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 Targets2019 Actual
Gross Loan Receivable Portfolio at Year End$1.1B - $1.2B$1.11B
easyfinancial Total Revenue Yield49% - 51%50.1%
New easyfinancial Locations10 - 2015
Net Charge-offs as a Percentage of Average Gross Consumer Loans Receivable11.5% - 13.5%13.3%
easyfinancial Operating Margin40% - 42%40.2%
Total Revenue Growth20% - 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 Forecasts2021 Forecasts2022 Forecasts
Gross Consumer Loan Receivable Portfolio at Year End$1.3B - $1.4B$1.5B - $1.7B$1.8B - $2B
easyfinancial Total Revenue Yield46.5% - 48.5%43% - 45%42% - 44%
New easyfinancial locations to be opened during the year20 - 2520 - 2515 - 20
Net Charge-offs as a Percentage of Average Gross Consumer Loans Receivable11.5% - 13.5%11% - 13%11% - 13%
easyfinancial Operating Margin42% - 44%43% - 45%43% - 45%
Total Revenue Growth14 - 16%12% - 14%10% - 12%
Return on Equity26%+25%+23%+
Net Debt to Total Capitalization66% - 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,
  20192018
     
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 EndedYear Ended
  December 31,December 31,
December 31,December 31,
  20192018
20192018
       
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
CorporateTotal
          
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
CorporateTotal
          
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
CorporateTotal
          
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
CorporateTotal
          
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 EndedVarianceVariance
December 31, 2019December 31, 2018$ / bps% change
Summary Financial Results    
Revenue165,536 138,160 27,376 19.8%
Operating expenses before depreciation and amortization102,790 90,369 12,421 13.7%
EBITDA53,395 37,847 15,548 41.1%
EBITDA margin32.3%27.4%490 bps 17.9%
Depreciation and amortization expense16,263 12,685 3,578 28.2%
Operating income46,483 35,106 11,377 32.4%
Operating margin28.1%25.4%270 bps 10.6%
Interest expense and amortization of deferred finance charges and interest expense on lease liabilities15,400 12,811 2,589 20.2%
Refinancing costs121,723 - 21,723 100.0%
Effective income tax rate28.6%28.7%(10 bps) (0.3%)
Net income6,683 15,887 (9,204)(57.9%)
Diluted earnings per share0.46 1.02 (0.56)(54.9%)
Return on equity8.0%23.0%(1,500 bps) (65.2%)
      
Adjusted (Normalized) Financial Results1     
Adjusted net income22,649 15,887 6,762 42.6%
Adjusted diluted earnings per share1.45 1.02 0.43 42.2%
Adjusted return on equity27.0%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 revenue130,005 103,286 26,719 25.9%
easyfinancial operating margin41.0%40.0%100 bps 2.5%
easyhome revenue35,531 34,874 657 1.9%
easyhome operating margin18.3%14.8%350 bps 23.6%
     
Portfolio Indicators    
Gross consumer loans receivable1,110,633 833,779 276,854 33.2%
Growth in consumer loans receivable75,037 84,198 (9,161)(10.9%)
Gross loan originations313,514 264,996 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 receivable13.3%13.1%20 bps 1.5%
Potential monthly lease revenue8,643 9,141 (498)(5.4%)
     
     
     
($ in 000’s except earnings per share and percentages)Year EndedVarianceVariance
December 31, 2019December 31, 2018$ / bps% change
Summary Financial Results  
Revenue609,383 506,191 103,192 20.4%
Operating expenses before depreciation and amortization376,226 334,471 41,755 12.5%
EBITDA195,755 131,632 64,123 48.7%
EBITDA margin32.1%26.0%610 bps 23.5%
Depreciation and amortization expense64,364 52,003 12,361 23.8%
Operating income168,793 119,717 49,076 41.0%
Operating margin27.7%23.7%400 bps 16.9%
Interest expense and amortization of deferred finance charges and interest expense on lease liabilities57,558 45,800 11,758 25.7%
Refinancing costs121,723 - 21,723 100.0%
Effective income tax rate28.1%28.1%- - 
Net income64,349 53,124 11,225 21.1%
Diluted earnings per share4.17 3.56 0.61 17.1%
Return on equity20.2%21.8%(160 bps) (7.3%)
      
Adjusted (Normalized) Financial Results1     
Adjusted net income80,315 53,124 27,191 51.2%
Adjusted diluted earnings per share5.17 3.56 1.61 45.2%
Adjusted return on equity25.3%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 revenue470,208 368,325 101,883 27.7%
easyfinancial operating margin40.2%38.5%170 bps 4.4%
easyhome revenue139,175 137,866 1,309 0.9%
easyhome operating margin17.8%15.6%220 bps 14.1%
      
Portfolio Indicators     
Gross consumer loans receivable1,110,633 833,779 276,854 33.2%
Growth in consumer loans receivable276,854 307,233 (30,379)(9.9%)
Gross loan originations1,095,375 922,550 172,825 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 receivable13.3%12.7%60 bps 4.7%
Potential monthly lease revenue8,643 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.