goeasy Ltd. Reports Record Results for the First Quarter

goeasy Ltd. Reports Record Results for the First Quarter

Loan Originations of $686 million, up 12% from $616 million
Loan Growth of $207 million, up 6% from $196 million
Loan Portfolio of $3.85 billion, up 29% from $2.99 billion
Revenue of $357 million, up 24% from $287 million
Diluted EPS of $3.40; Adjusted Diluted EPS1 of $3.83, up 24% from $3.10

MISSISSAUGA, ON, May 7, 2024 /CNW/ – goeasy Ltd. (TSX: GSY), (“goeasy” or the “Company“), one of Canada’s leading consumer lenders focused on delivering a full suite of financial services to non-prime Canadians, today reported results for the first quarter ended March 31, 2024.

First Quarter Results

The Company generated record first quarter loan originations of $686 million, up 12% compared to $616 million produced in the first quarter of 2023. The increase in lending was driven by a record volume of applications for credit, which were up 41% over the prior year. The Company experienced strong performance across several product and acquisition channels, including unsecured lending and automotive financing.

The increase in loan originations led to growth in the loan portfolio of $207 million, which was up 6% from $196 million of loan book growth in the first quarter of 2023. At quarter end, the consumer loan portfolio was $3.85 billion, up 29% from $2.99 billion in the first quarter of 2023. The growth in consumer loans led to an increase in revenue, which was a record $357 million in the quarter, up 24% from $287 million in the first quarter of last year. 

During the quarter, the Company continued to experience stable credit and payment performance. The net charge off rate was 9.1%, at the midpoint of the Company’s forecasted range of between 8.5% and 9.5%. The Company’s allowance for future credit losses increased slightly to 7.38%, compared to 7.28% in the fourth quarter.

Operating income for the first quarter of 2024 was a record $138 million, up 35% from $102 million in the first quarter of 2023. Operating margin for the first quarter was 38.6%, up from 35.5% in the same period last year. After adjusting for unusual and non-recurring items, the Company reported record adjusted operating income2 of $144 million, an increase of 35% compared to $106 million in the first quarter of 2023. Adjusted operating margin1 for the first quarter was 40.2%, up from 37.1% in the same period in 2023. The efficiency ratio1 for the first quarter of 2024 was 27.4%, an improvement of 570 bps from 33.1% in the first quarter of 2023, reflecting an increase in operating leverage.

Net income in the first quarter was $58.9 million, up 15% from $51.4 million in the same period of 2023, which resulted in diluted earnings per share of $3.40, up 13% from the $3.01 reported in the first quarter of 2023. After adjustments, adjusted net income2 was $66.3 million, up 25% from $52.9 million in the first quarter of 2023. Adjusted diluted earnings per share1 was $3.83, up 24% from $3.10 in the first quarter of 2023. Return on equity during the quarter was 21.9%, compared to 23.2% in the first quarter of 2023. Adjusted return on equity1 was 24.6% in the quarter, an increase of 70 bps from 23.9% in the same period of 2023.

“It was a strong start to the year with over $200 million in portfolio growth, a net charge-off rate within our targeted range at 9.1%, and adjusted earnings per share rising 24%,” said Jason Mullins, goeasy’s President and Chief Executive Officer, “During the quarter we also bolstered our balance sheet and liquidity, with another $500 million of new capital, providing us with additional funding to support our organic growth plans,” Mr. Mullins continued, “With the momentum we are experiencing in the business, we now expect to finish at the high end of our loan growth forecast for the year, further accelerating our journey to be the leading consumer lender for the over 9 million Canadians with non-prime credit.”

Other Key First Quarter Highlights

easyfinancial

  • Record revenue of $318 million, up 28%
  • 43% of the loan portfolio secured, up from 41%
  • Record volume of applications for credit, up 41%
  • New customer volume at 40,400, up 17%
  • 69% of net loan advances1 in the quarter were issued to new customers, up from 67%
  • Record volume of originations in automotive financing, up 49%
  • Average loan book per branch3 improved to a record $6.0 million, an increase of 18%
  • Weighted average interest rate3 on consumer loans of 30.0%, down slightly from 30.2%
  • Record operating income of $155 million, up 30%

easyhome

  • Revenue of $39.1 million, up 2%
  • Consumer loan portfolio within easyhome stores increased to $107.9 million, up 17%
  • Financial revenue2 from consumer lending increased to $12.8 million, up 15%
  • Record operating income of $11.3 million, up 24%

Overall

  • 91st consecutive quarter of positive net income
  • 2024 marks the 20th consecutive year of paying dividends and the 10th consecutive year of a dividend increase
  • 56th consecutive quarter of same store revenue growth
  • Total customers served over 1.4 million
  • Acquired and organically originated over $13.5 billion in loans
  • Adjusted return on equity1 of 24.6%, up from 23.9%
  • Fully drawn weighted average cost of borrowing at 6.9%, up from 5.7%
  • Net debt to net capitalization4 of 72% on March 31, 2024, in line with the Company’s target leverage profile

Balance Sheet and Liquidity

Total assets were $4.42 billion as of March 31, 2024, an increase of 26% from $3.49 billion as of March 31, 2023, primarily driven by growth in the consumer loan portfolio.

In February 2024, the Company issued US$400 million aggregate principal amount of senior unsecured notes due 2029 (the “Notes”). In connection with the offering, the Company entered into a currency swap agreement (the “Currency Swap”) to reduce the Canadian dollar equivalent cost of borrowing on the Notes to 7.195% per annum. Before giving effect to the Currency Swap, the coupon on the Notes is 7.625% per annum. The Company used the proceeds from the sale of the Notes to partially repay indebtedness under its secured facilities and for general corporate purposes.

During the quarter, the Company recognized an unrealized net investment loss of $4.4 million, due to a fair value change in the Company’s investments.

Free cash flow from operations before net growth in gross consumer loans receivable2 in the quarter was $77 million compared to $82 million in the first quarter of 2023. Based on the cash on hand at the end of the quarter and the borrowing capacity under the Company’s existing revolving credit facilities, the Company had approximately $1.26 billion in total funding capacity as of March 31, 2024. The Company remains confident that the capacity available under its existing funding facilities, and its ability to raise additional debt financing, is sufficient to fund its organic growth forecast.  

At quarter-end, the Company’s weighted average cost of borrowing was 6.8%, and the fully drawn weighted average cost of borrowing was 6.9%. The Company estimates that it could currently grow the consumer loan portfolio by approximately $250 million per year solely from internal cash flows, without utilizing external debt. The Company also estimates that once its existing and available sources of debt are fully utilized, it could continue to grow the loan portfolio by approximately $450 million per year solely from internal cash flows. The Company also estimates that if it were to run-off its consumer loan and leasing portfolios, the value of the total cash repayments paid to the Company over the remaining life of its contracts would be approximately $4.6 billion. If, during such a run-off scenario with reasonable cost reductions, all excess cash flows were applied directly to debt, the Company estimates it would extinguish all external debt within 18 months.

Dividend

The Board of Directors has approved a quarterly dividend of $1.17 per share payable on July 12, 2024 to the holders of common shares of record as at the close of business on June 28, 2024.

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 and expected financial performance and condition. Forward-looking statements include, but are not limited to, statements with respect to forecasts for growth of the consumer loans receivable, annual revenue growth forecasts, strategic initiatives, new product offerings and new delivery channels, anticipated cost savings, planned capital expenditures, anticipated capital requirements and the Company’s ability to secure sufficient capital, liquidity of the Company, plans and references to future operations and results, critical accounting estimates, expected future yields and net charge off rates on loans, the dealer relationships,  the size and characteristics of the Canadian non-prime lending market and the continued development of the type and size of competitors in the market. In certain cases, forward-looking 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 “expect”, “continue”, “anticipate”, “intend”, “aim”, “plan”, “believe”, “budget”, “estimate”, “forecast”, “foresee”, “target” 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. 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. Some important factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to, goeasy’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, offer 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, compete, 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. These and other factors could cause actual results to differ materially from our expectations expressed in the forward-looking statements, and further details and descriptions of these and other factors are disclosed in the Company’s Management’s Discussion and Analysis (“MD&A“), including under the section entitled “Risk Factors”.

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. is a Canadian company, headquartered in Mississauga, Ontario, that provides non-prime leasing and lending services through its easyhome, easyfinancial and LendCare brands. Supported by over 2,500 employees, the Company offers a wide variety of financial products and services including unsecured and secured instalment loans, merchant financing through a variety of verticals and lease-to-own merchandise. Customers can transact seamlessly through an omni-channel model that includes online and mobile platforms, over 400 locations across Canada, and point-of-sale financing offered in the retail, powersports, automotive, home improvement and healthcare verticals, through over 10,000 merchant partners across Canada. Throughout the Company’s history, it has acquired and organically served approximately 1.4 million Canadians and originated over $13.5 billion in loans.

Accredited by the Better Business Bureau, goeasy is the proud recipient of several awards in recognition of its exceptional culture and continued business growth including 2024 Best Workplaces™ in Financial Services & Insurance, Waterstone Canada’s Most Admired Corporate Cultures, ranking on the 2022 Report on Business Women Lead Here executive gender diversity benchmark, placing on the Report on Business ranking of Canada’s Top Growing Companies, ranking on the TSX30, Greater Toronto Top Employers Award and has been certified as a Great Place to Work®. The Company is represented by a diverse group of team members from over 70 nationalities who believe strongly in giving back to communities in which it operates. To date, goeasy has raised and donated over $5.6 million to support its long-standing partnerships with BGC Canada and many other local charities. In 2023, the Company announced a 3-year, $1.4 million commitment to BGC Canada’s Food Fund.

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.

For more information about goeasy and our business units, visit www.goeasy.com, www.easyfinancial.com, www.lendcare.ca, www.easyhome.ca.

For further information contact:

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

Farhan Ali Khan
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




March 31,

December 31,




2024

2023






ASSETS 





Cash 



191,403

144,577

Accounts receivable



31,911

30,762

Prepaid expenses



12,038

9,462

Consumer loans receivable, net 



3,653,437

3,447,588

Investments 



57,066

61,464

Lease assets



43,861

45,187

Derivative financial assets 



31,929

21,904

Property and equipment, net



34,901

35,382

Right-of-use assets, net



58,069

61,987

Intangible assets, net



120,490

124,931

Goodwill



180,923

180,923

TOTAL ASSETS



4,416,028

4,164,167






LIABILITIES AND SHAREHOLDERS’ EQUITY





Liabilities





Revolving credit facility 



(837)

190,921

Accounts payable and accrued liabilities



65,706

72,409

Income taxes payable



6,219

24,691

Dividends payable 



19,574

15,960

Unearned revenue



25,326

26,965

Accrued interest



39,165

12,875

Deferred income tax liabilities, net 



22,767

24,259

Lease liabilities



66,672

70,809

Secured borrowings 



143,311

143,177

Revolving securitization warehouse facilities 



1,225,251

1,364,741

Derivative financial liabilities 



19,658

42,457

Notes payable 



1,679,970

1,120,826

TOTAL LIABILITIES



3,312,782

3,110,090






Shareholders’ equity





Share capital 



435,554

428,328

Contributed surplus



21,064

24,817

Accumulated other comprehensive loss



(3,395)

(9,721)

Retained earnings



650,023

610,653

TOTAL SHAREHOLDERS’ EQUITY



1,103,246

1,054,077

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY



4,416,028

4,164,167

goeasy Ltd.










INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME





(Unaudited) 





(Expressed in thousands of Canadian dollars, except earnings per share)






















Three Months Ended




March 31,

March 31,




2024

2023






REVENUE





Interest income



260,072

201,428

Lease revenue



24,741

25,565

Commissions earned



63,964

53,916

Charges and fees



8,337

6,388




357,114

287,297






OPERATING EXPENSES










BAD DEBTS 



105,195

75,896






OTHER OPERATING EXPENSES





Salaries and benefits



52,450

51,163

Share-based compensation 



4,252

3,024

Advertising and promotion



7,774

7,247

Occupancy



5,326

6,644

Technology costs



8,340

7,289

Underwriting and collections



4,702

3,985

Other expenses



10,486

8,425




93,330

87,777






DEPRECIATION AND AMORTIZATION





Depreciation of lease assets



7,080

8,507

Amortization of intangible assets 



5,842

5,309

Depreciation of right-of-use assets



5,406

5,246

Depreciation of property and equipment



2,550

2,495




20,878

21,557






TOTAL OPERATING EXPENSES



219,403

185,230






OPERATING INCOME



137,711

102,067






OTHER (LOSS) INCOME 



(4,398)

1,983






FINANCE COSTS 



(51,313)

(34,226)






INCOME BEFORE INCOME TAXES



82,000

69,824






INCOME TAX EXPENSE (RECOVERY) 





Current



24,857

19,560

Deferred



(1,801)

(1,172)




23,056

18,388






NET INCOME



58,944

51,436






BASIC EARNINGS PER SHARE 



3.46

3.06

DILUTED EARNINGS PER SHARE 



3.40

3.01

SEGMENT REPORTING





(Expressed in thousands of Canadian dollars, except earnings per share)











Three Months Ended March 31, 2024


easyfinancial

easyhome

Corporate

Total






Revenue





Interest income

250,139

9,933

260,072

Lease revenue

24,741

24,741

Commissions earned

60,494

3,470

63,964

Charges and fees

7,423

914

8,337


318,056

39,058

357,114






Operating expenses 





Bad debts

101,303

3,892

105,195

Other operating expenses

52,011

14,562

26,757

93,330

Depreciation and amortization

9,875

9,283

1,720

20,878


163,189

27,737

28,477

219,403






Operating income (loss)

154,867

11,321

(28,477)

137,711






Other loss




(4,398)






Finance costs




(51,313)






Income before income taxes




82,000






Income taxes




23,056






Net income 




58,944






Diluted earnings per share




3.40







Three Months Ended March 31, 2023


easyfinancial

easyhome

Corporate

Total






Revenue





Interest income

193,179

8,249

201,428

Lease revenue

25,565

25,565

Commissions earned

50,384

3,532

53,916

Charges and fees

5,414

974

6,388


248,977

38,320

287,297






Operating expenses 





Bad debts

73,265

2,631

75,896

Other operating expenses

47,778

15,848

24,151

87,777

Depreciation and amortization

9,206

10,734

1,617

21,557


130,249

29,213

25,768

185,230






Operating income (loss)

118,728

9,107

(25,768)

102,067






Other income




1,983






Finance costs




(34,226)






Income before income taxes




69,824






Income taxes




18,388






Net income 




51,436






Diluted earnings per share




3.01

SUMMARY OF FINANCIAL RESULTS AND KEY PERFORMANCE INDICATORS





(Expressed in thousands of Canadian dollars, except earnings per share and percentages)










Three Months Ended




March 31, 

March 31, 

Variance 

Variance 

2024

2023

$ / bps

% change






Summary Financial Results





Revenue

357,114

287,297

69,817

24.3 %

Bad debts

105,195

75,896

29,299

38.6 %

Other operating expenses

93,330

87,777

5,553

6.3 %

EBITDA1

147,111

117,100

30,011

25.6 %

EBITDA margin1

41.2 %

40.8 %

40 bps   

1.0 %

Depreciation and amortization

20,878

21,557

(679)

(3.1 %)

Operating income

137,711

102,067

35,644

34.9 %

Operating margin

38.6 %

35.5 %

310 bps   

8.7 %

Other (loss) income

(4,398)

1,983

(6,381)

(321.8 %)

Finance costs

51,313

34,226

17,087

49.9 %

Effective income tax rate

28.1 %

26.3 %

180 bps   

6.8 %

Net income 

58,944

51,436

7,508

14.6 %

Diluted earnings per share

3.40

3.01

0.39

13.0 %

Return on receivables

6.2 %

7.0 %

(80 bps)  

(11.4 %)

Return on assets

5.5 %

6.1 %

(60 bps)  

(9.8 %)

Return on equity

21.9 %

23.2 %

(130 bps)  

(5.6 %)

Return on tangible common equity1

29.6 %

34.4 %

(480 bps)  

(14.0 %)






Adjusted Financial Results1





Other operating expenses

97,685

95,181

2,504

2.6 %

Efficiency ratio

27.4 %

33.1 %

(570 bps)  

(17.2 %)

Operating income

143,711

106,445

37,266

35.0 %

Operating margin

40.2 %

37.1 %

310 bps   

8.4 %

Net income

66,288

52,933

13,355

25.2 %

Diluted earnings per share

3.83

3.10

0.73

23.5 %

Return on receivables

7.0 %

7.2 %

(20 bps)  

(2.8 %)

Return on assets

6.2 %

6.2 %

Return on equity

24.6 %

23.9 %

70 bps   

2.9 %

Return on tangible common equity

32.0 %

33.8 %

(180 bps)  

(5.3 %)






Key Performance Indicators










Segment Financials





easyfinancial revenue

318,056

248,977

69,079

27.7 %

easyfinancial operating margin

48.7 %

47.7 %

100 bps   

2.1 %

easyhome revenue

39,058

38,320

738

1.9 %

easyhome operating margin

29.0 %

23.8 %

520 bps   

21.8 %






Portfolio Indicators





Gross consumer loans receivable

3,852,079

2,990,686

861,393

28.8 %

Growth in consumer loans receivable

206,877

195,992

10,885

5.6 %

Gross loan originations

686,433

615,619

70,814

11.5 %

Total yield on consumer loans (including ancillary products)1

35.0 %

35.6 %

(60 bps)  

(1.7 %)

Net charge offs as a percentage of average gross consumer loans receivable

9.1 %

8.9 %

20 bps   

2.2 %

Free cash flows from operations before net growth in gross consumer loans receivable1

77,142

82,101

(4,959)

(6.0 %)

Potential monthly leasing revenue1

7,377

7,729

(352)

(4.6 %)

1

EBITDA, adjusted other operating expenses, 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, efficiency ratio, adjusted operating margin, adjusted diluted earnings per share, adjusted return on equity, adjusted return on receivable, adjusted return on assets, reported and adjusted return on tangible common equity and total yield on consumer loans (including ancillary products) are non-IFRS ratios. Refer to “Non-IFRS Measures and Other Financial Measures” section in this press release.

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 International Accounting Standards Board (IASB), are not identified by IFRS and do not have standardized meanings that would ensure consistency and comparability among companies using these measures. The Company believes that non-IFRS measures are useful in assessing ongoing business performance and provide readers with a better understanding of how management assesses performance. These non-IFRS measures are used throughout this press release and listed below. An explanation of the composition of non-IFRS measures and other financial measures can be found in the Company’s MD&A, available on www.sedarplus.ca.

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 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted net income and adjusted earnings per share for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

 

($ in 000’s except earnings per share)

March 31,

2024

March 31,

2023




Net income as stated

58,944

51,436




Impact of adjusting items



Other operating expenses



Advisory costs1

2,543

Integration costs2

182

169

Contract exit fee4

934

Depreciation and amortization



Amortization of acquired intangible assets3

3,275

3,275

Other loss (income)5

4,398

(1,983)

Finance costs



Fair value change on prepayment options related to Notes Payable6

(1,198)

Total pre-tax impact of adjusting items

9,200

2,395

Income tax impact of above adjusting items

(1,856)

(898)

After-tax impact of adjusting items

7,344

1,497




Adjusted net income

66,288

52,933




Weighted average number of diluted shares outstanding

17,319

17,072




Diluted earnings per share as stated

3.40

3.01

Per share impact of adjusting items

0.43

0.09

Adjusted diluted earnings per share

3.83

3.10

Adjusting items related to the advisory costs

1

Advisory costs in the first quarter of 2024 were related to non-recurring advisory, consulting and legal costs.

Adjusting items related to the LendCare acquisition

2

Integration costs related to advisory and consulting costs, employee incentives, representation and warranty insurance costs, and other integration costs related to the acquisition of LendCare.

3

Amortization of the $131 million intangible asset related to the acquisition of LendCare with an estimated useful life of ten years.

Adjusting items related to a contract exit fee

4

In the first quarter of 2023, the Company settled its dispute with the third-party technology provider that was contracted in 2020 to develop a new loan management system.

Adjusting item related to other income (loss)

5

For the three-month periods ended March 31, 2024 and 2023, net investment (losses) income were mainly due to fair value changes on the Company’s investments.

Adjusting item related to prepayment options embedded in the Notes Payable

6

For the three-month period ended March 31, 2024, the Company recognized a fair value income on the prepayment options related to Notes Payable.

Adjusted Other Operating Expenses and Efficiency Ratio

Adjusted other operating expenses is a non-IFRS measure, while efficiency ratio is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted other operating expenses and efficiency ratio for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

 

($ in 000’s except earnings per share)

March 31,

2024

March 31,

2023




Other operating expenses as stated

93,330

87,777




Impact of adjusting items1



Other operating expenses



Advisory costs

(2,543)

Integration costs

(182)

(169)

Contract exit fee

(934)

Depreciation and amortization



Depreciation of lease assets

7,080

8,507

Total impact of adjusting items

4,355

7,404




Adjusted other operating expenses

97,685

95,181




Total revenue

357,114

287,297




Efficiency ratio

27.4 %

33.1 %

1

For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

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 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted operating income and adjusted operating margins for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

 

($ in 000’s except percentages)

March 31,

2024

March 31,

2024
(adjusted)

March 31,

2023

March 31,

2023
(adjusted)






easyfinancial





Operating income

154,867

154,867

118,728

118,728

Divided by revenue

318,056

318,056

248,977

248,977






easyfinancial operating margin

48.7 %

48.7 %

47.7 %

47.7 %






easyhome





Operating income

11,321

11,321

9,107

9,107

Divided by revenue

39,058

39,058

38,320

38,320






easyhome operating margin

29.0 %

29.0 %

23.8 %

23.8 %






Total





Operating income

137,711

137,711

102,067

102,067

Other operating expenses1 





Advisory costs

2,543

Integration costs

182

169

Contract exit fee

934

Depreciation and amortization1





Amortization of acquired intangible assets

3,275

3,275

Adjusted operating income

137,711

143,711

102,067

106,445






Divided by revenue

357,114

357,114

287,297

287,297






Total operating margin

38.6 %

40.2 %

35.5 %

37.1 %

1

For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

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 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate EBITDA and EBITDA margin for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

($in 000’s except percentages)

March 31,

2024

March 31,

2023




Net income as stated

58,944

51,436




Finance cost

51,313

34,226

Income tax expense

23,056

18,388

Depreciation and amortization

20,878

21,557

Depreciation of lease assets

(7,080)

(8,507)

EBITDA

147,111

117,100




Divided by revenue

357,114

287,297




EBITDA margin

41.2 %

40.8 %

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 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate free cash flow from operations before net growth in gross consumer loans receivable for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended


March 31,

2024

March 31,

2023




Cash used in operating activities

(129,735)

(113,891)




Net growth in gross consumer loans receivable during the period

206,877

195,992




Free cash flows from operations before net growth in gross consumer loans receivable

77,142

82,101

Adjusted Return on Receivables 

Adjusted return on receivables is a non-IFRS ratio. Refer to “Key Performance Indicators and Non-IFRS Measures” section on page 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted return on assets for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

($in 000’s except percentages)

March 31,

2024

March 31,

2024 

(adjusted)

March 31,

2023

March 31,

2023 

(adjusted)






Net income as stated

58,944

58,944

51,436

51,436

After-tax impact of adjusting items1

7,344

1,497

Adjusted net income

58,944

66,288

51,436

52,933






Multiplied by number of periods in a year

X 4   

X 4   

X 4   

X 4   






Divided by average gross consumer loans receivable

3,778,309

3,778,309

2,924,908

2,924,908






Return on receivables

6.2 %

7.0 %

7.0 %

7.2 %

1 

For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

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 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted return on assets for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

($in 000’s except percentages)

March 31,

2024

March 31,

2024 

(adjusted)

March 31,

2023

March 31,

2023 

(adjusted)






Net income as stated

58,944

58,944

51,436

51,436

After-tax impact of adjusting items1

7,344

1,497

Adjusted net income

58,944

66,288

51,436

52,933






Multiplied by number of periods in a year

X 4   

X 4   

X 4   

X 4   






Divided by average total assets for the period

4,290,098

4,290,098

3,398,474

3,398,474






Return on assets

5.5 %

6.2 %

6.1 %

6.2 %

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

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 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate adjusted return on equity for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

($in 000’s except percentages)

March 31,

2024

March 31,

2024 

(adjusted)

March 31,

2023

March 31,

2023

(adjusted)






Net income as stated

58,944

58,944

51,436

51,436

After-tax impact of adjusting items1

7,344

1,497

Adjusted net income

58,944

66,288

51,436

52,933






Multiplied by number of periods in a year

X 4   

X 4   

X 4   

X 4   






Divided by average shareholders’ equity for the period

1,078,662

1,078,662

885,896

885,896






Return on equity

21.9 %

24.6 %

23.2 %

23.9 %

1 For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

Reported and Adjusted 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 23 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate reported and adjusted return on tangible common equity for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

($ in 000’s except percentages)

March 31,

2024

March 31,

2024 

(adjusted)

March 31,

2023

March 31,

2023 

(adjusted)






Net income as stated

58,944

58,944

51,436

51,436

Amortization of acquired intangible assets

3,275

3,275

3,275

3,275

Income tax impact of the above item

(868)

(868)

(868)

(868)

Net income before amortization of acquired intangible assets, net of income tax

61,351

61,351

53,843

53,843






Impact of adjusting items1





Other operating expenses





Advisory costs

2,543

Integration costs

182

169

Contract exit fee

934

Other loss (income)

4,398

(1,983)

Finance costs





Fair value change on prepayment options related to Notes Payable

(1,198)

Total pre-tax impact of adjusting items

5,925

(880)

Income tax impact of above adjusting items

(988)

(30)

After-tax impact of adjusting items

4,937

(910)






Adjusted net income

61,351

66,288

53,843

52,933






Multiplied by number of periods in a year

X 4   

X 4   

X 4   

X 4   






Average shareholders’ equity

1,078,662

1,078,662

885,896

885,896

Average goodwill

(180,923)

(180,923)

(180,923)

(180,923)

Average acquired intangible assets2

(94,429)

(94,429)

(107,529)

(107,529)

Average related deferred tax liabilities

25,024

25,024

28,495

28,495

Divided by average tangible common equity

828,334

828,334

625,939

625,939






Return on tangible common equity

29.6 %

32.0 %

34.4 %

33.8 %

1 

For explanation of adjusting items, refer to the corresponding “Adjusted Net Income and Adjusted Diluted Earnings Per Share” section.

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 March 31, 2024 and 2023 include those indicated in the chart below:

($in 000’s)

Three Months Ended

March 31,

2024

March 31,

2023

Total company revenue

357,114

287,297

Less: easyfinancial revenue

(318,056)

(248,977)

Less: leasing revenue

(26,249)

(27,148)

easyhome financial revenue

12,809

11,172

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 13 of the Company’s MD&A for the three-month period ended March 31, 2024. Items used to calculate total yield on consumer loans as a percentage of average gross consumer loans receivable for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

($in 000’s except percentages)

March 31,

2024

March 31,

2023




Total Company revenue

357,114

287,297

Less: Leasing revenue

(26,249)

(27,148)

Financial revenue

330,865

260,149




Multiplied by number of periods in a year

X 4   

X 4   




Divided by average gross consumer loans receivable

3,778,309

2,924,908




Total yield on consumer loans as a percentage of average gross consumer loans receivable (annualized)

35.0 %

35.6 %

Net Principal Written and Percentage Net Principal Written to New Customers

Net principal written (Net loan advances) is a non-IFRS measure. See description in section “Portfolio Analysis” on page 13 of the Company’s MD&A for the three-month period ended March 31, 2024. The percentage of net loan advances to new customers is a non-IFRS ratio. It is calculated as loan originations to new customers divided by the net principal written. The Company uses percentage of net loan advances to new customers, among other measures, to assess the operating performance of its lending business.  Items used to calculate the percentage of net loan advances to new customers for the three-month periods ended March 31, 2024 and 2023 include those indicated in the chart below:


Three Months Ended

($ in 000’s)

March 31,

2024

March 31,

2023




Gross loan originations

686,433

615,619




Loan originations to new customers

355,881

302,543




Loan originations to existing customers

330,552

313,076

Less: Proceeds applied to repay existing loans

(171,082)

(162,954)

Net advance to existing customers

159,470

150,122




Net principal written

515,351

452,665

Percentage net advances to new customers

69.1 %

66.8 %

Net Debt to Net Capitalization

Net debt to net capitalization is a capital management measure. Refer to “Financial Condition” section on page 31 of the Company’s MD&A for the three-month period ended March 31, 2024.

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 the 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.

SOURCE goeasy Ltd

goeasy Ltd. Reports Record Results for the First Quarter