Enova International, Inc. - FORM 8-K - EX-99.2

Attached files

file	filename
8-K - 8-K - Enova International, Inc.	enva-8k_20150203.htm
EX-99.1 - EX-99.1 - Enova International, Inc.	enva-ex991_2015020370.htm

Exhibit 99.2

Enova International, Inc.

Selected Historical Data (Unaudited)

(In thousands, except per share data)

	2013												2013			2014												2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year
Statement of Income Data:
Revenue	$	182,312		$	176,143		$	198,098		$	208,770		$	765,323		$	208,465		$	201,482		$	205,168		$	194,722		$	809,837
Cost of Revenue		67,998			70,160			90,389			86,505			315,052			66,436			66,840			72,919			60,592			266,787

Gross Profit		114,314			105,983			107,709			122,265			450,271			142,029			134,642			132,249			134,130			543,050

Expenses
Marketing		27,295			30,774			36,523			40,744			135,336			28,478			30,828			33,393			35,163			127,862
Operations and technology		17,457			17,089			17,959			18,271			70,776			17,885			17,123			19,362			19,203			73,573
General and administrative		23,881			20,007			17,991			22,541			84,420			24,427			26,931			31,167			25,350			107,875
Depreciation and amortization		4,443			4,585			3,958			4,157			17,143			4,118			4,316			5,338			4,960			18,732

Total Expenses		73,076			72,455			76,431			85,713			307,675			74,908			79,198			89,260			84,676			328,042

Income from Operations		41,238			33,528			31,278			36,552			142,596			67,121			55,444			42,989			49,454			215,008
Interest expense		(5,025	)		(4,804	)		(4,909	)		(5,050	)		(19,788	)		(4,754	)		(7,311	)		(13,136	)		(13,273	)		(38,474	)
Foreign currency transaction (loss) gain		(355	)		69			(737	)		(153	)		(1,176	)		(101	)		(299	)		(155	)		520			(35	)

Income before Income Taxes		35,858			28,793			25,632			31,349			121,632			62,266			47,834			29,698			36,701			176,499
Provision for income taxes		13,050			10,365			8,544			11,635			43,594			22,211			17,205			11,213			14,199			64,828

Net Income	$	22,808		$	18,428		$	17,088		$	19,714		$	78,038		$	40,055		$	30,629		$	18,485		$	22,502		$	111,671

Earnings Per Share
Earnings per common share:
Basic	$	0.69		$	0.56		$	0.52		$	0.60		$	2.36		$	1.21		$	0.93		$	0.56		$	0.68		$	3.38
Diluted	$	0.69		$	0.56		$	0.52		$	0.60		$	2.36		$	1.21		$	0.93		$	0.56		$	0.68		$	3.38
Weighted average common shares outstanding:
Basic		33,000			33,000			33,000			33,000			33,000			33,000			33,000			33,000			33,000			33,000
Diluted		33,000			33,000			33,000			33,000			33,000			33,000			33,000			33,000			33,031			33,008

Balance Sheet Data (at period end):
Cash and cash equivalents	$	49,231		$	50,210		$	61,381		$	47,480		$	47,480		$	56,241		$	79,785		$	104,241		$	75,106		$	75,106
Consumer loans, net		206,091			232,930			272,001			303,467			303,467			280,186			291,966			303,694			323,611			323,611
Total assets		596,030			620,674			676,847			692,152			692,152			673,078			727,613			760,438			759,583			759,583
Long-term debt		399,365			397,894			437,397			424,133			424,133			376,872			493,863			494,021			494,181			494,181
Total stockholder’s equity		116,896			132,854			151,804			173,048			173,048			212,797			122,432			135,913			153,984			153,984

Enova International, Inc.

Adjusted EBITDA (Unaudited)

(Dollars in thousands)

	2013												2013			2014												2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year
Net Income	$	22,808		$	18,428		$	17,088		$	19,714		$	78,038		$	40,055		$	30,629		$	18,485		$	22,502		$	111,671
Depreciation and amortization expenses		4,443			4,585			3,958			4,157			17,143			4,118			4,316			5,338			4,960			18,732
Interest expense, net		5,025			4,804			4,909			5,050			19,788			4,754			7,311			13,136			13,273			38,474
Foreign currency transaction loss (gain)		355			(69	)		737			153			1,176			101			299			155			(520	)		35
Provision for income taxes		13,050			10,365			8,544			11,635			43,594			22,211			17,205			11,213			14,199			64,828
Adjustments:
Regulatory Penalty ^(a)		—			—			—			2,500			2,500			—			—			—			—			—

Adjusted EBITDA	$	45,681		$	38,113		$	35,236		$	43,209		$	162,239		$	71,239		$	59,760		$	48,327		$	54,414		$	233,740

Adjusted EBITDA margin calculated as follows:
Total Revenue	$	182,312		$	176,143		$	198,098		$	208,770		$	765,323		$	208,465		$	201,482		$	205,168		$	194,722		$	809,837
Adjusted EBITDA	$	45,681		$	38,113		$	35,236		$	43,209		$	162,239		$	71,239		$	59,760		$	48,327		$	54,414		$	233,740
Adjusted EBITDA as a percentage of total revenue		25.1	%		21.6	%		17.8	%		20.7	%		21.2	%		34.2	%		29.7	%		23.6	%		27.9	%		28.9	%

(a) On November 20, 2013, Cash America International, Inc., Enova’s former parent company, consented to the issuance of a Consent Order by the Consumer Financial Protection Bureau, or the CFPB, pursuant to which it agreed, without admitting or denying any of the facts or conclusions made by the CFPB from its 2012 review of Cash America and us, to pay a civil money penalty of $5 million, of which we and Cash America agreed to allocate $2.5 million of this penalty to us, or the Regulatory Penalty. For the three months and year ended December 31, 2013, this item represents the amount paid in connection with the Regulatory Penalty, which is nondeductible for tax purposes.

Enova International, Inc.

Adjusted Earnings (Unaudited)

(Dollars in thousands)

	2013										2013		2014									2014
	First Quarter			Second Quarter			Third Quarter		Fourth Quarter		Total Year		First Quarter		Second Quarter		Third Quarter		Fourth Quarter			Total Year
Net Income	$	22,808		$	18,428		$	17,088	$	19,714	$	78,038	$	40,055	$	30,629	$	18,485	$	22,502		$	111,671
Adjustments (net of tax):
Regulatory Penalty ^(a)		—			—			—		2,500		2,500		—		—		—		—			—
Intagible asset amortization		29			24			18		17		88		13		6		4		5			28
Non-cash equity-based compensation		(41	)		90			57		54		160		55		54		55		256			420
Foreign currency transaction loss (gain)		226			(44	)		479		94		755		65		192		97		(332	)		22

Adjusted earnings	$	23,022		$	18,498		$	17,642	$	22,379	$	81,541	$	40,188	$	30,881	$	18,641	$	22,431		$	112,141

Diluted earnings per share	$	0.69		$	0.56		$	0.52	$	0.60	$	2.36	$	1.21	$	0.93	$	0.56	$	0.68		$	3.38
Adjusted earnings per share	$	0.70		$	0.57		$	0.53	$	0.68	$	2.47	$	1.22	$	0.94	$	0.56	$	0.68		$	3.40

(a) On November 20, 2013, Cash America International, Inc., Enova’s former parent company, consented to the issuance of a Consent Order by the Consumer Financial Protection Bureau, or the CFPB, pursuant to which it agreed, without admitting or denying any of the facts or conclusions made by the CFPB from its 2012 review of Cash America and us, to pay a civil money penalty of $5 million, of which we and Cash America agreed to allocate $2.5 million of this penalty to us, or the Regulatory Penalty. For the three months and year ended December 31, 2013, this item represents the amount paid in connection with the Regulatory Penalty, which is nondeductible for tax purposes.

Enova International, Inc.

Loss Experience Trends - Short-Term Consumer Loans (Unaudited)

(Dollars in thousands)

	2013												2014
	First			Second			Third			Fourth			First			Second			Third			Fourth
Short-term consumer loans:	Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter
Cost of revenue	$	39,604		$	37,069		$	33,606		$	25,678		$	16,316		$	19,670		$	18,936		$	14,984
Charge-offs (net of recoveries)		41,267			37,656			42,922			35,863			19,156			19,755			19,630			17,803
Average short-term combined consumer loans and fees receivable, gross ^(a)(b)		175,607			157,563			143,983			121,020			106,007			94,426			90,890			83,544
Ending short-term combined consumer loans and fees receivable, gross ^(b)		158,102			157,306			131,633			122,165			95,553			95,055			86,211			92,561
Ending allowance and liability for losses	$	41,346		$	40,772		$	32,514		$	22,513		$	19,726		$	19,829		$	18,857		$	15,899

Short-term consumer loan ratios:
Cost of revenue as a % of average short-term combined consumer loans and fees receivable, gross^(a)(b)		22.6	%		23.5	%		23.3	%		21.2	%		15.4	%		20.8	%		20.8	%		17.9	%
Charge-offs (net of recoveries) as a % of average short-term combined consumer loans and fees receivable, gross ^(a)(b)		23.5	%		23.9	%		29.8	%		29.6	%		18.1	%		20.9	%		21.6	%		21.3	%
Gross profit margin		65.6	%		64.0	%		63.7	%		67.6	%		77.6	%		70.1	%		69.4	%		73.5	%
Allowance and liability for losses as a % of combined consumer loans and fees receivable, gross^(b)(c)		26.2	%		25.9	%		24.7	%		18.4	%		20.6	%		20.9	%		21.9	%		17.2	%

(a) The average short-term combined consumer loans and fees receivable is the average of the month-end balances during the period.
(b) Non-GAAP measure.
(c) Allowance and liability for losses as a % of combined consumer loans and fees receivable, gross, is determined using period-end balances.

Enova International, Inc.

Loss Experience Trends - Line of Credit Accounts (Unaudited)

(Dollars in thousands)

	2013												2014
	First			Second			Third			Fourth			First			Second			Third			Fourth
Line of credit accounts:	Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter
Cost of revenue	$	6,510		$	9,964		$	26,152		$	29,682		$	23,913		$	21,786		$	25,913		$	20,849
Charge-offs (net of recoveries)		9,596			7,321			14,211			25,159			26,602			27,211			24,292			23,381
Average consumer loan balance^(a)		39,558			45,629			79,757			110,439			121,457			120,228			126,908			121,950
Ending consumer loan balance		37,120			58,071			99,606			125,802			119,004			122,409			128,275			118,680
Ending allowance for losses balance	$	9,479		$	12,109		$	24,405		$	29,244		$	26,669		$	21,579		$	22,672		$	19,749

Line of credit account ratios:
Cost of revenue as a % of average consumer loan balance^(a)		16.5	%		21.8	%		32.8	%		26.9	%		19.7	%		18.1	%		20.4	%		17.1	%
Charge-offs (net of recoveries) as a % of average consumer loan balance^(a)		24.3	%		16.0	%		17.8	%		22.8	%		21.9	%		22.6	%		19.1	%		19.2	%
Gross profit margin		72.0	%		64.8	%		48.2	%		56.7	%		67.3	%		70.9	%		68.0	%		72.7	%
Allowance for losses as a % of consumer loan balance^(b)		25.5	%		20.9	%		24.5	%		23.2	%		22.4	%		17.6	%		17.7	%		16.6	%

(a) The average consumer loan balance for line of credit accounts is the average of the month-end balances during the period.
(b) Allowance for losses as a % of consumer loan balance is determined using period-end balances.

Enova International, Inc.

Loss Experience Trends - Installment Loans (Unaudited)

(Dollars in thousands)

	2013												2014
	First			Second			Third			Fourth			First			Second			Third			Fourth
Installment loans:	Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter			Quarter
Cost of revenue	$	21,884		$	23,127		$	30,631		$	31,145		$	26,203		$	25,384		$	28,070		$	24,759
Charge-offs (net of recoveries)		22,329			23,025			26,089			30,866			29,899			26,818			25,620			23,509
Average installment combined consumer loans and fees receivable, gross ^(a)(b)		120,035			122,339			146,142			168,588			175,198			171,043			186,308			201,821
Ending installment combined consumer loans and fees receivable, gross ^(b)		116,727			130,217			162,944			179,230			169,552			177,211			194,636			213,588
Ending allowance and liability for losses	$	26,403		$	26,555		$	32,077		$	32,608		$	29,084		$	27,967		$	29,914		$	30,876

Installment loan ratios:
Cost of revenue as a % of average installment combined consumer loans and fees receivable, gross^(a)(b)		18.2	%		18.9	%		21.0	%		18.5	%		15.0	%		14.8	%		15.1	%		12.3	%
Charge-offs (net of recoveries) as a % of average installment combined consumer loans and fees receivable, gross^(a)(b)		18.6	%		18.8	%		17.9	%		18.3	%		17.0	%		15.7	%		13.8	%		11.6	%
Gross profit margin		49.8	%		48.0	%		44.1	%		49.0	%		58.0	%		58.3	%		54.6	%		59.8	%
Allowance and liability for losses as a % of combined consumer loans and fees receivable, gross^(b)(c)		22.6	%		20.4	%		19.7	%		18.2	%		17.2	%		15.8	%		15.4	%		14.5	%

(a) The average installment combined consumer loan and fees receivable is the average of the month-end balances during the period.
(b) Non-GAAP measure.
(c) Allowance and liability for losses as a % of combined consumer loans and fees receivable, gross, is determined using period-end balances.

Enova International, Inc.

Revenue by Product (Unaudited)

(Dollars in thousands)

	2013												2013			2014												2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year
Interest and fees on short-term loans	$	115,010		$	103,032		$	92,508		$	79,156		$	389,706		$	72,978		$	65,707		$	61,885		$	56,599		$	257,169
Interest and fees on line of credit accounts		23,234			28,282			50,506			68,474			170,496			73,037			74,893			80,909			76,279			305,118
Interest and fees on installment loans		43,620			44,452			54,766			61,086			203,924			62,408			60,839			61,810			61,643			246,700
Total consumer loan revenue		181,864			175,766			197,780			208,716			764,126			208,423			201,439			204,604			194,521			808,987
Other		448			377			318			54			1,197			42			43			564			201			850
Total Revenue	$	182,312		$	176,143		$	198,098		$	208,770		$	765,323		$	208,465		$	201,482		$	205,168		$	194,722		$	809,837

	2013												2013			2014												2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year			First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year
Interest and fees on short-term loans		63.1	%		58.5	%		46.7	%		37.9	%		50.9	%		35.0	%		32.6	%		30.2	%		29.1	%		31.7	%
Interest and fees on line of credit accounts		12.8	%		16.1	%		25.5	%		32.8	%		22.3	%		35.0	%		37.2	%		39.4	%		39.2	%		37.7	%
Interest and fees on installment loans		23.9	%		25.2	%		27.6	%		29.3	%		26.6	%		30.0	%		30.2	%		30.1	%		31.6	%		30.5	%
Total consumer loan revenue		99.8	%		99.8	%		99.8	%		100.0	%		99.8	%		100.0	%		100.0	%		99.7	%		99.9	%		99.9	%
Other		0.2	%		0.2	%		0.2	%		—	%		0.2	%		—	%		—	%		0.3	%		0.1	%		0.1	%
Total Revenue		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Enova International, Inc.

Revenue and Gross Profit by Geography (Unaudited)

(Dollars in thousands)

	2013												2013				2014												2014
	First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year				First Quarter			Second Quarter			Third Quarter			Fourth Quarter			Total Year
Domestic
Revenue	$	91,075		$	87,858		$	105,199		$	111,417		$	395,549			$	109,087		$	108,786		$	126,130		$	130,712		$	474,715
Cost of Revenue		29,759			33,400			50,232			43,953			157,344				29,103			38,731			55,058			48,906			171,798
Gross Profit		61,316			54,458			54,967			67,464			238,205				79,984			70,055			71,072			81,806			302,917
Gross Profit Margin		67.3	%		62.0	%		52.3	%		60.6	%		60.2	%			73.3	%		64.4	%		56.3	%		62.6	%		63.8	%

International
Revenue	$	91,237		$	88,285		$	92,899		$	97,353		$	369,774			$	99,378		$	92,696		$	79,038		$	64,010		$	335,122
Cost of Revenue		38,239			36,760			40,157			42,552			157,708				37,333			28,109			17,861			11,686			94,989
Gross Profit		52,998			51,525			52,742			54,801			212,066				62,045			64,587			61,177			52,324			240,133
Gross Profit Margin		58.1	%		58.4	%		56.8	%		56.3	%		57.4	%			62.4	%		69.7	%		77.4	%		81.7	%		71.7	%

Total																`
Revenue	$	182,312		$	176,143		$	198,098		$	208,770		$	765,323			$	208,465		$	201,482		$	205,168		$	194,722		$	809,837
Cost of Revenue		67,998			70,160			90,389			86,505			315,052				66,436			66,840			72,919			60,592			266,787
Gross Profit		114,314			105,983			107,709			122,265			450,271				142,029			134,642			132,249			134,130			543,050
Gross Profit Margin		62.7	%		60.2	%		54.4	%		58.6	%		58.8	%			68.1	%		66.8	%		64.5	%		68.9	%		67.1	%

Enova International, Inc.

Reconciliation of GAAP to Non-GAAP Financial Measures - Combined Consumer Loan Balances (Unaudited)

(Dollars in thousands)

	2013								2014
	First		Second		Third		Fourth		First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
Short-term consumer loan balances, gross:
Company owned	$	128,100	$	121,890	$	96,505	$	80,753	$	65,910	$	60,140	$	50,822	$	56,298
Guranteed by the Company		30,002		35,416		35,128		41,412		29,643		34,915		35,389		36,263
Combined		158,102		157,306		131,633		122,165		95,553		95,055		86,211		92,561

Installment loan balances, gross:
Company owned	$	116,727	$	130,217	$	162,944	$	179,230	$	169,552	$	177,211	$	194,596	$	213,581
Guranteed by the Company		—		—		—		—		—		—		40		7
Combined		116,727		130,217		162,944		179,230		169,552		177,211		194,636		213,588

Total consumer loan balances, gross:
Company owned	$	281,947	$	310,178	$	359,055	$	385,785	$	354,466	$	359,760	$	373,693	$	388,559
Guranteed by the Company		30,002		35,416		35,128		41,412		29,643		34,915		35,429		36,270
Combined		311,949		345,594		394,183		427,197		384,109		394,675		409,122		424,829

Enova International, Inc. - FORM 8-K - EX-99.2 - February 6, 2015

Attached files

Enova International, Inc. Reports