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goeasy Ltd. Reports Record Performance for the Second Quarter Ended June 30, 2016

Revenue Growth of 18%

Net Income Growth of 110% (Normalized Growth of 58%)

25th Consecutive Quarter for Same Store Sales Growth


/EINPresswire.com/ -- MISSISSAUGA, ONTARIO -- (Marketwired) -- 08/02/16 -- goeasy Ltd. (TSX: GSY), ("goeasy" or the "Company"), a leading full service provider of goods and alternative financial services that improve the lives of everyday Canadians, today announced its results for the second quarter ended June 30, 2016.

Q2 2016 Results

Revenue for the second quarter of 2016 increased to $86.1 million, an increase of 18.1% from $73.9 million in the second quarter of 2015. Total same store sales growth in the quarter was 20.0%. The growth was driven primarily by the expansion of easyfinancial and the related growth of its consumer loans receivable portfolio which reached $326 million by quarter's end, up 41% when compared with June 30, 2015. Loan book growth in the second quarter of 2016 was $22.0 million.

Operating income for the quarter was $18.1 million, up $7.7 million or 74.2% compared to operating income of $10.4 million for the second quarter of 2015. Normalized operating income, excluding a gain on the sale of an investment, was $15.1 million, an increase of $4.7 million or 45.4%. Net income and diluted earnings per share for the quarter increased by 109.7% and 108.3%, respectively, from the second quarter of 2015 to $10.5 million and $0.75, respectively. On a normalized basis, net income was $7.9 million and diluted earnings per share was $0.57, both of which increased 58% from net income of $5.0 million and diluted earnings per share of $0.36 reported in the second quarter of 2015. These income statement metrics represent record second quarter performance for goeasy.

"We are delighted to report another record quarter, reflecting strong consumer demand from both online loan originations and walk-in traffic into our branch network," said David Ingram, goeasy's President and Chief Executive Officer. "We are reaping the benefits from our brand investment in easyfinancial on TV and our digital platforms which have resulted in improving consumer awareness for our installment loans. In addition, we are benefiting from our acquisition of 45 branches from the Cash Store in 2015. Their contribution to earnings has resulted in higher operating margins and increased guidance for easyfinancial."

Other highlights for the second quarter of 2016 include:

easyfinancial


--  Revenue increased by 42.8% for the second quarter of 2016 compared to
    the second quarter of 2015.
--  Gross loan originations increased by 27.3% from $77.4 million in the
    second quarter of 2015 to $98.5 million in the current quarter.
--  Net charge offs as a percentage of the average gross consumer loans
    receivable on an annualized basis were 15.2%, within the targeted range.
--  Cash generated from easyfinancial customer payments was $86.4 million in
    the second quarter of 2016 compared to $61.0 million in the second
    quarter of 2015.

easyhome


--  Same store revenue growth was slightly negative at (0.5%).
--  The operating margin for easyhome for the second quarter of 2016 was
    12.9%.

Overall


--  Normalized operating margin was 17.6% for the quarter, up from the
    operating margin of 14.3% in the second quarter of 2015.
--  The Company's normalized return on equity improved to 17.4% in the
    current quarter from 12.4% in the second quarter of 2015.

Six Months Results

For the first half of the year, goeasy achieved revenues of $168.4 million, up 17.4% compared with $143.4 million in the first half of 2015. Operating income for the period was $32.9 million compared with $20.2 million in the first six months of 2015, an increase of $12.7 million or 62.9%. Normalized operating income, excluding a gain on the sale of an investment, was $29.9 million, an increase of $9.7 million or 48.1%. Net income for the first half of the year was $17.8 million and diluted earnings per share was $1.27. On a normalized basis, net income was $15.2 million and diluted earnings per share was $1.09, compared to net income of $9.9 million and diluted earnings per share of $0.71 reported in the second quarter of 2015, increases of 52.8% and 53.5%, respectively.

Outlook

The Company reconfirmed its stated targets for 2016 including growing the loan book to $360 - $390 million by the end of 2016, opening between 10 and 20 new easyfinancial locations this year and achieving revenue growth of 16% - 20%. Additionally, based on the strong consumer loans receivable growth coupled with improving cost efficiencies and scale, particularly in the areas of labour and advertising, the Company has increased its targeted operating margin for easyfinancial to 34% to 36% while maintaining loan loss rates within our targeted range of 14% to 16%.

The Company also reconfirmed its stated targets for 2018 including reaching a $500 million loan book and total easyfinancial branch count of between 220 and 240 by the end of 2018. Given the strong margins reported for easyfinancial in the current year to date period, the Company has also increased its targeted operating margin for easyfinancial to 36% to 38% for 2018.

Normal Course Issuer Bid and Dividend

On June 23, 2015, the Company put in place a Normal Course Issuer Bid allowing it to purchase for cancellation up to 670,000 Common Shares. During the three month period ended June 30, 2016, the Company purchased and cancelled 182,800 of its common shares and to-date the Company has purchased and cancelled 452,341 of its common shares under this normal course issuer bid which expired on June 24, 2016.

On June 22, 2016 the Company renewed its Normal Course Issuer Bid for a further 12 months allowing it to purchase for cancellation up to an additional 986,105 Commons Shares.

The Board of Directors has approved a quarterly dividend of $0.125 per share payable on October 14, 2016 to the holders of common shares of record as at the close of business on September 30, 2016.

Forward-Looking Statements

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, those with respect to 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 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 December 31, 2015 Management Discussion and Analysis 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, secure new franchised locations, 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 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

As at June 30, 2016, the Company operated 180 easyhome stores (including 26 franchises and 3 consolidated franchise locations) and 210 easyfinancial locations.

goeasy Ltd. is a leading full service provider of goods and alternative financial services that improve the lives of everyday Canadians. Today, goeasy Ltd. serves its customers through two key operating divisions, easyhome and easyfinancial. easyhome is Canada's largest lease-to-own company, offering brand-name household furniture, appliances and electronics to consumers under weekly or monthly leasing agreements through both corporate and franchise stores. easyfinancial is the leading provider of alternative financial services, offering consumer loans between $500-$15,000, and is supported by a strong central credit adjudication process and industry leading risk analytics. easyfinancial also operates an indirect lending channel, offering loan products to consumers at the point-of-sale of third party merchants. Both operating divisions of goeasy Ltd. offer the highest level of customer service and enable customers to transact through a national store and branch network of over 180 easyhome and 200 easyfinancial locations across Canada and through its online and mobile eCommerce enabled platforms.

goeasy Ltd. is listed on the TSX under the symbol 'GSY'. For more information, visit www.goeasy.com.


INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(unaudited)
(expressed in thousands of Canadian dollars)
----------------------------------------------------------------------------

                                          As At June 30,  As At December 31,
                                                    2016                2015
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ASSETS
Cash                                              20,491              11,389
Amounts receivable                                10,884              13,000
Prepaid expenses                                   2,582               2,446
Consumer loans receivable                        306,789             270,961
Lease assets                                      56,404              60,753
Property and equipment                            17,908              18,689
Deferred tax assets                                7,953               5,913
Intangible assets                                 14,842              14,041
Goodwill                                          21,310              21,310
----------------------------------------------------------------------------
TOTAL ASSETS                                     459,163             418,502
----------------------------------------------------------------------------
----------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable and accrued
 liabilities                                      25,442              23,617
Income taxes payable                               3,219                 700
Dividends payable                                  1,677               1,341
Deferred lease inducements                         1,682               1,922
Unearned revenue                                   4,612               3,982
Provisions                                           435                 582
Term loan                                        235,924             210,299
----------------------------------------------------------------------------
TOTAL LIABILITIES                                272,991             242,443
----------------------------------------------------------------------------
Shareholders' equity
Share capital                                     83,111              81,725
Contributed surplus                                8,471               9,852
Accumulated other comprehensive
 income                                              814                 969
Retained earnings                                 93,776              83,513
----------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                       186,172             176,059
----------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS'
 EQUITY                                          459,163             418,502
----------------------------------------------------------------------------
----------------------------------------------------------------------------

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(expressed in thousands of Canadian dollars except earnings per share)
----------------------------------------------------------------------------
                                      Three Months Ended    Six Months Ended
                                    ----------------------------------------
                                      June 30,  June 30,  June 30,  June 30,
                                          2016      2015      2016      2015
----------------------------------------------------------------------------
REVENUE
Lease revenue                           34,244    36,120    70,192    72,873
Interest income                         33,974    23,641    65,529    44,799
Other                                   17,880    13,129    32,702    25,743
----------------------------------------------------------------------------
                                        86,098    72,890   168,423   143,415
----------------------------------------------------------------------------

Other income                             3,000         -     3,000         -
EXPENSES BEFORE DEPRECIATION AND
 AMORTIZATION
Salaries and benefits                   23,438    21,078    46,006    42,233
Stock based compensation                   992       975     1,999     2,595
Advertising and promotion                4,135     2,728     6,620     5,315
Bad debts                               13,315     9,436    25,695    17,604
Occupancy                                8,230     7,953    16,209    15,589
Other expenses                           7,246     6,405    14,596    12,363
----------------------------------------------------------------------------
                                        57,356    48,575   111,125    95,699
----------------------------------------------------------------------------
DEPRECIATION AND AMORTIZATION
Depreciation of lease assets            11,141    11,634    22,587    23,258
Depreciation of property and
 equipment                               1,421     1,359     2,804     2,639
Amortization of intangible assets        1,031       862     2,005     1,584
Impairment, net                              5        46         5        46
----------------------------------------------------------------------------
                                        13,598    13,901    27,401    27,527
----------------------------------------------------------------------------

Total operating expenses                70,954    62,476   138,526   123,226
----------------------------------------------------------------------------

Operating income                        18,144    10,414    32,897    20,189
Finance costs                            5,114     3,621     9,935     6,751
----------------------------------------------------------------------------

Income before income taxes              13,030     6,793    22,962    13,438
Income tax expense (recovery)
Current                                  3,574     1,786     7,227     3,038
Deferred                               (1,067)      (10)   (2,040)       460
----------------------------------------------------------------------------
                                         2,507     1,776     5,187     3,498
----------------------------------------------------------------------------

Net income                              10,523     5,017    17,775     9,940
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Basic earnings per share                  0.77      0.37      1.30      0.73
Diluted earnings per share                0.75      0.36      1.27      0.71
----------------------------------------------------------------------------
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Contacts:
goeasy Ltd.
David Ingram
President and Chief Executive Officer
(905) 272-2788

goeasy Ltd.
Steve Goertz
Executive Vice President and Chief Financial Officer
(905) 272-2788