Enova Reports Fourth Quarter and Full Year 2020 Results
CHICAGO, Feb. 4, 2021 PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology and analytics company offering consumer and small business loans and financing, today announced financial results for the fourth quarter and year ended December 31, 2020.
"Our strong financial and operating performance this year in the face of a pandemic reflects the adaptability of our technology driven online business," said David Fisher, Enova's CEO. "Our sophisticated world class analytics successfully navigated the shifting market conditions allowing us to rapidly increase originations in the back half of the year. In addition, due to the strength of our operating model and balance sheet we further diversified our business through the acquisition of OnDeck. Our broad product offerings position us well to continue to support our customers, generate sustainable and profitable growth and drive shareholder value."
Fourth Quarter 2020 Summary
-- Total revenue of $264 million in the fourth quarter of 2020 decreased
24% from $345 million in the fourth quarter of 2019.
-- Net revenue margin of 92.3% in the fourth quarter of 2020 compared to
gross profit margin of 42.5% in the fourth quarter of 2019.
-- Net income from continuing operations of $231 million, or $6.47 per
diluted share, in the fourth quarter of 2020, compared to $30 million,
or $0.87 per diluted share, in the fourth quarter of 2019.
-- Fourth quarter 2020 adjusted EBITDA of $149 million, a non-GAAP measure,
compared to $66 million in the fourth quarter of 2019.
-- Adjusted earnings of $85 million, or $2.39 per diluted share, both
non-GAAP measures, in the fourth quarter of 2020, compared to adjusted
earnings of $31 million, or $0.92 per diluted share, in the fourth
quarter of 2019.
Full Year 2020 Summary
-- Total revenue of $1.084 billion in 2020 decreased 8% from $1.175 billion
in 2019.
-- Gross profit margin was 63.1% in 2020, compared to 48.7% in 2019.
-- Net income from continuing operations of $378 million, or $11.71 per
diluted share, in 2020 increased from $128 million, or $3.72 per diluted
share, in 2019.
-- Full year 2020 adjusted EBITDA of $415 million, a non-GAAP measure,
increased from $276 million in 2019.
-- Adjusted earnings of $235 million, or $7.26 per diluted share, a
non-GAAP measure, in 2020 increased from adjusted earnings of $140
million, or $4.08 per diluted share, in 2019.
"Our strong financial performance this quarter reflects the continued robust credit quality of the portfolio as well as sequential growth in originations, receivables and revenue," said Steve Cunningham, CFO of Enova. "Our earnings capacity and balance sheet flexibility have us well positioned to leverage our machine learning driven analytics to continue to capture increased demand at attractive unit economics as the economy improves."
Outlook
Given the ongoing uncertainties related to COVID-19 resurgences, changes in governmental restrictions, potential economic stimulus, employment stabilization and business reopenings, the Company is not providing guidance for the first quarter of 2021.
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 fourth quarter results at 4 p.m. Central Time / 5 p.m. Eastern Time today, February 4(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 join the Enova International call. A replay of the conference call will be available until February 11, 2021, 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 International 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 10151286.
About Enova
Enova International (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 more than 7 million customers around the globe with access to more than $40 billion in loans and financing. The financial technology company has a portfolio of trusted brands serving consumers, including CashNetUSA®, NetCredit® and Simplic®; three brands serving small businesses, Headway Capital®, The Business Backer® and OnDeck®; 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
The combined loans and finance receivables measures are non-GAAP measures that include loans and finance receivables that Enova owns or has purchased and loans that Enova guarantees. Management believes these non-GAAP measures provide investors with important information needed to evaluate the magnitude of potential receivable losses and the opportunity for revenue performance of the loans and finance receivable portfolio on an aggregate basis. Management also believes that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on Enova's consolidated balance sheet since revenue is impacted by the aggregate amount of receivables owned by Enova and those guaranteed by Enova as reflected in its consolidated financial statements.
Adjusted Earnings Measures
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 each of these expense items.
Adjusted EBITDA Measures
In addition to reporting financial results in accordance with GAAP, Enova has provided Adjusted EBITDA and Adjusted EBITDA margin, or, collectively, the Adjusted EBITDA measures, which are non-GAAP measures. 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. In addition, management believes that the adjustments for lease termination and cease-use costs, gain on bargain purchase, losses on early extinguishment of debt, equity method investment income and acquisition-related costs shown below are useful to investors in order to allow them to compare our financial results during the periods shown without the effect of the expense items. Adjusted EBITDA margin is a non-GAAP measure that Enova defines as Adjusted EBITDA as a percentage of total revenue. Management believes Adjusted EBITDA Measures 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 Measures are also useful to investors to help assess Enova's estimated enterprise value.
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(Unaudited)
December 31,
2020 2019
Assets
Cash and cash equivalents $
297,273 $
35,895
Restricted cash 71,927 45,069
Loans and finance receivables at fair value 1,241,506
Loans and finance receivables, net 1,062,650
Income taxes receivable 32,859
Other receivables and prepaid expenses 40,301 31,643
Property and equipment, net 79,417 54,540
Operating lease right-of-use asset 40,123 19,586
Goodwill 267,974 267,013
Intangible assets, net 26,008 2,185
Other assets 43,546 22,912
Total assets $
2,108,075 $
1,574,352
Liabilities and Stockholders' Equity
Accounts payable and accrued expenses $
124,071 $
122,163
Operating lease liability 67,956 35,712
Income taxes currently payable 2,624
Deferred tax liabilities, net 48,129 48,683
Long-term debt 946,461 991,181
Total liabilities 1,189,241 1,197,739
Commitments and contingencies
Stockholders' equity:
Common stock, $0.00001 par value, 250,000,000 shares authorized,
41,936,784 and 35,764,943 shares issued and 35,762,926 and 32,974,714
outstanding as of December 31, 2020 and 2019, respectively
Preferred stock, $0.00001 par value, 25,000,000 shares authorized, no shares
issued and outstanding
Additional paid in capital 187,981 63,791
Retained earnings 849,466 372,681
Accumulated other comprehensive loss (6,898) (3,066)
Treasury stock, at cost (6,173,858 and 2,790,229 shares (113,201) (56,793)
as of December 31, 2020 and 2019, respectively)
Total Enova International, Inc. stockholders' equity 917,348 376,613
Noncontrolling interest 1,486
Total stockholders' equity 918,834 376,613
Total liabilities and stockholders' equity $
2,108,075 $
1,574,352
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
2020 2019 2020 2019
Revenue $
263,852 $
345,262 $
1,083,710 $
1,174,757
Change in Fair Value (20,349) (399,517)
Cost of Revenue (198,417) (602,894)
Net Revenue/Gross Profit 243,503 146,845 684,193 571,863
Expenses
Marketing 27,605 35,705 69,780 115,132
Operations and technology 30,812 22,909 96,284 84,262
General and administrative 56,657 24,642 140,600 109,204
Depreciation and amortization 8,288 4,007 19,732 15,055
Total Expenses 123,362 87,263 326,396 323,653
Income from Operations 120,141 59,582 357,797 248,210
Interest expense, net (27,304) (19,751) (86,691) (75,604)
Foreign currency transaction gain (loss), net 521 (26) 514 (216)
Gain on bargain purchase 163,999 163,999
Loss on early extinguishment of debt (827) (827) (2,321)
Equity method investment income 628 628
Income before Income Taxes 257,158 39,805 435,420 170,069
Provision for income taxes 26,379 10,277 57,191 42,053
Net income from continuing operations before noncontrolling interest 230,779 29,528 378,229 128,016
Less: Net income attributable to noncontrolling interest 85 85
Net income from continuing operations 230,694 29,528 378,144 128,016
Net loss from discontinued operations (3) (80,081) (300) (91,404)
Net income (loss) attributable to Enova International, Inc. $
230,691 $
(50,553) $
377,844 $
36,612
Earnings (Loss) Per Share attributable to Enova International, Inc.:
Earnings (loss) per common share - basic:
Continuing operations $
6.61 $
0.88 $
11.86 $
3.80
Discontinued operations (2.39) (0.01) (2.71)
Earnings (loss) per common share - basic $
6.61 $
(1.51) $
11.85 $
1.09
Earnings (loss) per common share - diluted:
Continuing operations $
6.47 $
0.87 $
11.71 $
3.72
Discontinued operations (2.35) (0.01) (2.66)
Earnings (loss) per common share - diluted $
6.47 $
(1.48) $
11.70 $
1.06
Weighted average common shares outstanding:
Basic 34,926 33,553 31,897 33,715
Diluted 35,645 34,119 32,302 34,398
ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(dollars in thousands)
(Unaudited)
Year Ended December 31,
2020 2019
Cash flows provided by operating activities
Cash flows from operating activities - continuing operations $
741,171 $
804,608
Cash flows from operating activities - discontinued operations (300) 44,031
Cash flows provided by operating activities 740,871 848,639
Cash flows used in investing activities
Loans and finance receivables 2,986 (851,056)
Acquisitions, net of cash acquired 109,920
Property and equipment additions (29,491) (20,062)
Other investing activities 168 27
Cash flows from investing activities - continuing operations 83,583 (871,091)
Cash flows from investing activities - discontinued operations (70,306)
Total cash flows used in investing activities 83,583 (941,397)
Cash flows provided by financing activities (535,974) 95,484
Effect of exchange rates on cash (244) 979
Net increase (decrease) in cash and cash equivalents and restricted cash 288,236 3,705
Less: increase in cash and cash equivalents from discontinued operations 26,976
Net increase (decrease) in cash, cash equivalents and restricted cash - continuing 288,236 30,681
operations
Cash, cash equivalents and restricted cash at beginning of year 80,964 50,283
Cash, cash equivalents and restricted cash at end of period $
369,200 $
80,964
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 continuing operations for the three months ended December 31, 2020 and 2019.
Three Months Ended December 31 2020 2019 Change
---
Ending combined loan and finance receivable principal balance:
Company owned $
1,263,134 $
1,121,408 $
141,726
Guaranteed by the Company(a) 8,845 27,455 (18,610)
Total combined loan and finance receivable principal balance(b) $
1,271,979 $
1,148,863 $
123,116
Ending combined loan and finance receivable fair value balance:
Company owned $
1,241,506 N/A N/A
Guaranteed by the Company(a) 10,289 N/A N/A
Ending combined loan and finance receivable fair value balance(b) $
1,251,795 N/A N/A
Fair value as a % of principal(c) 98.4
% N/A N/A
Ending combined loan and finance receivable balance, including principal
and accrued fees/interest outstanding:
Company owned $
1,310,171 $
1,210,262 $
99,909
Guaranteed by the Company(a) 10,163 27,560 (17,397)
Ending combined loan and finance receivable balance(b) $
1,320,334 $
1,237,822 $
82,512
Ending allowance for loan losses (prior to FVO adoption) N/A $
178,450 N/A
Allowance for losses as a % of combined loan and finance receivable balance(c) N/A 14.4
% N/A
Average combined loan and finance receivable balance, including
principal and accrued fees/interest outstanding:
Company owned(d) $
1,153,358 $
1,141,802 $
11,556
Guaranteed by the Company(a)(d) 8,861 24,723 (15,862)
Average combined loan and finance receivable balance(a)(d) $
1,162,219 $
1,166,525 $
(4,306)
Revenue $
261,299 $
343,144 $
(81,845)
Change in fair value/cost of revenue (20,349) (198,417) 178,068
Net revenue/gross profit 240,950 144,727 96,223
Gross profit margin/net revenue margin 92.2 42.2 50.0
% % %
Change in fair value/cost of revenue as a % of average loan and finance 1.8 17.0 (15.2)
% % %
receivable balance(d)
Delinquencies:
---
>30 days delinquent $
122,666 $
83,315 $
39,351
>30 days delinquent as a % of loan and finance receivable balance(c) 9.3 6.7 2.6
% % %
Charge-offs:
---
Charge-offs (net of recoveries) $
55,087 $
181,465 $
(126,378)
Charge-offs (net of recoveries) as a % of average loan and finance 4.7 15.6 (10.9)
% % %
receivable balance(d)
(a) Represents
loans
originated
by third-
party
lenders
through the
CSO
programs,
which are
not included
in our
consolidated
balance
sheets.
(b) Non-GAAP
measure.
(c) Determined
using
period-end
balances.
(d) The average
combined
loan and
finance
receivable
balance is
the average
of the
month-end
balances
during the
period.
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
Year Ended
December 31,
December 31,
2020 2019 2020 2019
Net income from continuing operations $
230,694 $
29,528 $
378,144 $
128,016
Adjustments:
Gain on bargain purchase(a) (163,999) (163,999)
Loss on early extinguishment of debt(b) 827 827 2,321
Acquisition-related costs(c) 13,430 20,023
Lease termination and cease use costs(d) 726
Intangible asset amortization 1,215 267 1,777 1,070
Stock-based compensation expense 7,153 2,183 18,041 11,967
Foreign currency transaction (gain) loss(e) (506) 26 (499) 216
Cumulative tax effect of adjustments (3,787) (693) (8,038) (3,907)
Discrete tax adjustments(f) (11,604) (141)
Adjusted earnings $
85,027 $
31,311 $
234,672 $
140,268
Diluted earnings per share $
6.47 $
0.87 $
11.71 $
3.72
Adjusted earnings per share $
2.39 $
0.92 $
7.26 $
4.08
Adjusted EBITDA
Three Months Ended
Year Ended
December 31,
December 31,
2020 2019 2020 2019
Net income from continuing operations $
230,694 $
29,528 $
378,144 $
128,016
Depreciation and amortization expenses(e) 8,282 4,007 19,726 15,055
Interest expense, net(e) 27,120 19,751 86,507 75,604
Foreign currency transaction (gain) loss(e) (506) 26 (499) 216
Provision for income taxes 26,379 10,277 57,191 42,053
Stock-based compensation expense 7,153 2,183 18,041 11,967
Adjustments:
Lease termination and cease use costs(d) 370
Gain on bargain purchase(a) (163,999) (163,999)
Loss on early extinguishment of debt(b) 827 827 2,321
Equity method investment income (628) (628)
Acquisition-related costs(c) 13,430 20,023
Adjusted EBITDA $
148,752 $
65,772 $
415,333 $
275,602
Adjusted EBITDA margin calculated as follows:
Total Revenue $
263,852 $
345,262 $
1,083,710 $
1,174,757
Adjusted EBITDA 148,752 65,772 415,333 275,602
Adjusted EBITDA as a percentage of total revenue 56.4 19.0 38.3 23.5
% % % %
(a) In the fourth
quarter of
2020, the
Company
recorded a
$164.0 million
gain on
bargain
purchase
related to an
acquisition.
(b) In the fourth
quarter of
2020, the
Company
recorded a
loss on early
extinguishment
of debt of
$0.8 million
($0.6 million
net of tax)
related to the
repurchase of
securitization
notes. In the
first quarter
of 2019, the
Company
recorded a
loss on early
extinguishment
of debt of
$2.3 million
($1.8 million
net of tax)
related to the
repurchase of
$44.1 million
principal
amount of
securitization
notes.
(c) In the fourth
and third
quarters of
2020, the
Company
incurred
expenses
totaling $13.4
million ($12.0
million net of
tax) and $6.6
million ($5.0
million net of
tax),
respectively,
related to an
acquisition.
(d) In the first
quarter of
2019, the
Company
recorded
impairment
charges of
$0.4 million
($0.3 million
net of tax) to
operating
right-of-use
lease assets
and $0.3
million ($0.3
million net of
tax) to
leasehold
improvement
assets related
to its
decision to
cease use and
sublease a
portion of a
leased office
space.
(e) Excludes
amounts
attributable
to
noncontrolling
interests.
(f) In the third
quarter of
2020, the
Company
recognized an
$11.6 million
income tax
benefit
resulting from
the release of
its liability
for certain
previously
unrecognized
tax benefits.
In the first
quarter of
2019, the
Company
recognized
$0.1 million
of interest
income on a
tax refund
received as a
result of the
U.S. Tax Cuts
and Jobs Act.
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SOURCE Enova International, Inc.
