ATLANTA, June 8, 2020 /PRNewswire/ -- Aaron's, Inc.
(NYSE: AAN), a leading omnichannel provider of lease-purchase
solutions, today provided a business update in connection with the
disruption caused by the COVID-19 pandemic.
"During this unprecedented time, Aaron's continues to focus on
keeping its associates, customers and communities safe, while also
providing customers access to the essential products they need,"
said John Robinson, Aaron's, Inc.
President and Chief Executive Officer. "Today, we are providing an
update of selected operational and financial metrics as well as
providing a consolidated outlook for the second quarter of
2020."
Consolidated Results
- For the second quarter of 2020 the Company expects revenues in
a range of $975 million to
$1 billion and non-GAAP earnings per
share of between $0.80 and
$0.85.
- As of May 31, 2020, the Company's
cash balance was approximately $230
million, an increase of approximately $90 million since April
30, 2020.
- Due to the portfolio nature of the business, the Company
expects that reported revenues and non-GAAP earnings in the third
and fourth quarters will be highly correlated to the volume of new
lease originations in the two quarters preceding each reported
quarter.
Progressive Leasing
- As Progressive's retail partners begin to reopen their stores,
the Company is experiencing a recovery in invoice volume from a low
point in April 2020 and expects this
improving trend to continue. The Company expects second quarter
invoice volumes will end the quarter flat to down low single digits
compared to the second quarter of 2019.
- The Company believes that, in the first quarter, Progressive
adequately reserved for the future impact of COVID-related
write-offs and, at this time, does not anticipate incremental
COVID-related charges in the second quarter. Write-offs for the
second quarter are expected to be in-line to slightly better than
the second quarter of 2019.
The Aaron's Business
- For the second quarter, revenue written into the portfolio is
expected to be down about 15% compared to the prior year second
quarter due primarily to the COVID-related weakness in April 2020. The Company expects to end the second
quarter with Same Store Revenues of -1.5% to -2.5%.
- The Company believes that, in the first quarter, the Aaron's
Business adequately reserved for the future impact of COVID-related
write-offs and, at this time, does not anticipate incremental
COVID-related charges in the second quarter. Write-offs for the
second quarter are expected to improve relative to prior year
levels by as much as 100 basis points, representing a significant
sequential improvement over the last several quarters.
- At the end of May 2020, nearly
all of the showrooms of Company-owned stores were open.
Reconciliation of non-GAAP Items
|
Q2 2020
Range
|
|
Low
|
|
High
|
|
|
|
|
Projected Earnings
per Share Assuming Dilution
|
$
0.74
|
|
$
0.79
|
Add: Projected
Intangible Amortization Expense
|
0.06
|
|
0.06
|
Projected Non-GAAP
Earnings Per Share Assuming Dilution
|
$
0.80
|
|
$
0.85
|
About Aaron's, Inc.
Headquartered in Atlanta,
Aaron's, Inc. (NYSE: AAN), is a leading omnichannel provider of
lease-purchase solutions. Progressive Leasing provides
lease-purchase solutions through approximately 20,000 retail
partner locations in 46 states and the District of Columbia, including e-commerce
merchants. The Aaron's Business engages in the sales and lease
ownership and specialty retailing of furniture, home appliances,
consumer electronics and accessories through its approximately
1,400 Company-operated and franchised stores in 47 states,
Puerto Rico and Canada, as well as its e-commerce platform,
Aarons.com. Vive Financial ("Vive," formerly Dent- A-Med, Inc.),
provides a variety of second-look credit products that are
originated through federally-insured banks. For more information,
visit investor.aarons.com, Aarons.com, ProgLeasing.com, and
ViveCard.com.
Safe Harbor
Statement under the Private Securities Litigation Reform Act
of 1995: 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
"believe," "expects," "aimed" "position," "expectations,"
"outlook," and similar terminology. These risks and
uncertainties include factors such as the effects on our business
of the COVID-19 pandemic, including its impact on our revenue and
overall financial performance and the manner in which we are able
to conduct our operations; increases in lease merchandise
write-offs and the provision for returns and uncollectible renewal
payments in light of the impact of the COVID-19 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, 2019 and in the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020. Statements in this
press release that are "forward-looking" include without limitation
statements about our expectations regarding our ability to
effectively manage our business through the challenges presented by
the COVID-19 pandemic and any longer-lasting economic downturn
resulting therefrom; our ability to continue servicing our
customers during the COVID-19 pandemic; the effectiveness of the
measures we are taking to protect our customers, employees and the
general public from becoming infected with the coronavirus;
consolidated revenues and adjusted earnings per share for the
second quarter of 2020; revenues and earnings for the third and
fourth quarters of 2020; invoice volume for our Progressive
business for the second quarter of 2020, and for the remainder of
2020; the adequacy of our reserves for write-offs for both our
Progressive and Aaron's Business businesses, and write-offs in the
second quarter of 2020; revenue written into the portfolio for our
Aaron's Business for the second quarter of 2020; and same store
revenues for the second quarter of 2020. 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.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/aarons-inc-provides-second-quarter-business-update-301071708.html
SOURCE Aaron's, Inc.