The following discussion should be read in conjunction with the unaudited
condensed consolidated financial statements and related notes thereto presented
in this quarterly report and the consolidated financial statements and related
notes thereto included in our Annual Report on Form 10-K for the year ended
2020 Recent Developments
Effective
?
the Company.
? For the three months ended
ended
? Revenue increased 4% to
? Net income decreased 80% to
? Earnings per share decreased 78% to
? Adjusted EBITDA, net decreased 74% to
Effective
ASC, 326, "Financial Instruments-Credit Losses," and applied a current expected
credit loss, or CECL, model to determine our allowance for loan loss. Estimates
of expected credit losses under the CECL model are based on relevant
? information about past events, current conditions, and reasonable and
supportable forward-looking forecasts regarding the collectability of the loan
portfolio. The impact of CECL is significantly influenced by the composition,
characteristics and quality of our portfolio of credit card and loan
receivables, as well as the prevailing economic conditions and forecasts
utilized.
In
data applications and analytics, for total consideration of approximately
? million, which includes contingent consideration with an estimated fair value
of
business. Precima was included in our
? We paid dividends and dividend equivalent rights of
months ended
? We sold one credit card portfolio for preliminary cash consideration of
million during the three months ended
COVID-19 Update
On
In response to the COVID-19 pandemic, first and foremost, we have prioritized
the health and safety of our associates. Effective teleworking protocols are in
place for more than 95% of our associates. Cross-training programs have been
completed at our Card Services business to ensure appropriate workforce coverage
while managing higher cardholder-related call volumes resulting from forbearance
programs introduced in response to the COVID-19 pandemic. These forbearance
programs include the option to waive the next payment or enroll in short-term
hardship programs for eligible accountholders. We are working closely with our
partners across all of our businesses to optimize their budgets, adjust
marketing support accordingly and accommodate the rapid shift to ecommerce in
light of retail-based store closings to reduce the spread of COVID-19. At
36
Index
We continue to monitor the rapidly evolving situation and guidance from international, federal, state and local government and public health authorities. Given the dynamic nature of this situation, we cannot reasonably estimate the impacts of COVID-19 on our financial condition, results of operations or cash flows at this time. However, we expect COVID-19 to have an adverse impact on future revenue growth as well as overall profitability. In particular, our allowance for loan loss under the CECL model may be volatile due to changes in the macroeconomic environment. We continue to evaluate and implement additional cost saving measures in procurement, marketing and operating expenses, while maintaining service levels and positioning for future growth.
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