Slide 1: Fourth Quarter & Full Year 2022 Earnings Review
Fourth Quarter & Full Year 2022 Earnings Review February 23, 2023 ™
Slide 2: Disclosures
Disclosures 2 Forward-Looking Statements This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding our goals, plans and projections with respect to our operations, financial positio
Slide 3: Elevating Financial Opportunity for All
3 Elevating Financial Opportunity for All Provide enterprise-wide strategic planning and shared services that will be leveraged across the organization Enterprise brand that clarifies our mission and unifies the Company’s resources and capabilities Execute our growth strategy to attract new LTO cust
Slide 4: New Enterprise Operating Structure
New Enterprise Operating Structure 4 Select Shared Services Operating Business UnitsMillions of Customer Relationships Proprietary Payment History Data
Slide 5: Organizational Structure
Organizational Structure 5 Shared Services Leaders Operating Unit Leaders Mitch Fadel Fahmi Karam Chief Financial Officer Sudeep Gautam Chief Technology & Digital Officer Anthony Blasquez Head of Rent-A-Center Ann Davids Chief Customer & Marketing Officer Bryan Pechersky General Counsel & Corporate
Slide 6: 2022 Consolidated Highlights
2022 Consolidated Highlights 2022 Financial Results • 2022 consolidated revenues of $4.2 billion, -11.2% y/y on a pro forma basis • 2022 Adjusted EBITDA1 of $453.5 million, -32.0% y/y on a pro forma basis, primarily due to higher loss rates and lower revenue • Non-GAAP Diluted EPS1 of $3.70, compare
Slide 7: 2022 Business Segment Highlights
2022 Business Segment Highlights Rent-A-Center Acima • Segment revenues -4.3% y/y; in-line with original expectations for 2022; revenue decreased primarily due to a lower lease portfolio value • 2022 ending lease portfolio value of $142.8M, -4.7% y/y, mainly due to a decrease in the number of delive
Slide 8: 2023 Operational Priorities
2023 Operational Priorities • Focus on customer base growth through new extended aisle vendors, better conversion rates from centralized operations support, and an upgraded online shopping experience • Utilize more data-driven interactions, increased personalization, and offer more convenient ways t
Slide 9: Q4 2022 Consolidated Financial Highlights
Q4 2022 Consolidated Financial Highlights Q4 2022 $’s millions, except percentages and EPS Actual % of Total Revenue Rent-A-Center Business $467.4 47.2% Acima $476.3 48.1% Franchising $30.3 3.1% Mexico $16.5 1.6% Total Revenue $990.5 100.0% % of Segment Revenue Rent-A-Center Business $68.3 14.6% Aci
Slide 10: Rent-A-Center Business Q4 Highlights
Rent-A-Center Business 2-Year Stacked Same Store Sales Rent-A-Center Past Due Rates2 Trend Rent-A-Center Q4 Highlights Financial Results • Revenue of $467.4 million, -7.7% y/y, due to a lower lease portfolio value that generated less revenues • Same Store Sales: -8.1% y/y (2-year stacked growth 2.3%
Slide 11: Acima Q4 Highlights
Acima Loss Rate & First Payment Miss Rate Trend Acima Past Due Rates2 Trend Acima Q4 Highlights Financial Results 8.6% 8.7% 8.7% 11.8% 12.6% 11.6% 9.0% 8.9% Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 First Payment Miss Rate Loss Rate 13.6% 14.7% 15.0% 14.8% 14.1% 13.5% 13.7% 14.1% 14.3% 14.3% 1
Slide 12: Full Year 2023 Guidance
Full Year 2023 Guidance Full Year 2023 Guidance Consolidated 1 Low High Revenues ($bn) 3.8 4.0 Adjusted EBITDA Excluding Stock Based Compensation ($mm) 2 380 415 Non-GAAP Diluted EPS 2 $2.50 $3.00 Free Cash Flow 2 3 180 215 Note: Adjusted EBITDA guidance excludes stock-based compensation of approxim
Slide 13: Financial Position & Capital Allocation
Financial Position & Capital Allocation Financial Results • Quarterly dividend of $0.34 per share or $1.36 per year • Long-term target leverage ratio remains at 1.5x • Evaluate share repurchases on an opportunistic basis with guidance from the board of directors Balance Sheet & Liquidity ($’s millio
Slide 14: Key Takeaways
Key Takeaways 14 Macro-economic environment remains uncertain • Conflicting economic trends: (-) inflation remains high, (-) lower discretionary income, (+) strong employment, (+) retail sales • Conditions are disproportionately affecting less affluent households: lower discretionary income, and hig
Slide 15: Appendix
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Slide 16: Net Earnings Excluding Special Items and Non-GAAP Diluted EPS, Q4 2022
Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share Three Months Ended December 31, 2022 (in thousands) Gross Profit Operating Profit Pre-Tax Income Tax Expense (Benefit) Net Earnings (Loss) Diluted Earnings (Loss) per Share GAAP Results $495,359 $42,338 $1
Slide 17: Net Earnings Excluding Special Items and Non-GAAP Diluted EPS, Q4 2021
Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share Three Months Ended December 31, 2021 (in thousands) Gross Profit Operating Profit Pre-Tax Income Tax Expense Net Earnings (Loss) Diluted Earnings (Loss) per Share GAAP Results $568,258 $36,829 $18,194 $8,3
Slide 18: Net Earnings Excluding Special Items and Non-GAAP Diluted EPS, Twelve 2022
Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share Twelve Months Ended December 31, 2022 (in thousands) Gross Profit Operating Profit Pre-Tax Income Tax Expense (Benefit) Net Earnings (Loss) Diluted Earnings (Loss) per Share GAAP Results $2,079,532 $148,53
Slide 19: Net Earnings Excluding Special Items and Non-GAAP Diluted EPS, Twelve 2021
Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share Twelve Months Ended December 31, 2021 (in thousands) Gross Profit Operating Profit Pre-Tax Income Tax Expense Net Earnings (Loss) Diluted Earnings (Loss) per Share GAAP Results $2,235,012 $280,539 $194,304
Slide 20: Operating Profit to Adjusted EBITDA, Three 2022
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) Three Months Ended December 31, 2022 (in thousands) Rent-A- Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $63,242 $56,983 $1,256 $3,954 $(83,097) $42,338 Plus: Amortizat
Slide 21: Operating Profit to Adjusted EBITDA, Three 2021
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) Three Months Ended December 31, 2021 (in thousands) Rent-A- Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $91,869 $31,699 $1,199 $4,826 $(92,764) $36,829 Plus: Amortizat
Slide 22: Operating Profit to Adjusted EBITDA, Twelve 2022
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) Twelve Months Ended December 31, 2022 (in thousands) Rent-A-Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $334,525 $151,301 $6,267 $19,124 $(362,679) $148,538 Plus: Amor
Slide 23: Operating Profit to Adjusted EBITDA, Twelve 2021
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) Twelve Months Ended December 31, 2021 (in thousands) Rent-A-Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $448,905 $176,496 $7,858 $20,321 $(373,041) $280,539 Plus: Amor
Slide 24: Net Cash Provided by Operating Activities to Free Cash Flow
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow Three Months Ended December 31, Twelve Months Ended December 31, 2022 2021 2022 2021 (in thousands) Amount Amount Amount Amount Net cash provided by operating activities $56,377 $66,094 $468,460 $392,298 Purchase of proper