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

MISSISSAUGA, ONTARIO - (Marketwired - Aug. 2, 2016) - 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:


  • 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.


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


  • 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.


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.

(expressed in thousands of Canadian dollars)
As At June 30,

As At December 31,

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
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


(expressed in thousands of Canadian dollars except earnings per share)
  Three Months Ended Six Months Ended
  June 30,
June 30,
June 30,
June 30,
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



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 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



Operating income



Finance costs 5,114 3,621 9,935 6,751
Income before income taxes



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



Basic earnings per share



Diluted earnings per share 0.75 0.36 1.27 0.71

SOURCE goeasy Ltd.


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

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



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