TORONTO, ON, JUNE 24, 2022 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) today announced the voting results from its Annual General Meeting of the Shareholders (the “Meeting”), held on June 23, 2022. A total of 25,217,961 shares were represented in person or by proxy at the Meeting, constituting approximately 73.47% of the Company’s total issued and outstanding common shares as of the record date.

Each of the matters put forward before shareholders for consideration and approval at the Meeting, as described in the Management Information Circular, was duly approved by the requisite number of votes.

The voting results in relation to the election of directors, were as follows:

Nominee Votes For
%
Votes Withheld
%
Michael Stein 98.49 1.51
Clive Kinross 99.53 0.47
Peter Monaco 99.98 0.02
Poonam Puri 99.23 0.77
Geoff Greenwade 99.23 0.77
Karen Martin 99.23 0.77

The Company has filed a report of voting results on all resolutions voted on at the Meeting under its profile on www.sedar.com.

About Propel

Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing and facilitating fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to underserved consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

For further information, please contact:
Sarika Ahluwalia
Senior Vice President, Corporate Affairs & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

Revenue increased by 85%, representing record quarterly performance

Total Originations Funded1 increased by 156%

Loans and advances receivable and Ending CLAB1 increased by 120% and 134%, respectively

Declares dividend of C$0.095 per share

TORONTO, ON, May 10, 2022 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) today reported its financial results for the three months ended March 31, 2022 (“Q1 2022”) and declared a dividend for the second quarter of 2022. All amounts are expressed in U.S. dollars unless otherwise stated.

Management Commentary

“Propel’s Q1 2022 results demonstrate the impact that our team’s operational progress has had on delivering profitable growth. In the past year, we have added bank partners, expanded our geographical presence, invested in marketing channels and introduced variable pricing and graduation capabilities, which have all contributed towards record loan balances and revenue growth in Q1 2022. Additionally, as the economy continues to reopen, we are seeing a return to the demand for credit and the transition from brick and mortar to online lending remains firmly intact. Going forward, we continue to be focused on the profitable expansion of our business and we see many opportunities to facilitate access to credit for more and more underserved consumers,” said Clive Kinross, Chief Executive Officer.

Financial and Operational Highlights for Q1 2022

Comparable metrics relative to Q1 2021

 

Discussion of Financial Results

Loans and advances receivable increased by 120% to $124.8 million as at March 31, 2022, compared to $56.8 million as at March 31, 2021. The growth in these balances was driven by: 1) the growth in the Bank Programs under our CreditFresh brand which included the ramp-up of our new bank partnership with First Electronic Bank (launched in the second quarter of 2021); 2) the roll-out of 10 new states over the fiscal year 2021; 3) the general economic recovery and return of demand as a result of easing of COVID-19-related restrictions; 4) the expansion of originations through newly-established marketing partners and channels; 5) the successful launch and subsequent expansion of variable pricing and graduation capabilities in the third quarter of 2021; and 6) the industrywide transition from brick-and-mortar to online lending. These factors, along with the significant growth in the MoneyKey Bank Service Program, have also driven the increase in Ending CLAB1 and Average CLAB1.

Revenue increased by 85% to a record $50.5 million in Q1 2022, compared to $27.3 million in Q1 2021. This growth was the result of the 134% growth in CLAB1, offset by a decrease in Annualized Revenue Yield1 to 132% in Q1 2022 from 162% in Q1 2021. The decrease in Annualized Revenue Yield1 is a result of a higher concentration of growth of the Bank Programs relative to our legacy products and the general reduction of interest rates across products facilitated over our platform and the introduction of variable pricing and graduation capabilities. The change in portfolio composition is consistent with the Company’s strategy and is expected to result in higher portfolio growth and lower defaults across the portfolio over time.

Net income decreased by 32% to $3.9 million in Q1 2022 from $5.7 million in Q1 2021. Adjusted Net Income1 decreased by 3% to $5.6 million in Q1 2022 from $5.8 million in Q1 2021. Management believes Adjusted Net Income1 is a truer reflection of business performance as it removes the effect of the non-cash forward-looking credit loss provisions that are recorded on accounts that are otherwise in good standing with no past-due amounts owed and expenses that that are not indicative of continuing operations, on an after-tax basis. The reduction in net income and Adjusted Net Income1 relative to Q1 2021 is the result of: 1) the investment and increased expenses incurred to support the Company’s significant Ending CLAB1 growth in the quarter and recently launched initiatives; 2) the atypical credit environment that the Company experienced in Q1 2021 as a result of COVID-19 related factors; and 3) the addition of costs related to Propel operating as a public company. These are also the primary factors that led to the changes in EBITDA1 and Adjusted EBITDA1.

_________
Note:
(1) See “Non-IFRS Financial Measures and Industry Metrics” and “Reconciliation of Non-IFRS Financial Measures” below. See also “Key Components of Results of Operations” in the accompanying Q1 2022 MD&A for further details concerning the non-IFRS financial measures and industry metrics used in this press release including definitions and reconciliations to the relevant reported IFRS measure.

Declaration of Q2 2022 Dividend

Propel also announced today that its board of directors has declared a dividend of C$0.095 per common share, payable on June 2, 2022 to shareholders of record as of the close of business on May 19, 2022. The Company has designated this dividend as an eligible dividend within the meaning of the Income Tax Act (Canada).

Conference Call Details

The Company will be hosting a conference call and webcast later this morning with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer.

Conference call details are as follows:

Date:May 10, 2022
Time: 8:30AM ET
Conference ID: 7257144
Toll free dial-in: (888) 550-4423
International dial-in: (438) 801-4067
Webcast: Click here
Replay: (800) 770-2030 or (647) 362-9199

About Propel

Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing and facilitating fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to underserved consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

Non-IFRS Financial Measures and Industry Metrics

This press release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted Net Income”, “Adjusted Net Income Margin”, “EBITDA”, “EBITDA Margin” and “Ending CLAB” . This press release also includes references to industry metrics such as “Annualized Revenue Yield” and “Total Originations Funded”, which are supplementary measures under applicable securities laws.

These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies.

Definitions and reconciliations of non-IFRS financial measures to the relevant reported measures can be found in our accompanying Fiscal 2021 MD&A. Such reconciliations can also be found in this press release under the heading ” Reconciliation of Non-IFRS Financial Measures ” below.

Forward-Looking Information

Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our ability to profitably grow our business and facilitate access to credit to more and more underserved consumers, the expected higher portfolio growth and lower defaults resulting from the Company’s portfolio composition. Particularly, information regarding our expectations of future results, targets, performance achievements, prospects or opportunities is forward-looking information. As the context requires, this may include certain targets as disclosed in the prospectus for our initial public offering, which are based on the factors and assumptions, and subject to the risks, as set out therein and herein. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the “Risk Factors” section of the Company’s annual information form dated March 21, 2022 for the year ended December 31, 2021 (the “AIF”). A copy of the AIF and the Company’s other publicly filed documents can be accessed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The forward-looking information contained in this press release represents our expectations as of the date of this press release (or as the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

For further information, please contact:
Sarika Ahluwalia
Senior Vice President, Corporate Affairs & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

Selected Financial Information

Three Months Ended March 31,
(US$ other than percentages) 2022 2021
Revenue 50,516,957 27,296,891
Provision for loan losses and other liabilities 23,551,631 6,894,155
Operating Expenses
Acquisition and data 8,647,081 3,838,757
Salaries, wages and benefits 6,455,839 4,520,613
General and administrative 2,254,758 797,477
Processing and technology 2,521,378 1,166,226
Total operating expenses 19,879,056 10,323,073
Operating income 7,086,270 10,079,663
Other income (expenses)
Interest and fees on credit facilities (1,293,277) (1,045,398)
Interest on term loan (443,716)
Interest expense on lease liabilities (102,420) (113,952)
Amortization of internally developed software (564,453) (505,939)
Depreciation of property and equipment (22,807) (31,676)
Amortization of right-of-use assets (159,952) (170,220)
Foreign exchange gain (loss) 36,990 (19,067)
Unrealized gain (loss) on derivative financial instruments 221,893 (32,169)
Total other income (expenses) (1,884,026) (2,362,137)
Income before transaction costs and income tax 5,202,244 7,717,526
Transaction costs
Income tax expense (recovery)
Current 1,378,271 1,911,272
Deferred (52,554) 133,873
Net Income for the period 3,876,527 5,672,381
Earnings per share(1):
Basic 0.11 0.24
Diluted 0.11 0.23
Dividends(1):
Dividends 2,563,057 1,069,469
Dividends per share 0.08 0.05

(1) All per share amounts prior to Q4 2021 have been restated to reflect the 2:1 share split that occurred as part of the reorganization completed in connection with our initial public offering. Please see the accompanying Q1 2022 MD&A for further details.

 

Reconciliation of Non-IFRS Financial Measures

The following table provides a reconciliation of our net income to EBITDA1, EBITDA margin1, Adjusted EBITDA1 and Adjusted EBITDA margin1 for Q1 2022 and Q1 2021:

Three Months Ended March 31,
(US$ other than percentages) 2022 2021
Net Income 3,876,527 5,672,381
Interest on Debt 1,293,277 1,489,114
Interest on lease liabilities 102,420 113,952
Amortization of internally developed software 564,453 505,939
Depreciation of property and equipment 22,807 31,676
Amortization of right-of-use assets 159,952 170,220
Income Tax Expense (Recovery) 1,325,717 2,045,145
EBITDA1 7,345,153 10,028,427
EBITDA margin1 as a % of revenue 15% 37%
Transaction Costs and Financing Costs
Provision for credit losses on current status accounts2 1,555,249 255,834
Provisions for CSO Guarantee liabilities and Bank Service Program liabilities 828,546 (117,405)
Adjusted EBITDA1 9,728,948 10,166,856
Adjusted EBITDA margin1 as a % of revenue 19% 37%

(1) See “Non-IFRS Financial Measures and Industry Metrics”.

(2) Provision included for (i) loan losses on good standing current principal (Stage 1 — Performing) balances (see “Critical Account Policies and Estimates — Loans and advances receivable” in the accompanying Q1 2022 MD&A).

 

The following table provides a reconciliation of our Net Income to Adjusted Net Income1 and Adjusted Net Income margin1 for Q1 2022 and Q1 2021:

Three Months Ended March 31,
(US$ other than percentages) 2022 2021
Net Income 3,876,527 5,672,381
Provision for credit losses on current status accounts net of taxes2 1,143,108 188,038
Provisions for CSO Guarantee liabilities and Bank Service Program liabilities net of taxes2 608,981 (86,293)
Adjusted Net Income1 for the period 5,628,616 5,774,126
Adjusted Net Income Margin1 11% 21%

(1) See “Non-IFRS Financial Measures and Industry Metrics”.

(2) Each item is adjusted for after-tax impact, at an effective tax rate of 26.5%.

The following table provides a reconciliation of our Ending CLAB1 to loans and advances receivable for periods ending March 31, 2022, March 31, 2021 and December 31, 2021:

As at March 31, As at Dec 31,
(US$ other than percentages) 2022 2021 2021
Ending Combined Loan and Advance balances1 158,151,577 67,462,965 134,843,170
Less: Loan and Advance balances owned by third party lenders pursuant to CSO program (3,752,500) (1,755,313) (4,260,648)
Less: Loan and Advance balances owned by a NBFI pursuant to the MoneyKey Bank Service program (22,199,374) (4,452,616) (17,782,252)
Loan and Advance owned by the Company 132,199,703 61,255,036 112,800,270
Less: Allowance for Credit Losses (27,099,543) (13,027,902) (23,700,774)
Add: Fees and interest receivable 16,657,696 7,080,040 12,034,604
Add: Acquisition transaction costs 3,031,759 1,506,790 2,715,724
Loans and advances receivable 124,789,615 56,813,964 103,849,824

(1) See “Non-IFRS Financial Measures and Industry Metrics”.

TORONTO, ON, April 29, 2022 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) announced today that it will be reporting financial results for the period ending March 31, 2022 (“Q1 2022”) prior to market open on Tuesday, May 10, 2022. The Company will be hosting a conference call and webcast with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer.

Conference details are as follows:

Date: May 10, 2022
Time: 8:30AM ET
Conference ID: 7257144
Toll free dial-in: (888) 550-4423
International dial-in: (438) 801-4067
Webcast:Click here
Replay: (800) 770-2030 or (647) 362-9199

About Propel

Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing and facilitating fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to underserved consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

For further information, please contact:

Sarika Ahluwalia
Senior Vice President, Corporate Affairs & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

Revenue increased by 84% in Q4 2021

Total Originations Funded1 increased by 98% in Q4 2021

Loans and advances receivable and Ending Combined Loan and Advance Balances1 increased by 109% and 115%, respectively, for fiscal 2021

Propel initiates annual outlook and provides an update to its operating and financial targets

TORONTO, ON, March 21, 2022 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) today reported its financial results for the three months (“Q4 2021”) and full year ended December 31, 2021. All amounts are expressed in U.S. dollars unless otherwise stated.

Management Commentary

“2021 was a transformational year for Propel. In addition to our IPO, we reached many operational milestones. We increased Total Originations Funded1 by 123%, increased revenue by 76%, added a third bank partner, we facilitated the entry into 10 new states for our Bank Partners through each of our MoneyKey and CreditFresh brands and we launched our variable pricing and graduation capabilities for us and our Bank Partners, which significantly increases the addressable market and helps fulfill our mission of facilitating access to credit for the millions of underserved consumers in the United States. I am incredibly proud of the Propel team, which now stands at over 400 people, and I believe we are well positioned to execute on our growth strategy,” said Clive Kinross, Chief Executive Officer.

Financial and Operational Highlights for Q4 2021 and Fiscal 2021


(1) See “Non-IFRS Financial Measures and Industry Metrics” and “Reconciliation of Non-IFRS Financial Measures” below. See also “Key Components of Results of Operations” in the accompanying Fiscal 2021 MD&A for further details concerning the non-IFRS financial measures and industry metrics used in this press release including definitions and reconciliations to the relevant reported IFRS measure.

Outlook

Propel operates in a very large market, facilitating credit solutions for the ~25% of U.S. adults that lack access to traditional credit. In 2021, Propel facilitated the rollout of 10 new states through its MoneyKey brand and 10 new states through its CreditFresh brand. This expanded geographic reach by our Bank Partners and provided the addressable market to rapidly accelerate originations in 2021. The Company believes these new states will continue to provide new opportunities to grow in 2022 and beyond. A strong economy in the U.S. and an accelerated transition from brick and mortar to online lending has also increased demand for credit beyond the Company’s expectations.

Furthermore, consistent with the Company’s growth strategy of facilitating the graduation of consumers up the credit spectrum and to serve lower risk segments of the consumer credit market, in the quarter ended September 30, 2021 (“Q3 2021”), the Company launched variable pricing and credit graduation capabilities on its platform for the Company and its Bank Partners. The level of originations attributable to variable pricing and graduation was immaterial in Q3 2021, but materially accelerated and exceeded the Company’s and our partners’ expectations in Q4 2021 contributing in large part to the record top-line growth experienced in the quarter. In addition, the loans and advances receivable and Total Originations Funded1 attributable to these programs continue to perform better than previously planned thus far in 2022.

The Company believes that achieving scale in variable pricing and graduation programs will be accretive to earnings over the long-term and that establishing market leadership in variable pricing and graduation capabilities is a timely competitive opportunity. In the near term, a higher concentration of lower credit risk consumers in the portfolio, driven in large part by the variable pricing and graduation related originations by our Bank Partners, is expected to result in higher growth to loans and advances receivable and Ending Combined Loan and Advance Balances1. At the same time, such growth is expected to result in a lower Annualized Revenue Yield1 and higher up-front costs to support the growth. The Company expects profitability trends to increase in 2023 and that lower relative provisions for loan losses along with lower Cost per Funded Origination1 associated with variable pricing and graduation programs will drive continued growth in profitability and cash flow over the long term.

Updating Previous Short-Term Operating and Financial Targets for 12 to 18 Months following June 30, 2021

As a result of its higher-than-expected growth trajectory of the Company’s loans and advances receivable and Ending Combined Loan and Advance Balances1 and the shift in portfolio composition, the Company is updating its previously reported Short-Term Operating and Financial Targets in connection with its IPO.

Propel now expects that for the 12 to 18 months following June 30, 2021:


Initiating Annual Operating and Financial Targets

The Company is initiating annual Operating and Financial Targets with growth rates provided in reference to the prior year, rather than the 12 to 18 month period covered in its previously reported targets. Based on the assumptions discussed in Propel’s accompanying management’s discussion & analysis for the period ended December 31, 2021 (the “Fiscal 2021 MD&A”), Propel anticipates achieving the results set forth below for the fiscal years ended 2022 and 2023.

Operating and Financial Targets(2) 2022 2023
Ending Combined Loan and Advance Balances(1) 80% – 90% 45% – 55%
Revenue $230 – $245 million $345 – $375 million
Adjusted EBITDA Margin(1) 18% – 22% 25% – 30%
Net Income Margin 7% – 9% 12% – 16%
Adjusted Net Income Margin(1) 9% – 11% 16% – 20%

Note:
(1) See “Non-IFRS Financial Measures and Industry Metrics”
(2) See “Forward Looking Information”

Discussion of Financial Results

Ending Combined Loan and Advance Balances1 increased by 115% to $134.8 million as at December 31, 2021, compared to $62.6 million as at December 31, 2020. Total Originations Funded1 increased by 98% to $90.5 million for the three-month period, and by 123% to $226.4 million for the fiscal year ended December 31, 2021. The growth in these balances was driven predominantly by: i) growth in the Bank Programs which included the ramp up of our new bank partnership with First Electronic Bank (launched in Q2 2021); ii) our facilitation of the roll-out of 10 new states by our Bank Partners through each of the MoneyKey and CreditFresh brands over the fiscal year 2021; iii) the addition of a number of new marketing partners and channels during the period; iv) the general economic recovery as a result of easing of COVID-19 related restrictions; and v) the transition from brick and mortar to online lending. In addition to the above, growth in these balances in the three months ended December 31, 2021 was further driven by the successful launch of variable pricing and graduation capabilities and by rising seasonal consumer demand that is typical for Q4.

Revenue increased by 84% to a record $41.2 million for the three months ended December 31, 2021, compared to $22.4 million in the corresponding quarter of the previous year and 76% to a record $129.6 million for the year ended December 31, 2021, compared to $73.5 million in the corresponding period of the previous year. This growth was primarily a result of the growth in balances and originations driven by the factors outlined above. All of these factors are expected to drive continued growth in future revenue over the upcoming periods.

Our Annualized Revenue Yield1 for the three-month period ended December 31, 2021 decreased to 141% from 169% for the same period in 2020. The Annualized Revenue Yield1 for the year ended December 31, 2021 decreased to 148% from 190% for the same period in the previous year. This change reflects the growth of CreditFresh and the Bank Programs relative to our legacy MoneyKey direct lending and credit service organization (“CSO”) products and a general reduction of rates across products facilitated through our platform consistent with our strategy. Products offered by our Bank Partners through the Bank Programs generally serve lower risk consumers when compared to our legacy direct lending and CSO products offered under the MoneyKey brand. As such, products offered to consumers through the Bank Programs have lower costs of credit, higher average loan amounts, as well as lower default rates, therefore maintaining and potentially enhancing margins while expanding the potential customer base that can receive products by and through the Propel platform. This shift in the portfolio along with the variable pricing and graduation capabilities are expected to continue to impact the Annualized Revenue Yield1 as lower cost products available through our platform continue to expand and be offered to new and existing customers.

Net income decreased by 96% to $(2.2) million for the three months ended December 31, 2021 from $(1.1) million for the same period in 2020, and decreased by 11% to $6.6 million for the year ended December 31, 2021 from $7.3 million for the same period in 2020. The reductions in net income relative to 2020 came as a result of a number of factors including: i) investment in growth and new initiatives; ii) direct and indirect costs associated with becoming a publicly listed company; and iii) the impact of COVID-19 on 2020 results and performance. In order to realize and deliver the Company’s significant growth opportunities, we are required to invest in and absorb larger costs in the short-term while realizing a large portion of the revenues and economic benefits in the future. As such, we are required to take larger immediate expenses relating primarily to: i) the provision for loan losses and other liabilities; ii) acquisition and data; and iii) other operating expenses including salaries, wages, and benefits and general and administrative expenses as we build up our infrastructure to support the increasing origination volumes.

Adjusted EBITDA1 decreased by 34% to $2.6 million for the three months ended December 31, 2021 from $4.0 million for the same period in 2020 and increased by 27% to $25.4 million for the year ended December 31, 2021, from $20.0 million for the same period in 2020. Adjusted EBITDA1 removes the effects of non-cash estimated credit loss provisions that are required under IFRS to be recorded against balances that are otherwise in good standing (see “Critical Account Policies and Estimates — Loans and advances receivable” in the accompanying Fiscal 2021 MD&A). As a result, in periods of significant growth where we record estimated loan losses on new originations without any corresponding income, our margins can appear artificially decreased and do not reflect the actual credit performance of the portfolio and the overall financial performance of the business. Adjusted EBITDA1 is impacted by similar dynamics and factors as those driving net income.

Propel is introducing Adjusted Net Income1 as we believe this metric reflects a more accurate picture of the portfolio’s and the Company’s performance as, similar to Adjusted EBITDA1, it removes on an after-tax basis the effect of the non-cash forward-looking credit loss provisions that are recorded on accounts that are otherwise in good standing with no past due amounts owed that are required under IFRS. Furthermore, it removes, on an after-tax basis, one-time expenses that are not indicative of continuing operations such as the transaction costs relating to the IPO. Adjusted Net Income1 decreased by 18% to $1.0 million for the three months ended December 31, 2021 from $1.2 million for the same period in 2020, and increased by 40% to $12.9 million for the year ended December 31, 2021 from $9.2 million for the same period in 2020. Notwithstanding the above, Adjusted Net Income1 is impacted by similar dynamics and factors as those driving net income and, as such, Adjusted Net Income1 as a percentage of revenue decreased to 10% from 13% for the year ended December 31, 2021.

Note:
(1) See “Non-IFRS Financial Measures and Industry Metrics” and “Reconciliation of Non-IFRS Financial Measures” below. See also “Key Components of Results of Operations” in the accompanying Fiscal 2021 MD&A for further details concerning the non-IFRS financial measures and industry metrics used in this press release including definitions and reconciliations to the relevant reported IFRS measure.

Conference Call Details

The Company will be hosting a conference call and webcast later this morning with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer.

Conference call details are as follows:

Date:  March 21, 2022
Time:  8:30AM ET
Conference ID:  7168064
Toll free dial-in:  (833) 989-2995
International dial-in:  (236) 714-4063
Webcast:  Click here
Replay:(800) 585-8367 or (416) 621-4642

About Propel

Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing and facilitating fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to underserved consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

Non-IFRS Financial Measures and Industry Metrics

This press release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include “Adjusted EBITDA”, “Adjusted Net Income”, “Annualized Revenue Yield”, “Cost Per Funded Origination”, “EBITDA”, “Ending Combined Loan and Advance Balances”, “Net Charge-Offs”, “Net Charge-Offs as a Percentage of Total Funded” and “Total Originations Funded”.

These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies. Definitions and reconciliations of non-IFRS financial measures to the relevant reported measures can be found in our accompanying Fiscal 2021 MD&A. Such reconciliations can also be found in this press release under the heading ” Reconciliation of Non-IFRS Financial Measures ” below.

Forward-Looking Information

Certain statements made in this press release may constitute forward-looking information under applicable securities laws. These statements may relate to our expected future growth, our ability to expand to jurisdictions outside of the United States, our ability to achieve scale in variable pricing and graduation programs and the resulting growth in Loans and Advances Receivable and Ending Combined Loan and Advance Balances1, the short term and long term impact of the Company’s portfolio growth to, our updated operating and financial targets for the 12 to 18 months following June 30, 2021 and our operating and financial targets for each of fiscal 2022 and 2023. Particularly, information regarding our expectations of future results, targets, performance achievements, prospects or opportunities is forward-looking information. As the context requires, this may include certain targets as disclosed in the prospectus for our initial public offering, which are based on the factors and assumptions, and subject to the risks, as set out therein and herein. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.

Implicit in forward-looking statements in respect of the Company’s expectations for: (i) Ending Combined Loan and Advance Balances growth; (ii) Revenue; (iii) Adjusted EBITDA Margin; (iv) Net Income Margin and (v) Adjusted Net Income Margin for the fiscal years 2022 and 2023 and our updates to the previously provided operating and financial targets for the 12 to 18 months following June 30, 2021, are certain assumptions relating to the COVID-19 pandemic and related government subsidies, the regulatory landscape, our continued expansion of our Federal Deposit Insurance Corporation (“FDIC”)-insured, state-chartered bank relationships (“Bank Partner”), the availability and cost of debt capital, the maintenance and expansion of our marketing partnerships and the overall macroeconomic environment, each as further set out in the accompanying Fiscal 2021 MD&A.

Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the factors discussed in the “Risk Factors” section of the Company’s annual information form dated March 21, 2021 for the year ended December 31, 2020 (the “AIF”). A copy of the AIF and the Company’s other publicly filed documents can be accessed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

The Company cautions that the list of risk factors and uncertainties described in the AIF is not exhaustive and other factors could also adversely affect its results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. The forward-looking information contained in this press release represents our expectations as of the date of this press release (or as the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

For further information, please contact:
Sarika Ahluwalia
Senior Vice President, Corporate Affairs & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

Selected Financial Information

Three Months Ended Dec 31, Year Ended Dec 31,
2021 2020 2021 2020
Revenue 41,177,872 22,439,563 129,649,121 73,461,749
Provision for loan losses and other liabilities21,846,09811,138,77855,021,09824,756,892
Operating expenses
Acquisition and data9,012,6715,357,05123,697,57612,903,185
Salaries, wages and benefits6,746,3383,653,23121,376,71912,534,740
General and administrative1,747,037679,2794,607,5772,599,675
Processing and technology1,648,783 1,101,782 5,797,000 3,379,515
Total operating expenses19,154,82910,791,34355,478,85231,417,115
 
Operating income176,945509,44219,149,17117,287,742
 
Other income (expenses)
Interest and fees on credit facilities (1,193,162) (715,441)(4,431,071) (2,316,836)
Interest on term loan (448,389) (886,852) (1,735,947)
Interest expense on lease liabilities(106,035)(111,498) (440,043) (468,428)
Amortization of internally developed software (610,520) (337,294) (2,140,366) (1,573,296)
Depreciation of property and equipment (24,513) (34,377) (111,704) (161,441)
Amortization of right-of-use assets (158,649) (180,785) (660,778) (716,939)
Foreign exchange gain (loss) (676,292) (50,888) (451,466) (147,433)
Unrealized gain (loss) on derivative financial instruments 2,077 280,453 (312,764) 280,453
Total other income (expenses) (2,767,094) (1,598,219) (9,435,044) (6,839,867)
 
Income before transaction costs and income tax(2,590,149)(1,088,777)9,714,12710,447,875
Transaction costs 1,285,034 3,947 1,649,855 26,096
 
Income tax expense (recovery)
Current590,6911,415,5924,742,7803,871,102
Deferred (2,252,817) (1,377,544) (3,240,950) (781,711)
 
Net Income for the period(2,213,057)(1,130,772)6,562,4427,332,388
 
 
Earnings per share(1):
Basic (0.06)(0.05)0.24 0.31
Diluted (0.06) (0.05) 0.23 0.30
 
Dividends:
Dividends 2,547,870 1,839,284 8,073,562 2,665,681
Dividends per share 0.07 0.08 0.29 0.11

Note:
(1) All per share amounts prior to Q4 2021 have been restated to reflect the 2:1 share split that occurred as part of the pre-Offering reorganization.

Reconciliation of Non-IFRS Financial Measures

The following table provides a reconciliation of our net income to EBITDA and to Adjusted EBITDA2 for the three- and twelve-month periods ending December 31, 2021 and December 31, 2020:

Three Months Ended Dec 31, Year Ended Dec 31,
2021 2020 2021 2020
Net Income (2,213,057) (1,130,772) 6,562,442 7,332,388
Interest on Debt 1,193,162 1,163,830 5,317,923 4,052,783
Interest on lease liabilities 106,035 111,498 440,043 468,428
Amortization of internally developed software 610,520 337,294 2,140,366 1,573,296
Depreciation of property and equipment 24,513 34,377 111,704 161,441
Amortization of right-of-use assets 158,649 180,785 660,778 716,939
Income Tax Expense (Recovery) (1,662,126) 38,048 1,501,830 3,089,391
EBITDA (1,782,304) 735,060 16,735,086 17,394,666
EBITDA margin(4)%3%13%24%
Transaction Costs and Financing Costs 1,285,034 3,947 1,649,855 26,096
Provision for credit losses on current status accounts(1)46,5522,668,9232,674,3382,394,856
Provisions for CSO Guarantee liabilities and Bank Service Program liabilities3,074,339564,4964,312,966149,052
Adjusted EBITDA(2)2,623,6213,972,42625,372,24519,964,670
Adjusted EBITDA margin6%18%20%27%

Note:
(1) Provision included for (i) loan losses on good standing current principal (Stage 1 — Performing) balances (see “Critical Account Policies and Estimates — Loans and advances receivable” in the accompanying Fiscal 2021 MD&A).
(2) See “Non-IFRS Financial Measures and Industry Metrics”.

The following table provides a reconciliation of our Net Income to Adjusted Net Income1 for the three-month periods ending December 31, 2021 and December 31, 2020 and for the years ending December 31, 2021 and December 31, 2020.

Three Months Ended Dec 31, Year Ended Dec 31,
2021 2020 2021 2020
Net Income (2,213,057) (1,130,772) 6,562,442 7,332,388
Transaction Costs and Financing Costs net of taxes(2)944,5002,901 1,212,643 19,181
Provision for credit losses on current status accounts net of taxes(2) 34,216 1,961,659 1,965,639 1,760,219
Provisions for CSO Guarantee liabilities and Bank Service Program liabilities net of taxes(2) 2,259,639 414,904 3,170,030109,553
Adjusted Net Income(1) for the period1,025,298 1,248,692 12,910,754 9,221,341
Adjusted Net Income Margin(1)2% 6% 10% 13%

Note:
(1) See “Non-IFRS Financial Measures and Industry Metrics”.
(2) Each item is adjusted for after-tax impact, at an effective tax rate of 26.5%

The following table provides a reconciliation of our Ending Combined Loan and Advance Balances1 to loans and advances receivable for periods ending December 31, 2021 and December 31, 2020 (See “Significant Accounting Judgments, Estimates and Assumptions and Significant Account Policies — Loans and advances receivable” in the accompanying Fiscal 2021 MD&A):

As at Dec 31,
2021 2020
Ending Combined Loan and Advance balances(1)134,843,170 62,643,735
Less: Loan and Advance balances owned by third party lenders pursuant to CSO program(4,260,648) (2,487,802)
Less: Loan and Advance balances owned by a NBFI pursuant to the MoneyKey Bank Service program (17,782,252) (3,316,386)
Loan and Advance owned by the Company 112,800,270 56,839,547
Less: Allowance for Credit Losses (23,700,774) (13,406,118)
Add: Fees and interest receivable 12,034,604 5,262,181
Add: Acquisition transaction costs 2,715,724 1,081,848*
Loans and advances receivable 103,849,824 49,777,458*

Note:
(1) See “Non-IFRS Financial Measures and Industry Metrics”.
* There has been a reclassification in 2020 figures in Acquisition transaction costs and, as a result, Loans and advances receivable. Refer to Note 22 in the consolidated financial statements. The amount previously reported were $2,881,948 and $51,577,558, respectively.

TORONTO, ON, March 11, 2022 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) announced today its participation in the 34th Annual Roth Conference March 13 – 15, 2022 in Laguna Beach, California. Clive Kinross, Propel’s Co-founder and CEO, will be making a group presentation and taking meetings with institutional investors.

Presentation details are as follows:

Date:Monday, March 14, 2022
Time:3:30pm PDT (6:30pm EDT)
Webcast Link:   https://wsw.com/webcast/roth43/prl.to/2077052

About Propel

Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to the over 60 million underserved U.S. consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

For further information, please contact:

Sarika Ahluwalia
Senior Vice President, Corporate Affairs & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

TORONTO, ON, March 7, 2022 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) announced today that it will be reporting financial results for the three months and full year ended December 31, 2021 prior to market open on Monday, March 21, 2022. The Company will be hosting a conference call and webcast with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer.

Conference details are as follows:

Date: March 21, 2022
Time: 8:30AM ET
Conference ID: 7168064
Toll free dial-in: (833) 989-2995
International dial-in: (236) 714-4063
Webcast: Click here
Replay: (800) 585-8367 or (416) 621-4642

About Propel

Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to the over 60 million underserved U.S. consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

For further information, please contact:

Sarika Ahluwalia
Senior Vice President, Corporate Affairs & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

TORONTO, ON, February 3, 2022 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) today provided an update on certain operating results as at December 31, 2021 (“Q4 2021”) and declared a dividend for the first quarter of 2022. All amounts are expressed in U.S. dollars unless otherwise stated.

Record Loans and Advances Receivable and Total Originations Funded1

Propel expects to report record loans and advances receivable of between $103 million and $106 million as at December 31, 2021, representing year-over-year growth of between 100% and 105%. The Company also expects to report Ending Combined Loan and Advanced Balance1 growth exceeding 110% as at the end of Q4 2021 compared to the prior year. Additionally, Propel expects to report Total Originations Funded1 of between $88 million and $90 million in Q4 2021, or between 93% to 98% growth as compared to the prior year. The growth in loans and advances receivable and Total Originations Funded1 is the result of the successful launch of variable pricing and graduation capabilities, greater geographic coverage, seasonality, and rising overall consumer demand. The Company expects an increase in acquisition and data costs commensurate with the higher origination volume in Q4 2021.

The variable pricing and graduation capabilities rolled out at the end of Q3 2021 performed stronger than expected in Q4 2021. While both programs are expected to carry lower Annualized Revenue Yields1 than the Company’s traditional programs, the Company expects lower relative provisions for loan losses along with lower Cost per Funded Origination1 to drive continued growth in profitability and cash flow over the long term. The rollout of these capabilities is aligned with advancing Propel’s mission of improving credit inclusion across the credit spectrum.

“The Propel team seized the opportunities from rising consumer demand, favourable seasonality and a wider product offering to deliver record origination volumes in Q4 2021. This was a tremendous milestone to achieve and an exciting way to cap a transformational year. We are executing on our growth strategy while furthering our mission to provide access to credit to an even broader group of underserved consumers,” said Clive Kinross, Chief Executive Officer.

Note 1: See “Non-IFRS Financial Measures and Industry Metrics”.

Declaration of Dividend

Propel also announced today that its board of directors has declared a dividend of C$0.095 per common share, payable on March 10, 2022 to shareholders of record as of the close of business on February 17, 2022. The Company has designated this dividend as an eligible dividend within the meaning of the Income Tax Act (Canada).

About Propel

Propel is an innovative, online financial technology (“fintech”) company, committed to credit inclusion by providing fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to the over 60 million underserved U.S. consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

Non-IFRS Financial Measures and Industry Metrics

This press release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include “Annualized Revenue Yield”, “Ending Combined Loan and Advance Balances” and “Total Originations Funded”. These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies. Definitions and reconciliations of our non-IFRS financial measures to the relevant reported measures can be found in the Company’s managements’ discussion & analysis.

Presentation of Financial Information

The preliminary, unaudited results included in this press release are based on information available to the Company as of the date of this release. Final reported results could differ from these preliminary results following the completion of year-end accounting procedures, final adjustments and other developments arising between now and the time that the Company’s financial results are finalized, and such changes could be material. The Company’s independent auditor has not audited, reviewed or performed any procedures with respect to the preliminary results included in this press release, and accordingly does not express an opinion or any other form of assurance with respect thereto. In addition, these preliminary results are not a comprehensive statement of the Company’s financial results for the quarter and fiscal year ended December 31, 2021. They should not be viewed as a substitute for audited financial statements prepared in accordance with International Financial Reporting Standards and are not necessarily indicative of the Company’s results for any future period.

Forward-Looking Information

Certain information in this press release, including preliminary, unaudited results for Q4 2021, trends and expectations regarding acquisition and data costs, Annualized Revenue Yields of the variable pricing and graduation programs, expected provisions for loan losses and other liabilities and Cost per Funded Origination as the variable pricing and graduation programs develop, constitutes forward looking information. In some cases, but not necessarily in all cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “is positioned”, “estimates”, “intends”, “assumes”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events.

Although the Company believes that the forward-looking statements in this press release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements. Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by Propel as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the “Risk Factors” section of the Company’s final prospectus dated October 13, 2021 and the Company’s other periodic filings made available at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect Propel; however, these factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. The forward-looking statements contained in this press release are made as of the date of this press release, and Propel expressly disclaims any obligation to update or alter statements containing any forward-looking information, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.

For further information, please contact:

Sarika Ahluwalia
Vice President, Compliance & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

TORONTO, ON, November 15, 2021 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) today announced that its board of directors has declared a dividend of CAD$0.095 per common share, payable on December 8, 2021 to shareholders of record as of the close of business on November 22, 2021. This dividend marks Propel’s first dividend declared as a public Company and is consistent with the dividend policy disclosed in its IPO prospectus dated October 13, 2021. The Company has designated this dividend as an eligible dividend within the meaning of the Income Tax Act (Canada).

About Propel

Propel is an innovative, online fintech company, committed to credit inclusion by providing fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to the over 60 million underserved U.S. consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

Forward-Looking Statements

This news release contains “forward-looking information” within the meaning of applicable securities legislation, which reflects the Company’s current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control. Actual results could differ materially from those projected herein. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained in this news release is provided as of the date of this news release and Propel does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

For further information, please contact:
Sarika Ahluwalia
Vice President, Compliance & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

Loans and Advances Receivable increased by 138%, Originations increased by 120%, Ending Combined Loan and Advance Balances increased by 150% and Revenue increased by 99%, all reaching record levels

TORONTO, ON, November 15, 2021 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) today reported its financial results for the three and nine month periods ending September 30, 2021 (“Q3 2021”). All amounts are expressed in U.S. dollars unless otherwise indicated.

Management Commentary

“By delivering record originations, revenue and loan and advance balances in Q3 2021, we are well on our way to meeting our short term targets. With the recent implementation of variable pricing and graduation capabilities through our platform, as well as expansion of certain programs into new states over the course of the year, we have significantly increased the market that is able to be served by our platform. This places Propel in an excellent position to drive growth in Q4, historically our strongest quarter of the year, and over the short term, and importantly allows us to continue to fulfill on our mission of credit inclusion,” said Clive Kinross, Chief Executive Officer.

Mr. Kinross continued, “We have now been in operation for 10 years, and I have never been more confident about our future growth prospects. We have established bank partnerships, diversified funding sources, reliable credit decisioning from our proprietary underwriting model, new product and service offerings and greenfield markets to penetrate. I believe that we have laid the groundwork for continued long-term growth.”

Q3 2021 Financial and Operational Highlights
Comparable metrics relative to Q3 2020

  • Loans and Advances Receivable: increased by 138% to $77.2 million, a record ending balance
  • Total Originations Funded: increased by 120% to $55.8 million in Q3 2021, a record performance for quarterly originations, and increased by 144% to $136.7 million for year-to-date Q3 2021
  • Ending Combined Loan and Advance Balances: increased by 150% to $96.8 million in Q3 2021, a record ending balance
  • Revenue: increased by 99% to $32.7 million in Q3 2021, and increased by 73% to $88.5 million for year-to-date Q3 2021, representing record performance for both periods
  • Net Income: decreased by 76% to $0.6 million in Q3 2021, and increased by 4% to $8.8 million for year-to-date Q3 2021
  • Adjusted EBITDA: decreased 26% to $5.0 million in Q3 2021, and increased 42% to $22.7 million for year-to-date Q3 2021
  • Cost of Debt Capital: decreased average interest rate to 9.2%, from 11.6%, in part through retirement of higher cost term loan at the end of Q2 2021
  • Product structure additions: rolled out variable pricing and graduation capabilities through our platform, consistent with strategy of providing more competitive products and lower cost of credit to new and existing customers
  • Geographic expansion: from Q1 to Q3 2021, facilitated expansion of bank programs into 4 and 3 new states through the MoneyKey and CreditFresh brands, respectively

Highlights Subsequent to Q3 2021

  • Successful IPO: raised gross proceeds of approximately C$70 million (including the full exercise of the underwriters’ over-allotment option)
  • Trading on TSX: began trading on the Toronto Stock Exchange under the symbol “PRL”
  • Geographic expansion: facilitated expansion of bank programs into 5 and 7 new states through the MoneyKey and CreditFresh brands, respectively
  • Dividend: Declared its first dividend as a public company of CAD $0.095 per share, to be paid on December 8, 2021

Short Term Targets

The Company is maintaining the Short Term operational and financial targets for the 12 to 18 month period following June 30, 2021, disclosed in its IPO prospectus dated October 13, 2021.

 

Operating and Financial Targets Short Term Targets
Ending Combined Loan and Advance Balance CAGR(1) 100%
Revenue Yield(1) 140% – 150%
Adjusted EBITDA Margin(1) 22% – 26%
Net Income Margin 8% – 10%

(1) See “Non-IFRS Financial Measures and Industry Metrics” in the Company’s Management Discussion and Analysis

Conference Call Details

The Company will be hosting a conference call and webcast later this morning with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer.

Q3 2021 conference call details are as follows:

Date:November 15, 2021
Time:8:30AM ET
Conference ID:6015799
Toll free dial-in:(833) 989-2995
International dial-in: (236) 714-4063
Webcast:Click here
Replay:(800) 585-8367 or (416) 621-4642

 

Discussion of Financial Results

  Three Months Ended Sept 30, % Nine Months Ended Sept 30, %
  2021 2020 Change 2021 2020 Change
Loans and Advances Receivable 77,216,368 33,282,125 132% 77,216,368 33,282,125 132%
Ending Combined Loan and Advance Balances(1) 96,841,777 38,735,070 150% 96,841,777 38,735,070 150%
Total Originations Funded(1) 55,786,111 25,340,129 120% 136,723,506 55,994,974 144%

(1) See “Non-IFRS Financial Financial Measures and Industry Metrics” in the Company’s Management Discussion and Analysis

Loans and Advances Receivable grew to $77.2 million and Ending Combined Loan and Advance Balances reached $96.8 million as at September 30, 2021 and the Company facilitated record Total Funded Originations for Q3 2021 and year-to-date Q3 2021. The growth was driven predominantly by the growth in the Bank Programs under the Company’s CreditFresh brand which included the ramp up of our new bank partnership launched in Q2 2021, the ramp up of the MoneyKey Bank Service program launched last year, the roll-out of several new states through both the CreditFresh and MoneyKey brands, the general economic recovery as a result of easing of COVID-19 related restrictions, and the increased penetration of our more recent marketing partners and channels.

  Three Months Ended Sept 30, % Nine Months Ended Sept 30, %
  2021 2020 Change 2021 2020 Change
Revenue 32,724,895 16,468,013 99% 88,471,249 51,022,187 73%
Annualized Revenue Yield(1) 143% 191% -25% 152% 202% -25%

Revenue increased by 99% to $32.7 million for Q3 2021 and increased 73% to $88.5 million for year-to-date Q3 2021. Revenue generated over both the periods represent historical records for the Company. The growth in revenue is attributable to the growth in Ending Combined Loan and Advance Balances discussed above.

Annualized Revenue Yield for Q3 2021 decreased to 143% and to 152% for year-to-date Q3 2021. This reflects the growth of CreditFresh and the Bank Programs relative to Propel’s legacy MoneyKey direct lending and CSO products and the general reduction of rates across products facilitated over Propel’s platform. Products offered by our Bank Partners through the Bank Programs generally serve lower risk consumers when compared to Propel’s legacy direct lending and CSO products offered under the MoneyKey brand.

  Three Months Ended Sept 30, % Nine Months Ended Sept 30, %
  2021 2020 Change 2021 2020 Change
Provision for loan losses and other liabilities 15,420,843 4,688,724 230% 33,175,000 13,618,114 144%
Provision for loan losses and other liabilities as a % of revenue 47% 28% 66% 37% 27% 40%
Net Charge-Offs as a % of Total Funded(1) 19% 8% 138% 18% 30% -38%

(1) See “Non-IFRS Financial Measures and Industry Metrics” in the Company’s Management Discussion and Analysis

 

Provision for loan losses and other liabilities increased by 230% to $15.4 million for Q3 2021 and increased 144% to $33.2 million for year-to-date Q3 2021. The increases are primarily due to the growth in 2021 and atypically low demand and provisioning in Q2 2020 and Q3 2020 as a result of the early stages of the COVID-19 pandemic. This is further reflected in the increases in provision for loan losses and other liabilities as a % of revenue for both the Q3 and year-to-date periods in 2021.

Demand was especially muted in Q2 2020 and Q3 2020 because of a temporary reduction in consumer spending coupled with an increase in government stimulus. Also, out of prudence, underwriting was proactively tightened due to the market uncertainty which further reduced origination volumes. This led to exceptionally low provisioning as percentage of revenue in Q2 2020 and Q3 2020.

In periods of high growth, Propel experiences a higher provision for loan losses as new customers tend to have higher default rates relative to existing customers in the portfolio that have been consistently making payments. Also, under IFRS, the Company records loan loss provisions based on expected future credit losses as soon as a new loan is originated without matching revenue that is earned over the life of a loan. Demand is highest in the second half of the year beginning with the back-to-school period in Q3 and demand is particularly strong in Q4 during the holiday season, where origination volume is at its highest. In contrast, Q1 tends to be the lowest demand period driven in large part by the tax refund season. As such, provision for loan losses and other liabilities as a percentage of revenue is highest in Q3 and Q4 and lowest in Q1 in a normalized environment. As a result of COVID-19, Q2 and Q3 2020 were uncharacteristically low growth periods that, coupled with very strong credit performance, drove atypically low provision for loan losses and other liabilities as a % of revenue. 2021 has seen a gradual return in demand as the economy reopens and government stimulus packages are being wound down. As such, provision for loan losses and other liabilities as a % of revenue are more normalized for the 2021 periods considering the accelerated growth realized.

  Three Months Ended Sept 30, % Nine Months Ended Sept 30, %
  2021 2020 Change 2021 2020 Change
Net Income 626,044 2,566,736 -76% 8,775,498 8,436,160 4%
Net Income as % of Revenue 2% 16%   10% 17%  
EBITDA(1) 2,849,359 5,168,345 -45% 18,517,389 16,659,605 11%
EBITDA as % of Revenue 9% 31%   21% 33%  
Adjusted EBITDA(1} 5,008,050 6,753,265 -26% 22,748,623 15,992,244 42%
Adjusted EBITDA as % of Revenue 15% 41%   26% 31%  

(1) “Non-IFRS Financial Measures and Industry Metrics” in the Company’s Management Discussion and Analysis

 

Net Income decreased by 76% to $0.6 million for Q3 2021 and Adjusted EBITDA decreased by 26% to $5.0 million. The increase in Revenue in Q3 2021 was offset primarily by higher provisioning in the higher growth period of the calendar third quarter as described above, the acquisition and data costs incurred through delivering record originations without a full period of revenue recognition, the increases in operating expenses to support the high growth, the uncharacteristic nature of Q3 2020 which resulted in much lower relative pro visioning due to the factors described above as well as low acquisition and data and other operating expenses given the atypically low demand and origination volume.

Net Income increased by 4% to $8.8 million for year-to-date Q3 2021 and Adjusted EBITDA increased by 42% to $22.7 million. The growth in both profitability metrics is a function of overall business growth and a return of demand for the products offered over the Company’s platform due to a more normalized operating environment, resulting in higher Ending Combined Loan and Advance Balances and Revenues. This growth has been offset in part by the higher provisioning discussed above and higher acquisition costs in periods of high growth.

Net Income for both the Q3 2021 and year-to-date Q3 2021 periods was more impacted by IFRS provisioning on new originations and accounts in good standing whereas an adjustment for this is made in the calculation of Adjusted EBTIDA. Net Income was also impacted by non-recurring transaction expenses of $0.3 million related to the Company’s financings.

About Propel

Propel is an innovative, online fintech company, committed to credit inclusion by providing fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to the over 60 million underserved U.S. consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

Forward-Looking Information

Certain statements made in this news release may constitute forward-looking information under applicable securities laws. These statements may relate to our future financial outlook and anticipated events or results and include the reaffirmation of our short-term operating and financial targets, our ability to drive growth in Q4 and over the long-term. Such statements are based on management’s reasonable assumptions and beliefs in light of the information currently available to us and is made as of the date of this news release. However, we do not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws in Canada. Actual results and the timing of events may differ materially from those anticipated in the forward-looking information as a result of various factors, including those described in “Risk Factors”. Additional risks and uncertainties are discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time, including the Company’s final initial public offering prospectus dated October 13, 2021 (the “Prospectus”). These factors are not intended to represent a complete list of the factors that could affect us; however, these factors should be considered carefully. A copy of the Prospectus and the Company’s other publicly filed documents can be accessed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (“SEDAR”) at www.sedar.com.

Implicit in forward-looking statements in respect of the Company’s expectations for: (i) Ending Combined Loan and Advance Balances CAGR; (ii) Revenue Yield; (iii) Adjusted EBITDA Margin; and (iv) Net Income Margin for the 12 to 18 month period following the date of the prospectus, are certain assumptions relating to the COVID-19 pandemic and related government subsidies, the regulatory landscape, our continued expansion of our Bank Partner relationships, the availability and cost of debt capital, the maintenance and expansion of our marketing partnerships and the overall macroeconomic environment, each as further set out in the Prospectus.

We caution that the list of risk factors and uncertainties is not exhaustive and other factors could also adversely affect our results. Readers are urged to consider the risks, uncertainties and assumptions carefully in evaluating the forward-looking information and are cautioned not to place undue reliance on such information. See “Risk Factors” in the Prospectus for a discussion of the uncertainties, risks and assumptions associated with these statements.

Non-IFRS Financial Measures and Industry Metrics

This news release makes reference to certain non-IFRS financial measures and industry metrics. These measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS. Such measures include “Adjusted EBITDA”, “EBITDA”, “Ending Combined Loan and Advance Balances”, “Net Charge-Offs”, “Net Charge-Offs as a Percentage of Total Funded” and “Total Originations Funded”. See “Key Components of Results of Operations” in the accompanying MD&A available on SEDAR.

For a reconciliation of the non-IFRS financial measures refenced herein, please see “Reconciliation of Non-IFRS Financial Measures” in this news release.

These non-IFRS financial measures and industry metrics are used to provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We believe that securities analysts, investors and other interested parties frequently use non-IFRS financial measures and industry metrics in the evaluation of issuers. The Company’s management also uses non-IFRS financial measures and industry metrics in order to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts, and to determine components of management and executive compensation. The key performance indicators used by the Company may be calculated in a manner different than similar key performance indicators used by other similar companies.

For further information, please contact:

Sarika Ahluwalia
Vice President, Compliance & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com

 

Reconciliation of Non-IFRS Financial Measures

The following table provides a reconciliation of our net income to EBITDA and to Adjusted EBITDA for the three- and nine-month periods ending September 30, 2021 and September 30, 2020:

  Three Months Ended Sept 30, Nine Months Ended Sept 30,
(US$) 2021 2020 2021 2020
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 626,044 2,566,736 8,775,498 8,463,160
Interest on Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,212,845 902,706 4,124,761 2,888,953
Interest on lease liabilities. . . . . . . . . . . . . . . . . . . . . . 106,564114,941334,008356,929
Amortization of intangible assets . . . . . . . . . . . . . . . . . . 493,375 441,239 1,529,846 1,236,002
Depreciation of property and equipment . . . . . . . . . . . . . 25,18638,21187,191127,064
Amortization of right-of-use assets. . . . . . . . . . . . . . . . . 159,629 179,090 502,129 536,154
Income Tax Expense (Recovery) . . . . . . . . . . . . . . . . . . 225,716 925,422 3,163,956 3,051,343
EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,849,359 5,168,345 18,517,38916,659,605
Transaction Costs and Financing Costs. . . . . . . . . . . . . 323,216 364,821 22,149
Provision for credit losses on current
status accounts(1) . . . . . . . . . . . . . . . . .. . . . . . . . . . . . .
1,194,979 1,419,197 2,627,786 (274,066)
Provisions for CSO Guarantee liabilities and
Bank Service Program liabilities. . . . . . . . . . . . . . . . . . .
640,496 165,724 1,238,627(415,444)
Adjusted EBITDA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,008,0506,753,265 22,748,623 15,992,244

Note: (1) Provision included for (i) loan losses on good standing current principal (Stage 1 — Performing) balances (see “Critical Accounting Estimates and Judgements — Loans and advances receivable” in the Company’s Management Discussion and Analysis).

 

The following table provides a reconciliation of our Ending Combined Loan and Advance Balances to loans and advances receivable for periods ending September 30, 2021, September 30, 2020, and December 31, 2020

  As at Sept 30,   As at Dec 31,
(US$) 2021 2020 2020
Ending Combined Loan and Advance balances. . . . . . . . . . . . . 96,841,775 38,735,070 62,643,735
Less: Loan and Advance balances owned by third
party lenders pursuant to CSO program. . . . . . . . . . . . . . . . . . .
(3,204,174) (2,560,981) (2,487,802)
Less: Loan and Advance balances owned by a NBFI
pursuant to the MoneyKey Bank Service program. . . . . . . . . . .
(9,519,178) (280,498) (3,316,385)
Loan and Advance owned by the Company . . . . . . . . . . . . . . . 84,118,425 35,893,590 56,839,548
Less: Allowance for Credit Losses. . . . . . . . . . . . . . . . . . . . . . . (19,809,595) (8,304,746) (13,406,118)
Add: Fees and interest receivable. . . . . . . . . . . . . . . . . . . . . . . . 9,076,161 4,177,246 5,262,181
Add: Deferred acquisition and data costs . . . . . . . . . . . . . . . . . 3,831,377 1,516,036 2,881,948
Loans and Advance Receivables. . . . . . . . . . . . . . . . . . . . . . . . 77,216,368 33,282,125 51,577,558

TORONTO, ON, November 2, 2021 – Propel Holdings Inc. (“Propel” or the “Company”) (TSX: PRL) announced today that it will be reporting its financial results for the period ending September 30, 2021 (“Q3 2021”) prior to market open on Monday, November 15, 2021. The Company will be hosting a conference call and webcast with a presentation by Clive Kinross, Chief Executive Officer, and Sheldon Saidakovsky, Chief Financial Officer.

Q3 2021 conference call details are as follows:

Date:November 15, 2021
Time:8:30AM ET
Conference ID:6015799
Toll free dial-in:(833) 989-2995
International dial-in: (236) 714-4063
Webcast:Click here
Replay:(800) 585-8367 or (416) 621-4642

 

About Propel

Propel is an innovative, online financial technology company, committed to credit inclusion by providing fair, fast and transparent access to credit with exceptional service using its proprietary online lending platform. Through its operating brands, MoneyKey and CreditFresh, Propel is focused on providing access to credit to the over 60 million underserved U.S. consumers who struggle to access credit from mainstream credit providers. Propel’s revenue growth and profitability have accelerated significantly over the past two years as Propel has been able to facilitate access to credit for an increasing number of consumers, helping them move forward in their credit journeys.

For further information, please contact:

Sarika Ahluwalia
Vice President, Compliance & Chief Compliance Officer
(647) 776-5468
IR@propelholdings.com