Rent-A-Center, Inc. Reports Fourth Quarter and Full Year 2021 Results|||

Full Revenues of $one.2 billion, upward 10.5% Pro Forma1
for the 4th Quarter

Acima Segment GMV of over $520 million, up five% Pro Forma for the 4th Quarter

Rent-A-Heart Business Segment Aforementioned-Shop-Sales upwardly 10.4% for the Quaternary Quarter

Fourth Quarter Diluted EPS of $0.xv; Non-GAAP Diluted EPS of

$1.08

Full Twelvemonth GAAP Diluted EPS of $2.02; Non-GAAP Diluted EPS of $5.57

PLANO, Texas–(Concern WIRE)–Hire-A-Heart, Inc. (the “Company” or “Rent-A-Center”) (NASDAQ:RCII) today announced results for the quarter and year ended December 31, 2021.

“2021 was a dynamic year for the Company with pregnant progress and some challenges. We generated revenues of $4.half dozen billion, which grew 17.three% on a pro-forma basis, and non-GAAP EPS of $five.57, driven past strong organic growth for both the Rent-A-Middle Business segment and the Acima business that we caused in February of 2021,” said Mitch Fadel, Principal Executive Officeholder.

“In the 4th quarter, the combined outcome of significantly reduced government pandemic relief, decades-high rates of aggrandizement, and supply chain disruptions impacted our target customers’ ability to access and beget durable goods, which negatively impacted our results. We anticipate these external headwinds will continue for the foreseeable future, resulting in year-over-yr declines in revenue and earnings for 2022, on a pro forma basis, while free greenbacks flow should increase for the yr,” continued Mr. Fadel.

“Looking frontwards to a normal post-pandemic environment, our mission to provide flexible leasing solutions for the financially underserved volition exist fifty-fifty more important as consumers adjust their spending choices to a less stimulative economic setting. Moreover, with the Acima acquisition and the Acima digital ecosystem exam we launched in Baronial, nosotros are transforming into a leading consumer Fintech platform concern, with omni-channel capabilities, a big addressable marketplace opportunity, and potential for expansion that nosotros believe should drive incremental earnings and shareholder value in the time to come,” concluded Mr. Fadel.


Fourth Quarter Consolidated Results

  • Fourth quarter 2021 consolidated revenues of $1.2 billion increased 63.five% year-over-year, primarily due to the acquisition of Acima Holdings, LLC (the “Acima Acquisition”), which closed in the showtime quarter of 2021, and strong growth in the Rent-A-Center Business. On a pro-forma1
    basis, revenues grew 10.five%, led by organic growth in the Acima and Hire-A-Center Business organisation segments.
  • GAAP operating turn a profit for the quaternary quarter of 2021 was $36.8 million compared to $54.6 1000000 in the prior year period. GAAP net income for the fourth quarter of 2021 was $9.eight million and included $60.4 meg of costs, net of tax, relating to special items described below, compared to $56.3 one thousand thousand of GAAP net income and $ane.one million of costs, cyberspace of tax, relating to special items in the prior yr catamenia.
  • Adjusted EBITDA in the quaternary quarter of 2021 was $124.iv million and decreased 22.iv% twelvemonth-over-year on a pro-forma basis1, primarily due to an increase in delinquency and loss rates compared to the prior year period that benefited from government programs and stimulus payments. Adjusted EBITDA margin was x.half-dozen% in the quaternary quarter of 2021 compared to xv.1% in the prior year period on a pro-forma1
    basis, likewise primarily due to the effects of college delinquency and loss rates, supply chain disruptions and rising inflation rates.
  • GAAP earnings per share for the 4th quarter of 2021 was $0.fifteen compared to $i.00 in the prior year menstruation. Non-GAAP earnings per share, which exclude the impact of special items described below, for the fourth quarter of 2021 was $1.08 compared to $i.03 in the prior year menses.
  • For the twelvemonth ended December 31, 2021, the Company generated $392.three meg of cash from operations, and ended the fourth quarter of 2021 with $108.three one thousand thousand of cash and cash equivalents, $1.6 billion of debt outstanding, $280.nine million of liquidity, including $172.6 million of undrawn revolving credit availability, and a pro-forma internet debt to Adjusted EBITDA ratio of ii.3 times.
  • During the fourth quarter of 2021, the Company returned $388.4 million of greenbacks to shareholders through a combination of $18.3 million in dividends and $370.i million in share repurchases. For the twelvemonth ended December 31, 2021, the Company returned $461.vi million of cash to shareholders.


Fourth Quarter Segment Highlights


Acima Segment:
Fourth quarter 2021 revenues of $611.9 one thousand thousand increased 204.3% year-over-year due to the Acima Acquisition, completed in the first quarter of 2021. On a pro-forma1
basis, revenues increased 12.3%, and GMV increased v% year-over-year, with growth in merchant partners and lease applications partially starting time past the effects of tighter charter underwriting, supply chain disruptions on merchant partners, and headwinds on consumer discretionary income from elevated rates of inflation and the current of air down of government pandemic financial relief. Revenue was also negatively impacted past college projected malversation rates based on contempo payment action. Skip/stolen losses were 11.8% of revenue in the fourth quarter of 2021 compared to ten.eight% in the prior year catamenia on a pro-forma basis. On a GAAP ground, segment operating profit was $31.vii million with an operating profit margin of v.two% in the fourth quarter of 2021, compared to $17.iii meg and 8.half-dozen% in the prior twelvemonth catamenia. Adjusted EBITDA was $58.half-dozen one thousand thousand with an Adjusted EBITDA margin of ix.6% in the fourth quarter of 2021, compared to $81.6 million and xv.0% in the prior year period on a pro-forma1
basis. The year-over-year decline in Adjusted EBITDA was primarily attributable to college malversation and loss rates, which the Company believes largely stemmed from the outcome of the wind down of regime pandemic relief and elevated rates of aggrandizement on customer discretionary income.


Hire-A-Center Business Segment:
Quaternary quarter 2021 revenues of $506.2 million increased ix.0% yr-over-year, primarily due to a 10.four% increase in same store sales, including 17.ix% growth in eastward-commerce sales and strong charter portfolio operation, partially starting time by the bear upon of refranchising approximately 100 stores in California in the quaternary quarter of 2020. Skip/stolen losses were iv.0% of acquirement in the fourth quarter of 2021 compared to 2.half-dozen% in the prior year menses. On a GAAP basis, segment operating turn a profit was $91.9 million with an operating profit margin of xviii.two% in the fourth quarter of 2021, compared to $80.iv million and 17.iii% in the prior year period. Adapted EBITDA was $97.8 one thousand thousand with an Adapted EBITDA margin of xix.3% in the fourth quarter of 2021, compared to $102.9 million and 22.two% in the prior year period. The turn down in segment operating turn a profit and Adjusted EBITDA was primarily owing to higher loss rates that the Visitor believes stemmed from the wind down of government pandemic relief, and college labor expense due to wage aggrandizement that more than outset revenue growth. On December 31, 2021, the Rent-A-Center Concern segment had 1,846 company-operated locations.

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Franchising Segment:
Quaternary quarter 2021 revenues of $37.6 meg increased two.1% year-over-year due to higher store count as a result of the Company refranchising approximately 100 California stores during 2020 and partially kickoff past lower inventory purchases per shop. Segment operating profit, on a GAAP basis, and Adjusted EBITDA were $4.9 million in the fourth quarter and increased $0.9 1000000 year-over-year. On December 31, 2021, at that place were 466 franchise-operated locations.


Mexico Segment:
4th quarter 2021 revenues of $15.7 1000000 increased 9.ix% year-over-twelvemonth on a constant currency footing. Segment operating turn a profit, on a GAAP basis, and Adjusted EBITDA were $ane.2 million and $ane.three one thousand thousand, respectively. In the fourth quarter, GAAP operating profit decreased $0.9 million yr-over-year. On December 31, 2021, the Mexico business had 123 company-operated locations.


Corporate Segment:
Fourth quarter 2021 non-GAAP ground expenses increased $7.nine million year-over-year or xx.7%, reflecting our addition of Acima related costs and investments we have been making in talent and technology to support our growth initiatives.


Cardinal Operating Metrics

Gross Merchandise Volume (GMV): The Company defines Gross Merchandise Volume as the retail value in U.Southward. dollars of merchandise caused by the Company that is leased to customers through a transaction that occurs within a defined catamenia, net of cancellations.

1) The disclosed pro forma results and metrics in this release and the Visitor’southward related earnings briefing telephone call represent estimated financial results and metrics every bit if the conquering of Acima had been completed on Jan i, 2020. The pro forma results and metrics may not necessarily reflect the bodily results of operations or metrics that would take been achieved had the acquisition been completed on Jan i, 2020, nor are they necessarily indicative of futurity results of operations or metrics.

Aforementioned STORE SALES

(Unaudited)

Tabular array 1

Menses

Hire-A-Center Business

United mexican states

3 Months Ended December 31, 2021
(1)

10.4 %

8.six %

Three Months Ended September 30, 2021
(1)

12.3 %

15.3 %

Three Months Ended December 31, 2020
(1)

13.vii %

10.v %

Annotation: Aforementioned store sale methodology – Aforementioned store sales mostly represents revenue earned in stores that were operated by us for 13 months or more and are reported on a constant currency basis equally a percentage of total acquirement earned in stores of the segment during the indicated period. The Company excludes from the aforementioned store sales base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same shop sales base in the thirtyth
total month following account transfer.

(one)
Due to the COVID-xix pandemic and related temporary store closures, all 32 stores in Puerto Rico were excluded starting in March 2020 and will remain excluded for xviii months.


Total Yr 2022 Guidance

The Company is providing the following guidance for its 2022 fiscal year:

Table 2

2022 Guidance

Full Year 2022

First Quarter 2022

Consolidated
(1)

Revenues ($’s billion)

$iv.450 – $4.600

$1.125 – $1.155

Adjusted EBITDA
(2)
($’s million)

$515 – $565

$85 – $100

Non-GAAP Diluted earnings per share
(2)(3)

$4.50 – $5.00

$0.65 – $0.lxxx

Free cash flow
(two)
($’s one thousand thousand)

$390 – $440

N/A

(one)
Consolidated includes Acima, Rent-A-Heart Business organization, Franchising, Mexico and Corporate Segments.

(2)
Non-GAAP fiscal measure. See descriptions below in this release. Because of the inherent uncertainty related to the special items identified in the tables beneath, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP mensurate without unreasonable endeavour. Adapted EBITDA figures at present exclude stock based compensation.

(3)
Not-GAAP diluted earnings per share excludes the impact of incremental depreciation and acquittal related to the estimated fair value of acquired Acima assets, stock compensation expense associated with the Acima Conquering equity consideration subject to vesting conditions, and onetime transaction and integration costs related to the Acima Acquisition. Guidance excludes the bear upon of futurity share repurchases.


Additional Commentary on the 2022 Outlook

  • 2022 guidance assumes the macro headwinds that affected the business in tardily 2021, including supply chain disruptions, high rates of inflation, and the effect of lower levels of government back up for our core consumers, will keep throughout the year.
  • The Visitor has modified its definition of Adjusted EBITDA get-go with first quarter 2022 results to exclude stock-based compensation. Therefore, 2022 Adjusted EBITDA guidance excludes the affect of stock-based bounty, whereas prior period Adjusted EBITDA within the residue of this press release includes the touch of stock-based compensation.


Webcast Information

Rent-A-Center, Inc. volition host a conference call to talk over the fourth quarter results, guidance and other operational matters on the morning of Thursday, February 24, 2022, at nine:30 a.m. ET. For a live webcast of the call, visit https://investor.rentacenter.com. Sure financial and other statistical information that will be discussed during the conference telephone call will besides be provided on the same website. Residents of the United States and Canada tin can listen to the call by dialing (855) 642-7045. International participants can access the call by dialing (346) 294-9649.

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Virtually Rent-A-Center, Inc.

Rent-A-Heart, Inc. (NASDAQ: RCII) is a leading provider of technology driven, flexible, no debt obligation leasing solutions that offer underserved consumers access to and potential ownership of high-quality durable goods that raise the quality of life. The Visitor’s omnichannel model utilizes proprietary data and technology to facilitate transactions beyond a wide range of retail channels including its own Acima virtual charter-to-own platform, Rentacenter.com, e-commerce partner platforms, partner retail stores, and Rent-A-Center branded stores. For boosted information about the Company, please visit our website Rentacenter.com or Investor.rentacenter.com.


Forward Looking Statements

This printing release and the guidance above and the Company’south related conference call contain forrard-looking statements that involve risks and uncertainties. These statements are made under the “rubber harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such frontwards-looking statements more often than not can be identified past the use of frontwards-looking terminology such every bit “may,” “will,” “await,” “intend,” “could,” “approximate,” “predict,” “continue,” “maintain,” “should,” “anticipate,” “believe,” or “confident,” or the negative thereof or variations thereon or similar terminology and including, among others, statements concerning (i) the Visitor’s guidance for 2022 and future outlook, (ii) the potential effects of the pandemic of the respiratory disease caused by a novel coronavirus (“COVID-19”) on the Company’s business operations, fiscal performance, and prospects, (iii) the hereafter business prospects and fiscal performance of the Company post-obit the merger with Acima Holdings, LLC (“Acima Holdings”), (iv) cost and acquirement synergies and other benefits expected to result from the Acima Holdings acquisition, (5) planned technologies and other enhancements to the Company’due south lease-to-ain solutions for consumers and retailers, (vi) potential additional product or service offerings, (7) the Visitor’s expectations, plans and strategy relating to its upper-case letter structure and capital allocation, including whatever share repurchases under the Company’s share repurchase program, and (viii) other statements that are not historical facts. However, there can be no assurance that such expectations will occur. The Visitor’due south actual hereafter performance could differ materially and adversely from such statements. Factors that could cause or contribute to these differences include, simply are not limited to: (ane) risks relating to the Acima Holdings acquisition, including (i) the possibility that the anticipated benefits from the Acima Holdings acquisition may not be fully realized or may take longer to realize than expected, (2) the possibility that costs, difficulties or disruptions related to the integration of Acima Holdings operations into the Company’southward other operations will be greater than expected, (3) the Company’s power to (A) effectively adjust to changes in the composition of the Company’south offerings and product mix as a result of acquiring Acima Holdings and keep to maintain the quality of existing offerings and (B) successfully introduce other new product or service offerings on a timely and cost-effective footing, and (iv) changes in the Company’southward futurity cash requirements as a upshot of the Acima Holdings conquering, whether caused by unanticipated increases in capital expenditures or working capital needs, unanticipated liabilities or otherwise; (ii) the Company’s ability to place potential acquisition candidates, complete acquisitions and successfully integrate acquired companies; (3) the affect of the COVID-xix pandemic and related government and regulatory restrictions issued to combat the pandemic, including adverse changes in such restrictions, and the expiration of governmental stimulus programs, and impacts on (i) need for the Company’s charter-to-own products offered in the Company’s operating segments, (ii) the Visitor’s Acima retail partners, (3) the Company’due south customers and their willingness and ability to satisfy their charter obligations, (4) the Company’s suppliers’ power to satisfy its merchandise needs and related supply concatenation disruptions, (v) the Visitor’s employees, including the power to adequately staff its operating locations, (vi) the Company’s financial and operational operation, and (seven) the Company’s liquidity; (4) the full general strength of the economy and other economical conditions affecting consumer preferences and spending, including the availability of credit to the Visitor’southward target consumers and impacts from aggrandizement; (5) factors affecting the disposable income available to the Visitor’due south electric current and potential customers; (vi) changes in the unemployment charge per unit; (vii) capital market weather condition, including availability of funding sources for the Company; (8) changes in the Company’s credit ratings; (ix) difficulties encountered in improving the financial and operational performance of the Visitor’due south business segments; (10) risks associated with pricing changes and strategies beingness deployed in the Company’s businesses; (11) the Company’s power to go on to realize benefits from its initiatives regarding cost-savings and other EBITDA enhancements, efficiencies and working capital improvements; (12) the Company’s power to continue to finer execute its strategic initiatives, including mitigating risks associated with any potential mergers and acquisitions, or refranchising opportunities; (13) failure to manage the Company’s store labor and other store expenses, including trade losses; (fourteen) disruptions caused by the operation of the Company’s store information management systems or disruptions in the systems of the Company’due south host retailers; (15) risks related to the Company’southward virtual lease-to-own business organisation, including the Company’southward ability to continue to develop and successfully implement the necessary technologies; (sixteen) the Visitor’southward ability to attain the benefits expected from its integrated virtual and staffed retail partner offering and to successfully abound this business segment; (17) exposure to potential operating margin degradation due to the higher cost of merchandise in the Company’s Acima offering and higher merchandise losses than compared to our Hire-A-Eye business segment; (18) the Visitor’s transition to more-readily scalable, “cloud-based” solutions; (19) the Visitor’southward power to develop and successfully implement digital or E-commerce capabilities, including mobile applications; (20) the Visitor’due south ability to protect its proprietary intellectual property; (21) the Visitor’s power or that of the Company’s host retailers to protect the integrity and security of client, employee and host retailer information, which may be adversely affected by hacking, estimator viruses, or similar disruptions; (22) disruptions in the Visitor’s supply chain; (23) limitations of, or disruptions in, the Company’s distribution network; (24) rapid inflation or deflation in the prices of the Company’s products; (25) the Visitor’s ability to execute and the effectiveness of shop consolidations, including the Company’s ability to retain the revenue from customer accounts merged into some other store location as a result of a store consolidation; (26) the Company’due south available cash flow and its ability to generate sufficient cash flow to continue paying dividends; (27) increased competition from traditional competitors, virtual lease-to-own competitors, online retailers, Purchase-Now-Pay-Afterwards and other Fintech companies and other competitors, including subprime lenders; (28) the Visitor’due south ability to identify and successfully market products and services that appeal to its electric current and time to come targeted customer segments and to accurately guess the size of the total addressable market; (29) consumer preferences and perceptions of the Company’s brands; (30) the Visitor’southward ability to retain the revenue associated with caused client accounts and enhance the operation of acquired stores; (31) the Company’southward ability to enter into new, and collect on, its rental or lease purchase agreements; (32) changes in the enforcement of existing laws and regulations and the enactment of new laws and regulations adversely affecting the Visitor’southward business concern, including any legislative or regulatory enforcement efforts that seek to re-characterize store-based or virtual lease-to-ain transactions as credit sales and to apply consumer credit laws and regulations to the Visitor’s business; (33) the Company’s compliance with applicative statutes or regulations governing its businesses; (34) the impact of any additional social unrest such equally that experienced in 2020 or otherwise, and resulting impairment to the Company’s inventory or other avails and potential lost revenues; (35) changes in interest rates; (36) changes in tariff policies; (37) adverse changes in the economical weather condition of the industries, countries or markets that the Company serves; (38) information applied science and data security costs; (39) the impact of any breaches in data security or other disturbances to the Company’due south information technology and other networks and the Company’s ability to protect the integrity and security of individually identifiable data of its customers, employees and retail partners; (40) changes in estimates relating to cocky-insurance liabilities and income tax and litigation reserves; (41) changes in the Company’s effective tax rate; (42) fluctuations in foreign currency exchange rates; (43) the Company’south ability to maintain an effective arrangement of internal controls, including in connection with the integration of Acima; (44) litigation or authoritative proceedings to which the Visitor is or may be a political party to from fourth dimension to time; and (45) the other risks detailed from fourth dimension to time in the Company’south SEC reports, including but non limited to, its Annual Report on Class 10-Yard for the yr ended December 31, 2020, its Annual Study on Course ten-K for the year ended December 31, 2021 (when filed) and in its subsequent Quarterly Reports on Class 10-Q and Electric current Reports on Grade 8-M. You are cautioned not to identify undue reliance on these forwards-looking statements, which speak only as of the appointment of this press release. Except as required by police, the Company is non obligated to publicly release whatever revisions to these forward-looking statements to reflect the events or circumstances after the appointment hereof or to reflect the occurrence of unanticipated events.

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Hire-A-Center, Inc. and Subsidiaries


CONSOLIDATED STATEMENTS OF EARNINGS – UNAUDITED

Tabular array 3

Iii Months Ended Dec 31,

Twelve Months Ended December 31,

(In thousands, except per share information)

2021

2020

2021

2020

Revenues

Store

Rentals and fees

$

929,665

$

580,781

$

3,522,453

$

2,263,091

Merchandise sales

183,184

78,024

829,222

378,717

Installment sales

20,593

19,530

73,585

68,500

Other

1,113

1,504

4,148

3,845

Full shop revenues

1,134,555

679,839

four,429,408

2,714,153

Franchise

Merchandise sales

30,514

30,470

126,856

80,023

Royalty income and fees

6,357

6,182

27,187

xx,015

Full revenues

one,171,426

716,491

four,583,451

ii,814,191

Cost of revenues

Store

Price of rentals and fees

347,902

166,006

1,260,434

655,612

Toll of merchandise sold

217,783

85,288

935,765

382,182

Toll of installment sales

vii,071

7,281

25,637

24,111

Full price of store revenues

572,756

258,575

2,221,836

1,061,905

Franchise toll of trade sold

30,412

30,502

126,603

80,134

Total cost of revenues

603,168

289,077

2,348,439

one,142,039

Gross turn a profit

568,258

427,414

2,235,012

1,672,152

Operating expenses

Store expenses

Labor

164,774

144,909

644,763

579,125

Other store expenses

229,374

146,078

770,073

609,370

General and administrative expenses

45,426

39,414

194,894

153,108

Depreciation and amortization

14,037

thirteen,587

54,830

56,658

Other charges

77,818

28,787

289,913

36,555

Total operating expenses

531,429

372,775

one,954,473

ane,434,816

Operating turn a profit

36,829

54,639

280,539

237,336

Debt refinancing charges

15,582

Involvement expense

eighteen,708

3,367

lxx,874

15,325

Interest income

(73

)

(207

)

(221

)

(768

)

Earnings before income taxes

18,194

51,479

194,304

222,779

Income taxation expense

8,382

(iv,821

)

59,364

fourteen,664

Net earnings

$

9,812

$

56,300

$

134,940

$

208,115

Basic weighted average shares

55,401

54,190

57,053

54,187

Basic earnings per common share

$

0.18

$

ane.04

$

2.37

$

3.84

Diluted weighted average shares

64,989

56,028

66,839

55,754

Diluted earnings per mutual share

$

0.15

$

i.00

$

two.02

$

3.73

Contacts

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Source: https://www.dailyhostnews.com/rent-a-center-inc-reports-fourth-quarter-and-full-year-2021-results