goeasy Ltd. Reports Record Results for the Third Quarter

Mississauga, Ontario, CANADA


Loan Portfolio of $1.90 billion, up 60%
Revenue of $220 million, up 36%
Adjusted Operating Income of $85.8 million, up 51%
Adjusted Quarterly Net Income of $46.7 million, up 48%
Adjusted Quarterly Diluted Earnings per Share of $2.70, up 35%

MISSISSAUGA, Ontario, Nov. 03, 2021 (GLOBE NEWSWIRE) -- goeasy Ltd. (TSX: GSY), (“goeasy” or the “Company”), one of Canada’s leading non-prime consumer lenders, today reported results for the third quarter ended September 30, 2021.
        
Third Quarter Results

During the quarter, the Company generated a record $436 million in total loan originations, up 52% compared to the $287 million produced in the third quarter of 2020, and a sequential increase of 15% from the $379 million in loan originations in the second quarter of 2021. The increase in loan originations led to record organic growth in the loan portfolio of $101 million during the quarter, resulting in a total gross consumer loan receivable portfolio of $1.90 billion, up 60% from $1.18 billion in the third quarter of 2020. The growth in consumer loans led to an increase in revenue, which was a record $220 million in the quarter, up 36% over the third quarter in 2020.

During the quarter, the Company continued to experience stable credit and payment performance. The net charge off rate for the third quarter was 8.3%, compared to 7.8% in the third quarter of 2020 and 8.2% in the second quarter of 2021. The overall allowance for future credit losses reduced slightly from 7.90% in the prior quarter to 7.83%.

Operating income for the third quarter of 2021 was a record $81.4 million, up 43% from $56.9 million in the third quarter of 2020. Operating margin for the third quarter was 37.0%, up from 35.2% in the prior year. After adjusting for items related to the recent acquisition of LendCare Holdings Inc. (“LendCare”), the Company reported record adjusted operating income of $85.8 million, up $28.9 million or an increase of 51% compared to the third quarter of 2020. Adjusted operating margin for the third quarter was 39.1%, up from 35.2% in the prior year. During the quarter, the Company also recorded a $23.2 million before-tax fair value gain on investments.

Net income in the third quarter was $63.5 million, compared to $33.1 million in the same period of 2020, which resulted in diluted earnings per share of $3.66, compared to $2.09 in the third quarter of 2020. After adjusting for non-recurring and unusual items on an after-tax basis, including $1.0 million of transaction and integration costs related to the acquisition of LendCare, $2.4 million in amortization of acquired intangible assets, and a $20.1 million fair value gain on investments, adjusted net income was a record $46.7 million, up 48% from $31.6 million in 2020. Adjusted diluted earnings per share was a record $2.70, up 35% from $2.00 in the third quarter of 2020.

Return on equity during the quarter was 32.7%, compared to 34.7% in the third quarter of 2020. After adjusting for the non-recurring and unusual items previously noted, adjusted return on equity was 24.0% in the quarter, compared to 33.1% in the same period of 2020.

“During the quarter we made significant progress on the integration of LendCare, which is on track to produce the synergies and accretion forecast during our acquisition,” said Jason Mullins, goeasy’s President and Chief Executive Officer, “With consumer demand for credit improving, complemented by the expansion of our auto lending program and point-of-sale channel, we grew the consumer loan portfolio a record $101 million during the quarter, more than double the same quarter last year. Meanwhile, the stable credit performance and improved operating leverage, led to record adjusted diluted earnings per share of $2.70,” Mr. Mullins concluded, “With our fully drawn weighted average cost of borrowing declining to 4.3% and total liquidity now exceeding $900 million, our balance sheet is stronger than ever and we remain on track to achieving our forecast for 2021 and beyond.”

Other Key Third Quarter Highlights

easyfinancial

  • Revenue of $182 million, up 45%
  • 33% of the loan portfolio secured, up from 12%
  • 66% of net loan advances in the quarter were issued to new customers, up from 50%
  • 41% of applications acquired online, up from 38%
  • 25% of new loans issued through point-of-sale financing, up from 18%
  • 4% of new loans issued auto financing, a new product category in 2021
  • Average loan book per branch improved to $4.0 million, an increase of 6%
  • Weighted average interest yield of 33.6%, down from 38.3%
  • Record operating income of $90.6 million, up 42%
  • Operating margin of 49.7%, down from 50.7%

easyhome

  • Record revenue of $37.6 million, up 5%
  • Same store revenue growth of 5.6%
  • Consumer loan portfolio within easyhome stores increased to $61.8 million, up 38%
  • Revenue from consumer lending increased to $7.9 million, up 43%
  • Record operating income of $10.1 million, up 28%
  • Record operating margin of 26.7%, up from 21.9%

Overall

  • 46th consecutive quarter of same store sales growth
  • 81st consecutive quarter of positive net income
  • 2021 marks the 17th consecutive year of paying dividends and the 7th consecutive year of a dividend increase
  • Total same store revenue growth of 15.4%
  • Adjusted return on equity of 24.0% in the quarter and adjusted return on tangible common equity of 42.9%
  • Fully drawn weighted average cost of borrowing reduced to 4.3%, down from 5.0%
  • Net external debt to net capitalization of 62% on September 30, 2021, down from 66% in the prior year and below the Company’s target leverage ratio of 70%

Nine Months Results

For the first nine months of 2021, the Company produced record revenues of $592 million, up 24% compared with $480 million in the same period of 2020. Operating income for the period was $201 million compared with $155 million in the first nine months of 2020, an increase of $46.2 million or 30%. Net income for the first nine months of 2021 was $195 million and diluted earnings per share was $11.75 compared with $87.6 million or $5.64 per share, increases of 123% and 108%, respectively. Excluding the effects of the adjusting items related to the acquisition of LendCare and fair value gains on investments, adjusted net income for the first nine months of 2021 was $127 million and adjusted diluted earnings per share was $7.66, increases of 54% and 44%, respectively, while adjusted return on equity was 26.6%.

Balance Sheet and Liquidity

Total assets were $2.47 billion as of September 30, 2021, an increase of 81% from $1.37 billion as of September 30, 2020, driven by growth in the consumer loan portfolio, including the $445 million gross consumer loan portfolio acquired through the acquisition of LendCare, the intangible assets and goodwill arising from the LendCare acquisition, and the return on the Company’s investment in Affirm Holdings Inc. (“Affirm”).

In September 2021, the Company entered into a 9-month total return swap agreement (the “TRS”) to partially hedge its market exposure related to 100,000 of the 468,000 contingent shares related to the equity held in Affirm. The TRS effectively results in the economic value of the hedged portion of the Company’s contingent equity in Affirm being settled in cash at maturity for US$110.35 per share, net of applicable fees. During the third quarter of 2021, the Company recognized a $20.1 million after-tax fair value gain on the investment in Affirm and the TRS. Year to date, the Company has recorded total fair value gains on investments of $92.4 million.

During the quarter, the Company increased its existing revolving securitization warehouse facility to $600 million. The warehouse facility continues to be structured and underwritten by National Bank Financial Markets under a new three-year agreement, which incorporates favorable key modifications, including improvements to eligibility criteria and advance rates. The interest on advances are payable at the rate of 1-month CDOR plus 185 bps, an improvement of 110 bps. Based on the current 1-month CDOR rate of 0.43% as of November 3, 2021, the interest rate would be 2.28%. The Company continues utilizing an interest rate swap agreement to generate fixed rate payments on the amounts drawn and mitigate the impact of interest rate volatility.

Cash provided by operating activities before the net growth in gross consumer loans receivable in the quarter was $89.2 million. Based on the cash on hand at the end of the quarter and the borrowing capacity under the Company’s revolving credit facilities, goeasy has approximately $908 million in total funding capacity, which it estimates is sufficient to fund its organic growth through the fourth quarter of 2023. At quarter-end, the Company’s fully drawn weighted average cost of borrowing reduced to 4.3%, down from 5.0% in the prior year, with incremental draws on its senior secured revolving credit facility bearing a rate of approximately 3.5% and incremental draws on its amended securitization facility bearing a rate of approximately 2.3%.

As of September 30, 2021, 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 $200 million per year solely from internal cash flows. The Company also estimates that 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 $3 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 16 months.

Future Outlook

The Company has provided 3-year forecasts for the years 2021 through 2023. 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, which increases the average loan size and extends 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. The forecasts outlined below contemplate the Company’s expected domestic organic growth plan and do not include the impact of any future mergers or acquisitions, or the associated gains or losses associated with its investments.

 Forecasts for 2021Forecasts for 2022Forecasts for 2023
Gross Loan Receivable Portfolio at Year End$1.95 billion –
$2.05 billion
$2.35 billion –
$2.55 billion
$2.8 billion –
$3.0 billion
New easyfinancial locations20 - 2515 - 2010 - 15
easyfinancial Total Revenue Yield40% - 42%36% - 38%35% - 37%
Total Revenue Growth24% - 27%17% - 20%12% - 15%
Net charge-off Rate (Average Receivables)8.5% - 10.5%8.5% - 10.5%8.0% - 10.0%
Adjusted Total Company Operating Margin35%+36%+37%+
Adjusted Return on Equity22%+22%+22%+
Cash provided by Operating Activities before Net Growth in Gross Consumer Loans Receivable$190 million –
$230 million
$270 million –
$310 million
$310 million –
$350 million
Net Debt to Net Capitalization64% - 66%64% - 66%63% - 65%

Dividend

The Board of Directors has approved a quarterly dividend of $0.66 per share payable on January 14, 2022 to the holders of common shares of record as at the close of business on December 31, 2021.

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, easyfinancial and LendCare brands. Supported by more than 2,200 employees, the Company offers a wide variety of financial products and services including unsecured and secured instalment loans. Customers can transact seamlessly through an omni-channel model that includes an online and mobile platform, over 400 locations across Canada, and point-of-sale financing offered in the retail, power sports, automotive, home improvement and healthcare verticals, through more than 4,000 merchants across Canada. Throughout the Company’s history, it has acquired and organically served over 1 million Canadians and originated over $7.2 billion in loans, with one in three easyfinancial customers graduating to prime credit and 60% increasing their credit score within 12 months of borrowing.

Accredited by the Better Business Bureau, 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 and has been certified as a Great Place to Work®. The company is represented by a diverse group of team members from over 75 nationalities who believe strongly in giving back to the communities in which it operates. To date, goeasy has raised and donated over $3.8 million to support its long-standing partnerships with BGC Canada, Habitat for Humanity and many other local charities.

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:

Jason Mullins
President & Chief Executive Officer
(905) 272-2788

Farhan Ali Khan
Senior Vice President, Corporate Development & Investor Relations
(905) 272-2788



goeasy Ltd.    
     
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION  
(Unaudited)    
(expressed in thousands of Canadian dollars)    
     
     
  As AtAs At 
  September 30,December 31, 
  20212020  
     
ASSETS     
Cash 124,68593,053  
Amounts receivable 18,0579,779  
Prepaid expenses 8,66813,005  
Consumer loans receivable, net 1,780,0731,152,378  
Investments 64,17856,040  
Lease assets 44,48249,384  
Property and equipment, net 34,39731,322  
Deferred tax assets, net -4,066  
Derivative financial assets 422-  
Intangible assets, net 161,18925,244  
Right-of-use assets, net 54,66346,335  
Goodwill 180,92321,310  
TOTAL ASSETS 2,471,7371,501,916  
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Liabilities    
Revolving credit facility 14,339198,339  
Accounts payable and accrued liabilities 61,43346,065  
Income taxes payable 22,86013,897  
Dividends payable 10,8886,661  
Unearned revenue 9,32910,622  
Accrued interest 22,9682,598  
Deferred tax liabilities, net 38,983-  
Derivative financial liabilities 19,07636,910  
Lease liabilities 62,91553,902  
Revolving securitization warehouse facility 122,648-  
Secured borrowings 191,574-  
Notes payable 1,087,397689,410  
TOTAL LIABILITIES 1,664,4101,058,404  
     
Shareholders' equity    
Share capital 369,475181,753  
Contributed surplus 20,51819,732  
Accumulated other comprehensive income (loss) 6,666(5,280) 
Retained earnings 410,668247,307  
TOTAL SHAREHOLDERS' EQUITY 807,327443,512  
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,471,7371,501,916  
     



goeasy Ltd.      
       
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME    
(Unaudited)      
(expressed in thousands of Canadian dollars except earnings per share)      
       
       
  Three Months EndedNine Months Ended 
  September 30,September 30,September 30,September 30, 
  2021
20202021
2020 
       
REVENUE      
Interest income 146,132 101,833380,109 302,799 
Lease revenue 27,923 28,41684,708 84,232 
Commissions earned 42,052 28,540117,824 83,166 
Charges and fees 3,655 3,0359,651 9,506 
  219,762 161,824592,292 479,703 
       
EXPENSES BEFORE DEPRECIATION AND AMORTIZATION      
Salaries and benefits 41,776 36,457120,986 102,283 
Stock-based compensation 2,116 1,7186,103 5,587 
Advertising and promotion 7,751 7,37720,815 18,195 
Bad debts 45,297 27,221123,444 100,505 
Occupancy 5,995 5,63917,272 17,126 
Technology costs 4,900 3,81712,721 10,499 
Other expenses 9,852 6,62432,356 22,378 
  117,687 88,853333,697 276,573 
       
DEPRECIATION AND AMORTIZATION      
Depreciation of lease assets 8,601 8,70126,687 26,790 
Depreciation of right-of-use assets 4,650 4,05313,416 11,994 
Amortization of intangible assets 5,405 1,82011,285 4,699 
Depreciation of property and equipment 2,067 1,4515,833 4,488 
  20,723 16,02557,221 47,971 
       
TOTAL OPERATING EXPENSES 138,410 104,878390,918 324,544 
       
OPERATING INCOME 81,352 56,946201,374 155,159 
       
OTHER INCOME 23,219 1,700106,505 5,700 
       
FINANCE COSTS      
Interest expense and amortization of deferred financing charges 20,889 12,54354,450 39,624 
Interest expense on lease liabilities 797 6902,294 2,025 
  21,686 13,23356,744 41,649 
       
INCOME BEFORE INCOME TAXES 82,885 45,413251,135 119,210 
       
INCOME TAX EXPENSE (RECOVERY)      
Current 25,769 9,99058,577 23,288 
Deferred (6,424)2,350(2,424)8,328 
  19,345 12,34056,153 31,616 
       
NET INCOME 63,540 33,073194,982 87,594 
       
BASIC EARNINGS PER SHARE 3.79 2.2012.15 5.95 
DILUTED EARNINGS PER SHARE 3.66 2.0911.75 5.64 
       



Segmented Reporting      
        
   Three Months Ended September 30, 2021 
($ in 000's except earnings per share)  easyfinancial1easyhomeCorporateTotal 
        
Revenue      
 Interest income 140,2665,866- 146,132 
 Lease revenue -27,923- 27,923 
 Commissions earned 39,2342,818- 42,052 
 Charges and fees 2,6191,036- 3,655 
   182,11937,643- 219,762 
        
Total operating expenses before      
       depreciation and amortization 83,16716,75217,768 117,687 
        
Depreciation and amortization      
 Depreciation and amortization of lease assets, property and equipment and intangible assets 5,8808,9121,281 16,073 
 Depreciation of right-of-use assets 2,5121,924214 4,650 
   8,39210,8361,495 20,723 
        
Segment operating income (loss) 90,56010,055(19,263)81,352 
        
Other income    23,219 
        
Finance costs      
 Interest expense and amortization of deferred financing charges    20,889 
 Interest expense on lease liabilities    797 
      21,686 
        
Income before income taxes    82,885 
        
Income taxes    19,345 
        
Net Income    63,540 
        
Diluted earnings per share    3.66 
1 LendCare’s financial results are reported under the easyfinancial reporting segment.    
        
   Three Months Ended September 30, 2020 
($ in 000's except earnings per share)  easyfinancialeasyhomeCorporateTotal 
        
Revenue      
 Interest income 97,5434,290- 101,833 
 Lease revenue -28,416- 28,416 
 Commissions earned 26,4742,066- 28,540 
 Charges and fees 1,8391,196- 3,035 
   125,85635,968- 161,824 
Total operating expenses before      
       depreciation and amortization 58,08917,20813,556 88,853 
        
Depreciation and amortization      
 Depreciation and amortization of lease assets, property and equipment and intangible assets 2,0149,051907 11,972 
 Depreciation of right-of-use-assets 1,9771,824252 4,053 
   3,99110,8751,159 16,025 
        
Segment operating income (loss) 63,7767,885(14,715)56,946 
        
Other income    1,700 
        
Finance costs      
 Interest expense and amortization of deferred financing charges    12,543 
 Interest expense on lease liabilities    690 
      13,233 
        
Income before income taxes    45,413 
        
Income taxes    12,340 
        
Net Income    33,073 
        
Diluted earnings per share    2.09 
        
   Nine Months Ended September 30, 2021 
($ in 000's except earnings per share)  easyfinancial1easyhomeCorporateTotal 
        
Revenue      
 Interest income 363,80616,303- 380,109 
 Lease revenue -84,708- 84,708 
 Commissions earned 109,8098,015- 117,824 
 Charges and fees 6,7212,930- 9,651 
   480,336111,956- 592,292 
        
Total operating expenses before      
       depreciation and amortization 223,78450,14359,770 333,697 
        
Depreciation and amortization      
 Depreciation and amortization of lease assets, property and equipment and intangible assets 12,42327,6523,730 43,805 
 Depreciation of right-of-use assets 7,0215,750645 13,416 
   19,44433,4024,375 57,221 
        
Segment operating income (loss) 237,10828,411(64,145)201,374 
        
Other income    106,505 
        
Finance costs      
 Interest expense and amortization of deferred financing charges    54,450 
 Interest expense on lease liabilities    2,294 
      56,744 
        
Income before income taxes    251,135 
        
Income taxes    56,153 
        
Net Income    194,982 
        
Diluted earnings per share    11.75 
1 LendCare’s financial results are reported under the easyfinancial reporting segment.    
        
   Nine Months Ended September 30, 2020 
($ in 000's except earnings per share)  easyfinancialeasyhomeCorporateTotal 
        
Revenue      
 Interest income 290,48312,316- 302,799 
 Lease revenue -84,232- 84,232 
 Commissions earned 76,7856,381- 83,166 
 Charges and fees 6,1133,393- 9,506 
   373,381106,322- 479,703 
        
Total operating expenses before      
       depreciation and amortization 186,84450,42839,301 276,573 
        
Depreciation and amortization      
 Depreciation and amortization of lease assets, property and equipment and intangible assets 5,48427,9032,590 35,977 
 Depreciation of right-of-use-assets 5,6915,595708 11,994 
   11,17533,4983,298 47,971 
        
Segment operating income (loss) 175,36222,396(42,599)155,159 
        
Other income    5,700 
        
Finance costs      
 Interest expense and amortization of deferred financing charges    39,624 
 Interest expense on lease liabilities    2,025 
      41,649 
        
Income before income taxes    119,210 
        
Income taxes    31,616 
        
Net Income    87,594 
        
Diluted earnings per share    5.64 
        



Summary of Financial Results and Key Performance Indicators      
       
($ in 000’s except earnings per share and percentages)Three Months EndedVarianceVariance  
September 30, 2021September 30, 2020$ / bps% change  
Summary Financial Results      
Revenue219,762 161,824 57,938 35.8%  
Operating expenses before depreciation and amortization2117,687 88,853 28,834 32.5%  
EBITDA1116,693 65,970 50,723 76.9%  
EBITDA margin153.1%40.8%1,230 bps 30.1%  
Depreciation and amortization expense220,723 16,025 4,698 29.3%  
Operating income81,352 56,946 24,406 42.9%  
Operating margin137.0%35.2%180 bps 5.1%  
Other income2,323,219 1,700 21,519 1,265.8%  
Finance costs21,686 13,233 8,453 63.9%  
Effective income tax rate23.3%27.2%(390 bps) (14.3%)  
Net income63,540 33,073 30,467 92.1%  
Diluted earnings per share3.66 2.09 1.57 75.1%  
Return on assets110.3%9.7%60 bps 6.2%  
Return on equity132.7%34.7%(200 bps) (5.8%)  
Return on tangible common equity158.3%39.1%1,920 bps 49.1%  
       
Adjusted Financial Results1,2,3      
Adjusted operating income85,818 56,946 28,872 50.7%  
Adjusted operating margin39.1%35.2%390 bps 11.1%  
Adjusted net income46,748 31,598 15,150 47.9%  
Adjusted diluted earnings per share2.70 2.00 0.70 35.0%  
Adjusted return on assets7.6%9.3%(170 bps) (18.3%)  
Adjusted return on equity24.0%33.1%(910 bps) (27.5%)  
Adjusted return on tangible common equity42.9%37.3%560 bps 15.0%  
       
Key Performance Indicators1    
Same store revenue growth (overall)15.4%3.1%1,230 bps 396.8%  
Same store revenue growth (easyhome)5.6%7.2%(160 bps) (22.2%)  
       
Segment Financials      
easyfinancial revenue182,119 125,856 56,263 44.7%  
easyfinancial operating margin49.7%50.7%(100 bps) (2.0%)  
easyhome revenue37,643 35,968 1,675 4.7%  
easyhome operating margin26.7%21.9%480 bps 21.9%  
       
Portfolio Indicators      
Gross consumer loans receivable1,896,716 1,182,801 713,915 60.4%  
Growth in consumer loans receivable100,872 48,319 52,553 108.8%  
Gross loan originations436,194 286,583 149,611 52.2%  
Total yield on consumer loans (including ancillary products)40.8%45.1%(430 bps) (9.5%)  
Net charge offs as a percentage of average gross consumer loans receivable8.3%7.8%50 bps 6.4%  
Cash provided by operating activities before net growth in gross consumer loans receivable89,240 63,578 25,662 40.4%  
Potential monthly lease revenue8,160 8,256 (96)(1.2%)  
       
1 See description in sections “Portfolio Analysis” and “Key Performance Indicators and Non-IFRS Measures” in September 30, 2021 Management’s Discussion and Analysis. 
2 During the third quarter of 2021, the Company had a total of -$18.8 million before-tax (-$16.8 million after-tax) of adjusting items which include:
Adjusting items related to the LendCare Acquisition
• Transaction costs of $0.3 million (non-tax deductible) which include advisory and consulting costs, legal costs, and other direct transaction related to the Acquisition of LendCare reported under Operating expenses before depreciation and amortization;
• 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 expenses before depreciation and amortization amounting to $1.0 million before-tax ($0.7 million after-tax); and
• Amortization of $131 million intangible asset related to the Acquisition of LendCare with an estimated useful life of ten years amounting to $3.3 million before-tax ($2.4 million after-tax).
Adjusting item related to other income
• Realized and unrealized fair value gains mainly on investments in Affirm and TRS amounting to $23.2 million before-tax ($20.1 million after-tax).
3 During the third quarter of 2020, the Company’s adjusting item includes:
• Unrealized fair value gain on investment in PayBright amounting to $1.7 million before-tax ($1.5 million after-tax).
  
  
  
  
  
  
  
       
       
($ in 000’s except earnings per share and percentages)Nine Months EndedVarianceVariance  
September 30, 2021September 30, 2020$ / bps% change  
Summary Financial Results    
Revenue592,292 479,703 112,589 23.5%  
Operating expenses before depreciation and amortization2333,697 276,573 57,124 20.7%  
EBITDA1338,413 182,040 156,373 85.9%  
EBITDA margin157.1%37.9%1,920 bps 50.7%  
Depreciation and amortization expense257,221 47,971 9,250 19.3%  
Operating income201,374 155,159 46,215 29.8%  
Operating margin134.0%32.3%170 bps 5.3%  
Other income2,3106,505 5,700 100,805 1,768.5%  
Finance costs256,744 41,649 15,095 36.2%  
Effective income tax rate22.4%26.5%(410 bps) (15.5%)  
Net income194,982 87,594 107,388 122.6%  
Diluted earnings per share11.75 5.64 6.11 108.3%  
Return on assets112.9%8.6%430 bps 50.0%  
Return on equity140.8%32.3%850 bps 26.3%  
Return on tangible common equity158.7%36.5%2,220 bps 60.8%  
       
Adjusted Financial Results1,2,3      
Adjusted operating income230,299 155,159 75,140 48.4%  
Adjusted operating margin38.9%32.3%660 bps 20.4%  
Adjusted net income127,114 82,649 44,465 53.8%  
Adjusted diluted earnings per share7.66 5.33 2.33 43.7%  
Adjusted return on assets8.4%8.1%30 bps 3.7%  
Adjusted return on equity26.6%30.5%(390 bps) (12.8%)  
Adjusted return on tangible common equity38.3%34.5%380 bps 11.0%  
       
Key Performance Indicators1    
Same store revenue growth (overall)12.1%7.8%430 bps 55.1%  
Same store revenue growth (easyhome)6.1%3.2%290 bps 90.6%  
       
Segment Financials      
easyfinancial revenue480,336 373,381 106,955 28.6%  
easyfinancial operating margin49.4%47.0%240 bps 5.1%  
easyhome revenue111,956 106,322 5,634 5.3%  
easyhome operating margin25.4%21.1%430 bps 20.4%  
       
Portfolio Indicators      
Gross consumer loans receivable1,896,716 1,182,801 713,915 60.4%  
Growth in consumer loans receivable4649,876 72,168 577,708 800.5%  
Gross loan originations1,087,627 699,028 388,599 55.6%  
Total yield on consumer loans (including ancillary products)42.4%45.2%(280 bps) (6.2%)  
Net charge offs as a percentage of average gross consumer loans receivable8.5%10.3%(180 bps) (17.5%)  
Cash provided by operating activities before net growth in gross consumer loans receivable200,652 169,639 31,013 18.3%  
Potential monthly lease revenue8,160 8,256 (96)(1.2%)  
       
1 See description in sections “Portfolio Analysis” and “Key Performance Indicators and Non-IFRS Measures” in September 30, 2021 Management’s Discussion and Analysis.
2 During the nine-month period ended September 30, 2021, the Company had a total of -$75.9 million before-tax (-$67.9 million after-tax) adjusting items which include:
Adjusting items related to the LendCare Acquisition
• Transaction costs of $9.3 million before-tax ($8.9 million after-tax) which include 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 amounting to $7.6 million which are non tax-deductible and loan commitment fees related to the Acquisition of LendCare reported under Finance costs amounting to $1.7 million before-tax ($1.3 million after-tax);
• 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 expenses before depreciation and amortization amounting to $1.6 million before-tax ($1.2 million after-tax);
• Bad debt expense related to the day one loan loss provision on the acquired loan portfolio from LendCare amounting to $14.3 million before-tax ($10.5 million after-tax); and
• Amortization of $131 million intangible asset related to the Acquisition of LendCare with an estimated useful life of ten years amounting to $5.5 million before-tax ($4.0 million after-tax).
Adjusting item related to other income
• Realized and unrealized fair value gains mainly on investments in Affirm and TRS amounting to $106.5 million before-tax ($92.4 million after-tax).
3 During the nine-month period ended September 30, 2020, the Company’s adjusting item includes:
• Unrealized fair value gain on investment in PayBright amounting to $5.7 million before-tax ($4.9 million after-tax).
4 Growth in consumer loan receivable during the period includes gross loan purchased through the LendCare Acquisition amounting to $444.5 million.