For Immediate Release:
RENT-A-CENTER, INC. REPORTS FOURTH QUARTER 2020 RESULTS
Consolidated Revenues of $716M, up 7.3%
Diluted EPS $1.00; Non-GAAP Diluted EPS $1.03, up 77.2%
Provides 2021 Guidance Reflecting Approximately 30% Anticipated Accretion from Acima Acquisition
Plano, Texas, February 24, 2021 - Rent-A-Center, Inc. (the "Company" or "Rent-A-Center") (NASDAQ/NGS: RCII) today announced results for the quarter ended December 31, 2020.
“This past year was pivotal for Rent-A-Center," said Mitch Fadel, Chief Executive Officer. "Strong performance in our Rent-A-Center business and growth in the retail partner channel drove record revenues and earnings despite operational challenges from the COVID-19 pandemic. We made important investments to support our digital strategy, and ended the year with the announcement of our acquisition of Acima, which we believe can significantly accelerate long-term growth and profitability."
“We expect Acima to drive significant accretion to non-GAAP Diluted EPS in 2021 and 2022," continued Mr. Fadel. "The acquisition dramatically increases our growth profile, and we believe we can achieve $6 billion in consolidated total revenue with mid-teens consolidated EBITDA margins in 2023 as we benefit from scale, profitability, and free cash flow generation. Acima's approach to origination, decisioning, servicing and collections is best in class, and its platform should support more opportunities to drive invoice volume growth and pursue new retail partner relationships."
"We're similarly confident that our omni-channel strategy can maintain strong long-term growth for Rent-A-Center," continued Mr. Fadel. "E-commerce and digital payments are enhancing our engagement with our customers, and we have a strategic advantage compared to other firms competing in the virtual lease-to-own ("LTO") industry to further leverage our last-mile capabilities."
"We believe there is a substantial opportunity in front of us, and our two platforms allow us to serve customers across multiple touchpoints as the LTO industry experiences broad based adoption via digital technology and growing popularity with a younger generation."
“The hurdles we overcame in 2020 underscored the dedication of our co-workers throughout the organization to serve our customers and our ability to perform across economic cycles, and we could not be more excited about our prospects to drive the business forward," concluded Mr. Fadel.
On a consolidated basis, total revenues increased in the fourth quarter of 2020 to $716.5 million, or by 7.3 percent compared to the same period in 2019, primarily due to an increase in same store sales revenue of 13.7 percent in the Rent-A-Center Business segment and a 4.8 percent increase in total revenues in the Preferred Lease segment, partially offset by a lower store count in the Rent-A-Center Business as a result of our refranchising efforts and the rationalization of our Rent-A-Center Business store base.
On a GAAP basis, the Company generated $54.6 million in operating profit in the fourth quarter of 2020 compared to $67.8 million in the fourth quarter of 2019, with the decrease primarily due to the gain on the sale-leaseback of our corporate headquarters in 2019. Net earnings and diluted earnings per share, on a GAAP basis, were $56.3 million and $1.00 respectively in the fourth quarter of 2020 compared to net earnings and diluted earnings per share of $40.5 million and $0.72 respectively in the fourth quarter of 2019 representing increases in net earnings and diluted earnings per share of 39.0 percent and 38.9 percent, respectively.
Special items in the fourth quarter of $28.8 million were primarily related to the loss incurred upon the sale of our Rent-A-Center Business stores in California to a franchisee, service costs related to the execution of the definitive merger agreement to acquire Acima Holdings LLC, and legal settlement reserves. These impacts were offset by the release of approximately $19.2 million in domestic and foreign tax valuation allowances.
The Company's Non-GAAP fourth quarter 2020 diluted earnings per share were $1.03 compared to $0.58 in the fourth quarter of 2019, an increase of 77.2 percent. Adjusted EBITDA in the fourth quarter was $97.0 million compared to $63.7 million in the fourth quarter of 2019, an increase of 52.2 percent. Adjusted EBITDA margin as a percentage of total revenues in the fourth quarter was 13.5 percent, an increase of 400 basis points compared to the fourth quarter of 2019.
The following information was filed by Rent A Center Inc De (RCII) on Wednesday, February 24, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.