Rent-to-own News - Rent-A-Center exceeds earnings guidance, announces cash dividend

Rent-A-Center, this week announced revenues and earnings for the quarter ended June 30, 2010.
 

Total revenues for the quarter ended June 30, 2010, were $671.5 million, a decrease of $8.1 million from total revenues of $679.6 million for the same period in the prior year. This decrease in revenues was primarily attributable to the November 2009 divestiture of dPi Teleconnect, LLC, the Company's subsidiary engaged in the prepaid telecommunications and energy business, which had contributed approximately $14.0 million in merchandise sales for the quarter ended June 30, 2009. Same store sales for the quarter ended June 30, 2010, increased 0.1%.

For the quarter ended June 30, 2010, net earnings increased approximately 14% to $47.8 million from $41.9 million for the same period in the prior year, and net earnings per diluted share also increased approximately 14% to $0.72 from $0.63 in the prior year period. Net earnings and net earnings per diluted share for the quarter ended June 30, 2009, increased as a result of $1.9 million in pre-tax litigation credits, or approximately $0.02 per share, related to the Hilda Perez matter as discussed below.

Net earnings per diluted share for the quarter ended June 30, 2010, increased approximately 18% to $0.72, as compared to adjusted net earnings per diluted share of $0.61, when excluding the pre-tax litigation credit above, for the quarter ended June 30, 2009.

"We are pleased with our results in the second quarter, having exceeded our earnings guidance by improving the margins on our inventory and continuing our expense management initiatives," said Mark E. Speese, the Company's Chairman and Chief Executive Officer. "We remain focused on attracting a variety of customers with our strong product values, while continuing to improve our margins and are cautiously optimistic regarding the balance of the year. This gives us the confidence to increase the lower end of our 2010 earnings guidance from $2.60 to $2.65 and maintain the upper end at $2.80."

Six Months Ended June 30, 2010 Results

Total revenues for the six months ended June 30, 2010, were $1.390 billion, a decrease of $18.0 million from total revenues of $1.408 billion for the same period in the prior year. As described above, this decrease in revenues was primarily attributable to the November 2009 divestiture of dPi Teleconnect, LLC, which had contributed approximately $28.0 million in merchandise sales for the six months ended June 30, 2009. Same store sales for the six months ended June 30, 2010, declined 0.1%.

Net earnings and net earnings per diluted share for the six months ended June 30, 2010, were $99.3 million and $1.49, respectively, as compared to $87.3 million and $1.31, respectively, for the same period in the prior year. Net earnings and net earnings per diluted share for the six months ended June 30, 2009, increased as a result of $4.9 million in pre-tax litigation credits, or approximately $0.04 per share, related to the Hilda Perez matter as discussed below.

Net earnings per diluted share for the six months ended June 30, 2010, increased approximately 17% to $1.49, as compared to adjusted net earnings per diluted share of $1.27, when excluding the pre-tax litigation credit above, for the six months ended June 30, 2009.