Upbound Group, Inc. · NASDAQ:UPBD
Upbound — Rent A Center Inc DE — Q4 2021 Earnings Presentation
20 slides from Upbound's earnings presentation, Feb 24, 2022
Slide 1: Rent-A-Center: Fourth Quarter 2021 Earnings Review
Rent-A-Center: Fourth Quarter 2021 Earnings Review
Slide 2: Important Notices
Important Notices 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 p
Slide 3: 2021 Full Year Highlights
3 2021 Full Year Highlights 1 Non-GAAP f inancial measure. Refer to explanations and reconciliations elsewhere in this presentation. Note: Pro forma results and metrics represent estimated financial results and metrics as if the acquisition of Acima had been completed on January 1, 2020. The pro f o
Slide 4: Business Highlights
4 Business Highlights Rent-A-Center Segment Highlights Acima Segment Highlights Strong merchant network growth, including notable additions like PC Richard & Son and Whirlpool Integration progress: achieved targeted synergies of at least $25 million, consolidated collection operations and conver
Slide 5: Macro Headwinds Impacting Our Core Consumers
5 Macro Headwinds Impacting Our Core Consumers 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% % C ha ng e Y /Y CPI Urban Consumers: All Items Less Food & Energy 2019 2020 2021 Government pandemic relief programs in 2020 & 2021, such as stimulus payments and extended unemployment benefits, provided a significa
Slide 6: Executing Our Long-Term Strategy
6 Executing Our Long-Term Strategy Returned the legacy LTO business to a profitable model that generates significant cash flow Accelerated the development of our digital growth engine by acquiring and integrating Acima, and then launching a proprietary digital Ecosystem with a direct-to-consumer
Slide 7: Q4 2021 Acima Highlights
7 Q4 2021 Acima Highlights Pro forma GMV growth of +5.0% driven by an increase in merchant partners and lease applications Q4 revenues of $612 million, +12.3% on a pro forma basis Implemented underwriting and collections changes to mitigate increased delinquency and loss rates Ecosystem test
Slide 8: Acima Ecosystem Test Progression
8 Acima Ecosystem Test Progression Ecosystem mobile app on pace for approximately half a million downloads by the end of February and 1 million downloads in 2022 The primary objective during Q4 was optimizing product and better understanding risk and performance The physical Lease Pay card was
Slide 9: Q4 Rent-A-Center Business Highlights
9 Q4 Rent-A-Center Business Highlights Rent-A-Center Business Same Store SalesQ4 2021 Highlights Same Store Sales: +10.4% year over year (+24.1% on a 2-year basis); 16th consecutive quarter of positive growth Q4 Ending Lease Portfolio: +10.5% year over year Skip / Stolen Losses: 4.0% of revenu
Slide 10: Balance Sheet and Q4 2021 Financial Highlights
Balance Sheet2 Cash: Ended Q4 2021 with $108M cash balance Debt: Ended Q4 2021 with $1.6B Liquidity: Ended Q4 2021 with approximately $280M in available liquidity Leverage Ratio: Ended Q4 2021 at 2.3x 10 Q4 2021 Financial Highlights Consolidated Revenue growth +63.5% vs. last year; pro for
Slide 11: 2022 Guidance
11 2022 Guidance Annual Guidance Q1 2022 Guidance Consolidated 1 Low High Low High Revenues ($bn) $4.450 $4.600 $1.125 $1.155 Adjusted EBITDA ($mm) 3 $515 $565 $85 $100 Diluted Non-GAAP EPS 3 $4.50 $5.00 $0.65 $0.80 Free Cash Flow ($mm) 2,3 $390 $440 1 Includes Rent-A-Center Business, Acima, Mexico,
Slide 12: Capital Allocation Priorities
12 Return capital to shareholders through a combination of dividends and share repurchases Funding current business and investing in organic growth opportunities I Opportunistic value enhancing M&AII III Capital Allocation Priorities Long-Term Capital Allocation Priorities2022 Capital Allocation Con
Slide 13: Question and Answer
Question and Answer
Slide 14: Appendix
Appendix
Slide 15: Q4 2021 Financial Highlights
15 Q4 2021 Financial Highlights 1 Non-GAAP f inancial measure. Refer to explanations and reconciliations elsewhere in this presentation. Q4 2021 In millions, except percentages and EPS Actual % of Total Revenue Rent-A-Center Business $506 43.2% Acima $612 52.3% Franchising $38 3.2% Mexico $16 1.4% T
Slide 16: Reconciliation of Net Earnings Per Share to Non-GAAP Diluted EPS
16 Reconciliation of Net Earnings Per Share to Non-GAAP Diluted Earnings Per Share 1 Includes amortization of approximately $29.3 million related to the total fair value of acquired intangible assets, incremental depreciation of approximately $4.0 million related to the fair value increase over net
Slide 17: Reconciliation of Net Earnings Per Share to Non-GAAP Diluted EPS
17 Reconciliation of Net Earnings Per Share to Non-GAAP Diluted Earnings Per Share 1Includes amortization of approximately $101.7 million related to the total fair value of acquired intangible assets, incremental depreciation of approximately $13.2 million related to the fair value increase over net
Slide 18: Reconciliation of Operating Profit to Adjusted EBITDA
18 Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and By Segment) (in thousands) Rent-A-Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) 91,869$ 31,699$ 1,199$ 4,826$ (92,764)$ 36,829$ Plus: Amortization, Depreciation 4,767 554 142 35
Slide 19: Reconciliation of Operating Profit to Adjusted EBITDA
19 Reconciliation of Operating Profit to Adjusted EBITDA (Consolidated and By Segment) (in thousands) Rent-A-Center Business Acima Mexico Franchising Corporate Consolidated GAAP Operating Profit (Loss) 333,379$ 57,847$ 5,798$ 12,570$ (172,258)$ 237,336$ Plus: Amortization, Depreciation 19,912 2,066
Slide 20: Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow
20 Reconciliation of Net Cash Provided By Operating Activities to Free Cash Flow (in thousands) 2020 2020 Net cash provided by operating activities 66,094$ (59,724)$ 392,298$ 236,502$ Purchase of property assets (16,574)$ (11,988) (62,450) (34,545) Hurricane insurance recovery proceeds - - - 158 Fre