

41.6

19.3

365.0

2019

518.6

—

—

—

—

—

—

48.0

125.7

121.4

89.8

75.1

34.7

494.7

2020

324.1

—

—

—

—

—

—

—

32.3

91.7

69.0

56.1

25.5

274.6

2021

412.4

—

—

—

—

—

—

—

—

48.5

89.9

73.0

34.2

245.6

2022

359.4

—

—

—

—

—

—

—

—

—

33.9

83.8

39.1

156.8

2023

410.6

—

—

—

—

—

—

—

—

—

—

50.2

52.4

102.6

2024

171.1

—

—

—

—

—

—

—

—

—

—

—

7.4

7.4

Subtotal

4,349.1

27.7

167.4

343.3

390.6

407.1

443.4

480.2

519.7

614.6

559.7

572.1

302.7

4,828.5

Europe Insolvency













2014

10.9

—

—

4.3

3.9

3.2

2.6

1.5

0.8

0.3

0.2

0.2

0.1

17.1

2015

19.0

—

—

3.0

4.4

5.0

4.8

3.9

2.9

1.6

0.6

0.4

0.1

26.7

2016

39.3

—

—

—

6.2

12.7

12.9

10.7

7.9

6.0

2.7

1.3

0.5

60.9

2017

39.2

—

—

—

—

1.2

7.9

9.2

9.8

9.4

6.5

3.8

0.9

48.7

2018

44.9

—

—

—

—

—

0.6

8.4

10.3

11.7

9.8

7.2

1.9

49.9

2019

77.2

—

—

—

—

—

—

5.0

21.1

23.9

21.0

17.5

7.5

96.0

2020

105.4

—

—

—

—

—

—

—

6.0

34.6

34.1

29.7

13.4

117.8

2021

53.2

—

—

—

—

—

—

—

—

5.5

14.4

14.7

7.5

42.1

2022

44.6

—

—

—

—

—

—

—

—

—

4.5

12.4

7.2

24.1

2023

46.7

—

—

—

—

—

—

—

—

—

—

4.2

5.7

9.9

2024

31.0

—

—

—

—

—

—

—

—

—

—

—

3.1

3.1

Subtotal

511.4

—

—

7.3

14.5

22.1

28.8

38.7

58.8

93.0

93.8

91.4

47.9

496.3

Total Europe

4,860.5

27.7

167.4

350.6

405.1

429.2

472.2

518.9

578.5

707.6

653.5

663.5

350.6

5,324.8

Total PRA Group

$     14,494.2

$  5,138.0

$  1,378.8

$  1,539.6

$  1,492.0

$  1,512.6

$  1,625.2

$  1,841.2

$  2,005.6

$  2,061.9

$  1,728.9

$  1,660.4

$ 923.4

$  22,907.6



(1)

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

(2)

Includes the acquisition date finance receivables portfolios 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 pool are presented at the year-end exchange rate for the respective year of purchase.

Use of Non-GAAP Financial Measures

The Company 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 (or less income tax benefit); plus foreign exchange loss (or less foreign exchange gain); plus interest expense, net; plus other expense (or less other income); plus depreciation and amortization; plus impairment of real estate; 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. The Company 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 June 30, 2024 and for the year ended December 31, 2023. 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)

June 30, 2024

December 31, 2023

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

$                                      4

$                                  (83)

Adjustments:



Income tax expense/(benefit)

12

(16)

Interest expense, net

208

181

Other expense

1

2

Depreciation and amortization

12

13

Impairment of real estate

5

5

Net income attributable to noncontrolling interests

19

17

Recoveries applied to negative allowance less changes in expected recoveries

804

888

Adjusted EBITDA

$                              1,065

$                              1,007

In addition, the Company uses return on average tangible equity (ROATE), which is a supplemental measure of performance that is not required by, or presented in accordance with, GAAP, to monitor and evaluate operating performance relative to the Company's equity. Management believes ROATE is a useful financial measure for investors in evaluating the effective use of equity, and is an important component of its long-term shareholder return. Average tangible equity ("ATE") is defined as average Total stockholders' equity - PRA Group, Inc. less average goodwill and average other intangible assets. ROATE is calculated by dividing annualized Net income/(loss) attributable to PRA Group, Inc. by ATE.

The following table displays the Company's ROATE and provides a reconciliation of Total stockholders' equity - PRA Group, Inc. as reported in accordance with GAAP to ATE for the periods indicated (amounts in thousands, except for ratio data):







Average Balance



Balance at Period End


Second Quarter


Year-to-Date



June 30, 2024


June 30, 2023


2024


2023


2024


2023

Total stockholders' equity - PRA Group, Inc.


$      1,145,463


$     1,165,525


$ 1,137,395


$ 1,161,934


$ 1,147,300


$  1,183,843

Less: Goodwill


415,646


414,905


413,746


417,776


419,685


423,824

Less: Other intangible assets


1,597


1,836


1,632


1,835


1,668


1,839

Average tangible equity






$     722,017


$    742,323


$     725,947


$     758,180

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






$       21,516


$       (3,804)


$       24,991


$      (62,433)

Return on average tangible equity (1)






11.9 %


(2.0) %


6.9 %


(16.5) %



(1)

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

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) 641-0558
[email protected]

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/pra-group-reports-second-quarter-2024-results-302214730.html

SOURCE PRA Group, Inc.


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