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Open Lending Reports First Quarter 2021 Financial Results

AUSTIN, Texas, May 11, 2021 (GLOBE NEWSWIRE) -- Open Lending Corporation (NASDAQ: LPRO) (the “Company” or “Open Lending”), a leading provider of lending enablement and risk analytics solutions to financial institutions, today reported financial results for its first quarter of 2021.

“We are pleased with our strong first quarter results, which included a 19% increase in certified loans, a 152% increase in revenue and a 217% increase in Adjusted EBITDA compared to the first quarter of 2020. March was especially notable, a record month in our Company’s history from a certified loan perspective, and the momentum has continued,” said John Flynn, Chairman and CEO Open Lending. “We’ve continued to make a lot of progress on our growth objectives, including the addition of many new credit union customers during the quarter, making traction in our efforts to expand into regional banks and online lending channels, OEM growth, as well as continuing to make progress adding additional insurance carrier partners to the platform.”

Three Months Ended March 31, 2021 Highlights

  • The Company facilitated 33,318 certified loans during the first quarter of 2021, compared to 28,024 certified loans in the first quarter of 2020

  • Total revenue was $44.0 million during the first quarter of 2021, compared to $17.4 million in the first quarter of 2020

  • Gross profit was $40.6 million during the first quarter of 2021, compared to $14.9 million in the first quarter of 2020

  • Net income was $12.9 million during the first quarter of 2021, compared to $8.2 million in the first quarter of 2020

  • Adjusted EBITDA was $30.3 million during the first quarter of 2021, compared to $9.6 million in the first quarter of 2020

Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure are provided in the financial tables included at the end of this press release. An explanation of this measure and how it is calculated is also included under the heading “Non-GAAP Financial Measures.”

2021 Outlook
Based on the first quarter results and trends into second quarter 2021, the Company is reaffirming its previously issued guidance of the following:

Full Year 2021 Outlook

Total Certified Loans

161,000 - 206,000

Total Revenue

$184 - $234 million

Adjusted EBITDA

$125 - $168 million

Adjusted Operating Cash Flow (a)

$81 - $111 million

  1. Adjusted Operating Cash Flow is defined as Adjusted EBITDA, minus CAPEX, plus or minus change in contract assets.

The guidance provided above includes forward-looking statements within the meaning of U.S. securities laws. While the financial guidance takes into account the continuing impact of the global COVID-19 pandemic, the impact of the pandemic has been unprecedented and the future effect of the pandemic on the global economy and our financial results remains uncertain, and our actual results may differ materially. See “Forward-Looking Statements” below.

Conference Call
Open Lending will host a conference call to discuss the first quarter 2021 financial results today at 5:00 pm ET. Hosting the call will be John Flynn, Chairman and CEO, Ross Jessup, President and COO, and Chuck Jehl, CFO. The conference call will be webcast live from the Company's investor relations website at https://investors.openlending.com/ under the “Events” section. The conference call can also be accessed live over the phone by dialing (877) 407-4018, or for international callers (201) 689-8471. A replay will be available two hours after the call and can be accessed by dialing (844) 512-2921 or (412) 317-6671 for international callers; the conference ID is 13719185. The replay will be available until Tuesday, May 25, 2021. An archive of the webcast will be available at the same location on the website shortly after the call has concluded.

About Open Lending
Open Lending (NASDAQ: LPRO) provides loan analytics, risk-based pricing, risk modeling and default insurance to auto lenders throughout the United States. For 20 years we have been empowering financial institutions to create profitable auto loan portfolios by saying “yes” to more automotive loans. For more information, please visit www.openlending.com.

Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements related to market trends, the anticipated impact of the global COVID-19 pandemic on factors impacting the Company’s business, the Company’s new lender pipeline, consumer behavior and demand for automotive loans, as well as future financial performance under the heading “2021 Outlook” above. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the Company’s control. These forward-looking statements are subject to a number of risks and uncertainties, including general economic, political and business conditions; the continuing effects of COVID-19 pandemic on consumer behavior; applicable taxes, inflation, interest rates and the regulatory environment; the outcome of judicial proceedings to which Open Lending is, or may become a party; failure to realize the anticipated benefits of the business combination; the amount of redemption requests made by the Company’s stockholders; those factors discussed in other documents of the Company filed, or to be filed, with the SEC. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company presently does not know or that they currently believe are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. The Company anticipates that subsequent events and developments will cause their assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Non-GAAP Financial Measures
Included in this press release is financial information that has not been prepared in accordance with GAAP. The Company uses Adjusted EBITDA, a non-GAAP financial measure, internally in analyzing our financial results and believe it is useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. The Company believes that the use of this non-GAAP financial measure provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.

Adjusted EBITDA is a non-GAAP financial measure used by management to evaluate its operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Accordingly, the Company believes these measures provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors. In addition, they provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain non-recurring variable charges. Adjusted EBITDA is defined as GAAP net income excluding interest expense, income taxes, depreciation and amortization expense, share-based compensation expense, and loss on extinguishment of debt. Adjusted EBITDA margin is defined as Adjusted EBITDA expressed as a percentage of total revenue.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of Adjusted EBITDA to its most directly comparable GAAP financial measure provided in the financial statement tables included below in this press release.

Contact:
ICR for Open Lending
Investors
openlending@icrinc.com

OPEN LENDING CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share data)

March 31,
2021

December 31,
2020

Assets

Current assets

Cash and cash equivalents

$

127,011

$

101,513

Restricted cash

2,631

2,635

Accounts receivable

6,803

4,352

Current contract assets

52,736

50,386

Prepaid expenses

932

1,873

Other current assets

980

2,018

Total current assets

191,093

162,777

Property and equipment, net

1,608

1,201

Operating lease right-of-use assets, net

5,600

5,733

Non-current contract assets

44,482

38,956

Deferred tax asset, net

83,888

85,218

Other non-current assets

124

124

Total assets

$

326,795

$

294,009

Liabilities and stockholders’ equity

Current liabilities

Accounts payable

2,991

3,442

Accrued expenses

3,994

3,033

Income tax payable

4,791

1,640

Current portion of debt

3,125

4,888

Other current liabilities

4,109

4,005

Total current liabilities

19,010

17,008

Long-term debt, net of deferred financing costs

170,212

152,859

Non-current operating lease liabilities

5,019

5,138

Other non-current liabilities

92,369

92,382

Total liabilities

$

286,610

$

267,387

Commitments and contingencies

Stockholders’ equity

Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued and outstanding

Common stock, $0.01 par value; 550,000,000 shares authorized, 128,198,185 shares issued and 126,803,096 shares outstanding as of March 31, 2021 and December 31, 2020, respectively

1,282

1,282

Additional paid-in capital

491,947

491,246

Accumulated deficit

(415,544

)

(428,406

)

Treasury stock at cost, 1,395,089 shares at March 31, 2021 and December 31, 2020, respectively

(37,500

)

(37,500

)

Total stockholders’ equity

40,185

26,622

Total liabilities and stockholders’ equity

$

326,795

$

294,009

OPEN LENDING CORPORATION
Condensed Consolidated Statements of Operations and Comprehensive Income
(Unaudited, in thousands, except share data)

Three Months Ended March 31,

2021

2020

Revenue

Program fees

$

14,911

$

12,712

Profit share

27,730

3,774

Claims administration service fees

1,367

944

Total revenue

44,008

17,430

Cost of services

3,362

2,495

Gross profit

40,646

14,935

Operating expenses

General and administrative

8,212

3,569

Selling and marketing

2,397

2,078

Research and development

591

359

Operating income

29,446

8,929

Interest expense

(3,289

)

(764

)

Interest income

84

17

Loss on extinguishment of debt

(8,778

)

Other (expense) income

(131

)

1

Income before income taxes

17,332

8,183

Provision for income taxes

4,470

11

Net income and comprehensive income

$

12,862

$

8,172

Preferred distribution to redeemable convertible Series C preferred units

(40,475

)

Accretion to redemption value of redeemable convertible Series C preferred units

47,537

Net income attributable to common stockholders

$

12,862

$

15,234

Net income and comprehensive income per common share

Basic

$

0.10

$

0.40

Diluted

$

0.10

$

0.16

Weighted average common shares outstanding

Basic

126,803,096

37,631,052

Diluted

126,837,832

51,909,655

OPEN LENDING CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)

Three Months Ended March 31,

2021

2020

Cash flows from operating activities

Net income

$

12,862

$

8,172

Adjustments to reconcile net income to net cash provided by operating activities:

Share-based compensation

701

487

Depreciation and amortization

522

122

Loss on extinguishment of debt

8,778

Deferred income taxes

1,330

Changes in assets & liabilities:

Accounts receivable

(2,451

)

(1,092

)

Contract assets

(7,876

)

4,202

Prepaid expenses

941

(178

)

Deferred transaction costs

(4,599

)

Other current and non-current assets

1,038

346

Accounts payable

(611

)

539

Accrued expenses

478

(974

)

Income tax payable

3,151

Operating lease liabilities

(140

)

(66

)

Other current and non-current liabilities

112

116

Net cash provided by operating activities

18,835

7,075

Cash flows from investing activities

Purchase of property and equipment

(3

)

(83

)

Net cash used in investing activities

(3

)

(83

)

Cash flows from financing activities

Proceeds from term loans

125,000

170,000

Proceeds from revolving facility

50,000

Payments on term loans

(166,847

)

(3,313

)

Payment of deferred financing costs

(1,491

)

(9,112

)

Distributions to Open Lending, LLC unitholders

(134,153

)

Net cash provided by financing activities

6,662

23,422

Net change in cash and cash equivalents and restricted cash

25,494

30,414

Cash and cash equivalents and restricted cash at the beginning of the period

104,148

9,898

Cash and cash equivalents and restricted cash at the end of the period

$

129,642

$

40,312

Supplemental disclosure of cash flow information:

Interest paid

$

2,722

$

89

Income tax (refunded) paid, net

(16

)

11

Non-cash investing and financing:

Internally developed software accrued but not paid

$

463

$

Deferred financing costs accrued but not paid

178

Change in fair value of redeemable convertible series C preferred units

(47,537

)

Distributions accrued but not paid

1,228

OPEN LENDING CORPORATION
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands)

Three Months Ended March 31,

2021

2020

Net income

$

12,862

$

8,172

Non-GAAP adjustments:

Interest expense

3,289

764

Provision for income taxes

4,470

11

Depreciation and amortization expense

193

122

Share-based compensation

701

487

Loss on extinguishment of debt (1)

8,778

Total adjustments

17,431

1,384

Adjusted EBITDA

30,293

9,556

Total revenue

$

44,008

$

17,430

Adjusted EBITDA margin

68.8

%

54.8

%

Notes:

(1) Reflects unamortized deferred financing costs which were written off in connection with the refinancing of our Term Loan due 2027 on March 19, 2021.