Financial and Operating Highlights
Fourth Quarter 2021 compared to Fourth Quarter 2020
- Total operating revenue increased 54.4% to
$216.5 million . - Purchase volume increased 58.5% to
$616.3 million . - Number of total customers served(1) at period end increased 52.5% to 2.7 million.
- Managed receivables(2) at period end associated with Credit as a Service Segment increased 47.7% to
$1.6 billion , and 11.4% over third quarter 2021. - Net income attributable to common shareholders increased 99.5% to
$43.7 million , or$2.13 per diluted common share, an increase of 88.5%.
Full Year 2021 compared to Full Year 2020
- Total operating revenue increased 32.8% to
$743.9 million . - Purchase volume increased 57.5% to
$2.2 billion . - Net income attributable to common shareholders increased 101.9% to
$155.5 million , or$7.56 per diluted common share, an increase of 91.4%. - Adjusted net income(2), which adjusts for the
$29.4 million ($24.1 million tax effected) loss on repurchase and redemption of convertible senior notes, increased 133.1% to$179.6 million , or$8.70 per diluted common share, an increase of 120.3%.
(1) In our calculation of total customers, we include all customers with account activity and customers who have open lines of credit at the end of the referenced period.
(2) Managed receivables and adjusted net income are non-GAAP financial measures. See “Non-GAAP Financial Measures” for important additional information.
Management Commentary
Fourth Quarter and Year Ended 2021 Financial Results | |||||||||||||||
For the Fourth Quarter Ended Dec. 31, | Income Increases (Decreases) | Percentage Increases (Decreases) | |||||||||||||
(In Thousands) | 2021 | 2020 | From 2020 to 2021 | From 2020 to 2021 | |||||||||||
Total operating revenue | $ | 216,524 | $ | 140,215 | $ | 76,309 | 54.4 | % | |||||||
Other non-operating revenue | 743 | 2,453 | (1,710 | ) | (69.7 | %) | |||||||||
Total revenue | 217,267 | 142,668 | 74,599 | 52.3 | % | ||||||||||
Interest expense | (15,669 | ) | (13,034 | ) | (2,635 | ) | 20.2 | % | |||||||
Provision for losses on loans, interest and fees receivable recorded at net realizable value | (11,986 | ) | (25,825 | ) | 13,839 | (53.6 | %) | ||||||||
Changes in fair value of loans, interest and fees receivable and notes payable associated with structured financings recorded at fair value | (73,752 | ) | (35,392 | ) | (38,360 | ) | 108.4 | % | |||||||
Net margin | 115,860 | 68,417 | 47,443 | 69.3 | % | ||||||||||
Total operating expense | (52,905 | ) | (37,028 | ) | (15,877 | ) | 42.9 | % | |||||||
Net income | $ | 49,839 | $ | 26,631 | $ | 23,208 | 87.1 | % | |||||||
Net income attributable to controlling interests | $ | 49,977 | $ | 26,675 | $ | 23,302 | 87.4 | % | |||||||
Preferred dividends and discount accretion | (6,309 | ) | (4,787 | ) | (1,522 | ) | 31.8 | % | |||||||
Net income attributable to common shareholders | $ | 43,668 | $ | 21,888 | $ | 21,780 | 99.5 | % | |||||||
Net income attributable to common shareholders per common share—basic | $ | 2.91 | $ | 1.51 | $ | 1.40 | 92.7 | % | |||||||
Net income attributable to common shareholders per common share—diluted | $ | 2.13 | $ | 1.13 | $ | 1.00 | 88.5 | % | |||||||
For the Year Ended | Income Increases (Decreases) | Percentage Increases (Decreases) | ||||||||||||
(In Thousands) | 2021 | 2020 | from 2020 to 2021 | from 2020 to 2021 | ||||||||||
Total operating revenue | $ | 743,855 | $ | 560,007 | 183,848 | 32.8 | % | |||||||
Other non-operating revenue | 4,201 | 3,403 | 798 | 23.4 | % | |||||||||
Total revenue | 748,056 | 563,410 | 184,646 | 32.8 | % | |||||||||
Interest expense | (54,127 | ) | (51,548 | ) | (2,579 | ) | 5.0 | % | ||||||
Provision for losses on loans, interest and fees receivable recorded at net realizable value | (36,455 | ) | (142,719 | ) | 106,264 | -74.5 | % | |||||||
Changes in fair value of loans, interest and fees receivable and notes payable associated with structured financings recorded at fair value | (218,733 | ) | (108,548 | ) | (110,185 | ) | 101.5 | % | ||||||
Net margin | 438,741 | 260,595 | 178,146 | 68.4 | % | |||||||||
Total Operating Expense | (189,729 | ) | (146,204 | ) | (43,525 | ) | 29.8 | % | ||||||
Loss on repurchase of convertible senior notes | ( 29,439 | ) | - | (29,439 | ) | |||||||||
Net income | $ | 177,789 | $ | 93,917 | 83,872 | 89.3 | % | |||||||
Net income attributable to controlling interests | $ | 177,902 | $ | 94,120 | 83,782 | 89.0 | % | |||||||
Preferred dividends and discount accretion | (22,363 | ) | (17,070 | ) | (5,293 | ) | 31.0 | % | ||||||
Net income attributable to controlling interests to common shareholders | $ | 155,539 | $ | 77,050 | 78,489 | 101.9 | % | |||||||
Net income attributable to common shareholders per common share—basic | $ | 10.32 | $ | 5.32 | 5.00 | 94.0 | % | |||||||
Net income attributable to common shareholders per common share—diluted | $ | 7.56 | $ | 3.95 | 3.61 | 91.4 | % | |||||||
Managed receivables
Managed receivables increased 47.7% to
Total revenue
Period-over-period increases in operating revenue primarily relate to growth in private label credit and general purpose credit card receivables.
During the quarter and year ended
Given our expectation for continued period-over-period growth in private label credit and general purpose credit card receivables, coupled with increased revenue recognition as a result of our adoption of the fair value option for all remaining loans receivable associated with our private label credit and general purpose credit card platform currently measured at amortized cost, we expect continued net period-over-period growth in our total interest income and related fees and charges for these operations in 2022.
Interest expense
Interest expense was
Outstanding notes payable, net, associated with private label credit and general purpose credit card products increased to
Provision for losses on loans, interest and fees receivable recorded at net realizable value
Provision for losses on loans, interest and fees receivable recorded at net realizable value decreased to
We have experienced a period-over-period decrease in this category primarily reflecting: 1) the effects of our adoption of the fair value option to account for certain loans receivable that are acquired on or after
This reduction in provision has been offset somewhat by additional reserves associated with accounts that have been impacted due to COVID-19. On
Total operating expense
Total operating expense increased 42.9% and 29.8% for the quarter and year ended
Certain operating costs are variable based on the levels of accounts and receivables we service (both for our own receivables and for others) and the pace and breadth of our growth in receivables. Increases in operating expenses were largely due to increases in receivables acquisition volume as well as increased marketing expenses that often precede the revenues generated from the subsequently acquired assets.
Net Income Attributable to Common Shareholders
Net income attributable to common shareholders increased 99.5% to
Net Income Attributable to Common Shareholders Per Common Share – basic and diluted
Net income attributable to common shareholders per basic common share increased to
Net income attributable to common shareholders per common share diluted increased to
Balance Sheet and Cash Flow Information
At
During 2021, cash flow from operations equaled
About Atlanticus Holdings Corporation
Empowering Better Financial Outcomes for Everyday Americans
Atlanticus’ technology allows bank, retail, and healthcare partners to offer more inclusive financial services to everyday Americans through the use of proprietary analytics. We apply the experience gained and infrastructure built from servicing over 18 million customers and $27 billion in consumer loans over our 25-year operating history to support lenders that originate a range of consumer loan products. These products include retail and healthcare private-label credit and general purpose credit cards marketed through our omnichannel platform, including retail point-of-sale, healthcare-point of-care, direct mail solicitation, internet-based marketing, and partnerships with third parties. Additionally, through our CAR subsidiary, Atlanticus serves the individual needs of automotive dealers and automotive non-prime financial organizations with multiple financing and service programs.
Forward-Looking Statements
This press release contains forward-looking statements that reflect the Company's current views with respect to, among other things, its business, operations, financial performance, managed receivables, total interest income and related fees and charges, debt financing and interest expense, interest rates, underwriting and economic developments. You generally can identify these statements by the use of words such as “outlook,” “potential,” “continue,” “may,” “seek,” “approximately,” “predict,” “believe,” “expect,” “plan,” “intend,” “estimate” or “anticipate” and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as “will,” “should,” “would,” “likely” and “could.” These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include those risks described in the Company's filings with the
Non-GAAP Financial Measures
This press release presents information about managed receivables and adjusted net income, which are non-GAAP financial measures provided as supplements to the results provided in accordance with accounting principles generally accepted in
These non-GAAP financial measures are presented for supplemental informational purposes only. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, GAAP financial measures. These non-GAAP financial measures may differ from the non-GAAP financial measures used by other companies. The calculation of managed receivables is provided below under “Calculation of Non-GAAP Financial Measure” for each of the fiscal periods indicated.
Contact:
Investor Relations
(212) 836-9604
kahl@equityny.com
Consolidated Statements of Operations (Unaudited) (Dollars in thousands, except per share data) | ||||||||||||||||
For the Three Months Ended | For the Year Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue: | ||||||||||||||||
Consumer loans, including past due fees | $ | 152,656 | $ | 103,714 | $ | 518,783 | $ | 410,616 | ||||||||
Fees and related income on earning assets | 53,808 | 31,428 | 194,466 | 133,960 | ||||||||||||
Other revenue | 10,060 | 5,073 | 30,606 | 15,431 | ||||||||||||
Total operating revenue, net | 216,524 | 140,215 | 743,855 | 560,007 | ||||||||||||
Other non-operating revenue | 743 | 2,453 | 4,201 | 3,403 | ||||||||||||
Total revenue | 217,267 | 142,668 | 748,056 | 563,410 | ||||||||||||
Interest expense | (15,669 | ) | (13,034 | ) | (54,127 | ) | (51,548 | ) | ||||||||
Provision for losses on loans, interest and fees receivable recorded at net realizable value | (11,986 | ) | (25,825 | ) | (36,455 | ) | (142,719 | ) | ||||||||
Changes in fair value of loans, interest and fees receivable and notes payable associated with structured financings recorded at fair value | (73,752 | ) | (35,392 | ) | (218,733 | ) | (108,548 | ) | ||||||||
Net margin | 115,860 | 68,417 | 438,741 | 260,595 | ||||||||||||
Operating expense: | ||||||||||||||||
Salaries and benefits | 9,447 | 8,437 | 34,024 | 29,079 | ||||||||||||
Card and loan servicing | 20,559 | 15,300 | 75,397 | 63,047 | ||||||||||||
Marketing and solicitation | 16,194 | 8,489 | 56,635 | 35,012 | ||||||||||||
Depreciation | 593 | 315 | 1,493 | 1,247 | ||||||||||||
Other | 6,112 | 4,487 | 22,180 | 17,819 | ||||||||||||
Total operating expense | 52,905 | 37,028 | 189,729 | 146,204 | ||||||||||||
Loss on repurchase and redemption of convertible senior notes | - | - | 29,439 | - | ||||||||||||
Income before income taxes | 62,955 | 31,389 | 219,573 | 114,391 | ||||||||||||
Income tax expense | (13,116 | ) | (4,758 | ) | (41,784 | ) | (20,474 | ) | ||||||||
Net income | 49,839 | 26,631 | 177,789 | 93,917 | ||||||||||||
Net loss attributable to noncontrolling interests | 138 | 44 | 113 | 203 | ||||||||||||
Net income attributable to controlling interests | 49,977 | 26,675 | 177,902 | 94,120 | ||||||||||||
Preferred dividends and discount accretion | (6,309 | ) | (4,787 | ) | (22,363 | ) | (17,070 | ) | ||||||||
Net income attributable to common shareholders | $ | 43,668 | $ | 21,888 | $ | 155,539 | $ | 77,050 | ||||||||
Net income attributable to common shareholders per common share—basic | $ | 2.91 | $ | 1.51 | $ | 10.32 | $ | 5.32 | ||||||||
Net income attributable to common shareholders per common share—diluted | $ | 2.13 | $ | 1.13 | $ | 7.56 | $ | 3.95 | ||||||||
Consolidated Balance Sheets (Unaudited) (Dollars in thousands) | |||||||
2021 | 2020 | ||||||
Assets | |||||||
Unrestricted cash and cash equivalents (including interest entities at | $ | 409,660 | $ | 178,102 | |||
Restricted cash and cash equivalents (including entities at | 96,968 | 80,859 | |||||
Loans, interest and fees receivable: | |||||||
Loans, interest and fees receivable, at fair value (including variable interest entities at | 1,026,424 | 417,098 | |||||
Loans, interest and fees receivable, gross (including interest entities at | 470,293 | 667,556 | |||||
Allowances for uncollectible loans, interest and fees receivable (including associated with variable interest entities at | (57,201 | ) | (124,961 | ) | |||
Deferred revenue (including 31, 2021 and | (29,281 | ) | (39,456 | ) | |||
Net loans, interest and fees receivable | 1,410,235 | 920,237 | |||||
Property at cost, net of depreciation | 7,335 | 2,240 | |||||
Investments in equity-method investee | — | 1,415 | |||||
Operating lease right-of-use assets | 4,016 | 9,181 | |||||
Prepaid expenses and other assets | 15,649 | 15,180 | |||||
Total assets | $ | 1,943,863 | $ | 1,207,214 | |||
Liabilities | |||||||
Accounts payable and accrued expenses | $ | 42,287 | $ | 41,731 | |||
Operating lease liabilities | 4,842 | 13,776 | |||||
Notes payable, net (including | 1,278,864 | 882,610 | |||||
Notes payable associated with structured financings, at fair value (associated with variable interest entities) | — | 2,919 | |||||
Convertible senior notes | — | 24,386 | |||||
Senior notes, net | 142,951 | — | |||||
Income tax liability | 47,770 | 25,932 | |||||
Total liabilities | 1,516,714 | 991,354 | |||||
Commitments and contingencies | |||||||
Preferred stock, no par value, 10,000,000 shares authorized: | |||||||
Series A preferred stock, 400,000 shares issued and outstanding at | 40,000 | 40,000 | |||||
Class B preferred units issued to noncontrolling interests | 99,650 | 99,350 | |||||
Shareholders' Equity | |||||||
Series B preferred stock, no par value, 3,188,533 shares issued and outstanding at shares issued and outstanding at | — | — | |||||
Common stock, no par value, 150,000,000 shares authorized: 14,804,408 and 16,115,353 shares issued at loaned shares to be returned at 31, 2020, respectively | — | — | |||||
Paid-in capital | 227,763 | 194,950 | |||||
Retained earnings (deficit ) | 60,236 | (117,666 | ) | ||||
Total shareholders’ equity | 287,999 | 77,284 | |||||
Noncontrolling interests | (500 | ) | (774 | ) | |||
Total equity | 287,499 | 76,510 | |||||
Total liabilities, preferred stock and shareholders' equity | $ | 1,943,863 | $ | 1,207,214 | |||
(1) Both the Series A preferred stock and the Series B preferred stock have no par value and are part of the same aggregate 10,000,000 shares authorized. | |||||||
Calculation of Non-GAAP Financial Measure | ||||||||||||||||
Loans, interest and fees receivable, at face value | ||||||||||||||||
At or for the Three Months Ended | ||||||||||||||||
2021 | 2020 | |||||||||||||||
(in Millions) | ||||||||||||||||
Loans, interest and fees receivable, at fair value | $ | 1,026.4 | $ | 846.2 | $ | 644.7 | $ | 481.4 | $ | 417.1 | $ | 310.8 | $ | 177.9 | $ | 89.4 |
Fair value mark against receivable (2) | 208.9 | 182.2 | 148.6 | 112.3 | 99.0 | 71.8 | 42.7 | 17.5 | ||||||||
Loans, interest and fees receivable, at face value | $ | 1,235.3 | $ | 1,028.4 | $ | 793.3 | $ | 593.7 | $ | 516.1 | $ | 382.6 | $ | 220.6 | $ | 106.9 |
(1) We elected the fair value option to account for certain loans receivable associated with our private label credit and general purpose credit card platform that are acquired on or after
(2) The fair value mark against receivables reflects the difference between the face value of a receivable and the net present value of the expected cash flows associated with that receivable.
Managed receivables | ||||||||||||||||
Below is the calculation of managed receivables (in millions): | ||||||||||||||||
At or for the Three Months Ended | ||||||||||||||||
2021 | 2020 | |||||||||||||||
(in Millions) | ||||||||||||||||
Loans, interest and fees receivable, gross | $ | 375.7 | $ | 417.8 | $ | 454.2 | $ | 498.8 | $ | 574.3 | $ | 604.8 | $ | 679.6 | $ | 810.6 |
Loans, interest and fees receivable, gross from fair value reconciliation above | 1,235.3 | 1,028.4 | 793.3 | 593.7 | 516.1 | 382.6 | 220.6 | 106.9 | ||||||||
Total managed receivables | $ | 1,611.0 | $ | 1,446.2 | $ | 1,247.5 | $ | 1,092.5 | $ | 1,090.4 | $ | 987.4 | $ | 900.2 | $ | 917.5 |
Source:
2022 GlobeNewswire, Inc., source