GlobeNewswire Inc | Aug 12, 2020 05:05PM EDT

August 12, 2020

Loan Portfolio of $1.13 billion, up 18%Net Charge-Off Rate of 10%, down 350 bpsAdjusted Diluted Earnings per Share of $1.89, up 50%Total Liquidity of $260 million, up 30%

MISSISSAUGA, Ontario, Aug. 12, 2020 (GLOBE NEWSWIRE) -- goeasy Ltd. (TSX: GSY) (goeasy or the Company), a leading full-service provider of goods and alternative financial services, announced its results for the second quarter ended June 30, 2020. Second Quarter Results

During the quarter, the Company generated record financial results, driven by strong credit performance and prudent expense controls, leading to an increase in cash flows and liquidity.

The effects of the COVID-19 pandemic, which included stay at home orders, increased government subsidies and reduced living expenses for consumers, served to temporarily reduce overall demand. As such, the Company generated $171 million in total loan originations, down 38% from the $276 million in the second quarter of 2019. The lower level of originations, combined with the Companys focus on managing its existing consumer loan book, led to a reduction in the loan portfolio of -$31.6 million during the quarter, which finished at $1.13 billion, up 18% from $960 million as of June 30, 2019. Revenue for the second quarter, which was partially impacted by lower commissions on ancillary products primarily related to higher levels of loan protection insurance claims, was $151 million, up 2% over the same period in 2019.

The Company also continued to experience strong credit and payment performance. Use of the Companys loan protection insurance program, increased government subsidies, assistance provided by banks and other lenders such as payment deferral programs and reduced living expenses, combined with previous credit model enhancements, resulted in an improvement to credit losses. The net charge-off rate for the second quarter was a record low 10%, compared to 13.5% in the second quarter of 2019 and 13.2% in the first quarter of 2020. Although there remains uncertainty about the exact timing and pace of an economic recovery, improvements in underlying credit performance and the general macroeconomic environment, resulted in the Company holding its allowance for future credit losses broadly flat at 10.05%.

Reduced operating expenses and record low credit losses led to operating income of $54 million, up 32% from $40.9 million in the second quarter of 2019, while the operating margin expanded to 35.8%, up from 27.7% in the prior year. During the quarter, the Company also recorded a $4 million pre-tax increase to the carrying value of its minority equity investment in PayBright, a Canadian payments platform focused on instant point-of-sale consumer financing and buy-now-pay-later programs.

Net income in the second quarter was a record $32.5 million, up 66% from $19.6 million in 2019, which resulted in diluted earnings per share of $2.11, up 67% from the $1.26 in the second quarter of 2019. Return on equity was a record 37%, up from 25.2% in the second quarter of 2019. After adjusting for the increase in the carrying value of the Companys minority equity investment, net income was a record $29.1 million and diluted earnings per share was $1.89, an increase of 49% and 50% respectively, while return on equity was 33.1%.

As we continued to prioritize the safety and well-being of our team, customers, and communities throughout the pandemic, the second quarter also highlighted the unique strength and resiliency of our business model. Record low credit losses and reduced originations combined to produce excess cash flows, which lifted our total liquidity to $260 million during the quarter and enabled us to repurchase an additional $20 million of our shares at an attractive return level, said Jason Mullins, goeasys President and Chief Executive Officer, During the quarter we also recognized a gain on our investment in PayBright, as their annualized revenues have now increased by over 85% since we arranged our equity position. Together with the strong operating results and prudent expense controls, we were pleased to produce record earnings in the quarter.

Other Key Second Quarter Highlights

easyfinancial

-- Secured loan portfolio grew to $126 million, up 42% -- 49% of net loan advances in the quarter were issued to new customers, down from 66% -- 42% of applications acquired online, down from 46% -- Aided brand awareness of 84%, up from 83% -- Average loan book per branch improved to $3.6 million, an increase of 11% -- The delinquency rate on the final Saturday of the quarter was a record low 3.7%, down from 4.3% -- Operating income of $60.1 million, up 28% -- Operating margin of 51.9%, up from 41.4%

easyhome

-- Revenue of $34.9 million, up 1% -- Same store revenue growth of 2.1% -- Consumer lending portfolio within easyhome stores increased to $40.4 million, up 37% -- Revenue from consumer lending increased to $5.1 million, up 32% -- Operating income of $7.5 million, up 34% -- Operating margin of 21.4%, up from 16.1%

Overall

-- 41st consecutive quarter of same store sales growth -- 76th consecutive quarter of positive net income -- 16th consecutive year of paying dividends and 6th consecutive year of dividend increases -- Total same store revenue growth of 1.1% -- Record return on equity of 37% in the quarter, up from 25.2% -- Fully drawn weighted average cost of borrowing reduced to 5.1%, down from 6.8% -- Net external debt to net capitalization of 70% on June 30, 2020, in line with the Companys target leverage ratio of 70% -- Repurchased 375,185 common shares at a weighted average price of $53.31 through the Companys Normal Course Issuer Bid, bringing total share repurchases year to date to 579,335 -- No reduction of personnel during COVID-19

Six Months Results

For the first six months of 2020, goeasy produced revenues of $318 million, up 11% compared with $288million in the same period of 2019. Operating income for the period was $98.2 million compared with $79.7 million in the first six months of 2019, an increase of $18.5 million or 23%. Net income for the first six months of 2020 was $54.5 million and diluted earnings per share was $3.51 compared with $37.8 million or $2.44 per share, increases of 44%. After adjusting for the increase in the carrying value of the Companys minority equity investment, net income for the first six months of 2020 was $51.1 million and diluted earnings per share was $3.29, increases of 35%, while return on equity was 29.6%.

Balance Sheet and Liquidity

Total assets were $1.35 billion as of June 30, 2020, an increase of 21% from $1.12 billion as of June 30, 2019, driven by the growth in the consumer loan portfolio.

On June 29, 2020, the Company issued a notice of its intention to redeem all 5.75% convertible unsecured subordinated debentures maturing on July 31, 2022 (the Convertible Debentures) that are issued and outstanding on July 31, 2020 (the Redemption Date). The Convertible Debentures are redeemable at a redemption price equal to their principal amount, plus accrued and unpaid interest thereon up to, but excluding, the Redemption Date. As of the close of business on June 28, 2020, there was $43,806,000 principal amount of Convertible Debentures issued and outstanding, of which the holders of approximately $41,379,000 aggregate principal amount elected to convert their Convertible Debentures into approximately 954,302 common shares prior to the Redemption Date. On the Redemption Date, the Company redeemed the $2,427,000 aggregate principal amount of Convertible Debentures that remained unconverted on that date.

Cash provided by operating activities before the net issuance of consumer loans receivable and purchase of lease assets was $83.4 million during the quarter, an increase of 24% from $67.3 million in the second quarter of 2019.

Based on the cash on hand at the end of the quarter and the borrowing capacity under the Companys revolving credit facility, goeasy had approximately $260 million in total funding capacity, which it estimates is sufficient to fund its growth through the fourth quarter of 2022. At quarter-end, the Companys fully drawn weighted average cost of borrowing reduced to 5.1%, down from 6.8% in the prior year, with incremental draws on its senior secured revolving credit facility bearing a rate of approximately 3.6% due to the lower interest rate environment. The Company also estimates that once its existing and available sources of capital are fully utilized, it could continue to grow the loan portfolio by approximately $150 million per year solely from internal cash flows.

The Company also estimates that as of June 30, 2020, if it were to run-off its consumer loan and consumer leasing portfolios, the value of the total cash repayments paid to the Company over the remaining life of its contracts would be approximately $2 billion. If during such a run-off scenario all excess cash flows were applied directly to debt, the Company estimates it would extinguish all external debt within 18 months.

COVID-19 & Future Outlook

Due to the current uncertainty relating to the impacts of COVID-19, the Company intends to re-publish a 3-year forecast when the economic conditions and outlook stabilize. However, the Company remains confident that it is well positioned to navigate through the current economic downturn and has begun to see conditions gradually improve. Recent trends include:

-- Improving Consumer Demand: The effects of the pandemic, which included stay at home orders, increased government subsidies and reduced expenses for consumers, led to temporarily reduced demand. In April, during the peak period of the economic shutdown, loan originations were $38 million, down -56% year-over-year. In May, loan origination volume improved to $51 million, down -50%, followed by $83 million in June, down only -8%. In July, demand elevated further, as loan originations climbed to approximately $97 million, down only -7% compared to the same period of the prior year, and the highest month year to date in 2020. -- Declining Loan Protection Insurance Claims: The majority of easyfinancial customers have Loan Protection Insurance, offered by Assurant Inc., a global provider of risk-management solutions, which covers a borrowers full loan payment for a period of 6 consecutive months in the event of unemployment. At the peak period in April, approximately $7.8 million of claims payments were made to easyfinancial on behalf of its customers. In May the total claims paid reduced slightly to $7.7 million, while in June they reduced further to $6.2 million. In the month of July claims paid have subsequently declined to $4.4 million and more than half of all customers who previously submitted an insurance claim have returned to making their regularly scheduled payments. -- Solutions to Support Borrowers below Pre-COVID Levels: easyfinancial has a suite of loan amendment solutions that it can offer borrowers to support them through a difficult financial period. These include temporarily deferring loan payments or extending the term of a loan to reduce the regular payment obligation. In April approximately 12% of customers utilized a form of support, as compared to approximately 7%-8% in a typical month prior to the pandemic. In May the portion of borrowers utilizing a form of support reduced to below pre-COVID levels at approximately 6.3%, followed by 6% in June. In July, the portion of customers that used support continued to remain below pre-COVID levels at approximately 6.8%. -- Strong Customer Payment Performance: The Company has continued to observe a strong level of true overall payment performance. In the month of April, the Company collected 93% of the customer payments it would collect under normal conditions, relative to the size of its consumer loan portfolio. In May this figure increased to 95%, rising further to 100% in June. In July, the Company collected 102% of the customer payment volume it would normally collect prior to the pandemic, highlighting the condition of the consumer to meet their debt obligations.

We remain optimistic that the worst of the health and economic crisis is behind us and have begun to see many positive trends emerge in the business. After experiencing moderate growth in the loan portfolio in both June and July, consumer demand for credit appears to be gradually rebuilding and we expect to grow the loan portfolio by approximately 3% to 5% in the third quarter, improving further thereafter. We also continue to experience record low credit losses, with the net charge-off rate expected to finish at, or below, 10% in the third quarter, Mr. Mullins concluded, Thanks to the passion and commitment of our goeasy team members, we have been able to support our customers through this difficult period, while demonstrating the strength of our business model. With gradually improving operating results, stable credit performance and sufficient liquidity to fund our organic business growth for several years into the future, we are well positioned to execute on our strategy and pursue the many new growth opportunities that lie ahead.

Dividend

The Board of Directors has approved a quarterly dividend of $0.45 per share payable on October 9, 2020 to the holders of common shares of record as at the close of business on September 25, 2020.

Forward-Looking Statements

All figures reported above with respect to outlook are targets established by the Company and are subject to change as plans and business conditions vary. Accordingly, investors are cautioned not to place undue reliance on the foregoing guidance. Actual results may differ materially.

This press release includes forward-looking statements about goeasy, including, but not limited to, its business operations, strategy, expected financial performance and condition, 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 are 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 Companys operations, economic factors and the industry generally, as well as those factors referred to in the Companys most recent Annual Information Form and Management Discussion and Analysis, as available on www.sedar.com, 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 Companys ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, 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 to 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

goeasy Ltd., a Canadian company, headquartered inMississauga,Ontario, provides non-prime leasing and lending services through its easyhome and easyfinancial divisions. With a wide variety of financial products and services including unsecured and secured instalment loans, goeasy aspires to help put Canadians on a path to a better financial future, as they rebuild their credit and graduate to prime lending. Customers can transact seamlessly with easyhome and easyfinancial through an omni-channel model that includes online and mobile, as well as over 400 leasing and lending locations acrossCanadasupported by more than 2,000 employees. Throughout the companys history, it has served over 1 million Canadians and originated over$4.4 billionin loans, with one in three customers graduating to prime credit and 60% increasing their credit score within 12 months of borrowing.

goeasy is the proud recipient of several awards including Waterstone Canadas Most Admired Corporate Cultures, Glassdoor Top CEO Award, Achievers Top 50 Most Engaged Workplaces inNorth America, Greater Toronto Top Employers Award, the Digital Finance Institutes Canadas Top 50 FinTech Companies, ranking on the TSX30 and placing on the Report on Business ranking of Canadas Top Growing Companies. The company and its employees believe strongly in giving back to the communities in which it operates and has raised over$3 millionto support its long-standing partnerships with theBoys & Girls Clubs of CanadaandHabitat for Humanity.

goeasy Ltd.s. common shares are listed on the TSX under the trading symbol GSY and goeasys convertible debentures are traded on the TSX under the trading symbol GSY-DB. goeasy is rated BB- with a stable trend from S&P and Ba3 with a stable trend from Moodys. Visitwww.goeasy.com.

For further information contact:

Jason MullinsPresident & Chief Executive Officer(905) 272-2788

David IngramExecutive Chairman of the Board(905) 272-2788

goeasy Ltd. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) (expressed in thousands of Canadian dollars) As At As At June 30, December 31, 2020 2019 ASSETS Cash 54,765 46,341 Amounts receivable 7,286 18,482 Prepaid expenses 4,088 7,077 Consumer loans receivable, net 1,057,337 1,040,552 Investment 38,300 34,300 Lease assets 44,538 48,696 Property and equipment, net 27,868 23,007 Deferred tax assets 6,912 14,961 Derivative financial assets 23,585 - Intangible assets, net 21,077 17,749 Right-of-use assets, net 45,153 46,147 Goodwill 21,310 21,310 TOTAL ASSETS 1,352,219 1,318,622 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Revolving credit facility 102,934 112,563 Accounts payable and accrued liabilities 37,481 41,350 Income taxes payable 11,575 4,187 Dividends payable 6,282 4,448 Unearned revenue 9,131 8,082 Derivative financial liabilities - 16,435 Lease liabilities 51,439 52,573 Accrued interest 4,188 4,358 Convertible debentures 41,020 40,656 Notes payable 734,824 701,549 TOTAL LIABILITIES 998,874 986,201 Shareholders' equity Share capital 142,061 141,956 Contributed surplus 17,702 20,296 Accumulated other comprehensive income (loss) 4,824 (915 )Retained earnings 188,758 171,084 TOTAL SHAREHOLDERS' EQUITY 353,345 332,421 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,352,219 1,318,622

goeasy Ltd. INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (expressed in thousands of Canadian dollars except earnings per share) Three Months Six Months Ended Ended June June June June 30, 30, 30, 30, 2020 2019 2020 2019 REVENUE Interest income 100,866 82,560 200,966 159,290Lease revenue 28,002 28,352 55,816 57,834Commissions earned 19,348 33,352 54,626 63,432Charges and fees 2,461 3,590 6,471 7,158 150,677 147,854 317,879 287,714 EXPENSES BEFORE DEPRECIATION AND AMORTIZATION Salaries and benefits 34,124 30,430 65,826 59,107Stock-based compensation 1,771 2,189 3,869 4,076Advertising and promotion 4,504 6,936 10,818 12,786Bad debts 24,666 35,765 73,284 70,159Occupancy 5,805 5,023 11,487 10,003Technology costs 3,313 3,019 6,682 5,757Other expenses 6,459 7,566 15,754 13,767 80,642 90,928 187,720 175,655 DEPRECIATION AND AMORTIZATION Depreciation of lease assets 9,065 9,378 18,089 19,028Depreciation of right-of-use assets 3,944 3,677 7,941 7,468Depreciation of property and equipment 1,425 1,549 3,037 3,050Amortization of intangible assets 1,607 1,391 2,879 2,772 16,041 15,995 31,946 32,318 TOTAL OPERATING EXPENSES 96,683 106,923 219,666 207,973 OPERATING INCOME 53,994 40,931 98,213 79,741 OTHER INCOME Unrealized fair value gain on investment 4,000 - 4,000 - FINANCE COSTS Interest expense and amortization of deferred 13,405 13,244 27,081 26,142financing chargesInterest expense on lease liabilities 667 592 1,335 1,195 14,072 13,836 28,416 27,337 INCOME BEFORE INCOME TAXES 43,922 27,095 73,797 52,404 INCOME TAX EXPENSE Current 6,001 6,497 13,298 13,854Deferred 5,379 1,030 5,978 709 11,380 7,527 19,276 14,563 NET INCOME 32,542 19,568 54,521 37,841 BASIC EARNINGS PER SHARE 2.25 1.34 3.74 2.58DILUTED EARNINGS PER SHARE 2.11 1.26 3.51 2.44

Segmented Reporting Three Months Ended June 30, 2020($ in 000's except earnings per easyfinancial easyhome Corporate Totalshare) Revenue Interest income 96,846 4,020 - 100,866Lease revenue - 28,002 - 28,002Commissions earned 17,346 2,002 - 19,348Charges and fees 1,545 916 - 2,461 115,737 34,940 - 150,677 Total operating expenses before 51,999 16,181 12,462 80,642depreciation and amortization Depreciation and amortization Depreciation and amortization oflease assets, property and 1,770 9,441 886 12,097equipment and intangible assetsDepreciation of right-of-use 1,865 1,827 252 3,944assets 3,635 11,268 1,138 16,041 Segment operating income (loss) 60,103 7,491 (13,600 ) 53,994 Other income Unrealized fair value gain on 4,000investment Finance costs Interest expense and amortization 13,405of deferred financing chargesInterest expense on lease 667liabilities 14,072 Income before income taxes 43,922 Income taxes 11,380 Net Income 32,542 Diluted earnings per share 2.11 Three Months Ended June 30, 2019($ in 000's except earnings per easyfinancial easyhome Corporate Totalshare) Revenue Interest income 79,817 2,743 - 82,560Lease revenue - 28,352 - 28,352Commissions earned 31,277 2,075 - 33,352Charges and fees 2,242 1,348 - 3,590 113,336 34,518 - 147,854 Total operating expenses before 63,085 17,172 10,671 90,928depreciation and amortization Depreciation and amortization Depreciation and amortization oflease assets, property and 1,777 9,829 712 12,318equipment and intangible assetsDepreciation of 1,539 1,945 193 3,677right-of-use-assets 3,316 11,774 905 15,995 Segment operating income (loss) 46,935 5,572 (11,576 ) 40,931 Finance costs Interest expense and amortization 13,244of deferred financing chargesInterest expense on lease 592liabilities 13,836 Income before income taxes 27,095 Income taxes 7,527 Net Income 19,568 Diluted earnings per share 1.26 Six Months Ended June 30, 2020($ in 000's except earnings per easyfinancial easyhome Corporate Totalshare) Revenue Interest income 192,940 8,026 - 200,966Lease revenue - 55,816 - 55,816Commissions earned 50,311 4,315 - 54,626Charges and fees 4,274 2,197 - 6,471 247,525 70,354 - 317,879 Total operating expenses before 128,755 33,220 25,745 187,720depreciation and amortization Depreciation and amortization Depreciation and amortization oflease assets, property and 3,470 18,852 1,683 24,005equipment and intangible assetsDepreciation of right-of-use 3,714 3,771 456 7,941assets 7,184 22,623 2,139 31,946 Segment operating income (loss) 111,586 14,511 (27,884 ) 98,213 Other income Unrealized fair value gain on 4,000investment Finance costs Interest expense and amortization 27,081of deferred financing chargesInterest expense on lease 1,335liabilities 28,416 Income before income taxes 73,797 Income taxes 19,276 Net Income 54,521 Diluted earnings per share 3.51 Six Months Ended June 30, 2019($ in 000's except earnings per easyfinancial easyhome Corporate Totalshare) Revenue Interest income 154,234 5,056 - 159,290Lease revenue - 57,834 - 57,834Commissions earned 59,323 4,109 - 63,432Charges and fees 4,390 2,768 - 7,158 217,947 69,767 - 287,714 Total operating expenses before 123,011 33,090 19,554 175,655depreciation and amortization Depreciation and amortization Depreciation and amortization oflease assets, property and 3,595 19,930 1,325 24,850equipment and intangible assetsDepreciation of 3,056 4,027 385 7,468right-of-use-assets 6,651 23,957 1,710 32,318 Segment operating income (loss) 88,285 12,720 (21,264 ) 79,741 Finance costs Interest expense and amortization 26,142of deferred financing chargesInterest expense on lease 1,195liabilities 27,337 Income before income taxes 52,404 Income taxes 14,563 Net Income 37,841 Diluted earnings per share 2.44

Summary of Financial Results and Key Performance Indicators ($ in 000?s except earnings per Three Months Ended Variance Varianceshare and percentages) June 30, June 30, $ / bps % change 2020 2019Summary Financial Results Revenue 150,677 147,854 2,823 1.9 %Operating expenses before 80,642 90,928 (10,286 ) (11.3 %)depreciation and amortizationEBITDA 64,970 47,548 17,422 36.6 %EBITDA margin 43.1 % 32.2 % 1,090 33.9 % bpsDepreciation and amortization 16,041 15,995 46 0.3 %expenseOperating income 53,994 40,931 13,063 31.9 %Operating margin 35.8 % 27.7 % 810 bps 29.2 %Other income^1 4,000 - 4,000 100.0 %Finance costs 14,072 13,836 236 1.7 %Effective income tax rate 25.9 % 27.8 % (190 bps ) (6.8 %)Net income 32,542 19,568 12,974 66.3 %Diluted earnings per share 2.11 1.26 0.85 67.5 %Return on equity 37.0 % 25.2 % 1,180 46.8 % bps Adjusted (Normalized) Financial Results^1Adjusted EBITDA 60,970 47,548 13,422 28.2 %Adjusted EBITDA margin 40.5 % 32.2 % 830 bps 25.8 %Adjusted net income 29,072 19,568 9,504 48.6 %Adjusted diluted earnings per share 1.89 1.26 0.63 50.0 %Adjusted return on equity 33.1 % 25.2 % 790 bps 31.3 % Key Performance Indicators Same store revenue growth (overall) 1.1 % 19.9 % (1,880 ) (94.5 %) bpsSame store revenue growth (easyhome) 2.1 % 3.8 % (170 bps ) (44.7 %) Segment Financials easyfinancial revenue 115,737 113,336 2,401 2.1 %easyfinancial operating margin 51.9 % 41.4 % 1,050 25.4 % bpseasyhome revenue 34,940 34,518 422 1.2 %easyhome operating margin 21.4 % 16.1 % 530 bps 32.9 % Portfolio Indicators Gross consumer loans receivable 1,134,482 959,708 174,774 18.2 %Growth in consumer loans receivable (31,573 ) 80,338 (111,911 ) (139.3 %)Gross loan originations 170,842 276,355 (105,513 ) (38.2 %)Total yield on consumer loans 42.6 % 50.4 % (780 bps ) (15.5 %)(including ancillary products)Net charge-offs as a percentage ofaverage gross consumer loans 10.0 % 13.5 % (350 bps ) (25.9 %)receivablePotential monthly lease revenue 8,204 8,365 (161 ) (1.9 %) ($ in 000?s except earnings per Six Months Ended Variance Varianceshare and percentages) June 30, June 30, $ / bps % change 2020 2019Summary Financial Results Revenue 317,879 287,714 30,165 10.5 %Operating expenses before 187,720 175,655 12,065 6.9 %depreciation and amortizationEBITDA 116,070 93,031 23,039 24.8 %EBITDA margin 36.5 % 32.3 % 420 bps 13.0 %Depreciation and amortization 31,946 32,318 (372 ) (1.2 %)expenseOperating income 98,213 79,741 18,472 23.2 %Operating margin 30.9 % 27.7 % 320 bps 11.6 %Other income^1 4,000 - 4,000 100.0 %Finance costs 28,416 27,337 1,079 3.9 %Effective income tax rate 26.1 % 27.8 % (170 bps ) (6.1 %)Net income 54,521 37,841 16,680 44.1 %Diluted earnings per share 3.51 2.44 1.07 43.9 %Return on equity 31.6 % 24.7 % 690 bps 27.9 % Adjusted (Normalized) Financial Results^1Adjusted EBITDA 112,070 93,031 19,039 20.5 %Adjusted EBITDA margin 35.3 % 32.3 % 300 bps 9.3 %Adjusted net income 51,051 37,841 13,210 34.9 %Adjusted diluted earnings per share 3.29 2.44 0.85 34.8 %Adjusted return on equity 29.6 % 24.7 % 490 bps 19.8 % Key Performance Indicators Same store revenue growth (overall) 10.0 % 20.3 % (1,030 ) (50.7 %) bpsSame store revenue growth (easyhome) 3.3 % 4.2 % (90 bps ) (21.4 %) Segment Financials easyfinancial revenue 247,525 217,947 29,578 13.6 %easyfinancial operating margin 45.1 % 40.5 % 460 bps 11.4 %easyhome revenue 70,354 69,767 587 0.8 %easyhome operating margin 20.6 % 18.2 % 240 bps 13.2 % Portfolio Indicators Gross consumer loans receivable 1,134,482 959,708 174,774 18.2 %Growth in consumer loans receivable 23,849 125,929 (102,080 ) (81.1 %)Gross loan originations 412,445 495,793 (83,348 ) (16.8 %)Total yield on consumer loans 45.2 % 50.2 % (500 bps ) (10.0 %)(including ancillary products)Net charge-offs as a percentage ofaverage gross consumer loans 11.6 % 13.4 % (180 bps ) (13.4 %)receivablePotential monthly lease revenue 8,204 8,365 (161 ) (1.9 %) ^1During the second quarter of 2020, the Company recognized an unrealized fairvalue gain before-tax of $4.0 million on its investment in PayBright.