Mr. Jason Mullins reports

GOEASY LTD. REPORTS RECORD RESULTS FOR THE THIRD QUARTER

goeasy Ltd. has released results for the third quarter ended Sept. 30, 2023.

Third quarter results

During the quarter, the company generated a record $722-million in loan originations, up 13 per cent compared with $641-million produced in the third quarter of 2022. The increase in lending was driven by a record volume of applications for credit, which were up 30 per cent over the prior year, leading to record loan originations across several of the company's products and acquisition channels.

The increase in loan originations led to record growth in the loan portfolio of $230-million, which was up 5 per cent from $219-million of loan book growth in the third quarter of 2022. At quarter-end, the consumer loan portfolio was $3.43-billion, up 33 per cent from $2.59-billion in the third quarter of 2022. The growth in consumer loans led to an increase in revenue, which was a record $322-million in the quarter, up 23 per cent from $262-million in the third quarter of last year.

During the quarter, the company once again continued to experience stable credit and payment performance. The net charge-off rate in the third quarter was 8.8 per cent, down from 9.3 per cent in the third quarter of 2022 and at the lower end of the company's forecasted range of between 8.5 per cent and 9.5 per cent. The stable credit performance reflects the improved credit and product mix of the loan portfolio and pro-active credit and underwriting enhancements made since the fourth quarter of 2021. The company's allowance for future credit losses reduced slightly to 7.37 per cent, compared with 7.42 per cent in the second quarter.

Operating income for the third quarter of 2023 was a record $127-million, up 39 per cent from $91-million in the third quarter of 2022. Operating margin for the third quarter was a record 39.3 per cent, up from 34.8 per cent in the same period last year. After adjustments, including unusual items and non-recurring expenses, the company reported record adjusted operating income of $130-million, an increase of 37 per cent compared with $95-million in the third quarter of 2022. Adjusted operating margin for the third quarter was a record 40.4 per cent, up from 36.2 per cent in the same period in 2022. The efficiency ratio for the third quarter of 2023 was a record 28.6 per cent, an improvement of 400 basis points from 32.6 per cent in the third quarter of 2022, reflecting an increase in operating leverage.

Net income in the third quarter was $66.3-million, up 41 per cent from $47.2-million in the same period of 2022, which resulted in diluted earnings per share of $3.87, up 35 per cent from the $2.86 reported in the third quarter of 2022. After adjusting for non-recurring and unusual items on an after-tax basis in both periods, adjusted net income was a record $65.2-million, up 34 per cent from $48.6-million in the third quarter of 2022. Adjusted diluted earnings per share were a record $3.81, up 29 per cent from $2.95 in the third quarter of 2022. Return on equity during the quarter was 27.0 per cent, compared with 24.2 per cent in the third quarter of 2022. Adjusted return on equity was 26.6 per cent in the quarter, an increase of 170 basis points from 24.9 per cent in the same period of 2022.

"During the quarter, we continued to execute on our strategy to build Canada's leading provider of non-prime consumer credit, while putting everyday Canadians on the path to a better tomorrow by helping them increase their credit score and graduate to lower rates," said Jason Mullins, goeasy's president and chief executive officer. "Record growth and reduced credit losses contributed to record earnings, with adjusted diluted EPS increasing 29 per cent over the same quarter last year,"

Mr. Mullins continued: "With the weighted-average credit score of our originations increasing for eight consecutive quarters and this past quarter having the highest weighted-average score in our history, we continue to improve the credit quality of our portfolio. Looking forward, we remain confident that we will meet, or exceed, all of our commercial forecasts. Despite higher borrowing costs, the benefits of scale are serving to produce meaningful operating leverage and protect margins, enabling us to grow earnings and produce a return on equity above 20 per cent."

Dividend

The board of directors has approved a quarterly dividend of 96 cents per share payable on Jan. 12, 2024, to the holders of common shares of record as at the close of business on Dec. 29, 2023.

About goeasy Ltd.

goeasy is a Canadian company, headquartered in Mississauga, Ont., that provides non-prime leasing and lending services through its easyhome, easyfinancial and LendCare brands. Supported by approximately 2,400 employees, the company offers a wide variety of financial products and services, including unsecured and secured instalment loans, merchant financing through a variety of verticals, and lease-to-own merchandise. Customers can transact seamlessly through an omnichannel model that includes on-line and mobile platforms, over 400 locations across Canada, and point-of-sale financing offered in the retail, powersports, automotive, home improvement and health care verticals, through over 9,100 merchant partners across Canada. Throughout the company's history, it has acquired and organically served over 1.3 million Canadians and originated over $12.1-billion in loans.

Accredited by the Better Business Bureau, goeasy is the proud recipient of several awards in recognition of its exceptional culture and continued business growth, including Waterstone Canada's most admired corporate cultures, ranking on the 2022 Report on Business women lead here executive gender diversity benchmark, placing on the Report on Business ranking of Canada's top growing companies, ranking on the TSX30 and Greater Toronto top employers award, and has been certified as a great place to work. The company is represented by a diverse group of team members from 78 nationalities which believes strongly in giving back to communities in which it operates. To date, goeasy has raised and donated over $5.2-million to support its long-standing partnerships with BGC Canada and many other local charities.

goeasy's common shares are listed on the Toronto Stock Exchange under the trading symbol GSY. goeasy is rated BB minus with a stable trend from S&P and Ba3 with a stable trend from Moody's.

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