Enova Reports Second Quarter 2017 Financial Results
CHICAGO, July 27, 2017 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company offering consumer and small business loans and financing, today announced financial results for the quarter ended June 30, 2017.
"We are pleased with the progress we are seeing in each of our six growth businesses, which was driven this quarter by continued healthy demand and good credit performance," said David Fisher, Enova's CEO. "We believe our leading competitive position, built on our world class analytics and technology platform, positions us well to execute our focused growth strategy and maintain strong profitability."
Second Quarter 2017 Summary
-- Total revenue of $189.9 million in the second quarter of 2017 increased
10.1% from $172.5 million in the second quarter of 2016.
-- Gross profit margin was 57.9% in the second quarter of 2017 compared to
62.1% in the second quarter of 2016, driven by stronger growth in the
U.S. installment loan and receivables purchase agreements and a higher
mix of new customers, which requires higher loan loss provisions.
-- Net income of $11.9 million, or $0.35 per diluted share, in the second
quarter of 2017 increased from $8.2 million, or $0.25 per diluted share,
in the second quarter of 2016. Second quarter 2017 adjusted EBITDA of
$41.6 million, a non-GAAP measure, increased from $35.2 million in the
second quarter of 2016.
-- Second quarter 2017 adjusted earnings per share of $0.41, a non-GAAP
measure, increased 46.4% from $0.28 in the second quarter of 2016.
"Our financial results demonstrate the strong operating leverage in our online business model and solid credit performance," said Steve Cunningham, CFO of Enova. "Diluted earnings per share and adjusted EBITDA came in at the high end of our guidance range, driven by efficient marketing and effective operating expense management."
Enova ended the second quarter of 2017 with unrestricted cash and cash equivalents of $46.2 million. As of June 30, 2017, the company had total debt outstanding of $638.7 million, which included $152.0 million outstanding under Enova's $295 million securitization facilities. During the second quarter, Enova generated $66.2 million of cash flow from operations.
Outlook
For the third quarter of 2017, Enova expects total revenue of $200 million to $220 million, GAAP diluted earnings per share of $0.02 to $0.21, adjusted EBITDA of $25 million to $35 million, and adjusted earnings per share of $0.07 to $0.25. For the full year 2017, Enova expects total revenue of $810 million to $860 million, GAAP diluted earnings per share of $0.88 to $1.24, adjusted EBITDA of $145 million to $165 million, and adjusted earnings per share of $1.07 to $1.43.
For information regarding the non-GAAP financial measures discussed in this release, please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below.
Conference Call
Enova will host a conference call to discuss its results at 4 p.m. Central Time / 5 p.m. Eastern Time today, Thursday, July 27(th). The live webcast of the call can be accessed at the Enova Investor Relations website at http://ir.enova.com, along with the company's earnings press release and supplemental financial information. The U.S. dial-in for the call is 1-855-560-2575 (1-412-542-4161 for non-U.S. callers). Please ask to be joined to the Enova International call. A replay of the conference call will be available until August 10, 2017, at 10:59 p.m. Central Time / 11:59 p.m. Eastern Time, while an archived version of the webcast will be available on the Enova Investor Relations website for 90 days. The U.S. dial-in for the conference call replay is 1-877-344-7529 (1-412-317-0088). The replay access code is 1010-9454.
About Enova
Enova (NYSE: ENVA) is a leading provider of online financial services to non-prime consumers and small businesses, providing access to credit powered by its advanced analytics, innovative technology, and world-class online platform and services. Enova has provided almost five million customers around the globe access to more than $20 billion in loans and financing. The financial technology company has a portfolio of trusted brands serving consumers, including CashNetUSA®, DollarsDirect®, NetCredit®, On Stride Financial®, Pounds to Pocket®, QuickQuid® and Simplic®; two brands serving small businesses, Headway Capital® and The Business Backer®; and offers online lending platform services to lenders. Through its Enova Decisions(TM) brand, it also delivers on-demand decision-making technology and real-time predictive analytics services to clients. You can learn more about the company and its brands at www.enova.com.
Cautionary Statement Concerning Forward Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 about the business, financial condition and prospects of Enova. These forward-looking statements give current expectations or forecasts of future events and reflect the views and assumptions of Enova's senior management with respect to the business, financial condition and prospects of Enova as of the date of this release and are not guarantees of future performance. The actual results of Enova could differ materially from those indicated by such forward-looking statements because of various risks and uncertainties applicable to Enova's business, including, without limitation, those risks and uncertainties indicated in Enova's filings with the Securities and Exchange Commission ("SEC"), including our annual report on Form 10-K, quarterly reports on Forms 10-Q and current reports on Forms 8-K. These risks and uncertainties are beyond the ability of Enova to control, and, in many cases, Enova cannot predict all of the risks and uncertainties that could cause its actual results to differ materially from those indicated by the forward-looking statements. When used in this release, the words "believes," "estimates," "plans," "expects," "anticipates" and similar expressions or variations as they relate to Enova or its management are intended to identify forward-looking statements. Enova cautions you not to put undue reliance on these statements. Enova disclaims any intention or obligation to update or revise any forward-looking statements after the date of this release.
Non-GAAP Financial Measures
In addition to the financial information prepared in conformity with generally accepted accounting principles, or GAAP, Enova provides historical non-GAAP financial information. Management believes that presentation of non-GAAP financial information is meaningful and useful in understanding the activities and business metrics of Enova's operations. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of Enova's business that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
Management provides non-GAAP financial information for informational purposes and to enhance understanding of Enova's GAAP consolidated financial statements. Readers should consider the information in addition to, but not instead of or superior to, Enova's financial statements prepared in accordance with GAAP. This non-GAAP financial information may be determined or calculated differently by other companies, limiting the usefulness of those measures for comparative purposes.
Combined Loans and Finance Receivables
Enova has provided combined loans and finance receivables, which is a non-GAAP measure. Enova also reports allowances and liabilities for estimated losses on loans and finance receivables individually and on a combined basis, which are GAAP measures that are included in Enova's financial statements. Management believes these measures provide investors with important information needed to evaluate the magnitude of potential cost of revenue and the opportunity for revenue performance of the loan and finance receivables portfolio on an aggregate basis. Management believes that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the residual amount on Enova's balance sheet since both revenue and the cost of revenue for loans and finance receivables are impacted by the aggregate amount of loans and finance receivables owned by Enova and those guaranteed by Enova as reflected in its financial statements.
Adjusted Earnings and Adjusted Earnings Per Share
In addition to reporting financial results in accordance with GAAP, Enova has provided adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. Management believes that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of Enova's financial performance, competitive position and prospects for the future. Management also believes that investors regularly rely on non-GAAP financial measures, such as the Adjusted Earnings Measures, to assess operating performance and that such measures may highlight trends in Enova's business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, management believes that the adjustments shown below are useful to investors in order to allow them to compare Enova's financial results during the periods shown without the effect of certain expense items.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP measure that Enova defines as earnings excluding depreciation, amortization, interest, foreign currency transaction gains or losses, taxes, and stock-based compensation, and Adjusted EBITDA margin is a non-GAAP measure that Enova defines as Adjusted EBITDA as a percentage of total revenue. Management believes Adjusted EBITDA and Adjusted EBITDA margin are used by investors to analyze operating performance and evaluate Enova's ability to incur and service debt and Enova's capacity for making capital expenditures. Adjusted EBITDA and Adjusted EBITDA margin are also useful to investors to help assess Enova's estimated enterprise value. The computation of Adjusted EBITDA and Adjusted EBITDA margin as presented below may differ from the computation of similarly-titled measures provided by other companies.
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(Unaudited)
June 30, December 31,
--------
2017 2016 2016
---- ---- ----
Assets
Cash and cash equivalents $46,209 $39,167 $39,934
Restricted cash and cash equivalents (includes
restricted cash of consolidated VIEs of $19,119,
$13,930 and $19,468 as of June 30, 2017 and 2016 and
December 31, 2016, respectively) 26,636 34,601 26,306
Loans and finance receivables, net (includes loans of
consolidated VIEs of $240,444, $155,313 and $234,497
and allowance for losses of $17,072, $13,024 and
$17,731 as of June 30, 2017 and 2016 and December 31,
2016, respectively) 563,996 489,990 561,550
Income taxes receivable 13,410 - -
Other receivables and prepaid expenses 22,006 18,468 19,524
Property and equipment, net 44,329 47,206 47,100
Goodwill 267,012 267,013 267,010
Intangible assets, net 4,865 5,946 5,404
Other assets 13,406 8,478 11,051
------ ----- ------
Total assets $1,001,869 $910,869 $977,879
========== ======== ========
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $62,799 $75,175 $71,671
Income taxes currently payable - 2,912 282
Deferred tax liabilities, net 25,753 19,677 14,316
Long-term debt (includes long-term debt of
consolidated VIEs of $151,987, $106,846 and $165,419
and debt issuance costs of $1,054, $2,948 and $1,869,
as of June 30, 2017 and 2016 and December 31, 2016,
respectively) 638,749 588,824 649,911
------- ------- -------
Total liabilities 727,301 686,588 736,180
------- ------- -------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.00001 par value, 250,000,000 shares
authorized, 33,752,662, 33,236,539 and 33,364,525
shares issued and 33,635,215, 33,197,558 and
33,293,100 outstanding as of June 30, 2017 and 2016
and December 31, 2016, respectively - - -
Preferred stock, $0.00001 par value, 25,000,000 shares
authorized, no shares issued and outstanding - - -
Additional paid in capital 23,753 14,073 18,446
Retained earnings 261,180 218,904 235,455
Accumulated other comprehensive loss (9,069) (8,447) (11,578)
Treasury stock, at cost (117,447, 38,981 and 71,425
shares as of June 30, 2017 and 2016 and December 31,
2016, respectively) (1,296) (249) (624)
------ ---- ----
Total stockholders' equity 274,568 224,281 241,699
------- ------- -------
Total liabilities and stockholders' equity $1,001,869 $910,869 $977,879
========== ======== ========
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Revenue $189,904 $172,535 $382,167 $347,188
Cost of Revenue 79,862 65,453 161,746 135,030
------ ------ ------- -------
Gross Profit 110,042 107,082 220,421 212,158
Expenses
Marketing 23,410 25,597 42,993 46,778
Operations and technology 21,818 20,935 45,349 41,069
General and administrative 26,245 27,515 51,941 55,440
Depreciation and amortization 3,366 4,228 6,863 8,215
----- ----- ----- -----
Total Expenses 74,839 78,275 147,146 151,502
------ ------ ------- -------
Income from Operations 35,203 28,807 73,275 60,656
Interest expense, net (17,012) (16,026) (34,234) (31,941)
Foreign currency transaction gain 62 471 289 2,039
--- --- --- -----
Income before Income Taxes 18,253 13,252 39,330 30,754
Provision for income taxes 6,380 5,064 13,605 12,703
----- ----- ------ ------
Net Income $11,873 $8,188 $25,725 $18,051
======= ====== ======= =======
Earnings Per Share:
Earnings per common share:
Basic $0.35 $0.25 $0.77 $0.54
Diluted $0.35 $0.25 $0.75 $0.54
Weighted average common shares
outstanding:
Basic 33,553 33,175 33,463 33,159
Diluted 34,125 33,335 34,081 33,261
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(dollars in thousands)
(Unaudited)
Six Months Ended June 30,
-------------------------
2017 2016
---- ----
Cash flows provided
by operating
activities $186,058 $180,507
Cash flows used in
investing
activities
Loans and finance
receivables (164,731) (190,184)
Change in
restricted cash 13 (27,935)
Property and
equipment
additions (5,301) (7,649)
Other investing
activities 1,482 95
----- ---
Total cash flows
used in investing
activities (168,537) (225,673)
Cash flows (used
in) provided by
financing
activities (15,900) 45,113
------- ------
Effect of exchange
rates on cash 4,654 (2,846)
----- ------
Net increase
(decrease) in cash
and cash
equivalents 6,275 (2,899)
Cash and cash
equivalents at
beginning of year 39,934 42,066
------ ------
Cash and cash
equivalents at end
of period $46,209 $39,167
======= =======
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
GEOGRAPHIC INFORMATION
(dollars in thousands)
The following tables present information on Enova's domestic and international operations for the three and six months ended June 30, 2017 and 2016.
Three Months Ended
June 30,
--------
2017 2016 $ Change % Change
---- ---- -------- --------
Domestic:
Revenue $158,073 $140,342 $17,731 12.6%
Cost of revenue 67,393 57,752 9,641 16.7
------ ------ ----- ----
Gross profit $90,680 $82,590 $8,090 9.8
======= ======= ====== ===
Gross profit margin 57.4% 58.8% (1.4)% (2.4)%
International:
Revenue $31,831 $32,193 $(362) (1.1)%
Cost of revenue 12,469 7,701 4,768 61.9
------ ----- ----- ----
Gross profit $19,362 $24,492 $(5,130) (20.9)
======= ======= ======= =====
Gross profit margin 60.8% 76.1% (15.3)% (20.1)%
Total:
Revenue $189,904 $172,535 $17,369 10.1%
Cost of revenue 79,862 65,453 14,409 22.0
------ ------ ------ ----
Gross profit $110,042 $107,082 $2,960 2.8
======== ======== ====== ===
Gross profit margin 57.9% 62.1% (4.2)% (6.8)%
Six Months Ended June 30,
-------------------------
2017 2016 $ Change % Change
---- ---- -------- --------
Domestic:
Revenue $322,742 $283,770 $38,972 13.7%
Cost of revenue 138,042 118,208 19,834 16.8
------- ------- ------ ----
Gross profit $184,700 $165,562 $19,138 11.6
======== ======== ======= ====
Gross profit margin 57.2% 58.3% (1.1)% (1.9)%
International:
Revenue $59,425 $63,418 $(3,993) (6.3)%
Cost of revenue 23,704 16,822 6,882 40.9
------ ------ ----- ----
Gross profit $35,721 $46,596 $(10,875) (23.3)
======= ======= ======== =====
Gross profit margin 60.1% 73.5% (13.4)% (18.2)%
Total:
Revenue $382,167 $347,188 $34,979 10.1%
Cost of revenue 161,746 135,030 26,716 19.8
------- ------- ------ ----
Gross profit $220,421 $212,158 $8,263 3.9
======== ======== ====== ===
Gross profit margin 57.7% 61.1% (3.4)% (5.6)%
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
LOANS AND FINANCE RECEIVABLES FINANCIAL AND OPERATING DATA
(dollars in thousands)
The following table shows loans and finance receivables and related loan loss activity, which is based on loan and finance receivable balances, for the three months ended June
30, 2017 and 2016.
Three Months Ended June 30, 2017 2016 Change
--------------------------- ---- ---- ------
Cost of revenue $79,862 $65,453 $14,409
Charge-offs (net of
recoveries) 78,768 58,558 20,210
Average combined loans and
finance receivables,
gross:
Company owned(a) 619,699 522,099 97,600
Guaranteed by Enova(a)(b) 24,999 27,537 (2,538)
------ ------ ------
Average combined loans and
finance receivables, gross
(a)(c) $644,698 $549,636 $95,062
======== ======== =======
Ending combined loans and
finance receivables,
gross:
Company owned $647,835 $563,810 $84,025
Guaranteed by Enova(b) 28,013 31,227 (3,214)
------ ------ ------
Ending combined loans and
finance receivables, gross
(c) $675,848 $595,037 $80,811
======== ======== =======
Ending allowance and
liability for losses $85,780 $75,653 $10,127
======= ======= =======
Combined originations (d) $512,546 $516,099 $(3,553)
Loans and finance
receivables ratios:
--------------------
Cost of revenue as a % of
average combined loans and
finance receivables,
gross(a)(c) 12.4% 11.9% 0.5%
Charge-offs (net of
recoveries) as a % of
average combined loans and
finance receivables,
gross(a)(c) 12.2% 10.7% 1.5%
Gross profit margin 57.9% 62.1% (4.2)%
Allowance and liability for
losses as a % of combined
loans and finance
receivables, gross(c)(e) 12.7% 12.7% - %
__________________
(a) The average combined loans and
finance receivables, gross, is the
average of the month-end balances
during the period.
(b) Represents loans originated by third-
party lenders through the credit
services organization (or CSO)
programs, which are not included in
Enova's financial statements.
(c) Non-GAAP measure. See the above
discussion for additional
information regarding combined loans
and finance receivables.
(d) Represents loans and finance
receivables originated by Enova and
third-party lenders (including
through the CSO programs) and
includes renewals of existing
origination agreements to customers
in good standing. The disclosure is
statistical data that is not
included in Enova's financial
statements.
(e) Allowance and liability for losses as
a percentage of combined loans and
finance receivables, gross, is
determined using period-end
balances.
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(dollars in thousands, except per share data)
Adjusted Earnings Measures
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Net Income $11,873 $8,188 $25,725 $18,051
Adjustments:
Intangible asset amortization 271 276 542 596
Stock-based compensation expense 2,987 2,181 5,307 4,149
Foreign currency transaction gain (62) (471) (289) (2,039)
Cumulative tax effect of
adjustments (1,113) (803) (1,923) (1,118)
------ ---- ------ ------
Adjusted earnings $13,956 $9,371 $29,362 $19,639
======= ====== ======= =======
Diluted earnings per share $0.35 $0.25 $0.75 $0.54
Adjusted earnings per share $0.41 $0.28 $0.86 $0.59
===== ===== ===== =====
Adjusted EBITDA
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Net Income $11,873 $8,188 $25,725 $18,051
Depreciation and amortization
expenses 3,366 4,228 6,863 8,215
Interest expense, net 17,012 16,026 34,234 31,941
Foreign currency transaction gain (62) (471) (289) (2,039)
Provision for income taxes 6,380 5,064 13,605 12,703
Stock-based compensation expense 2,987 2,181 5,307 4,149
Adjusted EBITDA $41,556 $35,216 $85,445 $73,020
======= ======= ======= =======
Adjusted EBITDA margin calculated
as follows:
Total Revenue $189,904 $172,535 $382,167 $347,188
Adjusted EBITDA 41,556 35,216 85,445 73,020
Adjusted EBITDA as a percentage of
total revenue 21.9% 20.4% 22.4% 21.0%
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(dollars in thousands)
Estimated Adjusted EBITDA For 2017
The following tables reconcile estimated Income from operations to Adjusted EBITDA, a non-GAAP measure:
Estimated Results
Three Months Ended September 30, 2017
-------------------------------------
Low High
--- ----
Unaudited
Income from operations 18,000 28,000
Depreciation and
amortization 4,000 4,000
Stock-based compensation
expense 3,000 3,000
----- -----
Adjusted EBITDA $25,000 $35,000
======= =======
Estimated Results
Year Ended December 31, 2017
----------------------------
Low High
--- ----
Unaudited
Income from operations $119,000 $139,000
Depreciation and
amortization 15,000 15,000
Stock-based compensation
expense 11,000 11,000
------ ------
Adjusted EBITDA $145,000 $165,000
======== ========
View original content with multimedia:http://www.prnewswire.com/news-releases/enova-reports-second-quarter-2017-financial-results-300495648.html
SOURCE Enova International, Inc.
