PRA Group Reports First Quarter 2024 Results
Press Releases

PRA Group Reports First Quarter 2024 Results

Accelerated Turnaround of U.S. Business Continuing to Gain Momentum

NORFOLK, Va., May 6, 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 first quarter of 2024 (“Q1 2024”).

Q1 2024 Highlights

  • Total portfolio purchases of $245.8 million.
  • Total cash collections of $449.5 million.
  • Estimated remaining collections (ERC)1 of $6.5 billion.
  • Cash efficiency ratio2 of 58.0%.
  • Diluted earnings per share of $0.09.
  • Debt to Adjusted EBITDA3 for the 12 months ended March 31, 2024 was 2.83x.
  • Total availability under the Company’s credit facilities as of March 31, 2024 was $1.2 billion, comprised of $366.9 million based on current ERC and $855.2 million of additional availability subject to borrowing base and debt covenants, including advance rates.







Three Months Ended March 31,

($ in thousands, except per share amounts)


2024


2023

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


$                    3,475


$                (58,629)

Diluted earnings per share


$                      0.09


$                    (1.50)






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.

“We began 2024 on a positive note, and are well-positioned to achieve our financial and operational targets for the full year. Building on the momentum from last year, the first quarter demonstrated continued progress as we drive the turnaround and deliver substantially improved results,” said Vikram Atal, president and chief executive officer. “Total cash collections of $450 million were up 9% year-over-year, reflecting higher portfolio purchases and the impact of our cash-generating and operational initiatives. Looking ahead, we are keenly focused on expanding profitability and delivering shareholder value.”

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)


Q1


Q4


Q3


Q2


Q1

Americas and Australia Core


$       256,861


$       220,127


$       223,714


$       220,886


$       227,960

Americas Insolvency


25,209


24,293


27,809


26,384


25,751

Europe Core


145,933


144,361


144,402


149,324


134,005

Europe Insolvency


21,515


21,502


23,639


22,725


23,568

Total Cash Collections


$       449,518


$       410,283


$       419,564


$       419,319


$       411,284


































Cash Collection Source –











Constant Currency-Adjusted


2024








2023

($ in thousands)


Q1








Q1

Americas and Australia Core


$       256,861








$       230,382

Americas Insolvency


25,209








25,752

Europe Core


145,933








138,330

Europe Insolvency


21,515








24,580

Total Cash Collections


$       449,518








$       419,044












  • Total cash collections in Q1 2024 increased 9.3%, or 7.3% on a constant currency-adjusted basis, to $449.5 million compared to $411.3 million in the first quarter of 2023 (“Q1 2023”). The increase was driven by higher cash collections in our U.S., Europe, and Brazil Core portfolios.
  • Total portfolio revenue in Q1 2024 was $253.7 million compared to $151.3 million in Q1 2023.







Three Months Ended March 31,

($ in thousands)


2024


2023

Portfolio income


$               202,056


$               188,242

Changes in expected future recoveries


$                 15,836


$                (40,750)

Recoveries received in excess of forecast


35,838


3,838

Changes in expected recoveries


$                 51,674


$                (36,912)

Total portfolio revenue


$               253,730


$               151,330






Expenses

  • Operating expenses in Q1 2024 increased $0.1 million, or 0.1%, to $189.2 million compared to $189.1 million in Q1 2023.
    • Compensation and employee services expenses decreased $8.8 million, primarily due to $7.5 million in severance expenses in Q1 2023.
    • Legal collection fees increased $3.3 million, primarily due to higher external legal collections within our U.S. Core portfolio.
    • Legal collection costs increased $2.8 million, primarily due to higher volumes of lawsuits filed in Europe, as well as the costs associated with our legal cash-generating initiatives in the U.S.
    • Agency fees increased $2.3 million, primarily due to higher cash collections in Brazil.
    • Communication expenses increased $2.1 million, primarily due to higher account volumes.
  • Interest expense, net in Q1 2024 was $52.3 million, an increase of $14.0 million, or 36.6%, compared to $38.3 million in Q1 2023, primarily reflecting a higher average debt balance and increased interest rates.
  • The effective tax rate for Q1 2024 was 16.9%.

Portfolio Acquisitions

  • The Company purchased $245.8 million in portfolios of nonperforming loans in Q1 2024.
  • At the end of Q1 2024, the Company had in place estimated forward flow commitments1 of $473.9 million over the next 12 months, comprised of $375.8 million in the Americas and Australia and $98.1 million in Europe.











Portfolio Purchase Source


2024


2023

($ in thousands)


Q1


Q4


Q3


Q2


Q1

Americas & Australia Core


$       174,660


$         143,052


$         187,554


$         171,440


$         116,867

Americas Insolvency


22,156


18,608


44,279


12,189


15,701

Europe Core


43,997


110,780


60,628


136,834


90,454

Europe Insolvency


5,004


12,476


18,722


7,296


7,203

Total Portfolio Acquisitions


$       245,817


$         284,916


$         311,183


$         327,759


$         230,225












2024 Financial and Operational Targets

The Company reiterates its expectation to achieve the following financial and operational targets for full year 2024:

  • Strong portfolio investment levels
  • Double-digit cash collections growth
  • Modest expense 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 May 6, 2025, or call 646-517-4150 in the U.S. or 1-888-660-6345 outside the U.S. and use access code 41062# until May 13, 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 based on projections and other factors, including sellers’ estimates of future flows 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 March 31,


2024


2023

Revenues:




Portfolio income

$               202,056


$                188,242

Changes in expected recoveries

51,674


(36,912)

Total portfolio revenue

253,730


151,330

Other revenue

1,856


4,140

Total revenues

255,586


155,470

Operating expenses:




Compensation and employee services

73,597


82,403

Legal collection fees

12,112


8,838

Legal collection costs

26,691


23,945

Agency fees

19,723


17,378

Outside fees and services

25,050


24,944

Communication

12,578


10,527

Rent and occupancy

4,144


4,448

Depreciation and amortization

2,720


3,589

Other operating expenses

12,575


13,042

Total operating expenses

189,190


189,114

    Income/(loss) from operations

66,396


(33,644)

Other income and (expense):




Interest expense, net

(52,278)


(38,283)

Foreign exchange gain/(loss), net

227


(9)

Other

(206)


(650)

Income/(loss) before income taxes

14,139


(72,586)

Income tax expense/(benefit)

2,386


(18,683)

Net income/(loss)

11,753


(53,903)

Adjustment for net income attributable to noncontrolling interests

8,278


4,726

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

$                    3,475


$                 (58,629)

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




Basic

$                      0.09


$                     (1.50)

Diluted

$                      0.09


$                     (1.50)

Weighted average number of shares outstanding:




Basic

39,274


39,033

Diluted

39,448


39,033

 

PRA Group, Inc.

Consolidated Balance Sheets

(Amounts in thousands)



(unaudited)




March 31,

2024


December 31,

2023

Assets




Cash and cash equivalents

$                108,100


$                112,528

Investments

58,879


72,404

Finance receivables, net

3,650,195


3,656,598

Income taxes receivable

32,067


27,713

Deferred tax assets, net

78,883


74,694

Right-of-use assets

44,187


45,877

Property and equipment, net

34,054


36,450

Goodwill

411,846


431,564

Other assets

63,971


67,526

Total assets

$             4,482,182


$             4,525,354

Liabilities and Equity




Liabilities:




Accounts payable

$                  10,814


$                     6,325

Accrued expenses

98,902


131,893

Income taxes payable

23,541


17,912

Deferred tax liabilities, net

16,888


17,051

Lease liabilities

48,557


50,300

Interest-bearing deposits

113,259


115,589

Borrowings

2,953,048


2,914,270

Other liabilities

20,855


32,638

Total liabilities

3,285,864


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, 39,345 shares issued and

outstanding as of March 31, 2024; 100,000 shares authorized, 39,247 shares issued and

outstanding as of December 31, 2023

393


392

Additional paid-in capital

8,928


7,071

Retained earnings

1,493,023


1,489,548

Accumulated other comprehensive loss

(373,018)


(329,899)

Total stockholders’ equity – PRA Group, Inc.

1,129,326


1,167,112

Noncontrolling interests

66,992


72,264

Total equity

1,196,318


1,239,376

Total liabilities and equity

$             4,482,182


$             4,525,354

 

Select Expenses (Income)

Amounts in thousands, pre-tax











Three Months Ended


March 31,

2024

December 31,

2023

September 30,

2023

June 30,

2023

March 31,

2023

December 31,

2022

September 30,

2022

June 30,

2022

Noncash interest expense – amortization of debt issuance costs

2,200

2,177

2,220

2,384

2,441

2,444

2,555

2,471

Change in fair value of derivatives

(5,930)

(6,734)

(6,545)

(6,960)

(5,470)

(3,309)

(1,042)

1,525

Amortization of intangibles

60

69

69

68

66

73

73

77

Impairment of real estate

202

5,037

Stock-based compensation expense

3,327

2,952

1,629

2,715

3,799

2,206

3,101

3,849

 

Purchase Price Multiples

as of March 31, 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

$              5,735,181

$                  53,058

297 %

233 %

2014

404,117

887,557

26,537

220 %

204 %

2015

443,114

903,490

35,096

204 %

205 %

2016

455,767

1,081,231

61,791

237 %

201 %

2017

532,851

1,204,662

98,626

226 %

193 %

2018

653,975

1,495,710

144,303

229 %

202 %

2019

581,476

1,294,975

159,210

223 %

206 %

2020

435,668

952,081

189,210

219 %

213 %

2021

435,846

745,705

325,686

171 %

191 %

2022

406,082

712,575

417,252

175 %

179 %

2023

622,583

1,227,658

1,038,459

197 %

197 %

2024

174,596

368,538

362,801

211 %

211 %

Subtotal

7,078,797

16,609,363

2,912,029



Americas Insolvency





1996-2013

1,266,056

2,502,843

54

198 %

159 %

2014

148,420

218,846

67

147 %

124 %

2015

63,170

88,037

51

139 %

125 %

2016

91,442

118,193

268

129 %

123 %

2017

275,257

357,959

1,435

130 %

125 %

2018

97,879

135,560

1,013

138 %

127 %

2019

123,077

168,504

12,379

137 %

128 %

2020

62,130

91,371

24,293

147 %

136 %

2021

55,187

73,991

29,902

134 %

136 %

2022

33,442

46,945

31,961

140 %

139 %

2023

91,282

120,803

105,383

132 %

135 %

2024

22,156

33,077

32,692

149 %

149 %

Subtotal

2,329,498

3,956,129

239,498



Total Americas and Australia

9,408,295

20,565,492

3,151,527



Europe Core






2012-2013

40,742

72,345

1

178 %

153 %

2014

773,811

2,551,509

431,677

330 %

208 %

2015

411,340

750,954

138,612

183 %

160 %

2016

333,090

578,002

161,067

174 %

167 %

2017

252,174

368,260

105,187

146 %

144 %

2018

341,775

548,888

186,849

161 %

148 %

2019

518,610

843,205

334,701

163 %

152 %

2020

324,119

564,901

247,220

174 %

172 %

2021

412,411

698,784

399,930

169 %

170 %

2022

359,447

583,939

460,431

162 %

162 %

2023

410,593

693,985

603,457

169 %

169 %

2024

43,809

82,653

81,224

189 %

189 %

Subtotal

4,221,921

8,337,425

3,150,356



Europe Insolvency





2014

10,876

18,933

174 %

129 %

2015

18,973

29,335

155 %

139 %

2016

39,338

57,747

742

147 %

130 %

2017

39,235

52,006

1,517

133 %

128 %

2018

44,908

52,670

3,747

117 %

123 %

2019

77,218

112,606

17,421

146 %

130 %

2020

105,440

156,347

35,698

148 %

129 %

2021

53,230

73,023

29,947

137 %

134 %

2022

44,604

61,163

43,051

137 %

137 %

2023

46,558

64,359

56,671

138 %

138 %

2024

4,978

7,530

7,495

151 %

151 %

Subtotal

485,358

685,719

196,289



Total Europe

4,707,279

9,023,144

3,346,645



Total PRA Group

$                14,115,574

$            29,588,636

$              6,498,172





(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 March 31, 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


March 31, 2024 (year-to-date)


As of March 31, 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

$                   9,021

$                 3,462

$                   5,949

$                 9,411


$                       16,050

2014

3,410

1,423

1,852

3,275


10,235

2015

4,262

1,713

2,582

4,294


15,130

2016

6,247

3,288

1,994

5,282


20,969

2017

10,450

4,796

3,180

7,976


40,703

2018

21,334

7,599

8,233

15,833


78,949

2019

22,567

9,256

2,710

11,966


89,544

2020

26,730

10,437

1,040

11,478


105,887

2021

29,841

14,658

(3,302)

11,356


171,251

2022

43,687

18,510

421

18,930


254,765

2023

73,573

45,156

8,060

53,215


565,671

2024

5,739

4,114

974

5,086


173,900

Subtotal

256,861

124,412

33,693

158,102


1,543,054

Americas Insolvency







1996-2013

267

37

231

268


2014

64

30

38

68


2015

50

11

28

39


28

2016

194

11

186

197


231

2017

805

46

1,028

1,074


1,280

2018

956

48

17

65


967

2019

5,719

399

(158)

240


11,825

2020

4,612

762

672

1,434


21,843

2021

4,090

885

193

1,079


25,851

2022

2,634

846

130

976


26,191

2023

5,432

2,984

(1,004)

1,981


80,736

2024

386

353

19

372


22,142

Subtotal

25,209

6,412

1,380

7,793


191,094

Total Americas and Australia

282,070

130,824

35,073

165,895


1,734,148

Europe Core







2012-2013

281

281

281


2014

24,056

16,757

6,329

23,086


97,667

2015

7,696

3,524

1,324

4,848


68,718

2016

6,809

3,351

1,410

4,762


90,482

2017

4,609

1,745

688

2,434


70,014

2018

9,554

3,534

(143)

3,392


121,309

2019

17,474

5,802

2,086

7,888


225,375

2020

12,662

4,951

1,190

6,141


152,642

2021

17,293

7,418

1,470

8,888


241,757

2022

18,662

7,916

273

8,190


288,841

2023

25,401

11,317

401

11,718


354,946

2024

1,436

369

563

932


43,288

Subtotal

145,933

66,684

15,872

82,560


1,755,039

Europe Insolvency







2014

45

45

45


2015

60

2

31

33


2016

250

36

69

105


278

2017

488

42

8

50


1,296

2018

1,080

88

9

97


3,393

2019

3,710

428

316

743


15,271

2020

6,272

847

(285)

561


32,321

2021

3,485

746

208

954


25,897

2022

3,332

1,025

227

1,252


34,421

2023

2,760

1,315

75

1,390


43,143

2024

33

19

26

45


4,988

Subtotal

21,515

4,548

729

5,275


161,008

Total Europe

167,448

71,232

16,601

87,835


1,916,047

Total PRA Group

$               449,518

$             202,056

$                 51,674

$              253,730


$                  3,650,195



(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 March 31, 2024 exchange rate.

 

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

as of March 31, 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

$     9.0

$ 5,674.9

2014

404.1

92.7

253.4

170.3

114.2

82.2

55.3

31.9

22.3

15.0

11.8

3.4

852.5

2015

443.1

117.0

228.4

185.9

126.6

83.6

57.2

34.9

19.5

14.1

4.3

871.5

2016

455.8

138.7

256.5

194.6

140.6

105.9

74.2

38.4

24.9

6.2

980.0

2017

532.9

107.3

278.7

256.5

192.5

130.0

76.3

43.8

10.4

1095.5

2018

654.0

122.7

361.9

337.7

239.9

146.1

92.9

21.3

1322.5

2019

581.5

143.8

349.0

289.8

177.7

110.3

22.6

1093.2

2020

435.7

132.9

284.3

192.0

125.8

26.7

761.7

2021

435.8

85.0

177.3

136.8

29.8

428.9

2022

406.1

67.7

195.4

43.7

306.8

2023

622.6

108.4

73.6

182.0

2024

174.5

5.9

5.9

Subtotal

7,078.8

3,618.9

753.0

844.8

837.1

860.9

945.1

1,141.4

1,271.8

1,206.9

946.0

892.6

256.9

13,575.4

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

0.3

2,502.8

2014

148.4

37.0

50.9

44.3

37.4

28.8

15.8

2.2

1.1

0.7

0.4

0.1

218.7

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

0.2

118.9

2017

275.3

49.1

97.3

80.9

58.8

44.0

20.8

4.9

0.8

356.6

2018

97.9

6.7

27.4

30.5

31.6

24.6

12.7

1.0

134.5

2019

123.1

13.4

31.4

39.1

37.8

28.7

5.7

156.1

2020

62.1

6.5

16.1

20.4

19.5

4.6

67.1

2021

55.2

4.6

17.9

17.5

4.1

44.1

2022

33.4

3.2

9.2

2.6

15.0

2023

91.3

9.2

5.4

14.6

2024

22.1

0.3

0.3

Subtotal

2,329.5

1,491.4

458.4

344.2

249.8

222.5

207.9

180.9

155.3

147.4

129.4

104.4

25.2

3,716.8

Total Americas and Australia

9,408.3

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

997.0

282.1

17,292.2

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

0.3

66.3

2014

773.8

153.2

292.0

246.4

220.8

206.3

172.9

149.8

149.2

122.2

107.6

24.1

1,844.5

2015

411.3

45.8

100.3

86.2

80.9

66.1

54.3

51.4

40.7

33.8

7.7

567.2

2016

333.1

40.4

78.9

72.6

58.0

48.3

46.7

36.9

29.7

6.8

418.3

2017

252.2

17.9

56.0

44.1

36.1

34.8

25.2

20.2

4.6

238.9

2018

341.8

24.3

88.7

71.3

69.1

50.7

41.6

9.6

355.3

2019

518.6

48.0

125.7

121.4

89.8

75.1

17.5

477.5

2020

324.1

32.3

91.7

69.0

56.1

12.7

261.8

2021

412.4

48.5

89.9

73.0

17.3

228.7

2022

359.4

33.9

83.8

18.7

136.4

2023

410.6

50.3

25.4

75.7

2024

43.9

1.2

1.2

Subtotal

4,221.9

27.7

167.4

343.3

390.6

407.1

443.4

480.2

519.7

614.6

559.7

572.2

145.9

4,671.8

Europe Insolvency













2014

10.9

4.3

3.9

3.2

2.6

1.5

0.8

0.3

0.2

0.2

17.0

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

0.3

60.7

2017

39.2

1.2

7.9

9.2

9.8

9.4

6.5

3.8

0.5

48.3

2018

44.9

0.6

8.4

10.3

11.7

9.8

7.2

1.1

49.1

2019

77.2

5.0

21.1

23.9

21.0

17.5

3.7

92.2

2020

105.4

6.0

34.6

34.1

29.7

6.3

110.7

2021

53.2

5.5

14.4

14.7

3.3

37.9

2022

44.6

4.5

12.4

3.5

20.4

2023

46.6

4.3

2.7

7.0

2024

5.0

Subtotal

485.4

7.3

14.5

22.1

28.8

38.7

58.8

93.0

93.8

91.5

21.5

470.0

Total Europe

4,707.3

27.7

167.4

350.6

405.1

429.2

472.2

518.9

578.5

707.6

653.5

663.7

167.4

5,141.8

Total PRA Group

$     14,115.6

$  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

$  1,660.7

$ 449.5

$  22,434.0



(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); 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 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 March 31, 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)

March 31, 2024

December 31, 2023

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

$                                  (21)

$                                  (83)

Adjustments:



Income tax expense/(benefit)

5

(16)

Foreign exchange gain

(1)

Interest expense, net

196

181

Other expense

2

2

Depreciation and amortization

13

13

Impairment of real estate

5

5

Adjustment for net income attributable to noncontrolling interests

20

17

Recoveries applied to negative allowance less Changes in expected recoveries

825

888

Adjusted EBITDA

$                              1,044

$                              1,007

The Company also 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, 2024 and for the year ended December 31, 2023 ($ in millions):

Debt to Adjusted EBITDA


LTM

For the Year Ended


March 31, 2024

December 31, 2023

Borrowings

$                              2,953

$                              2,914

Adjusted EBITDA

1,044

1,007

Debt to Adjusted EBITDA

2.83

2.89

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):

Return on Average Tangible Equity
















Period Ended


Average


Period Ended


Average



March 31,

2024


December 31,

2023


First Quarter

2024


March 31,

2023


December 31,

2022


First Quarter

2023

Total stockholders’ equity – PRA Group, Inc.


$  1,129,326


$ 1,167,112


$   1,148,219


$ 1,158,343


$ 1,227,661


$  1,193,002

Less: Goodwill


411,846


431,564


421,705


420,647


435,921


428,284

Less: Other intangible assets


1,666


1,742


1,704


1,833


1,847


1,840

Average tangible equity






$      724,810






$      762,878




















First Quarter

2024






First Quarter

2023

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






$           3,475






$      (58,629)

Return on average tangible equity (1)






1.9 %






(30.7) %

1.

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

Investor Contact:

Najim Mostamand, CFA

Vice President, Investor Relations

757-431-7913

IR@PRAGroup.com

News Media Contact:

Elizabeth Kersey

Senior Vice President, Communications and Public Policy

(757) 641-0558

Elizabeth.Kersey@PRAGroup.com

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/pra-group-reports-first-quarter-2024-results-302137215.html

SOURCE PRA Group, Inc.

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