MISSISSAUGA, ONTARIO - (Marketwired - Nov. 6, 2014) - 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, 2014.
Revenue for the third quarter of 2014 increased to $65.5 million, an increase of 19.4% from $54.9 million in the third quarter of 2013. Total same store sales growth in the quarter was 20.7%. The growth was driven primarily by the expansion of easyfinancial and the related growth of its consumer loans receivable portfolio by $20.3 million during the third quarter of 2014 compared with $8.9 million in the third quarter of 2013. The gross consumer loans receivable as at September 30, 2014 was $165.7 million compared with $92.8 million as at September 30, 2013, an increase of 79%.
Operating income for the quarter was $7.4 million, up $0.5 million or 6.6% compared to the third quarter of 2013. Net income for the quarter was $3.5 million, a decrease of 9.1% compared with $3.8 million reported in the third quarter of 2013. During the third quarter of 2014, easyhome made a planned one-time investment in advertising expenditures to support the launch of the goeasy master brand that reduced net income by $1.1 million (net of tax) and earnings per share by $0.08. Diluted earnings per share for the quarter decreased by $0.06 to $0.25 compared to $0.31 for the third quarter of 2013.
"easyhome again delivered record revenues," said David Ingram, easyhome's President and Chief Executive Officer. "We are still in the early days of the goeasy master brand launch but since the launch on September 15, 2014, we have seen an increase in the number of visitors to our websites and have realized an improvement in the number of deliveries and new customers within our leasing business compared to the trend during 2014. These positive changes will help the Company to deliver strong revenue growth and improved earnings in the fourth quarter and onwards, while advertising expenditures will return to more normal run rates."
For the first nine months of the year, easyhome recorded revenues of $189.1 million, up 17.4% compared with $161.0 million in the first nine months of 2013. Operating income for the period was $23.1 million compared with $17.5 million in the first nine months of 2013, an increase of 32%, while net income increased by $2.8 million or 28%. Earnings per share increased from $0.81 to $0.91 cents, an increase of $0.10 or 12%.
The Company has established the following targets for 2015:
Based on these assumptions, the Company is targeting total revenue growth of 17 - 20%. 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 9, 2015 to the holders of common shares of record as at the close of business on December 29, 2014.
As at September 30, 2014, easyhome Ltd. operated 235 easyhome leasing stores (including 9 consolidated franchise locations and 62 other franchise locations) and 143 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 under the master brand goeasy through its 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||155,779||103,936|
|Property and equipment||17,103||15,793|
|Deferred tax assets||8,096||3,997|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Bank revolving credit facility||-||23,496|
|Accounts payable and accrued liabilities||32,620||24,322|
|Income taxes payable||7,255||3,929|
|Deferred lease inducements||2,469||2,749|
|Accumulated other comprehensive income||682||307|
|Total Shareholders' Equity||147,153||135,633|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||294,056||232,900|
|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||19,107||16,152||56,849||48,968|
|Stock based compensation||1,182||895||4,450||2,454|
|Advertising and promotion||3,174||1,655||6,510||5,538|
|DEPRECIATION AND AMORTIZATION|
|Depreciation of lease assets||12,564||11,968||36,925||35,920|
|Depreciation of property and equipment||1,215||1,096||3,560||3,314|
|Amortization of intangible assets||526||318||1,512||925|
|Total operating expenses||58,120||47,918||166,057||143,562|
|Income before income taxes||4,873||5,262||17,158||13,232|
|Income tax expense (recovery)|
|Basic earnings per share||0.26||0.32||0.94||0.82|
|Diluted earnings per share||0.25||0.31||0.91||0.81|
President & Chief Executive Officer
Senior Vice President and Chief Financial Officer