Third Quarter GAAP Diluted Earnings Per
Share of $0.08; Non-GAAP Diluted EPS of $0.791
Outlook for Full Year 2023 Non-GAAP Diluted
EPS Improves to $3.45 - $3.55 from $3.25 - $3.55
Upbound Group, Inc. (the "Company" or "Upbound") (NASDAQ:UPBD)
today announced its third quarter 2023 results for the period
ending September 30, 2023. The earnings news release, financial
tables and related materials can be found on the company's investor
relations website at https://investor.upbound.com.
Today at 9 a.m. ET, Mitch Fadel, Chief Executive Officer, and
Fahmi Karam, Chief Financial Officer, will host a conference call
to review the financial results and 2023 outlook. The conference
call can be accessed via an audio webcast through the investor
relations website at investor.upbound.com, under events and
presentations. Participants can access the call by phone via this
link (Upbound Group Third Quarter Earnings Call), where the
dial-in details will be provided. A replay will also be available
on the website.
About Upbound Group,
Inc.
Upbound Group, Inc. (NASDAQ: UPBD) is an omni-channel platform
company committed to elevating financial opportunity for all
through innovative, inclusive, and technology-driven financial
solutions that address the evolving needs and aspirations of
consumers. The Company’s customer-facing operating units include
industry-leading brands such as Rent-A-Center® and Acima® that
facilitate consumer transactions across a wide range of store-based
and digital retail channels, including over 2,400 company branded
retail units across the United States, Mexico and Puerto Rico.
Upbound Group, Inc. is headquartered in Plano, Texas. For
additional information about the Company, please visit our website
Upbound.com.
Forward Looking
Statements
This press release, and the guidance above and the Company's
related conference call contain forward-looking statements that
involve risks and uncertainties. These statements are made under
the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. Such forward-looking statements
generally can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "intend," "could,"
"estimate," "predict," "continue," "maintain," "should,"
"anticipate," "believe," or “confident,” or the negative thereof or
variations thereon or similar terminology and including, among
others, statements concerning (i) the Company's guidance for 2023
and future outlook, (ii) the impact of ongoing challenging
macro-economic conditions on the Company's business operations,
financial performance, and prospects, (iii) the future business
prospects and financial performance of the Company following the
acquisition of Acima Holdings, LLC ("Acima Holdings"), (iv) cost
and revenue synergies and other benefits expected to result from
the Acima Holdings acquisition, (v) the Company’s growth
strategies, (vi) the Company's expectations, plans and strategy
relating to its capital structure and capital allocation, including
any share repurchases under the Company's share repurchase program,
and (vii) other statements that are not historical facts. However,
there can be no assurance that such expectations will occur. The
Company's actual future performance could differ materially and
adversely from such statements. Factors that could cause or
contribute to these differences include, but are not limited to:
(1) risks relating to the Acima Holdings acquisition, (2) the
impact of the COVID-19 pandemic and subsequent post pandemic
impacts and related government and regulatory restrictions issued
to combat the pandemic, including adverse changes in such
restrictions, the expiration of governmental stimulus programs, and
impacts on (i) demand for the Company's lease-to-own products
offered in the Company's operating segments, (ii) the Company's
Acima retail partners, (iii) the Company's customers and their
willingness and ability to satisfy their lease obligations, (iv)
the Company's suppliers' ability to satisfy its merchandise needs
and related supply chain disruptions, (v) the Company's employees,
including the ability to adequately staff its operating locations,
(vi) the Company's financial and operational performance, and (vii)
the Company's liquidity; (3) the general strength of the economy
and other economic conditions affecting consumer preferences and
spending, including the availability of credit to the Company's
target consumers and to other consumers, impacts from the continued
inflation, central bank monetary policy initiatives to address
inflation concerns and possible recession or slowdown in economic
growth; (4) factors affecting the disposable income available to
the Company's current and potential customers; (5) changes in the
unemployment rate; (6) capital market conditions, including
availability of funding sources for the Company; (7) changes in the
Company's credit ratings; (8) difficulties encountered in improving
the financial and operational performance of the Company's business
segments; (9) risks associated with pricing changes and strategies
being deployed in the Company's businesses; (10) the Company's
ability to continue to realize benefits from its initiatives
regarding cost-savings and other EBITDA enhancements, efficiencies
and working capital improvements; (11) the Company's ability to
continue to effectively execute its strategic initiatives,
including mitigating risks associated with any potential mergers
and acquisitions, or refranchising opportunities; (12) the
Company's ability to identify potential acquisition candidates,
complete acquisitions and successfully integrate acquired
companies; (13) failure to manage the Company's store labor and
other store expenses, including merchandise losses; (14)
disruptions caused by the operation of the Company's store
information management systems or disruptions in the systems of the
Company's host retailers; (15) risks related to the Company's
virtual lease-to-own business, including the Company's ability to
continue to develop and successfully implement the necessary
technologies; (16) the Company's ability to achieve the benefits
expected from its integrated virtual and staffed retail partner
offering and to successfully grow this business segment; (17)
exposure to potential operating margin degradation due to the
higher cost of merchandise in the Company's Acima segment and
higher merchandise losses than compared to our Rent-A-Center
segment; (18) the Company's transition to more readily scalable,
“cloud-based” solutions; (19) the Company's ability to develop and
successfully implement digital or E-commerce capabilities,
including mobile applications; (20) the Company's ability to
protect its proprietary intellectual property; (21) the Company's
ability or that of the Company's host retailers to protect the
integrity and security of customer, employee and host retailer
information, which may be adversely affected by hacking, computer
viruses, or similar disruptions; (22) impairment of the Company's
goodwill or other intangible assets; (23) disruptions in the
Company's supply chain; (24) limitations of, or disruptions in, the
Company's distribution network; (25) rapid inflation or deflation
in the prices of the Company's products and other related costs;
(26) allegations of product safety and quality control issues,
including recalls; (27) the Company's ability to execute, as well
as, the effectiveness of store consolidations, including the
Company's ability to retain the revenue from customer accounts
merged into another store location as a result of a store
consolidation; (28) the Company's available cash flow and its
ability to generate sufficient cash flow to continue paying
dividends; (29) increased competition from traditional competitors,
virtual lease-to-own competitors, online retailers,
Buy-Now-Pay-Later and other fintech companies and other
competitors, including subprime lenders; (30) the Company's ability
to identify and successfully market products and services that
appeal to its current and future targeted customer segments and to
accurately estimate the size of the total addressable market; (31)
consumer preferences and perceptions of the Company's brands; (32)
the Company’s ability to effectively provide consumers with
additional products and services beyond lease-to-own, including
through third party partnerships; (33) the Company's ability to
retain the revenue associated with acquired customer accounts and
enhance the performance of acquired stores; (34) the Company's
ability to enter into new, and collect on its, rental or lease
purchase agreements; (35) changes in the enforcement of existing
laws and regulations and the enactment of new laws and regulations
adversely affecting the Company's business, including any
legislative or other regulatory enforcement efforts that seek to
re-characterize store-based or virtual lease-to-own transactions as
credit sales and to apply consumer credit laws and regulations to
the Company's business; (36) the Company's compliance with
applicable statutes or regulations governing its businesses; (37)
changes in interest rates; (38) changes in tariff policies; (39)
adverse changes in the economic conditions of the industries,
countries or markets that the Company serves; (40) information
technology and data security costs; (41) the impact of any breaches
in data security or other disturbances to the Company's information
technology and other networks (42) changes in estimates relating to
self-insurance liabilities, and income tax and litigation reserves;
(43) changes in the Company's effective tax rate; (44) fluctuations
in foreign currency exchange rates; (45) the Company's ability to
maintain an effective system of internal controls; (46) litigation
or administrative proceedings to which the Company is or may be a
party to from time to time; and (47) the other risks detailed from
time to time in the Company's SEC reports, including but not
limited to, its Annual Report on Form 10-K for the year ended
December 31, 2022 and in its subsequent Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Except as required
by law, the Company is not obligated to publicly release any
revisions to these forward-looking statements to reflect the events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events.
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 or loss, 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) and (2) other non-GAAP financial measures
explained in the Company’s other quarterly earnings disclosures.
“Special items” refers to certain gains and charges we view as
extraordinary, unusual or non-recurring in nature or which we
believe do not reflect our core business activities. For the
periods presented herein, these special items are described in the
quantitative reconciliation table included below in this release.
Because of the inherent uncertainty related to these 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, GAAP financial measures
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.
Exhibit 1 -
Reconciliation of diluted earnings per share to Non-GAAP diluted
earnings per share
Three Months Ended
September 30, 2023
Diluted
Earnings per Share
GAAP Results
$0.08
Plus: Special Items
Acima equity consideration vesting
$0.47
Acima acquired assets depreciation and
amortization (1)
$0.22
Accelerated software depreciation
$0.06
Legal settlements
—
Other(2)
($0.04)
Discrete income tax items
—
Non-GAAP Adjusted Results
$0.79
1) Includes amortization of approximately
$14.3 million related to the total fair value of acquired
intangible assets and incremental depreciation of approximately
$4.0 million.
2) Represents interest income on tax
refunds for prior years received in 2023.
1 Non-GAAP financial measure. Refer to the explanations and
reconciliations elsewhere in this release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102655232/en/
Investor Contact: Upbound Group, Inc. Brendan Metrano VP,
Investor Relations 972-801-1280 brendan.metrano@upbound.com
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