ATLANTA, Sept. 10, 2020 /PRNewswire/ -- Aaron's, Inc.
(NYSE: AAN), a leading omnichannel provider of lease-purchase
solutions, today provided a business update for the third quarter
of 2020.
"While there remains uncertainty related to the pandemic,
including unemployment, government stimulus, and global supply
chain challenges, with two months behind us, we are in a position
to update the market on our expectations for the third quarter,"
said John Robinson, Aaron's, Inc.
President and Chief Executive Officer. "Our businesses are
performing very well in the quarter, with strong customer payment
activity and lease portfolio performance driving better than
expected financial results. At the same time, new lease
originations continue to face some headwinds due in part to our
more conservative approach to lease decisioning and
pandemic-related issues, including supply chain disruptions. Based
on our results to date, we are raising our third quarter
outlook."
Updated Third Quarter Outlook
Consolidated Results
- The Company expects revenues in a range of $1.00 billion to $1.02
billion, adjusted EBITDA between $140
million and $150 million, and
non-GAAP earnings per share between $1.40 and $1.50.
These estimates assume no reversal of incremental COVID-related
reserves established in the first quarter of 2020.
Progressive Leasing
- Progressive expects revenues in a range of $575 million to $585
million and EBITDA between $100
million and $105 million.
These estimates assume no reversal of incremental COVID-related
reserves established in the first quarter of 2020.
- Year-over-year invoice growth for the third quarter is expected
to be in the low-to-mid single digit percentage range, sequentially
higher than the second quarter of 2020.
- The Company believes Progressive has adequately reserved for
the future impact of COVID-related write-offs and, at this time,
does not anticipate incremental COVID-related charges in the third
quarter. Write-offs for the third quarter are expected to be
between 1.5% and 2.5%.
The Aaron's Business
- The Aaron's Business expects revenues in a range of
$415 million to $425 million and adjusted EBITDA between
$43 million and $48 million. These estimates assume no reversal
of incremental COVID-related reserves established in the first
quarter of 2020.
- The Company expects same store revenue growth of 4% to 6%.
- The Company believes the Aaron's Business has adequately
reserved for the future impact of COVID-related write-offs and, at
this time, does not anticipate incremental COVID-related charges in
the third quarter. Write-offs for the third quarter are expected to
be between 3% and 4%.
Reconciliation of non-GAAP Items
|
Q3 2020
Range
|
EPS:
|
Low
|
|
High
|
|
|
|
|
Projected Earnings
per Share Assuming Dilution
|
$
1.30
|
|
$
1.40
|
Add: Projected
Intangible Amortization Expense
|
0.08
|
|
0.08
|
Add: Projected
Restructuring Expense
|
0.02
|
|
0.02
|
Projected Non-GAAP
Earnings Per Share Assuming Dilution
|
$
1.40
|
|
$
1.50
|
|
|
Q3 2020
Ranges
|
EBITDA: ($ in
thousands)
|
Progressive
Leasing
|
Aaron's
Business
|
Consolidated
Total
(1)
|
|
|
|
|
Estimated Net
Earnings
|
|
|
$85,700 -
$93,400
|
Income Taxes
(2)
|
|
|
24,200 –
26,500
|
Projected Earnings
Before Income Taxes
|
89,000 -
94,000
|
25,100 -
30,100
|
109,900 –
119,900
|
Interest
Expense
|
3,200
|
(1,900)
|
2,200
|
Depreciation
|
2,400
|
16,700
|
19,300
|
Amortization
|
5,400
|
1,700
|
7,200
|
Projected
EBITDA
|
$100,000 -
$105,000
|
$41,600 -
$46,600
|
$138,600 -
$148,600
|
Restructuring
Expense
|
-
|
1,400
|
1,400
|
Projected Adjusted
EBITDA
|
$100,000 -
$105,000
|
$43,000 -
$48,000
|
$140,000 -
$150,000
|
|
(1) Includes
Progressive Leasing, Aaron's Business and Vive
Financial.
|
(2) Taxes are
calculated on a consolidated basis and are not identifiable by
Company segments.
|
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 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
"outlook," "uncertainty," "update," "believe," "expect," and
similar terminology. These risks and uncertainties include
factors such as the effects on our business from 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, including global supply chain challenges;
increased levels of unemployment related to the pandemic and
whether there will be any additional government stimulus or
supplemental unemployment benefits payments, and the amounts and
timing of any such payments; 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 consolidated third
quarter 2020 revenues, adjusted EBITDA and non-GAAP earnings per
share; customer payment activity and the performance of our
lease portfolios; third quarter revenues, EBITDA and invoice growth
for Progressive Leasing; the level of write-offs in the third
quarter for Progressive Leasing and the adequacy of its reserves
related to write-offs; whether there will be any incremental
COVID-related charges taken by Progressive Leasing during the third
quarter; revenues, adjusted EBITDA and same store revenues growth
for our Aaron's Business; the level of write-offs in the
third quarter for the Aaron's Business and the adequacy of its
reserves related to write-offs; and whether there will be any
incremental COVID-related charges taken by the Aaron's Business
during the third quarter. 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.
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SOURCE Aaron's, Inc.