Rent-A-Center reports Q4 2009 Results
Rent-A-Center, the nation’s largest rent-to-own operator, today announced revenues and earnings for the quarter and year ended December 31, 2009.
Total revenues for the quarter ended December 31, 2009 were $672.9 million, a decrease of $26.9 million from total revenues of $699.8 million for the same period in the prior year.
This decrease in revenues was primarily the result of a 3.2% reduction in same store sales, predominantly attributable to a decrease in the number of units per customer, and the anticipated revenue attrition from approximately 365 stores that received customer agreements from stores closed in the 2007 restructuring plan.
Net earnings for the quarter ended December 31, 2009 were $43.7 million, as compared to $36.1 million, for the same period in the prior year. Net earnings per diluted share for the quarter ended December 31, 2009 were $0.66, as compared to reported net earnings per diluted share of $0.54, and adjusted net earnings per diluted share, when excluding the 2008 items below, of $0.47, for the quarter ended December 31, 2008, an increase of 22.2% and 40.4%, respectively.
Net earnings and net earnings per diluted share for the quarter ended December 31, 2008 were affected by the following significant items, as discussed below:
• Increased as a result of $4.6 million in pre-tax litigation credits, or approximately $0.04 per share, related to the Hilda Perez and Shafer/Johnson matters;
• Increased as a result of a $4.3 million pre-tax gain, or approximately $0.04 per share, on the extinguishment of debt; and
• Decreased as a result of an additional $1.4 million pre-tax restructuring expense, or approximately $0.01 per share, related to our 2007 restructuring plan.
"We had a very strong quarter as both our financial results and operating metrics exceeded our expectations," commented Mark E. Speese, the Company’s Chairman and Chief Executive Officer. "Store rentals and fees and total revenue exceeded our guidance as well as our net earnings per diluted share. The fourth quarter of 2009 is the second consecutive quarter in which both our customer count and our deliveries per store have outperformed the comparable period in 2008 for each month during that quarter," Speese stated. "Due to the strong trends in our customer traffic, our continued focus on the customer’s in store experience as well as our expense management initiatives," continued Mr. Speese, "we are pleased to announce increased earnings expectations of between $2.35 and $2.55 per diluted share for 2010."
Year End December 31, 2009 Results:
Total revenues for the twelve months ended December 31, 2009 were $2.752 billion, a decrease of $132.0 million from total revenues of $2.884 billion for the same period in the prior year. This decrease in revenues was primarily the result of a 3.5% reduction in same store sales, predominantly attributable to a decrease in the number of units per customer, plus the impact of the 2007 restructuring plan.
Net earnings and net earnings per diluted share for the twelve months ended December 31, 2009 were $167.9 million and $2.52, respectively, as compared to $139.6 million and $2.08, respectively, for the same period in the prior year. Net earnings and net earnings per diluted share for the twelve months ended December 31, 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 twelve months ended December 31, 2008 were affected by the following significant items, as discussed below:
• Increased as a result of $4.6 million in pre-tax litigation credits, or approximately $0.04 per share, related to the Hilda Perez and Shafer/Johnson matters;
• Increased as a result of a $4.3 million pre-tax gain, or approximately $0.04 per share, on the extinguishment of debt; and
• Decreased as a result of an additional $4.5 million pre-tax restructuring expense, or approximately $0.04 per share, related to our 2007 restructuring plan.
When excluding the items above, adjusted net earnings per diluted share for the twelve months ended December 31, 2009 were $2.48, as compared to adjusted net earnings per diluted share for the twelve months ended December 31, 2008 of $2.04, an increase of 21.6%.
"As a result of our strong operating results, we generated positive cash flow from operations of approximately $330.1 million for the twelve month period through December 31, 2009, while ending the quarter with approximately $101.8 million of cash on hand," commented Robert D. Davis, the Company’s Executive Vice President and Chief Financial Officer. "This significant cash flow enabled us to enhance our capital structure by reducing our outstanding indebtedness by $235.9 million in 2009, or approximately 25% from year end 2008," Davis stated. "In addition, with our strong recurring cash flow from operations and the flexibility provided by the amendment to our senior credit facility completed in December, we will look to opportunistically repurchase shares of our common stock as well as continue to enhance our balance sheet," Davis concluded.
During the twelve month period ended December 31, 2009, the Company repurchased 472,100 shares of its common stock for $8.8 million in cash under its common stock repurchase program, all in the fourth quarter. To date, the Company has repurchased a total of 19,884,850 shares and has utilized approximately $466.5 million of the $500.0 million authorized by its Board of Directors since the inception of the plan.