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 InformationPRA 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 StatementsStatements 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 andoutstanding as of March 31, 2024; 100,000 shares authorized, 39,247 shares issued andoutstanding 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)