ATLANTA, Oct. 30, 2015
/PRNewswire/ -- Aaron's, Inc. (NYSE: AAN), a leader in the
sales and lease ownership and specialty retailing of furniture,
consumer electronics, home appliances and accessories, today
announced revenues and earnings for the three and nine months ended
September 30, 2015.
For the third quarter of 2015, revenues increased 10% to
$767.7 million compared with
$698.4 million for the third quarter
of 2014. Net earnings increased to $24.2
million versus $9.3 million in
the prior year period. Diluted earnings per share were $.33 compared with $.13 for the same quarter last year. EBITDA for
the quarter was $62.0 million
compared with $44.4 million a year
ago.
On a non-GAAP basis, net earnings for the third quarter of 2015
were $28.6 million compared with
$28.2 million for the same period in
2014, and earnings per share assuming dilution was $.39 in both periods. In 2015, non-GAAP net
earnings and diluted earnings per share exclude the effects of
amortization expense resulting from the 2014 acquisition of
Progressive. In 2014, in addition to Progressive amortization,
non-GAAP results exclude the effects of certain one-time
Progressive transaction costs, executive and other special
retirement expenses, a regulatory item, financial advisory and
legal costs related to addressing strategic matters and
restructuring charges related to store closures. See "Use of
Non-GAAP Information" and the related non-GAAP reconciliation
accompanying this press release.
"While we delivered positive revenue and EBITDA growth, the
third quarter was challenging in several respects," said
John Robinson, Chief Executive
Officer. "Solid revenue growth at Progressive and continued expense
control at our core stores was partially offset by lower than
expected EBITDA at Progressive and negative same store revenues in
the core segment."
"Progressive's revenues rose 47% over the same quarter last
year. We added retailers to our pipeline in the third quarter and
remain excited about our growth opportunities. Gross margin
improved in the quarter, however, we experienced higher bad debt
expense and merchandise write offs due to a temporary interruption
of certain data attributes we use to approve leases, as well as
software issues that delayed our ability to identify and begin
collections on certain delinquent accounts. We believe these issues
have been resolved and will not have a meaningful impact on future
results."
"Core earnings and EBITDA improved in the third quarter as our
cost reductions continued to offset a challenging revenue
environment. We are confident that future results will reflect the
strong growth prospects of Progressive and improved execution
across our business," Mr. Robinson concluded.
Financial Summary
During the first nine months
of 2015, revenues increased 21.2% to $2.359
billion compared with $1.946
billion for the first nine months of 2014. Net earnings were
$114.0 million versus $56.1 million last year. Diluted earnings per
share were $1.56 compared with
$.77 per share a year ago.
EBITDA for the Company increased 56.1% to $255.5 million for the nine months of 2015
compared with EBITDA of $163.7
million for the same period a year ago. On a non-GAAP basis,
net earnings for the first nine months of 2015 were $126.6 million compared with $93.6 million for the same period in 2014, and
earnings per share assuming dilution were $1.73 compared with $1.29 a year ago.
Aaron's Inc., which includes Progressive, had 1,521,000
customers at the end of September
2015 versus 1,431,000 last year, a 6.3% increase. The
Company generated $213.3 million in
cash from operations during the first nine months of 2015 and ended
the third quarter of 2015 with $66.9
million in cash compared with $3.5
million at the end of 2014. Debt was reduced to $494.2 million at September 30, 2015 from
$606.1 million at December 31,
2014.
On October 15, 2015 the Company
closed on the previously announced acquisition of Dent-A-Med, Inc.
Dent-A-Med's financial results will be consolidated with the
Company's in future periods.
Core Results
Revenues of the Aaron's Sales
& Lease Ownership division decreased 3.1% in the third quarter
of 2015 to $486.1 million compared
with $501.7 million in revenues in
the third quarter of 2014. Sales and lease ownership revenues for
the first nine months of 2015 decreased 3.1% to $1.535 billion compared with $1.584 billion for the same period a year
ago.
HomeSmart division revenues were $15.1
million in the third quarter of 2015, a 3.2% decrease from
$15.6 million in the third quarter of
2014. HomeSmart revenues for the first nine months of 2015 were
$47.5 million versus $48.9 million for the same period a year ago, a
2.9% decrease.
EBITDA for the core business for the three and nine months ended
September 30, 2015 was $43.7
million and $172.9 million,
respectively. As a percentage of revenues, EBITDA was 8.7% for the
three months and 10.9% for the first nine months of 2015 compared
to 5.0% and 8.0% for the same periods a year ago. Margin
improvement in the core business was driven by the Company's price
increases, inventory reduction, and cost initiatives. Write offs
for damaged, lost or unsaleable merchandise were 4.1% of revenues
in the quarter compared to 3.9% in the same period last year.
Same store revenues (revenues earned in Company-operated stores
open for the entirety of both quarters) decreased 4.1% during the
third quarter of 2015 compared with the third quarter of 2014, and
customer counts on a same store basis were down 2.8%.
Company-operated Aaron's stores had 1,037,000 customers and
franchised stores had 565,000 customers at the end of the quarter,
a 2.6% decline in total customers from the end of the third quarter
a year ago (customers of franchisees are not customers of Aaron's,
Inc.).
Progressive Results
Progressive's revenues in
the third quarter of 2015 increased 47.2% to $266.0 million. Revenues for the first nine
months of 2015 were $773.6 million.
Invoice volume per active door grew 16% in the third quarter
compared to the same period a year ago. Progressive had 483,000
customers at September 30, 2015.
EBITDA for the third quarter and first nine months of 2015 was
$18.3 million and $82.6 million, respectively. As a percentage of
revenues, EBITDA was 6.9% for the third quarter and 10.7% for the
first nine months of 2015, compared with an EBITDA margin of 10.3%
for the third quarter of 2014. Write offs for damaged, lost or
unsaleable merchandise were 8.5% of revenues in the third quarter
compared to 7.5% in 2014.
The year-over-year change in margin was primarily due to an
increase in bad debt expense and merchandise write offs that
resulted from the following:
- The impact of a temporary interruption of certain data
attributes used to make our approval decisions. We lost access to
the attributes in February 2015 and
replaced them in April 2015. Leases
generated during the period of interruption, while expected to be
profitable, are charging off at higher rates than originally
anticipated. Progressive's decisioning algorithm is now operating
with improved functionality and redundancy, and we expect to return
to more normalized levels of bad debt expense and write offs;
and
- Software issues that occurred during a limited period of time
spanning the second and third quarters of 2015. These issues failed
to identify a number of accounts as being delinquent and affected
our ability to begin prompt collections activities. As a result,
although not material to either period, an adjustment was recorded
in the third quarter to increase bad debt expense and merchandise
write offs by $3.2 million.
Progressive's results of operations beginning on its acquisition
date of April 14, 2014 were included
in the Company's consolidated financial statements for the third
quarter of 2014.
Components of Revenue
Consolidated lease
revenues and fees for the third quarter and nine months of 2015
increased 11.3% and 25.6%, respectively, over the comparable prior
year periods. Franchise royalties and fees decreased 1.7% in the
third quarter and 4.1% for the first nine months of 2015 compared
with the same periods in 2014. The decrease in the Company's
franchise royalties and fees are primarily the result of a decrease
in revenues of the Company's franchisees. Franchisees had revenues
of $235.9 million during the third
quarter and $733.7 million for the
nine months of 2015, decreases of 1.8% and 2.7%, respectively, from
the comparable 2014 periods. Same store revenues and customer
counts for franchised stores were down 0.4% and 0.7%, respectively,
for the third quarter of 2015 compared with the same quarter last
year (revenues and customers of franchisees, however, are not
revenues and customers of Aaron's, Inc.). Non-retail sales, which
are primarily sales of merchandise to Aaron's Sales and Lease
Ownership franchisees, increased 4.1% for the third quarter and
3.2% for the nine months of 2015 compared with the same periods
last year.
Store Count
During the third quarter of 2015,
the Company opened one Company-operated Aaron's Sales & Lease
Ownership store and two franchised stores. The Company acquired 13
franchised stores and sold three Company-operated stores to
franchisees. Two Company-operated and six franchised Aaron's Sales
& Lease Ownership stores were closed during the quarter. The
Company also completed two store swaps with third parties during
the quarter and merged the acquired stores with existing
locations.
At September 30, 2015, the Company had 1,218
Company-operated Aaron's Sales & Lease Ownership stores, 762
franchised Aaron's Sales & Lease Ownership stores, 82
Company-operated HomeSmart stores, and two franchised HomeSmart
stores. The total number of stores open at September 30, 2015
was 2,064.
2015 Outlook
The Company is updating its EBITDA
and diluted earnings per share guidance for the full year 2015. No
change is being made to previously provided revenue or EBITDA
guidance for the core segment. Diluted earnings per share is
presented both on a GAAP basis and on a non-GAAP basis that
excludes Progressive-related intangible amortization. The Company
currently expects to achieve the following:
Progressive
- No change is being made to Progressive's full year revenue
guidance; however, revenues are now expected to be at the low end
of the guidance range of $1.05 billion to
$1.15 billion.
- EBITDA in the range of $103 million to
$108 million compared with the previous guidance of
$120 million to $130 million.
Progressive expects its EBITDA margin to improve sequentially in
the fourth quarter of the year.
Consolidated Results
- EBITDA in the range of $308 million to
$328 million compared with the previous guidance of
$325 million to $350 million.
- GAAP diluted earnings per share in the range of $1.79 to $1.99 compared with the previous
guidance of $1.92 to $2.12.
- Non-GAAP adjusted diluted earnings per share in the range of
$2.02 to $2.22 compared with the
previous guidance of $2.16 to
$2.36.
Conference Call and Webcast
Aaron's will hold a
conference call to discuss its quarterly financial results on
Friday, October 30, 2015, at 10:00 a.m.
Eastern Time. The public is invited to listen to the
conference call by webcast accessible through the Company's
Investor Relations website, investor.aarons.com, in the "Investor
Relations" section. The webcast will be archived for playback at
that same site.
About Aaron's, Inc.
Aaron's,
Inc. (NYSE: AAN), a leader in the sales and lease ownership
and specialty retailing of furniture, consumer electronics, home
appliances and accessories, has more than 2,000 Company-operated
and franchised stores in 48 states, the District of Columbia,
and Canada. Aaron's was founded in 1955, is
headquartered in Atlanta and has been publicly traded
since 1982. Progressive Leasing, a wholly-owned subsidiary and
leading virtual lease-to-own company, provides lease-purchase
solutions through more than 16,000 retail locations in 46 states.
Aaron's, Inc. includes the Aarons.com, ShopHomeSmart.com and
ProgLeasing.com brands. For more information,
visit www.aarons.com.
Cautionary Notes Regarding Forward-Looking
Statements:
This press release contains certain
forward-looking statements that are intended to enjoy the safe
harbor protections of the Private Securities Litigation Reform Act
of 1995, as amended. These statements are based on management's
current expectations and plans, which involve risks and
uncertainties. Forward-looking statements contained in this press
release include, among other information, statements concerning the
impact of the interruption in Progressive's receipt of customer
attribute data, the resolution and impact of issues relating to
delinquent account classification at Progressive, management's
confidence that the Company's future results will reflect
Progressive's growth prospects and improved execution across the
Company's businesses as well as the Company's projected results,
including statements under the heading "2015 Outlook." You are
cautioned not to place undue reliance on these forward-looking
statements, which are not guarantees of future performance and
involve risks and uncertainties that may cause actual results to
differ materially from those set forth in these statements.
The following factors, in addition to those discussed in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2014, and subsequent
filings with the SEC, could cause actual results to differ
materially from management's current expectations and plans as
suggested by the forward-looking statements contained in this press
release: interruptions in Progressive's receipt of customer
attribute data as well as other issues that could negatively impact
Progressive's algorithm used to approve customers, controls and
operational issues, including those relating to the Company's
financial systems, software and other information technology
disruptions, the impact of increased regulation, changes in general
economic conditions, including consumer confidence and demand for
certain merchandise, increased competition and pricing pressures,
the impact of legal proceedings faced by the Company, costs
relating to protecting customer privacy and information security
more generally, challenges relating to the integration of the
Progressive acquisition and a failure to realize the expected
benefits of the transaction, the execution and results of our
operational strategies, risks related to Progressive's "virtual"
lease-to-own business, and deteriorations in our franchisee
relationships. Except as required by law, the Company undertakes no
obligation to update any forward-looking information contained in
this press release.
Aaron's, Inc. and
Subsidiaries
|
Consolidated
Statements of Earnings
|
(In thousands,
except per share amounts)
|
|
|
|
(Unaudited)
Three Months Ended
|
(Unaudited)
Nine Months Ended
|
|
|
September
30,
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenues:
|
|
|
|
|
|
|
|
|
Lease Revenues and
Fees
|
|
$
|
661,856
|
|
|
$
|
594,455
|
|
|
$
|
2,017,610
|
|
|
$
|
1,606,765
|
|
Retail
Sales
|
|
6,988
|
|
|
8,094
|
|
|
26,055
|
|
|
31,023
|
|
Non-Retail
Sales
|
|
81,708
|
|
|
78,503
|
|
|
262,194
|
|
|
254,021
|
|
Franchise Royalties
and Fees
|
|
15,574
|
|
|
15,838
|
|
|
48,069
|
|
|
50,147
|
|
Other
|
|
1,568
|
|
|
1,528
|
|
|
4,629
|
|
|
4,375
|
|
Total
|
|
767,694
|
|
|
698,418
|
|
|
2,358,557
|
|
|
1,946,331
|
|
|
|
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
|
|
|
Depreciation of Lease
Merchandise
|
|
302,029
|
|
|
260,819
|
|
|
912,377
|
|
|
661,446
|
|
Retail Cost of
Sales
|
|
4,537
|
|
|
5,409
|
|
|
17,090
|
|
|
19,900
|
|
Non-Retail Cost of
Sales
|
|
73,567
|
|
|
71,403
|
|
|
236,882
|
|
|
230,537
|
|
Operating
Expenses
|
|
345,514
|
|
|
325,148
|
|
|
998,989
|
|
|
898,963
|
|
Financial Advisory
and Legal Costs
|
|
—
|
|
|
385
|
|
|
—
|
|
|
13,661
|
|
Progressive-Related
Transaction Costs
|
|
—
|
|
|
371
|
|
|
—
|
|
|
6,638
|
|
Restructuring
Expenses
|
|
—
|
|
|
6,876
|
|
|
—
|
|
|
9,140
|
|
Regulatory
Income
|
|
—
|
|
|
(1,200)
|
|
|
—
|
|
|
(1,200)
|
|
Retirement and
Vacation Charges
|
|
—
|
|
|
9,094
|
|
|
—
|
|
|
9,094
|
|
Other Operating
Income, Net
|
|
(962)
|
|
|
(197)
|
|
|
(2,145)
|
|
|
(869)
|
|
Total
|
|
724,685
|
|
|
678,108
|
|
|
2,163,193
|
|
|
1,847,310
|
|
|
|
|
|
|
|
|
|
|
Operating
Profit
|
|
43,009
|
|
|
20,310
|
|
|
195,364
|
|
|
99,021
|
|
Interest
Income
|
|
483
|
|
|
634
|
|
|
1,714
|
|
|
2,461
|
|
Interest
Expense
|
|
(5,524)
|
|
|
(6,162)
|
|
|
(17,115)
|
|
|
(13,174)
|
|
Other Non-Operating
Expense, Net
|
|
(1,412)
|
|
|
(1,583)
|
|
|
(1,223)
|
|
|
(837)
|
|
Earnings Before
Income Taxes
|
|
36,556
|
|
|
13,199
|
|
|
178,740
|
|
|
87,471
|
|
|
|
|
|
|
|
|
|
|
Income
Taxes
|
|
12,362
|
|
|
3,904
|
|
|
64,757
|
|
|
31,332
|
|
|
|
|
|
|
|
|
|
|
Net
Earnings
|
|
$
|
24,194
|
|
|
$
|
9,295
|
|
|
$
|
113,983
|
|
|
$
|
56,139
|
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share
|
|
$
|
.33
|
|
|
$
|
.13
|
|
|
$
|
1.57
|
|
|
$
|
.78
|
|
Earnings Per Share
Assuming Dilution
|
|
$
|
.33
|
|
|
$
|
.13
|
|
|
$
|
1.56
|
|
|
$
|
.77
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding
|
|
72,586
|
|
|
72,340
|
|
|
72,558
|
|
|
72,350
|
|
Weighted Average
Shares Outstanding Assuming
Dilution
|
|
73,076
|
|
|
72,660
|
|
|
72,966
|
|
|
72,713
|
|
Selected Balance
Sheet Data
|
(In
thousands)
|
(Unaudited)
|
|
|
|
September 30,
2015
|
|
December 31,
2014
|
Cash and Cash
Equivalents
|
|
$
|
66,912
|
|
|
$
|
3,549
|
|
Investments
|
|
22,334
|
|
|
21,311
|
|
Accounts Receivable,
Net
|
|
85,224
|
|
|
107,383
|
|
Lease Merchandise,
Net
|
|
1,052,615
|
|
|
1,087,032
|
|
Property, Plant and
Equipment, Net
|
|
212,217
|
|
|
219,417
|
|
Other Assets,
Net
|
|
896,372
|
|
|
1,018,152
|
|
|
|
|
|
|
Total
Assets
|
|
2,335,674
|
|
|
2,456,844
|
|
|
|
|
|
|
Debt
|
|
494,161
|
|
|
606,082
|
|
Total
Liabilities
|
|
992,312
|
|
|
1,233,323
|
|
Shareholders'
Equity
|
|
$
|
1,343,362
|
|
|
$
|
1,223,521
|
|
|
|
|
|
|
Selected Cash Flow
Data
|
(In
thousands)
|
|
|
|
(Unaudited)
Nine Months Ended
|
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Cash Provided/(Used)
by Operating Activities
|
|
$
|
213,310
|
|
|
$
|
(8,661)
|
|
Cash Used by
Investing Activities
|
|
(34,342)
|
|
|
(623,863)
|
|
Cash (Used)/Provided
by Financing Activities
|
|
(115,605)
|
|
|
411,834
|
|
|
|
|
|
|
Increase (Decrease)
in Cash and Cash Equivalents
|
|
63,363
|
|
|
(220,690)
|
|
Cash and Cash
Equivalents at Beginning of Period
|
|
3,549
|
|
|
231,091
|
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
66,912
|
|
|
$
|
10,401
|
|
Use of Non-GAAP Financial Information:
This press release presents the Company's net earnings and
diluted earnings per share in accordance with generally accepted
accounting principles in the United
States ("GAAP") and in a format that is not in accordance
with GAAP due to the exclusion of $6.6
million in Progressive-related intangible amortization
expense in the third quarter of 2015 and $19.8 million for the nine months of 2015, as
well as the exclusion of certain 2014 charges as presented and
described in previous releases and as shown in this press release
for comparative purposes.
Management regards the amortization expense relating to the
Company's acquisition of Progressive as a special charge not
arising out of the ordinary course of business. Management believes
that presentation of net earnings and diluted earnings per share
excluding this adjustment is useful because it gives investors
supplemental information to evaluate and compare the Company's
underlying operating performance from period to period.
Non-GAAP financial measures, however, should not be used as a
substitute for, or considered superior to, measures of financial
performance prepared in accordance with GAAP, such as the Company's
GAAP basis net earnings and diluted earnings per share and the GAAP
operating income of the Company's segments, which are also
presented in the press release. Please refer to our Current Report
on Form 8-K furnishing this earnings release to the U.S. Securities
and Exchange Commission on the date hereof for further information
on our use of non-GAAP financial measures.
Reconciliation of
Net Earnings and Earnings Per Share Assuming Dilution to
Non-GAAP
|
Net Earnings and
Earnings Per Share Assuming Dilution
|
(In thousands,
except earnings per share)
|
|
|
(Unaudited)
Three Months Ended
September 30,
|
|
(Unaudited)
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net
Earnings
|
$
|
24,194
|
|
|
$
|
9,295
|
|
|
$
|
113,983
|
|
|
$
|
56,139
|
|
Add
Progressive-Related Intangible Amortization Expense
(1)(2)
|
4,359
|
|
|
7,984
|
|
|
12,603
|
|
|
13,502
|
|
Add Financial
Advisory and Legal Costs (3)
|
—
|
|
|
271
|
|
|
—
|
|
|
8,768
|
|
Add
Progressive-Related Transaction Cost (4)
|
—
|
|
|
261
|
|
|
—
|
|
|
4,260
|
|
Add Restructuring
Expenses (5)
|
—
|
|
|
4,842
|
|
|
—
|
|
|
5,866
|
|
Add Regulatory Income
(6)
|
—
|
|
|
(845)
|
|
|
—
|
|
|
(770)
|
|
Add Retirement and
Vacation Charges (7)
|
—
|
|
|
6,404
|
|
|
—
|
|
|
5,837
|
|
Non-GAAP Net
Earnings
|
$
|
28,553
|
|
|
$
|
28,212
|
|
|
$
|
126,586
|
|
|
$
|
93,602
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
Assuming Dilution
|
$
|
.33
|
|
|
$
|
.13
|
|
|
$
|
1.56
|
|
|
$
|
.77
|
|
Add
Progressive-Related Intangible Amortization Expense
|
.06
|
|
|
.11
|
|
|
.17
|
|
|
.19
|
|
Add Financial
Advisory and Legal Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
.12
|
|
Add
Progressive-Related Transaction Costs
|
—
|
|
|
—
|
|
|
—
|
|
|
.06
|
|
Add Retirement and
Vacation Related Charges
|
—
|
|
|
.09
|
|
|
—
|
|
|
.08
|
|
Add Restructuring
Expenses
|
—
|
|
|
.07
|
|
|
—
|
|
|
.08
|
|
Add Regulatory
Income
|
—
|
|
|
(.01)
|
|
|
—
|
|
|
(.01)
|
|
|
|
|
|
|
|
|
|
Non-GAAP Earnings Per
Share Assuming Dilution (8)
|
$
|
.39
|
|
|
$
|
.39
|
|
|
$
|
1.73
|
|
|
$
|
1.29
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding Assuming Dilution
|
73,076
|
|
|
72,660
|
|
|
72,966
|
|
|
72,713
|
|
(1)
|
Net of taxes of
$2,228 for the three months and $7,160 for the nine months ended
September 30, 2015 calculated using the effective
tax rate for the three and nine months ended September 30,
2015.
|
(2)
|
Net of taxes of
$3,354 for the three months and $7,535 for the nine months ended
September 30, 2014 calculated using the effective tax rates
for the three and nine months ended September 30,
2014.
|
(3)
|
Net of taxes of $114
for the three months and $4,893 for the nine months ended
September 30, 2014 calculated using the effective tax
rates for the three and nine months ended September 30,
2014.
|
(4)
|
Net of taxes of $110
for the three months and $2,378 for the nine months ended
September 30, 2014 calculated using the effective tax rates
for the three and nine months ended September 30,
2014.
|
(5)
|
Net of taxes of
$2,034 for the three months and $3,274 for the nine months ended
September 30, 2014 calculated using the effective tax rates
for the three and nine months ended September 30,
2014.
|
(6)
|
Net of taxes of
$2,690 for the three months and $3,257 for the nine months ended
September 30, 2014 calculated using the effective tax rates
for the three and nine months ended September 30,
2014.
|
(7)
|
Net of taxes of $355
for the three months and $430 for the nine months ended
September 30, 2014 calculated using the effective tax rates
for the three and nine months ended September 30,
2014.
|
(8)
|
In some cases the sum
of individual EPS amounts may not equal total EPS
calculations.
|
Aaron's, Inc. and
Subsidiaries
|
Non-GAAP Financial
Information
|
Quarterly Segment
EBITDA
|
(In
thousands)
|
(Unaudited)
|
|
Three Months Ended
September 30, 2015
|
|
Sales &
Lease
Ownership
|
Progressive
|
HomeSmart
|
Franchise
|
Manufacturing
|
Other1
|
Consolidated
Total
|
Net
Earnings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
24,194
|
|
Income
Taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
12,362
|
|
Earnings Before
Income
Taxes
|
32,348
|
|
5,617
|
|
(335)
|
|
11,327
|
|
349
|
|
(12,750)
|
|
36,556
|
|
Interest
Expense
|
1,950
|
|
5,556
|
|
213
|
|
—
|
|
5
|
|
(2,200)
|
|
5,524
|
|
Depreciation
|
7,169
|
|
572
|
|
612
|
|
358
|
|
396
|
|
3,778
|
|
12,885
|
|
Amortization
|
419
|
|
6,587
|
|
12
|
|
—
|
|
—
|
|
—
|
|
7,018
|
|
EBITDA
|
$
|
41,886
|
|
$
|
18,332
|
|
$
|
502
|
|
$
|
11,685
|
|
$
|
750
|
|
$
|
(11,172)
|
|
$
|
61,983
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014
|
|
Sales &
Lease
Ownership
|
Progressive
|
HomeSmart
|
Franchise
|
Manufacturing
|
Other1
|
Consolidated
Total
|
Net
Earnings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
9,295
|
|
Income
Taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3,904
|
|
Earnings Before
Income
Taxes
|
23,814
|
|
1,689
|
|
(906)
|
|
12,542
|
|
(17)
|
|
(23,923)
|
|
13,199
|
|
Interest
Expense
|
1,966
|
|
5,247
|
|
217
|
|
—
|
|
12
|
|
(1,280)
|
|
6,162
|
|
Depreciation
|
8,260
|
|
327
|
|
646
|
|
388
|
|
385
|
|
3,328
|
|
13,334
|
|
Amortization
|
353
|
|
11,338
|
|
42
|
|
—
|
|
—
|
|
—
|
|
11,733
|
|
EBITDA
|
$
|
34,393
|
|
$
|
18,601
|
|
$
|
(1)
|
|
$
|
12,930
|
|
$
|
380
|
|
$
|
(21,875)
|
|
$
|
44,428
|
|
Financial Advisory
and Legal Costs
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
385
|
|
$
|
385
|
|
Progressive-Related
Transaction Costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
371
|
|
371
|
|
Restructuring
Expenses
|
2,572
|
|
—
|
|
6
|
|
—
|
|
—
|
|
4,298
|
|
6,876
|
|
Regulatory
Income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,200)
|
|
(1,200)
|
|
Retirement/Vacation
Charges
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,094
|
|
9,094
|
|
Adjusted
EBITDA
|
$
|
36,965
|
|
$
|
18,601
|
|
$
|
5
|
|
$
|
12,930
|
|
$
|
380
|
|
$
|
(8,927)
|
|
$
|
59,954
|
|
|
1Other
segment is primarily revenues attributable to (i) the RIMCO segment
through the date of sale in January 2014, (ii) leasing space to
unrelated third parties in the corporate headquarters building and
(iii) several minor unrelated activities. The pre-tax losses or
earnings in the Other segment are the net result of the activity
mentioned above, net of the portion of corporate overhead not
allocated to the reportable segments for management
purposes.
|
Aaron's, Inc. and
Subsidiaries
|
Non-GAAP Financial
Information
|
Nine Months
Segment EBITDA
|
(In
thousands)
|
(Unaudited)
|
|
Nine Months Ended
September 30, 2015
|
|
Sales &
Lease
Ownership
|
Progressive
|
HomeSmart
|
Franchise
|
Manufacturing
|
Other1
|
Consolidated
Total
|
Net
Earnings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
113,983
|
|
Income
Taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
64,757
|
|
Earnings Before
Income Taxes
|
132,079
|
|
44,761
|
|
239
|
|
37,218
|
|
2,007
|
|
(37,564)
|
|
178,740
|
|
Interest
Expense
|
5,831
|
|
16,620
|
|
667
|
|
—
|
|
22
|
|
(6,025)
|
|
17,115
|
|
Depreciation
|
22,206
|
|
1,490
|
|
1,859
|
|
1,099
|
|
1,129
|
|
10,942
|
|
38,725
|
|
Amortization
|
1,150
|
|
19,763
|
|
21
|
|
—
|
|
—
|
|
—
|
|
20,934
|
|
EBITDA
|
$
|
161,266
|
|
$
|
82,634
|
|
$
|
2,786
|
|
$
|
38,317
|
|
$
|
3,158
|
|
$
|
(32,647)
|
|
$
|
255,514
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2014
|
|
Sales &
Lease
Ownership
|
Progressive
|
HomeSmart
|
Franchise
|
Manufacturing
|
Other1
|
Consolidated
Total
|
Net
Earnings
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
56,139
|
|
Income
Taxes
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
31,332
|
|
Earnings Before
Income
Taxes
|
111,806
|
|
1,366
|
|
(1,492)
|
|
38,173
|
|
441
|
|
(62,823)
|
|
87,471
|
|
Interest
Expense
|
5,891
|
|
9,501
|
|
688
|
|
—
|
|
40
|
|
(2,946)
|
|
13,174
|
|
Depreciation
|
25,766
|
|
587
|
|
1,944
|
|
1,217
|
|
1,152
|
|
9,677
|
|
40,343
|
|
Amortization
|
1,458
|
|
21,037
|
|
249
|
|
—
|
|
—
|
|
—
|
|
22,744
|
|
EBITDA
|
$
|
144,921
|
|
$
|
32,491
|
|
$
|
1,389
|
|
$
|
39,390
|
|
$
|
1,633
|
|
$
|
(56,092)
|
|
$
|
163,732
|
|
Financial Advisory
and
Legal Costs
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
13,661
|
|
$
|
13,661
|
|
Progressive-Related
Transaction Costs
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,638
|
|
6,638
|
|
Restructuring
Expenses
|
4,836
|
|
—
|
|
6
|
|
—
|
|
—
|
|
4,298
|
|
9,140
|
|
Regulatory
Income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,200)
|
|
(1,200)
|
|
Retirement and
Vacation Charges
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,094
|
|
9,094
|
|
Adjusted
EBITDA
|
$
|
149,757
|
|
$
|
32,491
|
|
$
|
1,395
|
|
$
|
39,390
|
|
$
|
1,633
|
|
$
|
(23,601)
|
|
$
|
201,065
|
|
|
1Other
segment is primarily revenues attributable to (i) the RIMCO segment
through the date of sale in January 2014, (ii) leasing space to
unrelated third parties in the corporate headquarters building and
(iii) several minor unrelated activities. The pre-tax losses or
earnings in the Other segment are the net result of the activity
mentioned above, net of the portion of corporate overhead not
allocated to the reportable segments for management
purposes.
|
Reconciliation of
2015 Projected Guidance for Earnings Per Share
|
Assuming Dilution
to Non-GAAP Earnings Per Share Assuming Dilution
|
|
|
Fiscal Year
2015
|
|
Low Range
|
High Range
|
Projected Earnings
Per Share Assuming Dilution
|
$
|
1.79
|
|
$
|
1.99
|
|
Add Projected
Progressive-Related Intangible Amortization Expense
|
.23
|
|
.23
|
|
Projected Non-GAAP
Earnings Per Share Assuming Dilution
|
$
|
2.02
|
|
$
|
2.22
|
|
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SOURCE Aaron's, Inc.