GreenSky, Inc. CEO David Zalik Comments on Recent Share Price Volatility

ATLANTA--(BUSINESS WIRE)--GreenSky, Inc. (“GreenSky” or the “Company”) (NASDAQ: GSKY), a leading financial technology company Powering Commerce at the Point of Sale^SM, commented on its recent share price volatility following the release of its Form 10-Q filed on May 15, 2019.

"When we ultimately decided to become a public company last year, we committed to be fully transparent in connection with our financial reporting. We take this responsibility seriously and, thus, always strive to publicly share with our investors information that we believe could be helpful in evaluating our Company," said David Zalik, Chairman and CEO of GreenSky. "With greater than $4.5 Billion of unused bank commitments available to fund GreenSky transaction growth well into 2020, our disclosure that, for its own strategic reasons, we do not expect Regions Financial, to renew its existing commitment with GreenSky upon expiration of its term, is hardly noteworthy. While we anticipate periodically announcing both new bank partner funding commitments along with the expansion of existing bank funding commitments in the ordinary course of business, given our year plus of funding headroom, we feel no sense of urgency today to add new bank partners to our GreenSky funding consortium.”

Zalik added, “Our leadership team and associates have worked tirelessly the past six years since entering the point of sale technology space to deliver an unrivaled value proposition to our ecosystem of merchants, banks and consumer borrowers. Our bank partners have come to rely on GreenSky to deliver a national portfolio of prime and super-prime assets, with minimal volatility, generating attractive risk-adjusted returns. The GreenSky business model has proven to be uniquely durable and, unlike the vast majority of fintech businesses we are aware of, has generated, and continues to generate, outstanding financial returns for all stakeholders:

• 2018 Transaction Volume in excess of $5.0 Billion
• Three-year Revenue compound annual growth rate in excess of 33%
• 2018 Adjusted EBITDA of $171.5 Million (with an Adjusted EBITDA margin of 41%)
• $1.8 Billion of Cumulative Capital returned in the form of cash distributions and share repurchases
• Cumulative Transaction Volume consummated in excess of $17 Billion
• Nearly 16,000 active Merchants using the GreenSky technology platform
• Loan Servicing Portfolio currently in excess of $7.6 Billion
• Over 2.4 million Cumulative Customers

The recent volatility in GreenSky’s share price since the filing of the 10-Q has created an attractive opportunity for the Company to accelerate its share repurchases, consistent with our Board approved share repurchase program, for the benefit of all long-term GreenSky shareholders. We have repurchased over $100 million thus far, and intend to continue to buy back our shares aggressively.”

About GreenSky, Inc.

GreenSky, Inc. (NASDAQ: GSKY) is a leading technology company Powering Commerce at the Point of Sale^SM for a growing ecosystem of merchants, consumers and banks. Our highly scalable, proprietary technology platform enables nearly 16,000 merchants to offer frictionless promotional payment options to consumers, driving increased sales volume and accelerated cash flow. Banks leverage GreenSky’s technology to provide loans to super-prime and prime consumers nationwide. Since our inception, over 2.4 million consumers have financed over $17 billion of commerce using our paperless, real time “apply and buy” technology. GreenSky is headquartered in Atlanta, Georgia. For more information, visit https://www.greensky.com.

Forward-Looking Statements

This press release contains forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance; transaction volume; profitability; and bank commitments. You generally can identify these statements by the use of words such as “outlook,” “potential,” “continue,” “may,” “seek,” “approximately,” “predict,” “believe,” “expect,” “plan,” “intend,” “estimate” or “anticipate” and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as “will,” “should,” “would,” “likely” and “could.” These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include those risks described in our filings with the Securities and Exchange Commission and include, but are not limited to, risks related to our ability to retain existing, and attract new, merchants and Bank Partners; our future financial performance, including trends in revenue, cost of revenue, gross profit or gross margin, operating expenses, and free cash flow; changes in market interest rates; increases in loan delinquencies; our ability to operate successfully in a highly regulated industry; the effect of management changes; cyberattacks and security vulnerabilities in our products and services; and our ability to compete successfully in highly competitive markets. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we disclaim any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.

Non-GAAP Financial Measures

This press release presents information about the Company’s Adjusted EBITDA, which is a non-GAAP financial measure provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). We believe that Adjusted EBITDA is one of the key financial indicators of our business performance over the long term and provides useful information regarding whether cash provided by operating activities is sufficient to maintain and grow our business. We believe that this methodology for determining Adjusted EBITDA can provide useful supplemental information to help investors better understand the economics of our platform. We are presenting this non-GAAP measure to assist investors in evaluating our financial performance and because we believe that this measure provides an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

This non-GAAP measure is presented for supplemental informational purposes only. This non-GAAP measure has a limitation as an analytical tool and should not be considered in isolation from, or as a substitute for, the analysis of other GAAP financial measures, such as net income. The non-GAAP measures GreenSky uses may differ from the non-GAAP measures used by other companies. A reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure is provided below.

Reconciliation of Adjusted EBITDA
(Dollars in thousands)
	Year Ended December 31,
	2018
Net income	$	127,980
Interest expense	23,584
Tax expense^(1)	6,106
Depreciation and amortization	4,478
Equity-related expense^(2)	6,054
Fair value change in servicing liabilities^(3)	945
Non-recurring transaction expenses^(4)	2,393
Adjusted EBITDA	$	171,540

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⁽¹⁾ Includes both corporate and non-corporate tax expense. Non-corporate tax expense is included within general and administrative expenses in our Consolidated Statements of Operations. Prior to the IPO and certain reorganization transactions, we did not have any corporate income tax expense.

⁽²⁾ Includes equity-based compensation to employees and directors, as well as equity-based payments to non-employees.

⁽³⁾ Includes the non-cash impact of the initial recognition of servicing liabilities and subsequent fair value changes in such servicing liabilities during the period presented.

⁽⁴⁾ In 2018, non-recurring transaction expenses include certain costs associated with certain reorganization transactions and our IPO, which were not deferrable against the proceeds of the IPO. Further, certain costs related to our March 2018 term loan upsizing were expensed as incurred, rather than deferred against the balance of the term loan and, therefore, are being added back to net income given the non-recurring nature of these expenses.