Atlanticus Holdings Corp Reports Growth Amidst Economic Headwinds
Atlanticus Holdings Corp (NASDAQ:ATLC) reports an 18.1% growth in receivables over the previous year.
Net income attributable to common shareholders decreased by 28.1% to $18.9 million.
Total operating revenue increased by 6.1% to $294.9 million compared to the same quarter last year.
Interest expense rose by 31.4% due to increased debt and higher cost of capital.
On November 8, 2023, Atlanticus Holdings Corp (NASDAQ:ATLC) announced its financial results for the third quarter ended September 30, 2023. Despite the challenging macro-economic landscape, the company has shown resilience with an 18.1% increase in receivables and serving over 3.4 million accounts.
Management Commentary
Jeff Howard, President and CEO, commented on the company's performance, stating,
Our third quarter results once again deliver strong profitability, attractive return on capital, and reasonable growth as we navigate an evolving macro-economic landscape.
He also highlighted the company's conservative approach to underwriting and its focus on long-term growth potential.
Financial Highlights
ATLC's total operating revenue saw a 6.1% increase to $294.9 million, while net income attributable to common shareholders experienced a 28.1% decrease to $18.9 million. The company's interest expense increased significantly by 31.4% due to the growth in receivables and the rising cost of capital.
Managed Receivables and Revenue Growth
Managed receivables grew by 12.9% to $2.3 billion, with significant contributions from private label credit and general purpose credit card products. The company's diverse array of industry segments and product enhancements have allowed for continued growth across its offerings.
Interest Expense and Debt Position
Interest expense for the quarter ended September 30, 2023, was $28.3 million, an increase from the previous year's $21.5 million. The company's notes payable associated with its credit platforms also increased, reflecting the company's strategic growth initiatives.
Operating Expenses and Net Income
Operating expenses rose by 6.3% compared to the same period in 2022, driven by variable servicing costs and the growth in receivables. Net income attributable to common shareholders decreased to $18.9 million, or $1.03 per diluted share.
Share Repurchases
During the quarter, ATLC repurchased and retired 285,906 shares of common stock at an aggregate cost of $9.4 million, demonstrating the company's commitment to shareholder value.
Balance Sheet Strength
The company's balance sheet remains robust with unrestricted cash and cash equivalents of $355.7 million and restricted cash and cash equivalents of $44.3 million as of September 30, 2023.
Outlook and Strategic Positioning
ATLC is well-positioned for long-term sustained growth with ample liquidity and a well-structured balance sheet. The company's strategic approach to navigating economic uncertainty and capitalizing on market opportunities is evident in its financial results.
For more detailed information on Atlanticus Holdings Corp's financial performance, investors are encouraged to review the full earnings presentation and the latest Form 10-Q filing available on the company's website.
Investors seeking further details can contact Investor Relations at (770) 828-2000 or via email at investors@atlanticus.com.
Explore the complete 8-K earnings release (here) from Atlanticus Holdings Corp for further details.
This article first appeared on GuruFocus.
