Upbound Group, Inc. · NASDAQ:UPBD
Upbound — Rent-A-Center — Q2 2019 Earnings Presentation
14 slides from Upbound's earnings presentation, Aug 8, 2019
Slide 1: Rent-A-Center
Rent-A-Center August 8, 2019
Slide 2: Safe Harbor: Forward-Looking Statements
Safe Harbor Forward-Looking Statements This presentation and the guidance herein contain forward-looking statements that involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward- looking terminology such as "may," "will," "expect," "intend,"
Slide 3: Consolidated Highlights
Consolidated Highlights Strategy Progress Cost Saving Initiatives Enhance Value Proposition Franchising Executed on $140+ million in annualized cost savings and $40+ Q2’19 same store sales +5.8% 100+ locations refranchised million in working capital within the last 18 months efficiencies Inv
Slide 4: Core U.S. Highlights Q2 2019
Core U.S. Highlights Q2 2019 Same store sales increase of 5.6% • Core U.S. portfolio finished Q2 up approximately 4.0% year over year on a same store basis • Online traffic increased 30% year over year; Online agreements increased 38% year over year • Agreements originating online represent approxim
Slide 5: Acceptance NOW Highlights Q2 2019
Acceptance NOW Highlights Q2 2019 • Same store sales increase of 6.0% • Portfolio invoice volume was $113M, 7.5% above last year • Adjusted EBITDA was $23 million, 13.1% EBITDA margin Same Store Sales (1) Invoice Volume (Same Store Sales Per Store Average) 27% 16% Acceptance NOW 14% YoY (PSA) 12% 13
Slide 6: Merchants Preferred Acquisition
Merchants Preferred Acquisition Transaction Overview Merchants Preferred Overview • RCII will acquire Merchants Preferred (“MP”) for • Founded in 2012 and based in Atlanta, GA $28 million in net cash and ~700k shares (valued • Revenues of approximately $80 million TTM as of August 7, 2019 at $17.5 m
Slide 7: Merchants Preferred Capability Enhancements & Growth Opportunity
Merchants Preferred Capability Enhancements & Growth Opportunity Existing Capabilities Capability Enhancements ANOW MP • Management team experienced in virtual rent to Management and own and technology innovation Sales Teams • Nationwide sales team of over 40 people Proven Virtual • Advanced virtual
Slide 8: Acceptance NOW and Merchants Preferred Growth Opportunity
Acceptance NOW and Merchants Preferred Growth Opportunity 3 Year Growth Goals Revenue • Grow annual revenues to $1.2B $1.2B+ • Drive invoice volume through: • Increased location count • Leverage nationwide sales team • Hybrid model • New product verticals $80M $788M • National retail partnerships $7
Slide 9: Financial Highlights
FINANCIAL HIGHLIGHTS
Slide 10: Profit and Loss Statement by Segment (Non-GAAP)
Profit and Loss Statement by Segment (Non-GAAP) Q2 2019 Comments Better (worse) $656M in Revenues versus 2018 Q2 • Flat versus prior year primarily driven by ($ in m illio ns , exc ept EP S) Actual % $ % refranchising and closures of certain Core U.S. stores offset by consolidated Core U.S. $451 68.
Slide 11: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Highlights Net Debt / Adjusted EBITDA Metrics Balance Sheet As of August • Aggressively deleveraged the balance sheet through 2018 Q219 5, 2019 refinancing • Improved capital allocation flexibility Cash $155 $353 $102 8.6x Debt 543 543 280 Cash Flow8.4x Net Debt $387 $190
Slide 12: Strong Balance Sheet and Capital Allocation Framework
Strong Balance Sheet and Capital Allocation Framework Refinancing Overview • New five-year $300 million asset based revolving credit facility • New seven-year $200 million Term Loan B New Facility (1) • Debt reduced by approximately $260 million by eliminating $543 million in senior notes • Expected
Slide 13: Fiscal Year 2019 Guidance
Fiscal Year 2019 Guidance Target Ranges ($m) Change vs. Previous (1) 2019 Guidance Guidance on 5/6/19 Low High Low High Consolidated Revenues $2,595 $2,640 $10 $10 Updated Core $1,800 $1,825 $10 $10 ANOW $700 $715 - - Same store sales Mid single digits Low to mid single digits Adjusted EBITDA $240 $
Slide 14: Question and Answer
=<xc Question and Answer