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 nine months ended
ended
? Revenue decreased 17% to
? Net income increased 12% to
? Adjusted EBITDA, net decreased 51% 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. Our adoption of CECL on
our allowance for loan loss at adoption of
through a cumulative-effect adjustment to retained earnings, net of taxes. 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 and can lead to
volatility in our provision for loan loss.
In
data applications and analytics, for total consideration of approximately
? million. Included in total consideration is contingent consideration with an
estimated fair value of
of specified events and performance of the business. Precima was included in
our
? We paid dividends and dividend equivalent rights of
months ended
? We sold one credit card portfolio for cash consideration of
during the nine months ended
We launched our direct-to-consumer Comenity-branded general purpose credit card
? which provides
cardholders.
In
? credit card processing services to Fiserv, a leading global provider of
payments and financial services technology solutions.
In
? acquire Bread in its entirety. Bread provides technology solutions for
merchants to provide digital purchase financing options to customers in the
form of installment credit as well as credit and debit multi-pay solutions.
COVID-19 Update
On
COVID-19 restrictions have also adversely impacted and continue to adversely impact our associates, our business partners, and our customers, which has negatively impacted our financial performance. However, in the third quarter of
43
Index
2020, we began to see sequential improvement in certain key metrics.
Specifically, our third quarter financial results demonstrated a recovery in
Card Services credit sales, which increased 28% sequentially over the second
quarter of 2020; further, credit metrics remained resilient, reflecting strong
payment trends across our cardholder base. Additionally,
We continue to monitor the evolving situation and guidance from international,
federal, state and local government and public health authorities. In addition,
surges in COVID-19 cases, such as those recently experienced in
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