SEC Info℠ | Home | Search | My Interests | Help | Sign In | Please Sign In | ||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size 8/06/19 GreenSky, Inc. 8-K:2,9 8/06/19 2:350K |
Document/Exhibit Description Pages Size 1: 8-K Current Report HTML 18K 2: EX-99.1 Miscellaneous Exhibit HTML 131K
Exhibit |
• | Transaction Volume and Transaction Fee Rate: Second quarter transaction volume increased 20% over the prior year to $1.6 billion. The average transaction fee rate was 6.9% in the second quarter, up from 6.8% in the second quarter of 2018. |
• | Revenue:
Second quarter revenue grew 31% over the prior year to $138.7 million from $105.7 million. Consistent with our transaction volume growth, transaction fees were up 20% to $108.4 million. Servicing and other revenue of $30.3 million was up 96%, of which $5.9 million was primarily due to continued portfolio growth and $9.0 million was due to the recognition of a servicing asset associated with an increase to the contractual fixed servicing fee for one of the Bank Partner’s servicing agreements. |
• | Net
Income and Pro Forma Net Income(1): GAAP Net Income for the second quarter of 2019 was $39.2 million or $0.19 per diluted share. Second quarter Pro Forma Net Income was $33.6 million, which reflected incremental tax expense assuming all of our noncontrolling interests were subject to corporate income taxation at our full year expected tax rate of 19.25%. |
• | Adjusted
EBITDA and Adjusted EBITDA Margin(1): Second quarter Adjusted EBITDA was $52.9 million and 38% of revenue compared to $51.9 million and 49% of revenue for the second quarter of 2018. |
• | Operating Cash Flow and Free Cash Flow: For the six months ended
June 30, 2019, operating cash flow and free cash flow were $89.8 million and $37.5 million, respectively. |
• | Bank Partner Commitments: As of June 30, 2019, the Company had aggregate bank partner commitments of $11.9 billion from its nine Bank Partners, $4.0
billion of which were unused. |
• | Liquidity: As of June 30, 2019, the Company had unrestricted cash of $209 million, in addition to an unused $100 million working capital line of credit available. |
Three
Months Ended June 30, | |||||||||||
2019 | 2018 | Growth | |||||||||
Active Merchants (at end of period) | 16,603 | 13,440 | 24 | % | |||||||
Transaction
Volume ($ millions) | $ | 1,578 | $ | 1,318 | 20 | % | |||||
Loan Servicing Portfolio ($ millions)(2) | $ | 8,191 | $ | 6,253 | 31 | % | |||||
Cumulative
Consumer Accounts (in thousands) | 2,632 | 1,897 | 39 | % | |||||||
Origination Productivity Index(3) | 21.3 | % | 22.3 | % | n/m |
(1) | Pro
Forma Net Income and Adjusted EBITDA are non-GAAP measures. Refer to “Non-GAAP Financial Measures” for important additional information. |
(2) | The average loan servicing portfolio for the three months ended June 30, 2019 and 2018 was $7,884 million and $5,931 million, respectively. |
(3) | This
index captures projected future gross cash flows related to the respective period's originations, expressed as a percentage of the period's originations. Refer to the Second Quarter 2019 Earnings Presentation for additional information. |
• | Data Science: The Company launched a Data Science division to strengthen its consumer protection capabilities by employing artificial intelligence and machine
learning to detect suspicious activity earlier, alert consumers faster and remediate issues more efficiently. |
• | New Chief Technology Officer: With over 20 years' experience leading technology strategy, software and product development, Minaz Vastani joined GreenSky’s leadership team in the second quarter, and will focus on advancing the competitive differentiation of the Company’s point of sale technology platform. |
• | American
Express Alliance: Augmenting GreenSky's low cost acquisition of highly qualified home improvement and elective healthcare providers, the American Express alliance, since its launch in early September 2018, has resulted in nearly 4,700 referrals to GreenSky for enrollment evaluation. |
• | Share Repurchases: During the second quarter of 2019, the Company repurchased approximately 4.5 million shares of its Class A common stock at a cost of $51.3
million under the Company's Board-approved $150 million share repurchase program. Since announcing the share repurchase program, the Company has repurchased 13.4 million shares of its Class A common stock at a cost of $146.1 million. There will be no further share repurchases pursuant to this authorization. |
Assets | ||||||||
Cash and cash equivalents | $ | 209,176 | $ | 303,390 | ||||
Restricted
cash | 200,252 | 155,109 | ||||||
Loan receivables held for sale, net | 2,798 | 2,876 | ||||||
Accounts receivable,
net | 22,622 | 15,400 | ||||||
Related party receivables | 100 | 142 | ||||||
Property, equipment and software, net | 14,194 | 10,232 | ||||||
Operating
lease right-of-use assets | 12,895 | — | ||||||
Deferred tax assets, net | 359,969 | 306,979 | ||||||
Other assets | 18,863 | 8,777 | ||||||
Total
assets | $ | 840,869 | $ | 802,905 | ||||
Liabilities and Equity (Deficit) | ||||||||
Liabilities | ||||||||
Accounts
payable | $ | 14,430 | $ | 5,357 | ||||
Accrued compensation and benefits | 6,858 | 8,484 | ||||||
Other
accrued expenses | 1,308 | 1,015 | ||||||
Finance charge reversal liability | 164,979 | 138,589 | ||||||
Term loan | 385,662 | 386,822 | ||||||
Tax
receivable agreement liability | 303,233 | 260,901 | ||||||
Related party liabilities | — | 825 | ||||||
Operating
lease liabilities | 15,761 | — | ||||||
Other liabilities | 45,396 | 35,677 | ||||||
Total liabilities | 937,627 | 837,670 | ||||||
Commitments,
Contingencies and Guarantees | ||||||||
Equity (Deficit) | ||||||||
Class
A common stock, par value $0.01 and 75,356,311 shares issued and 61,772,014 shares outstanding at June 30, 2019 and 59,197,863 shares issued and 54,504,902 shares outstanding at December 31, 2018 | 753 | 591 | ||||||
Class B common stock, par value $0.001 and 115,309,728 and 128,549,555 shares issued and outstanding at June 30, 2019 and December 31,
2018, respectively | 116 | 129 | ||||||
Additional paid-in capital | 118,382 | 44,524 | ||||||
Retained earnings | 39,163 | 24,218 | ||||||
Treasury
stock | (146,119 | ) | (43,878 | ) | ||||
Accumulated other comprehensive income (loss) | (558 | ) | — | |||||
Noncontrolling interest | (108,495 | ) | (60,349 | ) | ||||
Total
equity (deficit) | (96,758 | ) | (34,765 | ) | ||||
Total liabilities and equity (deficit) | $ | 840,869 | $ | 802,905 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue | |||||||||||||||
Transaction
fees | $ | 108,365 | $ | 90,197 | $ | 192,413 | $ | 161,137 | |||||||
Servicing
and other | 30,330 | 15,507 | 49,982 | 29,893 | |||||||||||
Total revenue | 138,695 | 105,704 | 242,395 | 191,030 | |||||||||||
Costs
and expenses | |||||||||||||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 56,228 | 33,765 | 114,265 | 69,895 | |||||||||||
Compensation
and benefits | 20,459 | 15,585 | 40,092 | 31,928 | |||||||||||
Sales and marketing | 1,187 | 1,038 | 2,390 | 1,866 | |||||||||||
Property,
office and technology | 4,512 | 3,137 | 8,926 | 5,859 | |||||||||||
Depreciation and amortization | 1,695 | 1,067 | 3,162 | 2,037 | |||||||||||
General
and administrative | 7,519 | 4,074 | 14,441 | 8,247 | |||||||||||
Related party expenses | 589 | 230 | 1,125 | 813 | |||||||||||
Total
costs and expenses | 92,189 | 58,896 | 184,401 | 120,645 | |||||||||||
Operating profit | 46,506 | 46,808 | 57,994 | 70,385 | |||||||||||
Other
income (expense), net | |||||||||||||||
Interest and dividend income | 869 | 1,482 | 2,465 | 2,802 | |||||||||||
Interest
expense | (6,323 | ) | (5,787 | ) | (12,566 | ) | (11,378 | ) | |||||||
Other gains (losses) | (6,325 | ) | (93 | ) | (6,360 | ) | (795 | ) | |||||||
Total
other income (expense), net | (11,779 | ) | (4,398 | ) | (16,461 | ) | (9,371 | ) | |||||||
Income before income tax expense (benefit) | 34,727 | 42,410 | 41,533 | 61,014 | |||||||||||
Income
tax expense (benefit) | (4,466 | ) | 1,594 | (5,061 | ) | 1,594 | |||||||||
Net income | $ | 39,193 | $ | 40,816 | $ | 46,594 | $ | 59,420 | |||||||
Less:
Net income attributable to noncontrolling interests | 26,877 | 35,266 | 31,379 | 53,870 | |||||||||||
Net income attributable to GreenSky, Inc. | $ | 12,316 | $ | 5,550 | $ | 15,215 | $ | 5,550 | |||||||
Earnings
per share of Class A common stock(1): | |||||||||||||||
Basic | $ | 0.20 | $ | 0.10 | $ | 0.26 | $ | 0.10 | |||||||
Diluted | $ | 0.19 | $ | 0.09 | $ | 0.23 | $ | 0.09 |
(1) | For
the three and six months ended June 30, 2018, basic and diluted earnings per share of Class A common stock is applicable only for the period from May 24, 2018 through June 30, 2018, which is the period following the initial public offering and related Reorganization Transactions. |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities | |||||||
Net
income | $ | 46,594 | $ | 59,420 | |||
Adjustments to reconcile net income to net cash provided by operating activities | |||||||
Depreciation and amortization | 3,162 | 2,037 | |||||
Share-based
compensation expense | 5,936 | 2,851 | |||||
Equity-based payments to non-employees | 7 | 8 | |||||
Operating lease liability payments | (143 | ) | (193 | ) | |||
Amortization
of debt related costs | 840 | 840 | |||||
Fair value change in assets and liabilities | (7,999 | ) | 201 | ||||
Original issuance discount on term loan payment | (21 | ) | (10 | ) | |||
Deferred
tax expense (benefit) | (5,061 | ) | 1,594 | ||||
Loss on remeasurement of tax receivable agreement liability | 6,383 | — | |||||
Changes in assets and liabilities: | |||||||
(Increase)
decrease in loan receivables held for sale | 78 | 30,116 | |||||
(Increase) decrease in accounts receivable | (7,375 | ) | (2,065 | ) | |||
(Increase) decrease in
related party receivables | 42 | 182 | |||||
(Increase) decrease in other assets | (870 | ) | 3,619 | ||||
Increase (decrease) in accounts payable | 9,378 | (1,217 | ) | ||||
Increase
(decrease) in finance charge reversal liability | 26,390 | 12,899 | |||||
Increase (decrease) in related party liabilities | — | (1,044 | ) | ||||
Increase (decrease)
in other liabilities | 12,448 | 366 | |||||
Net cash provided by operating activities | 89,789 | 109,604 | |||||
Cash flows from investing activities | |||||||
Purchases
of property, equipment and software | (7,123 | ) | (2,707 | ) | |||
Net cash used in investing activities | (7,123 | ) | (2,707 | ) | |||
Cash flows from financing activities | |||||||
Proceeds
from IPO, net of underwriters discount and commissions | — | 954,845 | |||||
Purchases of GreenSky Holdings, LLC units | — | (901,833 | ) | ||||
Purchases of
Class A common stock | — | (53,012 | ) | ||||
Issuances of Class B common stock | — | 129 | |||||
Redemptions of GreenSky Holdings, LLC units prior to Reorganization
Transactions | — | (496 | ) | ||||
Proceeds from term loan | — | 399,000 | |||||
Repayments of term loan | (1,979 | ) | (350,115 | ) | |||
Member
distributions | (17,757 | ) | (127,640 | ) | |||
Payments under tax receivable agreement | (4,664 | ) | — | ||||
Class A common stock repurchases | (104,272 | ) | — | ||||
Equity
option exercises prior to Reorganization Transactions | — | 339 | |||||
Payment of IPO related expenses | — | (2,749 | ) | ||||
Payment of equity transaction
expenses, prior to Reorganization Transactions | — | (32 | ) | ||||
Payment of taxes on Class B common stock exchanges | (1,805 | ) | — | ||||
Proceeds from option
exercises | 290 | — | |||||
Payment of option exercise taxes | (1,550 | ) | — | ||||
Net cash used in financing activities | (131,737 | ) | (81,564 | ) | |||
Net
increase (decrease) in cash and cash equivalents and restricted cash | (49,071 | ) | 25,333 | ||||
Cash and cash equivalents and restricted cash at beginning of period | 458,499 | 353,838 | |||||
Cash
and cash equivalents and restricted cash at end of period | $ | 409,428 | $ | 379,171 | |||
Supplemental non-cash financing activities | |||||||
Equity
transaction costs accrued but not paid | $ | — | $ | 1,106 | |||
Distributions accrued but not paid | 7,105 | 11,493 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net
income | $ | 39,193 | $ | 40,816 | $ | 46,594 | $ | 59,420 | |||||||
Interest
expense | 6,323 | 5,787 | 12,566 | 11,378 | |||||||||||
Tax expense (benefit) | (4,466 | ) | 1,594 | (5,061 | ) | 1,594 | |||||||||
Depreciation
and amortization | 1,695 | 1,067 | 3,162 | 2,037 | |||||||||||
Equity-related expense(1) | 3,275 | 1,854 | 5,943 | 2,859 | |||||||||||
Transaction
expenses(2) | 6,383 | 759 | 6,383 | 1,882 | |||||||||||
Non-recurring expenses(3) | 524 | — | 1,740 | — | |||||||||||
Adjusted
EBITDA | $ | 52,927 | $ | 51,877 | $ | 71,327 | $ | 79,170 |
(1)
| Includes equity-based compensation to employees and directors, as well as equity-based payments to non-employees. |
(2) | For the three and six months ended June 30, 2019, includes loss on remeasurement of our tax receivable agreement liability. For the three and six months ended June 30, 2018, includes certain costs associated with our IPO, which were not deferrable against the proceeds of the IPO. Further, includes certain costs, such as legal and debt arrangement costs, related to our March 2018 term loan upsizing. |
(3) | For
the three months ended June 30, 2019, includes legal fees associated with IPO related litigation. For the six months ended June 30, 2019, includes the following: (i) legal fees associated with IPO related litigation of $959, (ii) one-time tax compliance fees related to filing the final tax return for the Former Corporate Investors associated with the Reorganization Transactions of $160, and (iii) lien filing expenses related to certain Bank Partner solar loans of $621. |
Three
Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | 39,193 | $ | 40,816 | $ | 46,594 | $ | 59,420 | |||||||
Transaction
expenses(1) | 6,383 | 759 | 6,383 | 1,882 | |||||||||||
Non-recurring expenses(2) | 524 | — | 1,740 | — | |||||||||||
Incremental
pro forma tax expense(3) | (12,481 | ) | (8,038 | ) | (14,620 | ) | (12,439 | ) | |||||||
Pro Forma Net Income | $ | 33,619 | $ | 33,537 | $ | 40,097 | $ | 48,863 |
(1)
| For the three and six months ended June 30, 2019, includes loss on remeasurement of our tax receivable agreement liability. For the three and six months ended June 30, 2018, includes certain costs associated with our IPO, which were not deferrable against the proceeds of the IPO. Further, includes certain costs, such as legal and debt arrangement costs, related to our March 2018 term loan upsizing. |
(2) | For the three months ended June 30, 2019, includes legal
fees associated with IPO related litigation. For the six months ended June 30, 2019, includes the following: (i) legal fees associated with IPO related litigation of $959, (ii) one-time tax compliance fees related to filing the final tax return for the Former Corporate Investors associated with the Reorganization Transactions of $160, and (iii) lien filing expenses related to certain Bank Partner solar loans of $621. |
(3) | Represents the incremental tax effect on net income, adjusted for transaction and non-recurring expenses, assuming that all consolidated net income was subject to corporate taxation at a full year effective tax rate of 19.25%
for the three and six months ended June 30, 2019 and 22.3% for the three and six months ended June 30, 2018. |
Three
Months Ended June 30, 2018 | ||||
Diluted EPS | $ | 0.09 | ||
Net income prior to IPO(1) | 0.11 | |||
Tax effect of net income prior to IPO(2) | (0.02 | ) | ||
Pro
Forma Diluted EPS(3) | $ | 0.18 | ||
Weighted average shares outstanding – diluted | 188,889,922 |
(1)
| Represents net income earned during the three months ended June 30, 2018, prior to the IPO, of $19,609 divided by weighted average shares outstanding on a fully diluted basis. |
(2) | We assumed a full year effective tax rate of 22.3%. |
(3) | Pro Forma Diluted EPS recalculates to $0.18. "Net income
prior to IPO" was rounded up for footing purposes. Transaction expenses were excluded from the reconciliation because the per-share effect was less than $0.01. |
This ‘8-K’ Filing | Date | Other Filings | ||
---|---|---|---|---|
Filed on / For Period end: | 8/6/19 | |||
6/30/19 | ||||
12/31/18 | 10-K | |||
6/30/18 | 10-Q | |||
5/24/18 | 3, 4, 8-A12B, CERT, CT ORDER, EFFECT, S-1MEF | |||
List all Filings |