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Financial News

goeasy Ltd. Reports Record Results for the Fourth Quarter and Full Year

Loan Portfolio Increased from $834 million to $1.11 billion, up 33%
Adjusted Quarterly Earnings Per Share Increased from $1.02 to $1.45, up 42%
Adjusted Annual Earnings Per Share Increased from $3.56 to $5.17, up 45%
Dividend Per Share Increased from $1.24 to $1.80, up 45%

MISSISSAUGA, Ontario, Feb. 12, 2020 (GLOBE NEWSWIRE) -- goeasy Ltd. (TSX: GSY), (“goeasy” or the “Company”), a leading full-service provider of goods and alternative financial services, announced its results for the fourth quarter ended December 31, 2019.

Fourth Quarter Results

During the quarter the Company generated a record $314 million of total loan originations, up 18% from the $265 million in the fourth quarter of 2018. The increased originations led to growth in the loan portfolio of $75 million, which reached $1.11 billion at the end of the quarter, up 33% from $834 million as at December 31, 2018.

Revenue for the fourth quarter increased to a record $166 million, up 20% over the same period in 2018, driven by the expansion of the consumer loan portfolio. The net charge-off rate for the quarter was 13.3% compared to 13.1% in the fourth quarter of 2018, 13.2% in the third quarter of 2019 and within the Company’s targeted range of 11.5% to 13.5% for 2019.

Operating income grew to a record $46.5 million, up 32% from $35.1 million in the fourth quarter of 2018, while the operating margin expanded to a record 28.1% up from 25.4% in the prior year. Net income in the fourth quarter, which included a $16.0 million after-tax charge associated with the refinancing of the Company’s notes payable completed on November 27, 2019, was $6.7 million, while diluted earnings per share was $0.46. Excluding the one-time refinancing charge, adjusted net income was $22.6 million, up $6.8 million or 43% from the net income of $15.9 million in the fourth quarter of 2018. Adjusted diluted earnings per share was $1.45 per share, an increase of $0.43 or 42% from diluted earnings per share of $1.02 in the fourth quarter of 2018.

“The fourth quarter wrapped up another record year for the Company and was highlighted by strong loan growth, stable credit performance and further improvements to our balance sheet and liquidity,” said Jason Mullins, goeasy’s President and Chief Executive Officer. “With brand awareness at an all-time high of 85%, we experienced record levels of consumer demand, resulting in an 18% increase in loan originations and a loan portfolio that exceeded $1.11 billion. In parallel, we also made great strides to strengthen our balance sheet through the amendment to our revolving credit facility and refinancing of our notes payable, which collectively served to increase our liquidity and reduce our fully drawn weighted average cost of borrowing from 6.8% to 5.5%.” Mr. Mullins continued, “We are also pleased to have achieved all our stated targets for the year, while producing record revenue and earnings. After normalizing for the one-time charge related to our refinancing, adjusted diluted earnings per share for the full year was $5.17, an increase of 45% versus the $3.56 in 2018.”

Other Key Fourth Quarter Highlights

easyfinancial

  • Total application volume increased 19%
  • Revenue grew to $130 million, up 26%
  • Secured loan portfolio grew to $116 million, up 118%
  • 62% of net loan advances in the quarter were issued to new customers, consistent with 2018
  • 50% of applications acquired online, up from 42%
  • Record aided brand awareness of 85%, up from 84%
  • Average loan book per branch improved to $3.7 million, an increase of 28%
  • The delinquency rate on the final Saturday of the quarter was 5.1%, down slightly from 5.2%
  • Operating income of $53.3 million, up 29%
  • Operating margin of 41%, up from 40% in the fourth quarter of 2018

easyhome

  • Revenue of $35.5 million, up 2%
  • Same store revenue growth of 6.2%
  • Consumer lending portfolio within easyhome stores increased to $38.1 million, up 75%
  • Revenue from consumer lending increased to $5.1 million, up 76%
  • Operating income of $6.5 million, up 26%
  • Operating margin of 18.3%, up from the 14.8% reported in the fourth quarter of 2018

Overall

  • 39th consecutive quarter of same store sales growth
  • 74th consecutive quarter of positive net income
  • Total same store revenue growth of 19.7%
  • Adjusted return on equity of 27% in the quarter, up from 23%
  • Net external debt to net capitalization of 71% as at December 31, 2019, in line with the Company’s target leverage ratio of 70%
  • Cash provided by operating activities before the net issuance of consumer loans receivable and purchase of lease assets during the quarter was $71.1 million
  • Named a Top Employer in the Greater Toronto Area
  • Subsequent to quarter-end, was added to the S&P/TSX Canadian Dividend Aristocrats Index with a 42% compound annual growth rate in the dividend over the prior 5 years

Full Year Results

For the full year, the Company funded $1.1 billion in loan originations, up 19% from the $923 million in 2018. The consumer loan portfolio grew $1.11 billion, up 33% from $834 million in 2018. The growth in the consumer loan portfolio produced record revenues of $609 million, up 20% compared with $506 million in 2018. Operating income for 2019 was $169 million up 41% from $120 million in 2018.

Net income for the full year, which included a $21.7 million one-time before tax charge associated with the refinancing of the Company’s notes payable completed on November 27, 2019, was $64.3 million, which resulted in diluted earnings per share of $4.17. Excluding the one-time refinancing charge, adjusted net income was $80.3 million, up $27.2 million or 51% from the net income of $53.1 million in 2018. Adjusted diluted earnings per share was $5.17 per share, an increase of $1.61 or 45% from diluted earnings per share of $3.56 in 2018.

The Company achieved all its stated targets for 2019 as follows:

  2019 Targets 2019 Actual
Gross Loan Receivable Portfolio at Year End $1.1B - $1.2B $1.11B
easyfinancial Total Revenue Yield 49% - 51% 50.1%
New easyfinancial Locations 10 - 20 15
Net Charge-offs as a Percentage of Average Gross Consumer Loans Receivable 11.5% - 13.5% 13.3%
easyfinancial Operating Margin 40% - 42% 40.2%
Total Revenue Growth 20% - 22% 20.4%
Return on Equity* 24%+ 25.3%*

*Adjusted for the one-time $16.0 million after-tax charge associated with the refinancing of the Company’s notes payable completed on November 27, 2019

Balance Sheet and Liquidity

Total assets were $1.32 billion as at December 31, 2019, an increase of 25% from $1.06 billion as at December 31, 2018, driven by the growth in the consumer loan portfolio.

Cash provided by operating activities before the net issuance of consumer loans receivable and purchase of lease assets was $296 million in 2019, an increase of 28% from $232 million in 2018. 

During 2019, the Company made several enhancements to its balance sheet, including amendments to its revolving credit facility and refinancing of its unsecured notes payable. The amendments to the revolving credit facility increased the maximum principal amount available to be borrowed from $174.5 million in 2018 to $310.0 million and extended the maturity date from November 1, 2020 to February 12, 2022. As part of these amendments, the cost of borrowing under the revolving credit facility was also reduced. Subsequent to these amendments, interest on advances is payable at either the Canadian Bankers’ Acceptance rate (“BA”) plus 300 bps or lender’s prime rate (“Prime”) plus 200 bps, at the option of the Company. On November 27, 2019, the Company issued USD550.0 million of 5.375% senior unsecured notes payable which mature on December 1, 2024. The proceeds from the November 27, 2019 notes issuance were used to extinguish the Company’s previous USD475.0 million of 7.875% senior unsecured outstanding notes payable that would have matured on November 1, 2022, and unwind the related cross-currency swap. As a result of repaying these notes, the Company incurred an early repayment penalty, recognized the remaining unamortized net deferred financing costs associated with these notes, realized a derivative loss, and reclassified the net change in cash flow hedge from other comprehensive income (loss) to the consolidated statement of income resulting in a one-time after-tax charge of $16.0 million. Due to the improved cost of borrowing, the Company estimates it will prospectively save approximately C$0.42 in annual after-tax earnings per share, more than offsetting the cost of refinancing. 

Based on the cash on hand at the end of the quarter and the borrowing capacity under the Company’s amended revolving credit facility, goeasy had approximately $240 million in funding capacity, which will allow it to achieve its targets for the growth of its consumer loan portfolio through to the third quarter of 2021. The Company has historically been able to obtain the additional financing required to fund the growth of its business at steadily lower costs of borrowing, at more favorable terms, and extending its liquidity runway. The Company also estimates that once its existing and available sources of capital are fully utilized, it could continue to grow the loan portfolio by approximately $150 million per year solely from internal cash flows.

The Company also estimates that as of December 31, 2019 if it were to run-off its consumer loan and consumer leasing portfolios, the value of the total cash repayments paid to the Company over the remaining life of its contracts would be approximately $2.2 billion. If during such a run-off scenario all excess cash flows were applied directly to debt, the Company estimates it would extinguish all external debt within 22 months.

Future Outlook

The Company has provided a 3-year forecast for 2020 through 2022. The periods of 2020 and 2021 have been updated to reflect the most recent outlook. The Company continues to pursue a long-term strategy that includes expanding its product range, developing its channels of distribution and leveraging risk-based pricing offers, which increase the average loan size and extend the life of its customer relationships. As such, the total yield earned on its consumer loan portfolio will gradually decline, while net charge-off rates moderate and operating margins expand.

  2020 Forecasts 2021 Forecasts 2022 Forecasts
Gross Consumer Loan Receivable Portfolio at Year End $1.3B - $1.4B $1.5B - $1.7B $1.8B - $2B
easyfinancial Total Revenue Yield 46.5% - 48.5% 43% - 45% 42% - 44%
New easyfinancial locations to be opened during the year 20 - 25 20 - 25 15 - 20
Net Charge-offs as a Percentage of Average Gross Consumer Loans Receivable 11.5% - 13.5% 11% - 13% 11% - 13%
easyfinancial Operating Margin 42% - 44% 43% - 45% 43% - 45%
Total Revenue Growth 14 - 16% 12% - 14% 10% - 12%
Return on Equity 26%+ 25%+ 23%+
Net Debt to Total Capitalization 66% - 68% 64% - 66% 62% - 64%

“As we look forward to 2020 and beyond, we are excited about the many opportunities that lie ahead. We are in the early period of executing our strategy to expand the product range, develop our channels of distribution, increase our geographic footprint and deliver a best-in-class customer experience that helps over 60% of our customers improve their credit score and 1 in 3 graduate to prime credit. With a strong balance sheet and award-winning culture to help fuel our ambitions, we are positioned better than ever to capture a greater share of the $231 billion non-prime consumer credit market. Our updated three-year forecast reflects the consumer loan portfolio growing to between $1.8 billion and $2 billion by the end of 2022, while credit continues to gradually improve and the net debt to total capitalization steadily declines.” Mr. Mullins concluded, “I want to thank the entire goeasy team for the passion that they pour into taking care of our customers and for all of their accomplishments during another record year for our Company. We are truly just getting started.”

Dividend

Based on its 2019 adjusted earnings and the Company’s confidence in its continued growth and access to capital going forward, the Board of Directors has approved an increase to the annual dividend from $1.24 per share to $1.80 per share, an increase of 45%.  2019 marks the 6th consecutive year of an increase in the dividend to shareholders. As such, the Board of Directors has approved a quarterly dividend of $0.45 per share payable on April 10, 2020 to the holders of common shares of record as at the close of business on March 27, 2020.

Forward-Looking Statements

All figures reported above with respect to outlook are targets established by the Company and are subject to change as plans and business conditions vary. Accordingly, investors are cautioned not to place undue reliance on the foregoing guidance. Actual results may differ materially.

This press release includes forward-looking statements about goeasy, including, but not limited to, its business operations, strategy, expected financial performance and condition, the estimated number of new locations to be opened, targets for growth of the consumer loans receivable portfolio, annual revenue growth targets, strategic initiatives, new product offerings and new delivery channels, anticipated cost savings, planned capital expenditures, anticipated capital requirements, liquidity of the Company, plans and references to future operations and results and critical accounting estimates. In certain cases, forward-looking statements are statements that are predictive in nature, depend upon or refer to future events or conditions, and/or can be identified by the use of words such as ‘expects’, ‘anticipates’, ‘intends’, ‘plans’, ‘believes’, ‘budgeted’, ‘estimates’, ‘forecasts’, ‘targets’ or negative versions thereof and similar expressions, and/or state that certain actions, events or results ‘may’, ‘could’, ‘would’, ‘might’ or ‘will’ be taken, occur or be achieved.

Forward-looking statements are based on certain factors and assumptions, including expected growth, results of operations and business prospects and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company’s operations, economic factors and the industry generally, as well as those factors referred to in the Company’s most recent Annual Information Form and Management Discussion and Analysis, as available on www.sedar.com, in the section entitled “Risk Factors”. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those expressed or implied by forward-looking statements made by the Company, due to, but not limited to, important factors such as the Company’s ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, purchase products which appeal to customers at a competitive rate, respond to changes in legislation, react to uncertainties related to regulatory action, raise capital under favourable terms, manage the impact of litigation (including shareholder litigation), control costs at all levels of the organization and maintain and enhance the system of internal controls. The Company cautions that the foregoing list is not exhaustive.

The reader is cautioned to consider these, and other factors carefully and not to place undue reliance on forward-looking statements, which may not be appropriate for other purposes. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless required by law.

About goeasy

goeasy Ltd., a Canadian company, headquartered in Mississauga, Ontario, provides non-prime leasing and lending services through its easyhome and easyfinancial divisions. With a wide variety of financial products and services including unsecured and secured instalment loans, goeasy aspires to help put Canadians on a path to a better financial future, as they rebuild their credit and graduate to prime lending. Customers can transact seamlessly with easyhome and easyfinancial through an omni-channel model that includes online and mobile, as well as over 400 leasing and lending locations across Canada supported by more than 2,000 employees.

Throughout the company’s history, it has served over 1 million Canadians and originated over $3.9 billion in loans, with one in three customers graduating to prime credit and 60% increasing their credit score within 12 months of borrowing.

goeasy is the proud recipient of several awards including Waterstone Canada’s Most Admired Corporate Cultures, Glassdoor Top CEO Award, Achievers Top 50 Most Engaged Workplaces in North America, Greater Toronto Top Employers Award, the Digital Finance Institute’s Canada’s Top 50 FinTech Companies, ranking on the TSX30 and placing on the Report on Business ranking of Canada’s Top Growing Companies. The company and its employees believe strongly in giving back to the communities in which it operates and has raised over $2.9 million to support its long-standing partnerships with the Boys & Girls Clubs of Canada and Habitat for Humanity.

goeasy Ltd.’s. common shares are listed on the TSX under the trading symbol “GSY” and goeasy’s convertible debentures are traded on the TSX under the trading symbol “GSY-DB”.  goeasy is rated BB- with a stable trend from S&P and Ba3 with a stable trend from Moody’s. Visit www.goeasy.com.

For further information contact:

Jason Mullins
President & Chief Executive Officer
(905) 272-2788

David Ingram
Executive Chairman of the Board
(905) 272-2788


         
goeasy Ltd.        
         
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
(expressed in thousands of Canadian dollars) 
         
         
    As At
As At
    December 31,
December 31,
    2019 2018
         
ASSETS        
Cash   46,341   100,188  
Amounts receivable   18,482   15,450  
Prepaid expenses   7,077   3,835  
Consumer loans receivable, net   1,040,552   782,864  
Investment   34,300   -  
Lease assets   48,696   51,618  
Property and equipment, net   23,007   21,283  
Deferred tax assets   14,961   9,445  
Derivative financial asset   -   35,094  
Intangible assets, net   17,749   14,589  
Right-of-use assets   46,147   -  
Goodwill   21,310   21,310  
TOTAL ASSETS   1,318,622   1,055,676  
         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Liabilities        
Revolving credit facility   115,000   -  
Accounts payable and accrued liabilities   41,350   45,103  
Income taxes payable   4,187   7,499  
Dividends payable   4,448   3,247  
Deferred lease inducements   -   1,234  
Unearned revenue   8,082   6,002  
Derivative financial liabilities   16,435   -  
Lease liabilities   52,573   -  
Convertible debentures   41,712   40,581  
Notes payable   702,414   650,481  
TOTAL LIABILITIES   986,201   754,147  
         
Shareholders' equity        
Share capital   141,956   138,090  
Contributed surplus   20,296   16,105  
Accumulated other comprehensive income (loss)   (915 ) 3,624  
Retained earnings   171,084   143,710  
TOTAL SHAREHOLDERS' EQUITY   332,421   301,529  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   1,318,622   1,055,676  
         



             
goeasy Ltd.            
             
CONSOLIDATED STATEMENTS OF INCOME
(expressed in thousands of Canadian dollars except earnings per share)
             
             
    Three Months Ended Year Ended
    December 31, December 31,
December 31, December 31,
    2019 2018
2019 2018
             
REVENUE            
Interest income   96,403   73,834   345,997   255,997  
Lease revenue   28,268   29,437   113,236   119,745  
Commissions earned   37,169   31,486   135,510   117,000  
Charges and fees   3,696   3,403   14,640   13,449  
    165,536   138,160   609,383   506,191  
             
EXPENSES BEFORE DEPRECIATION AND AMORTIZATION            
Salaries and benefits   31,166   29,183   120,414   114,522  
Stock-based compensation   2,858   1,755   8,686   6,836  
Advertising and promotion   7,488   6,203   26,699   19,145  
Bad debts   43,257   34,186   156,742   118,980  
Occupancy   5,484   8,807   20,573   34,665  
Technology costs   3,222   2,826   12,293   11,118  
Other expenses   9,315   7,409   30,819   29,205  
    102,790   90,369   376,226   334,471  
             
DEPRECIATION AND AMORTIZATION            
Depreciation of lease assets   9,351   9,944   37,402   40,088  
Depreciation of right-of-use assets   3,933   -   15,199   -  
Depreciation of property and equipment   1,624   1,249   6,281   5,719  
Amortization of intangible assets   1,355   1,492   5,482   6,196  
    16,263   12,685   64,364   52,003  
             
Total operating expenses   119,053   103,054   440,590   386,474  
             
Operating income   46,483   35,106   168,793   119,717  
             
Finance costs            
Interest expenses and amortization of deferred financing charges   14,744   12,811   55,094   45,800  
Interest expenses on lease liabilities   656   -   2,464   -  
Refinancing cost relating to notes payable   21,723   -   21,723   -  
    37,123   12,811   79,281   45,800  
             
Income before income taxes   9,360   22,295   89,512   73,917  
             
Income tax expense (recovery)            
Current   5,812   3,753   27,763   24,354  
Deferred   (3,135 ) 2,655   (2,600 ) (3,561 )
    2,677   6,408   25,163   20,793  
             
Net income   6,683   15,887   64,349   53,124  
             
Basic earnings per share   0.46   1.07   4.40   3.78  
Diluted earnings per share   0.46   1.02   4.17   3.56  
             



                 
Segmented Reporting                
                   
      Three Months Ended December 31, 2019
($ in 000's except earnings per share)   easyfinancial
easyhome
Corporate Total
                   
Revenue                
  Interest income   92,803   3,600   -   96,403  
  Lease revenue   -   28,268   -   28,268  
  Commissions earned   34,777   2,392   -   37,169  
  Charges and fees   2,425   1,271   -   3,696  
      130,005   35,531   -   165,536  
                   
Total operating expenses before                
  depreciation and amortization   73,062   17,309   12,419   102,790  
                   
Depreciation and amortization                
  Depreciation and amortization of lease assets, property and equipment and intangible assets   1,805   9,757   768   12,330  
  Depreciation of right-of-use assets   1,793   1,965   175   3,933  
      3,598   11,722   943   16,263  
                   
Segment operating income (loss)   53,345   6,500   (13,362 ) 46,483  
                   
Finance costs                
  Interest expenses and amortization of deferred financing charges             14,744  
  Interest expense on lease liabilities             656  
  Refinancing cost relating to notes payable             21,723  
                37,123  
                   
Income before income taxes             9,360  
                   
Income taxes             2,677  
                   
Net Income             6,683  
                   
Diluted earnings per share             0.46  
                   
      Three Months Ended December 31, 2018
($ in 000's except earnings per share)   easyfinancial
easyhome
Corporate Total
                   
Revenue                
  Interest income   71,814   2,020   -   73,834  
  Lease revenue   -   29,437   -   29,437  
  Commissions earned   29,594   1,892   -   31,486  
  Charges and fees   1,878   1,525   -   3,403  
      103,286   34,874   -   138,160  
Total operating expenses before                
  depreciation and amortization   60,032   19,482   10,855   90,369  
                   
Depreciation and amortization                
  Depreciation and amortization of lease assets, property and equipment and intangible assets   1,965   10,238   482   12,685  
Segment operating income (loss)   41,289   5,154   (11,337 ) 35,106  
                   
Finance costs                
  Interest expense and amortization of deferred financing charges             12,811  
Income before income taxes             22,295  
                   
Income taxes             6,408  
                   
Net Income             15,887  
                   
Diluted earnings per share             1.02  
                   
                   
      Year Ended December 31, 2019
($ in 000's except earnings per share)   easyfinancial
easyhome
Corporate Total
                   
Revenue                
  Interest income   334,124   11,873   -   345,997  
  Lease revenue   -   113,236   -   113,236  
  Commissions earned   126,806   8,704   -   135,510  
  Charges and fees   9,278   5,362   -   14,640  
      470,208   139,175   -   609,383  
Total operating expenses before                
  depreciation and amortization   267,356   67,253   41,617   376,226  
                   
Depreciation and amortization                
  Depreciation and amortization of lease assets, property and equipment and intangible assets   7,194   39,140   2,831   49,165  
  Depreciation of right-of-use assets   6,521   7,943   735   15,199  
      13,715   47,083   3,566   64,364  
                   
Segment operating income (loss)   189,137   24,839   (45,183 ) 168,793  
                   
Finance costs                
  Interest expense and amortization of deferred financing charges             55,094  
  Interest expense on lease liabilities             2,464  
  Refinancing cost relating to notes payable             21,723  
                79,281  
                   
Income before income taxes             89,512  
                   
Income taxes             25,163  
                   
Net Income             64,349  
                   
Diluted earnings per share             4.17  
                   
      Year Ended December 31, 2018
($ in 000's except earnings per share)   easyfinancial
easyhome
Corporate Total
                   
Revenue                
  Interest income   250,622   5,375   -   255,997  
  Lease revenue   -   119,745   -   119,745  
  Commissions earned   110,423   6,577   -   117,000  
  Charges and fees   7,280   6,169   -   13,449  
      368,325   137,866   -   506,191  
                   
Total operating expenses before                
  depreciation and amortization   218,138   74,215   42,118   334,471  
                   
Depreciation and amortization                
  Depreciation and amortization of lease assets, property and equipment and intangible assets   8,333   42,104   1,566   52,003  
Segment operating income (loss)   141,854   21,547   (43,684 ) 119,717  
                   
Finance costs                
  Interest expense and amortization of deferred financing charges             45,800  
Income before income taxes             73,917  
                   
Income taxes             20,793  
                   
Net Income             53,124  
                   
Diluted earnings per share             3.56  
                 



Summary of Financial Results and Key Performance Indicators        
         
($ in 000’s except earnings per share and percentages) Three Months Ended Variance Variance
December 31, 2019 December 31, 2018 $ / bps % change
Summary Financial Results        
Revenue 165,536   138,160   27,376   19.8 %
Operating expenses before depreciation and amortization 102,790   90,369   12,421   13.7 %
EBITDA 53,395   37,847   15,548   41.1 %
EBITDA margin 32.3 % 27.4 % 490 bps   17.9 %
Depreciation and amortization expense 16,263   12,685   3,578   28.2 %
Operating income 46,483   35,106   11,377   32.4 %
Operating margin 28.1 % 25.4 % 270 bps   10.6 %
Interest expense and amortization of deferred finance charges and interest expense on lease liabilities 15,400   12,811   2,589   20.2 %
Refinancing costs1 21,723   -   21,723   100.0 %
Effective income tax rate 28.6 % 28.7 % (10 bps)   (0.3 %)
Net income 6,683   15,887   (9,204 ) (57.9 %)
Diluted earnings per share 0.46   1.02   (0.56 ) (54.9 %)
Return on equity 8.0 % 23.0 % (1,500 bps)   (65.2 %)
           
Adjusted (Normalized) Financial Results1          
Adjusted net income 22,649   15,887   6,762   42.6 %
Adjusted diluted earnings per share 1.45   1.02   0.43   42.2 %
Adjusted return on equity 27.0 % 23.0 % 400 bps   17.4 %
           
Key Performance Indicators    
Same store revenue growth (overall) 19.7 % 28.5 % (880 bps)   (30.9 %)
Same store revenue growth (easyhome) 6.2 % 7.1 % (90 bps)   (12.7 %)
           
Segment Financials          
easyfinancial revenue 130,005   103,286   26,719   25.9 %
easyfinancial operating margin 41.0 % 40.0 % 100 bps   2.5 %
easyhome revenue 35,531   34,874   657   1.9 %
easyhome operating margin 18.3 % 14.8 % 350 bps   23.6 %
         
Portfolio Indicators        
Gross consumer loans receivable 1,110,633   833,779   276,854   33.2 %
Growth in consumer loans receivable 75,037   84,198   (9,161 ) (10.9 %)
Gross loan originations 313,514   264,996   48,518   18.3 %
Total yield on consumer loans (including ancillary products) 49.8 % 52.7 % (290 bps)   (5.5 %)
Net charge-offs as a percentage of average gross consumer loans receivable 13.3 % 13.1 % 20 bps   1.5 %
Potential monthly lease revenue 8,643   9,141   (498 ) (5.4 %)
         
         
         
($ in 000’s except earnings per share and percentages) Year Ended Variance Variance
December 31, 2019 December 31, 2018 $ / bps % change
Summary Financial Results    
Revenue 609,383   506,191   103,192   20.4 %
Operating expenses before depreciation and amortization 376,226   334,471   41,755   12.5 %
EBITDA 195,755   131,632   64,123   48.7 %
EBITDA margin 32.1 % 26.0 % 610 bps   23.5 %
Depreciation and amortization expense 64,364   52,003   12,361   23.8 %
Operating income 168,793   119,717   49,076   41.0 %
Operating margin 27.7 % 23.7 % 400 bps   16.9 %
Interest expense and amortization of deferred finance charges and interest expense on lease liabilities 57,558   45,800   11,758   25.7 %
Refinancing costs1 21,723   -   21,723   100.0 %
Effective income tax rate 28.1 % 28.1 % -   -  
Net income 64,349   53,124   11,225   21.1 %
Diluted earnings per share 4.17   3.56   0.61   17.1 %
Return on equity 20.2 % 21.8 % (160 bps)   (7.3 %)
           
Adjusted (Normalized) Financial Results1          
Adjusted net income 80,315   53,124   27,191   51.2 %
Adjusted diluted earnings per share 5.17   3.56   1.61   45.2 %
Adjusted return on equity 25.3 % 21.8 % 350 bps   16.1 %
         
Key Performance Indicators    
Same store revenue growth (overall) 19.5 % 25.7 % (620 bps)   (24.1 %)
Same store revenue growth (easyhome) 4.3 % 6.4 % (210 bps)   (32.8 %)
           
Segment Financials          
easyfinancial revenue 470,208   368,325   101,883   27.7 %
easyfinancial operating margin 40.2 % 38.5 % 170 bps   4.4 %
easyhome revenue 139,175   137,866   1,309   0.9 %
easyhome operating margin 17.8 % 15.6 % 220 bps   14.1 %
           
Portfolio Indicators          
Gross consumer loans receivable 1,110,633   833,779   276,854   33.2 %
Growth in consumer loans receivable 276,854   307,233   (30,379 ) (9.9 %)
Gross loan originations 1,095,375   922,550   172,825   18.7 %
Total yield on consumer loans (including ancillary products) 50.1 % 54.2 % (410 bps)   (7.6 %)
Net charge-offs as a percentage of average gross consumer loans receivable 13.3 % 12.7 % 60 bps   4.7 %
Potential monthly lease revenue 8,643   9,141   (498 ) (5.4 %)
         
1During the fourth quarter of 2019, the Company refinanced its notes payable incurring a $16.0 million after-tax charge associated with extinguishing the Company's notes payable.  
         

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