Document and Company Informatio
Document and Company Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 22, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38047 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 45-0491516 | |
Entity Address, Address Line One | 5501 Headquarters Drive | |
Entity Address, City or Town | Plano | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75024 | |
City Area Code | 972 | |
Local Phone Number | 801-1100 | |
Title of 12(b) Security | Common stock, $.01 par value | |
Trading Symbol | RCII | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,170,466 | |
Entity Registrant Name | RENT A CENTER INC DE | |
Entity Central Index Key | 0000933036 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Store | ||||
Rentals and fees | $ 579,573 | $ 550,795 | $ 1,682,310 | $ 1,665,829 |
Merchandise sales | 91,233 | 65,552 | 300,693 | 240,864 |
Installment sales | 16,580 | 16,952 | 48,970 | 49,658 |
Other | 844 | 1,054 | 2,341 | 2,962 |
Total store revenues | 688,230 | 634,353 | 2,034,314 | 1,959,313 |
Franchise | ||||
Merchandise sales | 19,069 | 11,178 | 49,553 | 30,307 |
Royalty income and fees | 4,716 | 3,840 | 13,833 | 12,370 |
Total revenues | 712,015 | 649,371 | 2,097,700 | 2,001,990 |
Store | ||||
Cost of rentals and fees | 167,027 | 161,971 | 489,606 | 473,001 |
Cost of merchandise sold | 95,177 | 70,575 | 296,894 | 250,000 |
Cost of installment sales | 5,713 | 5,527 | 16,830 | 16,133 |
Total cost of store revenues | 267,917 | 238,073 | 803,330 | 739,134 |
Franchise cost of merchandise sold | 19,070 | 11,302 | 49,632 | 29,923 |
Total cost of revenues | 286,987 | 249,375 | 852,962 | 769,057 |
Gross profit | 425,028 | 399,996 | 1,244,738 | 1,232,933 |
Store expenses | ||||
Labor | 150,493 | 158,666 | 434,216 | 473,221 |
Other store expenses | 140,818 | 150,366 | 463,292 | 463,385 |
General and administrative expenses | 41,576 | 34,364 | 113,694 | 105,822 |
Depreciation and amortization | 13,810 | 14,894 | 43,071 | 45,788 |
Other (gains) and charges | (1,856) | 2,859 | 7,768 | (41,308) |
Total operating expenses | 344,841 | 361,149 | 1,062,041 | 1,046,908 |
Operating profit | 80,187 | 38,847 | 182,697 | 186,025 |
Debt refinancing charges | 0 | 2,168 | 0 | 2,168 |
Interest expense | 3,350 | 6,733 | 11,958 | 26,214 |
Interest income | (152) | (85) | (561) | (2,956) |
Earnings before income taxes | 76,989 | 30,031 | 171,300 | 160,599 |
Income tax expense (benefit) | 12,959 | (1,246) | 19,485 | 27,544 |
Net earnings | $ 64,030 | $ 31,277 | $ 151,815 | $ 133,055 |
Basic earnings per common share | $ 1.19 | $ 0.57 | $ 2.80 | $ 2.46 |
Diluted earnings per common share | $ 1.15 | $ 0.56 | $ 2.73 | $ 2.39 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Comprehensive Income Statement - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Condensed Consolidated Statements of Comprehensive Income [Abstract] | ||||
Net earnings | $ 64,030 | $ 31,277 | $ 151,815 | $ 133,055 |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments, net of tax of $162 and $(91), $(872) and $(11) for the three and six months ended September 30, 2020 and 2019, respectively | (344) | (3,280) | (40) | |
foreign currency translation tax adjustment | 162 | (91) | (872) | (11) |
Total other comprehensive income (loss) | 609 | (344) | (3,280) | (40) |
Comprehensive income | $ 64,639 | 30,933 | $ 148,535 | $ 133,015 |
Accumulated Other comprehensive (Loss) Income [Member] | ||||
Other comprehensive income (loss) | ||||
Total other comprehensive income (loss) | $ (344) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and cash equivalents | $ 227,398 | $ 70,494 |
Receivables, net of allowance for doubtful accounts of $7,916 and $5,601 in 2020 and 2019, respectively | 75,471 | 84,123 |
Allowance for doubtful accounts | 7,916 | 5,601 |
Prepaid expenses and other assets | 40,172 | 46,043 |
Rental merchandise, net | ||
On rent | 680,955 | 697,270 |
Held for rent | 119,903 | 138,418 |
Merchandise held for installment sale | 4,287 | 4,878 |
Property assets, net of accumulated depreciation of $550,958 and $522,826 in 2020 and 2019, respectively | 145,298 | 166,138 |
Property assets, accumulated depreciation | 550,958 | 522,826 |
Operating lease right-of-use assets | 280,845 | 281,566 |
Deferred tax asset | 14,889 | 14,889 |
Goodwill | 70,217 | 70,217 |
Other intangible assets, net | 8,130 | 8,762 |
Total Assets | 1,667,565 | 1,582,798 |
LIABILITIES | ||
Accounts payable - trade | 176,304 | 168,120 |
Accrued liabilities | 305,919 | 275,777 |
Operating lease liabilities | 283,784 | 285,041 |
Deferred tax liability | 168,622 | 163,984 |
Senior debt, net | 190,599 | 230,913 |
Total Liabilities | 1,125,228 | 1,123,835 |
STOCKHOLDERS' EQUITY | ||
Common stock, $.01 par value; 250,000,000 shares authorized; 112,023,559 and 111,166,229 shares issued in September 30, 2020 and December 31, 2019, respectively | $ 1,103 | $ 1,110 |
Common stock - par value | $ 0.01 | $ 0.01 |
Common stock - shares authorized | 250,000,000 | 250,000,000 |
Common stock - shares issued | 112,023,559 | 111,166,229 |
Additional paid-in capital | $ 878,965 | $ 869,617 |
Retained earnings | 1,051,760 | 947,875 |
Treasury stock at cost, 57,889,659 and 56,428,482 shares in September 30, 2020 and December 31, 2019 | $ (1,375,541) | $ (1,348,969) |
Treasury stock - shares at cost | 57,889,659 | 56,428,482 |
Accumulated other comprehensive loss | $ (13,950) | $ (10,670) |
Total Stockholders' Equity | 542,337 | 458,963 |
Total Liabilities and Stockholders' Equity | $ 1,667,565 | $ 1,582,798 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Accumulated Other comprehensive (Loss) Income [Member] |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock, shares, outstanding | 109,910 | |||||
Total stockholders' equity | $ 286,517 | $ 1,099 | $ 838,436 | $ 805,924 | $ (1,347,677) | $ (11,265) |
ASU adoption adjustment | (1,976) | (1,976) | ||||
Net earnings | 7,323 | 7,323 | ||||
Total other comprehensive income (loss) | 521 | 521 | ||||
Exercise of stock options, shares | 284 | |||||
Exercise of stock options | 2,892 | $ 3 | 2,889 | |||
Vesting of restricted share units, shares | 218 | |||||
Vesting of restricted share units | 0 | $ 2 | (2) | |||
Tax effect of stock awards vested and options exercised | (1,734) | (1,734) | ||||
Stock-based compensation | 709 | 709 | ||||
Net earnings | 133,055 | 133,055 | ||||
Total other comprehensive income (loss) | (40) | |||||
Common stock, shares, outstanding | 110,412 | |||||
Total stockholders' equity | 294,252 | $ 1,104 | 840,298 | 811,271 | (1,347,677) | (10,744) |
Net earnings | 94,455 | 94,455 | ||||
Total other comprehensive income (loss) | (217) | (217) | ||||
Exercise of stock options, shares | 101 | |||||
Exercise of stock options | 1,418 | $ 1 | 1,417 | |||
Vesting of restricted share units, shares | 49 | |||||
Vesting of restricted share units | 0 | |||||
Stock-based compensation | 1,982 | 1,982 | ||||
Common stock, shares, outstanding | 110,562 | |||||
Total stockholders' equity | 391,890 | $ 1,105 | 843,697 | 905,726 | (1,347,677) | (10,961) |
Net earnings | 31,277 | 31,277 | ||||
Total other comprehensive income (loss) | (344) | (344) | ||||
Exercise of stock options, shares | 105 | |||||
Exercise of stock options | 1,503 | $ 1 | 1,502 | |||
Stock-based compensation | 1,952 | 1,952 | ||||
Dividends declared | (13,707) | (13,707) | ||||
MP Acquisition, shares | 439 | |||||
MP Acquisition | 19,169 | $ 4 | 19,165 | |||
Common stock, shares, outstanding | 111,106 | |||||
Total stockholders' equity | 431,740 | $ 1,110 | 866,316 | 923,296 | (1,347,677) | (11,305) |
Common stock, shares, outstanding | 111,166 | |||||
Total stockholders' equity | 458,963 | $ 1,110 | 869,617 | 947,875 | (1,348,969) | (10,670) |
ASU adoption adjustment | (769) | (769) | ||||
Net earnings | 49,292 | 49,292 | ||||
Total other comprehensive income (loss) | (3,906) | (3,906) | ||||
Purchase of treasury stock | (26,525) | $ (14) | (26,511) | |||
Exercise of stock options, shares | 69 | |||||
Exercise of stock options | 1,195 | $ 1 | 1,194 | |||
Vesting of restricted share units, shares | 434 | |||||
Vesting of restricted share units | 0 | $ 4 | (4) | |||
Tax effect of stock awards vested and options exercised | (5,270) | (5,270) | ||||
Stock-based compensation | 3,043 | 3,043 | ||||
Net earnings | 151,815 | 151,815 | ||||
Total other comprehensive income (loss) | (3,280) | |||||
Purchase of treasury stock | (26,600) | |||||
Common stock, shares, outstanding | 111,669 | |||||
Total stockholders' equity | 476,023 | $ 1,101 | 868,580 | 996,398 | (1,375,480) | (14,576) |
Net earnings | 38,493 | 38,493 | ||||
Total other comprehensive income (loss) | 17 | 17 | ||||
Exercise of stock options, shares | 42 | |||||
Exercise of stock options | 486 | 486 | ||||
Stock-based compensation | 2,849 | 2,849 | ||||
Dividends declared | (31,292) | (31,292) | ||||
Common stock, shares, outstanding | 111,711 | |||||
Total stockholders' equity | 486,576 | $ 1,101 | 871,915 | 1,003,599 | (1,375,480) | (14,559) |
Net earnings | 64,030 | 64,030 | ||||
Total other comprehensive income (loss) | 609 | |||||
Purchase of treasury stock | (61) | $ 0 | (61) | |||
Exercise of stock options, shares | 226 | |||||
Exercise of stock options | 4,055 | $ 2 | 4,053 | |||
Vesting of restricted share units, shares | 87 | |||||
Vesting of restricted share units | 0 | $ 0 | 0 | |||
Stock-based compensation | 2,997 | 2,997 | ||||
Dividends declared | (15,869) | (15,869) | ||||
Common stock, shares, outstanding | 112,024 | |||||
Total stockholders' equity | $ 542,337 | $ 1,103 | $ 878,965 | $ 1,051,760 | $ (1,375,541) | $ (13,950) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net earnings | $ 151,815 | $ 133,055 |
Adjustments to reconcile net earnings to net cash provided by operating activities | ||
Depreciation of rental merchandise | 471,530 | 455,143 |
Bad debt expense | 10,959 | 11,591 |
Stock-based compensation expense | 8,889 | 4,644 |
Depreciation of property assets | 42,268 | 45,551 |
Loss on sale or disposal of property assets | 1,067 | 278 |
Amortization of intangibles | 810 | 237 |
Amortization of financing fees | 1,186 | 2,574 |
Write-off of debt financing fees | 0 | 2,168 |
Deferred income taxes | 4,383 | 16,629 |
Changes in operating assets and liabilities, net of acquired assets | ||
Rental merchandise | (435,722) | (387,098) |
Receivables | (2,465) | (11,891) |
Prepaid expenses and other assets | 5,871 | 10,080 |
Operating lease right-of-use assets and lease liabilities | (536) | 5,305 |
Accounts payable - trade | 8,184 | (8,796) |
Accrued liabilities | 27,987 | (51,341) |
Net cash provided by operating activities | 296,226 | 228,129 |
Cash flows from investing activities | ||
Purchase of property assets | (22,557) | (12,010) |
Proceeds from sale of property assets | 196 | 16,922 |
Hurricane insurance recovery proceeds | 158 | 995 |
Acquisitions of businesses | 700 | 28,722 |
Net cash used in investing activities | (22,903) | (22,815) |
Cash flows from financing activities | ||
Share repurchases | 26,572 | 0 |
Exercise of stock options | 5,737 | 5,813 |
Shares withheld for payment of employee tax withholdings | (5,270) | (1,733) |
Debt issuance costs | 0 | 8,454 |
Proceeds from debt | 198,000 | 285,400 |
Repayments of debt | (239,500) | (568,140) |
Dividends paid | 47,329 | 0 |
Net cash used in financing activities | (114,934) | (287,114) |
Effect of exchange rate changes on cash | (1,485) | 91 |
Net increase (decrease) in cash and cash equivalents | 156,904 | (81,709) |
Cash and cash equivalents at beginning of period | 70,494 | 155,391 |
Cash and cash equivalents at end of period | $ 227,398 | $ 73,682 |
Basis of Presentation (Notes)
Basis of Presentation (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Presentation [Abstract] | |
Basis of Presentation [Text Block] | Basis of Presentation The interim condensed consolidated financial statements of Rent-A-Center, Inc. included herein have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to the SEC’s rules and regulations, although we believe the disclosures are adequate to make the information presented not misleading. We suggest these financial statements be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2019. In our opinion, the accompanying unaudited interim financial statements contain all adjustments, consisting only of those of a normal recurring nature, necessary to present fairly our results of operations and cash flows for the periods presented. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. COVID-19 During the first quarter of 2020, the respiratory disease caused by a novel coronavirus (“COVID-19”) began to spread worldwide causing the World Health Organization to declare the outbreak a pandemic, and resulting in significant disruptions to the U.S. and world economies. In response to the issuance of U.S. federal guidelines to contain the spread of the COVID-19 virus, state and local jurisdictions implemented various containment measures, including temporary shelter-in-place orders and closure of non-essential businesses. The effects of these containment measures negatively impacted our operations resulting in the temporary or partial closure of certain locations in all of our U.S. operating segments during the first half of 2020. In addition, certain of our Mexico locations were also temporarily closed in accordance with jurisdictional ordinances issued in Mexico. In response to these restrictions and negative impacts to our operations, we implemented certain measures to reduce operating expenses and cash flow uses in order to mitigate these effects. In addition, we implemented additional electronic payment methods for our Rent-A-Center Business and Preferred Lease customers. While the pandemic is ongoing and uncertainties remain that may not allow us to accurately predict the full impact that COVID-19 will ultimately have on our business, all locations in our Rent-A-Center Business, Franchising and Mexico operating segments, and staffed Preferred Lease locations temporarily or partially closed at the onset of the pandemic, were reopened in the second quarter of 2020 and continue to remain fully operational. Use of Estimates In preparing financial statements in conformity with U.S. generally accepted accounting principles, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent losses and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. In applying accounting principles, we must often make individual estimates and assumptions regarding expected outcomes or uncertainties. Our estimates, judgments and assumptions are continually evaluated based on available information and experience. However, uncertainties, including future unknown impacts of the COVID-19 pandemic, may affect certain estimates and assumptions inherent in the financial reporting process, which may impact reported amounts of assets and liabilities in future periods and cause actual results to differ from those estimates. Principles of Consolidation and Nature of Operations These financial statements included herein include the accounts of Rent-A-Center, Inc. and its direct and indirect subsidiaries. All intercompany accounts and transactions have been eliminated. Unless the context indicates otherwise, references to “Rent-A-Center” refer only to Rent-A-Center, Inc., the parent, and references to the "Company", “we,” “us” and “our” refer to the consolidated business operations of Rent-A-Center and any or all of its direct and indirect subsidiaries. We report four operating segments: Rent-A-Center Business, Preferred Lease, Mexico and Franchising. Our Rent-A-Center Business segment consists of company-owned lease-to-own stores in the United States and Puerto Rico that lease household durable goods to customers on a lease-to-own basis. We also offer merchandise on an installment sales basis in certain of our stores under the names “Get It Now” and “Home Choice.” Our Rent-A-Center Business segment operates through our company-owned stores and e-commerce platform through rentacenter.com. Our Preferred Lease segment, which operates in the United States and Puerto Rico, and includes the operations of Merchants Preferred (as defined in Note 2 below) acquired in August 2019, generally offers the lease-to-own transaction to consumers who do not qualify for financing from the traditional retailer through kiosks located within such retailer's locations, including staffed options, unstaffed or virtual options, or a combination of the two (the hybrid model). The hybrid model can be staffed by a Preferred Lease employee (staffed locations) or employ a virtual solution where customers, either directly or with the assistance of a representative of the third-party retailer, initiate the lease-to-own transaction online in the retailers' locations using our virtual solutions (virtual locations). Our Mexico segment consists of our company-owned lease-to-own stores in Mexico that lease household durable goods to customers on a lease-to-own basis. Rent-A-Center Franchising International, Inc., an indirect, wholly owned subsidiary of Rent-A-Center, is a franchisor of lease-to-own stores. Our Franchising segment’s primary source of revenue is the sale of rental merchandise to its franchisees, who in turn offer the merchandise to the general public for rent or purchase under a lease-to-own transaction. The balance of our Franchising segment’s revenue is generated primarily from royalties based on franchisees’ monthly gross revenues. Newly Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires immediate recognition of estimated current expected credit losses, rather than recognition when incurred. We adopted ASU 2016-13 and all related amendments, including ASU 2020-02 and ASU 2020-03, beginning January 1, 2020, using a modified retrospective approach. Under such approach, we recognized a cumulative-effect of the guidance as an adjustment to the opening balance of retained earnings for the quarter ended March 31, 2020. The application of this new methodology is limited to our installment notes receivables and trade receivables with our franchisees, primarily related to merchandise sales. The comparative information has not been restated and continues to be reported under the accounting standards in effect for periods ending prior to January 1, 2020. The cumulative effect as of January 1, 2020 resulting from the adoption of ASU 2016-13 and related amendments was a net decrease to opening retained earnings in our condensed consolidated balance sheet of $0.8 million. See Note 4 for additional information regarding our trade and note receivables and related allowances for doubtful accounts. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the subsequent measurement of goodwill by eliminating the hypothetical purchase price allocation and instead using the difference between the carrying amount and the fair value of the reporting unit. We adopted ASU 2017-04 beginning January 1, 2020, using a prospective approach. There was no impact on our financial statements for the nine months ended September 30, 2020 resulting from the adoption of this ASU. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies, and adds certain disclosure requirements in ASC 820, to improve the effectiveness of the fair value measurement disclosures. We adopted ASU 2018-13 beginning January 1, 2020, using a prospective approach. There was no impact on our financial statements for the nine months ended September 30, 2020 resulting from the adoption of this ASU. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40); Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement, which requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing agreement under the internal-use software guidance in ASC 350-40. We adopted ASU 2018-15 beginning January 1, 2020, using a prospective approach. Following our adoption of this ASU, deferred implementation costs related to cloud computing arrangements are recorded to prepaid expenses and other assets in our condensed consolidated balance sheet and subsequently amortized to other store expenses in our condensed consolidated statement of operations. Impacts to our financial statements resulting from the adoption of this ASU were immaterial to our financial statements for the nine months ended September 30, 2020. |
Acquisitions and Store Sales (N
Acquisitions and Store Sales (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Acquisitions and store sales [Text Block] | Acquisitions and Store SalesOn August 13, 2019, we completed the acquisition of substantially all of the assets of C/C Financial Corp. dba Merchants Preferred ("Merchants Preferred"), a nationwide provider of virtual lease-to-own services. The aggregate purchase price was approximately $46.4 million, including net cash consideration of approximately $28.0 million, and 701,918 shares of our common stock valued at $27.31 per share, as of the date of closing, less working capital adjustments of approximately $0.9 million. Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. The following table provides the final estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date: (in thousands) August 13, 2019 Receivables $ 1,813 Prepaid expenses and other assets 154 Rental merchandise 17,904 Software 4,300 Right of use operating leases 404 Other intangible assets 8,900 Goodwill 13,403 Lease liabilities (487) Net identifiable assets acquired $ 46,391 The fair value measurements were primarily based on significant unobservable inputs (level 3) developed using company-specific information. Certain fair value estimates were determined based on an independent valuation of the net assets acquired, including identifiable intangible assets, relating to dealer relationships of $8.9 million, and software of $4.3 million. The fair value for dealer relationships and software were estimated using common industry valuation methods for similar asset types, based primarily on cost inputs and projected cash flows. The dealer relationships and software assets were both assigned remaining lives of 10 years. In addition, we recorded goodwill of $13.4 million, which consists of the excess of the net purchase price over the fair value of the net assets acquired. The goodwill is not deductible for tax purposes. |
Subsequent Events | California Refranchise Sale On July 22, 2020, we entered into an asset purchase agreement to sell all 99 Rent-A-Center Business corporate stores in the state of California to an experienced franchisee. The sale was consummated on October 5, 2020 for cash consideration of approximately $16 million, including approximately $1 million paid for related franchise fees. In accordance with the criteria included in US GAAP, assets sold in connection with the sale were classified as assets held for sale and reported at their net book value as of September 30, 2020, including idle and on-rent inventory of approximately $31.1 million and property assets of approximately $0.8 million. |
Revenues Revenues (Notes)
Revenues Revenues (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Revenues [Abstract] | |
Revenues [Text Block] | Revenues The following table disaggregates our revenue for the periods ended September 30, 2020 and 2019: Three Months Ended September 30, 2020 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 414,798 $ 153,306 $ 11,469 $ — $ 579,573 Merchandise sales 42,459 48,096 678 — 91,233 Installment sales 16,580 — — — 16,580 Other 386 257 12 189 844 Total store revenues 474,223 201,659 12,159 189 688,230 Franchise Merchandise sales — — — 19,069 19,069 Royalty income and fees — — — 4,716 4,716 Total revenues $ 474,223 $ 201,659 $ 12,159 $ 23,974 $ 712,015 Nine Months Ended September 30, 2020 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 1,193,301 $ 454,744 $ 34,265 $ — $ 1,682,310 Merchandise sales 144,887 153,774 2,032 — 300,693 Installment sales 48,970 — — — 48,970 Other 1,222 511 19 589 2,341 Total store revenues 1,388,380 609,029 36,316 589 2,034,314 Franchise Merchandise sales — — — 49,553 49,553 Royalty income and fees — — — 13,833 13,833 Total revenues $ 1,388,380 $ 609,029 $ 36,316 $ 63,975 $ 2,097,700 Three Months Ended September 30, 2019 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 389,421 $ 148,711 $ 12,663 $ — $ 550,795 Merchandise sales 29,185 35,667 700 — 65,552 Installment sales 16,952 — — — 16,952 Other 939 108 7 — 1,054 Total store revenues 436,497 184,486 13,370 — 634,353 Franchise Merchandise sales — — — 11,178 11,178 Royalty income and fees — — — 3,840 3,840 Total revenues $ 436,497 $ 184,486 $ 13,370 $ 15,018 $ 649,371 Nine Months Ended September 30, 2019 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 1,196,800 $ 431,008 $ 38,021 $ — $ 1,665,829 Merchandise sales 112,678 125,963 2,223 — 240,864 Installment sales 49,658 — — — 49,658 Other 2,514 426 22 — 2,962 Total store revenues 1,361,650 557,397 40,266 — 1,959,313 Franchise Merchandise sales — — — 30,307 30,307 Royalty income and fees — — — 12,370 12,370 Total revenues $ 1,361,650 $ 557,397 $ 40,266 $ 42,677 $ 2,001,990 Rental-Purchase Agreements Rent-A-Center Business, Preferred Lease, and Mexico Rentals and Fees. Rental merchandise is leased to customers pursuant to rental purchase agreements, which provide for weekly, semi-monthly or monthly rental terms with non-refundable rental payments. At the expiration of each rental term, customers may renew the rental agreement for the next rental term. Generally, the customer has the right to acquire title of the merchandise either through a purchase option or through payment of all required rental terms. Customers can terminate the rental agreement at the end of any rental term without penalty. Therefore, rental transactions are accounted for as operating leases. Rental payments received at our Rent-A-Center Business, Preferred Lease (excluding virtual) and Mexico locations must be prepaid in advance of the next rental term. Under the virtual business model, revenues are earned prior to the rental payment due date. Therefore, virtual business revenue is accrued prior to receipt of the rental payment, net of estimated returns and uncollectible renewal payments. Under both models, rental revenue is recognized over the rental term. See Note 4 for additional information regarding accrued rental revenue and the related allowances for returns and uncollectible payments. Cash received for rental payments, including fees, prior to the period in which it should be recognized, is deferred and recognized according to the rental term. At September 30, 2020 and December 31, 2019, we had $41.9 million and $39.9 million, respectively, in deferred revenue included in accrued liabilities related to our rental purchase agreements. Revenue related to various payment, reinstatement or late fees is recognized when paid by the customer at the point service is provided. Rental merchandise is depreciated using the income forecasting method and is recognized in cost of sales over the rental term. We also offer additional product plans along with our rental agreements which provide customers with liability protection against significant damage or loss of a product, and club membership benefits, including various discount programs, product service and replacement benefits in the event merchandise is damaged or lost, and payment insurance in the event eligible customers become unemployed. Customers renew product plans in conjunction with their rental term renewals, and can cancel the plans at any time. Revenue for product plans is recognized over the term of the plan. Costs incurred related to product plans are primarily recognized in cost of sales. Revenue from contracts with customers Rent-A-Center Business, Preferred Lease, and Mexico Merchandise Sales. Merchandise sales include payments received for the exercise of the early purchase option offered through our rental purchase agreements or merchandise sold through point of sale transactions. Revenue for merchandise sales is recognized when payment is received and ownership of the merchandise passes to the customer. The remaining net value of merchandise sold is recorded to cost of sales at the time of the transaction. Installment Sales. Revenue from the sale of merchandise in our retail installment stores is recognized when the installment note is signed and control of the merchandise has passed to the customer. The cost of merchandise sold through installment agreements is recognized in cost of sales at the time of the transaction. We offer extended service plans with our installment agreements which are administered by third parties and provide customers with product service maintenance beyond the term of the installment agreement. Payments received for extended service plans are deferred and recognized, net of related costs, when the installment payment plan is complete and the service plan goes into effect. Customers can cancel extended service plans at any time during the installment agreement period and receive a refund for payments previously made towards the plan. At September 30, 2020 and December 31, 2019, we had $3.0 million and $2.9 million in deferred revenue included in accrued liabilities related to extended service plans. Other. Other revenue primarily consists of other miscellaneous product plans offered to our rental and installment customers. Revenue for other product plans is recognized in accordance with the terms of the applicable plan agreement. Franchising Merchandise Sales. Revenue from the sale of rental merchandise is recognized upon shipment of the merchandise to the franchisee. |
Receivables and Allowance for D
Receivables and Allowance for Doubtful Accounts(Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables and Allowance for Doubtful Accounts [Abstract] | |
Receivables and Allowance for Doubtful Accounts [Text Block] | Receivables and Allowance for Doubtful Accounts Installment sales receivables consist primarily of receivables due from customers for the sale of merchandise in our retail installment stores. Installment sales receivable associated with the sale of merchandise at our Get It Now and Home Choice stores generally consist of the sales price of the merchandise purchased and any additional fees for services the customer has chosen, less the customer’s down payment. No interest is accrued and interest income is recognized each time a customer makes a payment, generally on a monthly basis. Interest paid on installment agreements for the nine months ended September 30, 2020 was $8.5 million. Trade and notes receivables consist primarily of amounts owed from our franchisees for inventory purchases, earned royalties and other obligations; and other corporate related receivables. Credit is extended based on an evaluation of a franchisee’s financial condition and collateral is generally not required. Trade receivables are generally due within 30 days. Receivables consist of the following: (In thousands) September 30, 2020 December 31, 2019 Installment sales receivables $ 57,939 $ 56,370 Trade and notes receivables 25,448 33,354 Total receivables 83,387 89,724 Less allowance for doubtful accounts (7,916) (5,601) Total receivables, net of allowance for doubtful accounts $ 75,471 $ 84,123 We have established an allowance for doubtful accounts for our installment notes receivable. Our policy for determining the allowance is primarily based on historical loss experience, as well as the results of management’s review and analysis of the payment and collection of the installment notes receivable within the previous year. We believe our allowance is adequate to absorb all expected losses. Our policy is to charge off installment notes receivable that are 120 days or more past due. Charge-offs are applied as a reduction to the allowance for doubtful accounts and any recoveries of previously charged off balances are applied as an increase to the allowance for doubtful accounts. The allowance for our Franchising trade and note receivables is determined by considering a number of factors, including the length of time receivables are past due, previous loss history, the franchisee’s current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Trade receivables that are more than 90 days past due are either written-off or fully reserved in our allowance for doubtful accounts. Payments subsequently received on such receivables are credited to the allowance for doubtful accounts. The allowance for doubtful accounts related to trade and notes receivable was $0.9 million and $1.5 million at September 30, 2020 and December 31, 2019, respectively. The allowance for doubtful accounts related to installment sales receivable was $7.0 million and $4.1 million at September 30, 2020 and December 31, 2019, respectively. Changes in our allowance for doubtful accounts are as follows: (In thousands) September 30, 2020 Beginning allowance for doubtful accounts $ 5,601 Bad debt expense (1) 10,959 Accounts written off (9,141) Recoveries 497 Ending allowance for doubtful accounts $ 7,916 (1) Uncollectible installment payments, franchisee obligations, and other corporate receivables are recognized in other store operating expenses in our condensed consolidated financial statements. |
Leases Leases (Notes)
Leases Leases (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases [Text Block] | Leases We lease space for all of our Rent-A-Center Business and Mexico stores under operating leases expiring at various times through 2027. In addition, we lease space for certain support facilities under operating leases expiring at various times through 2032. Most of our store leases are five-year leases and contain renewal options for additional periods ranging from three to five years at rental rates adjusted according to agreed formulas. We evaluate all leases to determine if it is likely that we will exercise future renewal options and in most cases we are not reasonably certain of exercise due to competing market rental rates and lack of significant penalty or business disruption incurred by not exercising the renewal options. We include month-to-month leases in operating lease right-of-use assets and operating lease liabilities in our condensed consolidated balance sheet. In certain situations involving the sale of a Rent-A-Center Business corporate store to a franchisee, we enter into a lease assignment agreement with the buyer, but we remain the primary obligor under the original lease for the remaining active term. These assignments are therefore classified as subleases and the original lease is included in our operating lease right-of-use assets and operating lease liabilities in our condensed consolidated balance sheet. We lease vehicles for all of our Rent-A-Center Business stores under operating leases with lease terms expiring twelve months after the start date of the lease. We classify these leases as short-term and have elected the short-term lease exemption for our vehicle leases, and have therefore excluded them from our operating lease right-of-use assets within our condensed consolidated balance sheet. We also lease vehicles for all of our Mexico stores which have terms expiring at various times through 2022 with rental rates adjusted periodically for inflation. Finally, we have a minimal number of equipment leases, primarily related to temporary storage containers and certain back office technology hardware assets. For all of the leases described above, we have elected not to separate the lease and non-lease components and account for these as a single component. We have also elected to use the practical expedients that remove the requirement to reassess whether expired or existing contracts contain leases and the requirement to reassess the lease classification for any existing leases prior to our adoption of ASU 2016-02. Operating lease right-of-use assets and operating lease liabilities are discounted using our incremental borrowing rate, since the implicit rate is not readily determinable. We do not currently have any financing leases. Operating lease costs are recorded on a straight-line basis within other store expenses in our condensed consolidated statements of operations. Total operating lease costs by expense type: Three Months Ended Nine Months Ended (in thousands) September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Operating lease cost included in other store expenses (1) $ 34,682 $ 36,441 $ 106,559 $ 111,226 Operating lease cost included in other charges 121 2,933 1,081 10,185 Sublease receipts (2,180) (2,065) (6,641) (5,559) Total operating lease charges $ 32,623 $ 37,309 $ 100,999 $ 115,852 (1) Includes short-term lease costs, which are not significant. Supplemental cash flow information related to leases: Nine Months Ended (in thousands) September 30, 2020 September 30, 2019 Cash paid for amounts included in measurement of operating lease liabilities $ 85,794 $ 91,235 Cash paid for short-term operating leases not included in operating lease liabilities 17,466 21,247 Right-of-use assets obtained in exchange for new operating lease liabilities 74,095 36,371 Weighted-average discount rate and weighted-average remaining lease term: (in thousands) September 30, 2020 December 31, 2019 Weighted-average discount rate (1) 7.0 % 7.7 % Weighted-average remaining lease term (in years) 4 4 (1) January 1, 2019 incremental borrowing rate was used for leases in existence at the time of adoption of ASU 2016-02. Reconciliation of undiscounted operating lease liabilities to the present value operating lease liabilities at September 30, 2020: (In thousands) Operating Leases 2020 $ 29,607 2021 101,986 2022 73,861 2023 48,490 2024 31,687 Thereafter 34,289 Total undiscounted operating lease liabilities 319,920 Less: Interest (36,136) Total present value of operating lease liabilities $ 283,784 In response to the COVID-19 pandemic and related government restrictions negatively impacting our operations, we renegotiated certain store lease agreements in the second quarter to obtain rent relief in the near term, in order to help offset the negative financial impacts of COVID-19. As of September 30, 2020, we have renegotiated approximately 500 lease agreements, receiving near term rent abatements of approximately $2.3 million and rent deferrals of approximately $2.2 million. On April 10, 2020, the Financial Accounting Standards Board ("FASB") staff issued a question-and-answer document providing guidance for lease concessions provided to lessees in response to the effects of COVID-19. Such guidance allows lessees to make an election not to evaluate whether a lease concession provided by a lessor should be accounted for as a lease modification in the event the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee. We elected this practical expedient in our accounting for any lease concessions provided in connection with our renegotiated lease agreements that did not result in a substantial increase in the rights of or obligations to the lessor. As a result of this election, we recognized rent abatement credits of approximately $0.8 million for the nine-months ended September 30, 2020 in our condensed consolidated statement of operations. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Tax [Text Block] | Income Taxes On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act”), which includes modifications to the limitation on business interest expense deductions and net operating loss provisions. The effective tax rate was 11.4% for the nine months ended September 30, 2020, compared to 17.2% in 2019, primarily as a result of the tax benefit of net operating loss carrybacks at a 35% tax rate that became available as a result of the CARES Act. |
Senior Debt (Notes)
Senior Debt (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Senior Debt [Abstract] | |
Senior Debt | Senior Debt, net On August 5, 2019, we entered into a new Term Loan Credit Agreement (the “Term Loan Credit Agreement”) providing for a seven-year $200 million senior secured term loan facility and an Asset Based Loan Credit Agreement (the “ABL Credit Agreement”) providing a five-year asset-based revolving credit facility (the “ABL Credit Facility”) with commitments of up to $300 million, the proceeds of which were used for the redemption of all of our outstanding senior notes. The amount outstanding under the Term Loan Credit Agreement was $198.0 million at September 30, 2020. We had no amounts outstanding under our ABL Credit Agreement at September 30, 2020 and had $209.3 million available. Proceeds from the Term Loan Credit Agreement were net of original issue discount of $2.0 million upon issuance from the lenders. In addition, in connection with the closing of the Term Loan Credit Agreement and the ABL Credit Agreement, we incurred approximately $6.3 million in debt issuance costs. The original issue discount and debt issuance costs will be amortized over the remaining terms of the respective credit agreements. As of September 30, 2020, the total unamortized balance of debt issuance costs relating to our senior debt and original issue discount reported in the condensed consolidated balance sheet were $5.7 million and $1.7 million, respectively. We also utilize the ABL Credit Facility for the issuance of letters of credit. As of September 30, 2020, we have issued letters of credit in the aggregate outstanding amount of $90.7 million primarily relating to workers compensation insurance claims. Term Loan Credit Agreement The Term Loan Credit Agreement, which matures on August 5, 2026, amortizes in equal quarterly installments at a rate of 1.00% per annum of the original principal amount thereof, with the remaining balance due at final maturity. Interest on the Term Loan Credit Agreement will accrue at the Eurodollar rate plus an applicable margin equal to 4.50%. The margin on the Term Loan Credit Agreement was 4.69% at September 30, 2020. The Term Loan Credit Agreement permits us to prepay the term loans, in whole or in part, without penalty on or after the six-month anniversary of the closing date of the Term Loan Credit Agreement. It also permits us to incur incremental term loans in an aggregate amount equal to $150 million plus the amount of voluntary prepayments of the term loans and an unlimited amount subject to a pro forma consolidated senior secured leverage ratio of not greater than 2.00 to 1.00, subject to certain other conditions. The obligations under the Term Loan Credit Agreement are guaranteed by certain of our subsidiaries. The Term Loan Credit Agreement and the guarantees are secured on a first-priority basis by substantially all of our tangible and intangible assets, other than collateral subject to a first-priority lien under the ABL Credit Agreement, consisting of, among other things, accounts receivable, inventory and bank accounts (and funds on deposit therein), in which the Term Loan Credit Agreement and the guarantees have a second-priority security interest, in each case, subject to certain exceptions. The Term Loan Credit Agreement contains covenants that are usual and customary for facilities and transactions of this type and that, among other things, restrict our ability to: • create certain liens and enter into certain sale and lease-back transactions; • create, assume, incur or guarantee certain indebtedness; • consolidate or merge with, or convey, transfer or lease all or substantially all of our assets, to another person • pay dividends or make other distributions on, or repurchase or redeem, our capital stock or certain other debt; and • make other restricted payments. These covenants are subject to a number of limitations and exceptions set forth in the Term Loan Credit Agreement. We are currently permitted to pay dividends and repurchase our common stock without limitation. The Term Loan Credit Agreement provides for customary events of default, including, but not limited to, failure to pay principal and interest, failure to comply with covenants, agreements or conditions, and certain events of bankruptcy or insolvency. ABL Credit Agreement The ABL Credit Facility will mature on August 5, 2024. The Borrowers (as defined in the ABL Credit Agreement) may borrow only up to the lesser of the level of the then-current Borrowing Base and the committed maximum borrowing capacity of $300 million. The Borrowing Base is tied to the Eligible Installment Sales Accounts, Inventory and Eligible Rental Contracts, reduced by Reserves, as defined in the ABL Credit Agreement. We provide to the Agent information necessary to calculate the Borrowing Base within 30 days of the end of each calendar month, unless liquidity is less than 15% of the maximum borrowing capacity of the ABL Credit Agreement or $45 million, in which case we must provide weekly information. Interest is payable on the ABL Credit Facility at a fluctuating rate of interest determined by reference to the Eurodollar rate plus an applicable margin of 1.50% to 2.00%. The margin on the ABL Credit Facility was 1.69% at September 30, 2020. A commitment fee equal to 0.250% to 0.375% of the unused portion of the ABL Credit Facility fluctuates dependent upon average utilization for the prior month as defined by a pricing grid included in the ABL Credit Agreement. The commitment fee at September 30, 2020 was 0.375%. We paid $0.6 million of commitment fees during the third quarter of 2020. Letters of credit are limited to the lesser of (x) $150 million, subject to certain limitations, and (y) the aggregate unused availability then in effect. Subject to certain conditions, the ABL Credit Facility may be expanded by up to $100 million in additional commitments, subject to a pro forma fixed charge coverage ratio being greater than 1.10 to 1.00. The obligations under the ABL Credit Agreement are guaranteed by us and certain of our subsidiaries. The ABL Credit Agreement and the guarantees are secured on a first-priority basis on all our and the guarantors’ accounts receivable, inventory and bank accounts (and funds on deposit therein) and a second-priority basis on all of the tangible and intangible assets (second in priority to the liens securing the Term Loan Credit Agreement) of such persons, in each case, subject to certain exceptions. The ABL Credit Agreement contains covenants that are usual and customary for facilities and transactions of this type and are substantially the same as covenants in the Term Loan Credit Agreement. The ABL Credit Facility also requires the maintenance of a Consolidated Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) of 1.10 to 1.00 at the end of each fiscal quarter when either (i) certain specified events of default have occurred and are continuing or (ii) availability is less than or equal to the greater of $33.75 million and 15% of the line cap then in effect. The Fixed Charge Coverage Ratio as of September 30, 2020 was 1.58 to 1.00. The ABL Credit Agreement provides for customary events of default that are substantially the same as events of default in the Term Loan Credit Agreement. The table below shows the scheduled maturity dates of our outstanding debt at September 30, 2020 for each of the years ending December 31: (in thousands) Term Loan ABL Credit Facility Total 2020 $ 500 $ — $ 500 2021 2,000 — 2,000 2022 2,000 — 2,000 2023 2,000 — 2,000 2024 2,000 — 2,000 Thereafter 189,500 — 189,500 Total senior debt $ 198,000 $ — $ 198,000 |
Fair Value (Notes)
Fair Value (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value We follow a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values, in determining the fair value of our non-financial assets and non-financial liabilities, which consist primarily of goodwill. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. There were no changes in the methods and assumptions used in measuring fair value during the period.Our financial instruments include cash and cash equivalents, receivables, payables, and borrowings against our ABL Credit Facility and Term Loan Facility. The carrying amount of cash and cash equivalents, receivables and payables approximates fair value at September 30, 2020 and December 31, 2019, because of the short maturities of these instruments. In addition, the interest rates on our Term Loan Facility and ABL Credit Facility are variable and, therefore, the carrying value of outstanding borrowings approximates their fair value. |
Other Charges (Notes)
Other Charges (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Other Charges | Other Charges Store Consolidations. During the first nine months of 2020, we closed 25 Rent-A-Center Business stores, resulting in pre-tax charges of $1.2 million in other miscellaneous shutdown and holding costs, $0.4 million in lease impairment charges, and $0.1 million in disposal of fixed assets. During the first nine months of 2019, we closed 83 Rent-A-Center Business stores, resulting in pre-tax charges of $3.1 million in lease impairment, $1.7 million in other miscellaneous shutdown and holding costs, $0.8 million in disposal of fixed assets, and $0.4 million in severance and other payroll-related costs. Cost Savings Initiatives. During 2018, we began the execution of multiple cost savings initiatives, including reductions in overhead and supply chain operations. In connection with these initiatives, we recorded pre-tax charges during the nine months ended September 30, 2020 consisting of $1.1 million in severance and other payroll-related costs, $0.4 million in lease impairment charges, and $0.4 million in other miscellaneous shutdown and holding costs. Costs incurred during the first nine months of 2019 related to these initiatives included pre-tax charges of $4.7 million in lease impairment charges, $2.8 million in severance and other payroll-related costs, $2.2 million in other miscellaneous shutdown and holding costs, and $0.4 million in disposal of fixed assets. COVID-19 Pandemic. In March 2020, national efforts to contain the COVID-19 virus began to be implemented. In connection with COVID-19, during the first nine months of 2020, we incurred approximately $1.0 million in sanitization cleaning and personal protective equipment expenses, $0.4 million in payroll-related costs, and $0.2 million in lease expense related to closed stores and idled vehicles, partially offset by real estate lease abatement credits of $0.8 million for our Rent-A-Center Business stores. Social Unrest. During the second quarter of 2020, we incurred expenses resulting from certain civil unrest that occurred in connection with efforts to institute law enforcement and other social and political reforms. In connection with this unrest, approximately 30 Rent-A-Center Business stores were looted and/or damaged, resulting in $0.7 million of inventory write-offs and $0.1 million in disposal of fixed assets during the first nine months of 2020. Activity with respect to other charges for the nine months ended September 30, 2020 is summarized in the below table: (in thousands) Accrued Charges at December 31, 2019 Charges & Adjustments Payments & Adjustments Accrued Charges at September 30, 2020 Cash charges: Labor costs $ 738 $ 1,610 $ (1,450) $ 898 Lease obligations (1) — (645) 645 — Shutdown and holding costs — 1,573 (1,573) — Total cash charges $ 738 2,538 $ (2,378) $ 898 Non-cash charges: Rental merchandise losses (2) 721 Asset impairments (3) 1,376 Other (4) 3,133 Total other charges $ 7,768 (1) Includes lease abatement credits related to renegotiated lease agreements in response to COVID-19. (2) Reflects losses due to looting. (3) Asset impairments primarily includes impairments of operating lease right-of-use assets and other property assets related to the closure of Rent-A-Center Business stores and previously closed product service centers, damage related to looting, as well as a write-down of capitalized software in the first nine months of 2020. (4) Other primarily includes legal settlement reserves, state tax audit assessment reserves, expenses related to COVID-19, partially offset by proceeds received from the sale of a class action claim and insurance proceeds related to Hurricane Maria in 2017. |
Segment Information (Notes)
Segment Information (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information [Abstract] | |
Segment Information | Segment Information The operating segments reported below are the segments for which separate financial information is available and for which segment results are evaluated by the chief operating decision makers. Our operating segments are organized based on factors including, but not limited to, type of business transactions, geographic location and store ownership. All operating segments offer merchandise from certain basic product categories: furniture, consumer electronics, appliances, computers, and accessories. Smartphones are also offered in our Rent-A-Center Business stores and franchise locations. In addition, in the Rent-A-Center Business segment, we have recently expanded into other product categories including, tires, tools, handbags, jewelry and other accessories. Segment information for the three and nine months ended September 30, 2020 and 2019 is as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Revenues Rent-A-Center Business $ 474,223 $ 436,497 $ 1,388,380 $ 1,361,650 Preferred Lease 201,659 184,486 609,029 557,397 Mexico 12,159 13,370 36,316 40,266 Franchising 23,974 15,018 63,975 42,677 Total revenues $ 712,015 $ 649,371 $ 2,097,700 $ 2,001,990 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Gross profit Rent-A-Center Business $ 332,742 $ 306,881 $ 966,347 $ 945,392 Preferred Lease 78,727 80,113 238,433 246,821 Mexico 8,655 9,286 25,615 27,966 Franchising 4,904 3,716 14,343 12,754 Total gross profit $ 425,028 $ 399,996 $ 1,244,738 $ 1,232,933 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Operating profit Rent-A-Center Business $ 99,950 $ 52,175 $ 253,025 $ 170,411 Preferred Lease 16,073 21,830 40,528 66,077 Mexico 1,724 1,213 3,743 3,906 Franchising 3,146 1,135 8,694 4,716 Total segments 120,893 76,353 305,990 245,110 Corporate (40,706) (37,506) (123,293) (59,085) Total operating profit $ 80,187 $ 38,847 $ 182,697 $ 186,025 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Depreciation and amortization Rent-A-Center Business $ 4,926 $ 5,037 $ 14,759 $ 15,619 Preferred Lease 541 379 1,542 1,040 Mexico 104 82 292 317 Franchising 15 3 28 42 Total segments 5,586 5,501 16,621 17,018 Corporate 8,224 9,393 26,450 28,770 Total depreciation and amortization $ 13,810 $ 14,894 $ 43,071 $ 45,788 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Capital expenditures Rent-A-Center Business $ 5,721 $ 4,129 $ 10,205 $ 5,594 Preferred Lease 20 24 106 125 Mexico 116 35 205 65 Total segments 5,857 4,188 10,516 5,784 Corporate 1,950 2,734 12,041 6,226 Total capital expenditures $ 7,807 $ 6,922 $ 22,557 $ 12,010 (in thousands) September 30, 2020 December 31, 2019 On rent rental merchandise, net Rent-A-Center Business $ 417,212 $ 411,482 Preferred Lease 249,266 268,845 Mexico 14,477 16,943 Total on rent rental merchandise, net $ 680,955 $ 697,270 (in thousands) September 30, 2020 December 31, 2019 Held for rent rental merchandise, net Rent-A-Center Business $ 112,176 $ 131,086 Preferred Lease 1,969 1,254 Mexico 5,758 6,078 Total held for rent rental merchandise, net $ 119,903 $ 138,418 (in thousands) September 30, 2020 December 31, 2019 Assets by segment Rent-A-Center Business $ 916,894 $ 953,151 Preferred Lease 337,752 357,859 Mexico 33,957 33,707 Franchising 12,044 11,095 Total segments 1,300,647 1,355,812 Corporate 366,918 226,986 Total assets $ 1,667,565 $ 1,582,798 |
Stock-Based Compensation (Notes
Stock-Based Compensation (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Common Stock and Stock-Based Compensation In March 2020, our Board of Directors authorized a stock repurchase program with respect to the purchase of up to an aggregate of $75 million of Rent-A-Center common stock, superseding our prior authorization. During the nine months ended September 30, 2020, the Company repurchased 1,463,377 shares of our common stock for an aggregate purchase price of $26.6 million, which includes shares having aggregate purchase price of $10.0 million that were purchased under a former repurchase program that was previously authorized by our Board of Directors. No shares were repurchased during the nine months ended September 30, 2019. Under the March 2020 authorization, $58.4 million remains available for repurchases in the open market and privately negotiated transactions. We recognized $3.0 million and $2.0 million in compensation expense related to stock options and restricted stock units during the three months ended September 30, 2020 and 2019, respectively, and $8.9 million and $4.6 million during the nine months ended September 30, 2020 and 2019, respectively. During the nine months ended September 30, 2020, we granted approximately 390,000 stock options, 400,000 market-based performance restricted stock units and 192,000 time-vesting restricted stock units. The stock options granted were valued using a Black-Scholes pricing model with the following assumptions: an expected volatility of 45.62% to 54.72%, a risk-free interest rate of 0.22% to 1.72%, an expected dividend yield of 4.02% to 8.20%, and an expected term of 3.50 to 5.75 years. The weighted-average exercise price of the options granted during the nine months ended September 30, 2020 was $24.47 and the weighted-average grant-date fair value was $6.94. Performance-based restricted stock units are valued using a Monte Carlo simulation. Time-vesting restricted stock units are valued using the closing price on the trading day immediately preceding the day of the grant. The weighted-average grant date fair value of the market-based performance and time-vesting restricted stock units granted during the nine months ended September 30, 2020 was $29.05 and $25.06, respectively. |
Contingencies (Notes)
Contingencies (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies From time to time, we are a party to various legal proceedings and governmental inquiries arising in the ordinary course of business. We reserve for loss contingencies that are both probable and reasonably estimable. We regularly monitor developments related to these legal proceedings and inquiries, and review the adequacy of our legal reserves on a quarterly basis. We do not expect these losses to have a material impact on our condensed consolidated financial statements if and when such losses are incurred. Nevertheless, we cannot predict the impact of future developments affecting our claims and lawsuits, and any resolution of a claim or lawsuit or reserve within a particular fiscal period may materially and adversely impact our results of operations for that period. We are subject to unclaimed property audits by states in the ordinary course of business. The property subject to review in the audit process include unclaimed wages, vendor payments and customer refunds. State escheat laws generally require entities to report and remit abandoned and unclaimed property to the state. Failure to timely report and remit the property can result in assessments that could include interest and penalties, in addition to the payment of the escheat liability itself. We routinely remit escheat payments to states in compliance with applicable escheat laws. California Attorney General. The California Attorney General (“CAG”) previously issued an investigative subpoena seeking information with respect to our Acceptance Now business practices (now part of the Preferred Lease segment). The request for documents and information was sought in connection with a broader investigation of the lease-to-own industry in California. Since receiving such demand, we have cooperated with the CAG in connection with its investigation and made several productions of requested documents. In March 2020, the CAG put forth proposed settlement terms to address alleged violations of California law. After several rounds of negotiations, in September 2020, the CAG proposed revised terms. In both cases, the proposed settlement terms include civil penalties, disgorgement of certain revenues, additional training requirements, and recommended changes to Acceptance Now business practices. We believe that our business practices are in compliance with |
Earnings Per Common Share (Note
Earnings Per Common Share (Notes) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share Summarized basic and diluted earnings per common share were calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2020 2019 2020 2019 Numerator: Net earnings $ 64,030 $ 31,277 $ 151,815 $ 133,055 Denominator: Weighted-average shares outstanding 53,985 54,487 54,186 54,190 Effect of dilutive stock awards 1,621 1,571 1,476 1,563 Weighted-average dilutive shares 55,606 56,058 55,662 55,753 Basic earnings per common share $ 1.19 $ 0.57 $ 2.80 $ 2.46 Diluted earnings per common share $ 1.15 $ 0.56 $ 2.73 $ 2.39 Anti-dilutive securities excluded from diluted loss per common share: Anti-dilutive performance share units — 260 324 260 Anti-dilutive stock options 907 974 1,238 1,047 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | These financial statements included herein include the accounts of Rent-A-Center, Inc. and its direct and indirect subsidiaries. All intercompany accounts and transactions have been eliminated. |
Newly adopted accounting pronouncements [Policy Text Block] | Newly Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires immediate recognition of estimated current expected credit losses, rather than recognition when incurred. We adopted ASU 2016-13 and all related amendments, including ASU 2020-02 and ASU 2020-03, beginning January 1, 2020, using a modified retrospective approach. Under such approach, we recognized a cumulative-effect of the guidance as an adjustment to the opening balance of retained earnings for the quarter ended March 31, 2020. The application of this new methodology is limited to our installment notes receivables and trade receivables with our franchisees, primarily related to merchandise sales. The comparative information has not been restated and continues to be reported under the accounting standards in effect for periods ending prior to January 1, 2020. The cumulative effect as of January 1, 2020 resulting from the adoption of ASU 2016-13 and related amendments was a net decrease to opening retained earnings in our condensed consolidated balance sheet of $0.8 million. See Note 4 for additional information regarding our trade and note receivables and related allowances for doubtful accounts. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the subsequent measurement of goodwill by eliminating the hypothetical purchase price allocation and instead using the difference between the carrying amount and the fair value of the reporting unit. We adopted ASU 2017-04 beginning January 1, 2020, using a prospective approach. There was no impact on our financial statements for the nine months ended September 30, 2020 resulting from the adoption of this ASU. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies, and adds certain disclosure requirements in ASC 820, to improve the effectiveness of the fair value measurement disclosures. We adopted ASU 2018-13 beginning January 1, 2020, using a prospective approach. There was no impact on our financial statements for the nine months ended September 30, 2020 resulting from the adoption of this ASU. In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40); Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement, which requires implementation costs incurred by customers in cloud computing arrangements to be deferred and recognized over the term of the arrangement, if those costs would be capitalized by the customer in a software licensing agreement under the internal-use software guidance in ASC 350-40. We adopted ASU 2018-15 beginning January 1, 2020, using a prospective approach. Following our adoption of this ASU, deferred implementation costs related to cloud computing arrangements are recorded to prepaid expenses and other assets in our condensed consolidated balance sheet and subsequently amortized to other store expenses in our condensed consolidated statement of operations. Impacts to our financial statements resulting from the adoption of this ASU were immaterial to our financial statements for the nine months ended September 30, 2020. |
Acquisitions Acquisitions (Tabl
Acquisitions Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions [Abstract] | |
Acquisition assets acquired and liabilities assumed [Table Text Block] | Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. The following table provides the final estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date: (in thousands) August 13, 2019 Receivables $ 1,813 Prepaid expenses and other assets 154 Rental merchandise 17,904 Software 4,300 Right of use operating leases 404 Other intangible assets 8,900 Goodwill 13,403 Lease liabilities (487) Net identifiable assets acquired $ 46,391 |
Revenues Revenues (Tables)
Revenues Revenues (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenues [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table disaggregates our revenue for the periods ended September 30, 2020 and 2019: Three Months Ended September 30, 2020 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 414,798 $ 153,306 $ 11,469 $ — $ 579,573 Merchandise sales 42,459 48,096 678 — 91,233 Installment sales 16,580 — — — 16,580 Other 386 257 12 189 844 Total store revenues 474,223 201,659 12,159 189 688,230 Franchise Merchandise sales — — — 19,069 19,069 Royalty income and fees — — — 4,716 4,716 Total revenues $ 474,223 $ 201,659 $ 12,159 $ 23,974 $ 712,015 Nine Months Ended September 30, 2020 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 1,193,301 $ 454,744 $ 34,265 $ — $ 1,682,310 Merchandise sales 144,887 153,774 2,032 — 300,693 Installment sales 48,970 — — — 48,970 Other 1,222 511 19 589 2,341 Total store revenues 1,388,380 609,029 36,316 589 2,034,314 Franchise Merchandise sales — — — 49,553 49,553 Royalty income and fees — — — 13,833 13,833 Total revenues $ 1,388,380 $ 609,029 $ 36,316 $ 63,975 $ 2,097,700 Three Months Ended September 30, 2019 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 389,421 $ 148,711 $ 12,663 $ — $ 550,795 Merchandise sales 29,185 35,667 700 — 65,552 Installment sales 16,952 — — — 16,952 Other 939 108 7 — 1,054 Total store revenues 436,497 184,486 13,370 — 634,353 Franchise Merchandise sales — — — 11,178 11,178 Royalty income and fees — — — 3,840 3,840 Total revenues $ 436,497 $ 184,486 $ 13,370 $ 15,018 $ 649,371 Nine Months Ended September 30, 2019 Rent-A-Center Business Preferred Lease Mexico Franchising Consolidated (In thousands) Store Rentals and fees $ 1,196,800 $ 431,008 $ 38,021 $ — $ 1,665,829 Merchandise sales 112,678 125,963 2,223 — 240,864 Installment sales 49,658 — — — 49,658 Other 2,514 426 22 — 2,962 Total store revenues 1,361,650 557,397 40,266 — 1,959,313 Franchise Merchandise sales — — — 30,307 30,307 Royalty income and fees — — — 12,370 12,370 Total revenues $ 1,361,650 $ 557,397 $ 40,266 $ 42,677 $ 2,001,990 |
Receivables and Allowance for_2
Receivables and Allowance for Doubtful Accounts (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables and Allowance for Doubtful Accounts [Abstract] | |
Receivables [Table Text Block] | Receivables consist of the following: (In thousands) September 30, 2020 December 31, 2019 Installment sales receivables $ 57,939 $ 56,370 Trade and notes receivables 25,448 33,354 Total receivables 83,387 89,724 Less allowance for doubtful accounts (7,916) (5,601) Total receivables, net of allowance for doubtful accounts $ 75,471 $ 84,123 |
Changes in allowance for doubtful accounts [Table Text Block] | Changes in our allowance for doubtful accounts are as follows: (In thousands) September 30, 2020 Beginning allowance for doubtful accounts $ 5,601 Bad debt expense (1) 10,959 Accounts written off (9,141) Recoveries 497 Ending allowance for doubtful accounts $ 7,916 (1) Uncollectible installment payments, franchisee obligations, and other corporate receivables are recognized in other store operating expenses in our condensed consolidated financial statements. |
Leases Leases (Tables)
Leases Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Operating lease costs [Table Text Block] | Total operating lease costs by expense type: Three Months Ended Nine Months Ended (in thousands) September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Operating lease cost included in other store expenses (1) $ 34,682 $ 36,441 $ 106,559 $ 111,226 Operating lease cost included in other charges 121 2,933 1,081 10,185 Sublease receipts (2,180) (2,065) (6,641) (5,559) Total operating lease charges $ 32,623 $ 37,309 $ 100,999 $ 115,852 (1) Includes short-term lease costs, which are not significant. Supplemental cash flow information related to leases: Nine Months Ended (in thousands) September 30, 2020 September 30, 2019 Cash paid for amounts included in measurement of operating lease liabilities $ 85,794 $ 91,235 Cash paid for short-term operating leases not included in operating lease liabilities 17,466 21,247 Right-of-use assets obtained in exchange for new operating lease liabilities 74,095 36,371 Weighted-average discount rate and weighted-average remaining lease term: (in thousands) September 30, 2020 December 31, 2019 Weighted-average discount rate (1) 7.0 % 7.7 % Weighted-average remaining lease term (in years) 4 4 (1) January 1, 2019 incremental borrowing rate was used for leases in existence at the time of adoption of ASU 2016-02. |
Operating lease liability maturity [Table Text Block] | Reconciliation of undiscounted operating lease liabilities to the present value operating lease liabilities at September 30, 2020: (In thousands) Operating Leases 2020 $ 29,607 2021 101,986 2022 73,861 2023 48,490 2024 31,687 Thereafter 34,289 Total undiscounted operating lease liabilities 319,920 Less: Interest (36,136) Total present value of operating lease liabilities $ 283,784 |
Senior debt (Tables)
Senior debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt [Table Text Block] | The table below shows the scheduled maturity dates of our outstanding debt at September 30, 2020 for each of the years ending December 31: (in thousands) Term Loan ABL Credit Facility Total 2020 $ 500 $ — $ 500 2021 2,000 — 2,000 2022 2,000 — 2,000 2023 2,000 — 2,000 2024 2,000 — 2,000 Thereafter 189,500 — 189,500 Total senior debt $ 198,000 $ — $ 198,000 |
Other Charges (Tables)
Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Other Charges [Table Text Block] | Activity with respect to other charges for the nine months ended September 30, 2020 is summarized in the below table: (in thousands) Accrued Charges at December 31, 2019 Charges & Adjustments Payments & Adjustments Accrued Charges at September 30, 2020 Cash charges: Labor costs $ 738 $ 1,610 $ (1,450) $ 898 Lease obligations (1) — (645) 645 — Shutdown and holding costs — 1,573 (1,573) — Total cash charges $ 738 2,538 $ (2,378) $ 898 Non-cash charges: Rental merchandise losses (2) 721 Asset impairments (3) 1,376 Other (4) 3,133 Total other charges $ 7,768 (1) Includes lease abatement credits related to renegotiated lease agreements in response to COVID-19. (2) Reflects losses due to looting. (3) Asset impairments primarily includes impairments of operating lease right-of-use assets and other property assets related to the closure of Rent-A-Center Business stores and previously closed product service centers, damage related to looting, as well as a write-down of capitalized software in the first nine months of 2020. (4) Other primarily includes legal settlement reserves, state tax audit assessment reserves, expenses related to COVID-19, partially offset by proceeds received from the sale of a class action claim and insurance proceeds related to Hurricane Maria in 2017. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Information [Abstract] | |
Segment Information | Segment information for the three and nine months ended September 30, 2020 and 2019 is as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Revenues Rent-A-Center Business $ 474,223 $ 436,497 $ 1,388,380 $ 1,361,650 Preferred Lease 201,659 184,486 609,029 557,397 Mexico 12,159 13,370 36,316 40,266 Franchising 23,974 15,018 63,975 42,677 Total revenues $ 712,015 $ 649,371 $ 2,097,700 $ 2,001,990 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Gross profit Rent-A-Center Business $ 332,742 $ 306,881 $ 966,347 $ 945,392 Preferred Lease 78,727 80,113 238,433 246,821 Mexico 8,655 9,286 25,615 27,966 Franchising 4,904 3,716 14,343 12,754 Total gross profit $ 425,028 $ 399,996 $ 1,244,738 $ 1,232,933 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Operating profit Rent-A-Center Business $ 99,950 $ 52,175 $ 253,025 $ 170,411 Preferred Lease 16,073 21,830 40,528 66,077 Mexico 1,724 1,213 3,743 3,906 Franchising 3,146 1,135 8,694 4,716 Total segments 120,893 76,353 305,990 245,110 Corporate (40,706) (37,506) (123,293) (59,085) Total operating profit $ 80,187 $ 38,847 $ 182,697 $ 186,025 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Depreciation and amortization Rent-A-Center Business $ 4,926 $ 5,037 $ 14,759 $ 15,619 Preferred Lease 541 379 1,542 1,040 Mexico 104 82 292 317 Franchising 15 3 28 42 Total segments 5,586 5,501 16,621 17,018 Corporate 8,224 9,393 26,450 28,770 Total depreciation and amortization $ 13,810 $ 14,894 $ 43,071 $ 45,788 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2020 2019 2020 2019 Capital expenditures Rent-A-Center Business $ 5,721 $ 4,129 $ 10,205 $ 5,594 Preferred Lease 20 24 106 125 Mexico 116 35 205 65 Total segments 5,857 4,188 10,516 5,784 Corporate 1,950 2,734 12,041 6,226 Total capital expenditures $ 7,807 $ 6,922 $ 22,557 $ 12,010 (in thousands) September 30, 2020 December 31, 2019 On rent rental merchandise, net Rent-A-Center Business $ 417,212 $ 411,482 Preferred Lease 249,266 268,845 Mexico 14,477 16,943 Total on rent rental merchandise, net $ 680,955 $ 697,270 (in thousands) September 30, 2020 December 31, 2019 Held for rent rental merchandise, net Rent-A-Center Business $ 112,176 $ 131,086 Preferred Lease 1,969 1,254 Mexico 5,758 6,078 Total held for rent rental merchandise, net $ 119,903 $ 138,418 (in thousands) September 30, 2020 December 31, 2019 Assets by segment Rent-A-Center Business $ 916,894 $ 953,151 Preferred Lease 337,752 357,859 Mexico 33,957 33,707 Franchising 12,044 11,095 Total segments 1,300,647 1,355,812 Corporate 366,918 226,986 Total assets $ 1,667,565 $ 1,582,798 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Summarized basic and diluted earnings per common share were calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except per share data) 2020 2019 2020 2019 Numerator: Net earnings $ 64,030 $ 31,277 $ 151,815 $ 133,055 Denominator: Weighted-average shares outstanding 53,985 54,487 54,186 54,190 Effect of dilutive stock awards 1,621 1,571 1,476 1,563 Weighted-average dilutive shares 55,606 56,058 55,662 55,753 Basic earnings per common share $ 1.19 $ 0.57 $ 2.80 $ 2.46 Diluted earnings per common share $ 1.15 $ 0.56 $ 2.73 $ 2.39 Anti-dilutive securities excluded from diluted loss per common share: Anti-dilutive performance share units — 260 324 260 Anti-dilutive stock options 907 974 1,238 1,047 |
Basis of Presentation Basis of
Basis of Presentation Basis of Presentation (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
ASU adoption adjustment | $ 800 | $ 769 | $ 1,976 |
Acquisitions Acquisitions (Deta
Acquisitions Acquisitions (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 05, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Aug. 13, 2019 |
Business Acquisition [Line Items] | |||||||
Acquisition date | Aug. 13, 2019 | ||||||
Acquired entity | Merchants Preferred | ||||||
Description of acquired entity | a nationwide provider of virtual lease-to-own services | ||||||
Aggregate purchase price | $ 46,400 | ||||||
Cash consideration | $ 28,000 | ||||||
Common stock consideration | 701,918 shares of our common stock | ||||||
Common stock price | $ 27.31 | ||||||
Working capital adjustment | $ 900 | ||||||
Goodwill | $ 70,217 | $ 70,217 | $ 70,217 | ||||
Description of goodwill recognized | consists of the excess of the net purchase price over the fair value of the net assets acquired | ||||||
Proceeds from Sale of Property, Plant, and Equipment | 196 | $ 16,922 | |||||
Royalty income and fees | 4,716 | $ 3,840 | 13,833 | $ 12,370 | |||
On rent | 680,955 | 680,955 | $ 697,270 | ||||
Property, Plant and Equipment, Net | $ 145,298 | $ 145,298 | $ 166,138 | ||||
Subsequent Event [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Proceeds from Sale of Property, Plant, and Equipment | $ 16,000 | ||||||
On rent | 31,100 | ||||||
Property, Plant and Equipment, Net | $ 800 | ||||||
Subsequent Event, Date | Oct. 5, 2020 | ||||||
Subsequent Event, Description | asset purchase agreement to sell all 99 Rent-A-Center Business corporate stores in the state of California to an experienced franchisee | ||||||
Subsequent Event [Member] | Franchise fees [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Royalty income and fees | $ 1,000 | ||||||
Merchants Preferred [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Receivables | $ 1,813 | ||||||
Prepaid expenses and other assets | 154 | ||||||
Rental merchandise | 17,904 | ||||||
Software | 4,300 | ||||||
Right of use operating leases | 404 | ||||||
Other intangible assets | 8,900 | ||||||
Goodwill | 13,403 | ||||||
Lease liabilities | (487) | ||||||
Net identifiable assets acquired | $ 46,391 | ||||||
Intangible assets remaining lives | 10 years |
Revenues Revenues (Details)
Revenues Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||
Rentals and fees | $ 579,573 | $ 550,795 | $ 1,682,310 | $ 1,665,829 | |
Merchandise sales | 91,233 | 65,552 | 300,693 | 240,864 | |
Installment sales | 16,580 | 16,952 | 48,970 | 49,658 | |
Other | 844 | 1,054 | 2,341 | 2,962 | |
Total store revenues | 688,230 | 634,353 | 2,034,314 | 1,959,313 | |
Merchandise sales | 19,069 | 11,178 | 49,553 | 30,307 | |
Royalty income and fees | 4,716 | 3,840 | 13,833 | 12,370 | |
Total revenues | 712,015 | 649,371 | 2,097,700 | 2,001,990 | |
Franchise fees [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue | 4,200 | 4,200 | $ 4,500 | ||
Other product plans [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue | 3,000 | 3,000 | 2,900 | ||
Rental purchase agreements [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Deferred revenue | 41,900 | 41,900 | $ 39,900 | ||
Rent-A-Center Business [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Rentals and fees | 414,798 | 389,421 | 1,193,301 | 1,196,800 | |
Merchandise sales | 42,459 | 29,185 | 144,887 | 112,678 | |
Installment sales | 16,580 | 16,952 | 48,970 | 49,658 | |
Other | 386 | 939 | 1,222 | 2,514 | |
Total store revenues | 474,223 | 436,497 | 1,388,380 | 1,361,650 | |
Merchandise sales | 0 | 0 | 0 | 0 | |
Royalty income and fees | 0 | 0 | 0 | 0 | |
Total revenues | 474,223 | 436,497 | 1,388,380 | 1,361,650 | |
Preferred Lease [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Rentals and fees | 153,306 | 148,711 | 454,744 | 431,008 | |
Merchandise sales | 48,096 | 35,667 | 153,774 | 125,963 | |
Installment sales | 0 | 0 | 0 | 0 | |
Other | 257 | 108 | 511 | 426 | |
Total store revenues | 201,659 | 184,486 | 609,029 | 557,397 | |
Merchandise sales | 0 | 0 | 0 | 0 | |
Royalty income and fees | 0 | 0 | 0 | 0 | |
Total revenues | 201,659 | 184,486 | 609,029 | 557,397 | |
Mexico [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Rentals and fees | 11,469 | 12,663 | 34,265 | 38,021 | |
Merchandise sales | 678 | 700 | 2,032 | 2,223 | |
Installment sales | 0 | 0 | 0 | 0 | |
Other | 12 | 7 | 19 | 22 | |
Total store revenues | 12,159 | 13,370 | 36,316 | 40,266 | |
Merchandise sales | 0 | 0 | 0 | 0 | |
Royalty income and fees | 0 | 0 | 0 | 0 | |
Total revenues | 12,159 | 13,370 | 36,316 | 40,266 | |
Franchising [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Rentals and fees | 0 | 0 | 0 | 0 | |
Merchandise sales | 0 | 0 | 0 | 0 | |
Installment sales | 0 | 0 | 0 | 0 | |
Other | 189 | 0 | 589 | 0 | |
Total store revenues | 189 | 0 | 589 | 0 | |
Merchandise sales | 19,069 | 11,178 | 49,553 | 30,307 | |
Royalty income and fees | 4,716 | 3,840 | 13,833 | 12,370 | |
Total revenues | $ 23,974 | $ 15,018 | $ 63,975 | $ 42,677 |
Receivables and Allowance for_3
Receivables and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Receivables [Line Items] | ||
Interest paid on installment agreements | $ 8,500 | |
Accounts Receivable, before Allowance for Credit Loss | 83,387 | $ 89,724 |
Receivables, net of allowance for doubtful accounts of $7,916 and $5,601 in 2020 and 2019, respectively | 75,471 | 84,123 |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts | 7,916 | 5,601 |
Bad debt expense | 10,959 | |
Accounts written off | (9,141) | |
Recoveries | 497 | |
Installment sales receivable [Member] | ||
Receivables [Line Items] | ||
Accounts Receivable, before Allowance for Credit Loss | 57,939 | 56,370 |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts | 7,000 | 4,100 |
Trade and notes receivables [Member] | ||
Receivables [Line Items] | ||
Accounts Receivable, before Allowance for Credit Loss | 25,448 | 33,354 |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Allowance for doubtful accounts | $ 900 | $ 1,500 |
Leases Leases (Details)
Leases Leases (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)store | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)store | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Operating lease charges | $ 32,623 | $ 37,309 | $ 100,999 | $ 115,852 | |
Sublease receipts | $ (2,180) | (2,065) | (6,641) | (5,559) | |
Cash paid for amounts included in measurement of operating lease liabilities | 85,794 | 91,235 | |||
Cash paid for short-term operating leases not included in operating lease liabilities | 17,466 | 21,247 | |||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 74,095 | 36,371 | |||
Weighted-average discount rate | 7.00% | 7.00% | 7.70% | ||
Weighted average remaining lease term (in years) | 4 years | 4 years | 4 years | ||
2020 | $ 29,607 | $ 29,607 | |||
2021 | 101,986 | 101,986 | |||
2022 | 73,861 | 73,861 | |||
2023 | 48,490 | 48,490 | |||
2024 | 31,687 | 31,687 | |||
Thereafter | 34,289 | 34,289 | |||
Total undiscounted operating lease liabilities | 319,920 | 319,920 | |||
Less: Interest | (36,136) | (36,136) | |||
Operating lease liabilities | $ 283,784 | $ 283,784 | $ 285,041 | ||
Operating lease, number of units | store | 500 | 500 | |||
Payments for Rent | $ 800 | ||||
Abatement [Member] | |||||
Lessee, Lease, Description [Line Items] | |||||
Payments for Rent | 2,300 | ||||
Deferral [Member] | |||||
Lessee, Lease, Description [Line Items] | |||||
Payments for Rent | 2,200 | ||||
Other store expenses [Member] | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease charges | $ 34,682 | 36,441 | 106,559 | 111,226 | |
Other charges [Member] | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease charges | $ 121 | $ 2,933 | $ 1,081 | $ 10,185 |
Income Taxes (Details)
Income Taxes (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate | 11.40% | 17.20% |
Senior Debt (Details)
Senior Debt (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Aug. 05, 2019 | |
Debt Instrument [Line Items] | ||
Senior debt, net | $ 198,000,000 | |
Original issue discount | $ 2,000,000 | |
Debt issuance costs | $ 6,300,000 | |
Letters of credit, amount outstanding | $ 90,700,000 | |
Actual fixed charge coverage ratio | 1.58 | |
2020 | $ 500,000 | |
2021 | 2,000,000 | |
2022 | 2,000,000 | |
2023 | 2,000,000 | |
2024 | 2,000,000 | |
Thereafter | 189,500,000 | |
Original Issue Discount [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Expense | 1,700,000 | |
Debt Issuance Costs [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized Debt Issuance Expense | 5,700,000 | |
Term loan credit [Member] | ||
Debt Instrument [Line Items] | ||
Senior debt, net | $ 198,000,000 | |
Maturity date | Aug. 5, 2026 | |
Debt Instrument, Frequency of Periodic Payment | quarterly | |
Debt Instrument, Periodic Payment, Percent | 1.00% | |
Incremental term loans available | $ 150,000,000 | |
Required consolidated senior secured leverage ratio, minimum | 2 | |
2020 | $ 500,000 | |
2021 | 2,000,000 | |
2022 | 2,000,000 | |
2023 | 2,000,000 | |
2024 | 2,000,000 | |
Thereafter | 189,500,000 | |
Term loan credit [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Senior debt, net | $ 200,000,000 | |
Term loan credit [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis margin on variable rate | 4.50% | |
Actual margin on variable rate | 4.69% | |
ABL credit facility [Member] | ||
Debt Instrument [Line Items] | ||
Senior debt, net | $ 0 | |
ABL Credit Facility amount available | $ 209,300,000 | |
Maturity date | Aug. 5, 2024 | |
Line of credit commitment fee percentage | 0.375% | |
Line of credit commitment fee | $ 600,000 | |
Line of credit additional borrowing capacity | $ 100,000,000 | |
Required proforma fixed charge coverage ratio, minimum | 1.10 | |
Required consolidated fixed charge coverage ratio, minimum | 1.10 | |
2020 | $ 0 | |
2021 | 0 | |
2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
Thereafter | $ 0 | |
ABL credit facility [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Line of credit commitment fee percentage | 0.25% | |
ABL credit facility [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Senior debt, net | $ 300,000,000 | |
Letters of credit, amount outstanding | $ 150,000,000 | |
Line of credit commitment fee percentage | 0.375% | |
ABL credit facility [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Actual margin on variable rate | 1.69% | |
ABL credit facility [Member] | Eurodollar [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Basis margin on variable rate | 1.50% | |
ABL credit facility [Member] | Eurodollar [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Basis margin on variable rate | 2.00% |
Other Charges (Details)
Other Charges (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)store | Sep. 30, 2019USD ($)store | Dec. 31, 2019USD ($) | |
Restructuring Cost and Reserve [Line Items] | |||||
Payments for Rent | $ 800 | ||||
Accrued Charges | $ 898 | 898 | $ 738 | ||
Charges & Adjustments | 2,538 | ||||
Payments & Adjustments | (2,378) | ||||
Rental merchandise losses | 721 | ||||
Asset impairments | 1,376 | ||||
Other (gains) and charges | (1,856) | $ 2,859 | 7,768 | $ (41,308) | |
Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued Charges | 898 | 898 | 738 | ||
Charges & Adjustments | 1,610 | ||||
Payments & Adjustments | (1,450) | ||||
Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued Charges | 0 | 0 | 0 | ||
Charges & Adjustments | (645) | ||||
Credits | 645 | ||||
Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Accrued Charges | $ 0 | 0 | $ 0 | ||
Charges & Adjustments | 1,573 | ||||
Payments & Adjustments | (1,573) | ||||
Abatement [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Payments for Rent | 2,300 | ||||
Non-Cash Charges [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Other | 3,133 | ||||
Store Consolidation Plan [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | 400 | ||||
Store Consolidation Plan [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | 400 | 3,100 | |||
Store Consolidation Plan [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | 1,200 | 1,700 | |||
Store Consolidation Plan [Member] | Disposal of fixed assets [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Disposal of fixed assets | $ 100 | $ 800 | |||
Store Consolidation Plan [Member] | Rent-A-Center Business [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Stores closed | store | 25 | 83 | |||
Cost Savings Initiative [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | $ 1,100 | $ 2,800 | |||
Cost Savings Initiative [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | 400 | 4,700 | |||
Cost Savings Initiative [Member] | Other Restructuring [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | 400 | 2,200 | |||
Cost Savings Initiative [Member] | Disposal of fixed assets [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Disposal of fixed assets | $ 400 | ||||
COVID-19 Pandemic [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Other | 1,000 | ||||
COVID-19 Pandemic [Member] | Employee Severance [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | 400 | ||||
COVID-19 Pandemic [Member] | Facility Closing [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Charges & Adjustments | 200 | ||||
COVID-19 Pandemic [Member] | Abatement [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Payments for Rent | 800 | ||||
Social Unrest [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Rental merchandise losses | 700 | ||||
Social Unrest [Member] | Disposal of fixed assets [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Disposal of fixed assets | $ 100 | ||||
Social Unrest [Member] | Rent-A-Center Business [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Stores closed | store | 30 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Total revenues | $ 712,015 | $ 649,371 | $ 2,097,700 | $ 2,001,990 | |
Gross profit | 425,028 | 399,996 | 1,244,738 | 1,232,933 | |
Operating profit | 80,187 | 38,847 | 182,697 | 186,025 | |
Depreciation and amortization | 13,810 | 14,894 | 43,071 | 45,788 | |
Capital expenditures | 7,807 | 6,922 | 22,557 | 12,010 | |
On rent | 680,955 | 680,955 | $ 697,270 | ||
Rental merchandise held for rent, net | 119,903 | 119,903 | 138,418 | ||
Assets | 1,667,565 | 1,667,565 | 1,582,798 | ||
Rent-A-Center Business [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 474,223 | 436,497 | 1,388,380 | 1,361,650 | |
Gross profit | 332,742 | 306,881 | 966,347 | 945,392 | |
Operating profit | 99,950 | 52,175 | 253,025 | 170,411 | |
Depreciation and amortization | 4,926 | 5,037 | 14,759 | 15,619 | |
Capital expenditures | 5,721 | 4,129 | 10,205 | 5,594 | |
On rent | 417,212 | 417,212 | 411,482 | ||
Rental merchandise held for rent, net | 112,176 | 112,176 | 131,086 | ||
Assets | 916,894 | 916,894 | 953,151 | ||
Preferred Lease [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 201,659 | 184,486 | 609,029 | 557,397 | |
Gross profit | 78,727 | 80,113 | 238,433 | 246,821 | |
Operating profit | 16,073 | 21,830 | 40,528 | 66,077 | |
Depreciation and amortization | 541 | 379 | 1,542 | 1,040 | |
Capital expenditures | 20 | 24 | 106 | 125 | |
On rent | 249,266 | 249,266 | 268,845 | ||
Rental merchandise held for rent, net | 1,969 | 1,969 | 1,254 | ||
Assets | 337,752 | 337,752 | 357,859 | ||
Mexico [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 12,159 | 13,370 | 36,316 | 40,266 | |
Gross profit | 8,655 | 9,286 | 25,615 | 27,966 | |
Operating profit | 1,724 | 1,213 | 3,743 | 3,906 | |
Depreciation and amortization | 104 | 82 | 292 | 317 | |
Capital expenditures | 116 | 35 | 205 | 65 | |
On rent | 14,477 | 14,477 | 16,943 | ||
Rental merchandise held for rent, net | 5,758 | 5,758 | 6,078 | ||
Assets | 33,957 | 33,957 | 33,707 | ||
Franchising [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 23,974 | 15,018 | 63,975 | 42,677 | |
Gross profit | 4,904 | 3,716 | 14,343 | 12,754 | |
Operating profit | 3,146 | 1,135 | 8,694 | 4,716 | |
Depreciation and amortization | 15 | 3 | 28 | 42 | |
Assets | 12,044 | 12,044 | 11,095 | ||
Total Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating profit | 120,893 | 76,353 | 305,990 | 245,110 | |
Depreciation and amortization | 5,586 | 5,501 | 16,621 | 17,018 | |
Capital expenditures | 5,857 | 4,188 | 10,516 | 5,784 | |
Assets | 1,300,647 | 1,300,647 | 1,355,812 | ||
Corporate [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating profit | (40,706) | (37,506) | (123,293) | (59,085) | |
Depreciation and amortization | 8,224 | 9,393 | 26,450 | 28,770 | |
Capital expenditures | 1,950 | $ 2,734 | 12,041 | $ 6,226 | |
Assets | $ 366,918 | $ 366,918 | $ 226,986 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock Repurchase Program, Authorized Amount | $ 75,000 | $ 75,000 | |||
Treasury Stock, Shares, Acquired | 1,463,377 | 0 | |||
Purchase of treasury stock | 61 | $ 26,525 | $ 26,600 | ||
Stock Repurchased During Period, Value | 10,000 | ||||
Remaining Authorized Repurchase Amount | 58,400 | 58,400 | |||
Stock-based compensation expense | $ 3,000 | $ 2,000 | $ 8,889 | $ 4,644 | |
Stock options granted | 390,000 | ||||
Performance-based restricted stock units granted | 400,000 | ||||
Time-vesting restricted stock units granted | 192,000 | ||||
Expected volatility rate, minimum | 45.62% | ||||
Expected volatility rate, maximum | 54.72% | ||||
Risk free interest rate, minimum | 0.22% | ||||
Risk free interest rate, maximum | 1.72% | ||||
Weighted average exercise price of options granted | $ 24.47 | ||||
Weighted average grant date fair value of options granted | $ 6.94 | ||||
Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Dividend yield | 4.02% | ||||
Expected term | 3 years 6 months | ||||
Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Dividend yield | 8.20% | ||||
Expected term | 5 years 9 months | ||||
Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average grant date fair value of restricted stock units granted | $ 29.05 | ||||
Performance-based restricted stock units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average grant date fair value of restricted stock units granted | $ 25.06 |
Earnings Per Common Share Earni
Earnings Per Common Share Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Earnings Per Common Share | ||||||||
Net earnings | $ 64,030 | $ 38,493 | $ 49,292 | $ 31,277 | $ 94,455 | $ 7,323 | $ 151,815 | $ 133,055 |
Weighted-average shares outstanding | 53,985 | 54,487 | 54,186 | 54,190 | ||||
Effect of dilutive stock awards | 1,621 | 1,571 | 1,476 | 1,563 | ||||
Weighted-average dilutive shares | 55,606 | 56,058 | 55,662 | 55,753 | ||||
Basic earnings per common share | $ 1.19 | $ 0.57 | $ 2.80 | $ 2.46 | ||||
Diluted earnings per common share | $ 1.15 | $ 0.56 | $ 2.73 | $ 2.39 | ||||
Retained Earnings [Member] | ||||||||
Earnings Per Common Share | ||||||||
Net earnings | $ 64,030 | $ 38,493 | $ 49,292 | $ 31,277 | $ 94,455 | $ 7,323 | $ 151,815 | $ 133,055 |
Performance-based restricted stock units [Member] | ||||||||
Earnings Per Common Share | ||||||||
Anti-dilutive securities | 0 | 260 | 324 | 260 | ||||
Stock options [Member] | ||||||||
Earnings Per Common Share | ||||||||
Anti-dilutive securities | 907 | 974 | 1,238 | 1,047 |