Atlanticus (ATLC) Q4 2020 earnings summary

Executive summary

• 2020 operating revenue rose 63.0% YoY to $560.0M; net income attributable to common shareholders was $77.1M, up from $25.3M.

• Credit and Other Investments managed receivables grew 19.2%; total purchase volume across point-of-sale and general-purpose channels rose 18.5% to ~$1.2B.

• Operations continued through the pandemic, including COVID-related accommodations for over 80,000 people and 650,000+ new customer accounts across platform channels.

Financial highlights

• Total operating revenue was $560.0M vs. $343.6M in 2019; net margin was $260.6M vs. $158.2M.

• Net income was $93.9M vs. $26.2M; net income attributable to common shareholders was $77.1M vs. $25.3M.

• Basic EPS was $5.32 vs. $1.74; diluted EPS was $3.95 vs. $1.66.

• Operating cash flow was $212.7M vs. $100.0M; investing cash use was $292.6M and financing cash inflow was $162.4M.

• 2019 other non-operating revenue included a $105.9M release of portfolio-related accruals; 2020 included $2.0M in investment distributions.

Outlook and guidance

• Expected continued 2021 growth in point-of-sale and direct-to-consumer receivables, acquisitions and related interest and fee income, subject to COVID-19 and stimulus impacts.

• Management expected lower combined net charge-off rates in early 2021 versus prior-year periods as 2020 delinquency improvements flowed through; longer term, newer receivables may bring higher losses.

• Auto Finance managed receivables were expected to grow modestly in 2021; managed yield was expected to remain near recent levels, with moderate mix-driven variation.

• Additional debt financing and higher quarterly interest expense were anticipated as receivables grew; 2021 marketing and servicing expenses were also expected to increase.