MISSISSAUGA, ONTARIO - (Marketwired - Nov. 6, 2013) - easyhome Ltd. (TSX:EH) ("easyhome" or the "Company"), the Canadian leader in providing goods and financial services to the cash and credit constrained consumer, today announced its results for the third quarter ended September 30, 2013.
Revenue for the third quarter of 2013 increased to $54.9 million, an increase of 11.3% from $49.3 million in the third quarter of 2012. The growth was driven primarily by the expansion of easyfinancial and the related growth of its consumer loans receivable portfolio. Operating income for the quarter was $6.9 million, up $2.7 million or 62% compared to the third quarter of 2012. Net income for the quarter was $3.8 million, an increase of 45% compared with $2.6 million reported in the third quarter of 2012. Diluted earnings per share for the quarter increased by 41% to $0.31 compared to $0.22 for the third quarter of 2012.
"We are delighted to report continued strong growth in revenue, operating income and net income," said David Ingram, easyhome's President and Chief Executive Officer. "Our leasing business delivered a 14.3% improvement in its operating income while easyfinancial's operating income increased 50%."
"The ever increasing demand for easyfinancial's loan products has given us the confidence to embark on a more aggressive growth plan for easyfinancial," continued Mr. Ingram. "We are building on a foundation of strength while enjoying record performance during 2013. We have in place the capital, the systems and analytical tools, the personnel and the required strategic framework to significantly expand our easyfinancial operations and realize easyfinancial's vision of becoming Canada's leading alternative provider of financial services to the cash and credit constrained consumer."
Additionally, the Company announced a $20.0 million equity financing that will close on November 12, as well as a debt refinancing earlier in the year and is well capitalized to deliver its growth plans for easyfinancial.
easyhome plans to strategically invest in growing the number of locations for stand-alone branches of easyfinancial to approximately 225 over the next three years, up from 112 at September 30, 2013. This growth of the retail footprint and the introduction of new delivery channels will help grow easyfinancial's consumer loans receivable portfolio to a target of $250 million by the end of 2016. For 2016, the Company expects easyfinancial to have an operating margin of 32% growing to approximately 35% over time as growth levels moderate.
"The Board is pleased to be moving forward with the strategic growth strategy as the Company is in a position of unprecedented strength," said Donald K. Johnson, Chairman of the Board. "easyhome has all the elements in place to ensure the projected growth will continue to create value for shareholders."
Highlights for the third quarter of 2013 include:
Year to date, revenue reached $161.0 million, up 8.8% from $148.0 million in 2012. Net income for the first nine months of 2013 was $9.8 million, up 35% from $7.3 million a year earlier. Diluted earnings per share rose 32.7% to $0.81 in the first three quarters of 2013 from $0.61 in the same period of 2012.
The Company has established the following targets for 2014:
Based on these assumptions, the Company is targeting total revenue growth of 10 - 12%. The achievement of these targets by the Company, however, is predicated on a number of factors, including the pace of expansion of easyfinancial.
The Board of Directors has approved a quarterly dividend payment of $0.085 per share payable on January 10, 2014 to the holders of common shares of record as at the close of business on December 27, 2013.
As at September 30, 2013, easyhome Ltd. operated 235 easyhome leasing stores (including 8 consolidated franchise locations and 52 other franchise locations) and 112 easyfinancial locations.
easyhome Ltd. is the Canadian leader in providing goods and financial services to the cash and credit constrained consumer. easyhome Ltd. serves its customers through two key operating divisions, easyhome Leasing and easyfinancial. easyhome Leasing is Canada's largest merchandise leasing Company, offering top quality, brand-name household furnishings, appliances and home electronic products to consumers under weekly or monthly leasing agreements through both corporate and franchise stores. easyfinancial is a leading provider of consumer loans as an alternative to traditional banks and payday lenders. easyhome Ltd. is listed on the TSX under the symbol 'EH'. For more information, visit www.easyhome.ca.
The above analysis refers to certain financial measures, including same store revenue growth and gross consumer loans receivable which are not determined in accordance with International Financial Reporting Standards ("IFRS"). These measures do not have standardized meanings and may not be comparable to similar measures presented by other companies. These measures are defined in our Management's Discussion and Analysis for the period which is available on SEDAR or on the Company's website at www.easyhome.ca or can be determined by reference to our financial statements. We discuss these measures as we believe that they facilitate the understanding of the results of our operations and financial position.
This news release includes forward-looking statements about easyhome Ltd., including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as 'expects', 'anticipates', 'intends', 'plans', 'believes' or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenue, earnings or growth rates), ongoing business strategies or prospects about future events is also a forward-looking statement. 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 our operations, economic factors and the industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by us, due to, but not limited to important factors such as our 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 our customers at a competitive rate, cope with changes in legislation, react to uncertainties related to regulatory actions, 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 our system of internal controls. We caution 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. We are under no obligation (and expressly disclaim any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless otherwise required by law.
|INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION|
|(expressed in thousands of Canadian dollars)|
|As at||As at|
|September 30,||December 31,|
|Consumer loans receivable||48,667||34,425|
|Total current assets||58,202||44,556|
|Consumer loans receivable||38,389||32,159|
|Property and equipment||15,021||13,729|
|Deferred tax assets||4,466||4,232|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Bank revolving credit facility||28,166||21,281|
|Accounts payable and accrued liabilities||20,269||31,696|
|Income taxes payable||6,924||4,216|
|Deferred lease inducements||635||564|
|Total current liabilities||60,696||63,070|
|Accounts payable and accrued liabilities||1,906||1,459|
|Deferred lease inducements||1,757||1,898|
|Accumulated other comprehensive income (loss)||82||(137||)|
|Total shareholders' equity||112,798||105,013|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||207,638||189,927|
|INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME|
|(expressed in thousands of Canadian dollars except earnings per share)|
|Three months ended||Nine months ended|
|September 30,||September 30,||September 30,||September 30,|
|EXPENSES BEFORE DEPRECIATION AND AMORTIZATION|
|Salaries and benefits||16,152||15,874||48,968||47,405|
|Stock based compensation||895||504||2,454||998|
|Advertising and promotion||1,655||1,702||5,538||5,858|
|Distribution and travel||1,720||1,821||5,185||5,535|
|Restructuring and other items||-||-||-||436|
|DEPRECIATION AND AMORTIZATION|
|Depreciation of lease assets||11,968||11,847||35,920||36,045|
|Depreciation of property and equipment||1,096||1,007||3,314||2,978|
|Amortization of intangible assets||318||119||925||348|
|Total operating expenses||47,918||44,997||143,562||136,060|
|Income before income taxes||5,262||3,811||13,232||10,491|
|Income tax expense (recovery)|
|Basic earnings per share||0.32||0.22||0.82||0.61|
|Diluted earnings per share||0.31||0.22||0.81||0.61|
President & Chief Executive Officer
Senior Vice President and Chief Financial Officer
goeasy Ltd. is the leading full service provider of goods and alternative financial services that improve the lives of everyday Canadians.