Slide 1: First Quarter Earnings Review
First Quarter Earnings Review May 4, 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: Q1 Consolidated Highlights
Q1 Consolidated Highlights Q1 Financial Results • Consolidated revenues of $1.0 billion, -12.4% y/y • Adjusted EBITDA1 of $111.5 million, +12.1% y/y primarily due to lower early payouts and losses compared to Q1 2022 • Non-GAAP Diluted EPS1 of $0.83, compared to $0.74 in Q1 2022 • Cash flow from ope
Slide 4: Q1 Business Segment Highlights
Q1 Business Segment Highlights Rent-A-Center Acima • Segment revenues -6.5% y/y primarily due to a lower lease portfolio value and fewer early payouts • Q1 2023 ending lease portfolio value of $140.2M, -3.2% y/y improved 150 bps compared to Q4 2022 and was better than expected due to lower early pay
Slide 5: 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 6: Q1 2023 Consolidated Financial Highlights
Q1 2023 Consolidated Financial Highlights Q1 2023 $’s millions, except percentages and EPS Actual % of Total Revenue Rent-A-Center Business $485.0 47.8% Acima $483.8 47.6% Franchising $29.8 2.9% Mexico $17.4 1.7% Total Revenue $1,016.1 100.0% Adj EBITDA Margin Rent-A-Center Business $73.9 15.2% Acim
Slide 7: Rent-A-Center Business
Rent-A-Center Business Qtr. End Portfolio Value ($M)3 Rent-A-Center Business Past Due Rates2,3 Trend Rent-A-Center Q1 Highlights Financial Results • Revenue of $485.0 million, -6.5% y/y due to a lower lease portfolio value and fewer customers electing early payouts. Same store sales -6.6%, which imp
Slide 8: Acima Loss Rate & First Payment Miss Rate Trend
Acima Loss Rate & First Payment Miss Rate Trend Acima Past Due Rates2 Trend Acima Q1 Highlights Financial Results • GMV -12.6% y/y, due to a lower number of lease applications driven by weaker customer traffic at merchant partner locations and disciplined underwriting • Q1 revenues of $483.8 million
Slide 9: Full Year 2023 Guidance
Full Year 2023 Guidance Note: Adjusted EBITDA guidance excludes stock-based compensation of approximately $23 million for full year 2023 1 Includes Rent-A-Center Business, Acima, Mexico, Franchise and Corporate segments. 2 Adjusted EBITDA, non-GAAP diluted earnings per share and free cash flow are n
Slide 10: Financial Position & Capital Allocation
Financial Position & Capital Allocation Financial Results • Quarterly dividend of $0.34 per share or annualized dividend of $1.36 per share • Net leverage decreased from 2.8x to 2.6x. Gross debt reduced $42.6mm in the quarter • Long-term target leverage ratio remains at 1.5x • Evaluate share repurch
Slide 11: Key Takeaways
Key Takeaways 11 Cautiously optimistic outlook for 2023 • (+) Raised full year 2023 guidance for Adj. EBITDA and Adj. EPS • (+) Growing evidence that “trade-down” is occurring; should provide counter-cyclical benefits in a weaker economy • (-) Weak tax refund season could be a sign of potential weak
Slide 12: Upbound
upbound Repent
Slide 13: Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted EPS
Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share 1 Stock compensation expense recognized during the three months ended March 31, 2023 related to Acima equity consideration includes $78.4 million attributable to the acceleration of restricted stock agreem
Slide 14: Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted EPS
Reconciliation of Net Earnings Excluding Special Items and Non-GAAP Diluted Earnings Per Share 1 Includes amortization of approximately $22.1 million related to the total fair value of acquired intangible assets and incremental depreciation of approximately $4.0 million Three Months Ended March 31,
Slide 15: Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment)
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) Three Months Ended March 31, 2023 (in thousands) Rent-A- Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $68,961 $53,870 $995 $4,760 $(163,699) $(35,113) Plus: Amortizatio
Slide 16: Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment)
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) Three Months Ended March 31, 2022 (in thousands) Rent-A- Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $100,176 $9,600 $2,066 $4,790 $(105,589) $11,043 Plus: Amortizatio
Slide 17: Reconciliation of 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 March 31 2023 2022 (in thousands) Amount Amount Net cash provided by operating activities $105,417 $205,291 Purchase of property assets (9,534) (16,403) Free cash flow $95,883 $188,888
Slide 18: Supplemental Segment Performance Details – GAAP
Supplemental Segment Performance Details – GAAP
Slide 19: Supplemental Segment Performance Details – Non-GAAP
Supplemental Segment Performance Details – Non-GAAP