Item 2.02 Results of Operations and Financial Condition.
The disclosure set forth in Item 7.01 of this Current Report on Form 8-K is incorporated in this Item 2.02 by reference.
Item 7.01 Regulation FD Disclosure.
In connection with the Offering (as defined below),
Preliminary Fourth Quarter 2022 Financial Results
Our financial results for the three months and year endedDecember 31, 2022 are not yet complete and will not be available until after the completion of this offering. Accordingly, our estimated results below are forward-looking statements based solely on information available to us as of the date of this Current Report on Form 8-K, and we undertake no obligation to update this information, except as may be required by law. Actual results remain subject to the completion of management's and our audit committee's reviews and our other financial closing procedures, as well as the completion of the preparation of our unaudited consolidated financial data for the three months endedDecember 31, 2022 and our audited consolidated financial data for the year endedDecember 31, 2022 . During the course of that process, we may identify items that would require us to make adjustments, which may be material, to the information presented below. Accordingly, you should not place undue reliance on this preliminary data. The preliminary financial data included in this Item 7.01 has been prepared by and is the responsibility of our management. Our independent registered public accounting firm,Ernst & Young LLP , has not audited, reviewed, compiled or performed any procedures with respect to the preliminary financial results.Accordingly, Ernst & Young LLP does not express an opinion or any other form of assurance with respect thereto. As a result, we have provided ranges, rather than specific amounts, for the estimated financial results below. Our actual results may vary materially from the estimated preliminary results included herein. These preliminary results should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included in our Annual Report on Form 10-K for the year endedDecember 31, 2021 and our Quarterly Report on Form 10-Q for the period endedSeptember 30, 2022 , which have been filed with theU.S. Securities and Exchange Commission (the "SEC Filings"). The preliminary financial information presented herein should not be considered a substitute for the financial information to be filed with theSEC in our Annual Report on Form 10-K for the year endedDecember 31, 2022 once it becomes available. Three Months Three Months Ended Year Ended Ended Year Ended December 31, December 31, December 31, December 31, 2022 2021 (estimated) (estimated) ($ in thousands) High Low High Low Actual Actual Cash collections$ 411,240 $ 372,074 $ 1,815,493 $ 1,642,589 $ 473,671 $ 2,061,741 Total revenues 233,992 211,707 1,014,850 918,198 256,936 1,095,732 Total operating expenses 171,717 155,363 714,758 646,686 174,487 720,736 Adjusted EBITDA 250,105 226,286 1,162,336 1,051,638 297,736 1,378,302 Actual Actual Portfolio acquisitions$ 288,094 $ 849,996 $ 201,696 $ 972,281 As of September 30, As of December 31, 2022 2022 (estimated) High Low Actual Estimated remaining collections$ 5,842,237 $ 5,557,250 $ 5,320,246
--------------------------------------------------------------------------------
• We believe that the decrease in estimated cash collections for the three
months ended
purchases.
• We believe that the decrease in estimated cash collections for the year
ended
was primarily driven by excess consumer liquidity in the prior year coupled with lower levels of portfolio purchases.
• We believe that the decrease in estimated total revenues for both the
three months and year ended
periods ended
portfolio purchases, lower levels of cash overperformance, and the impact
of foreign exchange translation.
• We believe that the decrease in estimated total operating expenses for
the three months ended
ended
expenses, compensation and employee services costs and the impact of foreign exchange translation.
• We believe that the decrease in estimated total operating expenses for
the year ended
employee services, other operating expenses, legal collection fees and
the impact of foreign exchange translation.
• We believe that the decrease in estimated adjusted EBITDA for both the
three months and year endedDecember 31, 2022 , as compared to the same periods endedDecember 31, 2021 , was primarily driven by lower cash collections.
• We believe that the increase in estimated remaining collections at
driven by higher purchases during the three months endedDecember 31, 2022 and the weakening of theU.S. dollar.
Non-GAAP Financial Measures
Because we have not yet completed our year-end closing process and because of the forward-looking nature of the estimated adjusted EBITDA ranges presented above, we do not have specific quantifications of the amounts that would be required to provide a reconciliation of net income, the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted inthe United States ("GAAP"), to adjusted EBITDA for the three months and year endedDecember 31, 2022 . We believe that there is a degree of variability with respect to certain of the GAAP measures and certain adjustments made to arrive at the relevant non-GAAP measure that precludes us from providing an accurate preliminary estimate of a GAAP to non-GAAP reconciliation without unreasonable effort or expense. As a result, we believe that providing estimates of the amounts that would be required to reconcile the ranges of our adjusted EBITDA would imply a degree of precision that would be confusing or misleading to investors for the reasons identified above. Adjusted EBITDA is calculated as net income plus income tax expense (or less income tax benefit); plus foreign exchange loss (or less foreign exchange gain); plus interest expense, net (or less interest income, net); plus other expense (or less other income); plus depreciation and amortization; plus net income attributable to noncontrolling interests (or less net loss attributable to noncontrolling interests); plus loss on sale of subsidiaries (or less gain on sale of subsidiaries); 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. We present adjusted EBITDA because we consider it an important supplemental measure of our operations and financial performance. Our management believes adjusted EBITDA helps provide enhanced period- -------------------------------------------------------------------------------- to-period comparability of operations and financial performance, as it excludes certain items whose fluctuations from period to period do not necessarily correspond to changes in the operations of our business, and is useful to investors as other companies in our 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 . . . Item 8.01 Other Information. OnJanuary 23, 2023 , the Company issued a press release announcing its intent, subject to market and other conditions, to offer$350.0 million aggregate principal amount of senior notes due 2028 in a private transaction that is exempt from the registration requirements of the Securities Act of 1933, as amended. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 8.01 by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits 99.1 Press Release datedJanuary 23, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
--------------------------------------------------------------------------------
© Edgar Online, source