Loan Originations of
Organic Loan Growth of
Loan Portfolio of
Quarterly Diluted Earnings per Share of
Adjusted Quarterly Diluted Earnings per Share1 of
Second Quarter Results
During the quarter, the Company experienced record loan originations of
The improved loan originations led to record organic growth in the loan portfolio of
During the quarter, the Company also continued to experience stable credit and payment performance. The net charge off rate in the second quarter was 9.3%, in line with the Company’s target range of between 8.5% and 10.5% on an annualized basis, and up from 8.2% in the second quarter of 2021, a period which benefited from pandemic related government support and reduced consumer expenses. The Company’s allowance for future credit losses decreased slightly to 7.68% from 7.78% in the first quarter of 2022, primarily due to the improved product and credit mix of the loan portfolio.
Operating income for the second quarter of 2022 was a record
Net income in the second quarter was
“We are delighted to report record organic loan growth of
Other Key Second Quarter Highlights
easyfinancial
- Revenue of
$214 million , up 30% - 36% of the loan portfolio secured, up from 33%
- 65% of net loan advances in the quarter were issued to new customers, consistent year over year
- Record net customer growth during the quarter of 12,157
- Record home equity originations, which increased 169%
- Record powersports financing originations, which increased 59%
- Record automotive financing originations of
$50 million , which increased 451% - Average loan book per branch3 improved to
$4.3 million , an increase of 14% - Weighted average interest rate3 on consumer loans of 31.7%, down from 33.7%
- Record operating income of
$95.6 million , up 28% - Operating margin of 44.6%, down from 45.4%
easyhome
- Revenue of
$37.5 million , broadly flat year over year - Same store revenue growth3 of 2.8%
- Consumer loan portfolio within easyhome stores increased to
$77.1 million , up 35% - Financial revenue1 from consumer lending increased to
$9.9 million , up 35% from$7.3 million - Operating income of
$8.7 million , down 6% - Operating margin of 23.3%, down from 24.9%
Overall
- 49th consecutive quarter of same store revenue growth3
- 84th consecutive quarter of positive net income
- 2022 marks the 18th consecutive year of paying dividends and the 8th consecutive year of a dividend increase
- Total same store revenue growth3 of 16.8%
- Total customers served over 1.2 million
- Record adjusted return on tangible common equity1 of 38.0%, up from 34.8% in the second quarter of 2021
- Fully drawn weighted average cost of borrowing at 4.9%
- Net debt to net capitalization4 of 70% on
June 30, 2022 , up from 64% in the prior year and in line with the Company’s target leverage ratio
Six Months Results
For the first six months of 2022, the Company produced record revenues of
Balance Sheet and Liquidity
Total assets were
During the quarter, the Company entered into a strategic commercial partnership and agreed to make a minority equity investment of
During the quarter, the Company increased its existing revolving securitization warehouse facility (“Securitization Facility”) by
During the second quarter of 2022, the Company recognized a
Free cash flow from operations before net growth in gross consumer loans receivable2 in the quarter was
Updated Outlook
On
Forecasts for 2022 | Forecasts for 2023 | Forecasts for 2024 | |
Gross consumer loans receivable at year end | |||
New easyfinancial locations to be opened during the year | 10 - 15 | 10 - 15 | 5 |
Total yield on consumer loans (including ancillary products)1 | 36.5% - 38.5% | 35.0% - 37.0% | 34.0% - 36.0% |
Net charge offs as a percentage of average gross consumer loans receivable | 8.5% - 10.5% | 8.5% - 10.5% | 8.0% - 10.0% |
Total Company Operating Margin | 35% + | 36% + | 37% + |
Return on Equity | 22% + | 22% + | 22% + |
Dividend
The Board of Directors has approved a quarterly dividend of
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’s 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,
Accredited by the
goeasy Ltd.’s. common shares are listed on the TSX under the trading symbol “GSY”. 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:
President & Chief Executive Officer
(905) 272-2788
Senior Vice President, Chief Corporate Development Officer
(905) 272-2788
Notes:
1 These are non-IFRS ratios. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
2 These are non-IFRS measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
3 These are supplementary financial measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
4 These are capital management measures. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.
5 Non-IFRS ratios, non-IFRS measures, supplementary financial measures and capital management measures are not determined in accordance with IFRS, do not have standardized meanings and may not be comparable to similar financial measures presented by other companies.
goeasy Ltd. | ||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||
(Unaudited) | ||
(expressed in thousands of Canadian dollars) | ||
As At | As At | |
2022 | 2021 | |
ASSETS | ||
Cash | 95,900 | 102,479 |
Accounts receivable | 22,877 | 20,769 |
Prepaid expenses | 8,651 | 8,018 |
Income taxes recoverable | 3,357 | - |
Consumer loans receivable, net | 2,223,563 | 1,899,631 |
Investments | 36,618 | 64,441 |
Lease assets | 45,378 | 47,182 |
Property and equipment, net | 34,811 | 35,285 |
Derivative financial assets | 26,291 | 20,634 |
Intangible assets, net | 157,871 | 159,651 |
Right-of-use assets, net | 59,507 | 57,140 |
180,923 | 180,923 | |
TOTAL ASSETS | 2,895,747 | 2,596,153 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Liabilities | ||
Revolving credit facility | 143,331 | - |
Accounts payable and accrued liabilities | 46,992 | 57,134 |
Income taxes payable | - | 27,859 |
Dividends payable | 14,407 | 10,692 |
Unearned revenue | 20,592 | 11,354 |
Accrued interest | 7,972 | 8,135 |
Deferred tax liabilities, net | 29,923 | 38,648 |
Lease liabilities | 68,168 | 65,607 |
Secured borrowings | 138,378 | 173,959 |
Revolving securitization warehouse facility | 526,095 | 292,814 |
Derivative financial liabilities | 23,048 | 34,132 |
Notes payable | 1,108,363 | 1,085,906 |
TOTAL LIABILITIES | 2,127,269 | 1,806,240 |
Shareholders' equity | ||
Share capital | 357,377 | 363,514 |
Contributed surplus | 18,630 | 22,583 |
Accumulated other comprehensive income | 12,452 | 8,567 |
Retained earnings | 380,019 | 395,249 |
TOTAL SHAREHOLDERS' EQUITY | 768,478 | 789,913 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 2,895,747 | 2,596,153 |
goeasy Ltd. | ||||||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
(Unaudited) | ||||||||
(expressed in thousands of Canadian dollars except earnings per share) | ||||||||
Three Months Ended | Six Months Ended | |||||||
2022 | 2021 | 2022 | 2021 | |||||
REVENUE | ||||||||
Interest income | 169,311 | 128,483 | 326,135 | 233,977 | ||||
Lease revenue | 25,948 | 28,348 | 52,826 | 56,785 | ||||
Commissions earned | 51,343 | 42,435 | 95,201 | 75,772 | ||||
Charges and fees | 5,050 | 3,090 | 9,632 | 5,996 | ||||
251,652 | 202,356 | 483,794 | 372,530 | |||||
EXPENSES BEFORE DEPRECIATION AND AMORTIZATION | ||||||||
Salaries and benefits | 43,908 | 43,804 | 85,872 | 79,210 | ||||
Stock-based compensation | 2,490 | 1,901 | 4,790 | 3,987 | ||||
Advertising and promotion | 9,383 | 7,172 | 18,893 | 13,064 | ||||
Bad debts | 67,936 | 48,873 | 122,085 | 78,147 | ||||
Occupancy | 6,184 | 5,753 | 12,563 | 11,277 | ||||
Technology costs | 5,460 | 4,017 | 10,700 | 7,821 | ||||
Other expenses | 10,799 | 15,409 | 22,662 | 22,504 | ||||
146,160 | 126,929 | 277,565 | 216,010 | |||||
DEPRECIATION AND AMORTIZATION | ||||||||
Depreciation of lease assets | 8,195 | 8,843 | 16,660 | 18,086 | ||||
Amortization of intangible assets | 4,915 | 4,134 | 10,128 | 5,880 | ||||
Depreciation of right-of-use assets | 4,971 | 4,422 | 9,840 | 8,766 | ||||
Depreciation of property and equipment | 2,228 | 1,938 | 4,453 | 3,766 | ||||
20,309 | 19,337 | 41,081 | 36,498 | |||||
TOTAL OPERATING EXPENSES | 166,469 | 146,266 | 318,646 | 252,508 | ||||
OPERATING INCOME | 85,183 | 56,090 | 165,148 | 120,022 | ||||
OTHER (LOSS) INCOME | (6,819 | ) | (4,086 | ) | (24,344 | ) | 83,286 | |
FINANCE COSTS | ||||||||
Interest expense and amortization of deferred financing charges | 23,590 | 20,066 | 46,233 | 33,561 | ||||
Interest expense on lease liabilities | 855 | 756 | 1,691 | 1,497 | ||||
24,445 | 20,822 | 47,924 | 35,058 | |||||
INCOME BEFORE INCOME TAXES | 53,919 | 31,182 | 92,880 | 168,250 | ||||
INCOME TAX EXPENSE (RECOVERY) | ||||||||
Current | 20,325 | 15,811 | 36,621 | 32,808 | ||||
Deferred | (4,706 | ) | (4,096 | ) | (8,137 | ) | 4,000 | |
15,619 | 11,715 | 28,484 | 36,808 | |||||
NET INCOME | 38,300 | 19,467 | 64,396 | 131,442 | ||||
BASIC EARNINGS PER SHARE | 2.37 | 1.20 | 3.96 | 8.39 | ||||
DILUTED EARNINGS PER SHARE | 2.32 | 1.16 | 3.86 | 8.10 | ||||
Segmented Reporting | ||||||
Three Months Ended | ||||||
($ in 000's except earnings per share) | easyfinancial | easyhome | Corporate | Total | ||
Revenue | ||||||
Interest income | 162,140 | 7,171 | - | 169,311 | ||
Lease revenue | - | 25,948 | - | 25,948 | ||
Commissions earned | 47,897 | 3,446 | - | 51,343 | ||
Charges and fees | 4,077 | 973 | - | 5,050 | ||
214,114 | 37,538 | - | 251,652 | |||
Total operating expenses before depreciation and amortization | 110,158 | 18,327 | 17,675 | 146,160 | ||
Depreciation and amortization | ||||||
Depreciation and amortization of lease assets, property and equipment and intangible assets | 5,626 | 8,485 | 1,227 | 15,338 | ||
Depreciation of right-of-use assets | 2,748 | 1,988 | 235 | 4,971 | ||
8,374 | 10,473 | 1,462 | 20,309 | |||
Segment operating income (loss) | 95,582 | 8,738 | (19,137 | ) | 85,183 | |
Other loss | (6,819 | ) | ||||
Finance costs | ||||||
Interest expense and amortization of deferred financing charges | 23,590 | |||||
Interest expense on lease liabilities | 855 | |||||
24,445 | ||||||
Income before income taxes | 53,919 | |||||
Income taxes | 15,619 | |||||
Net Income | 38,300 | |||||
Diluted earnings per share | 2.32 | |||||
Three Months Ended | ||||||
($ in 000's except earnings per share) | easyfinancial | easyhome | Corporate | Total | ||
Revenue | ||||||
Interest income | 123,036 | 5,447 | - | 128,483 | ||
Lease revenue | - | 28,348 | - | 28,348 | ||
Commissions earned | 39,665 | 2,770 | - | 42,435 | ||
Charges and fees | 2,187 | 903 | - | 3,090 | ||
164,888 | 37,468 | - | 202,356 | |||
Total operating expenses before depreciation and amortization | 83,291 | 17,066 | 26,572 | 126,929 | ||
Depreciation and amortization | ||||||
Depreciation and amortization of lease assets, property and equipment and intangible assets | 4,458 | 9,165 | 1,292 | 14,915 | ||
Depreciation of right-of-use-assets | 2,288 | 1,918 | 216 | 4,422 | ||
6,746 | 11,083 | 1,508 | 19,337 | |||
Segment operating income (loss) | 74,851 | 9,319 | (28,080 | ) | 56,090 | |
Other loss | (4,086 | ) | ||||
Finance costs | ||||||
Interest expense and amortization of deferred financing charges | 20,066 | |||||
Interest expense on lease liabilities | 756 | |||||
20,822 | ||||||
Income before income taxes | 31,182 | |||||
Income taxes | 11,715 | |||||
Net Income | 19,467 | |||||
Diluted earnings per share | 1.16 | |||||
Six Months Ended | ||||||
($ in 000's except earnings per share) | easyfinancial | easyhome | Corporate | Total | ||
Revenue | ||||||
Interest income | 312,289 | 13,846 | - | 326,135 | ||
Lease revenue | - | 52,826 | - | 52,826 | ||
Commissions earned | 88,754 | 6,447 | - | 95,201 | ||
Charges and fees | 7,681 | 1,951 | - | 9,632 | ||
408,724 | 75,070 | - | 483,794 | |||
Total operating expenses before depreciation and amortization | 205,810 | 35,775 | 35,980 | 277,565 | ||
Depreciation and amortization | ||||||
Depreciation and amortization of lease assets, property and equipment and intangible assets | 11,536 | 17,255 | 2,450 | 31,241 | ||
Depreciation of right-of-use assets | 5,471 | 3,931 | 438 | 9,840 | ||
17,007 | 21,186 | 2,888 | 41,081 | |||
Segment operating income (loss) | 185,907 | 18,109 | (38,868 | ) | 165,148 | |
Other loss | (24,344 | ) | ||||
Finance costs | ||||||
Interest expense and amortization of deferred financing charges | 46,233 | |||||
Interest expense on lease liabilities | 1,691 | |||||
47,924 | ||||||
Income before income taxes | 92,880 | |||||
Income taxes | 28,484 | |||||
Net Income | 64,396 | |||||
Diluted earnings per share | 3.86 | |||||
Six Months Ended | ||||||
($ in 000's except earnings per share) | easyfinancial | easyhome | Corporate | Total | ||
Revenue | ||||||
Interest income | 223,540 | 10,437 | - | 233,977 | ||
Lease revenue | - | 56,785 | - | 56,785 | ||
Commissions earned | 70,575 | 5,197 | - | 75,772 | ||
Charges and fees | 4,102 | 1,894 | - | 5,996 | ||
298,217 | 74,313 | - | 372,530 | |||
Total operating expenses before depreciation and amortization | 140,617 | 33,391 | 42,002 | 216,010 | ||
Depreciation and amortization | ||||||
Depreciation and amortization of lease assets, property and equipment and intangible assets | 6,543 | 18,740 | 2,449 | 27,732 | ||
Depreciation of right-of-use-assets | 4,509 | 3,826 | 431 | 8,766 | ||
11,052 | 22,566 | 2,880 | 36,498 | |||
Segment operating income (loss) | 146,548 | 18,356 | (44,882 | ) | 120,022 | |
Other income | 83,286 | |||||
Finance costs | ||||||
Interest expense and amortization of deferred financing charges | 33,561 | |||||
Interest expense on lease liabilities | 1,497 | |||||
35,058 | ||||||
Income before income taxes | 168,250 | |||||
Income taxes | 36,808 | |||||
Net Income | 131,442 | |||||
Diluted earnings per share | 8.10 | |||||
Summary of Financial Results and Key Performance Indicators | ||||||||
($ in 000’s except earnings per share and percentages) | Three Months Ended | Variance | Variance | |||||
$ / bps | % change | |||||||
Summary Financial Results | ||||||||
Revenue | 251,652 | 202,356 | 49,296 | 24.4 | % | |||
Operating expenses before depreciation and amortization2,3 | 146,160 | 126,929 | 19,231 | 15.2 | % | |||
EBITDA1 | 90,478 | 62,498 | 27,980 | 44.8 | % | |||
EBITDA margin1 | 36.0 | % | 30.9 | % | 510 bps | 16.5 | % | |
Depreciation and amortization expense2 | 20,309 | 19,337 | 972 | 5.0 | % | |||
Operating income | 85,183 | 56,090 | 29,093 | 51.9 | % | |||
Operating margin | 33.8 | % | 27.7 | % | 610 bps | 22.0 | % | |
Other loss2,3 | (6,819 | ) | (4,086 | ) | (2,733 | ) | (66.9 | %) |
Finance costs3 | 24,445 | 20,822 | 3,623 | 17.4 | % | |||
Effective income tax rate | 29.0 | % | 37.6 | % | (860 bps) | (22.9 | %) | |
Net income | 38,300 | 19,467 | 18,833 | 96.7 | % | |||
Diluted earnings per share | 2.32 | 1.16 | 1.16 | 100.0 | % | |||
Return on assets | 5.5 | % | 3.8 | % | 170 bps | 44.7 | % | |
Return on equity | 20.2 | % | 12.0 | % | 820 bps | 68.3 | % | |
Return on tangible common equity1 | 33.0 | % | 16.8 | % | 1620 bps | 96.4 | % | |
Adjusted Financial Results1,2,3 | ||||||||
Adjusted operating income | 88,740 | 79,870 | 8,870 | 11.1 | % | |||
Adjusted operating margin | 35.3 | % | 39.5 | % | (420 bps) | (10.6 | %) | |
Adjusted net income | 46,830 | 43,687 | 3,143 | 7.2 | % | |||
Adjusted diluted earnings per share | 2.83 | 2.61 | 0.22 | 8.4 | % | |||
Adjusted return on assets | 6.7 | % | 8.6 | % | (190 bps) | (22.1 | %) | |
Adjusted return on equity | 24.7 | % | 26.9 | % | (220 bps) | (8.2 | %) | |
Adjusted return on tangible common equity | 38.0 | % | 34.8 | % | 320 bps | 9.2 | % | |
Key Performance Indicators | ||||||||
Same store revenue growth (overall)1 | 16.8 | % | 20.2 | % | (340 bps) | (16.8 | %) | |
Same store revenue growth (easyhome)1 | 2.8 | % | 7.9 | % | (510 bps) | (64.6 | %) | |
Segment Financials | ||||||||
easyfinancial revenue | 214,114 | 164,888 | 49,226 | 29.9 | % | |||
easyfinancial operating margin | 44.6 | % | 45.4 | % | (80 bps) | (1.8 | %) | |
easyhome revenue | 37,538 | 37,468 | 70 | 0.2 | % | |||
easyhome operating margin | 23.3 | % | 24.9 | % | (160 bps) | (6.4 | %) | |
Portfolio Indicators | ||||||||
Gross consumer loans receivable | 2,369,843 | 1,795,844 | 573,999 | 32.0 | % | |||
Growth in consumer loans receivable4 | 215,543 | 518,553 | (303,010 | ) | (58.4 | %) | ||
Gross loan originations | 628,189 | 379,082 | 249,107 | 65.7 | % | |||
Total yield on consumer loans (including ancillary products)1 | 39.0 | % | 42.8 | % | (380 bps) | (8.9 | %) | |
Net charge offs as a percentage of average gross consumer loans receivable | 9.3 | % | 8.2 | % | 110 bps | 13.4 | % | |
Free cash flows from operation before net growth in gross consumer loans receivable1 | 56,918 | 48,246 | 8,672 | 18.0 | % | |||
Potential monthly lease revenue1 | 7,634 | 8,322 | (688 | ) | (8.3 | %) | ||
1 EBITDA, adjusted operating income, adjusted net income and free cash flows from operations before net growth in gross consumer loans receivable are non-IFRS measures. EBITDA margin, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on asset, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Same store revenue growth (overall), same store revenue growth (easyhome) and potential monthly leasing revenue are supplementary financial measures. See description in “Key Performance Indicators and Non-IFRS Measures” section in this press release. 2 During the three-month period ended Adjusting items related to the acquisition of LendCare • Integration costs related to consulting costs, employee incentives, representation and warranty insurance cost, and other integration costs related to the acquisition of LendCare. Integration costs amounting to • Amortization of Adjusting item related to other loss • Fair value losses mainly on investments in Affirm and its related TRS amounting to 3 During the three-month period ended Adjusting items related to the acquisition of LendCare • Transaction costs of • Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance cost, and other integration costs related to the acquisition of LendCare reported under Operating expense before depreciation and amortization amounting to • Bad debt expense related to the day one loan loss provision on the acquired loan portfolio from the LendCare amounting to Adjusting item related to other income • Fair value loss mainly on investments in Affirm and its related TRS amounting to 4 Growth in consumer loans receivable for the three-month period ended | ||||||||
($ in 000’s except earnings per share and percentages) | Six Months Ended | Variance | Variance | |||||
$ / bps | % change | |||||||
Summary Financial Results | ||||||||
Revenue | 483,794 | 372,530 | 111,264 | 29.9 | % | |||
Operating expenses before depreciation and amortization2 | 277,565 | 216,010 | 61,555 | 28.5 | % | |||
EBITDA1 | 165,225 | 221,720 | (56,495 | ) | (25.5 | %) | ||
EBITDA margin1 | 34.2 | % | 59.5 | % | (2,530 bps) | -42.5 | % | |
Depreciation and amortization expense2 | 41,081 | 36,498 | 4,583 | 12.6 | % | |||
Operating income | 165,148 | 120,022 | 45,126 | 37.6 | % | |||
Operating margin | 34.1 | % | 32.2 | % | 190 bps | 5.9 | % | |
Other income2,3 | (24,344 | ) | 83,286 | (107,630 | ) | (129.2 | %) | |
Finance costs3 | 47,924 | 35,058 | 12,866 | 36.7 | % | |||
Effective income tax rate | 30.7 | % | 21.9 | % | 880 bps | 40.2 | % | |
Net income | 64,396 | 131,442 | (67,046 | ) | (51.0 | %) | ||
Diluted earnings per share | 3.86 | 8.10 | (4.24 | ) | (52.3 | %) | ||
Return on assets | 4.7 | % | 14.2 | % | (950 bps) | (66.9 | %) | |
Return on equity | 16.7 | % | 45.3 | % | (2,860 bps) | (63.1 | %) | |
Return on tangible common equity1 | 27.6 | % | 56.0 | % | (2,840 bps) | (50.7 | %) | |
Adjusted Financial Results1,2,3 | ||||||||
Adjusted operating income | 174,801 | 144,481 | 30,320 | 21.0 | % | |||
Adjusted operating margin | 36.1 | % | 38.8 | % | (270 bps) | (7.0 | %) | |
Adjusted net income | 92,609 | 80,366 | 12,243 | 15.2 | % | |||
Adjusted diluted earnings per share | 5.55 | 4.95 | 0.60 | 12.1 | % | |||
Adjusted return on assets | 6.8 | % | 8.7 | % | (190 bps) | (21.8 | %) | |
Adjusted return on equity | 24.1 | % | 27.7 | % | (360 bps) | (13.0 | %) | |
Adjusted return on tangible common equity | 36.9 | % | 33.8 | % | 310 bps | 9.2 | % | |
Key Performance Indicators | ||||||||
Same store revenue growth (overall)1 | 15.1 | % | 10.4 | % | 470 bps | 45.2 | % | |
Same store revenue growth (easyhome)1 | 2.8 | % | 6.4 | % | (360 bps) | (56.3 | %) | |
Segment Financials | ||||||||
easyfinancial revenue | 408,724 | 298,217 | 110,507 | 37.1 | % | |||
easyfinancial operating margin | 45.5 | % | 49.1 | % | (360 bps) | (7.3 | %) | |
easyhome revenue | 75,070 | 74,313 | 757 | 1.0 | % | |||
easyhome operating margin | 24.1 | % | 24.7 | % | (60 bps) | (2.4 | %) | |
Portfolio Indicators | ||||||||
Gross consumer loans receivable | 2,369,843 | 1,795,844 | 573,999 | 32.0 | % | |||
Growth in consumer loans receivable4 | 339,504 | 549,004 | (209,500 | ) | (38.2 | %) | ||
Gross loan originations | 1,104,732 | 651,433 | 453,299 | 69.6 | % | |||
Total yield on consumer loans (including ancillary products)1 | 38.9 | % | 43.4 | % | (450 bps) | (10.4 | %) | |
Net charge-offs as a percentage of average gross consumer loans receivable | 9.1 | % | 8.6 | % | 50 bps | 5.8 | % | |
Free cash flows from operation before net growth in gross consumer loans receivable1 | 96,846 | 111,412 | (14,566 | ) | (13.1 | %) | ||
Potential monthly lease revenue1 | 7,634 | 8,322 | (688 | ) | (8.3 | %) | ||
1 EBITDA, adjusted operating income, adjusted net income and free cash flows from operations before net growth in gross consumer loans receivable are non-IFRS measures. EBITDA margin, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on asset, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Same store revenue growth (overall), same store revenue growth (easyhome) and potential monthly lease revenue are supplementary financial measures. Non-IFRS measures, non-IFRS ratios and supplemental financial measures are not determined in accordance with IFRS, do not have standardized meanings and may not be comparable to similar financial measures presented by other companies. See description in “Key Performance Indicators and Non-IFRS Measures” section in this press release. 2 During the six months ended Adjusting items related to corporate development costs • Corporate development costs of Adjusting items relating to the acquisition of LendCare • Integration costs related to consulting costs, employee incentives, representation and warranty insurance cost, and other integration costs related to the acquisition of LendCare. Integration costs amounting to • Amortization of Adjusting item related to other income • Fair value loss mainly on investments in Affirm and its related TRS amounting to 3 During the six months ended • Transaction costs of • Bad debt expense related to the day one loan loss provision on the acquired loan portfolio from LendCare amounting to 4 Growth in consumer loans receivable for the six-month period ended | ||||||||
Non-IFRS Measures and Other Financial Measures
The Company uses a number of financial measures to assess its performance. Some of these measures are not calculated in accordance with International Financial Reporting Standards (IFRS) as issued by
Adjusted Net Income and Adjusted Diluted Earnings Per Share
Adjusted net income is a non-IFRS measure, while adjusted diluted earnings per share is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | Six Months Ended | |||||||
($in 000’s except earnings per share) | 2022 | 2021 | 2022 | 2021 | ||||
Net income as stated | 38,300 | 19,467 | 64,396 | 131,442 | ||||
Impact of adjusting items | ||||||||
Operating expenses before depreciation and amortization | ||||||||
Corporate development costs1 | - | - | 2,314 | - | ||||
Integration costs3 | 282 | 648 | 789 | 648 | ||||
Transaction costs2 | - | 6,679 | - | 7,359 | ||||
Day one loan loss provision on the acquired loans 4 | - | 14,252 | - | 14,252 | ||||
Amortization of intangible assets | ||||||||
Amortization of acquired intangible assets 5 | 3,275 | 2,200 | 6,550 | 2,200 | ||||
Other loss (income)6 | 6,819 | 4,086 | 24,344 | (83,286 | ) | |||
Finance costs | ||||||||
Transaction costs2 | - | 1,726 | - | 1,726 | ||||
Total pre-tax impact of adjusting items | 10,376 | 29,591 | 33,997 | (57,101 | ) | |||
Income tax impact of above adjusting items | (1,846 | ) | (5,371 | ) | (5,784 | ) | 6,025 | |
After-tax impact of adjusting items | 8,530 | 24,220 | 28,213 | (51,076 | ) | |||
Adjusted net income | 46,830 | 43,687 | 92,609 | 80,366 | ||||
Weighted average number of diluted shares outstanding | 16,522 | 16,768 | 16,677 | 16,230 | ||||
Diluted earnings per share as stated | 2.32 | 1.16 | 3.86 | 8.10 | ||||
Per share impact of adjusting items | 0.51 | 1.45 | 1.69 | (3.15 | ) | |||
Adjusted diluted earnings per share | 2.83 | 2.61 | 5.55 | 4.95 | ||||
Adjusting item related to corporate development costs
1 Corporate development costs are related to the exploration of a strategic acquisition opportunity, which the Company elected to not undertake, including advisory, consulting and legal costs reported under Operating expenses before depreciation and amortization.
Adjusting items related to the LendCare Acquisition
2 Transaction costs included advisory and consulting costs, legal costs, and other direct transaction costs related to the acquisition of LendCare reported under Operating expenses before depreciation and amortization and loan commitment fees related to the acquisition of LendCare reported under Finance costs.
3 Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance cost, other integration costs related to the acquisition of LendCare. Integration costs were reported under Operating expenses before depreciation and amortization.
4 Bad debt expense related to the day one loan loss provision on the acquired loan portfolio from LendCare.
5 Amortization of
Adjusting item related to other income (loss)
6 For the three and six-month periods ended
Adjusted Operating Income and Adjusted Operating Margin
Adjusted operating income is a non-IFRS measure, while adjusted operating margin is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
easyfinancial | ||||||||
Operating income | 95,582 | 95,582 | 74,851 | 74,851 | ||||
Divided by revenue | 214,114 | 214,114 | 164,888 | 164,888 | ||||
easyfinancial operating margin | 44.6 | % | 44.6 | % | 45.4 | % | 45.4 | % |
easyhome | ||||||||
Operating income | 8,738 | 8,738 | 9,319 | 9,319 | ||||
Divided by revenue | 37,538 | 37,538 | 37,468 | 37,468 | ||||
easyhome operating margin | 23.3 | % | 23.3 | % | 24.9 | % | 24.9 | % |
Total | ||||||||
Operating income | 85,183 | 85,183 | 56,090 | 56,090 | ||||
Operating expenses before depreciation and amortization1 | ||||||||
Integration costs | - | 282 | - | 648 | ||||
Transaction costs | - | - | - | 6,679 | ||||
Day one loan loss provision on the acquired loans | - | - | - | 14,252 | ||||
Amortization of intangible assets1 | ||||||||
Amortization of acquired intangible assets | - | 3,275 | - | 2,200 | ||||
Adjusted operating income | 85,183 | 88,740 | 56,090 | 79,869 | ||||
Divided by revenue | 251,652 | 251,652 | 202,356 | 202,356 | ||||
Total operating margin | 33.8 | % | 35.3 | % | 27.7 | % | 39.5 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
Six Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
easyfinancial | ||||||||
Operating income | 185,907 | 185,907 | 146,548 | 146,548 | ||||
Divided by revenue | 408,724 | 408,724 | 298,217 | 298,217 | ||||
easyfinancial operating margin | 45.5 | % | 45.5 | % | 49.1 | % | 49.1 | % |
easyhome | ||||||||
Operating income | 18,109 | 18,109 | 18,356 | 18,356 | ||||
Divided by revenue | 75,070 | 75,070 | 74,313 | 74,313 | ||||
easyhome operating margin | 24.1 | % | 24.1 | % | 24.7 | % | 24.7 | % |
Total | ||||||||
Operating income | 165,148 | 165,148 | 120,022 | 120,022 | ||||
Operating expenses before depreciation and amortization1 | ||||||||
Corporate development costs | - | 2,314 | - | - | ||||
Integration costs | - | 789 | - | 648 | ||||
Transaction costs | - | - | - | 7,359 | ||||
Day one loan loss provision on the acquired loans | - | - | - | 14,252 | ||||
Amortization of intangible assets1 | ||||||||
Amortization of acquired intangible assets | - | 6,550 | - | 2,200 | ||||
Adjusted operating income | 165,148 | 174,801 | 120,022 | 144,481 | ||||
Divided by revenue | 483,794 | 483,794 | 372,530 | 372,530 | ||||
Total operating margin | 34.1 | % | 36.1 | % | 32.2 | % | 38.8 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and EBITDA Margin
EBITDA is a non-IFRS measure, while EBITDA margin is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | Six Months Ended | |||||||
($in 000’s except percentages) | 2022 | 2021 | 2022 | 2021 | ||||
Net income as stated | 38,300 | 19,467 | 64,396 | 131,442 | ||||
Finance cost | 24,445 | 20,822 | 47,924 | 35,058 | ||||
Income tax expense | 15,619 | 11,715 | 28,484 | 36,808 | ||||
Depreciation and amortization | 20,309 | 19,337 | 41,081 | 36,498 | ||||
Depreciation of lease assets | (8,195 | ) | (8,843 | ) | (16,660 | ) | (18,086 | ) |
EBITDA | 90,478 | 62,498 | 165,225 | 221,720 | ||||
Divided by revenue | 251,652 | 202,356 | 483,794 | 372,530 | ||||
EBITDA margin | 36.0 | % | 30.9 | % | 34.2 | % | 59.5 | % |
Free Cash Flow from Operations before Net Growth in Gross Consumer Loans Receivable
Free cash flow from operations before net growth in gross consumer loans receivable is a non-IFRS measure. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | Six Months Ended | |||||||
2022 | 2021 | 2022 | 2021 | |||||
Cash (used in) provided by operating activities | (158,625 | ) | (25,787 | ) | (242,658 | ) | 6,928 | |
Net growth in gross consumer loans receivable during the period1 | 215,543 | 74,033 | 339,504 | 104,484 | ||||
Free cash flows from operations before net growth in gross consumer loans receivable | 56,918 | 48,246 | 96,846 | 111,412 | ||||
1 Excludes
Adjusted Return on Assets
Adjusted return on assets is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
Net income as stated | 38,300 | 38,300 | 19,467 | 19,467 | ||||
After-tax impact of adjusting items1 | - | 8,530 | - | 24,220 | ||||
Adjusted net income | 38,300 | 46,830 | 19,467 | 43,687 | ||||
Multiplied by number of periods in a year | X 4 | X 4 | X 4 | X 4 | ||||
Divided by average total assets for the period | 2,792,034 | 2,792,034 | 2,031,583 | 2,031,583 | ||||
Return on assets | 5.5 | % | 6.7 | % | 3.8 | % | 8.6 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
Six Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
Net income as stated | 64,396 | 64,396 | 131,442 | 131,442 | ||||
After-tax impact of adjusting items1 | - | 28,213 | - | (51,076 | ) | |||
Adjusted net income | 63,396 | 92,609 | 131,442 | 80,366 | ||||
Multiplied by number of periods in a year | X 4/2 | X 4/2 | X 4/2 | X 4/2 | ||||
Divided by average total assets for the period | 2,726,740 | 2,726,740 | 1,855,027 | 1,855,027 | ||||
Return on assets | 4.7 | % | 6.8 | % | 14.2 | % | 8.7 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
Adjusted Return on Equity
Adjusted return on equity is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
Net income as stated | 38,300 | 38,300 | 19,467 | 19,467 | ||||
After-tax impact of adjusting items1 | - | 8,530 | - | 24,220 | ||||
Adjusted net income | 38,300 | 46,830 | 19,467 | 43,687 | ||||
Multiplied by number of periods in a year | X 4 | X 4 | X 4 | X 4 | ||||
Divided by average shareholders’ equity for the period | 759,896 | 759,896 | 649,529 | 649,529 | ||||
Return on equity | 20.2 | % | 24.7 | % | 12.0 | % | 26.9 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
Six Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
Net income as stated | 64,396 | 64,396 | 131,442 | 131,442 | ||||
After-tax impact of adjusting items1 | - | 28,213 | - | (51,076 | ) | |||
Adjusted net income | 64,396 | 92,609 | 131,442 | 80,366 | ||||
Multiplied by number of periods in a year | X 4/2 | X 4/2 | X 4/2 | X 4/2 | ||||
Divided by average shareholders’ equity for the period | 769,902 | 769,902 | 580,856 | 580,856 | ||||
Return on equity | 16.7 | % | 24.1 | % | 45.3 | % | 27.7 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
Return on Tangible Common Equity
Reported and adjusted return on tangible common equity are non-IFRS ratios. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
Net income as stated | 38,300 | 38,300 | 19,467 | 19,467 | ||||
Amortization of acquired intangible assets | 3,275 | 3,275 | 2,200 | 2,200 | ||||
Income tax impact of the above item | (868 | ) | (868 | ) | (583 | ) | (583 | ) |
Net income before amortization of acquired intangible assets, net of income tax | 40,707 | 40,707 | 21,084 | 21,084 | ||||
Impact of adjusting items1 | ||||||||
Operating expenses before depreciation and amortization | ||||||||
Integration costs | - | 282 | - | 648 | ||||
Transaction costs | - | - | - | 6,679 | ||||
Day one loan loss provision on the acquired loans | - | - | - | 14,252 | ||||
Other loss | - | 6,819 | - | 4,086 | ||||
Finance costs | ||||||||
Transaction costs | - | - | - | 1,726 | ||||
Total pre-tax impact of adjusting items | - | 7,101 | - | 27,391 | ||||
Income tax impact of above adjusting items | - | (978 | ) | - | (4,789 | ) | ||
After-tax impact of adjusting items | - | 6,123 | - | 22,602 | ||||
Adjusted net income | 40,707 | 46,830 | 21,084 | 43,686 | ||||
Multiplied by number of periods in a year | X 4 | X 4 | X 4 | X 4 | ||||
Average shareholders’ equity | 759,896 | 759,896 | 649,529 | 649,529 | ||||
Average goodwill | (180,923 | ) | (180,923 | ) | (100,573 | ) | (100,573 | ) |
Average acquired intangible assets2 | (117,354 | ) | (117,354 | ) | (64,408 | ) | (64,408 | ) |
Average related deferred tax liabilities | 31,099 | 31,099 | 17,068 | 17,068 | ||||
Divided by average tangible common equity | 492,718 | 492,718 | 501,616 | 501,616 | ||||
Return on tangible common equity | 33.0 | % | 38.0 | % | 16.8 | % | 34.8 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
2 Excludes intangible assets relating to software.
Six Months Ended | ||||||||
($in 000’s except percentages) | 2022 | 2022 (adjusted) | 2021 | 2021 (adjusted) | ||||
Net income as stated | 64,396 | 64,396 | 131,442 | 131,442 | ||||
Amortization of acquired intangible assets | 6,550 | 6,550 | 2,200 | 2,200 | ||||
Income tax impact of the above item | (1,736 | ) | (1,736 | ) | (583 | ) | (583 | ) |
Net income before amortization of acquired intangible assets, net of income tax | 69,210 | 69,210 | 133,059 | 133,059 | ||||
Impact of adjusting items1 | ||||||||
Operating expenses before depreciation and amortization | ||||||||
Corporate development costs | - | 2,314 | - | - | ||||
Integration costs | - | 789 | - | 648 | ||||
Transaction costs | - | - | - | 7,359 | ||||
Day one loan loss provision on the acquired loans | - | - | - | 14,252 | ||||
Other loss (income) | - | 24,344 | - | (83,286 | ) | |||
Finance costs | ||||||||
Transaction costs | - | - | - | 1,726 | ||||
Total pre-tax impact of adjusting items | - | 27,447 | - | (59,301 | ) | |||
Income tax impact of above adjusting items | - | (4,048 | ) | - | 6,608 | |||
After-tax impact of adjusting items | - | 23,399 | - | (52,693 | ) | |||
Adjusted net income | 69,210 | 92,609 | 133,059 | 80,366 | ||||
Multiplied by number of periods in a year | X 4/2 | X 4/2 | X 4/2 | X 4/2 | ||||
Average shareholders’ equity | 769,902 | 769,902 | 580,856 | 580,856 | ||||
Average goodwill | (180,923 | ) | (180,923 | ) | (74,152 | ) | (74,152 | ) |
Average acquired intangible assets2 | (118,992 | ) | (118,992 | ) | (42,939 | ) | (42,939 | ) |
Average related deferred tax liabilities | 31,533 | 31,533 | 11,380 | 11,380 | ||||
Divided by average tangible common equity | 501,520 | 501,520 | 475,145 | 475,145 | ||||
Return on tangible common equity | 27.6 | % | 36.9 | % | 56.0 | % | 33.8 | % |
1 For explanation of adjusting items, refer to the “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section above.
2 Excludes intangible assets relating to software.
easyhome Financial Revenue
easyhome financial revenue is a non-IFRS measure. It’s calculated as total company revenue less easyfinancial revenue and leasing revenue. The Company believes that easyhome financial revenue is an important measure of the performance of the easyhome segment. Items used to calculate easyhome financial revenue for the three-month periods ended
($ in 000’s) | Three Months Ended | |||
2022 | 2021 | |||
Total company revenue | 251,652 | 202,356 | ||
Less: easyfinancial revenue | (214,114 | ) | (164,888 | ) |
Less: leasing revenue | (27,641 | ) | (30,123 | ) |
easyhome financial revenue | 9,897 | 7,345 | ||
Total Yield on Consumer Loans as a Percentage of Average Gross Consumer Loans Receivable
Total yield on consumer loans as a percentage of average gross consumer loans receivable is a non-IFRS ratio. See description in section “Portfolio Analysis” on page 26 of the Company’s MD&A for the three and six-month periods ended
Three Months Ended | Six Months Ended | |||||||
($in 000’s except percentages) | 2022 | 2021 | 2022 | 2021 | ||||
251,652 | 202,356 | 483,794 | 372,530 | |||||
Less: Leasing revenue | (27,641 | ) | (30,123 | ) | (56,207 | ) | (60,366 | ) |
Financial revenue | 224,011 | 172,233 | 427,587 | 312,164 | ||||
Multiplied by number of periods in a year | X 4 | X 4 | X 4/2 | X 4/2 | ||||
Divided by average gross consumer loans receivable | 2,295,232 | 1,611,479 | 2,198,495 | 1,438,099 | ||||
Total yield on consumer loans as a percentage of average gross consumer loans receivable (annualized) | 39.0 | % | 42.8 | % | 38.9 | % | 43.4 | % |
Net Debt to Net Capitalization
Net debt to net capitalization is a capital management measure. Refer to “Financial Condition” section on page 47 of the Company’s MD&A for the three and six-month periods ended
Average Loan Book Per Branch
Average loan book per branch is a supplementary financial measure. It is calculated as gross consumer loans receivable held by easyfinancial branch locations divided by number of total easyfinancial branch locations.
Weighted Average Interest Rate
Weighted average interest rate is a supplementary financial measure. It Is calculated as the sum of individual loan balance multiplied by interest rate divided by gross consumer loans receivable.
Same Store Revenue Growth
Same store revenue growth (easyhome) and same store revenue growth (overall) are supplementary financial measures. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 37 of the Company’s MD&A for the three and six-month periods ended
Potential Monthly Leasing Revenue
Potential monthly leasing revenue is a supplementary financial measure. Refer to “Portfolio Analysis” section on page 26 of the Company’s MD&A for the three and six-month periods ended
Source: goeasy Ltd.
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