Credit Acceptance Corp (CACC) 2024 Q4 法說會逐字稿

Good day, everyone and welcome to the Credit Acceptance Corporation fourth quarter 2024 earnings call. Today's call is being recorded a webcast and transcript of today's earnings call will be made available on Credit Acceptance website. At this time, I would like to turn the call over to Credit Acceptance's Chief Financial Officer, Jay Martin, please go ahead.

大家好，歡迎參加 Credit Acceptance Corporation 2024 年第四季財報電話會議。今天的電話會議正在進行網路直播，今天的收益電話會議記錄將在 Credit Acceptance 網站上公佈。現在，我想將電話轉給 Credit Acceptance 的財務長傑伊馬丁 (Jay Martin)，請繼續。

Thank you. Good afternoon and welcome to the Credit Acceptance Corporation fourth quarter 2024 earnings call. As you read our news release posted on the investor relations section of our website at ir.creditacceptance.com, and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of federal securities law.

謝謝。下午好，歡迎參加 Credit Acceptance Corporation 2024 年第四季財報電話會議。當您閱讀我們在網站 ir.creditacceptance.com 的投資者關係部分發布的新聞稿以及收聽本次電話會議時，請注意兩者都包含聯邦證券法含義內的前瞻性陳述。

These forward-looking statements are subject to a number of risks and uncertainties many of which are beyond our control and which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in the cautionary statement regarding forward-looking information included in the news release, consider all forward-looking statements in light of those and other risks and uncertainties.

這些前瞻性陳述受到許多風險和不確定因素的影響，其中許多超出我們的控制範圍，並可能導致實際結果與此類陳述有重大差異。這些風險和不確定性包括新聞稿中關於前瞻性資訊的警告聲明中明確說明的風險和不確定性，請根據這些風險和不確定性以及其他風險和不確定性考慮所有前瞻性陳述。

Additionally, I should mention that to comply with the SEC's regulations, please refer to the financial results section of our news release which provides tables showing how non-GAAP measures, reconcile the GAAP measures. At this time, I will turn the call over to our Chief Executive Officer, Ken Booth to discuss our fourth quarter results.

此外，我應該提到，為了遵守美國證券交易委員會的規定，請參閱我們新聞稿中的財務結果部分，其中提供了顯示非公認會計準則指標如何與公認會計準則指標進行協調的表格。現在，我將把電話轉給我們的執行長 Ken Booth，討論我們的第四季業績。

Thanks, Jay. Overall, we had another mixed quarter as it related to collections and originations, two key drivers of our business. Collections improved sequentially this quarter with only our 2022 vintage continued to underperform our expectations while our other vintages were stable during the quarter. Overall, a small decline of 0.3% or $31 million in forecast and net cash flows. During the quarter, our growth slowed significantly. However, this was still our second highest Q4 unit and dollar volume ever.

謝謝，傑伊。總體而言，我們經歷了另一個好壞參半的季度，因為它與我們業務的兩個關鍵驅動因素——收款和發起有關。本季的葡萄酒收藏量較上季提高，只有 2022 年份的葡萄酒持續表現不如預期，而其他年份的葡萄酒則在本季保持穩定。總體而言，預測淨現金流小幅下降 0.3% 或 3,100 萬美元。本季度，我們的成長顯著放緩。然而，這仍然是我們有史以來第四季第二高的單位數和美元交易量。

Our loan portfolio is now at a new record high of $8.9 billion an adjusted basis of 15% from last year. Our market share in our core segment of used vehicles financed by subprime consumers was 6.1% year-to-date through November compared to 4.8% for the same period in 2023. Our slower growth was likely impacted by our Q3 scorecard change that has resulted in lower advance rates.

我們的貸款組合現在達到了創紀錄的 89 億美元，比去年同期成長了 15%。截至今年 11 月，我們在次級消費者融資二手車核心細分市場的市佔率為 6.1%，而 2023 年同期為 4.8%。我們的成長放緩可能是受到第三季記分卡變化的影響，導致預付率下降。

Beyond these two key drivers, we continued making progress during the quarter towards our mission of maximizing intrinsic value and positively changing the lives of our five key constituents: dealers, consumers, team members, investors, and the communities we operate in. We do this by providing a valuable product that enables dealers to sell vehicles to consumers regardless of their credit history.

除了這兩個關鍵驅動因素之外，我們在本季度繼續朝著最大化內在價值和積極改變我們五個關鍵要素（經銷商、消費者、團隊成員、投資者和我們經營所在的社區）的生活的使命取得進展。我們透過提供有價值的產品來實現這一點，使經銷商能夠向消費者出售汽車，而不管他們的信用記錄如何。

This allows viewers to make incremental sales to the roughly 55% of adults with other than prime credit. For these adults, it enables them to obtain a vehicle to get their jobs, take their kids to school, et cetera. It also gives them the opportunity to improve or build their credit.

這使得觀眾能夠向大約 55% 的非主要成年人進行增量銷售。對於這些成年人來說，它可以讓他們獲得一輛車去上班、送孩子上學等等。這也為他們提供了改善或建立信用的機會。

Our customers are couples like Marita and Steven who experienced financial challenges after they move from the Midwest to the South for a fresh start. Their financial challenges took a toll on their credit and their transportation. Steven's car broke down during his long commute to work. They tried to finance a new vehicle but dealerships turned them away due to their credit. They had to rent cars at high cost so Steven could get to work.

我們的客戶是像瑪麗塔和史蒂文這樣的夫婦，他們從中西部搬到南部尋找新的開始後遇到了財務挑戰。他們的財務困難對他們的信用和交通造成了影響。史蒂文的車在他長途通勤途中拋錨了。他們試圖融資購買一輛新車，但經銷商因他們的信用問題而拒絕了他們。他們不得不花高價租車以便史蒂文能夠去上班。

Discouraged but not defeated, they found a dealership who approved them for a vehicle through Credit Acceptance. It was a moment of relief and a turning point in their lives with a reliable vehicle to regain stability, improve their credit and felt support along the way from.

儘管灰心喪氣，但他們並沒有被打敗，他們找到了一家透過信貸接受批准他們購買車輛的經銷商。這是一個讓他們鬆了一口氣的時刻，也是他們生活的轉折點，他們有了一輛可靠的車，重新獲得了穩定，提高了信用，並感受到了一路上的支持。

From Marita and Steven, Credit Acceptance is more than a lender. We're a jump start in their new life journey. As Marina and Steven discovered the benefits of our program don't end once the contract is signed, we strive to support our consumers throughout the life of the contract as we have for many years. We are working with consumers impacted by hurricanes and more recently the wildfires including suspending some of our collection efforts to allow those customers to prioritize their safety and most urgent needs.

對 Marita 和 Steven 來說，Credit Acceptance 不僅僅是一個貸款機構。我們是他們新人生旅程的起點。正如瑪麗娜和史蒂文發現的那樣，我們計劃帶來的好處不會在簽訂合約後終止，因此我們努力在整個合約有效期內為我們的消費者提供支持，就像我們多年來所做的那樣。我們正在與受到颶風和最近的野火影響的消費者合作，包括暫停部分收款工作，以便這些客戶優先考慮他們的安全和最緊急的需求。

During the quarter, we financed 78,911 contracts for our dealers and consumers. We collected $1.3 billion overall and paid $65 million in portfolio profit and portfolio profit expressed for our dealers. We had 902 new dealers for the quarter and now have our largest number of active dealers ever for our fourth quarter with 10,149 dealers.

本季度，我們為經銷商和消費者提供了 78,911 份合約融資。我們總共收取了13億美元，並支付了6500萬美元的投資組合利潤和為我們的經銷商表達的投資組合利潤。本季我們新增了 902 家經銷商，第四季活躍經銷商數量達到 10,149 家，創歷史新高。

From an initiative perspective, we've made progress towards improving product innovation and our go to market approach with the goal of supporting and getting us faster and more effectively than ever before. This requires teamwork, attention to detail and an iterative process that attempts to make improvement every step of the way.

從主動性角度來看，我們在改善產品創新和市場進入方式方面取得了進展，目標是比以往更快、更有效地支持我們。這需要團隊合作、注重細節以及力求在每一步都取得進步的迭代過程。

We also continue to invest in our technology team to remain focused on modernizing both our key technology architecture and how our teams perform work to support this goal. During the quarter, we received five awards from Newsweek, Monster, Fortune, the Detroit Free Press and Computer World, recognizing us as a great place to work. We continue to focus on making our amazing workplace even better.

我們也將繼續投資於我們的技術團隊，以繼續專注於現代化我們的關鍵技術架構以及我們的團隊如何開展工作以支持這一目標。在本季度，我們獲得了《新聞周刊》、《怪獸》、《財富》、《底特律自由新聞報》和《電腦世界》頒發的五項獎項，認可我們是一家優秀的工作場所。我們將繼續致力於讓我們出色的工作場所變得更加美好。

This makes 13 workplace awards for 2024 which is the most we've ever received. We support our team members in making a difference, to make a difference with us, and make a difference to them. During Q4, we raised money and collected food for stone soup food bank. And our team members also came together over the holiday season to pack 106,000 meals for local food banks.

這樣，2024 年我們就獲得了 13 項工作場所獎項，這是有史以​​來最多的一次。我們支持我們的團隊成員做出貢獻，與我們一起做出貢獻，並為他們做出貢獻。在第四季度，我們為石頭湯食物銀行籌集資金並收集食物。我們的團隊成員還在節日期間齊心協力，為當地的食物銀行打包了 106,000 份餐點。

Now Jay Martin and I will take your questions along with Doug Busk, our Chief Treasury Officer; Jay Brinkley, our Senior Vice President and Treasurer; and Jeff Soutar, our Vice President and Assistant Treasurer.

現在，傑伊馬丁 (Jay Martin) 和我將與我們的財務長道格布斯克 (Doug Busk) 一起回答大家的問題；我們的高級副總裁兼財務主管傑伊·布林克利 (Jay Brinkley)；以及我們的副總裁兼助理財務主管 Jeff Soutar。

(Operator Instructions)

（操作員指令）

Moshe Orenbuch, TD Cowen.

Moshe Orenbuch，TD Cowen。

Great. Thanks. Team, I'm hoping that you could expand just a little bit on the comments about the slowing growth and how much of that you think is a result of the changes that you made and is any of it a result of changes in the environment, competition? Maybe just flesh that out for us if you would.

偉大的。謝謝。團隊，我希望您能就有關增長放緩的評論稍微展開一下，您認為其中有多少是由於您所做出的改變造成的，其中有多少是由於環境和競爭的變化造成的？如果您願意的話，也許可以為我們詳細說明一下。

Yeah, good question. It's hard to tell exactly. Obviously, our volume per dealer declines about 3.7% versus Q4 2023. And that's a good indicator of maybe the competitive environment, but we also have the complication this time where we have changed our scorecard. So it's hard to attribute to which of the two. But I will say that Q4 of 2024 was our second highest unit dollar by ever. So we do feel good about where we're at.

是的，好問題。很難確切地說。顯然，與 2023 年第四季相比，我們每家經銷商的銷量下降了約 3.7%。這也許是競爭環境的一個很好的指標，但這次我們也遇到了複雜的情況，我們改變了記分卡。因此很難判斷這是由哪一方造成的。但我要說的是，2024 年第四季是我們有史以來第二高的單位美元收入。所以我們對於目前的狀況感到很滿意。

Got you. And one of the things I always use as a guide to think about the adjusted yield is, how you've performed kind of in the previous period and usually there's a pretty good correlation and you did have like a roughly I think $60 million reduction in collections last quarter and yet the adjusted yield went up. Anything that we should kind of be aware of like, what drives that adjusted yield up in a period when collections levels are down?

明白了。我考慮調整後收益率時始終使用的指導原則之一是，你在前一時期的表現如何，通常它們之間存在相當好的相關性，我認為上個季度你的收款減少了大約 6000 萬美元，但調整後的收益率卻上升了。我們應該注意什麼，例如，在收款水準下降的時期，是什麼推動了調整後報酬率上升？

Yeah, so all things being equal, that declined last quarter, you would think would have a negative impact on the floating yield, the adjusted revenue as a percentage of average capital going forward. But what impacts the ultimate yield is the business we write in the subsequent period and our overall composition of the portfolio. So the yield that we recognize on the business we wrote in the fourth quarter increased our overall yield, so that more than offset the decline forecast collections we saw in the third quarter.

是的，所以在其他條件相同的情況下，上個季度的下降，你會認為會對浮動收益率、調整後收入佔未來平均資本的百分比產生負面影響。但影響最終收益率的是我們在後續期間開展的業務以及我們投資組合的整體組成。因此，我們在第四季度的業務中獲得的收益提高了我們的整體收益，從而抵消了我們在第三季度看到的預測收益下降。

Okay. Thank you.

好的。謝謝。

John Rowan, Janney Montgomery Scott.

約翰·羅恩、珍妮·蒙哥馬利·斯科特。

Hi, good afternoon, guys. When did you make the change to the scorecards?

大家下午好。您什麼時候對記分卡做出更改的？

The score current changes made during Q3. When it first goes in, and it takes a little while to take effect. So I was having full effect until sometime in September.

目前的得分是在 Q3 期間做出的改變。剛開始的時候，需要一點時間才能生效。因此，直到九月的某個時候，我的這種狀態才完全消失。

Okay. I just -- I don't remember discussing that on the last quarter conference call. Was -- that's something that I guess came in after, I don't know -- was that something you disclosed at the time of the call last quarter?

好的。我只是——我不記得在上個季度的電話會議上討論過這個問題。我猜這是後來發生的事情，我不知道，這是您在上個季度的電話會議中披露的事情嗎？

I don't know if we did or not. I thought we did, but I don't know, probably didn't have much impact on Q3.

我不知道我們是否這樣做了。我認為我們確實做到了，但我不知道，可能對第三季沒有太大影響。

Okay.

好的。

I mean. John, we've talked about that we always adjust our forecast, both with the credit scorecard and our ongoing forecast to reflect recent trends in loan performance. Whether we specifically discussed this change or not, I don't recall but it's a common practice.

我是說。約翰，我們已經討論過，我們總是調整我們的預測，包括使用信用記分卡和我們的持續預測，以反映貸款表現的最新趨勢。我不記得我們是否具體討論過這項變化，但這是常見的做法。

Okay. Well, I mean, obviously unit volume was down, was flat, relatively, year over year. It looks like subsequent to the quarter end you're down about 4% -- or no 3% relative to the prior quarter. And obviously dollar volumes off more than that because of the increase in the advanced rate. I mean, or the decrease in the advance rate.

好的。嗯，我的意思是，顯然單位銷售下降了，與去年同期相比相對持平。看起來，在季度末之後，您的銷售額下降了約 4%——或者與上一季相比下降了 3%。顯然，由於預付利率的上升，美元交易量的下降幅度超過了這個數字。我的意思是，或是預付率的下降。

I guess I'm just trying to holding on whether or not you're -- this is a reaction to kind of the chronic underperformance of the vintages over the last several years and whether you're, I don't know, kind of right sizing you buy box in light of the current environment which has been challenging to get the forecasting models correct.

我想我只是想堅持一下，你是否——這是對過去幾年葡萄酒長期表現不佳的一種反應，以及你是否根據當前的環境正確調整了購買框的規模，這對於獲得正確的預測模型來說是一個挑戰。

I'm just trying to understand if you know those are related that you basically go out and you cut the advanced rate and you let a bunch of volume trade off.

我只是想知道，如果您知道這些是相關的，那麼您基本上就會出去降低預付利率，然後進行大量的交易。

Yeah, I mean, I think we adjusted the scorecard to reflect trends that we've seen in the forecast. So that that's a part of it. I think there's also a chance that the competitive environment is a little more difficult than it was before too. And then, we're coming off our highest year ever. So we got harder comparable.

是的，我的意思是，我認為我們調整了記分卡以反映我們在預測中看到的趨勢。這就是其中的一部分。我認為競爭環境也有可能比以前更困難一些。然後，我們即將迎來有史以來最高的一年。因此我們變得更加難以比較。

Okay. And then just last question for me. Obviously there was that there's a relatively large sequential decline in G&A expense. Is that just because of the weaker volume growth or is that there's just something one time in that, that item?

好的。接下來是我最後一個問題。顯然，一般及行政管理費用較上月下降幅度相對較大。這只是因為銷量成長較弱嗎，還是只是因為其中某一個項目出現了問題？

Yeah. So the decline in G&A expense is primarily related to legal expense. We do see a fair amount of volatility in legal expense quarter to quarter, just based on where ongoing regulatory matters and legal matters are. We don't comment on those matters specifically. We don't go into any more detail than what we put in our [profile] file, in our file. That decline primarily (technical difficulty).

是的。因此，一般及行政費用的下降主要與法律費用有關。我們確實看到，法律費用在每個季度之間都存在相當大的波動，這僅取決於正在進行的監管事項和法律事項的進展。我們不會對這些事情具體發表評論。我們不會在我們的文件中詳細描述我們的[profile]文件中的內容。這種下降主要是（技術難度）。

Okay. All right. Thank you.

好的。好的。謝謝。

Rob Wildhack, Autonomous Research.

Rob Wildhack，自主研究。

Hi guys. A couple of quarters in a row where the revisions to forecasted collections, they're still negative, but they're smaller negative. Perhaps any changes in the broader economy and things like that. Does that, is that a signal that you think the worst is behind you in terms of downward revisions to the forecast?

嗨，大家好。連續幾季預測收入的修正仍為負值，但負值較小。也許是更廣泛的經濟狀況和諸如此類的事情發生的變化。這是否表明，就預測下調而言，最糟糕的情況已經過去了？

Well, our forecast at any point in time reflects our best estimate. So we do factor in under performance we've seen in the past. We point out for the quarter -- we did see a smaller decline this quarter than we have more recent quarters like what you said, it was down $31 million or 0.3%. If you start digging into it by cohort, you'll see that most of the decline was on the '22 business. Hard to say why that continues to keep declining. But we do know our forecasting models perform best during relatively stable economic periods. They're less accurate during periods of volatility like we experienced pandemic with this cohort.

嗯，我們在任何時間點的預測都反映了我們的最佳估計。因此，我們確實將過去的表現不佳因素納入考量。我們指出，就本季而言，我們確實看到本季的降幅比最近幾季要小，就像你說的，下降了 3,100 萬美元，降幅為 0.3%。如果你開始按群組深入研究，你會發現大部分的下降都發生在‘22’業務上。很難說清為何這種趨勢會持續下降。但我們確實知道，我們的預測模型在相對穩定的經濟時期表現最佳。在動盪時期，它們的準確性較低，就像我們這次經歷的疫情一樣。

We also know others in our industry who have experienced similar or worse performance on the ''22 cohort. So we don't believe the trends unique to Credit Acceptance. But I would point out at this point, the 22 business is less material to our financial results. We originated a lower volume that year and we've collected about 66% of what we ultimately expect to collect going forward.

我們也知道，我們行業中的其他人在 2022 年隊列中也經歷了類似或更糟的表現。因此，我們不相信 Credit Acceptance 獨有的趨勢。但現在我要指出的是，這 22 項業務對我們的財務表現不太重要。我們當年的發放量較低，目前已收回的金額約為未來最終預期收回金額的 66%。

Our financial results going to be more heavily weighted on the '23 and '24 cohorts. We wrote more businesses those years and they're last season and we were happy to report this quarter that our forecasts were stable on those two cohorts.

我們的財務表現將更依賴『23』和『24』群體。那些年我們撰寫了更多的業務，這是上個季度的事情，我們很高興地報告，本季我們對這兩個群體的預測是穩定的。

Okay. And you've also been pretty active in capital markets raised a lot of new capital in the past several quarters. I mean, when you did that, did you have a specific level of origination growth in mind? I guess I'm wondering if origination growth is going to be a lot slower for a while given the scorecard changes or competitive dynamics. What's the possibility that you're in a really meaningful excess capital position today?

好的。而且你們在資本市場上也相當活躍，在過去幾季籌集了大量新資本。我的意思是，當您這樣做的時候，您是否考慮過特定的起源增長水平？我想知道，考慮到記分卡的變化或競爭動態，發起成長是否會在一段時間內變得更加緩慢。您今天處於真正有意義的過剩資本狀況的可能性有多大？

Well. Hey, Rob. This is Jay Brinkley. We know that tax time is always our busy season, right? And so we'd rather miss it on that side of it. So I think we stated on last quarter's call that we were going to be fairly conservative going into the unknowns related to the election.

出色地。嘿，羅布。這是傑伊·布林克利。我們知道報稅季總是我們的繁忙季節，對嗎？因此我們寧願錯過它的那一邊。因此，我認為我們在上個季度的電話會議上表示，我們將對與選舉相關的未知因素採取相當保守的態度。

And what impact that might have on the capital market. So, ended up with a solid cash position, but you know that this is the right time of year to be in that position. And we feel good about that going into our busy time when originations really pick up.

以及這可能對資本市場產生什麼影響。因此，最終獲得了穩固的現金狀況，但您知道這是保持這種狀況的最佳時機。當我們進入繁忙時期，當業務發起真正增加時，我們對此感到很高興。

Okay. Thank you.

好的。謝謝。

Thank you. There are no more questions in the queue, and I would like to go ahead and turn the call back over to Mr. Martin for closing remarks. Please go ahead.

謝謝。現在沒有其他問題了，我想將電話轉回給馬丁先生，請他作最後發言。請繼續。

We would like to thank everyone for their support and for joining us on the conference call today. If you have any additional follow up questions, please direct them to our investor relations mailbox at ir@creditacceptance.com. We look forward to talking to you again next quarter. Thank you.

我們要感謝大家的支持以及今天參加我們的電話會議。如果您有任何其他後續問題，請寄至我們的投資者關係信箱：ir@creditacceptance.com。我們期待下個季度再次與您交談。謝謝。

Once again, this does conclude today's conference. Thank you for your participation. You may all disconnect.

今天的會議再次到此結束。感謝您的參與。你們都可以斷開連線。