PR Newswire | Oct 28, 2021 04:16PM EDT

10/28 15:16 CDT

Enova Reports Third Quarter 2021 Results- Total revenue increased 21% sequentially and 57% from the third quarter of 2020 to $320 million- Strong third quarter profitability with diluted earnings per share from continuing operations of $1.36 and adjusted earnings per share of $1.50- Total company originations increased 26% sequentially to a record $856 million- Continued strong credit performance with consolidated portfolio net charge-offs as a percentage of average combined loan and finance receivables of 4.2%, down from 4.7% in the third quarter of 2020- At September 30, cash and marketable securities totaled $306 million and available capacity on committed facilities totaled $694 million CHICAGO, Oct. 28, 2021

CHICAGO, Oct. 28, 2021 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and artificial intelligence, today announced financial results for the third quarter ending September 30, 2021.

"We are pleased to again report a strong quarter of growth across all of our businesses," said David Fisher, Enova's CEO. "We continued to see rising demand, driven by increased spending as the economy recovers. Our accelerated marketing activities were highly successful in capturing the growing demand, particularly from new customers, which as a percentage of originations were the highest since the company's first year of operation. We expect this momentum to continue into the fourth quarter and believe that our demonstrated ability to capture market share combined with strong credit metrics provides good tailwinds as we enter 2022."

Third Quarter 2021 Summary

* Total revenue of $320 million in the third quarter of 2021 increased 57% from $205 million in the third quarter of 2020. * Net revenue margin of 77% in the third quarter of 2021 compared to 89% in the third quarter of 2020. * Net income from continuing operations of $52 million, or $1.36 per diluted share, in the third quarter of 2021, compared to $94 million, or $3.09 per diluted share, in the third quarter of 2020. * Third quarter 2021 adjusted EBITDA of $100 million, a non-GAAP measure, compared to $136 million in the third quarter of 2020. * Adjusted earnings of $57 million, or $1.50 per diluted share, both non-GAAP measures, in the third quarter of 2021, compared to adjusted earnings of $90 million, or $2.97 per diluted share, in the third quarter of 2019.

"We are encouraged by the growth in originations this quarter and our ability to deliver solid top and bottom-line results," said Steve Cunningham, CFO of Enova. "Credit performance across the portfolio remains very good, which contributed to our strong financial results this quarter. Looking forward, given the improving macroeconomic environment we expect credit to remain a tailwind and this is reflected in the fair value of our portfolio as we exited the quarter."

Outlook

Enova is monitoring and adapting quickly to changes in the current environment as the economy recovers from the impacts of the COVID-19 pandemic. Given the ongoing uncertainties in the operating environment the Company is not providing guidance for the fourth 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.

CFPB Civil Investigative Demand

The Company has received a Civil Investigative Demand ("CID") from the Consumer Financial Protection Bureau ("CFPB") concerning certain loan processing issues. Enova has been cooperating fully with the CFPB by providing data and information in response to the CID. Enova anticipates being able to expeditiously complete the investigation as several of the issues were self-disclosed and the Company has provided, and will continue to provide, restitution to customers who may have been negatively impacted.

"Enova has led the industry in providing innovative products that help consumers and small businesses and we are committed to putting customers first and complying with regulatory requirements," said Sean Rahilly, General Counsel & Chief Compliance Officer at Enova International. "We have devoted significant efforts to continually improving our technology and processes, as well as ongoing enhancements to our systems and controls to prevent negative customer experiences. Working with our regulatory authorities like the CFPB is a critical part of the process of providing financial services and we look forward to completing the investigation."

Conference Call

Enova will host a conference call to discuss its third quarter results at 4 p.m. Central Time / 5 p.m. Eastern Time today, October 28th. 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 November 4, 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 10160556.

About Enova

Enova International (NYSE: ENVA) is a leading financial technology company providing online financial services through its artificial intelligence and machine learning powered lending platform. Enova serves the needs of non-prime consumers and small businesses, who are frequently underserved by traditional banks. Enova has provided more than 7 million customers with over $40 billion in loans and financing with market leading products that provide a path for them to improve their financial health. 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 MeasuresIn 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 ReceivablesThe 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 MeasuresIn 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 MeasuresIn 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 transaction-related costs, lease termination and cease-use loss (gain), other nonoperating expenses and equity method investment income 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)

September 30, December 31,

2021 2020 2020

Assets

Cash and cash equivalents $ 229,088 $ 490,033 $ 297,273

Restricted cash 59,053 45,017 71,927

Loans and finance receivables at fair value 1,635,282 693,370 1,241,506

Income taxes receivable 4,799 - -

Other receivables and prepaid expenses 52,975 25,117 40,301

Property and equipment, net 81,149 63,403 79,417

Operating lease right-of-use assets 36,105 20,370 40,123

Goodwill 279,275 267,868 267,974

Intangible assets, net 37,458 1,623 26,008

Other assets 52,315 27,363 43,546

Total assets $ 2,467,499 $ 1,634,164 $ 2,108,075

Liabilities and Stockholders' Equity

Accounts payable and accrued expenses $ 124,584 $ 76,526 $ 124,071

Operating lease liabilities 61,985 35,258 67,956

Income taxes currently payable - 15,339 2,624

Deferred tax liabilities, net 71,297 69,874 48,129

Long-term debt 1,075,380 863,472 946,461

Total liabilities 1,333,246 1,060,469 1,189,241

Commitments and contingencies

Stockholders' equity:

Common stock, $0.00001 par value, 250,000,000 shares authorized,43,224,666, 36,190,857 and 41,936,784 shares issued and - - -36,427,705, 30,111,727 and 35,762,926 outstanding as ofSeptember 30, 2021 and 2020 and December 31, 2020, respectively

Preferred stock, $0.00001 par value, 25,000,000 shares authorized, - - -no shares issued and outstanding

Additional paid in capital 217,051 74,868 187,981

Retained earnings 1,057,111 618,775 849,466

Accumulated other comprehensive loss (8,185) (8,547) (6,898)

Treasury stock, at cost (6,796,961, 6,079,130 and 6,173,858 shares as (133,041) (111,401) (113,201)of September 30, 2021 and 2020 and December 31, 2020, respectively)

Total Enova International, Inc. stockholders' equity 1,132,936 573,695 917,348

Noncontrolling interest 1,317 - 1,486

Total stockholders' equity 1,134,253 573,695 918,834

Total liabilities and stockholders' equity $ 2,467,499 $ 1,634,164 $ 2,108,075

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)

(Unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Revenue $ 320,160 $ 204,545 $ 844,324 $ 819,858

Change in Fair Value (73,778) (22,777) (100,443) (379,168)

Net Revenue 246,382 181,768 743,881 440,690

Expenses

Marketing 79,726 4,629 163,548 42,175

Operations and technology 37,966 17,702 108,628 65,472

General and administrative 33,557 33,656 116,321 83,943

Depreciation and amortization 8,914 3,770 23,001 11,444

Total Expenses 160,163 59,757 411,498 203,034

Income from Operations 86,219 122,011 332,383 237,656

Interest expense, net (18,163) (18,634) (57,493) (59,387)

Foreign currency transaction loss (109) (30) (383) (7)

Equity method investment income 529 - 2,558 -

Other nonoperating expenses - - (1,128) -

Income before Income Taxes 68,476 103,347 275,937 178,262

Provision for income taxes 16,667 9,671 67,607 30,812

Net income from continuing operations before noncontrolling 51,809 93,676 208,330 147,450interest

Less: Net income attributable to noncontrolling interest 261 - 685 -

Net income from continuing operations 51,548 93,676 207,645 147,450

Net loss from discontinued operations - (9) - (297)

Net income attributable to Enova International, Inc. $ 51,548 $ 93,667 $ 207,645 $ 147,153

Earnings (Loss) Per Share attributable to Enova International, Inc.:

Earnings (loss) per common share - basic:

Continuing operations $ 1.40 $ 3.11 $ 5.68 $ 4.78

Discontinued operations - - - (0.01)

Earnings (loss) per common share - basic $ 1.40 $ 3.11 $ 5.68 $ 4.77

Earnings (loss) per common share - diluted:

Continuing operations $ 1.36 $ 3.09 $ 5.48 $ 4.73

Discontinued operations - - - (0.01)

Earnings (loss) per common share - diluted $ 1.36 $ 3.09 $ 5.48 $ 4.72

Weighted average common shares outstanding:

Basic 36,744 30,108 36,554 30,880

Diluted 37,984 30,363 37,874 31,180

ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(dollars in thousands)

(Unaudited)

Nine Months Ended September 30,

2021 2020

Cash flows from operating activities

Cash flows from operating activities - continuing operations $ 325,157 $ 623,530

Cash flows from operating activities - discontinued operations - (297)

Total cash flows provided by operating activities 325,157 623,233

Cash flows from investing activities

Loans and finance receivables (470,416) 40,505

Acquisitions (29,153) (3,597)

Purchases of property and equipment (22,031) (19,835)

Other investing activities 25 57

Total cash flows (used in) provided by investing activities (521,575) 17,130

Cash flows provided by (used in) financing activities 115,433 (186,103)

Effect of exchange rates on cash, cash equivalents and restricted cash (74) (174)

Net (decrease) increase in cash, cash equivalents and restricted cash (81,059) 454,086

Cash, cash equivalents and restricted cash at beginning of year 369,200 80,964

Cash, cash equivalents and restricted cash at end of period $ 288,141 $ 535,050

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 lossactivity, which is based on loan and finance receivable balances, forcontinuing operations for the three months ended September 30, 2021 and 2020.

Three Months Ended September 30, 2021 2020 Change

Ending combined loan and finance receivable principal balance:

Company owned $ 1,586,449 $ 651,289 $ 935,160

Guaranteed by the Company^(a) 11,354 6,905 4,449

Total combined loan and finance receivable principal balance^(b) $ 1,597,803 $ 658,194 $ 939,609

Ending combined loan and finance receivable fair value balance:

Company owned $ 1,635,282 $ 693,370 $ 941,912

Guaranteed by the Company^(a) 16,921 7,411 9,510

Ending combined loan and finance receivable fair value balance^(b) $ 1,652,203 $ 700,781 $ 951,422

Fair value as a % of principal^(c) 103.4 % 106.5 % (3.1) %

Ending combined loan and finance receivable balance, including principaland accrued fees/interest outstanding:

Company owned $ 1,650,771 $ 698,964 $ 951,807

Guaranteed by the Company^(a) 13,239 8,100 5,139

Ending combined loan and finance receivable balance^(b) $ 1,664,010 $ 707,064 $ 956,946

Average combined loan and finance receivable balance, including principaland accrued fees/interest outstanding:

Company owned^(d) $ 1,540,424 $ 747,956 $ 792,468

Guaranteed by the Company^(a)(d) 11,366 6,855 4,511

Average combined loan and finance receivable balance^(a)(d) $ 1,551,790 $ 754,811 $ 796,979

Revenue $ 316,042 $ 203,397 $ 112,645

Change in fair value (72,546) (22,777) (49,769)

Net revenue 243,496 180,620 62,876

Net revenue margin 77.0 % 88.8 % (11.8) %

Change in fair value as a % of average loan and finance receivable balance^(d) 4.7 % 3.0 % 1.7 %

Delinquencies:

>30 days delinquent $ 90,782 $ 25,841 $ 64,941

>30 days delinquent as a % of loan and finance receivable balance^(c) 5.5 % 3.7 % 1.8 %

Charge-offs:

Charge-offs (net of recoveries) $ 64,896 $ 35,166 $ 29,730

Charge-offs (net of recoveries) as a % of average loan and finance 4.2 % 4.7 % (0.5) %receivable balance^(d)

______________________________

(a) Represents loans originated by third-party lenders through the CSOprograms, 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 averageof 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 Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Net income from continuing operations $ 51,548 $ 93,676 $ 207,645 $ 147,450

Adjustments:

Transaction-related costs^(a) - 6,593 1,424 6,593

Lease termination and cease-use loss (gain)^(b) (113) - (113) -

Other nonoperating expenses^(c) - - 1,128 -

Intangible asset amortization 2,013 27 4,848 562

Stock-based compensation expense 5,018 3,768 16,072 10,888

Foreign currency transaction loss 102 30 373 7

Cumulative tax effect of adjustments (1,581) (2,454) (5,843) (4,251)

Adjusted earnings $ 56,987 $ 90,036 $ 225,534 $ 149,645

Diluted earnings per share $ 1.36 $ 3.09 $ 5.48 $ 4.73

Adjusted earnings per share $ 1.50 $ 2.97 $ 5.95 $ 4.80

Adjusted EBITDA

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Net income from continuing operations $ 51,548 $ 93,676 $ 207,645 $ 147,450

Depreciation and amortization expenses 8,912 3,770 22,990 11,444

Interest expense, net 17,966 18,634 57,013 59,387

Foreign currency transaction loss 102 30 373 7

Provision for income taxes 16,667 9,671 67,607 30,812

Stock-based compensation expense 5,018 3,768 16,072 10,888

Adjustments:

Transaction-related costs^(a) - 6,593 1,424 6,593

Lease termination and cease-use loss (gain)^(b) (113) - (113) -

Other nonoperating expenses^(c) - - 1,128 -

Equity method investment income (529) - (2,558) -

Adjusted EBITDA $ 99,571 $ 136,142 $ 371,581 $ 266,581

Adjusted EBITDA margin calculated as follows:

Total Revenue $ 320,160 $ 204,545 $ 844,324 $ 819,858

Adjusted EBITDA 99,571 136,142 371,581 266,581

Adjusted EBITDA as a percentage of total revenue 31.1 % 66.6 % 44.0 % 32.5 %

_____________________________

(a) In the first quarter of 2021, the Company incurred expenses totaling$1.4 million ($1.1 million net of tax) related to acquisitions and adivestiture of a subsidiary. In the third quarter of 2020, the Company incurred expenses totaling$6.6 million ($5.0 million net of tax) related to an acquisition.

(b) In the third quarter of 2021, the Company recorded a gain of $0.1million ($0.1 million net of tax) upon the exit of leased office space.

(c) In the first quarter of 2021, the Company recorded other nonoperatingexpense of $0.4 million ($0.3 million net of tax) related to the repurchase ofsecuritization notes. In the second quarter of 2021, the Company recorded othernonoperating expense of $0.8 million ($0.6 million net of tax) related to anincomplete transaction.

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SOURCE Enova International, Inc.