Upbound Group, Inc. · NASDAQ:UPBD
Upbound — Rent A Center Inc DE — Q3 2022 Earnings Presentation
17 slides from Upbound's earnings presentation, Nov 3, 2022
Slide 1: Rent-A-Center Third Quarter 2022 Earnings Review
Rent-A-Center Third Quarter 2022 Earnings Review
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: Navigating Through Challenging External Conditions
Navigating Through Challenging External Conditions 3 Q3’22 Results Q3 consolidated revenues of $1.0 billion, -13.3% y/y, mainly due to lower rental revenue in both the Acima and Rent-A- Center business segments Q3 Adjusted EBITDA1 of $115.0 million, -34.6% y/y, primarily due to lower revenues an
Slide 4: Q3 2022 Acima Highlights
Q3 2022 Acima Highlights 4 Business Highlights GMV -23.0% y/y, due to a lower number of lease applications driven by weaker household durable goods demand and underwriting changes made earlier in 2022 Q3 revenues of $504.4 million, -19.1% vs. last year, primarily due to lower GMV over the past t
Slide 5: Q3 2022 Rent-A-Center Highlights
Q3 2022 Rent-A-Center Highlights 5 Rent-A-Center Business 2-Year Stack Same Store Sales Business Highlights 1 Non-GAAP financial measure. Refer to explanations and reconciliations elsewhere in this presentation. 7.0% 0% 10% 20% 30% Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22
Slide 6: Course of Action Heading into 2023
Course of Action Heading into 2023 6 Acima Objectives Identify opportunities for risk-adjusted growth, such as adjusting value proposition or pushing into fast-growing channels/product categories Develop and refine existing products & solutions that can expand our near-term addressable market to
Slide 7: Q3 2022 Financial Highlights
Q3 2022 Financial Highlights 7 Consolidated Revenue growth -13.3% vs. last year Adjusted EBITDA1: $115.0M, -34.6% year-over-year; due to lower revenue and higher loss rates caused by pressure on customer discretionary income Adjusted EBITDA1 margin: 11.2% vs. 14.9% in the prior year period N
Slide 8: Fourth Quarter 2022 Guidance
Fourth Quarter 2022 Guidance 8 1 Includes Rent-A-Center Business, Acima, Mexico, Franchise and Corporate segments. 2 Free Cash Flow defined as net cash provided by operating activities less capital expenditures. 3 Adjusted EBITDA, non-GAAP diluted earnings per share and free cash flow are non-GAAP m
Slide 9: Financial Position & Capital Allocation
Financial Position & Capital Allocation 9 2022 Capital Allocation Considerations ($’s millions) 9/30/22 Liquidity $540 Cash (unrestricted) $166 Revolving Credit Availability $374 Total Debt $1,402 Leverage Ratio (LTM) 2.6x Interest Coverage Ratio (LTM) 5.0x Dividend Payout Ratio (LTM) 34% Quarterl
Slide 10: Q3 2022 Key Takeaways
Q3 2022 Key Takeaways 10 Macro-economic environment remains challenging o Conflicting economic trends: (-) inflation, (-) lower discretionary income, (+) strong employment, (+) ample credit access broadly o Conditions are disproportionately affecting less affluent households: discretionary income,
Slide 11: Appendix
Appendix
Slide 12: Q3 2022 Financial Highlights
Q3 2022 Financial Highlights 121 Non-GAAP financial measure. Refer to explanations and reconciliations elsewhere in this presentation. Q3 2022 In millions, except percentages and EPS Actual % of Total Revenue Rent-A-Center Business $474 46.3% Acima $504 49.2% Franchising $30 2.9% Mexico $16 1.6% Tot
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 13 Three Months Ended September 30, 2022 (in thousands) Gross Profit Operating Profit Earnings Before Income Taxes Tax (Benefit) Expense Net (Loss) Earnings Diluted (Loss) Earnings per Share GAAP Results $
Slide 14: Three Months Ended September 30, 2021 Reconciliation
14 Three Months Ended September 30, 2021 (in thousands) Gross Profit Operating Profit Earnings Before Income Taxes Tax Expense Net (Loss) Earnings Diluted (Loss) Earnings per Share GAAP Results $568,760 $67,146 $40,595 $19,328 $21,267 $0.31 Plus: Special Items (Extraordinary, Unusual or Non- Recurri
Slide 15: Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment)
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) 15 Three Months Ended September 30, 2022 (in thousands) Rent-A-Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $71,999 $48,885 $996 $5,077 $(89,880) $37,077 Plus: Amortiza
Slide 16: Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment)
Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and by Segment) 16 Three Months Ended September 30, 2021 (in thousands) Rent-A-Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) $109,272 $51,884 $2,285 $4,816 $(101,111) $67,146 Plus: Amor
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 17 Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (in thousands) Amount Amount Amount Amount Net cash provided by operating activities $124,962 $75,686 $412,083 $326,204 Purchase of pr