Q3 2021 Consolidated Financial Statements

Interim Condensed Consolidated Financial Statements

goeasy Ltd.

(Unaudited) September 30, 2021

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Unaudited)

(expressed in thousands of Canadian dollars)

	As At	As At
	September 30,	December 31,
	2021	2020
ASSETS	124,685
Cash (note 5)	93,053
Amounts receivable	18,057	9,779
Prepaid expenses	8,668	13,005
Consumer loans receivable, net (note 6)	1,780,073	1,152,378
Investments (note 7)	64,178	56,040
Lease assets	44,482	49,384
Property and equipment, net	34,397	31,322
Deferred tax assets, net (note 16)	‐	4,066
Derivative financial assets (note 8)	422	‐
Intangible assets, net	161,189	25,244
Right‐of‐use assets, net	54,663	46,335
Goodwill	180,923	21,310
TOTAL ASSETS	2,471,737	1,501,916
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities	14,339
Revolving credit facility (note 10)	198,339
Accounts payable and accrued liabilities	61,433	46,065
Income taxes payable	22,860	13,897
Dividends payable (note 13)	10,888	6,661
Unearned revenue	9,329	10,622
Accrued interest	22,968	2,598
Deferred tax liabilities, net (note 16)	38,983	‐
Derivative financial liabilities (notes 7 and 12)	19,076	36,910
Lease liabilities	62,915	53,902
Revolving securitization warehouse facility (note 8)	122,648	‐
Secured borrowings (note 9)	191,574	‐
Notes payable (note 12)	1,087,397	689,410
TOTAL LIABILITIES	1,664,410	1,058,404
Shareholders' equity	369,475
Share capital (note 13)	181,753
Contributed surplus	20,518	19,732
Accumulated other comprehensive income (loss)	6,666	(5,280)
Retained earnings	410,668	247,307
TOTAL SHAREHOLDERS' EQUITY	807,327	443,512
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	2,471,737	1,501,916

See accompanying notes to the interim condensed consolidated financial statements.

On behalf of the Board:

David Ingram	Karen Basian
Director	Director

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(expressed in thousands of Canadian dollars except earnings per share)

	Three Months Ended	Nine Months Ended
	September 30,	September 30,	September 30,	September 30,
	2021	2020	2021	2020
REVENUE	146,132	101,833	380,109	302,799
Interest income
Lease revenue	27,923	28,416	84,708	84,232
Commissions earned	42,052	28,540	117,824	83,166
Charges and fees	3,655	3,035	9,651	9,506
	219,762	161,824	592,292	479,703
EXPENSES BEFORE DEPRECIATION AND AMORTIZATION	41,776	36,457	120,986	102,283
Salaries and benefits
Stock‐based compensation (note 14)	2,116	1,718	6,103	5,587
Advertising and promotion	7,751	7,377	20,815	18,195
Bad debts	45,297	27,221	123,444	100,505
Occupancy	5,995	5,639	17,272	17,126
Technology costs	4,900	3,817	12,721	10,499
Other expenses (note 4)	9,852	6,624	32,356	22,378
	117,687	88,853	333,697	276,573
DEPRECIATION AND AMORTIZATION	8,601	8,701	26,687	26,790
Depreciation of lease assets
Depreciation of right‐of‐use assets	4,650	4,053	13,416	11,994
Amortization of intangible assets	5,405	1,820	11,285	4,699
Depreciation of property and equipment	2,067	1,451	5,833	4,488
	20,723	16,025	57,221	47,971
TOTAL OPERATING EXPENSES	138,410	104,878	390,918	324,544
OPERATING INCOME	81,352	56,946	201,374	155,159
OTHER INCOME (NOTE 7)	23,219	1,700	106,505	5,700
FINANCE COSTS	20,889	12,543	54,450	39,624
Interest expenses and amortization of deferred financing charges (note 15)
Interest expense on lease liabilities	797	690	2,294	2,025
	21,686	13,233	56,744	41,649
INCOME BEFORE INCOME TAXES	82,885	45,413	251,135	119,210
INCOME TAX EXPENSE (RECOVERY) (NOTE 16)	25,769	9,990	58,577	23,288
Current
Deferred	(6,424)	2,350	(2,424)	8,328
	19,345	12,340	56,153	31,616
NET INCOME	63,540	33,073	194,982	87,594
BASIC EARNINGS PER SHARE (NOTE 17)	3.79	2.20	12.15	5.95
DILUTED EARNINGS PER SHARE (NOTE 17)	3.66	2.09	11.75	5.64

See accompanying notes to the interim condensed consolidated financial statements.

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(expressed in thousands of Canadian dollars)

	Three Months Ended	Nine Months Ended
	September 30,	September 30,	September 30,	September 30,
	2021	2020	2021	2020
Net income	63,540	33,073	194,982	87,594
Other comprehensive income (loss) to be reclassified to the consolidated statement of income in subsequent periods	(3)	2	(2)	‐
Change in foreign currency translation reserve
Change in fair value of cash flow hedge, net of taxes	3,202	(3,897)	10,354	4,530
Change in costs of hedging, net of taxes	710	(517)	1,594	(3,203)
	3,909	(4,412)	11,946	1,327
Comprehensive income	67,449	28,661	206,928	88,921

See accompanying notes to the interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)

(expressed in thousands of Canadian dollars)

					Accumulated
					Other	Total
	Share	Contributed	Total	Retained	Comprehensive	Shareholders'
	Capital	Surplus	Capital	Earnings	Income (Loss)	Equity
Balance, December 31, 2020	181,753	19,732	201,485	247,307	(5,280)	443,512
Common shares issued	187,722	(5,317)	182,405	‐	‐	182,405
Stock‐based compensation (note 14)	‐	6,103	6,103	‐	‐	6,103
Comprehensive income	‐	‐	‐	194,982	11,946	206,928
Dividends (note 13)	‐	‐	‐	(31,621)	‐	(31,621)
Balance, September 30, 2021	369,475	20,518	389,993	410,668	6,666	807,327
Balance, December 31, 2019	141,956	20,296	162,252	171,084	(915)	332,421
Common shares issued	8,817	(7,307)	1,510	‐	‐	1,510
Stock‐based compensation (note 14)	‐	5,587	5,587	‐	‐	5,587
Conversion of convertible debentures	38,978	1,168	40,146	‐	‐	40,146
Settlement of deferred share units	‐	(2,000)	(2,000)	‐	‐	(2,000)
Shares purchased for cancellation (note 13)	(7,227)	‐	(7,227)	(29,693)	‐	(36,920)
Comprehensive income	‐	‐	‐	87,594	1,327	88,921
Dividends (note 13)	‐	‐	‐	(19,442)	‐	(19,442)
Balance, September 30, 2020	182,524	17,744	200,268	209,543	412	410,223

See accompanying notes to the interim condensed consolidated financial statements.

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(expressed in thousands of Canadian dollars)

	Three Months Ended	Nine Months Ended
	September 30,	September 30,	September 30,	September 30,
	2021	2020	2021	2020
OPERATING ACTIVITIES	63,540		194,982
Net income	33,073	87,594
Add (deduct) items not affecting cash	45,297		123,444
Bad debts expense	27,221	100,505
Depreciation of lease assets	8,601	8,701	26,687	26,790
Depreciation of right‐of‐use assets	4,650	4,053	13,416	11,994
Amortization of intangible assets	5,405	1,820	11,285	4,699
Stock‐based compensation (note 14)	2,116	1,718	6,103	5,587
Depreciation of property and equipment	2,067	1,451	5,833	4,488
Amortization of deferred financing charges	1,588	942	4,003	3,286
Write‐off of unamortized deferred financing cost	‐	118	‐	118
Deferred income tax expense (recovery)	(6,424)	2,350	(2,424)	8,328
Other income (note 7)	(23,219)	(1,700)	(106,505)	(5,700)
	103,621	79,747	276,824	247,689
Net change in other operating assets and liabilities (note 18)	35,126	16,906	46,867	35,179
Net issuance of consumer loans receivable	(143,219)	(70,882)	(306,619)	(160,951)
Purchase of lease assets	(7,160)	(10,512)	(21,776)	(24,446)
Cash provided by (used in) operating activities	(11,632)	15,259	(4,704)	97,471
INVESTING ACTIVITIES	87,863		109,199
Proceeds on sale of investment	‐	‐
Purchase of property and equipment	(1,997)	(2,488)	(4,757)	(10,386)
Purchase of intangible assets	(4,215)	(3,421)	(13,044)	(9,628)
Purchase of investment	‐	‐	(11,343)	‐
Cash used in the acquisition, net of cash acquired	1,309	‐	(282,215)	‐
Cash provided by (used in) investing activities	82,960	(5,909)	(202,160)	(20,014)
FINANCING ACTIVITIES	‐		391,516
Issuance of notes payable, net of financing charges (note 12)	‐	‐
Advances from revolving securitization warehouse facility, net of financing charges	(1,278)	‐	202,671	‐
Issuance of common shares, net of issuance costs (note 13)	(250)	206	169,460	1,510
Advances from revolving credit facilities	29,902	15,000	74,887	85,000
Advances from secured borrowings	27,799	‐	67,113	‐
Lease incentive received	475	3	1,195	194
Payment of cash‐settled restricted share units	‐	‐	(1,159)	‐
Payment of lease liability	(4,817)	(4,229)	(13,926)	(12,501)
Payment of common share dividends (note 13)	(10,694)	(6,282)	(26,897)	(17,177)
Payment of loan from secured borrowings	(22,972)	‐	(42,797)	‐
Payment of advances from revolving securitization warehouse facility	(75,000)	‐	(80,000)	‐
Payment of notes payable	‐	‐	(243,567)	‐
Payment of advances from revolving credit facilities	(30,000)	(20,000)	(260,000)	(100,000)
Settlement of deferred share units	‐	‐	‐	(2,000)
Redemption of convertible debentures	‐	(2,427)	‐	(2,427)
Purchase of common shares for cancellation	‐	(6,909)	‐	(36,920)
Cash provided by (used in) financing activities	(86,835)	(24,638)	238,496	(84,321)
Net increase (decrease) in cash during the period	(15,507)	(15,288)	31,632	(6,864)
Cash, beginning of period	140,192	54,765	93,053	46,341
Cash, end of period	124,685	39,477	124,685	39,477

See accompanying notes to the interim condensed consolidated financial statements.