8-K
Enova International, Inc. (ENVA)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of Earliest Event Reported):
February 03, 2022
ENOVA INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-35503 | 45-3190813 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File No.) | (IRS Employer Identification No.) |
175 West Jackson Boulevard
Chicago, Illinois 60604
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (312) 568-4200
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading symbol(s) | Name of Exchange of which registered |
|---|---|---|
| Common stock, par value $0.00001 per share | ENVA | NYSE |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On February 3, 2022, Enova International, Inc. (the “Company”) issued a press release to announce its consolidated financial results for the three months ended December 31, 2021. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The press release includes non-GAAP financial measures as that term is defined in Regulation G. The press release also includes the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), information reconciling the non-GAAP financial measures to the GAAP financial measures, and a discussion of the reasons why the Company’s management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations. The non-GAAP financial information presented therein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.
ITEM 7.01 REGULATION FD DISCLOSURE
See Item 2.02 Results of Operations and Financial Condition.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)Exhibits
The following exhibits are furnished as part of this Report on Form 8-K:
| Exhibit No. | Description |
|---|---|
| 99.1 | Enova International, Inc. press release dated February 03, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENOVA INTERNATIONAL, INC. | ||
|---|---|---|
| Date: February 3, 2022 | By: | /s/ Sean Rahilly |
| Sean Rahilly | ||
| General Counsel & Secretary |
Exhibit 99.1
Enova Reports Fourth Quarter and Full Year 2021 Results
-- Total revenue increased 14% sequentially in the fourth quarter of 2021 and 38% from the fourth quarter of 2020 to $364 million
-- Strong fourth quarter profitability with diluted earnings per share from continuing operations of $1.30 and adjusted earnings per share of $1.61
-- Total company originations increased 25% sequentially in the fourth quarter to a record $1.1 billion
-- Continued strong credit performance with consolidated portfolio net charge-offs as a percentage of average combined loan and finance receivables of 6.7% in the fourth quarter of 2021, compared to 4.7% in the fourth quarter of 2020
-- Acquired approximately 2.5 million shares during the fourth quarter under the company's share repurchase program
-- At December 31, cash and marketable securities totaled $242 million and available capacity on committed facilities totaled $488 million
CHICAGO, Feb. 3, 2022 /PRNewswire/ -- Enova International (NYSE: ENVA), a leading financial technology company powered by machine learning and artificial intelligence, today announced financial results for the fourth quarter and year ended December 31, 2021.
"We are encouraged by our strong finish to 2021 and the momentum we are carrying into 2022," said David Fisher, Enova's CEO. "Our fourth quarter performance was driven by the continued effectiveness of our marketing to capture demand across our businesses, especially from new customers. In addition, credit quality remains strong, in both legacy and newer vintages, supported by our machine learning-powered risk management and analytical capabilities. We believe our diversified products and the ability of our talented team to manage through changing market dynamics has us well positioned for continued profitable growth in 2022 and beyond."
Fourth Quarter 2021 Summary
- Total revenue of $364 million in the fourth quarter of 2021 increased 38% from $264 million in the fourth quarter of 2020.
- Net revenue margin of 77% in the fourth quarter of 2021 compared to 92% in the fourth quarter of
- Net income from continuing operations of $49 million, or $1.30 per diluted share, in the fourth quarter of 2021, compared to $231 million, or $6.47 per diluted share, in the fourth quarter of 2020.
- Fourth quarter 2021 adjusted EBITDA of $101 million, a non-GAAP measure, compared to $149 million in the fourth quarter of 2020.
- Adjusted earnings of $60 million, or $1.61 per diluted share, both non-GAAP measures, in the fourth quarter of 2021, compared to adjusted earnings of $85 million, or $2.39 per diluted share, in the fourth quarter of 2020.
Full Year 2021 Summary
- Total revenue of $1.208 billion in 2021 increased 11% from $1.084 billion in 2020.
- Net revenue margin of 85% in 2021 compared to 63% in 2020.
- Net income from continuing operations of $256 million, or $6.79 per diluted share, in 2021, compared to $378 million, or $11.71 per diluted share, in 2020.
- Full year 2021 adjusted EBITDA of $473 million, a non-GAAP measure, compared to $415 million in 2020.
- Adjusted earnings of $286 million, or $7.57 per diluted share, both non-GAAP measures, in 2021, compared to adjusted earnings of $235 million, or $7.26 per diluted share, in 2020.
"We finished the year with strong financial results as fourth quarter and full-year 2021 total originations, originations from new customers, ending receivables and revenue were all the largest and most diverse in our company's history," said Steve Cunningham, CFO of Enova. "We continue to see strong unit economics from new originations as credit performance across our brands continues to perform inline or better than expectations. Our solid balance sheet and ample liquidity give us the flexibility to continue to deliver on our commitment to long-term shareholder value through both share repurchases and investments in our business to drive meaningful, sustainable and profitable growth."
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 and full year 2021 quarter results at 4 p.m. Central Time / 5 p.m. Eastern Time today, February 3rd. 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 10, 2022, 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 5103540**.**
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 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 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), gain on bargain purchase, 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) | |||
|---|---|---|---|
| 2020 | |||
| Assets | |||
| Cash and cash equivalents | 165,477 | $ | 297,273 |
| Restricted cash | 60,406 | 71,927 | |
| Loans and finance receivables at fair value | 1,964,690 | 1,241,506 | |
| Income taxes receivable | 51,104 | — | |
| Other receivables and prepaid expenses | 52,274 | 40,301 | |
| Property and equipment, net | 78,402 | 79,417 | |
| Operating lease right-of-use asset | 23,101 | 40,123 | |
| Goodwill | 279,275 | 267,974 | |
| Intangible assets, net | 35,444 | 26,008 | |
| Other assets | 51,310 | 43,546 | |
| Total assets | 2,761,483 | $ | 2,108,075 |
| Liabilities and Stockholders' Equity | |||
| Accounts payable and accrued expenses | 156,102 | $ | 124,071 |
| Operating lease liability | 40,987 | 67,956 | |
| Income taxes currently payable | — | 2,624 | |
| Deferred tax liabilities, net | 86,943 | 48,129 | |
| Long-term debt | 1,384,399 | 946,461 | |
| Total liabilities | 1,668,431 | 1,189,241 | |
| Commitments and contingencies | |||
| Stockholders' equity: | |||
| Common stock, 0.00001 par value, 250,000,000 shares authorized,<br>43,423,572 and 41,936,784 shares issued and 34,144,012 and 35,762,926<br>outstanding as of December 31, 2021 and 2020, respectively | — | — | |
| Preferred stock, 0.00001 par value, 25,000,000 shares authorized, no shares<br>issued and outstanding | — | — | |
| Additional paid in capital | 225,689 | 187,981 | |
| Retained earnings | 1,105,761 | 849,466 | |
| Accumulated other comprehensive loss | (8,540) | (6,898) | |
| Treasury stock, at cost (9,279,560 and 6,173,858 shares as of<br>December 31, 2021 and 2020, respectively) | (229,858) | (113,201) | |
| Total Enova International, Inc. stockholders' equity | 1,093,052 | 917,348 | |
| Noncontrolling interest | — | 1,486 | |
| Total stockholders' equity | 1,093,052 | 918,834 | |
| Total liabilities and stockholders' equity | 2,761,483 | $ | 2,108,075 |
All values are in US Dollars.
| ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES<br><br>CONSOLIDATED STATEMENTS OF INCOME<br><br>(in thousands, except per share data)<br><br>(Unaudited) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | |||||||
| December 31, | December 31, | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| Revenue | $ | 363,608 | $ | 263,852 | $ | 1,207,932 | $ | 1,083,710 |
| Change in Fair Value | (83,229) | (20,349) | (183,672) | (399,517) | ||||
| Net Revenue | 280,379 | 243,503 | 1,024,260 | 684,193 | ||||
| Expenses | ||||||||
| Marketing | 107,612 | 27,605 | 271,160 | 69,780 | ||||
| Operations and technology | 39,072 | 30,812 | 147,700 | 96,284 | ||||
| General and administrative | 40,641 | 56,657 | 156,962 | 140,600 | ||||
| Depreciation and amortization | 12,374 | 8,288 | 35,375 | 19,732 | ||||
| Total Expenses | 199,699 | 123,362 | 611,197 | 326,396 | ||||
| Income from Operations | 80,680 | 120,141 | 413,063 | 357,797 | ||||
| Interest expense, net | (19,016) | (27,304) | (76,509) | (86,691) | ||||
| Foreign currency transaction gain (loss), net | 1 | 521 | (382) | 514 | ||||
| Gain on bargain purchase | — | 163,999 | — | 163,999 | ||||
| Equity method investment income | 395 | 628 | 2,953 | 628 | ||||
| Other nonoperating expenses | (842) | (827) | (1,970) | (827) | ||||
| Income before Income Taxes | 61,218 | 257,158 | 337,155 | 435,420 | ||||
| Provision for income taxes | 12,480 | 26,379 | 80,087 | 57,191 | ||||
| Net income from continuing operations before noncontrollinginterest | 48,738 | 230,779 | 257,068 | 378,229 | ||||
| Less: Net income attributable to noncontrolling interest | 88 | 85 | 773 | 85 | ||||
| Net income from continuing operations | 48,650 | 230,694 | 256,295 | 378,144 | ||||
| Net loss from discontinued operations | — | (3) | — | (300) | ||||
| Net income attributable to Enova International, Inc. | $ | 48,650 | $ | 230,691 | $ | 256,295 | $ | 377,844 |
| Earnings (Loss) Per Share attributable to Enova International,Inc.: | ||||||||
| Earnings (loss) per common share – basic: | ||||||||
| Continuing operations | $ | 1.36 | $ | 6.61 | $ | 7.05 | $ | 11.86 |
| Discontinued operations | — | — | — | (0.01) | ||||
| Earnings (loss) per common share – basic | $ | 1.36 | $ | 6.61 | $ | 7.05 | $ | 11.85 |
| Earnings (loss) per common share – diluted: | ||||||||
| Continuing operations | $ | 1.30 | $ | 6.47 | $ | 6.79 | $ | 11.71 |
| Discontinued operations | — | — | — | (0.01) | ||||
| Earnings (loss) per common share – diluted | $ | 1.30 | $ | 6.47 | $ | 6.79 | $ | 11.70 |
| Weighted average common shares outstanding: | ||||||||
| Basic | 35,750 | 34,926 | 36,351 | 31,897 | ||||
| Diluted | 37,330 | 35,645 | 37,736 | 32,302 | ||||
| ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES<br><br>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS<br><br>(dollars in thousands)<br><br>(Unaudited) | ||||||||
| --- | --- | --- | --- | --- | ||||
| Year Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows provided by (used in) operating activities | ||||||||
| Cash flows from operating activities - continuing operations | $ | 471,868 | $ | 741,171 | ||||
| Cash flows from operating activities - discontinued operations | — | (300) | ||||||
| Cash flows provided by operating activities | 471,868 | 740,871 | ||||||
| Cash flows (used in) provided by investing activities | ||||||||
| Loans and finance receivables | (923,494) | 2,986 | ||||||
| Acquisitions, net of cash acquired | (29,153) | 109,920 | ||||||
| Property and equipment additions | (29,674) | (29,491) | ||||||
| Sale of subsidiary | 1,928 | — | ||||||
| Other investing activities | 25 | 168 | ||||||
| Cash flows from investing activities - continuing operations | (980,368) | 83,583 | ||||||
| Cash flows from investing activities - discontinued operations | — | — | ||||||
| Total cash flows (used in) provided by investing activities | (980,368) | 83,583 | ||||||
| Cash flows provided by (used in) financing activities | 365,149 | (535,974) | ||||||
| Effect of exchange rates on cash | 34 | (244) | ||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | (143,317) | 288,236 | ||||||
| Less: increase in cash and cash equivalents from discontinued operations | — | — | ||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash - continuingoperations | (143,317) | 288,236 | ||||||
| Cash, cash equivalents and restricted cash at beginning of year | 369,200 | 80,964 | ||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 225,883 | $ | 369,200 |
| ENOVA INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LOANS AND FINANCE RECEIVABLES FINANCIAL AND OPERATING DATA | ||||||||||||
| (dollars in thousands) | ||||||||||||
| The following table includes financial information for loans and finance receivables, which is based on loan and finance receivable balances for the three months ended<br><br>December 30, 2021 and 2020. | Three Months Ended December 31 | 2021 | 2020 | Change | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Ending combined loan and finance receivable principal balance: | ||||||||||||
| Company owned | $ | 1,878,426 | $ | 1,263,134 | $ | 615,292 | ||||||
| Guaranteed by the Company^(a)^ | 11,790 | 8,845 | 2,945 | |||||||||
| Total combined loan and finance receivable principal balance^(b)^ | $ | 1,890,216 | $ | 1,271,979 | $ | 618,237 | ||||||
| Ending combined loan and finance receivable fair value balance: | ||||||||||||
| Company owned | $ | 1,964,690 | $ | 1,241,506 | $ | 723,184 | ||||||
| Guaranteed by the Company^(a)^ | 18,813 | 10,289 | 8,524 | |||||||||
| Ending combined loan and finance receivable fair value balance^(b)^ | $ | 1,983,503 | $ | 1,251,795 | $ | 731,708 | ||||||
| Fair value as a % of principal^(c)^ | 104.9 | % | 98.4 | % | 6.5 | % | ||||||
| Ending combined loan and finance receivable balance, including principaland accrued fees/interest outstanding: | ||||||||||||
| Company owned | $ | 1,944,262 | $ | 1,310,171 | $ | 634,091 | ||||||
| Guaranteed by the Company^(a)^ | 13,750 | 10,163 | 3,587 | |||||||||
| Ending combined loan and finance receivable balance^(b)^ | $ | 1,958,012 | $ | 1,320,334 | $ | 637,678 | ||||||
| Average combined loan and finance receivable balance, includingprincipal and accrued fees/interest outstanding: | ||||||||||||
| Company owned^(d)^ | $ | 1,792,257 | $ | 1,153,358 | $ | 638,899 | ||||||
| Guaranteed by the Company^(a)(d)^ | 13,212 | 8,861 | 4,351 | |||||||||
| Average combined loan and finance receivable balance^(a)(d)^ | $ | 1,805,469 | $ | 1,162,219 | $ | 643,250 | ||||||
| Revenue | $ | 358,633 | $ | 261,299 | $ | 97,334 | ||||||
| Change in fair value | (81,911) | (20,349) | (61,562) | |||||||||
| Net revenue | 276,722 | 240,950 | 35,772 | |||||||||
| Net revenue margin | 77.2 | % | 92.2 | % | (15.0) | % | ||||||
| Change in fair value as a % of average loan and finance receivable balance^(d)^ | 4.5 | % | 1.8 | % | 2.7 | % | ||||||
| Delinquencies: | ||||||||||||
| >30 days delinquent | $ | 103,213 | $ | 122,666 | $ | (19,453) | ||||||
| >30 days delinquent as a % of loan and finance receivable balance^(c)^ | 5.3 | % | 9.3 | % | (4.0) | % | ||||||
| Charge-offs: | ||||||||||||
| Charge-offs (net of recoveries) | $ | 120,259 | $ | 55,087 | $ | 65,172 | ||||||
| Charge-offs (net of recoveries) as a % of average loan and finance receivable balance^(d)^ | 6.7 | % | 4.7 | % | 2.0 | % | (a) | Represents loans originated by third-party lenders through the CSO programs, which are not included in ourconsolidated 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<br><br>RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES<br><br>(dollars in thousands, except per share data)<br><br><br><br>**** | ||||||||
|---|---|---|---|---|---|---|---|---|
| Adjusted Earnings Measures | ||||||||
| Three Months Ended | Year Ended | |||||||
| December 31, | December 31, | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||
| Net income from continuing operations | $ | 48,650 | $ | 230,694 | $ | 256,295 | $ | 378,144 |
| Adjustments: | ||||||||
| Gain on bargain purchase^(a)^ | — | (163,999) | — | (163,999) | ||||
| Transaction-related costs^(b)^ | — | 13,430 | 1,424 | 20,023 | ||||
| Lease termination and cease use costs^(c)^ | 7,648 | — | 7,535 | — | ||||
| Other nonoperating expenses^(d)^ | 842 | 827 | 1,970 | 827 | ||||
| Intangible asset amortization | 2,014 | 1,215 | 6,862 | 1,777 | ||||
| Stock-based compensation expense | 5,107 | 7,153 | 21,179 | 18,041 | ||||
| Foreign currency transaction (gain) loss, net | (1) | (506) | 372 | (499) | ||||
| Cumulative tax effect of adjustments | (4,012) | (3,787) | (9,855) | (8,038) | ||||
| Discrete tax adjustments^(e)^ | — | — | — | (11,604) | ||||
| Adjusted earnings | $ | 60,248 | $ | 85,027 | $ | 285,782 | $ | 234,672 |
| Diluted earnings per share | $ | 1.30 | $ | 6.47 | $ | 6.79 | $ | 11.71 |
| Adjusted earnings per share | $ | 1.61 | $ | 2.39 | $ | 7.57 | $ | 7.26 |
| Adjusted EBITDA | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Net income from continuing operations | $ | 48,650 | $ | 230,694 | $ | 256,295 | $ | 378,144 | |||||||
| Depreciation and amortization expenses^(f)^ | 12,372 | 8,282 | 35,362 | 19,726 | |||||||||||
| Interest expense, net^(f)^ | 18,916 | 27,120 | 75,929 | 86,507 | |||||||||||
| Foreign currency transaction (gain) loss, net | (1) | (506) | 372 | (499) | |||||||||||
| Provision for income taxes | 12,480 | 26,379 | 80,087 | 57,191 | |||||||||||
| Stock-based compensation expense | 5,107 | 7,153 | 21,179 | 18,041 | |||||||||||
| Adjustments: | |||||||||||||||
| Transaction-related costs^(b)^ | — | 13,430 | 1,424 | 20,023 | |||||||||||
| Lease termination and cease use loss^(c)^ | 3,449 | — | 3,336 | — | |||||||||||
| Gain on bargain purchase^(a)^ | — | (163,999) | — | (163,999) | |||||||||||
| Equity method investment income | (395) | (628) | (2,953) | (628) | |||||||||||
| Other nonoperating expenses^(d)^ | 842 | 827 | 1,970 | 827 | |||||||||||
| Adjusted EBITDA | $ | 101,420 | $ | 148,752 | $ | 473,001 | $ | 415,333 | |||||||
| Adjusted EBITDA margin calculated as follows: | |||||||||||||||
| Total Revenue | $ | 363,608 | $ | 263,852 | $ | 1,207,932 | $ | 1,083,710 | |||||||
| Adjusted EBITDA | 101,420 | 148,752 | 473,001 | 415,333 | |||||||||||
| Adjusted EBITDA as a percentage of total revenue | 27.9 | % | 56.4 | % | 39.2 | % | 38.3 | % | (a) | In the fourth quarter of 2020, the Company recorded a $164.0 million gain on bargain purchaserelated to an acquisition. | |||||
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| (b) | In the first quarter of 2021, the Company incurred expenses totaling$1.4 million ($1.1 million net of tax) related to acquisitions and a divestiture of a subsidiary. 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. | ||||||||||||||
| (c) | In the fourth and third quarters of 2021, the Company recorded a loss of $7.6 million ($5.7 million net of tax), including a net write-off of leasehold improvements of $4.2 million, and a gain of $0.1 million ($0.1 million net of tax), respectively, upon the exits of leased office spaces. | ||||||||||||||
| (d) | In the fourth quarter of 2021, the Company incurred a loss of $0.8 million ($0.6 million net of tax) related to the partial divestiture of a subsidiary. In the second quarter of 2021, the Company recorded other nonoperating expense of $0.8 million ($0.6 million net of tax) related to an incomplete transaction. In the first quarter of 2021 and fourth quarter of 2020, the Company recorded other nonoperating expense of $0.4 million ($0.3 million net of tax) and $0.8 million ($0.6million net of tax) related to early extinguishment of debt. | ||||||||||||||
| (e) | In the thirdquarter of 2020, the Company recognized an $11.6 million income tax benefit resulting from the release of its liability forcertain previously unrecognized tax benefits. | ||||||||||||||
| (f) | Excludes amounts attributable tononcontrolling interests. |
CONTACT: Public Relations Contact: Kaitlin Lowey, Email: media@enova.com, or Investor Relations Contact: Monica Gould, Office: (212) 871-3927, Email: IR@enova.com