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Marketwired
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(2)

goeasy Ltd. Reports Record Performance for the Third Quarter ended September 30, 2016 / Revenue Growth of 13% Adjusted Net Income Growth of 41%

MISSISSAUGA, ONTARIO -- (Marketwired) -- 11/03/16 -- goeasy Ltd. (TSX: GSY) ("goeasy" or the "Company"), a leading full service provider of goods and alternative financial services that improve the lives of everyday Canadians, today announced its results for the third quarter ended September 30, 2016.

Q3 2016 Results

Revenue for the third quarter of 2016 increased to $87.8 million, an increase of 12.6% from $78.0 million in the third quarter of 2015. Total same store sales growth in the quarter was 15.4%. The growth was driven primarily by the expansion of easyfinancial and the related growth of its consumer loans receivable portfolio which reached $344 million by quarter's end, up 35.5% when compared with September 30, 2015. Loan book growth in the third quarter of 2016 was $17.5 million.

Operating income for the quarter was $12.4 million. Operating income included transaction advisory costs of $5.3 million to analyze, arrange financing and submit a bid for a potential strategic acquisition. Excluding these transaction advisory costs, adjusted operating income was $17.8 million, up $4.9 million or 37.9% compared to operating income of $12.9 million in the third quarter of 2015. Adjusted net income for the quarter was $8.8 million, up $2.6 million or 41.2% from $6.3 million in the third quarter of 2015. Adjusted diluted earnings per share for the quarter was $0.64, up $0.29 or 42.2% from $0.45 in the third quarter of 2015. These income statement metrics represent record third quarter performance for goeasy.

"We are pleased to report another record quarter as we continue to meet strong consumer demand by offering everyday Canadians an alternative between banks and high cost payday lenders," said David Ingram, goeasy's President and Chief Executive Officer. "As we devoted significant time and resources to explore a strategic acquisition opportunity during the preceding quarters, our team also delivered record revenue and record adjusted net income for the period. Ultimately, we believe that pursuing the growth opportunities available to us through expanding our existing business will create the most value for our shareholders."

Other highlights for the third quarter of 2016 include:

easyfinancial

--  Revenue increased by 34.0% from $39.3 million in the third quarter of
    2015 to $52.6 million in the current quarter.
--  Gross loan originations increased by 23.5% from $81.8 million in the
    third quarter of 2015 to $101.1 million in the current quarter.
--  Net charge offs as a percentage of the average gross consumer loans
    receivable on an annualized basis were 15.4%, within the targeted range
    of 14% to 16%.
--  Operating margin for the third quarter of 2016 improved from 32.4% to
    39.9%.
--  Cash generated from easyfinancial customer payments was $89.0 million in
    the third quarter of 2016 compared to $65.9 million in the third quarter
    of 2015.

easyhome

--  Same store revenue declined 4.1%.
--  The number of delivered units declined by 2.1% in the quarter when
    compared to the third quarter of 2015.
--  The operating margin for easyhome for the third quarter of 2016 was
    14.4%.

Overall

--  26th consecutive quarter of same store sales growth.
--  Adjusted operating margin was 20.2% for the quarter, up from the
    operating margin of 16.5% in the third quarter of 2015.
--  The Company's adjusted return on equity improved to 18.9% in the current
    quarter from 15.0% in the third quarter of 2015.

Nine Months Results

For the first nine months of the year, goeasy achieved revenues of $256.2 million, up 15.7% compared with $221.4 million in the first nine months of 2015. For the first nine months of 2016, operating income was $45.3 million, net income was $22.7 million and diluted earnings per share was $1.63. The actual metrics for 2016 included a $3.0 million gain on the sale of an investment and $6.4 million in transaction advisory costs that are not routine and non-recurring. Excluding these items, adjusted operating income for the period was $48.7 million compared with $33.1 million in the first nine months of 2015, an increase of $15.6 million or 47.4%; adjusted net income was $24.8 million compared with $16.2 million in the first nine months of 2015, an increase of 53.2%; and adjusted diluted earnings per share was $1.78 compared with $1.15 for the first nine months of 2015, an increase of 54.8%.

Balance Sheet and Liquidity

Total assets were $483.4 million as at September 30, 2016, an increase of 21.0% from $399.5 million as at September 30, 2015 and driven by the $90.1 million growth in the gross consumer loans receivable portfolio. Total assets were funded, in part, by gross drawings of $255.0 million under the term loan of the Company's credit facilities. As at September 30, 2016, the Company had $74.8 available to support future growth consisting of $29.8 million of cash, $20.0 million under the revolving operating facility and $25.0 million still available under the term loan facility.

The Company believes that the cash flows provided by operations will be sufficient in the near-term to meet operational requirements, purchase lease assets, meet capital spending requirements and pay dividends. Also, the additional availability described above will allow the Company to achieve its targets for the growth of its consumer loans receivable portfolio into mid 2017.

Outlook

The Company has updated its stated targets for 2016. The ending easyfinancial gross consumer loans receivable target has been narrowed to $370 to $380 million while the easyfinancial operating margin target has been increased to a range of 35% to 38% while maintaining loan loss rates within the targeted range of 14% to 16%. The Company's targets for new easyfinancial locations during 2016 has remained at 10 to 20 locations. Finally, given the reduction in demand within the rent-to-own industry experience by easyhome, the Company's revenue growth target has been moderated to a range of 14% to 16%.

The Company's targets for 2018 remain unchanged.

Normal Course Issuer Bid and Dividend

On June 22, 2016, the Company renewed its Normal Course Issuer Bid allowing it to purchase for cancellation up to 986,105 Common Shares over the following 12 months. During the three month period ended September 30, 2016, the Company purchased and cancelled 94,500 of its common shares under this normal course issuer bid.

The Board of Directors has approved a quarterly dividend of $0.125 per share payable on January 13, 2017 to the holders of common shares of record as at the close of business on December 30, 2016.

Forward-Looking Statements

This press release includes forward-looking statements about goeasy, including, but not limited to, its business operations, strategy and expected financial performance and condition. Forward-looking statements include, but are not limited to, those with respect to 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 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 Company's operations, economic factors and the industry generally, as well as those factors referred to in the Company's December 31, 2015 Management Discussion and Analysis 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 Company's ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, secure new franchised locations, 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 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

As at September 30, 2016, the Company operated 177 easyhome stores (including 26 franchises and 3 consolidated franchise locations) and 209 easyfinancial locations.

goeasy Ltd. is a leading full service provider of goods and alternative financial services that improve the lives of everyday Canadians. Today, goeasy Ltd. serves its customers through two key operating divisions, easyhome and easyfinancial. easyhome is Canada's largest lease-to-own company, offering brand-name household furniture, appliances and electronics to consumers under weekly or monthly leasing agreements through both corporate and franchise stores. easyfinancial is the leading provider of alternative financial services, offering consumer loans between $500-$15,000, and is supported by a strong central credit adjudication process and industry leading risk analytics. easyfinancial also operates an indirect lending channel, offering loan products to consumers at the point-of-sale of third party merchants. Both operating divisions of goeasy Ltd. offer the highest level of customer service and enable customers to transact through a national store and branch network of over 175 easyhome and 200 easyfinancial locations across Canada and through its online and mobile eCommerce enabled platforms.

goeasy Ltd. is listed on the TSX under the symbol 'GSY'. For more information, visit www.goeasy.com.

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(expressed in thousands of Canadian dollars)
----------------------------------------------------------------------------

                                                        As At          As At
                                                September 30,   December 31,
                                                         2016           2015
----------------------------------------------------------------------------

ASSETS
Cash                                                   29,752         11,389
Amounts receivable                                     11,664         13,000
Prepaid expenses                                        3,139          2,446
Consumer loans receivable                             323,890        270,961
Lease assets                                           54,178         60,753
Property and equipment                                 16,757         18,689
Deferred tax assets                                     7,942          5,913
Intangible assets                                      14,753         14,041
Goodwill                                               21,310         21,310
----------------------------------------------------------------------------
TOTAL ASSETS                                          483,385        418,502
----------------------------------------------------------------------------
----------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Accounts payable and accrued liabilities               35,518         23,617
Income taxes payable                                    2,737            700
Dividends payable                                       1,665          1,341
Deferred lease inducements                              1,572          1,922
Unearned revenue                                        4,640          3,982
Provisions                                                533            582
Term loan                                             248,654        210,299
----------------------------------------------------------------------------
TOTAL LIABILITIES                                     295,319        242,443
----------------------------------------------------------------------------

Shareholders' equity
Share capital                                          82,544         81,725
Contributed surplus                                     8,757          9,852
Accumulated other comprehensive income                    832            969
Retained earnings                                      95,933         83,513
----------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY                            188,066        176,059
----------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            483,385        418,502
----------------------------------------------------------------------------
----------------------------------------------------------------------------

goeasy Ltd.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(expressed in thousands of Canadian dollars except earnings per share)
----------------------------------------------------------------------------

                          Three Months Ended          Nine Months Ended
                     -------------------------------------------------------
                     September 30, September 30, September 30, September 30,
                              2016          2015          2016          2015
----------------------------------------------------------------------------

REVENUE
Lease revenue               33,825        37,256       104,017       110,129
Interest income             35,776        26,481       101,305        71,280
Other                       18,187        14,246        50,889        39,989
----------------------------------------------------------------------------
                            87,788        77,983       256,211       221,398
----------------------------------------------------------------------------

Other income                     -             -         3,000             -

EXPENSES BEFORE
 DEPRECIATION AND
 AMORTIZATION
Salaries and benefits       22,761        21,328        68,543        63,561
Stock-based
 compensation                1,134         1,009         3,133         3,604
Advertising and
 promotion                   2,595         2,754         9,215         8,069
Bad debts                   14,037        10,856        39,732        28,460
Occupancy                    8,334         7,995        24,543        23,584
Other expenses               7,656         6,671        21,402        19,034
Transaction advisory
 costs                       5,308             -         6,382             -
----------------------------------------------------------------------------
                            61,825        50,613       172,950       146,312
----------------------------------------------------------------------------

DEPRECIATION AND
 AMORTIZATION
Depreciation of lease
 assets                     10,854        12,248        33,441        35,506
Depreciation of
 property and
 equipment                   1,418         1,326         4,222         3,965
Amortization of
 intangible assets           1,073           880         3,078         2,464
Impairment, net                174            44           179            90
----------------------------------------------------------------------------
                            13,519        14,498        40,920        42,025
----------------------------------------------------------------------------

Total operating
 expenses                   75,344        65,111       213,870       188,337
----------------------------------------------------------------------------

Operating income            12,444        12,872        45,341        33,061

Finance costs                5,411         3,978        15,346        10,729
----------------------------------------------------------------------------

Income before income
 taxes                       7,033         8,894        29,995        22,332

Income tax expense
 (recovery)
Current                      2,090         1,960         9,317         4,998
Deferred                        11           678        (2,029)        1,138
----------------------------------------------------------------------------
                             2,101         2,638         7,288         6,136
----------------------------------------------------------------------------

Net income                   4,932         6,256        22,707        16,196
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Basic earnings per
 share                        0.37          0.46          1.67          1.19
Diluted earnings per
 share                        0.36          0.45          1.63          1.15
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Reconciliation of Normalized Financial Results (Non-IFRS Measures)

To supplement the Company's financial results presented in accordance with IFRS, goeasy uses certain non-IFRS measures indicated below, which exclude a gain on the sale of an investment and transaction advisory costs that are not routine and are non-recurring. The information presented below should be read in conjunction with the Company's interim condensed consolidated financial statements and MD&A. Management believes that presenting such normalized non-IFRS measures provides investors with a better perspective on the Company's ongoing operating performance and a more relevant comparison to prior period results.

----------------------------------------------------------------------------
----------------------------------------------------------------------------
(expressed in
 thousands of
 Canadian dollars
 except percentages
 and per share data)     Three Months Ended          Nine Months Ended
                    --------------------------------------------------------
                    --------------------------------------------------------
                    September 30, September 30, September 30, September 30,
                             2016          2015          2016          2015
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Operating income as
 stated                    12,444        12,872        45,341        33,061

Divided by revenue         87,788        77,983       256,211       221,398

Operating margin             14.2%         16.5%         17.7%         14.9%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Operating income as
 stated                    12,444        12,872        45,341        33,061

Other income(1)                 -             -        (3,000)            -
Transaction advisory
 costs(2)                   5,308             -         6,382             -
----------------------------------------------------------------------------
Adjusted operating
 income                    17,752        12,872        48,723        33,061

Divided by revenue         87,788        77,983       256,211       221,398
Adjusted operating
 margin                      20.2%         16.5%         19.0%         14.9%
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Net income as stated        4,932         6,256        22,707        16,196

Other income(1)                 -             -        (3,000)            -
Transaction advisory
 costs(2)                   5,308             -         6,382             -
Tax impact of above
 items                     (1,407)            -        (1,276)            -
----------------------------------------------------------------------------
After tax impact of
 above items                3,901             -         2,106             -
----------------------------------------------------------------------------
Adjusted net income         8,833         6,256        24,813        16,196
----------------------------------------------------------------------------
----------------------------------------------------------------------------

Weighted average
 number of diluted
 shares outstanding        13,854        14,029        13,919        14,029

Diluted earnings per
 share as stated             0.36          0.45          1.63          1.15

Per share impact of
 other income and
 transaction
 advisory costs              0.28             -          0.15             -
----------------------------------------------------------------------------

Adjusted earnings
 per share                   0.64          0.45          1.78          1.15
----------------------------------------------------------------------------
----------------------------------------------------------------------------

(1)  On June 30, 2016, the Company sold its minority interest in a provider
     of credit remediation products for cash proceeds of $3.0 million. The
     shares were acquired by the Company during the start-up phase of this
     company and the net book value of those shares was nil.
(2)  During the three and nine month periods ending September 30, 2016, the
     Company incurred transaction advisory costs related to a potential
     acquisition of $5.3 million and $6.4 million, respectively.

Contacts:
goeasy Ltd.
David Ingram
President and Chief Executive Officer
(905) 272-2788
(905) 272-9886 (FAX)

goeasy Ltd.
Steve Goertz
Executive Vice President and Chief Financial Officer
(905) 272-2788
(905) 272-9886 (FAX)
www.goeasy.com

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