World Acceptance Corporation ($WRLD)

Good morning, and welcome to World Acceptance Corporation's Fourth Quarter 2026 Earnings Conference Call. This call is being recorded. Before we begin, the corporation has requested that I make the following announcement. The comments made during this conference call may contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 that represent the corporation's expectations and beliefs concerning future events. Such forward-looking statements are about matters that are inherently subject to risks and uncertainties. Statements other than those of historical fact as well as those identified by the words anticipate, estimate, intend, plan, expect, believe, may, will and should or any variation of the foregoing and similar expressions are forward-looking statements. Additional information regarding forward-looking statements and any factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements are included in the paragraph discussing forward-looking statements in today's earnings press release and in the Risk Factors section of the corporation's most recent Form 10-K for the fiscal year ended March 31, 2025, and subsequent reports filed with or furnished to the SEC from time to time. The corporation does not undertake any obligation to update any forward-looking statements it makes. At this time, it is my pleasure to turn the floor over to your host, Janet Matricciani, Interim President and Chief Executive Officer.

Thank you, Michael. Good morning, and welcome to our fourth quarter and full year 2026 earnings call. I rejoined the company on April 13, and I'm pleased to be leading the team as we strengthen and grow our company. And I look forward to speaking with you in more detail in the quarters ahead. But for today, I'll turn it over to our CFO, Johnny Calmes, to walk through the quarter and the full year highlights. Thank you, Johnny.

Thanks, Janet. We are pleased with the results of fourth quarter and more importantly, we feel we are positioned very well for fiscal 2027. We achieved earnings per share of $7.70 for the fourth quarter of fiscal 2026, including the impact of one of our senior executives retiring, which had an after-tax impact of approximately $0.25 per share. Total revenue for the quarter increased 7.4%, driven by an increase in loans outstanding and yields. We also had a fantastic tax preparation season, where we saw returns prepared increase 13%. Interest fee and insurance income increased 5.4%, and we expect similar increases in the coming quarters. After a buildup in field personnel in the third fiscal quarter to address service gaps, we reduced headcount in the field by 5% in the fourth quarter. This will reduce personnel expense in the coming quarters relative to the third and fourth quarters of fiscal '26. We expect personnel expense to be between $47 million to $49 million in the first 3 quarters and slightly higher than that in the fourth quarter. We increased our loans outstanding by 4.4%, while also decreasing our delinquency in both rate and dollars. This should lead to higher revenues and lower charge-offs in the coming quarters. We also intend to rely less on new customers in the coming year, which should have a positive impact on credit metrics. Further, we repurchased an additional 37.8 million of shares during the quarter. This is in addition to shares previously repurchased during the fiscal year, equates to 16.5% of our outstanding shares at the beginning of the year. At this time, we would like to open it up to any questions you may have.

[Operator Instructions] And the first question for today comes from Kyle Joseph with Stephens.

Welcome back, Janet. Just wanted to start on everything that was going on macroeconomically. It sounds like you guys obviously had good growth of your tax revs, but just kind of want to talk through the impacts of the bigger tax refunds on loan demand and credit and then how much of that was offset in March by the increase in gas prices?

Sure. So Kyle, we actually have Tobin Turner, our Chief Operating Officer, here with us on the call, and he can speak to some of the impacts that we're seeing from gas prices or not seeing.

Yes. We're definitely, thank you, Kyle. We're watching our most recent vintages very, very closely. So far, we seem fairly pleased with their performance. we've kind of been watching our credit box around the margin pretty tightly. So at the present, high gas prices are definitely on our radar, but we're not seeing a significant impact in our most recent vintages, at least yet.

And as you can see, our front-end delinquency and back-end delinquency looks really strong and improvement over March of last year. So yes, certainly something we're watching, but there's no clear indications that it's having an impact so far.

Got it. And then, yes, nice to see another quarter of loan growth, but just remind us any leverage limitations you have there? How much growth can you actually do, obviously, balancing repurchasing shares as well?

Sure. Yes, there's no leverage limitations. But in general, the goal is to kind of grow in that mid-single-digit range kind of where we were this year, maybe a little higher.

[Operator Instructions]Seeing no additional questions, this concludes our question-and-answer session. I would like to turn the conference back over to Ms. Matricciani for any closing remarks.

Yes. I'd just like to say thank you very much for your interest in our company, and we very much look forward to our path ahead.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.