Rent-A-Center releases Q2 results
Rent-A-Center today announced revenues and earnings for the quarter ended June 30, 2009.
Total revenues for the quarter ended June 30, 2009 were $679.6 million, a decrease of $39.4 million from total revenues of $719.0 million for the same period in the prior year.
This anticipated decrease in revenues was primarily the result of a 6.2% reduction in same store sales, partially attributable to the 2007 store consolidation plan.
Net earnings and net earnings per diluted share for the quarter ended June 30, 2009 were $41.9 million and $0.63, respectively, as compared to $37.7 million and $0.56, respectively, for the same period in the prior year. Net earnings and net earnings per diluted share for the quarter ended June 30, 2009 include $1.9 million, or approximately $0.02 per share, as a result of a pre-tax litigation credit related to the Hilda Perez matter as discussed below.
When excluding the item above, adjusted net earnings per diluted share for the quarter ended June 30, 2009 were $0.61, as compared to net earnings per diluted share for the quarter ended June 30, 2008 of $0.56, an increase of 8.9%.
“We are pleased that our customer traffic in the quarter exceeded our expectations,” said Mark E. Speese, the Company’s Chairman and Chief Executive Officer. “However, our average price per customer agreement was lower than expected in the second quarter, which we believe reflected our customer’s discretion in this difficult economy. Although our lower average price per customer agreement will impact our 2009 revenue forecast, we believe our expense management initiatives, focus on margin improvement and prudent use of cash will positively impact earnings for the year. As a result, we are increasing our guidance for 2009 diluted earnings per share to $2.32 to $2.42."
Six Months Ended June 30, 2009 Results
Total revenues for the six months ended June 30, 2009 were $1.408 billion, a decrease of $68.0 million from total revenues of $1.476 billion for the same period in the prior year. This decrease in revenues was primarily the result of a 3.6% reduction in same store sales and the anticipated revenue attrition from approximately 375 stores that received customer agreements from stores closed in the 2007 restructuring plan.
Net earnings and net earnings per diluted share for the six months ended June 30, 2009 were $87.3 million and $1.31, respectively, as compared to $74.1 million and $1.10, 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 include $4.9 million, or approximately $0.04 per share, as a result of pre-tax litigation credits related to the Hilda Perez matter as discussed below.
Net earnings and net earnings per diluted share for the six months ended June 30, 2008 were reduced by $2.9 million, or approximately $0.03 per share, as a result of a pre-tax restructuring expense related to our 2007 restructuring plan as discussed below.
When excluding the items above, adjusted net earnings per diluted share for the six months ended June 30, 2009 were $1.27, as compared to adjusted net earnings per diluted share for the six months ended June 30, 2008 of $1.13, an increase of 12.4%.
Through the six month period ended June 30, 2009, the Company generated cash flow from operations of approximately $211.3 million, while ending the quarter with approximately $95.6 million of cash on hand. The Company utilized its cash flow from operations to reduce its outstanding indebtedness by approximately $170.9 million in 2009, or approximately 18% from year end 2008.
As previously announced on June 10, 2009, the Company provided notice to The Bank of New York Mellon Trust Company, the indenture trustee, of its election to redeem its outstanding balance of $75.4 million in aggregate principal amount of its 7½% Senior Subordinated Notes due May 2010, at a redemption price equal to 100% of the principal amount outstanding, plus accrued interest to the redemption date. The Company expects the redemption to occur on or about July 28, 2009. The Company expects to fund the redemption price primarily with cash flow generated from operations, together with amounts available under its senior credit facilities.