Blog: PRA GROUP INC : Results of Operations and Financial Condition … – Marketscreener.com

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), PRA Group, Inc. (the
“Company,” “we,” “our” or “us”) is disclosing certain preliminary financial
results for the three months and year ended December 31, 2022.

Preliminary Fourth Quarter 2022 Financial Results


Our financial results for the three months and year ended December 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 ended
December 31, 2022 and our audited consolidated financial data for the year ended
December 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 ended December 31, 2021 and our
Quarterly Report on Form 10-Q for the period ended September 30, 2022, which
have been filed with the U.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 the SEC
in our Annual Report on Form 10-K for the year ended December 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


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• We believe that the decrease in estimated cash collections for the three

months ended December 31, 2022, as compared to the three months ended

December 31, 2021, was primarily driven by lower levels of portfolio

          purchases.


• We believe that the decrease in estimated cash collections for the year

ended December 31, 2022, as compared to the year ended December 31, 2021,

          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 December 31, 2022, as compared to the same

periods ended December 31, 2021, was primarily driven by lower levels of

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 December 31, 2022, as compared to the same period

ended December 31, 2021, was primarily driven by lower other operating

          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 December 31, 2022, as compared to the year ended

December 31, 2021, was primarily driven by lower compensation and

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 ended December 31, 2022, as compared to the same
          periods ended December 31, 2021, was primarily driven by lower cash
          collections.


     •    We believe that the increase in estimated remaining collections at

December 31, 2022, as compared to September 30, 2022, was primarily

          driven by higher purchases during the three months ended December 31,
          2022 and the weakening of the U.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 in the United States ("GAAP"), to adjusted EBITDA
for the three months and year ended December 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.


On January 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 dated January 23, 2023

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

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