MISSISSAUGA, Ontario, March 23, 2020 (GLOBE NEWSWIRE) -- goeasy Ltd. (TSX: GSY), (“goeasy” or the “Company”), a leading full-service provider of goods and alternative financial services, has today shared its response plan to the COVID-19 (coronavirus) outbreak and provided an update to shareholders in response to the most frequently asked questions received in recent weeks, along with an update on its Normal Course Issuer Bid (the “NCIB”) and recent insider share purchases.
Response to COVID-19
As the Company continues to monitor and assess the global impact of COVID-19, it has activated a series of proactive and precautionary measures to protect the health and safety of its employees, customers and communities. These measures, which will continue to adapt and evolve, currently include:
All stores and branches remain open at this time and call center staff are operating remotely or have been distributed across one of the Company’s office facilities. Furthermore, if the Company’s consumer lending business, easyfinancial, were required to close its branches to the public, it is prepared and able to operate fully remote, by leveraging digital lending technology to continue accepting and originating loans. In addition, the Company collects more than 96% of its loan repayments through electronic payment mechanisms. In the event branches are closed, the Company can continue to run its entire lending operation with limited disruption.
Balance Sheet and Liquidity
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 to C$310.0 million and extended the maturity date to February 2022. The Company also issued US$550.0 million (approximately C$714 million) of 5.375% senior unsecured notes payable which mature in December 2024.
Based on the cash on hand at the end of the fourth quarter of 2019 and the borrowing capacity under the Company’s revolving credit facility, goeasy had approximately $240 million in funding capacity, which is sufficient to fund the planned growth of its consumer loan portfolio through to the third quarter of 2021. If, after exhausting its existing sources of capital in 2021, the Company were unable to obtain more corporate debt due, the Company expects that it could fund annualized loan growth of approximately $150 million from its own internal cash flows.
Historical Performance of Non-Prime Consumers During a Recession
Although it may seem counter-intuitive, non-prime consumers are in fact generally more resilient in their repayment of credit during times of economic stress and higher unemployment, when compared to prime borrowers. The Company has identified several sources of information and data to support this assertion. Each of these sources suggests that during times of economic stress, the non-prime consumer is generally impacted to a lesser degree than a prime consumer.
goeasy During an Economic Downturn
While the degree of severity and length of an economic downturn is difficult to predict, the Company believes that it is well positioned to navigate through such an event based on several factors:
Normal Course Issuer Bid
Pursuant to the Normal Course Issuer Bid (“NCIB”) announced on December 18, 2019, since February 26th, 2020 goeasy has repurchased a total of 179,200 common shares at an average price per common share of $51.74 for a total value of $9,273,000. The Company has the option to continue to purchase up to an aggregate of 1,038,269 common shares by way of its NCIB, which together with the common shares already repurchased, represents approximately 10% of goeasy’s public float as of December 9, 2019.
Insider Share Purchases
In accordance with reporting requirements under the Securities Act (Ontario), the Company has also disclosed recent insider share purchases. Between the period of February 21st and March 17th, 2020, members of the senior management team and Board of Directors, collectively purchased common shares or exercised stock options for a total of 56,729 shares with a value of $1,396,839. All insider trading activity can be found on the System for Electronic Disclosure by Insiders (“SEDI”). Management and insiders have now entered a black-out period for trading effective March 17th, 2020.
Further information and supporting material related to these topics and others can be found in the Company’s Q4 investor presentation at: http://investors.goeasy.com
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