SALT LAKE CITY, April 29, 2021 /PRNewswire/ -- PROG
Holdings, Inc. (NYSE:PRG), the fintech holding company for
Progressive Leasing, a leading provider of in-store and e-commerce
lease-to-own solutions, and Vive Financial, a provider of
omnichannel second-look revolving credit solutions, announces
financial results for the first quarter ended March 31, 2021.
![PROG Holdings, Inc. logo (PRNewsfoto/PROG Holdings, Inc.) PROG Holdings, Inc. logo (PRNewsfoto/PROG Holdings, Inc.)](https://mma.prnewswire.com/media/1483267/PROG_Holdings_Logo.jpg)
"Our first quarter results reflect the exceptional execution of
our team and our point-of-sale retail partners in a challenging
environment as we continue to add and scale partner relationships
while increasing our e-commerce penetration," said Steve Michaels, President and Chief Executive
Officer of PROG Holdings. "The Progressive Leasing segment
delivered record first quarter results in revenue, gross
merchandise volume (GMV), earnings before taxes, and adjusted
EBITDA. Our portfolio performance exceeded our expectations as the
continued financial strength of our consumer resulted in increased
revenues and low write-offs in the period. We anticipate strong
results for the remainder of 2021, building on Progressive's 10.4%
GMV growth in the first quarter."
Financial Highlights
Consolidated revenues for the first quarter of 2021 were
$721.0 million, an increase of 7.9%
from the same period in 2020. The increase was primarily driven by
continued strong customer payment performance across both the
Progressive Leasing and Vive Financial business segments, as well
as elevated buyout activity in the period. Progressive Leasing's
GMV increased 10.4% to $510 million
compared with the same period in 2020, with 14.3% of the quarter's
GMV generated from the Company's e-commerce channel, up from 1.9%
in Q1 2020. GMV in the first quarter primarily benefited from the
continued scale of national partners, increased penetration in
e-commerce, and federal stimulus, and was partially offset by a
delayed tax refund season and smaller average refunds.
The provision for lease merchandise write-offs was 2.6% of lease
revenues in the first quarter of 2021 compared with 8.5% in the
same period of 2020. Low levels of delinquencies and a more
favorable outlook of consumer payment performance benefited our
provision for write-offs reported in the period. Provisions for
write-offs in the first quarter of 2020 reflect the recording of
$16.1 million in Progressive Leasing
reserves relating to the COVID-19 pandemic. The first quarter of
2021 results benefited by a $2.5
million release of COVID-19-related
reserves.
The Company reported net earnings from continuing operations for
the first quarter of 2021 of $79.5
million compared with $57.7
million in the prior year period.
Adjusted EBITDA for the first quarter of 2021 was $118.1 million, compared with $62.6 million for the same period in 2020, an
increase of $55.5 million, or 88.7%.
As a percentage of revenues, adjusted EBITDA was 16.4% in the first
quarter of 2021 compared with 9.4% for the same period in 2020. The
increases in net earnings from continuing operations and adjusted
EBITDA were primarily driven by the Company's increased revenues
and improvements in our provision for write-offs.
Diluted earnings per share from continuing operations for the
first quarter of 2021 were $1.16
compared with $0.85 in the year ago
period. On a non-GAAP basis, diluted earnings per share from
continuing operations were $1.22 in
the first quarter of 2021 compared with $0.41 for the same quarter in 2020.
Liquidity and Capital Allocation
PROG Holdings ended the first quarter of 2021 with a cash
position of $151.2 million and a
balance of $50 million on its
$350 million revolving credit
facility. The Company repurchased $28.1
million of its stock in the period at an average price per
share of $47.70, leaving
$271.9 million available through its
$300 million repurchase
authorization.
The Company expects to repurchase additional shares under its
$300 million program from time to
time, subject to its capital plan, market conditions and other
factors. The timing and amount of any further repurchases under the
program will be determined by management. The Company is not
obligated to acquire any specific number of shares, and the program
may be suspended or discontinued at any time.
2021 Outlook
The Company is providing the following outlook for its 2021
fiscal year.
|
FY 2021
Outlook
|
(In thousands,
except per share amounts)
|
Low
|
High
|
|
|
|
PROG Holdings - Total
Revenues
|
$
|
2,700,000
|
|
$
|
2,775,000
|
|
PROG Holdings - Net
Earnings
|
246,000
|
|
259,000
|
|
PROG Holdings -
Adjusted EBITDA1
|
380,000
|
|
400,000
|
|
PROG Holdings -
Diluted EPS
|
3.56
|
|
3.81
|
|
PROG Holdings -
Diluted Non-GAAP EPS
|
3.80
|
|
4.05
|
|
|
|
|
Progressive Leasing -
Total Revenues
|
2,645,000
|
|
2,710,000
|
|
Progressive Leasing -
Earnings before taxes
|
328,000
|
|
345,000
|
|
Progressive Leasing -
Adjusted EBITDA1
|
378,000
|
|
396,000
|
|
|
|
|
Vive - Total
Revenues
|
55,000
|
|
65,000
|
|
Vive - Earnings
before taxes
|
—
|
|
2,000
|
|
Vive - Adjusted
EBITDA1
|
2,000
|
|
4,000
|
|
|
|
1
|
The FY 2021 Adjusted
EBITDA outlook includes the add-back of stock-based compensation
expense. See GAAP to Non-GAAP reconciliation below for further
details.
|
Conference Call and Webcast
The Company has scheduled a live webcast and conference call for
Thursday, April 29, 2021, at
8:30 A.M. ET to discuss its financial
results for the first quarter of 2021. To access the live webcast,
visit the Company's investor relations website,
https://investor.progleasing.com/. To join the conference call via
telephone, dial 877-270-2148 and request to join the PROG Holdings,
Inc. call. International participants without internet access can
join the conference call by dialing 412-902-6510 and requesting to
join the PROG Holdings, Inc. call. The webcast will be archived for
playback on the investor relations website following the event.
About PROG Holdings, Inc.
PROG Holdings, Inc. (NYSE:PRG) is a fintech holding company
headquartered in Salt Lake City,
UT, that provides transparent and competitive payment
options to credit challenged consumers. The Company owns
Progressive Leasing, a leading provider of in-store, e-commerce,
and app-based point-of-sale lease-to-own solutions, and Vive
Financial, an omnichannel provider of second-look revolving credit
products. Progressive Leasing has helped millions of consumers
acquire furniture, appliances, jewelry, electronics, mattresses,
cell phones, and other large-ticket products consumers need by
utilizing a technology-based proprietary platform that provides
instant decisioning results. Vive Financial offers consumers who
may not qualify for traditional prime lending products a variety of
second-look, revolving credit products originated through federally
insured banks, including private label and Vive-branded credit
cards. More information on PROG Holdings' companies can be found on
their websites, https://progleasing.com and
https://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 "anticipates", "continue",
"expects", "expectation", "outlook", 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,
including the impact of the pandemic and such measures on: (a)
demand for the lease-to-own products offered by our Progressive
Leasing segment, (b) Progressive Leasing's POS partners and Vive's
merchant partners, (c) Progressive Leasing's and Vive's customers,
including their ability and willingness to satisfy their
obligations under their lease agreements and loan agreements,
respectively, (d) Progressive Leasing's point-of-sale partners
being able to obtain the merchandise its customers need or desire,
(e) our employees and labor needs, including our ability to
adequately staff our operations, (f) our financial and operational
performance, and (g) our liquidity; (ii) changes in the enforcement
of existing laws and regulations and the adoption of new laws and
regulations that may unfavorably impact our businesses; (iii) the
effects on our business and reputation resulting from Progressives
Leasing's announced settlement and related consent order with the
FTC, including the risk of losing existing POS partners or being
unable to establish new relationships with additional POS partners,
and of any follow-on regulatory and/or civil litigation arising
therefrom; (iv) other types of legal and regulatory proceedings and
investigations, including those related to consumer protection,
customer privacy, third party and employee fraud and information
security; (v) increased competition from traditional and virtual
lease-to-own competitors and also from competitors of our Vive
segment; (vi) increases in lease merchandise write-offs and the
provision for returns and uncollectible renewal payments for
Progressive Leasing, especially in light of the COVID-19 pandemic,
and for loan losses, with respect to our Vive segment; (vii) the
possibility that the operational, strategic and shareholder value
creation opportunities expected from the spin-off of the Company's
Aaron's Business segment may not be achieved in a timely manner, or
at all; (viii) Vive's business model differing significantly
from Progressive Leasing's, which creates specific and unique risks
for the Vive business, including Vive's reliance on two bank
partners to issue its credit products and Vive's exposure to the
unique regulatory risks associated with the lending-related laws
and regulations that apply to its business; and (ix) 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, which was filed with the Securities and Exchange
Commission on February 26, 2021. Statements in this press release
that are "forward-looking" include without limitation statements
about (i) our ability to add new POS and e-commerce partner
relationships and to increase the scale of those relationships;
(ii) our ability to increase our penetration in the e-commerce
market; (iii) the strength of our businesses during the ongoing
economic uncertainty caused by the COVID pandemic; (iv) our
expectations for growth in Progressive Leasing's gross merchandise
volume and expanding our business with e-commerce partners; (v) our
plans to repurchase shares under our Board-authorized $300 million
repurchase program; and (vi) our outlook for our consolidated
financial performance for our 2021 fiscal year. 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.
PROG Holdings,
Inc.
|
Consolidated
Statements of Earnings
|
(In thousands,
except per share data)
|
|
|
|
(Unaudited)
Three Months
Ended
|
|
March 31,
|
|
|
2021
|
2020
|
Revenues:
|
|
|
|
Lease Revenues and
Fees
|
|
$
|
707,982
|
|
$
|
658,534
|
|
Interest and Fees on
Loans Receivable
|
|
13,019
|
|
9,908
|
|
Total
|
|
721,001
|
|
668,442
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
Depreciation of Lease
Merchandise
|
|
505,057
|
|
463,919
|
|
Provision for Lease
Merchandise Write-offs
|
|
18,640
|
|
55,714
|
|
Operating
Expenses
|
|
91,196
|
|
98,984
|
|
Total
|
|
614,893
|
|
618,617
|
|
Operating
Profit
|
|
106,108
|
|
49,825
|
|
Interest
Expense
|
|
(512)
|
|
—
|
|
Earnings Before
Income Tax Expense from Continuing Operations
|
|
105,596
|
|
49,825
|
|
Income Tax Expense
(Benefit)
|
|
26,108
|
|
(7,857)
|
|
Net Earnings from
Continuing Operations
|
|
79,488
|
|
57,682
|
|
Loss from Discontinued
Operations, Net of Income Tax
|
|
—
|
|
(337,687)
|
|
Net Earnings
(Loss)
|
|
$
|
79,488
|
|
$
|
(280,005)
|
|
|
|
|
|
Basic Earnings
(Loss) per Share:
|
|
|
|
Continuing
Operations
|
|
$
|
1.17
|
|
$
|
0.86
|
|
Discontinued
Operations
|
|
—
|
|
(5.05)
|
|
Total Basic Earnings
(Loss) per Share
|
|
$
|
1.17
|
|
$
|
(4.19)
|
|
Diluted Earnings
(Loss) per Share:
|
|
|
|
Continuing
Operations
|
|
$
|
1.16
|
|
$
|
0.85
|
|
Discontinued
Operations
|
|
—
|
|
(4.98)
|
|
Total Diluted
Earnings (Loss) per Share
|
|
$
|
1.16
|
|
$
|
(4.13)
|
|
|
|
|
|
Weighted Average
Shares Outstanding
|
|
67,730
|
|
66,822
|
|
Weighted Average
Shares Outstanding Assuming Dilution
|
|
68,260
|
|
67,864
|
|
PROG Holdings,
Inc.
|
Consolidated
Balance Sheets
|
(In thousands,
except share data)
|
|
|
|
(Unaudited)
March 31, 2021
|
|
December 31,
2020
|
ASSETS:
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
151,151
|
|
|
$
|
36,645
|
|
Accounts Receivable
(net of allowances of $47,757 in 2021 and $56,364 in
2020)
|
|
53,996
|
|
|
61,254
|
|
Lease Merchandise
(net of accumulated depreciation and allowances of $376,517 in 2021
and $409,307 in 2020)
|
|
574,581
|
|
|
610,263
|
|
Loans Receivable (net
of allowances and unamortized fees of $56,499 in 2021 and $52,274
in 2020)
|
|
91,368
|
|
|
79,148
|
|
Property, Plant and
Equipment, Net
|
|
26,144
|
|
|
26,705
|
|
Operating Lease
Right-of-Use Assets
|
|
19,691
|
|
|
20,613
|
|
Goodwill
|
|
288,801
|
|
|
288,801
|
|
Other Intangibles,
Net
|
|
149,000
|
|
|
154,421
|
|
Prepaid Expenses and
Other Assets
|
|
44,066
|
|
|
39,554
|
|
Total
Assets
|
|
$
|
1,398,798
|
|
|
$
|
1,317,404
|
|
LIABILITIES & SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Accounts Payable and
Accrued Expenses
|
|
$
|
105,146
|
|
|
$
|
78,249
|
|
Deferred Income Tax
Liability
|
|
132,467
|
|
|
126,938
|
|
Customer Deposits and
Advance Payments
|
|
45,806
|
|
|
46,565
|
|
Operating Lease
Liabilities
|
|
28,423
|
|
|
29,516
|
|
Debt
|
|
50,000
|
|
|
50,000
|
|
Total
Liabilities
|
|
361,842
|
|
|
331,268
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Common Stock, Par
Value $0.50 Per Share: Authorized: 225,000,000 Shares at March 31,
2021 and December 2020; Shares Issued: 90,752,123 at March 31, 2021
and December 31, 2020
|
|
45,376
|
|
|
45,376
|
|
Additional Paid-in
Capital
|
|
314,026
|
|
|
318,263
|
|
Retained
Earnings
|
|
1,315,866
|
|
|
1,236,378
|
|
|
|
|
|
|
Less: Treasury Shares
at Cost
|
|
|
|
|
Common Stock:
23,402,427 Shares at March 31, 2021 and 23,029,434 at December 31,
2020
|
|
(638,312)
|
|
|
(613,881)
|
|
Total Shareholders'
Equity
|
|
1,036,956
|
|
|
986,136
|
|
Total
Liabilities & Shareholders' Equity
|
|
$
|
1,398,798
|
|
|
$
|
1,317,404
|
|
PROG Holdings,
Inc.
|
Consolidated
Statements of Cash Flows
|
(In
thousands)
|
|
|
Three Months
Ended March 31,
|
(In
Thousands)
|
2021
|
|
2020
|
OPERATING
ACTIVITIES:
|
|
|
|
Net Earnings
(Loss)
|
$
|
79,488
|
|
|
$
|
(280,005)
|
|
Adjustments to
Reconcile Net Earnings (Loss) to Net Cash Provided by Operating
Activities:
|
|
|
|
Depreciation of Lease
Merchandise
|
505,057
|
|
|
597,407
|
|
Other Depreciation and
Amortization
|
7,114
|
|
|
25,267
|
|
Provisions for
Accounts Receivable and Loan Losses
|
42,964
|
|
|
97,804
|
|
Stock-Based
Compensation
|
4,163
|
|
|
5,619
|
|
Deferred Income
Taxes
|
5,529
|
|
|
(90,268)
|
|
Impairment of Goodwill
and Other Assets
|
—
|
|
|
466,030
|
|
Non-Cash Lease
Expense
|
229
|
|
|
26,895
|
|
Other Changes,
Net
|
(179)
|
|
|
839
|
|
Changes in Operating
Assets and Liabilities, Net of Effects of Acquisitions and
Dispositions:
|
|
|
|
Additions to Lease
Merchandise
|
(490,710)
|
|
|
(556,807)
|
|
Book Value of Lease
Merchandise Sold or Disposed
|
21,335
|
|
|
114,762
|
|
Accounts
Receivable
|
(29,238)
|
|
|
(68,420)
|
|
Prepaid Expenses and
Other Assets
|
(4,422)
|
|
|
9,347
|
|
Income Tax
Receivable
|
—
|
|
|
(44,137)
|
|
Operating Lease
Right-of-Use Assets and Liabilities
|
(400)
|
|
|
(25,579)
|
|
Accounts Payable and
Accrued Expenses
|
26,897
|
|
|
(43,584)
|
|
Customer Deposits and
Advance Payments
|
(759)
|
|
|
(7,410)
|
|
Cash Provided by
Operating Activities
|
167,068
|
|
|
227,760
|
|
INVESTING
ACTIVITIES:
|
|
|
|
Investments in Loans
Receivable
|
(48,720)
|
|
|
(21,997)
|
|
Proceeds from Loans
Receivable
|
30,821
|
|
|
14,956
|
|
Outflows on Purchases
of Property, Plant and Equipment
|
(1,844)
|
|
|
(23,587)
|
|
Proceeds from
Disposition of Property, Plant, and Equipment
|
12
|
|
|
906
|
|
Outflows on
Acquisitions of Businesses and Customer Agreements. Net of Cash
Acquired
|
—
|
|
|
(855)
|
|
Cash Used in
Investing Activities
|
(19,731)
|
|
|
(30,577)
|
|
FINANCING
ACTIVITIES:
|
|
|
|
Borrowings on
Revolving Facility, Net
|
—
|
|
|
300,000
|
|
Proceeds from
Debt
|
—
|
|
|
5,625
|
|
Repayments on
Debt
|
—
|
|
|
(392)
|
|
Acquisition of
Treasury Stock
|
(28,102)
|
|
|
—
|
|
Dividends
Paid
|
—
|
|
|
(2,668)
|
|
Issuance of Stock
Under Stock Option Plans
|
282
|
|
|
528
|
|
Shares Withheld for
Tax Payments
|
(5,011)
|
|
|
(5,877)
|
|
Debt Issuance
Costs
|
—
|
|
|
(1,020)
|
|
Cash (Used in)
Provided by Financing Activities
|
(32,831)
|
|
|
296,196
|
|
EFFECT OF EXCHANGE
RATE CHANGES
|
—
|
|
|
(117)
|
|
Increase in Cash
and Cash Equivalents
|
114,506
|
|
|
493,262
|
|
Cash and Cash
Equivalents at Beginning of Period
|
36,645
|
|
|
57,755
|
|
Cash and Cash
Equivalents at End of Period
|
$
|
151,151
|
|
|
$
|
551,017
|
|
PROG Holdings,
Inc.
|
Quarterly Revenues
by Segment
|
(In
thousands)
|
|
|
Unaudited
|
|
Three Months
Ended
|
|
March 31,
2021
|
|
Progressive
Leasing
|
Vive
|
Consolidated
Total
|
Lease Revenues and
Fees
|
$
|
707,982
|
|
$
|
—
|
|
$
|
707,982
|
|
Interest and Fees on
Loans Receivable
|
—
|
|
13,019
|
|
13,019
|
|
Total
Revenues
|
$
|
707,982
|
|
$
|
13,019
|
|
$
|
721,001
|
|
|
|
|
|
|
Unaudited
|
|
Three Months
Ended
|
|
March 31,
2020
|
|
Progressive
Leasing
|
Vive
|
Consolidated
Total
|
Lease Revenues and
Fees
|
$
|
658,534
|
|
$
|
—
|
|
$
|
658,534
|
|
Interest and Fees on
Loans Receivable
|
—
|
|
9,908
|
|
9,908
|
|
Total
Revenues
|
$
|
658,534
|
|
$
|
9,908
|
|
$
|
668,442
|
|
Use of Non-GAAP Financial Information:
Non-GAAP net earnings from continuing operations, non-GAAP
diluted earnings from continuing operations 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 from continuing operations and
non-GAAP diluted earnings from continuing operations per share for
the three months ended March 31,
2021, exclude intangible amortization expense. Non-GAAP net
earnings from continuing operations and non-GAAP diluted earnings
from continuing operations per share for the three months ended
March 31, 2020 exclude intangible
amortization expense and income tax benefits from our revaluation
of net operating loss carrybacks resulting from the CARES Act. The
amounts for these after-tax non-GAAP adjustments, which are tax
effected using our statutory tax rate, can be found in the
reconciliation of net earnings from continuing operations and
earnings from continuing operations per share assuming dilution to
non-GAAP net earnings from continuing operations and earnings from
continuing operations 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, net, depreciation on property, plant and equipment,
amortization of intangible assets and income taxes. Adjusted EBITDA
for the three months ended March 31,
2021 and 2020 also excludes stock-based compensation
expense. The amounts for these pre-tax non-GAAP adjustments can be
found in the quarterly segment EBITDA tables in this press release.
Adjusted EBITDA for the Company's full year 2021 outlook is
calculated as projected earnings before interest expense, interest
income, depreciation on property, plant and equipment, amortization
of intangible assets and income taxes. Adjusted EBITDA for the
Company's full year 2021 outlook also excludes stock-based
compensation expense.
In addition to the adjusted EBITDA reconciliations for the three
months ended March 31, 2021 and
March 31, 2020 set forth in this
discussion about use of non-GAAP financial information, we have
included the earnings (loss) from continuing operations before tax
and adjusted EBITDA for the Company and each segment for the three
months ended June 30, 2020,
September 30, 2020 and December 31, 2020, along with the related GAAP to
Non-GAAP reconciliations. The earnings (loss) from continuing
operations before tax and adjusted EBITDA results for each quarter
in 2020 exclude the discontinued operations resulting from our
spin-off of the Aaron's Business segment effective November 30, 2020. We believe investors may find
that information helpful in evaluating our earnings from continuing
operations and adjusted EBITDA performance in future periods.
Adjusted EBITDA for three months ended June 30, 2020, September
30, 2020, and December 31,
2020 also excludes: (i) stock-based compensation expense,
(ii) insurance reimbursements for certain legal costs associated
with our FTC regulatory charge; (iii) stock-based compensation
modification expense and other executive retirement charges
resulting from our separation and distribution of Aaron's Business;
(iv) income tax benefits from our revaluation of net operating loss
carrybacks resulting from the CARES Act; (v) income tax expense for
the recognition of a revaluation allowance on foreign tax credits
resulting from our separation and distribution of Aaron's Business;
and (vi) certain corporate restructuring charges.
Management believes that non-GAAP net earnings from continuing
operations, non-GAAP diluted earnings from continuing operations
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.
EBITDA, adjusted EBITDA, non-GAAP net earnings from continuing
operations and non-GAAP diluted earnings from continuing operations
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. We believe the exclusion
of stock-based compensation expense provides for a
better comparison of our operating results with our peer companies
as the calculations of stock-based compensation vary
from period to period and company to company due to different
valuation methodologies, subjective assumptions and the variety of
award types. 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 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.
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 from continuing operations and diluted
earnings from continuing operations per share and the GAAP revenues
and earnings from continuing operations before income taxes of the
Company's segments, 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 from continuing
operations, non-GAAP diluted earnings from continuing operations
per share, EBITDA, and adjusted EBITDA may not be comparable to
similar measures disclosed by other companies, because not all
companies and analysts calculate these measures in the same
manner.
PROG Holdings
Inc.
|
Reconciliation of
Net Earnings and Earnings Per Share Assuming Dilution from
Continuing Operations to Non-GAAP Net Earnings and Earnings Per
Share Assuming Dilution from Continuing Operations
|
(In thousands,
except per share amounts)
|
|
|
Unaudited
|
|
Three Months
Ended
|
|
March 31,
|
|
2021
|
2020
|
Net Earnings from
Continuing Operations
|
$
|
79,488
|
|
$
|
57,682
|
|
Add: Intangible
Amortization Expense
|
5,421
|
|
5,566
|
|
Less: Tax impact of
adjustments (1)
|
(1,409)
|
|
(1,447)
|
|
Less: NOL Carryback
Revaluation
|
—
|
|
(34,190)
|
|
Non-GAAP Net Earnings
from Continuing Operations
|
$
|
83,500
|
|
$
|
27,611
|
|
|
|
|
Earnings from
Continuing Operations Per Share Assuming Dilution
|
$
|
1.16
|
|
$
|
0.85
|
|
Add: Intangible
Amortization Expense
|
0.08
|
|
0.08
|
|
Less: Tax impact of
adjustments (1)
|
(0.02)
|
|
(0.02)
|
|
Less: NOL Carryback
Revaluation
|
—
|
|
(0.50)
|
|
Non-GAAP Earnings
from Continuing Operations Per Share Assuming
Dilution(2)
|
$
|
1.22
|
|
$
|
0.41
|
|
|
|
|
Weighted Average
Shares Outstanding Assuming Dilution
|
68,260
|
|
67,864
|
|
|
|
|
|
(1) Adjustments are tax-effected using an
assumed statutory tax rate of 26.0%.
|
(2) In
some cases, the sum of individual EPS amounts may not equal total
non-GAAP EPS calculations due to rounding.
|
PROG Holdings
Inc.
|
Non-GAAP Financial
Information
|
Quarterly Segment
EBITDA
|
(In
thousands)
|
|
|
Unaudited
|
|
Three Months
Ended
|
|
March 31,
2021
|
|
Progressive
Leasing
|
Vive
|
Consolidated
Total
|
Net Earnings from
Continuing Operations
|
|
|
$
|
79,488
|
|
Income
Taxes(1)
|
|
|
26,108
|
|
Earnings from
Continuing Operations Before Income Taxes
|
$
|
104,172
|
|
$
|
1,424
|
|
105,596
|
|
Interest
Expense
|
435
|
|
77
|
|
512
|
|
Depreciation
|
2,212
|
|
187
|
|
2,399
|
|
Amortization
|
5,421
|
|
—
|
|
5,421
|
|
EBITDA
|
112,240
|
|
1,688
|
|
113,928
|
|
Stock-Based
Compensation
|
4,063
|
|
100
|
|
4,163
|
|
Adjusted
EBITDA
|
$
|
116,303
|
|
$
|
1,788
|
|
$
|
118,091
|
|
|
(1) Taxes are
calculated on a consolidated basis and are not identifiable by
Company Segment.
|
|
|
|
Unaudited
|
|
Three Months
Ended
|
|
March 31,
2020
|
|
Progressive
Leasing
|
Vive
|
Unallocated
Corporate Expenses
|
Consolidated
Total
|
Net Earnings
from Continuing Operations
|
|
|
|
$
|
57,682
|
|
Income
Taxes(1)
|
|
|
|
(7,857)
|
|
Earnings (Loss) from
Continuing Operations Before Income Taxes
|
$
|
62,707
|
|
$
|
(7,152)
|
|
$
|
(5,730)
|
|
49,825
|
|
Depreciation
|
2,121
|
|
217
|
|
—
|
|
2,338
|
|
Amortization
|
5,421
|
|
145
|
|
—
|
|
5,566
|
|
EBITDA
|
70,249
|
|
(6,790)
|
|
(5,730)
|
|
57,729
|
|
Stock-Based
Compensation(2)
|
2,736
|
|
84
|
|
2,042
|
|
4,862
|
|
Adjusted
EBITDA
|
$
|
72,985
|
|
$
|
(6,706)
|
|
$
|
(3,688)
|
|
$
|
62,591
|
|
|
(1) Taxes are
calculated on a consolidated basis and are not identifiable by
Company Segment.
|
(2) 2020
quarterly Adjusted EBITDA metrics have been updated to add-back
Stock-based compensation to conform to management's 2021 definition
of Adjusted EBITDA.
|
PROG Holdings
Inc.
|
Non-GAAP Financial
Information
|
Quarterly Segment
EBITDA
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
June 30,
2020
|
|
Progressive
Leasing
|
Vive
|
Unallocated
Corporate Expenses
|
Consolidated
Total
|
Net Earnings from
Continuing Operations
|
|
|
|
$
|
58,997
|
|
Income
Taxes(1)
|
|
|
|
767
|
|
Earnings (Loss)
Before Income Taxes
|
$
|
63,113
|
|
$
|
1,626
|
|
$
|
(4,975)
|
|
59,764
|
|
Depreciation
|
2,179
|
|
210
|
|
—
|
|
2,389
|
|
Amortization
|
5,421
|
|
145
|
|
—
|
|
5,566
|
|
EBITDA
|
70,713
|
|
1,981
|
|
(4,975)
|
|
67,719
|
|
Stock-Based
Compensation(2)
|
3,270
|
|
96
|
|
2,187
|
|
5,553
|
|
Restructuring
Expenses, Net
|
—
|
|
—
|
|
238
|
|
238
|
|
Adjusted
EBITDA
|
$
|
73,983
|
|
$
|
2,077
|
|
$
|
(2,550)
|
|
$
|
73,510
|
|
|
(1) Taxes are
calculated on a consolidated basis and are not identifiable by
Company Segment.
|
(2) 2020
quarterly Adjusted EBITDA metrics have been updated to add-back
Stock-based compensation to conform to management's 2021 definition
of Adjusted EBITDA.
|
|
|
|
Three Months
Ended
|
|
September 30,
2020
|
|
Progressive
Leasing
|
Vive
|
Unallocated
Corporate Expenses
|
Consolidated
Total
|
Net Earnings from
Continuing Operations
|
|
|
|
$
|
74,643
|
|
Income
Taxes(1)
|
|
|
|
21,005
|
|
Earnings (Loss)
Before Income Taxes
|
$
|
106,682
|
|
$
|
(2,347)
|
|
$
|
(8,687)
|
|
95,648
|
|
Depreciation
|
2,208
|
|
196
|
|
—
|
|
2,404
|
|
Amortization
|
5,420
|
|
145
|
|
—
|
|
5,565
|
|
EBITDA
|
114,310
|
|
(2,006)
|
|
(8,687)
|
|
103,617
|
|
Insurance Recoveries
related to legal and regulatory expenses
|
(835)
|
|
—
|
|
—
|
|
(835)
|
|
Stock-Based
Compensation(2)
|
2,931
|
|
141
|
|
2,345
|
|
5,417
|
|
Separation
Costs
|
1,765
|
|
—
|
|
678
|
|
2,443
|
|
Adjusted
EBITDA
|
$
|
118,171
|
|
$
|
(1,865)
|
|
$
|
(5,664)
|
|
$
|
110,642
|
|
|
(1) Taxes are
calculated on a consolidated basis and are not identifiable by
Company Segment.
|
(2) 2020
quarterly Adjusted EBITDA metrics have been updated to add-back
Stock-based compensation to conform to management's 2021 definition
of Adjusted EBITDA.
|
PROG Holdings
Inc.
|
Non-GAAP Financial
Information
|
Quarterly Segment
EBITDA
|
(In
thousands)
|
|
|
|
Three Months
Ended
|
|
December 31,
2020
|
|
Progressive
Leasing
|
Vive
|
Unallocated
Corporate
Expenses
|
Consolidated
Total
|
|
Net Earnings from
Continuing Operations
|
|
|
|
$
|
42,305
|
|
|
Income
Taxes(1)
|
|
|
|
24,034
|
|
|
Earnings (Loss)
Before Income Taxes
|
$
|
88,134
|
|
$
|
(3,307)
|
|
$
|
(18,488)
|
|
66,339
|
|
|
Interest
Expense
|
187
|
|
—
|
|
—
|
|
187
|
|
|
Depreciation
|
2,356
|
|
192
|
|
—
|
|
2,548
|
|
|
Amortization
|
5,421
|
|
23
|
|
—
|
|
5,444
|
|
|
EBITDA
|
96,098
|
|
(3,092)
|
|
(18,488)
|
|
74,518
|
|
|
Stock-based
compensation(2)
|
3,518
|
|
46
|
|
1,007
|
|
4,571
|
|
|
Separation
Costs
|
572
|
|
—
|
|
14,938
|
|
15,510
|
|
|
Adjusted
EBITDA
|
$
|
100,188
|
|
$
|
(3,046)
|
|
$
|
(2,543)
|
|
$
|
94,599
|
|
|
|
|
|
|
|
|
|
(1) Taxes are
calculated on a consolidated basis and are not identifiable by
Company Segment.
|
(2) 2020 quarterly
Adjusted EBITDA metrics have been updated to add-back Stock-based
compensation to conform to management's 2021 definition of Adjusted
EBITDA.
|
PROG Holdings
Inc.
|
Gross Merchandise
Volume by Quarter
|
(In
thousands)
|
|
|
Three Months
Ended
|
|
Year Ended
|
|
Three Months
Ended
|
|
Mar 31,
|
Jun 30,
|
Sept 30,
|
Dec 31,
|
|
Dec 31,
|
|
Mar 31,
|
|
2020
|
|
2020
|
|
2021
|
Progressive
Leasing
|
462,025
|
|
404,018
|
|
448,843
|
|
536,422
|
|
|
1,851,308
|
|
|
510,046
|
|
Vive
|
25,376
|
|
21,536
|
|
37,883
|
|
45,956
|
|
|
130,751
|
|
|
55,898
|
|
Total
|
487,401
|
|
425,554
|
|
486,726
|
|
582,378
|
|
|
1,982,059
|
|
|
565,944
|
|
Reconciliation of
Full Year 2021 Outlook for Adjusted EBITDA
|
(In
thousands)
|
|
|
Full Year 2021
Ranges
|
|
Progressive
Leasing
|
Vive
|
Consolidated
Total
|
Estimated Net
Earnings
|
|
|
$246,000 -
$259,000
|
Taxes(1)
|
|
|
82,000 -
88,000
|
Projected Earnings
Before Taxes
|
328,000 -
345,000
|
0 - 2,000
|
328,000
-347,000
|
Interest
Expense
|
1,000
|
700
|
1,700
|
Depreciation
|
10,800
|
800
|
11,600
|
Amortization
|
21,700
|
—
|
21,700
|
Projected
EBITDA
|
361,500 -
378,500
|
1,500 -
3,500
|
363,000 -
382,000
|
Stock-based
compensation
|
16,500 -
17,500
|
500
|
17,000 -
18,000
|
Projected Adjusted
EBITDA
|
378,000 -
396,000
|
2,000 -
4,000
|
380,000 -
400,000
|
|
(1) Taxes are
calculated on a consolidated basis and are not identifiable by
Company segments.
|
Reconciliation of
Full Year 2021 Outlook for Earnings Per Share
|
Assuming Dilution
to Non-GAAP Earnings Per Share Assuming Dilution
|
|
|
Full Year 2021
Range
|
|
Low
|
High
|
Projected Earnings
Per Share Assuming Dilution
|
$
|
3.56
|
|
$
|
3.81
|
|
Add Projected
Intangible Amortization Expense
|
0.24
|
|
0.24
|
|
Projected Non-GAAP
Earnings Per Share Assuming Dilution
|
$
|
3.80
|
|
$
|
4.05
|
|
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SOURCE PROG Holdings, Inc.