Rent-A-Center, Inc. Reports Fourth Quarter and Full Year 2021 Results

By: Rent-A-Center | 1 Shares 402 Reads

Total Revenues of $1.2 billion, up 10.5% Pro Forma1 for the Fourth Quarter
Acima Segment GMV of over $520 million, up 5% Pro Forma for the Fourth Quarter
Rent-A-Center Business Segment Same-Store-Sales up 10.4% for the Fourth Quarter
Fourth Quarter Diluted EPS of $0.15; Non-GAAP Diluted EPS of $1.08
Full Year GAAP Diluted EPS of $2.02; Non-GAAP Diluted EPS of $5.57

PLANO, Texas - (BUSINESS WIRE) - February 23, 2022 - Rent-A-Center, Inc. (the "Company" or "Rent-A-Center") (NASDAQ:RCII) today announced results for the quarter and year ended December 31, 2021.

"2021 was a dynamic year for the Company with significant progress and some challenges. We generated revenues of $4.6 billion, which grew 17.3% on a pro-forma basis, and non-GAAP EPS of $5.57, driven by strong organic growth for both the Rent-A-Center Business segment and the Acima business that we acquired in February of 2021,” said Mitch Fadel, Chief Executive Officer.

“In the fourth quarter, the combined effect of significantly reduced government pandemic relief, decades-high rates of inflation, and supply chain disruptions impacted our target customers’ ability to access and afford durable goods, which negatively impacted our results. We anticipate these external headwinds will continue for the foreseeable future, resulting in year-over-year declines in revenue and earnings for 2022, on a pro forma basis, while free cash flow should increase for the year," continued Mr. Fadel.

"Looking forward to a normal post-pandemic environment, our mission to provide flexible leasing solutions for the financially underserved will be even more important as consumers adjust their spending choices to a less stimulative economic setting. Moreover, with the Acima acquisition and the Acima digital ecosystem test we launched in August, we are transforming into a leading consumer Fintech platform business, with omni-channel capabilities." concluded Mr. Fadel.

Fourth Quarter Consolidated Results

Fourth quarter 2021 consolidated revenues of $1.2 billion increased 63.5% year-over-year, primarily due to the acquisition of Acima Holdings, LLC (the "Acima Acquisition"), which closed in the first quarter of 2021, and strong growth in the Rent-A-Center Business. On a pro-forma1 basis, revenues grew 10.5%, led by organic growth in the Acima and Rent-A-Center Business segments.
GAAP operating profit for the fourth quarter of 2021 was $36.8 million compared to $54.6 million in the prior year period. GAAP net income for the fourth quarter of 2021 was $9.8 million and included $60.4 million of costs, net of tax, relating to special items described below, compared to $56.3 million of GAAP net income and $1.1 million of costs, net of tax, relating to special items in the prior year period.
Adjusted EBITDA in the fourth quarter of 2021 was $124.4 million and decreased 22.4% year-over-year on a pro-forma basis1, primarily due to an increase in delinquency and loss rates compared to the prior year period that benefited from government programs and stimulus payments. Adjusted EBITDA margin was 10.6% in the fourth quarter of 2021 compared to 15.1% in the prior year period on a pro-forma1 basis, also primarily due to the effects of higher delinquency and loss rates, supply chain disruptions and rising inflation rates.
GAAP earnings per share for the fourth quarter of 2021 was $0.15 compared to $1.00 in the prior year period. Non-GAAP earnings per share, which exclude the impact of special items described below, for the fourth quarter of 2021 was $1.08 compared to $1.03 in the prior year period.
For the year ended December 31, 2021, the Company generated $392.3 million of cash from operations, and ended the fourth quarter of 2021 with $108.3 million of cash and cash equivalents, $1.6 billion of debt outstanding, $280.9 million of liquidity, including $172.6 million of undrawn revolving credit availability, and a pro-forma net debt to Adjusted EBITDA ratio of 2.3 times.
During the fourth quarter of 2021, the Company returned $388.4 million of cash to shareholders through a combination of $18.3 million in dividends and $370.1 million in share repurchases. For the year ended December 31, 2021, the Company returned $461.6 million of cash to shareholders.

Fourth Quarter Segment Highlights

Acima Segment: Fourth quarter 2021 revenues of $611.9 million increased 204.3% year-over-year due to the Acima Acquisition, completed in the first quarter of 2021. On a pro-forma1 basis, revenues increased 12.3%, and GMV increased 5% year-over-year, with growth in merchant partners and lease applications partially offset by the effects of tighter lease underwriting, supply chain disruptions on merchant partners, and headwinds on consumer discretionary income from elevated rates of inflation and the wind down of government pandemic financial relief. Revenue was also negatively impacted by higher projected delinquency rates based on recent payment activity. Skip/stolen losses were 11.8% of revenue in the fourth quarter of 2021 compared to 10.8% in the prior year period on a pro-forma basis. On a GAAP basis, segment operating profit was $31.7 million with an operating profit margin of 5.2% in the fourth quarter of 2021, compared to $17.3 million and 8.6% in the prior year period. Adjusted EBITDA was $58.6 million with an Adjusted EBITDA margin of 9.6% in the fourth quarter of 2021, compared to $81.6 million and 15.0% in the prior year period on a pro-forma1 basis. The year-over-year decline in Adjusted EBITDA was primarily attributable to higher delinquency and loss rates, which the Company believes largely stemmed from the effect of the wind down of government pandemic relief and elevated rates of inflation on customer discretionary income.

Rent-A-Center Business Segment: Fourth quarter 2021 revenues of $506.2 million increased 9.0% year-over-year, primarily due to a 10.4% increase in same store sales, including 17.9% growth in e-commerce sales and strong lease portfolio performance, partially offset by the impact of refranchising approximately 100 stores in California in the fourth quarter of 2020. Skip/stolen losses were 4.0% of revenue in the fourth quarter of 2021 compared to 2.6% in the prior year period. On a GAAP basis, segment operating profit was $91.9 million with an operating profit margin of 18.2% in the fourth quarter of 2021, compared to $80.4 million and 17.3% in the prior year period. Adjusted EBITDA was $97.8 million with an Adjusted EBITDA margin of 19.3% in the fourth quarter of 2021, compared to $102.9 million and 22.2% in the prior year period. The decline in segment operating profit and Adjusted EBITDA was primarily attributable to higher loss rates that the Company believes stemmed from the wind down of government pandemic relief, and higher labor expense due to wage inflation that more than offset revenue growth. On December 31, 2021, the Rent-A-Center Business segment had 1,846 company-operated locations.

Franchising Segment: Fourth quarter 2021 revenues of $37.6 million increased 2.1% year-over-year due to higher store count as a result of the Company refranchising approximately 100 California stores during 2020 and partially offset by lower inventory purchases per store. Segment operating profit, on a GAAP basis, and Adjusted EBITDA were $4.9 million in the fourth quarter and increased $0.9 million year-over-year. On December 31, 2021, there were 466 franchise-operated locations.

Mexico Segment: Fourth quarter 2021 revenues of $15.7 million increased 9.9% year-over-year on a constant currency basis. Segment operating profit, on a GAAP basis, and Adjusted EBITDA were $1.2 million and $1.3 million, respectively. In the fourth quarter, GAAP operating profit decreased $0.9 million year-over-year. On December 31, 2021, the Mexico business had 123 company-operated locations.

Corporate Segment: Fourth quarter 2021 non-GAAP basis expenses increased $7.9 million year-over-year or 20.7%, reflecting our addition of Acima related costs and investments we have been making in talent and technology to support our growth initiatives.

Key Operating Metrics

Gross Merchandise Volume (GMV): The Company defines Gross Merchandise Volume as the retail value in U.S. dollars of merchandise acquired by the Company that is leased to customers through a transaction that occurs within a defined period, net of cancellations.

1) The disclosed pro forma results and metrics in this release and the Company's related earnings conference call represent estimated financial results and metrics as if the acquisition of Acima had been completed on January 1, 2020. The pro forma results and metrics may not necessarily reflect the actual results of operations or metrics that would have been achieved had the acquisition been completed on January 1, 2020, nor are they necessarily indicative of future results of operations or metrics.

SAME STORE SALES (Unaudited)
Table 1
Period	Rent-A-Center Business	Mexico
Three Months Ended December 31, 2021 ⁽¹⁾	10.4 %	8.6 %
Three Months Ended September 30, 2021⁽¹⁾	12.3 %	15.3 %
Three Months Ended December 31, 2020⁽¹⁾	13.7 %	10.5 %

Note: Same store sale methodology - Same store sales generally represents revenue earned in stores that were operated by us for 13 months or more and are reported on a constant currency basis as a percentage of total revenue earned in stores of the segment during the indicated period. The Company excludes from the same store sales base any store that receives a certain level of customer accounts from closed stores or acquisitions. The receiving store will be eligible for inclusion in the same store sales base in the 30^th full month following account transfer.

⁽¹⁾ Due to the COVID-19 pandemic and related temporary store closures, all 32 stores in Puerto Rico were excluded starting in March 2020 and will remain excluded for 18 months.

Full Year 2022 Guidance

The Company is providing the following guidance for its 2022 fiscal year:

Table 2
2022 Guidance	Full Year 2022	First Quarter 2022
Consolidated ⁽¹⁾
Revenues ($'s billion)	$4.450 - $4.600	$1.125 - $1.155
Adjusted EBITDA ⁽²⁾($'s million)	$515 - $565	$85 - $100
Non-GAAP Diluted earnings per share ⁽²⁾⁽³⁾	$4.50 - $5.00	$0.65 - $0.80
Free cash flow ⁽²⁾($'s million)	$390 - $440	N/A

⁽¹⁾Consolidated includes Acima, Rent-A-Center Business, Franchising, Mexico and Corporate Segments.

⁽²⁾ Non-GAAP financial measure. See descriptions below in this release. Because of the inherent uncertainty related to the special items identified in the tables below, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP measure without unreasonable effort. Adjusted EBITDA figures now exclude stock based compensation.

⁽³⁾Non-GAAP diluted earnings per share excludes the impact of incremental depreciation and amortization related to the estimated fair value of acquired Acima assets, stock compensation expense associated with the Acima Acquisition equity consideration subject to vesting conditions, and one-time transaction and integration costs related to the Acima Acquisition. Guidance excludes the impact of future share repurchases.

Additional Commentary on the 2022 Outlook

2022 guidance assumes the macro headwinds that affected the business in late 2021, including supply chain disruptions, high rates of inflation, and the effect of lower levels of government support for our core consumers, will continue throughout the year.

The Company has modified its definition of Adjusted EBITDA beginning with first quarter 2022 results to exclude stock-based compensation. Therefore, 2022 Adjusted EBITDA guidance excludes the impact of stock-based compensation, whereas prior period Adjusted EBITDA within the remainder of this press release includes the impact of stock-based compensation.

Webcast Information

Rent-A-Center, Inc. will host a conference call to discuss the fourth quarter results, guidance and other operational matters on the morning of Thursday, February 24, 2022, at 9:30 a.m. ET. Certain financial and other statistical information that will be discussed during the conference call will also be provided on the same website.


Rent-A-Center, Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF EARNINGS - UNAUDITED

Table 3	Three Months Ended December 31,						Twelve Months Ended December 31,
(In thousands, except per share data)		2021			2020			2021			2020
Revenues
Store
Rentals and fees	$	929,665		$	580,781		$	3,522,453		$	2,263,091
Merchandise sales		183,184			78,024			829,222			378,717
Installment sales		20,593			19,530			73,585			68,500
Other		1,113			1,504			4,148			3,845
Total store revenues		1,134,555			679,839			4,429,408			2,714,153
Franchise
Merchandise sales		30,514			30,470			126,856			80,023
Royalty income and fees		6,357			6,182			27,187			20,015
Total revenues		1,171,426			716,491			4,583,451			2,814,191
Cost of revenues
Store
Cost of rentals and fees		347,902			166,006			1,260,434			655,612
Cost of merchandise sold		217,783			85,288			935,765			382,182
Cost of installment sales		7,071			7,281			25,637			24,111
Total cost of store revenues		572,756			258,575			2,221,836			1,061,905
Franchise cost of merchandise sold		30,412			30,502			126,603			80,134
Total cost of revenues		603,168			289,077			2,348,439			1,142,039
Gross profit		568,258			427,414			2,235,012			1,672,152
Operating expenses
Store expenses
Labor		164,774			144,909			644,763			579,125
Other store expenses		229,374			146,078			770,073			609,370
General and administrative expenses		45,426			39,414			194,894			153,108
Depreciation and amortization		14,037			13,587			54,830			56,658
Other charges		77,818			28,787			289,913			36,555
Total operating expenses		531,429			372,775			1,954,473			1,434,816
Operating profit		36,829			54,639			280,539			237,336
Debt refinancing charges		—			—			15,582			—
Interest expense		18,708			3,367			70,874			15,325
Interest income		(73	)		(207	)		(221	)		(768	)
Earnings before income taxes		18,194			51,479			194,304			222,779
Income tax expense		8,382			(4,821	)		59,364			14,664
Net earnings	$	9,812		$	56,300		$	134,940		$	208,115
Basic weighted average shares		55,401			54,190			57,053			54,187
Basic earnings per common share	$	0.18		$	1.04		$	2.37		$	3.84
Diluted weighted average shares		64,989			56,028			66,839			55,754
Diluted earnings per common share	$	0.15		$	1.00		$	2.02		$	3.73


Rent-A-Center, Inc. and Subsidiaries SELECTED BALANCE SHEETS HIGHLIGHTS - UNAUDITED

Table 4	December 31,
(In thousands)		2021		2020
Cash and cash equivalents	$	108,333	$	159,449
Receivables, net		129,166		90,003
Prepaid expenses and other assets		63,468		50,006
Rental merchandise, net
On rent		1,173,024		762,886
Held for rent		132,984		146,266
Operating lease right-of-use assets		291,338		283,422
Goodwill		286,962		70,217
Total assets		2,993,327		1,750,980

Operating lease liabilities	$	296,535	$	285,354
Senior debt, net		1,135,207		190,490
Senior notes, net		435,992		—
Total liabilities		2,480,051		1,158,900
Stockholders' equity		513,276		592,080


Rent-A-Center, Inc. and Subsidiaries SEGMENT INFORMATION HIGHLIGHTS - UNAUDITED

Table 5	Three Months Ended December 31,				Twelve Months Ended December 31,
(In thousands)		2021		2020		2021		2020
Revenues
Rent-A-Center Business	$	506,163	$	464,261	$	2,037,849	$	1,852,641
Acima		611,915		201,122		2,328,089		810,151
Mexico		15,733		14,267		61,403		50,583
Franchising		37,615		36,841		156,110		100,816
Total revenues	$	1,171,426	$	716,491	$	4,583,451	$	2,814,191

Table 6	Three Months Ended December 31,				Twelve Months Ended December 31,
(In thousands)		2021		2020		2021		2020
Gross profit
Rent-A-Center Business	$	360,590	$	328,348	$	1,433,536	$	1,294,695
Acima		189,671		82,677		728,852		321,110
Mexico		10,794		10,050		43,117		35,665
Franchising		7,203		6,339		29,507		20,682
Total gross profit	$	568,258	$	427,414	$	2,235,012	$	1,672,152

Table 7	Three Months Ended December 31,						Twelve Months Ended December 31,
(In thousands)		2021			2020			2021			2020
Operating profit
Rent-A-Center Business	$	91,869		$	80,354		$	448,905		$	333,379
Acima		31,699			17,319			176,496			57,847
Mexico		1,199			2,055			7,858			5,798
Franchising		4,826			3,876			20,321			12,570
Total segments		129,593			103,604			653,580			409,594
Corporate		(92,764	)		(48,965	)		(373,041	)		(172,258	)
Total operating profit	$	36,829		$	54,639		$	280,539		$	237,336

Table 8	Three Months Ended December 31,				Twelve Months Ended December 31,
(In thousands)		2021		2020		2021		2020
Depreciation and amortization
Rent-A-Center Business	$	4,767	$	5,153	$	18,588	$	19,912
Acima		554		524		2,122		2,066
Mexico		142		121		511		413
Franchising		35		12		93		40
Total segments		5,498		5,810		21,314		22,431
Corporate		8,539		7,777		33,516		34,227
Total depreciation and amortization	$	14,037	$	13,587	$	54,830	$	56,658

Table 9	Three Months Ended December 31,				Twelve Months Ended December 31,
(In thousands)		2021		2020		2021		2020
Capital expenditures
Rent-A-Center Business	$	1,937	$	4,664	$	23,139	$	14,869
Acima		100		55		1,045		161
Mexico		288		187		1,032		392
Total segments		2,325		4,906		25,216		15,422
Corporate		14,249		7,082		37,234		19,123
Total capital expenditures	$	16,574	$	11,988	$	62,450	$	34,545

Table 10	On lease at December 31,				Held for lease at December 31,
(In thousands)		2021		2020		2021		2020
Lease merchandise, net
Rent-A-Center Business	$	477,901	$	444,945	$	123,111	$	136,219
Acima		676,279		299,660		626		2,228
Mexico		18,844		18,281		9,247		7,819
Total lease merchandise, net	$	1,173,024	$	762,886	$	132,984	$	146,266

Table 11	December 31,
(In thousands)		2021		2020
Assets
Rent-A-Center Business	$	1,026,886	$	999,252
Acima		1,476,752		389,650
Mexico		41,669		42,278
Franchising		15,412		14,729
Total segments		2,560,719		1,445,909
Corporate		432,608		305,071
Total assets	$	2,993,327	$	1,750,980

Non-GAAP Financial Measures

This release and the Company's related conference call contain certain financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (GAAP), including (1) Non-GAAP diluted earnings per share (net earnings, as adjusted for special items (as defined below), net of taxes, divided by the number of shares of our common stock on a fully diluted basis), (2) Adjusted EBITDA (net earnings before interest, taxes, depreciation and amortization, as adjusted for special items) on a consolidated and segment basis and (3) Free Cash Flow (net cash provided by operating activities less capital expenditures). “Special items” refers to certain gains and charges we view as extraordinary, unusual or non-recurring in nature and which we believe do not reflect our core business activities. For the periods presented herein, these special items are described in the quantitative reconciliation tables included below in this release. Because of the inherent uncertainty related to the special items, management does not believe it is able to provide a meaningful forecast of the comparable GAAP measures or reconciliation to any forecasted GAAP measure without unreasonable effort.

These non-GAAP measures are additional tools intended to assist our management in comparing our performance on a more consistent basis for purposes of business decision-making by removing the impact of certain items management believes do not directly reflect our core operations. These measures are intended to assist management in evaluating operating performance and liquidity, comparing performance and liquidity across periods, planning and forecasting future business operations, helping determine levels of operating and capital investments and identifying and assessing additional trends potentially impacting our Company that may not be shown solely by comparisons of GAAP measures. Consolidated Adjusted EBITDA is also used as part of our incentive compensation program for our executive officers and others.

We believe these non-GAAP financial measures also provide supplemental information that is useful to investors, analysts and other external users of our consolidated financial statements in understanding our financial results and evaluating our performance and liquidity from period to period. However, non-GAAP financial measures have inherent limitations and are not substitutes for or superior to, and they should be read together with, our consolidated financial statements prepared in accordance with GAAP. Further, because non-GAAP financial measures are not standardized, it may not be possible to compare such measures to the non-GAAP financial measures presented by other companies, even if they have the same or similar names.

Reconciliation of net earnings to net earnings excluding special items and non-GAAP diluted earnings per share:

Table 12	Three Months Ended December 31, 2021
(In thousands)	Gross Profit			Operating Profit		Earnings Before Income Taxes		Tax Expense		Net Earnings			Diluted Earnings per Share
GAAP Results		568,258		$	36,829	$	18,194	$	8,382	$	9,812		$	0.15
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
Acima equity consideration vesting		—			33,940		33,940		—		33,940			0.52
Acima acquired assets depreciation and amortization ⁽¹⁾		(4,280	)		28,955		28,955		5,200		23,755			0.37
Legal settlement reserves		—			6,750		6,750		1,212		5,538			0.09
Acima integration costs		—			2,415		2,415		434		1,981			0.03
Hurricane charges		—			770		770		138		632			0.01
Acima transaction costs		—			344		344		62		282			—
COVID-19 testing		—			293		293		53		240			—
Store closure costs		—			71		71		12		59			—
Discrete income tax items		—			—		—		5,989		(5,989	)		(0.09	)
Non-GAAP Adjusted Results	$	563,978		$	110,367	$	91,732	$	21,482	$	70,250		$	1.08

⁽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 book value for acquired software assets, and a depreciation credit adjustment of approximately $(4.3) million related to a step-down of estimated fair value below net book value for acquired lease merchandise.

Table 13	Three Months Ended December 31, 2020
(In thousands)	Gross Profit		Operating Profit			Earnings Before Income Taxes			Tax Expense			Net Earnings			Diluted Earnings per Share
GAAP Results	$	427,414	$	54,639		$	51,479		$	(4,821	)	$	56,300		$	1.00
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
California refranchise store sale		—		16,600			16,600			4,573			12,027			0.21
Acima transaction Costs		—		6,400			6,400			1,763			4,637			0.08
Legal settlement reserves		—		3,500			3,500			964			2,536			0.05
Asset disposals		—		1,279			1,279			352			927			0.02
Store closure costs		—		412			412			113			299			0.01
State tax audit assessment reserves		—		400			400			110			290			0.01
COVID-19 impacts		—		334			334			92			242			—
Cost savings initiatives		—		(277	)		(277	)		(76	)		(201	)		—
Nationwide protest impacts		—		139			139			38			101			—
Discrete tax items		—		—			—			19,724			(19,724	)		(0.35	)
Non-GAAP Adjusted Results	$	427,414	$	83,426		$	80,266		$	22,832		$	57,434		$	1.03

Table 14	Twelve Months Ended December 31, 2021
(In thousands)	Gross Profit			Operating Profit		Earnings Before Income Taxes		Tax Expense		Net Earnings			Diluted Earnings per Share
GAAP Results	$	2,235,012		$	280,539	$	194,304	$	59,364	$	134,940		$	2.02
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
Acima equity consideration vesting		—			127,060		127,060		—		127,060			1.90
Acima acquired assets depreciation and amortization⁽¹⁾		(14,265	)		100,694		100,694		24,241		76,453			1.14
Acima transaction costs		—			17,680		17,680		4,256		13,424			0.20
Legal settlement reserves		—			17,500		17,500		4,213		13,287			0.20
Acima integration costs		—			10,305		10,305		2,481		7,824			0.12
Hurricane impacts		—			1,424		1,424		343		1,081			0.02
Store closure costs		—			531		531		128		403			0.01
COVID-19 testing		—			293		293		71		222			—
State tax audit assessment reserves		—			161		161		39		122			—
Debt refinancing charges		—			—		15,582		3,751		11,831			0.18
Discrete income tax items		—			—		—		14,316		(14,316	)		(0.22	)
Non-GAAP Adjusted Results	$	2,220,747		$	556,187	$	485,534	$	113,203	$	372,331		$	5.57

⁽¹⁾Includes 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 book value for acquired software assets, and a depreciation credit adjustment of approximately $(14.2) million related to a step-down of estimated fair value below net book value for acquired lease merchandise.

Table 15	Twelve Months Ended December 31, 2020
(In thousands)	Gross Profit		Operating Profit			Earnings Before Income Taxes			Tax Expense			Net Earnings			Diluted Earnings per Share
GAAP Results	$	1,672,152	$	237,336		$	222,779		$	14,664		$	208,115		$	3.73
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
California refranchise store sale		—		16,600			16,600			4,430			12,170			0.22
Legal settlement reserves		—		7,900			7,900			2,108			5,792			0.10
Acima transaction costs		—		6,400			6,400			1,708			4,692			0.08
Legal settlement		—		(2,800	)		(2,800	)		(747	)		(2,053	)		(0.04	)
Store closure costs		—		2,089			2,089			557			1,532			0.03
Asset disposals		—		1,804			1,804			481			1,323			0.02
Cost savings initiatives		—		1,583			1,583			422			1,161			0.02
State tax audit assessment reserves		—		1,225			1,225			327			898			0.02
COVID-19 impacts		—		1,153			1,153			308			845			0.02
Nationwide protest impacts				942			942			251			691			0.01
Insurance reimbursed proceeds		—		(341	)		(341	)		(91	)		(250	)		—
Discrete income tax items		—		—			—			37,986			(37,986	)		(0.68	)
Non-GAAP Adjusted Results	$	1,672,152	$	273,891		$	259,334		$	62,404		$	196,930		$	3.53

Reconciliation of operating profit to Adjusted EBITDA (consolidated and by segment):

Table 16	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: Amortization, Depreciation		4,767		554		142		35		8,539			14,037
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
Acima equity consideration vesting		—		—		—		—		33,940			33,940
Acima acquired assets depreciation and amortization ⁽¹⁾		—		24,983		—		—		3,972			28,955
Legal settlement reserves		—		—		—		—		6,750			6,750
Acima integration costs		—		1,318		—		—		1,097			2,415
Hurricane impacts		770		—		—		—		—			770
Acima transaction costs		—		—		—		—		344			344
COVID-19 testing		293		—		—		—		—			293
Store closure costs		71		—		—		—		—			71
Adjusted EBITDA	$	97,770	$	58,554	$	1,341	$	4,861	$	(38,122	)	$	124,404

Table 17	Three Months Ended December 31, 2020
(In thousands)	Rent-A-Center Business			Acima		Mexico		Franchising		Corporate			Consolidated
GAAP Operating Profit (Loss)	$	80,354		$	17,319	$	2,055	$	3,876	$	(48,965	)	$	54,639
Plus: Amortization, Depreciation		5,153			524		121		12		7,777			13,587
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
California refranchise store sale		16,600			—		—		—		—			16,600
Acima transaction Costs		—			—		—		—		6,400			6,400
Legal settlement reserves		—			—		—		—		3,500			3,500
Asset disposals		6			4		—		—		1,269			1,279
Store closure costs		389			—		23		—		—			412
State tax audit assessment reserves		—			400		—		—		—			400
COVID-19 impacts		284			—		—		—		50			334
Cost savings initiatives		(8	)		37		—		—		(306	)		(277	)
Nationwide protest impacts		139			—		—		—		—			139
Adjusted EBITDA	$	102,917		$	18,284	$	2,199	$	3,888	$	(30,275	)	$	97,013

Table 18	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: Amortization, Depreciation		18,588		2,122		511		93		33,516			54,830
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
Acima equity consideration vesting		—		—		—		—		127,060			127,060
Acima acquired assets depreciation and amortization ⁽¹⁾		—		87,455		—		—		13,239			100,694
Acima transaction costs		—		—		—		—		17,680			17,680
Legal settlement reserves		—		—		—		—		17,500			17,500
Acima integration costs		14		6,849		—		—		3,442			10,305
Hurricane impacts		1,276		148		—		—		—			1,424
Store closure costs		528		—		3		—		—			531
COVID-19 testing		293		—		—		—		—			293
State tax audit assessment reserves		—		—		—		—		161			161
Adjusted EBITDA	$	469,604	$	273,070	$	8,372	$	20,414	$	(160,443	)	$	611,017

Table 19	Twelve Months Ended December 31, 2020
(In thousands)	Rent-A-Center Business			Preferred Lease		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		413		40		34,227			56,658
Plus: Special Items (Extraordinary, Unusual or Non-Recurring Gains or Charges)
California refranchise store sale		16,600			—		—		—		—			16,600
Legal settlement reserves		—			—		—		—		7,900			7,900
Acima transaction costs		—			—		—		—		6,400			6,400
Legal settlement		—			—		—		—		(2,800	)		(2,800	)
Store closure costs		2,052			—		37		—		—			2,089
Asset disposals		531			4		—		—		1,269			1,804
Cost savings initiatives		577			193		—		—		813			1,583
State tax audit assessment reserves		261			400		—		—		564			1,225
COVID-19 impacts		883			115		—		—		155			1,153
Nationwide protest impacts		942			—		—		—		—			942
Insurance reimbursement proceeds		(341	)		—		—		—		—			(341	)
Adjusted EBITDA	$	374,796		$	60,625	$	6,248	$	12,610	$	(123,730	)	$	330,549

Reconciliation of net cash provided by (used in) operating activities to free cash flow:

Table 20	Three Months Ended December 31,						Twelve Months Ended December 31,
(In thousands)		2021			2020			2021			2020
Net cash provided by (used in) 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
Free cash flow	$	49,520		$	(71,712	)	$	329,848		$	202,115

Proceeds from sale of stores		1			14,281			4			14,477
Acquisitions of businesses		14			—			(1,273,528	)		(700	)
Free cash flow including acquisitions and divestitures	$	49,535		$	(57,431	)	$	(943,676	)	$	215,892

SOURCE Rent-A-Center, Inc.

###

ADVERTISE

Rent-A-Center, Inc. Reports Fourth Quarter and Full Year 2021 Results

Fourth Quarter Consolidated Results

Fourth Quarter Segment Highlights

Key Operating Metrics

Additional Commentary on the 2022 Outlook

Webcast Information

Franchise News

By Type

By Sector

Rent-A-Center, Inc. Reports Fourth Quarter and Full Year 2021 Results

Fourth Quarter Consolidated Results

Fourth Quarter Segment Highlights

Key Operating Metrics

Additional Commentary on the 2022 Outlook

Webcast Information

Franchise News

By Type

By Sector

Subscribe to our Newsletters