World Acceptance (WRLD)

Risks

• Employee misconduct or misconduct by third parties acting on our behalf could harm us by subjecting us to monetary loss, significant legal liability, regulatory scrutiny, and reputational harm.
• Interest rate fluctuations may adversely affect our borrowing costs, profitability and liquidity.
• We are exposed to credit risk in our lending activities.
• Our insurance operations are subject to a number of risks and uncertainties, including claims, catastrophic events, underwriting risks and dependence on a primary distribution channel.
• If our estimates of credit losses are not adequate to absorb actual losses, our provision for credit losses would increase, which would adversely affect our results of operations.
• The concentration of our revenues in certain states could adversely affect us.
• We may be unable to execute our business strategy due to economic conditions.
• We currently lack product and business diversification; as a result, our revenues and earnings may be disproportionately negatively impacted by external factors and may be more susceptible to fluctuations than more diversified companies.
• A reduction in demand for our products and a failure by us to adapt to such reduction could adversely affect our business and results of operations.
• We operate in a highly competitive market, and we cannot ensure that the competitive pressures we face will not have a material adverse effect on our results of operations, financial condition and liquidity.
• We depend on secure information technology, and an attack on or a breach of those systems or those of third-party vendors could result in significant losses, unauthorized disclosure of confidential customer information, and reputational damage, which could materially adversely affect our business, financial condition and/or results of operations, and could lead to significant financial and legal exposure and reputational harm.
• Any interruption of our information systems could adversely affect us.
• We may not be able to make technological improvements as quickly as some of our competitors, which could harm our ability to compete with our competitors and adversely affect our results of operations, financial condition, and liquidity.
• We are subject to data privacy laws, which may significantly increase our compliance and technology costs resulting in a material adverse effect on our results of operations and financial condition.
• We are also subject to the risk of theft or misuse of physical customer and employee records at our facilities.
• Our off-site data center and centralized IT functions are susceptible to disruption by catastrophic events, which could have a material adverse effect on our business, results of operations, and financial condition.
• A small number of our shareholders have the ability to significantly influence matters requiring shareholder approval and such shareholders may have interests which conflict with the interests of our other security holders.
• Initiating and processing potential acquisitions may be unsuccessful or difficult, leading to losses and increased delinquencies, which could have a material adverse effect on our results of operations.
• We depend to a substantial extent on borrowings under our revolving credit agreement to fund our liquidity needs.
• Our current debt and any additional debt we may incur in the future could negatively impact our business, prevent us from satisfying our debt obligations and adversely affect our financial condition.
• We may not be able to generate sufficient cash flows to service our outstanding debt and fund operations and may be forced to take other actions to satisfy our obligations under such debt.
• The terms of our debt limit how we conduct our business.
• The conditions of the U.S. and international capital markets may adversely affect lenders with which we have relationships, causing us to incur additional costs and reducing our sources of liquidity, which may adversely affect our financial position, liquidity and results of operations.
• Risks Related to Legal Proceedings and Regulation
• Federal legislative or regulatory proposals, initiatives, actions, or changes that are adverse to our operations or result in adverse regulatory proceedings, or our failure to comply with existing or future federal laws and regulations, could force us to modify, suspend, or cease part or all of our nationwide operations.
• Unfavorable state legislation, executive orders, or regulatory actions, adverse outcomes in litigation or regulatory proceedings or failure to comply with existing laws and regulations could force us to cease, suspend or modify our operations in a state, potentially resulting in a material adverse effect on our business, results of operations and financial condition.
• Changes in local laws and regulations or interpretations of local laws and regulations could negatively impact our business, results of operations, and financial condition.
• Our use of third-party vendors is subject to regulatory review.
• Our risk management efforts may not be effective.
• We may experience significant turnover in our senior management, and our business may be adversely affected by the transitions in our senior management team.
• The departure, transition, or replacement of key personnel could significantly impact the results of our operations. If we cannot continue to hire and retain high-quality employees, our business and financial results may be negatively affected.
• Changes in federal, state and local tax law, interpretations of existing tax law, or adverse determinations by tax authorities, could increase our tax burden or otherwise adversely affect our financial condition or results of operations.
• Damage to our reputation could negatively impact our business.
• We have goodwill, which is subject to periodic review and testing for impairment.
• If we fail to maintain appropriate controls and procedures, we may not be able to accurately report our financial results, which could have a material adverse effect on our operations, financial condition, and the trading price of our common stock.
• Regular turnover among our managers and other employees at our branches makes it more difficult for us to operate our branches and increases our costs of operations, which could have an adverse effect on our business, results of operations and financial condition.
• Absence of dividends could reduce our attractiveness to investors.
• Various provisions of our charter documents and applicable laws could delay or prevent a change of control that shareholders may favor.
• Overall stock market volatility may materially and adversely affect the market price of our common stock.
• Changes to accounting rules, regulations or interpretations could significantly affect our financial results.
• If assumptions or estimates we use in preparing our financial statements are incorrect or are required to change, our reported results of operations and financial condition may be adversely affected.
• The future issuance of additional shares of our common stock in connection with potential acquisitions or otherwise will dilute all other shareholders.