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MarketScreener Homepage  >  Equities  >  Nyse  >  Elevate Credit, Inc.    ELVT

ELEVATE CREDIT, INC.

(ELVT)
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Elevate Credit : Announces Third Quarter 2019 Results

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11/04/2019 | 04:20pm EST

ELEVATE CREDIT ANNOUNCES THIRD QUARTER 2019 RESULTS

Elevate Credit announces strong third quarter earnings growth;

Raises 2019 net income guidance

FORT WORTH, TX - November 4, 2019 - Elevate Credit, Inc. (NYSE: ELVT) ("Elevate" or the "Company"), a leading tech-enabled provider of innovative and responsible online credit solutions for non-prime consumers, today announced results for the third quarter ended September 30, 2019. The financial performance for the quarter is a strong turnaround from the net loss incurred in the third quarter of 2018.

"The third quarter of 2019 was another successful result for Elevate and we are very pleased with the operating leverage we continue to generate through improved credit quality and lower customer acquisition costs. As a result, we are also pleased to raise our full year 2019 net income outlook from $25 million to $30 million, to $28 million to $32 million; 9% higher than our previous range at the midpoint. Our measured approach to originations continued in the quarter and we remain encouraged by the early feedback from our recently deployed credit models as we look toward 2020."

Third Quarter 2019 Financial Highlights1

  • Net income: Net income for the three months ended September 30, 2019 totaled $4.8 million, up $9.0 million, compared to a net loss of $(4.2) million in the third quarter of 2018. Fully diluted earnings per share for the third quarter of 2019 was $0.11, an increase from a loss of $(0.10) per fully diluted share a year ago.
  • Revenue: Revenues decreased 4.3% for the third quarter of 2019 totaling $192.8 million compared to $201.5 million for the third quarter of 2018. Revenues increased $15.0 million, or 8.4%, from the second quarter of 2019. Revenues less net charge-offs totaled $105.8 million for the third quarter of 2019, an increase of 4.6% from $101.1 million in the third quarter of 2018.
  • Combined loans receivable - principal: Combined loans receivable - principal totaled $628.7 million at September 30, 2019, a decrease of $5.2 million, or 1.0%, from $634.0 million for the prior-year quarter end. Combined loans receivable - principal increased $27.5 million, or 4.6%, compared to the prior quarter-end balance of $601.2 million.
  • Improving credit quality: The ending combined loan loss reserve, as a percentage of combined loans receivable, was 13.8% as of September 30, 2019, lower than 13.9% reported for the prior-year period. Net charge-offs as a percentage of revenues for the third quarter of 2019 totaled 45%, down from 50% in the third quarter of 2018.
  • Customer acquisition cost: The average customer acquisition cost was $184 in the third quarter of 2019, lower than $225 for the prior-year quarter. The total number of new customer loans decreased from approximately 95,000 in the third quarter of 2018 to 75,000 in the third quarter of 2019.
  • Adjusted EBITDA margin: Adjusted EBITDA increased to $29.0 million in the third quarter of 2019, up 56.7% from $18.5 million in the third quarter of 2018. The Adjusted EBITDA margin for the third quarter of 2019 was 15.1%, up from 9.2% in the prior-year quarter.

__________________________

1 Adjusted EBITDA, Adjusted EBITDA margin, combined loans receivable - principal, combined loans receivable, and combined loan loss reserve are non-GAAP financial measures. These terms are defined elsewhere in this release. Please see the schedules appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

1

Year-to-date 2019 Financial Highlights1

  • Netincome:NetincomefortheninemonthsendedSeptember30,2019totaled$23.9million,up$15.5million, or 185.2%, compared to $8.4 million in the first nine months of 2018. Fully diluted earnings per share was $0.54, an increase from $0.19 fully diluted per share a year ago.
  • Revenue: Revenues decreased 3.3% for the nine months ended September 30, 2019, totaling $560.0 million compared to $579.4 million for the first nine months of 2018. Revenues less net charge-offs totaled $289.5 million for the first nine months of 2019, up slightly from $285.3 million for the first nine months of 2018.
  • Customer acquisition cost: The average customer acquisition cost was $210 for the nine months ended September 30, 2019, lower than $257 for the first nine months of 2018. The total number of new customer loans decreased from approximately 250,000 for the nine months ended September 30, 2018 to 196,000 in the first nine months of 2019.
  • Adjusted EBITDAmargin: Adjusted EBITDAincreased to $107.6 million for the first nine months of 2019, up 27.8% from $84.2 million in the first nine months of 2018. The Adjusted EBITDAmargin for the first nine months of 2019 was 19.2%, up from 14.5% in the prior-year.

Liquidity and Capital Resources

Interest expense in the third quarter of 2019 declined to $14.7 million as compared to $17.9 million in the second quarter of 2019 and $19.8 million in the third quarter of 2018. This decrease resulted from a lower cost of funds, which decreased to approximately 10.7%, versus 13.6% and 14.6% in the second quarter of 2019 and the third quarter of 2018, respectively.

The Company's Board of Directors authorized a share repurchase program beginning in July 2019 providing for the repurchase of up to $10 million of the Company's common stock through July 31, 2024. The Company purchased $434 thousand of common shares under this program during the third quarter of 2019.

Financial Outlook

The Company is revising the full year 2019 revenue guidance down to $740 million to $750 million, but increasing full year 2019 net income guidance to $28 million to $32 million, and diluted earnings per share to $0.63 to $0.72. Fiscal year 2019 Adjusted EBITDA guidance is revised to $135 million to $140 million, the upper half of our prior guidance. Prior guidance for full year 2019 was $750 million to $770 million in revenue, $25 million to $30 million in net income, $0.55 to $0.65 in diluted earnings per share, and $130 million to $140 million in Adjusted EBITDA.

__________________________

1 Adjusted EBITDA, Adjusted EBITDA margin, combined loans receivable - principal, combined loans receivable, and combined loan loss reserve are non-GAAP financial measures. These terms are defined elsewhere in this release. Please see the schedules appearing later in this release for reconciliations of these non-GAAP measures to the most directly comparable GAAP measures.

2

Conference Call

The Company will host a conference call to discuss its third quarter 2019 financial results on Monday, November 4th at 4:00pm Central Time / 5:00pm Eastern Time. Interested parties may access the conference call live over the phone by dialing 1-877-407-0792 (domestic) or 1-201-689-8263 (international) and requesting the Elevate Credit Third Quarter 2019 Earnings Conference Call. Participants are asked to dial in a few minutes prior to the call to register for the event. The conference call will also be webcast live through Elevate's website at http://www.elevate.com/investors.

An audio replay of the conference call will be available approximately three hours after the conference call until 11:59 pm ET on November 18, 2019, and can be accessed by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international), and providing the passcode 13695563, or by accessing Elevate's website.

Forward-Looking Statements

This press release contains 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. Such statements contain words such as "may," "will," "might," "expect," "believe," "anticipate," "could," "would," "estimate," "continue," "pursue," or the negative thereof or comparable terminology, and may include (without limitation) information regarding the Company's expectations, goals or intentions regarding future performance.These statements may include words such as "anticipate," "estimate," "expect," "project," "plan," "intend," "believe," "may," "will," "should," "likely" and other words and terms of similar meaning. The forward-looking statements include statements regarding: our expectationsof future financialperformance includingour outlookfor full fiscalyear 2019 (includingall statements under the heading "Financial Outlook"); our potential to drive long-term earnings growth; our expectation of continued strong earnings through 2019 and that we will see the added benefit from new credit models; and the Company's targeted customer acquisition cost range of $250-$300.Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. These risks and uncertainties include, but are not limited to: the Company's limited operating history in an evolving industry; new laws and regulations in the consumer lending industry in many jurisdictions that could restrict the consumer lending products and services the Company offers, impose additional compliance costs on the Company, render the Company's current operations unprofitable or even prohibit the Company's current operations; scrutiny by regulators and payment processors of certain online lenders' access to the Automated Clearing House system to disburse and collect loan proceeds and repayments; a lack of sufficient debt financing at acceptable prices or disruptions in the credit markets; the impact of competition in our industry and innovation by our competitors; our ability to prevent security breaches, disruption in service and comparable events that could compromise the personal and confidential information held in our data systems, reduce the attractiveness of our platform or adversely impact our ability to service loans; and other risks related to litigation, compliance and regulation. Additional factors that could cause actual results to differ are discussed under the heading "Risk Factors" and in other sections of the Company's most recentAnnual Report on Form 10-K, and in the Company's other current and periodic reports filed from time to time with the SEC. All forward- looking statements in this press release are made as of the date hereof, based on information available to the Company as of the date hereof, and the Company assumes no obligation to update any forward-looking statement.

3

About Elevate

Elevate (NYSE: ELVT), together with its bank partners, has originated $7.8 billion in non-prime credit to more than

2.4 million non-prime consumers to date and has saved its customers more than $6.1 billion versus the cost of payday loans. Its responsible, tech-enabled online credit solutions provide immediate relief to customers today and help them build a brighter financial future. The company is committed to rewarding borrowers' good financial behavior with features like interest rates that can go down over time, free financial training and free credit monitoring. Elevate's suite of groundbreaking credit products includes RISE, Elastic, Sunny and Today Card. For more information, please visit http://www.elevate.com.

Investor Relations:

Solebury Trout

Sloan Bohlen, (817) 928-1646investors@elevate.com

or

Media Inquiries:

Solebury Trout

Lisa Wolford, (917) 846-0881lwolford@soleburytrout.com

4

Elevate Credit, Inc. and Subsidiaries

Condensed Consolidated Income Statements

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(Dollars in thousands, except share and

2019

2018

2019

2018

per share amounts)

Revenues

$

192,778

$

201,480

$

560,042

$

579,394

Cost of sales:

Provision for loan losses

101,047

113,896

266,503

294,636

Direct marketing costs

13,821

21,280

41,169

64,155

Other cost of sales

7,459

7,997

21,081

20,892

Total cost of sales

122,327

143,173

328,753

379,683

Gross profit

70,451

58,307

231,289

199,711

Operating expenses:

Compensation and benefits

26,953

24,380

78,301

70,187

Professional services

8,715

9,789

27,274

26,475

Selling and marketing

1,794

2,170

5,845

7,525

Occupancy and equipment

5,054

4,553

15,285

13,302

Depreciation and amortization

4,350

3,490

12,940

9,167

Other

1,252

1,233

4,269

4,018

Total operating expenses

48,118

45,615

143,914

130,674

Operating income

22,333

12,692

87,375

69,037

Other expense:

Net interest expense

(14,660)

(19,810)

(51,826)

(58,286)

Foreign currency transaction loss

(870)

(325)

(967)

(800)

Non-operating loss

(695)

-

(695)

(38)

Total other expense

(16,225)

(20,135)

(53,488)

(59,124)

Income (loss) before taxes

6,108

(7,443)

33,887

9,913

Income tax expense (benefit)

1,344

(3,209)

9,993

1,536

Net income (loss)

$

4,764

$

(4,234)

$

23,894

$

8,377

Basic earnings (loss) per share

$

0.11

$

(0.10)

$

0.55

$

0.20

Diluted earnings (loss) per share

$

0.11

$

(0.10)

$

0.54

$

0.19

Basic weighted average shares

outstanding

44,169,964

43,182,208

43,736,458

42,653,947

Diluted weighted average shares

outstanding

44,743,944

43,182,208

44,320,427

44,354,376

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Elevate Credit Inc. published this content on 04 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 November 2019 21:19:08 UTC

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Financials (USD)
Sales 2019 750 M
EBIT 2019 112 M
Net income 2019 30,6 M
Debt 2019 -
Yield 2019 -
P/E ratio 2019 5,89x
P/E ratio 2020 4,60x
Capi. / Sales2019 0,24x
Capi. / Sales2020 0,23x
Capitalization 182 M
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Number of Analysts 8
Average target price 5,67  $
Last Close Price 4,12  $
Spread / Highest target 69,9%
Spread / Average Target 37,5%
Spread / Lowest Target 21,4%
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NameTitle
Jason D. Harvison President, Chief Executive Officer & Director
Saundra D. Schrock Chairman
Christopher T. Lutes Chief Financial Officer
Joan Kuehl Chief Information Officer
Robert L. Johnson Independent Director
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