ATLANTA, April 27, 2021
/PRNewswire/ --
Financial Highlights
- First Quarter Revenues of $481.1
Million, Up 11.1%
- Diluted EPS of $1.04, Up From
($9.57); Non-GAAP Diluted EPS
$1.24, Up 313.3%
- Net Income of $36.3 Million,
Up From ($323.8) Million
- Adjusted EBITDA of $73.9
Million, Up 112.9%
- Same Store Revenues Up 14.8%; E-commerce Lease Revenues Up
42.0%
Refer to the "Basis of Presentation" section below for
information regarding the consolidated and combined financial
results for the periods discussed in this release.
The Aaron's Company, Inc. (NYSE: AAN), a leading
technology-enabled omnichannel provider of lease-to-own and
purchase solutions, today announced financial results for the first
quarter ended March 31, 2021.
"We are very pleased to announce a strong start to 2021," said
Douglas Lindsay, Chief Executive
Officer of The Aaron's Company. "Customer deliveries and payment
activity in the quarter were robust, and the size of our lease
portfolio continues to grow compared to the prior year
period. Our operations teams are energized and are executing
at a high level, and our key strategic priorities continue gaining
momentum. We are making investments in industry-leading technology,
analytics-driven marketing programs, and our rapidly growing
e-commerce channel. As a result of these investments, we believe
Aaron's is well-positioned to continue delivering long-term
earnings growth and strong free cash flow."
Results of Operations - First Quarter 2021
For the first quarter of 2021, consolidated revenues were
$481.1 million compared with
$432.8 million for the first quarter
of 2020, an increase of 11.1%. The increase in consolidated
revenues was primarily due to the improving quality and size of our
lease portfolio and strong customer payment activity during
the quarter, partially offset by the planned net reduction of 78
company-operated stores compared to the prior year period.
E-commerce revenues were up 42% compared to the prior year quarter
and represented 14.2% of overall lease revenues compared to 11.3%
in the prior year quarter.
On a same store revenue basis, revenues increased 14.8% in the
first quarter compared to the prior year quarter, the first
double-digit same store revenue growth since 2009, and the fourth
consecutive positive quarter in a row. Same store revenue growth
was primarily driven by a larger same store lease portfolio size
and strong customer payment activity, including retail sales and
early purchase option exercises, which we believe are partially as
a result of the government stimulus programs.
Net earnings for the first quarter of 2021 were $36.3 million compared to net losses of
$323.8 million in the prior year
period. Net earnings in the first quarter of 2021 included
$3.4 million in pre-tax restructuring
charges and $4.4 million in pre-tax
spin-related separation charges. Net losses in the first quarter of
2020 included a $446.9 million
goodwill impairment charge, $22.3
million in pre-tax restructuring charges, and $14.7 million in early termination charges
incurred to terminate a sales and marketing agreement, partially
offset by a $34.2 million net
income tax benefit resulting from the revaluation of a net
operating loss carryback.
Adjusted EBITDA for the Company was $73.9
million for the first quarter of 2021, compared with
$34.7 million for the same period in
2020, an increase of $39.2 million,
or 112.9%. As a percentage of revenues, Adjusted EBITDA was 15.4%
in the first quarter of 2021 compared with 8.0% for the same period
in 2020, an improvement of 740 basis points. The improvement in
adjusted EBITDA margin was primarily due to the items described
above related to the revenue increase, a reduction in lease
merchandise write-offs, and the impact of the COVID-related
reserves recorded in 2020 that did not repeat in 2021, partially
offset by higher personnel costs related to variable performance
compensation.
Diluted earnings per share for the first quarter of 2021 were
$1.04 compared with diluted losses
per share of $9.57 in the year ago
same period. On a non-GAAP basis, diluted earnings per share were
$1.24 in the first quarter of 2021
compared with non-GAAP diluted earnings per share of $0.30 for the same quarter in 2020, an increase
of $0.94 or 313.3%.
During the quarter, the Company repurchased 252,200 shares of
Aaron's common stock for a total purchase price, including
brokerage commissions, of approximately $6.3
million. Also during the quarter, the Company's board of
directors declared a quarterly cash dividend of $0.10 per share which was paid on April 6, 2021.
As of March 31, 2021, the company had a cash balance of
$61.1 million, less than $0.5 million of debt, and total available
liquidity of $295.5 million.
Franchise Performance
Franchisee revenues totaled $88.9
million for the first quarter of 2021, a decrease of 13.4%
from the first quarter of 2020 primarily due to a reduction in
franchise locations. Same-store revenues for franchised stores
increased 13.1% for the first quarter of 2021 compared with the
same quarter in 2020. Revenues and customers of franchisees are not
revenues and customers of the Company.
2021 Outlook
Based on the recent passage of the American Rescue Plan Act and
our performance in the first quarter of 2021, the Company has
revised its full year 2021 outlook. For the full year 2021, we
expect consolidated revenues between $1.725
billion and $1.775 billion,
representing an increase in our outlook of $75 million. We also expect adjusted EBITDA of
between $190 million and $205 million, representing an increase in our
outlook of $35 million. First half
2021 revenues and adjusted EBITDA are expected to be higher than
the second half of 2021 primarily due to the uncertainty related to
future consumer payment and spending patterns in the latter part of
the year.
For the full year 2021 updated outlook, we have assumed an
effective tax rate for 2021 of approximately 25%, depreciation and
amortization of between $70 million
and $75 million, and a diluted
weighted average share count of approximately 35 million shares.
This outlook assumes no significant deterioration in the current
retail environment or in the state of the U.S. economy as compared
to its current condition, a gradual improvement in global supply
chain conditions, and no impact of the child tax credit program
expected to begin in July 2021.
|
Current
Outlook1
|
Original
Outlook
|
(In thousands,
except per share amounts)
|
Low
|
High
|
Low
|
High
|
Total
Revenues
|
$
|
1,725,000
|
$
|
1,775,000
|
$
|
1,650,000
|
$
|
1,700,000
|
Adjusted
EBITDA
|
190,000
|
205,000
|
155,000
|
170,000
|
Capital
Expenditures
|
80,000
|
90,000
|
80,000
|
90,000
|
Free Cash
Flow
|
90,000
|
100,000
|
80,000
|
90,000
|
Annual Same Store
Revenues
|
4.0%
|
6.0%
|
0.0%
|
2.0%
|
|
1 See
the "Use of Non-GAAP Financial Information" section accompanying
this press release.
|
Basis of Presentation
The financial statements and related results discussed herein
for periods prior to and through the date of the separation and
distribution, November 30, 2020, were
prepared on a combined standalone basis and were derived from the
consolidated financial statements and accounting records of PROG
Holdings, Inc. The financial statements for the periods subsequent
to December 1, 2020 and through
March 31, 2021 are consolidated
financial statements of the Company and its subsidiaries, each of
which is wholly-owned, and is based on the financial position and
results of operations of the Company as a standalone company.
The combined financial statements prepared through November 30, 2020 include all revenues and costs
directly attributable to the Company and an allocation of expenses
from PROG Holdings, Inc. related to certain corporate functions and
actions. These costs include executive management, finance,
treasury, tax, audit, legal, information technology, human
resources and risk management functions and the related benefit
cost associated with such functions, including stock-based
compensation. These expenses have been allocated to the Company
based on direct usage or benefit where specifically identifiable,
with the remaining expenses allocated primarily on a pro rata basis
using an applicable measure of revenues, headcount or other
relevant measures.
Conference Call and Webcast
The Company will hold a conference call to discuss its quarterly
results on April 27, 2021, at 8:30 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. The webcast will
be archived for playback at that same site.
About The Aaron's Company Inc.
Headquartered in Atlanta, The
Aaron's Company, Inc. (NYSE: AAN), is a leading, technology-enabled
omnichannel provider of lease-to-own and purchase solutions.
The Aaron's Company engages in the sales and lease ownership and
specialty retailing of furniture, appliances, consumer electronics
and accessories through its approximately 1,300 Company-operated
and franchised stores in 47 states and Canada, as well as its e-commerce platform,
Aarons.com. For more information, visit investor.aarons.com and
Aarons.com.
Forward-Looking Statements
Statements in this news release regarding our business that
are not historical facts are "forward-looking statements" that
involve risks and uncertainties which could cause actual results to
differ materially from those contained in the forward-looking
statements. Such forward-looking statements generally can be
identified by the use of forward-looking terminology, such as
"remain," "believe," "outlook," "expect," "assume," "assumed," and
similar terminology. These risks and uncertainties include
factors such as (i) the impact of the COVID-19 pandemic and related
measures taken by governmental or regulatory authorities to combat
the pandemic, and whether additional government stimulus payments
or supplemental unemployment benefits will be approved, and the
nature, amount and timing of any such payments or benefits,
including the impact of the pandemic and such measures on: (a)
demand for the lease-to-own products offered by us, (b) our
customers, including their ability and willingness to satisfy their
obligations under their lease agreements, (c) our suppliers'
ability to provide us with the merchandise we need to obtain from
them, (d) our employees and labor needs, including our ability to
adequately staff our operations, (e) our financial and operational
performance, and (f) our liquidity; (ii) the possibility that
the operational, strategic and shareholder value creation
opportunities expected from the separation and spin-off of the
Aaron's Business into what is now The Aaron's Company, Inc. may not
be achieved in a timely manner, or at all; (iii) the failure of
that separation to qualify for the expected tax treatment; (iv)
changes in the enforcement and interpretation of existing laws and
regulations and the adoption of new laws and regulations that may
unfavorably impact our business; (v) legal and regulatory
proceedings and investigations, including those related to consumer
protection laws and regulations, customer privacy, third party and
employee fraud and information security; (vi) the risks associated
with our strategy and strategic priorities not being successful,
including our e-commerce and real estate repositioning and
optimization initiatives or being more costly than anticipated;
(vii) risks associated with the challenges faced by our business,
including the commoditization of consumer electronics and our high
fixed-cost operating model; (viii) increased competition from
traditional and virtual lease-to-own competitors, as well as from
traditional and online retailers and other competitors; (ix)
financial challenges faced by our franchisees, which we believe may
be exacerbated by the COVID-19 pandemic and related governmental or
regulatory measures to combat the pandemic; (x) increases in lease
merchandise write-offs, especially in light of the COVID-19
pandemic and its adverse economic impacts, as well as the potential
limited duration and impact of stimulus and other government
payments made by Federal and State governments to counteract the
economic impact of the pandemic; and the other risks and
uncertainties discussed under "Risk Factors" in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31,
2020. Statements in this press release that are "forward-looking"
include without limitation statements about: (i) the
execution of our key strategic priorities; (ii) the growth and
other benefits we expect from executing those priorities; (iii) our
2021 financial performance outlook; and (iv) the impact on our 2021
financial performance of additional rounds of government stimulus
payments. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
of this press release. Except as required by law, the Company
undertakes no obligation to update these forward-looking statements
to reflect subsequent events or circumstances after the date of
this press release.
THE AARON'S
COMPANY, INC.
|
Condensed
Consolidated and Combined Statements of Earnings
|
(In thousands,
except per share amounts)
|
|
|
|
(Unaudited)
Three Months
Ended
|
|
March 31,
|
|
|
2021
|
2020
|
REVENUES:
|
|
|
|
Lease and Retail
Revenues
|
|
$
|
444,087
|
|
$
|
398,910
|
|
Non-Retail
Sales
|
|
29,949
|
|
26,846
|
|
Franchise Royalties
and Fees
|
|
7,018
|
|
7,075
|
|
|
|
481,054
|
|
432,831
|
|
COST OF
REVENUES:
|
|
|
|
Cost of Lease and
Retail Revenues
|
|
151,495
|
|
142,003
|
|
Non-Retail Cost of
Sales
|
|
26,491
|
|
23,581
|
|
|
|
177,986
|
|
165,584
|
|
GROSS
PROFIT
|
|
303,068
|
|
267,247
|
|
OPERATING
EXPENSES:
|
|
|
|
Personnel
Expenses
|
|
124,863
|
|
115,746
|
|
Other Operating
Expenses, Net
|
|
108,366
|
|
123,065
|
|
Provision for Lease
Merchandise Write-Offs
|
|
13,417
|
|
23,960
|
|
Restructuring
Expenses, Net
|
|
3,441
|
|
22,286
|
|
Impairment of
Goodwill
|
|
ā
|
|
446,893
|
|
Separation
Costs
|
|
4,390
|
|
ā
|
|
|
|
254,477
|
|
731,950
|
|
OPERATING PROFIT
(LOSS)
|
|
48,591
|
|
(464,703)
|
|
Interest
Expense
|
|
(344)
|
|
(3,799)
|
|
Other Non-Operating
Income (Expense), Net
|
|
402
|
|
(1,759)
|
|
EARNINGS (LOSS)
BEFORE INCOME TAX EXPENSE (BENEFIT)
|
|
48,649
|
|
(470,261)
|
|
INCOME TAX EXPENSE
(BENEFIT)
|
|
12,326
|
|
(146,487)
|
|
NET EARNINGS
(LOSS)
|
|
$
|
36,323
|
|
$
|
(323,774)
|
|
|
|
|
|
EARNINGS (LOSS)
PER SHARE
|
|
$
|
1.06
|
|
$
|
(9.57)
|
|
EARNINGS (LOSS)
PER SHARE ASSUMING DILUTION
|
|
$
|
1.04
|
|
$
|
(9.57)
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING
|
|
34,262
|
|
33,842
|
|
WEIGHTED AVERAGE
SHARES OUTSTANDING ASSUMING DILUTION
|
|
34,919
|
|
33,842
|
|
THE
AARON'S COMPANY, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
(Unaudited)
|
|
|
|
March 31,
2021
|
|
December 31,
2020
|
ASSETS:
|
|
|
|
Cash and Cash
Equivalents
|
$
|
61,064
|
|
|
$
|
76,123
|
|
Accounts Receivable
(net of allowances of $3,920 in 2021 and $7,613 in 2020)
|
27,898
|
|
|
33,990
|
|
Lease Merchandise (net
of accumulated depreciation and allowances of $441,017
in 2021 and $458,405 in 2020)
|
705,536
|
|
|
697,235
|
|
Property, Plant and
Equipment, Net
|
209,357
|
|
|
200,370
|
|
Operating Lease
Right-of-Use Assets
|
228,584
|
|
|
238,085
|
|
Goodwill
|
8,468
|
|
|
7,569
|
|
Other Intangibles,
Net
|
7,480
|
|
|
9,097
|
|
Income Tax
Receivable
|
823
|
|
|
1,093
|
|
Prepaid Expenses and
Other Assets
|
86,400
|
|
|
89,895
|
|
Total
Assets
|
$
|
1,335,610
|
|
|
$
|
1,353,457
|
|
LIABILITIES & SHAREHOLDERS'
EQUITY:
|
|
|
|
Accounts Payable and
Accrued Expenses
|
$
|
209,138
|
|
|
$
|
230,848
|
|
Deferred Income Taxes
Payable
|
71,342
|
|
|
62,601
|
|
Customer Deposits and
Advance Payments
|
58,819
|
|
|
68,894
|
|
Operating Lease
Liabilities
|
256,585
|
|
|
278,958
|
|
Debt
|
338
|
|
|
831
|
|
Total
Liabilities
|
596,222
|
|
|
642,132
|
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
Common Stock, Par
Value $0.50 Per Share: Authorized: 112,500,000 Shares at
March 31, 2021 and December 31, 2020; Shares Issued: 35,430,776 at
March 31,
2021 and 35,099,571 at December 31, 2020
|
17,715
|
|
|
17,550
|
|
Additional Paid-in
Capital
|
712,597
|
|
|
708,668
|
|
Retained
Earnings
|
34,732
|
|
|
1,881
|
|
Accumulated Other
Comprehensive Loss
|
(670)
|
|
|
(797)
|
|
|
764,374
|
|
|
727,302
|
|
Less: Treasury Shares
at Cost
|
|
|
|
1,260,778 Shares
at March 31, 2021 and 894,660 at December 31, 2020
|
(24,986)
|
|
|
(15,977)
|
|
Total
Liabilities & Shareholders' Equity
|
$
|
1,335,610
|
|
|
$
|
1,353,457
|
|
THE AARON'S
COMPANY, INC.
|
CONDENSED
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
|
|
(Unaudited)
|
Three Months
Ended
March
31,
|
(In
Thousands)
|
2021
|
|
2020
|
OPERATING
ACTIVITIES:
|
|
|
|
Net (Loss)
Earnings
|
$
|
36,323
|
|
|
$
|
(323,774)
|
|
Adjustments to
Reconcile Net Earnings to Net Cash Provided by Operating
Activities:
|
|
|
|
Depreciation of Lease
Merchandise
|
139,212
|
|
|
133,489
|
|
Other Depreciation and
Amortization
|
17,067
|
|
|
17,332
|
|
Accounts Receivable
Provision
|
3,763
|
|
|
8,807
|
|
Stock-Based
Compensation
|
3,593
|
|
|
2,207
|
|
Deferred Income
Taxes
|
8,741
|
|
|
(76,542)
|
|
Impairment of
Assets
|
2,272
|
|
|
466,030
|
|
Non-Cash Lease
Expense
|
23,030
|
|
|
25,772
|
|
Other Changes,
Net
|
(831)
|
|
|
1,818
|
|
Changes in Operating
Assets and Liabilities, Net of Effects of Acquisitions and
Dispositions:
|
|
|
|
Additions to Lease
Merchandise
|
(197,922)
|
|
|
(111,260)
|
|
Book Value of Lease
Merchandise Sold or Disposed
|
50,444
|
|
|
55,784
|
|
Accounts
Receivable
|
2,265
|
|
|
1,542
|
|
Prepaid Expenses and
Other Assets
|
1,440
|
|
|
9,917
|
|
Income Tax
Receivable
|
270
|
|
|
(85,891)
|
|
Operating Lease
Right-of-Use Assets and Liabilities
|
(37,776)
|
|
|
(24,422)
|
|
Accounts Payable and
Accrued Expenses
|
(21,563)
|
|
|
(39,341)
|
|
Customer Deposits and
Advance Payments
|
(10,129)
|
|
|
(4,683)
|
|
Cash Provided by
Operating Activities
|
20,199
|
|
|
56,785
|
|
INVESTING
ACTIVITIES:
|
|
|
|
Proceeds from
Investments
|
1,974
|
|
|
ā
|
|
Purchases of Property,
Plant & Equipment
|
(27,032)
|
|
|
(21,732)
|
|
Proceeds from
Dispositions of Property, Plant, and Equipment
|
2,695
|
|
|
903
|
|
Acquisitions of
Businesses and Customer Agreements, Net of Cash Acquired
|
(1,062)
|
|
|
(855)
|
|
Cash Used in
Investing Activities
|
(23,425)
|
|
|
(21,684)
|
|
FINANCING
ACTIVITIES:
|
|
|
|
Borrowings on
Revolving Facility, Net
|
ā
|
|
|
300,000
|
|
Proceeds from
Debt
|
ā
|
|
|
5,625
|
|
Repayments on
Debt
|
(492)
|
|
|
(392)
|
|
Dividends
Paid
|
(3,430)
|
|
|
ā
|
|
Acquisition of
Treasury Stock
|
(5,727)
|
|
|
ā
|
|
Issuance of Stock
Under Stock Option Plans
|
543
|
|
|
ā
|
|
Shares Withheld for
Tax Payments
|
(2,729)
|
|
|
ā
|
|
Net Transfers From
Former Parent
|
ā
|
|
|
90,502
|
|
Debt Issuance
Costs
|
ā
|
|
|
(1,020)
|
|
Cash (Used in)
Provided by Financing Activities
|
(11,835)
|
|
|
394,715
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
2
|
|
|
(117)
|
|
Increase (Decrease) in
Cash and Cash Equivalents
|
(15,059)
|
|
|
429,699
|
|
Cash and Cash
Equivalents at Beginning of Year
|
76,123
|
|
|
48,773
|
|
Cash and Cash
Equivalents at End of Year
|
$
|
61,064
|
|
|
$
|
478,472
|
|
Use of Non-GAAP Financial Information:
Non-GAAP net earnings, non-GAAP diluted earnings per share,
EBITDA and adjusted EBITDA are supplemental measures of our
performance that are not calculated in accordance with generally
accepted accounting principles in the
United States ("GAAP"). Non-GAAP net earnings and
non-GAAP diluted earnings per share for 2021 exclude certain
charges including amortization expense resulting from franchisee
acquisitions, restructuring charges, and separation costs
associated with the separation and distribution transaction that
resulted in our spin-off into a separate publicly-traded company.
Non-GAAP net earnings and non-GAAP diluted earnings per share for
2020 exclude certain charges including amortization expense
resulting from franchisee acquisitions, early termination charges
incurred to terminate a sales and marketing agreement, goodwill
impairment charges, restructuring charges, and an income tax
benefit resulting from the revaluation of a net operating loss
carryback. The amounts for these pre-tax non-GAAP adjustments,
which are tax-effected using estimated tax rates which are
commensurate with non-GAAP pre-tax earnings, can be found in the
Reconciliation of Net Earnings (Loss) and Earnings Per Share
Assuming Dilution to non-GAAP Net Earnings (Loss) and Earnings Per
Share Assuming Dilution table in this press release.
The EBITDA and adjusted EBITDA figures presented in this press
release are calculated as the Company's earnings before interest
expense, depreciation on property, plant and equipment,
amortization of intangible assets and income taxes. Adjusted
EBITDA also excludes the other adjustments described in the
calculation of non-GAAP net earnings above. The amounts for these
pre-tax non-GAAP adjustments can be found in the Quarterly EBITDA
tables in this press release.
Management believes that non-GAAP net earnings, non-GAAP diluted
earnings per share, EBITDA and Adjusted EBITDA provide relevant and
useful information, and are widely used by analysts, investors and
competitors in our industry as well as by our management in
assessing both consolidated and business unit performance.
Non-GAAP net earnings and non-GAAP diluted earnings per share
provide management and investors with an understanding of the
results from the primary operations of our business by excluding
the effects of certain items that generally arose from larger,
one-time transactions that are not reflective of the ordinary
earnings activity of our operations or transactions that have
variability and volatility of the amount. This measure may be
useful to an investor in evaluating the underlying operating
performance of our business.
EBITDA and adjusted EBITDA also provide management and investors
with an understanding of one aspect of earnings before the impact
of investing and financing charges and income taxes. These
measures may be useful to an investor in evaluating our operating
performance and liquidity because the measures:
- Are widely used by investors to measure a company's operating
performance without regard to items excluded from the calculation
of such measure, which can vary substantially from company to
company depending upon accounting methods, book value of assets,
capital structure and the method by which assets were acquired,
among other factors.
- Are a financial measurement that is used by rating agencies,
lenders and other parties to evaluate our creditworthiness.
- Are used by our management for various purposes, including as a
measure of performance of our operating entities and as a basis for
strategic planning and forecasting.
The Free Cash Flow figures presented in this press release are
calculated as the Company's cash flows provided by operating
activities less capital expenditures. Management believes that Free
Cash Flow is an important measure of liquidity provides relevant
and useful information, and are widely used by analysts, investors
and competitors in our industry as well as by our management in
assessing liquidity.
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, the
Company's GAAP revenues and earnings before income taxes and GAAP
cash from operating activities, which are also presented in the
press release. Further, we caution investors that amounts
presented in accordance with our definitions of non-GAAP net
earnings, non-GAAP diluted earnings per share, EBITDA, adjusted
EBITDA and Free Cash Flow may not be comparable to similar measures
disclosed by other companies, because not all companies and
analysts calculate these measures in the same manner.
Reconciliation of
Earnings (Loss) Before Income Taxes and Earnings (Loss) Per Share
Assuming Dilution to Non-GAAP Net Earnings and Earnings Per Share
Assuming Dilution
|
(In thousands,
except per share)
|
|
|
(Unaudited)
Three Months
Ended
|
|
March 31,
|
|
2021
|
2020
|
Earnings (Loss)
Before Income Taxes
|
$
|
48,649
|
|
$
|
(470,261)
|
|
Add:
Franchisee-Related Intangible Amortization Expense
|
1,507
|
|
1,580
|
|
Add: Restructuring
Expenses, net
|
3,441
|
|
22,286
|
|
Add: Sales and
Marketing Early Contract Termination Fees
|
ā
|
|
14,663
|
|
Add: Separation
Costs
|
4,390
|
|
ā
|
|
Add: Impairment of
Goodwill
|
ā
|
|
446,893
|
|
Non-GAAP Earnings
Before Income Taxes
|
57,987
|
|
15,161
|
|
|
|
|
Income taxes,
calculated using a non-GAAP Effective Tax Rate
|
14,692
|
|
4,950
|
Non-GAAP Net
Earnings
|
$
|
43,295
|
|
$
|
10,211
|
|
|
|
|
NOL Carryback
Revaluation(1)
|
ā
|
|
(34,191)
|
|
|
|
|
Earnings (Loss) Per
Share Assuming Dilution
|
$
|
1.04
|
|
$
|
(9.57)
|
|
Add:
Franchisee-Related Intangible Amortization Expense
|
0.04
|
|
0.05
|
|
Add: Restructuring
Expenses, net
|
0.10
|
|
0.66
|
|
Add: Sales and
Marketing Early Contract Termination Fees
|
ā
|
|
0.43
|
|
Add: Separation
Costs
|
0.13
|
|
ā
|
|
Add: Impairment of
Goodwill
|
ā
|
|
13.21
|
|
Less: NOL Carryback
Revaluation(1)
|
ā
|
|
(1.01)
|
|
Tax Effect of Non-GAAP
adjustments
|
$
|
(0.07)
|
|
$
|
(3.46)
|
|
Non-GAAP Earnings Per
Share Assuming Dilution(2)
|
$
|
1.24
|
|
$
|
0.30
|
|
|
|
|
Weighted Average
Shares Outstanding Assuming Dilution
|
34,919
|
|
33,842
|
|
(1)
|
This Non-GAAP
adjustment directly impacted income tax benefit during the three
months ended March 31, 2020. While the inclusion of this adjustment
is not necessary to reconcile from Non-GAAP earnings before income
taxes to Non-GAAP net earnings in the above table, it is necessary
to reconcile from losses per share assuming dilution (based on GAAP
net earnings) to Non-GAAP earnings per share assuming dilution for
the three months ended March 31, 2020.
|
(2)
|
In some cases, the
sum of individual EPS amounts may not equal total non-GAAP EPS
calculations due to rounding.
|
The Aaron's
Company, Inc.
|
Non-GAAP Financial
Information
|
Quarterly
EBITDA
|
(In
thousands)
|
|
|
(Unaudited)
|
|
Three Months
Ended
|
|
March 31,
2021
|
|
March 31,
2020
|
Net Earnings
(Loss)
|
$
|
36,323
|
|
|
$
|
(323,774)
|
|
Income
Taxes
|
12,326
|
|
|
(146,487)
|
|
Earnings (Loss)
Before Income Taxes
|
$
|
48,649
|
|
|
$
|
(470,261)
|
|
Interest
Expense
|
344
|
|
|
3,799
|
|
Depreciation
|
15,383
|
|
|
15,490
|
|
Amortization
|
1,684
|
|
|
1,842
|
|
EBITDA
|
$
|
66,060
|
|
|
$
|
(449,130)
|
|
Sales and Marketing
Early Contract Termination Fees
|
ā
|
|
|
14,663
|
|
Separation
Costs
|
4,390
|
|
|
ā
|
|
Restructuring
Expenses, net
|
3,441
|
|
|
22,286
|
|
Impairment of
Goodwill
|
ā
|
|
|
446,893
|
|
Adjusted
EBITDA
|
$
|
73,891
|
|
|
$
|
34,712
|
|
Reconciliation of
2021 Current Outlook for Adjusted EBITDA
|
(In
thousands)
|
|
|
Fiscal Year 2021
Ranges
|
|
Consolidated
Total
|
Estimated Net
Earnings
|
$82,500 -
$90,000
|
Income
Taxes
|
27,500
- 30,000
|
Projected Earnings
Before Income Taxes
|
110,000 - 120,000
|
Interest
Expense
|
1,000
|
Depreciation and
Amortization
|
70,000 - 75,000
|
Projected
EBITDA
|
$181,000 -
$196,000
|
Projected Other
Adjustments, Net1
|
9,000
|
Projected Adjusted
EBITDA
|
$190,000 -
$205,000
|
|
1 Projected Other Adjustments include
non-GAAP charges related to restructuring charges and separation
costs associated with the separation and distribution transaction
that resulted in our spin-off into a separate publicly-traded
company.
|
Reconciliation of
2021 Current Outlook for Free Cash Flow
|
(In
thousands)
|
|
|
Fiscal Year 2021
Ranges
|
|
Consolidated
Total
|
Cash Provided by
Operating Activities
|
$170,000 -
$190,000
|
Capital
Expenditures
|
80,000
- 90,000
|
Free Cash
Flow
|
$90,000 -
$100,000
|
Reconciliation of
2021 Original Outlook for EBITDA
|
(In
thousands)
|
|
|
Fiscal Year 2021
Ranges
|
|
Consolidated
Total
|
Estimated Net
Earnings
|
$61,000 -
$68,000
|
Income
Taxes
|
20,000
- 23,000
|
Projected Earnings
Before Income Taxes
|
81,000 - 91,000
|
Interest
Expense
|
1,000
|
Separation
Costs
|
3,000
|
Depreciation and
Amortization
|
70,000 - 75,000
|
Projected Adjusted
EBITDA
|
$155,000 -
$170,000
|
Reconciliation of
2021 Original Outlook for Free Cash Flow
|
(In
thousands)
|
|
|
Fiscal Year 2021
Ranges
|
|
Consolidated
Total
|
Cash Provided by
Operating Activities
|
$160,000 -
$180,000
|
Capital
Expenditures
|
80,000
- 90,000
|
Free Cash
Flow
|
$80,000 -
$90,000
|
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SOURCE The Aaron's Company, Inc.