easyhome Ltd. Reports Results for the First Quarter Ended March 31, 2015

easyhome Ltd. Reports Results for the First Quarter Ended March 31, 2015

Total Revenue Growth of 17%, Same Store Sales Growth of 20%, Operating Income Growth of 23% and Successful Integration of 45 Acquired Locations

MISSISSAUGA, ONTARIO - (Marketwired - May 4, 2015) - 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 first quarter ended March 31, 2015.

Revenue for the first quarter of 2015 increased to $70.5 million, an increase of 16.9% from $60.3 million in the first quarter of 2014. The growth was driven primarily by the expansion of easyfinancial and the related growth of its consumer loans receivable portfolio. Total same store sales growth in the quarter was 19.8%. Operating income for the quarter was $9.8 million, up $1.8 million or 23% compared to the first quarter of 2014. Net income for the quarter was $4.9 million, an increase of 6.3% compared with $4.6 million reported in the first quarter of 2014. Diluted earnings per share for the quarter increased to $0.35 compared to $0.34 for the first quarter of 2014. Operating income and earnings per share for the first quarter of 2015 were reduced by $0.8 million and $0.04 per share, respectively, due to the earnings drag from the 45 new locations acquired from a former payday loan operator on February 10, 2015.

"We are satisfied with the results for the quarter," said David Ingram, easyhome's President and Chief Executive Officer. "We made progress in the advancement of our strategic imperatives, specifically the expansion of our easyfinancial retail footprint through the acquisition of 45 locations during the quarter. Although this transaction impacted earnings in the quarter by $0.04 per share, we are confident that it will deliver the expected positive benefits in the second half of 2015 and onwards."

During the first quarter of 2015, the consumer loans receivable portfolio experienced growth of $15.3 million compared with growth of $12.8 million in the first quarter of 2014. The gross consumer loans receivable as at March 31, 2015 was $207.5 million compared with $123.5 million as at March 31, 2014, growing 68% over the preceding 12 months.

Other highlights for the first quarter of 2015 include:


Revenue for easyfinancial increased by 61% for the first quarter of 2015 compared to the first quarter of 2014.

Operating margin of 30.2% for the first quarter of 2015 was down from 35.8% reported for the same period in 2014. The drag on earnings of $0.8 million associated with acquisition of the 45 new locations reduced operating margin by 2.5%.

The 45 new locations acquired on February 10, 2015 opened as easyfinancial locations on March 9, 2015 and, as a group, are performing according to our expectations for both growth and operating income performance.

easyhome Leasing

Revenue for easyhome leasing decreased by $2.0 million or 5.0%. Same store revenue growth of 3.3% was more than offset by the impact of store sales and closures over the past 15 months and the sale of the U.S. franchise royalty stream that occurred on December 31, 2014.

The operating margin of easyhome Leasing for the first quarter of 2015 was 15.6%, within the range of our long-term expectations.


The Company has made progress on its strategic imperatives, including opening 49 new easyfinancial locations during the quarter, increasing the number of leasing and lending transactions that originate online by 70% and 150%, respectively, and continuing to refine our credit adjudication strategies to take advantage of greater amounts of historical data.


David Ingram commented, "We are confident that our growth plans for easyfinancial, including the acquisition of 45 new locations, will enable us to achieve our loan book target of $280 - $295 million by the end of 2015 and our new store schedule is on track for at least 60 locations this year. This continued growth will enable easyfinancial to achieve its goal of becoming Canada's largest provider of consumer loans as an alternative to traditional banks and payday lenders."

Mr. Ingram continued, "The earnings drag associated with the acquisition of stores from a former payday loan lender will impact earnings for the second quarter of 2015 by $0.10 before it contributes to earnings in the second half of the year. We anticipate that the new store drag associated with the acquisition will reduce earnings per share in 2015 by approximately $0.10, but increase earnings per share by approximately $0.15 in 2016 and add $0.25 in 2017."

"We expect our earnings to begin expanding in the second half of 2015 as we experience the benefits of several recent enhancements and ongoing key initiatives," Mr. Ingram commented. "In the fourth quarter of 2014, we made adjustments to our credit criteria for loan originations. While this will result in a short term increase in loss rates to the upper level of our historical range, we will experience benefits in reduced loan losses longer term. Secondly, we have begun the process of redesigning our eCommerce sites to make them more user friendly and optimized for mobile devices. We expect this will lead to tangible increases in online conversion rates, helping drive sales for both the lending and leasing businesses."

The Board of Directors has approved a quarterly dividend payment of $0.10 per share payable on July 10, 2015 to the holders of common shares of record as at the close of business on June 26, 2015.

About easyhome

As at March 31, 2015, the Company operated 188 easyhome leasing stores (including 22 franchises and 6 consolidated franchise locations) and 194 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.

easyhome Ltd.
(expressed in thousands of Canadian dollars)


  As At As At
  March 31, December 31,
  2015 2014
Cash 333 1,165
Amounts receivable 12,176 16,508
Prepaid expenses 2,861 1,971
Consumer loans receivable 194,762 180,693
Lease assets 64,496 64,526
Property and equipment 18,964 16,915
Deferred tax assets 6,265 6,725
Intangible assets 12,614 11,006
Goodwill 20,374 19,963
TOTAL ASSETS 332,845 319,472
Revolving operating facility 1,617 1,756
Accounts payable and accrued liabilities 24,786 32,837
Income taxes payable 4,111 3,042
Dividends payable 1,343 1,133
Deferred lease inducements 2,323 2,603
Unearned revenue 4,031 3,978
Provisions 407 314
Term loan 134,998 119,841
TOTAL LIABILITIES 173,616 165,504
Shareholders' equity    
Share capital 81,442 80,364
Contributed surplus 6,753 6,458
Accumulated other comprehensive income 1,002 694
Retained earnings 70,032 66,452


easyhome Ltd.
(expressed in thousands of Canadian dollars except earnings per share)


  Three Months Ended  
  March 31, March 31,  
  2015 2014  
Lease revenue 36,753 38,500  
Interest income 21,158 12,789  
Other 12,614 9,045  
  70,525 60,334  
Salaries and benefits 21,155 18,259  
Stock based compensation 1,620 1,547  
Advertising and promotion 2,587 1,629  
Bad debts 8,168 4,207  
Occupancy 7,636 6,923  
Other 5,958 6,028  
  47,124 38,593  
Depreciation of lease assets 11,624 12,060  
Depreciation of property and equipment 1,280 1,146  
Amortization of intangible assets 722 480  
Impairment, net - 82  
  13,626 13,768  
Total operating expenses 60,750 52,361  
Operating income 9,775 7,973  
Finance costs 3,130 1,558  
Income before income taxes 6,645 6,415  
Income tax expense (recovery)      
Current 1,252 3,199  
Deferred 470 (1,414 )
  1,722 1,785  
Net income 4,923 4,630  
Basic earnings per share 0.36 0.35  
Diluted earnings per share 0.35 0.34  

SOURCE easyhome Ltd.


David Ingram
easyhome Ltd.
President and Chief Executive Officer
(905) 272-2788

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



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