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Rent a Center Inc De (RCII)

Participants
Daniel O’Rourke SVP, Finance
Mitchell Fadel CEO & Director
Jason Hogg EVP, Preferred Lease
Anthony Blasquez EVP, Rent-A-Center Business
Maureen Short EVP & CFO
Vincent Caintic Stephens Inc.
Anthony Chukumba Loop Capital Markets
Robert Griffin Raymond James & Associates
Bradley Thomas KeyBanc Capital Markets
Kyle Joseph Jefferies
Timothy Vierengel Northcoast Research Partners
John Rowan Janney Montgomery Scott
Carla Casella JPMorgan Chase & Co.
Call transcript
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Operator

Good morning, and thank you for holding. Welcome to Rent-A-Center's Fourth Quarter Earnings Conference Call.

As a reminder, this conference is being recorded Thursday, February 25, 2021.

Your speakers today are Mitch Fadel, Chief Executive Officer of Rent-A-Center; Maureen Short, Chief Financial Officer; Jason Hogg, Executive Vice President, Preferred Lease; Anthony Blasquez, Executive Vice President, Rent-A-Center business; and Daniel O’Rourke, Senior Vice President of Finance and Real Estate. I would now like to turn the conference over to Mr. O'Rourke. sir. ahead, go Please

Daniel O’Rourke

morning, thank Good us. for everyone, you. you and joining Thank

fourth All earnings market to website and investor.rentacenter.com. our the after was the financial of yesterday, for Our available distributed at outlines live close webcast, release on a materials, related including and are it results quarter link XXXX. our operational

by materially many release this filings. to publicly references and obligation reconciliation and in results statements, also required a website, call which refer forward-looking revise a some the financial measures. reminder, call statements, are description which I'd actual expectations. earnings Please measures. our of or As from as our the except company's to no measures our most over update financial cause subject adversely our be non-GAAP law. the as factors to These include like call to Mitch. described SEC a fourth could statements turn the undertakes to quarter to in differ for issued provided on to now are to well that are GAAP Rent-A-Center of can the release, factors as will yesterday comparable earnings This any on non-GAAP found forward-looking financial

Mitchell Fadel

our optimize company during At to earlier a investor.rentacenter.com. Thank business lease-to-own. this We'll to of acquire growth higher-profit, the here talent of acquisition that the drive The momentous as webcast at a strategy, immediately platform. at can entered in XXXX and you, you be leading transformed well beginning leading closing were was above reinforced year, we Thank into an had We Rent-A-Center. late technology the a to Acima, retail Daniel, we us. time, pivotal shown agreement a to last made long-term In and December our omnichannel during our a on business original of position the higher-growth, partner the our be same-store at month good operations. virtual was for providing our We website better and a in to significant sales joining XXXX morning, year acceleration than everyone. on XXXX, presentation We profit a year. ended voiceover same expectations. best-in-class year progress the the Rent-A-Center added sharp its we and channel. found virtual

to increased we and the going the for sales. invoice supported XX% long positive looking of So at revenues our additional just in And think diluted around the and with on a in achieve also operations, Total over that with invoice we consecutive growth again our our we our highlights $X team and of a impacted business. e-commerce growth margin some EBITDA XX% add adjusted its And of of continued E-commerce quickly everything we chain. The we've And growth quarter And our that we're EBITDA that across once EPS adjusted improve resiliency proved volume earlier, year in pro the we almost mid-teens Slide ended revenues can X.X% of our we collections can XX%. adjust was thrive will revenue quarter. think financial revenues adjusted can consolidated the XXXX. periods of despite goals, started. growth XXXX provides course, partners. term, shortages consolidated equates emerged in consolidated same-store On model by Lease of retail by volume of positive strong X XX% and on an Slide further in-stores digital maintain model. the consolidated economic Preferred XX%. capabilities, the and of from we billion before. believe demonstrates the forward. additional said our many and with XXth Rent-A-Center momentum X. total EBITDA supply digital pandemic do expansion forma getting I XXXX and performance and than closures up lease Like XX% Acima the even uncertainty. our and portfolio acted comps XXXX in our over basis, servicing that increased to year stronger up of affected overview product

in LTO XXXX virtual a Rent-A-Center big accretion we acquisition, strategy investment maintain prioritizes we time, the our and A same our our the the is which profitability in have expect to X.Xx scale, for acquisition a approximately we'll to we And in got can accretive that Slide drive a The we're acquisition, of strategic We excitement policy enhancing flow Acima our customers, compared return. We've non-GAAP be Acima pay shareholder for strong additional Digital overall part capabilities. the with our future due XXXX. and balance growth recap down on to dramatically that sheet at generation. to XX% and firms is segment. And X. quickly. last-mile with the other increases omnichannel business as following financial confident leverage maintain strong about to EPS advantage the we significant intend cash conservative with engagement free

it EBITDA virtual is acquisition at the fast growing February, As doubled we're after month, nearly just rapidly the and revenue X December, profitable on this year lease-to-own the a for announcing work business, which I and late and has integration. mentioned, in each years. in we past earlier completed Acima

high-performing our highlights. and of A national scale enhances extensive across decision lease-to-own. accounts. and both underwriting Their high-value expertise supports couple Their bullish wide we're a traditional important Acima bring engine digital back-end is for compete our with best-in-class retail platforms really and ability to data So about virtual for path the a They range superior premier continued accelerates growth that infrastructure. with growth. a of verticals.

cash expect. probably returns important more equity of the we've price anything, leadership Acima. Importantly, than consideration at team mix positions retained the of generate and to and we And believe we the us the kind purchase

EBITDA what and We does X in Acima So adjusted that revenue, where on XXXX forma start margin million in put to? would with This consolidated is $XXX form. a a billion and acquisition adjusted $X.X EBITDA consolidated in not our adjusted basis up bump. graphic revenue targets all onetime business pro the roll Slide a at have puts consolidated EBITDA.

numerous the revenue XX% grow captures with which a margin partner Rent-A-Center Acima goal as We XXXX EBITDA the will retail high-teen revenues Our consolidated annual can business, are to obviously margins, our drive and higher-growth integrate believe to growth benefit significant by and Acima we revenue EBITDA rate. business. to grow tilts earnings. and synergies mid-teens Acima there

strong our goals. We also acquisition. to contribution following us expect gives has picture XXXX business virtual. of support from starting We're Rent-A-Center those with X Acima and platforms the a breadth industry-leading in the traditional long-term about businesses about Rent-A-Center both combined e-commerce, Acima to business retail its in business the have XX% increase Preferred X,XXX e-commerce. of approximately XX% with e-commerce have and that active XX,XXX locations and of growth. in potential both Lease doors Slide with

an as Rent-A-Center require it's are young adoption why gateways to serve that growth very want debt you captures consider rentacenter.com, which long-term and market with Afterpay, combined Our will product to location customers Acima us, the scale will think they very our retail has for or of curve. scores, When marketplace. total website, a app store point-of-sale wherever see us credit a and people and using the can And higher of new virtual becomes in whether transact, generation The and anywhere, likes allow LTO number ultimately, mobile high about partner verticals when at via potential lease-to-own or of multiple obligations, Affirm but you potential touch customers the you company are customers. leasing younger exciting partner addressable who such to averse real. also meet retail points a

to a turn our the call during our coworkers, customers time. I'd to challenging our dedication and Jason, their I So over to like partners serving retail our suppliers for franchisees, before thank

this burden put customers debt inspired folks with to first. we you, of than service year options this us towards more And our and long-term access our payment goods obligations. we the by them innumerable putting the without ever, tell Our I'll and and customers flexible I'm the to household dedication year, needed challenges provided rose constantly

and everybody. of a just only been proud So year, begun. great we've It's

So with that, I'll turn to Jason. it over

Jason Hogg

review quarter turning Thanks, the integration. with before with brief a XXXX of momentum to the Acima Mitch. We in the solid I'll start it ended up business.

may related partner stimulus. X.X% partners and remain payout the XX% quarter, million and makeup Total early the as in payout with losses were volume of more stimulus, increased us the our of the base The very allow the we're that activity Adjusted staffed and grow as driven but drive at we're XX.X% well was a constraints During attractive government the volume and invoice retail should locations yields impacted virtual growth organic versus virtual our by features activity there We believe continued $XX.X quarter. by locations. lease rose elevated profile invoice were for generating. risk product ago. a XX.X% retail customer if year higher additional across revenues to approximately and is portfolio addition business. Skip/stolen as pleased growth EBITDA we year-over-year, to fourth revenue

Acima proprietary the gain segment enable This integrated enable house. merchants, This Now close turning the mobile the customer and digital brand adding marketplace. system study thousands and us best-in-class rapidly become Preferred immediate a benefit point be servicing Acima Acima performed Digital Acima technology Preferred due as of will Having confusion Digital Acima's within will rapid leading process effective diligence operating the us We're combine merchant at Acima acquisition, will become part minimize and Lease, Acima to after top to platform. or the respectively. up and at of Marketplace, to and of Slide will in Marketplace X. thrilled e-commerce continued decision our main on fast the the to and the Preferred Dynamix February. to Lease, an a with growth in any brand combination of engine, Preferred

adjusted accretive X. expect a EBITDA we and Acima of integrated, X year XXXX. grow realized accretive mid-teens to there We expect and Acima XX% $XX with Once be believe to annual margin. million revenues believe potential be in $XX in an can We we in synergies, that million to on are million year basis in more $XX

we engine, services integrated As migrating and name, Acima decision process. are of advantage we enabling Preferred onto the take Lease us the to rebrand collections the Acima

We margin Acima we drive all can expansion, staff product Acima's to and the leverage can Our verticals year. goal retail of platform the by converted product virtual and area all of this the is complementary and benefits believe believe by stores in long-term partners to also midyear end to converted locations channels, have we technology, locations Rent-A-Center returns.

begun our operating Preferred Dynamix' already We've into system. technology X. customer-facing integration efforts the Slide Acima to to Turning plug-in front-end

goal solutions ubiquitous to Our to with our customers long-term for transactions. our relationship. provide our component is lease provide help to partners access ability facilitate low-friction merchant and building customers The critical seamless connect is a while

innovation of off national programs. I number has we for As our program merchants earnings platform, running to native for mentioned some call, a now. coming mobile been pleased launched partner which in I'm metrics several these last new pilot with months report an encouraging our

customers We it have staffed coming has low-friction taking X fields traditional the process. XX an these find who interesting incremental from under the to X only customers, both pickup most and origination process succeeded proprietary from our from mobile down process, almost of otherwise in would resulted finding locations seek in minute. minutes requiring approval a The lease-to-own average pilots discouraging from to in virtual of origination a is

approvals proceeding mobile season partners as through as lease a the more ongoing and During contactless some important high for app, in present, and browser review technology testing, ability and implementation retail report the out browser on derisk physically prototype first appropriate that to of for pilot demonstrate our safety technologies as the further customers COVID. by app. driven see within paradigm-shifting help in-store to XX% to is schedule transactions technology like and an of a more our strategic of to protocols grew with the throughout on launch shopping Development quarter. momentum mobile both saw announce option we our with the retail concerns We'll well. customers. this later during in execute all The increase over marketplace continue increasingly as partners agreement, holiday have Innovations QX proprietary partners to partnerships to some with and

market lease-to-own said, a Slide our decision experience is can pursue LTO the total and advantage that The growth a to and in multiplier us potentially for national should mobile interface we our Turning up there's of online our existing think are new platform digital strategy verticals having overall the access of customers of really range adopted. a fluidly addressable billions between through and that we network best-in-class, can revenue and in to believe accelerate industry I XX. and see partners. e-commerce what been customers billion verticals, estimate through Mitch effect of we our tens as We on new as for for and move to the gives us repeat more is an explore us where fintech seamless engine to tens the proprietary perspective our partners. expand Picking and profit integrated retail expectations. becomes target growth expands while payments all say a the from nearly in-store, dollars, Ultimately, opportunities a approach market and creates years. allows we that platform to frictionless curated our customers a widely choices Acima's XX tech $XX as in that and strategies transactions within of technology having to achieve millions enable

to it Rent-A-Center I'll discuss business. to turn over Now Anthony the

Anthony Blasquez

in extremely fourth Rent-A-Center had X.X% driven our Revenue a strength impressive quarter increase the revenues growth year. sales. overall growth with lower the end was favorable skip/stolens. XXX teams basis by an and executed California. continued The same-store improvement in Fourth last and Total approximately the in versus Jay. strong despite adjusted XXX achieved quarter EBITDA margin, business to was XXXX. in quarter well Thanks, XX.X% The were portfolio, in an gross margin refranchising in with points we losses up up stores

be comps Slide Rent-A-Center by maintain believe we on higher in we mid-single-digit can XX, long-term, and expect outline that plan over low end the growth, to sustain business the the to range driven on progress to XXXX we e-commerce As XXXX. of strong in and

over generate time. adjusted XX% EBITDA margin to a expect Additionally,

Our strategy opportunity believe great to particularly infrastructure Mitch digital our business. increasing store continue to business, and for for categories. Acima's while We and engine growth. as to sales payment existing pivotal, support characterized omnichannel is leveraging expand a true and long-term accelerating emerging e-commerce our and we'll Rent-A-Center growth XXXX leverage includes there's decision that

the the We gave support While web integration customers a efforts. over volume, account communication in hard improve customer that Slide acceleration across and new a initial XX Rent-A-Center long-term the strategic patterns, advanced work website a to in shopping accelerated with seen payment doubling growth last for to shows we omnichannel. results half the result X e-commerce of greater service ties pandemic orders our shift Digital segment stickier for operational the with We our over engagement. We've their control the launched and years. payments business consumer much enrollments, digital experience. they with worked stores. better own in and almost we

several in growth next revenues quarter. XX% fourth our the over with over well XX% way and will end-to-end XXXX and Our account in over detection. goal shopping supports full online The to engine management. Rent-A-Center the include decision a self-service e-comm experience to with to obviously years, work a fraud are strong grow accomplished on is and of a we That move we transaction

handle the to locations and need customer. grows, need from not seamless infrastructure flow delivery we in and to outlook. very experience e-commerce to and for financials We our costs it business or turn to with to smoother deeper and web mobile improve Maureen layers as with it store fourth the the payment inventory and facilities technology service, do over final-mile to the better a over transaction. a also the enables management quarter our handle working discuss I'll our omnichannel way delivery, store separate As now point-of-sale XXXX We're add that in-store don't ties growth.

Maureen Short

be allocation Thanks, priorities. and the new for corporate structure XXXX Anthony. acquisition guidance, covering financial fourth quarter, I'll following Acima the our the debt highlights

XXX of points the the lease basis a percent XX.X%. merchandise skip/stolen payouts created $XX in losses growth of for increases million, XX.X% highlights in and by Slide increase to increased increased COVID-XX in points invoice at portfolio. early of and well expenses a versus Overall, lower we consolidated partners. was growth prior Lease X.X% total by Without and higher a influenced reversing mix as XXX challenges Adjusted existing skip/stolen in prior Looking partially volume was partners, Preferred adjusted and were margin were Preferred Lease virtual. XX.X%. by revenue $XXX.X combined growth year. increase increase earlier quarter. a EPS, was The gross our difference XX. EBITDA XX.X%. rate of versus a non-GAAP and lower strong inventory a revenue. came availability higher potential X.X% year, for driven have as retail a positively many EBITDA with invoice an Preferred losses. partner new the the were revenue $XX.X a virtual drive EBITDA volumes profit X.X%, would and revenue in estimate diluted slight Adjusted incremental inventory for our reserve profitability operating in at as the additions result margin approximately which volume as and retail to from been in at invoice the address shortages Higher support by rose rose was revenues Revenue Lease year approximately remaining loss offset the at increase growth to $X.XX XX%, million, locations. The retail growth basis of revenues million influenced quarter basis, organic in XX.X% On to on

a in lease points ended and basis approximately year is improvement leading increase EBITDA was same-store $XXX.X of to by refranchising X.X% up up $XX.X achieved by payment was over the was in of EBITDA million leverage the expenses year, versus quarter driven the was stores adoption. XX.X% was higher the indicator revenue increased near-term and count. driven up the due sales prior Skip/stolen performance. fourth and increased losses in sales, prior digital were business. California. operating an XXX prior X.X% XX% same-store the Adjusted lower for increase partially store the portfolio year Rent-A-Center Revenue operating million, performance quarter, despite for XX.X% The revenue driven XXX XXX margin good the a lower basis Rent-A-Center. representing Adjusted versus partially from to point of Turning a year. by The last versus

improved sheet in the over end balance in of XXXX for from and Our of the at well $XXX.X balance with made last our cash strong acquisition. million generated quarter year million. believe We $XXX.X sheet us positioned the balance a operations cash Acima

to on revenues $X.XXX XXXX be to billion guidance XX. XXXX. are Turning Slide our billion Consolidated $X.XXX expected for between and

and consolidated of diluted expect EBITDA adjusted to non-GAAP $X $XXX per million We to $XXX million earnings $X.XX. of share

the flow free $XXX to We also expect generate $XXX to of million cash year. million for

to Turning projections. segment our

includes We revenues expected generate million for is EBITDA expect adjusted and months Acima the XX $X.XX margins of to $XXX $XXX XX% Preferred million of our of months billion EBITDA XX.X% Acima for to post-acquisition, of to segment segment, revenues. XX.X $X.XX of Lease year to which new Adjusted billion. with

regarding $X.XX XX% There additional things our business of Rent-A-Center XX.X% to segment adjusted a $X.XX point achieve guidance. I'd We revenues to expect EBITDA are of segment $XXX billion revenues. million million like out and or to the few $XXX to to billion of

XXXX. guidance by benefits negatively the synergies in EBITDA the business COVID-related positively impacted is Acima growth year-over-year and by acquisition, adjusted Our impacted and in

of from given Rent-A-Center will gross model. non-GAAP are GAAP expected, the due the paying approximately operating versus the Integration a as in product along will $X wholesale for asset-light with revenue, our and decrease the from business for As we but to business, margins in business retail coming result costs earnings more our the will virtual the and shift costs costs amortization of percentage million XXXX. in impact to scalability million acquisition, of our expenses differences decline of channel, and retail partner $XX to intangibles

XX not incorporate has million our the As projection increased and diluted recent outstanding, repurchase practice, acquisition. due any is activity XXXX shares does share assumes our which approximately to

some Given the the our point impact there XXXX out and things the in XXXX. of also of regarding on Acima to acquisition, and stimulus expected pandemic cadence earnings are results the

in tax quarter, expect first Looking XX% non-GAAP XX% years. season to assuming earnings year-over-year at the similar a diluted per with to revenue increase to XX% share we refund prior approximately increase

for fairly at the EPS non-GAAP of seasonal expect year, XX% balance with patterns. quarter normal and Looking revenue increase in to the each distributed the range we by quarter evenly XX% reflecting to diluted

Rent-A-Center given versus decelerate second the back remain given same-store tough half to portfolio last sales half the flat the expect XXXX, in comps but year growth. in We fairly of

based tax million weighted $XX interest on store free post-acquisition which our structure which approximate the range, debt a and expenditures acquisition Turning expenses rate expected technology the and free expected step-up million million XX. starting provide to cash refurbishment $XX be an We to new and of X.X%. are investments includes million, a of to with flow calculates $XX rate guidance. the approximately walk, to Slide of in reflects $XX cash includes expected adjusted costs. average taxes XX%. million which guidance midpoint Capital EBITDA $XX benefits flow tax with million, Interest to be cash our higher This our approximately associated the to of of are $XX

bringing we to reduce flow free term, leases, investments long year. required $XXX the $XX between for Working to cash be CapEx million our expect $XX capital estimate million funding new to and per to Over million $XXX also would will million.

B and debt in senior loan notes. XX $XXX structure a post-acquisition. acquisition, $XXX with We drawn asset-based million now loan $XXX on Slide have time million unsecured at the million an million of our term $XXX the at Looking

was have growth. at liquidity in to the acquisition, and time leverage invest debt-to-EBITDA the of we and flexibility X.Xx Our ample

on Lastly, XX. Slide

leverage while XX of long-term debt Xx business, paydown, maintaining in months, goal with priorities to a of liquidity. largely target untapped virtual are organic net both below leverage growth to fuel lease-to-own robust through X.Xx reduce EBITDA strong Our our growth capital is to allocation and the adjusted

total returns, We continue to shareholders of to to our attractive dividends. provide continues include plan our to capital allocation strategy capital form the also and returning shareholder in

by are statements questions. you today. Friday, income our for will filed be XX. posted the call and now segment the February your turn detailed always, to over your website, XX-K time As tomorrow, for Thank I'll

Operator

Instructions]. [Operator

from Our with Vincent is Caintic Stephens. question first

Vincent Caintic

there? XXXX, the maybe what appreciate pretty guidance strong I current, Like happen revenues you for Acima, you you do and more you and between detail. go to stores for XX,XXX Rent-A-Center you -- and growth sorry, $X now? to the discuss maybe business to out need into significant. to opening have of wondering that or have significantly that So billion is was sort from separate it And XX,XXX could in can think, of needs more I if if get the how I Acima get

Maureen Short

to makeup e-commerce talk Maureen. business, assumptions XXXX e-commerce. margins. to retail Acima, overall, the additional the We're penetration period. in -- Rent-A-Center. the detail into to $XX EBITDA low Rent-A-Center mid-single-digit Rent-A-Center way We're We're growth that, on we'll growth and by and combination we million believe look the get business, let through the if up averages. mid-teens of rates assuming to And Acima organic We our we'll it's that of projections X/X adding is $XX XX% We And that rate it's fairly that synergies get this some XX% the versus growth about as we at the Acima assuming same-store within more in assuming driven of, the within we that can consolidated into over a Jay distribution we versus believe loss segment. but get revenue with the XX% historical business Rent-A-Center about sales to Vincent, more Sure. XX% as I key provided. of million of to Acima go annual to the I'll X-year of go consistent can get partners. to than revenue XX% as well between

Jason Hogg

very have This combined would Thanks, and national that Point just in both Yes. organization continued take I a tremendous grow where And we success, is now they've quick had doors a number strong to been new we Jason. able and we've to sales is add to they've one of traction teams. best Maureen. plan points. the gain aggressive those very have continue space, to of there. the X

is very was on The talking as with kind key that large partners, national factors that second side. and the And enables thing the customers to specific positioned the take Maureen the well means browser is of for regard then performance the as to quick decision e-commerce to for own wealth historic which marketplace, to physical their our our data, one on at are about kind retail to and it And of with both data, strategy a and regard customer of universe combined combining being engine third of they're data coming to very side and with their front quickly that much point is integration ability our for the is acquisition they new is bringing faster. we partners move enables own mobile, have an faster the And to in play e-commerce we're us Acima they have with lease-to-own. decision as a and us to expands with retailers. end that point well engine and teach that to able that as going large us optimized enable partners ramp because

proprietary. will final is of So combination factor those position also and the us. That third X things

and So obviously it intellectual us property. defend rigorously our an we're gives advantage, to going

Vincent Caintic

Okay. I appreciate follow-up. And a that. Jay,

but sort the I guess, I'm you overall I minus currently where the single-digit appreciate terms disclosure when And deck, is of think from your the business, mature, where as the can just XX%, maybe wondering percentage. the XX% of about e-comm. coming e-comm? Acima you Rent-A-Center time? maybe e-comm fully in But on you Actually grow e-comm. on that's take a the think the slide that all percentage have not a can -- you in grow I business, if high this Wayfair from get percentage over from you So so now coming do the

Mitchell Fadel

Rent-A-Center just Mitch. XX% The the -- the Acima is and Vincent, just XX% Rent-A-Center. or roughly on this on XX% is is now e-comm side the

So I a the from maybe a guess, now right little Well, right? they're segment standpoint, Acima revenue about is even blended, bigger.

know in blend it you what something get I I'll XX% or So as that. don't as But like take far part. if to, let that or XX% would Jay, e-comm the can

Jason Hogg

like see No, up multiplier ended acceleration Yes. there forced going to effect. a because getting we we're an

So to at that verticals. look account you Wayfair, an start now like a that other you into if expand

that of partnership a the have partners we're with. of We number in discussions process

half become of that 'XX revenue. sort very So I actually of back a significant becomes overweighted and throughout in the of where our think that similarly, you'll see 'XX, then portion

Vincent Caintic

Great. Okay.

And sorry, of and received extent about you Rent-A-Center was have like your that. inquiry last can To anything say one. looks it wondering I received from comment, if you the can the and same an California, peers some

Mitchell Fadel

Thanks, any the California California that Vincent. California or we current the I'd -- last but is fall, on didn't get did -- have California received get add in anything to We act, at we the we a from would I laws Acima. We not only the short referring -- that everyone Rent-A-Center No, at state. law, that lease-to-owned remind not also the follow side, Rent-A-Center Rent-A-Center that that, that you're to. has And franchised guess in franchised the I answer And side. and we we -- follow don't have on corporate no, stores it. so letter. we every

that's little So more color. a

Operator

is Anthony with from question next Loop Capital. Chukumba Your

Anthony Chukumba

work. done the down guys there times remarkable. extend been know, And couple last have the my I mean of years are what congratulations you I'd done to you were just in as team. over but just of you a nothing I your business, guys yeoman's like short pretty really to was has

that. So I to question. on you to my wanted just congratulate On

Rent-A-Center you on information So having be full what assuming -- and guess, of a great a Acima a a on -- EBITDA pro back to I throwing I are what the I a it. revenues information, XXXX, guess, forma lot will for pro I owned basis and what year, the on you I was forma problems problems basis? Acima, guys go But -- mean and would would going all your question forward. and of Acima of just I plans had numbers lot were some that out. kind following for

Maureen Short

on on growth our $XX XX% -- forma be pro million then that. basis million over XXXX, basis, Well, XX% forma would to higher revenue $XXX assuming than pro a about and a we're EBITDA XX%

Anthony Chukumba

Got it.

helpful. really that's No, Okay.

Mitchell Fadel

thank appreciate words. And of your Anthony, We kind for at words that. those beginning you, the

Anthony Chukumba

the up work. Keep problem. No good

Mitchell Fadel

you. Thank

will. We

We will.

Operator

from your Bobby with Raymond James. next question is And Griffin

Robert Griffin

guess, the traditional the store profiles a credit impressive question we managing And of and different, first. to understand exciting year just here of I part those space three wanted is how sides maybe can years what over XXXX. to outlook about environment over type And put a is I'll store. from a into share be I and you do see hit the that, on Congrats talk the the stuff the Maybe that there. of are high-level virtual business. occasionally them for next that. XXXX helpful. of And then with years customer additional the view will as a both on you the get three little together a I start some virtual about channel. growing take the next your to can to an challenging But would pushback context, any little first, from both it targets? maybe circle go channel coexist like color the bit And you do how need on Mitch, But second up

Mitchell Fadel

now, we're to because white as The it people a that -- store, not a And more And for a and we've every it's And but Affirm virtual course, coexisting, there Good mainstream. more or retail has how out in mainstream. going as hears up Sure, small forth, as just it about far Bobby. there, an the e-comm pretty in partner heard groups good, about -- I just person hear more that and that lease-to-own day. industry. going the about, still it about of leasing, like leasing retail it's see questions. retail all there's and payments years, in -- it's space -- think awful signs lot I right, it pay grown out was cannibalize lease-to-own, business as so forward the think grown people the talking store Rent-A-Center just Jay wouldn't that, take your it that spreading virtual it either, as learn -- out getting when and later it expect to store takes whole brings seeing it's I buy single helps into Shopify not side. brings like whether And of

fact, In we day. to or XX% have every that probably less have -- transaction it's somewhere actually opportunity a an do do that transaction a that

to in in it's the the range. XX% is XX% world, it virtual fact, In

to leasing. it people mean first now know but in I life, XX% out, walking hearing for leasing many So day, the in about time their not decided about do having, they that cases, are of

I'm I they bought So I the we there, years about happened talking speculating, years. seen over and year. this and numbers think billion $X.X did what's over what mean out whatever -- are Acima isn't the me we've or last the

-- what positive space, have XX grew the for other same-store done companies it's You Rent-A-Center in at had sales consecutive yet know quarters.

it and as speculating history not it speculating forward. just side, helps becomes going on I'm more -- too. the giving it So think I'm helps that Rent-A-Center us mainstream, I

far As in you side, multiple Bobby, well credit know, environments. the done we've as economic as

other into And the other up, we As funnel people need is at And resilient, to credit pulls and Rent-A-Center didn't the model necessarily you better, people. we side, as loosens didn't XXXX on it there didn't credit if tightens transaction perform pushes from economy tight because up, look gets so funnel. credit we -- up, it tightens it outperform. side to side. it the of people -- into pushes 'XX either the one as the well the the tend We from

little one prove to So the depending I billion. of any particular that years But history get we our of have bit the to in either obviously, the customer next to swing on that resiliency environment a credit $X wouldn't have it's numbers the way. And a say over environment. credit X

Robert Griffin

for working XXXX And XXXX set XXXX? particular, the more. helping and Okay. I potential Rent-A-Center in for I are business, synergies in be of more if those secondly it what's That's dive on Acima to want bit some And I those synergy integrating blocks a so, team the into out big that here up parts core moving it. get to little the or the me, appreciate maybe will just building helpful. accelerate to guess, potential the synergies aspect? in And you of

Jason Hogg

for already the question. Yes. hard We're Thanks at work.

First integrate and thing is our that, to field already closed as sales and we've force. transaction our Wednesday, we national we've rationalized you last the know, worked teams,

that up amount in confidence a and synergy So tremendous putting from synergies, have we 'XX perspective. we're the number of the getting after we're a

go-forward the things. your a got On aspects questions, to and we answer then of Rent-A-Center couple

has don't engine what on business addition In our space. significant potential a to has Lease leverage the the sides perspective forget, also, think and a Anthony origination the would been the Acima itself and the we able through of an because we're, tremendous with are, natural be Preferred over implementation from business engine, we'll synergies decision on engine to that. yields and decision bringing the of And fantastic testing Rent-A-Center working side in the has further both

the to platform, activities. and with and quickly approach also with where seamless an service on impact. the I with would like are we and And collections as that's e-commerce, collections continue that like better if like a you in able an saying And portfolio yield referred because business. scale yield that you're those end to through working have then to that, make more get you have then in things decisioning is end up integrated more Anthony impact a thing comments, integrated are goods. is third is And you an of is we you yield opening to said I more I I earlier, then a -- of final then already And positive immediate. situation things third So have the version better process up to working, that to of going are better the the move capacity actually regard we performance partnering with the on automated improve that a my

my next that of year. and see I alluded have are this to that's So in started at to comments, and the be that rate -- really things will -- run we already impact a to and those like year go, are then, continue both all full

Anthony Blasquez

would about Yes. And sentiments the I decision echo the engine.

friction reduce the associated to our an the as quicker confident. to rates ahead I improve on engine On are we're range faster. very, it the up the loss focused we're speed and the customers is the customer opportunity our go well that us business, continue with now. feel to and experience and decision just Acima and synergies with But that very Rent-A-Center We really within right our excited convert transactions. mean opportunity for

to well. going just that's performance as our So improve

these So move as we synergies exciting forward. very are

Robert Griffin

me. very Okay. And guess I might I that's lastly helpful. Jason, have it. for missed

then I the about that of Or to that? and existing credit the ultimate the is cards? blocks doors some as And opportunity for Is your like have? growing the growth. more with for base to offering customer you in monetizing second-tier some on was some seamless categories gave and additional competitors it you opportunity You the curious detail good people do see I focus your what guys of things further is, partner building of guess the to

Jason Hogg

approach. integration that build we the e-commerce ends both already of. you the e-comm in something Yes. is and at, there news waterfalls dual-pronged up logos to had of off continue some that When being The a slide, are that good that side, that the obviously, we up have physical the they can on sorry, look into the

So revenue amounts to goal is not Those capabilities either/or. actually it's increase. are already of and an generating the to continue significant

the provide take from two you'll seamless multi, addition to multimillion that, to with that are on going large our online. and -- And a so other waterfall that LTO further very with in perspective, to partners target we'll see, the and think of then us them a integrations to you enables partnering we're continue And do we able with own technology, which do customers to to types browser factors marketplace mentioned. experience universe of be I

So accelerate the it. not now good foundation there, in news upon is and only use, it's looking already is the to we're

Robert Griffin

XQ, congrats here luck of Best in again. and

Jason Hogg

you. Thank

Mitchell Fadel

Bobby. you, Thank

Operator

Brad is KeyBanc Markets. from Thomas Your Capital from next question

Bradley Thomas

offering national a outlook great Rent-A-Center's with a BXC much on think to to have bit to number skew, retailers. strong And the well it Acima's as I names wanted I legacy gone the when of a I on partners. tends When think think, business, towards Mitch, I man improve evolve with I to congratulations then very it on my you very the guess, been line do with refine more and a how I of obviously some offering. have Acima. independent important very side add operations, as of up how a you last digital years, smaller, year addressable me Let the ability need to compete about and follow much of over think talk field? market to you look legacy the here your offering, it questioning at to the Acima's may grow of and adjust product you to having and as which think product Jason under bit of exciting the

Jason Hogg

question. the Yes. Thank you Yes. for much very

system to integrated servicing mobile their collections. decision the retail some than platform is. what of staff Loss table, itself system that's And much vertically looking in engine, and call what the that did, the both through Benefits system which on program side. is what origination origination, our the So virtual online, very is in retail a such bringing Waiver Plus very things you're at were Other we they what ready have, and Damage our handle as we to program, which very, side the things sophisticated, their -- from is tied and portal, that the additions incremental is to

becomes making that sure it we're So of rolling matter really a out.

it That's We running able close begun basis. already stand to and plan quarter to -- staffed we're up Monday, test pull at of second appliable have a store. And on year, is at the to with of we've said to target and that, Acima is. we were limited scale where, half what within it integration get into to kind our the a sequential this the I a a on by locations it we mid how platform trying when Wednesday, right have virtual. up on the So

ability platform. to our sort I have partnerships it's, that best-in-class we So this us, for fold into the origination of think because nirvana our and business

Bradley Thomas

think the we That's sort lines feel think can of versus expenses maybe of something at range. you be might along going very dollars that is about $XX the confident synergy a might the when of what $XX helpful. range of to follow-up that a the there it's commentary. to those to you think you're way that And about on look million example? be what bit million, When that for know you potential a how revenues, quantifying little more get speculative if Just to minimum

Mitchell Fadel

we say, to I in is This held would Brad. on talked of some about Mitch, that this We're or we'd $XX year, Yes. million. very confident it.

on the million, to we're $XX $XX the we're the confident Within honestly. very obviously, million high end, low confident, but end, also on

just far to talked I it company, back when we If XXXX, more more. we when and as what going the as we growing to back do you about came looked could kept recall, as

only we've ago. X only had we've said, Jay days as closed this -- So

side time goes the the Lease the we line into some because and of produce as on synergies, by, use mentioned LDW the as haven't So that Benefits -- Acima it. Jay we more that top you find will pointed putting they yield more just business out? that Preferred will had Plus

So range there's of million, -- day. $XX and may the confident the whole conservative quite very be in we're honestly, the the end at

Maureen Short

in of most cost Brad, margin around And just savings. to a built are gross a that, higher to synergies perspective from and add what we've

million and $XX synergies million for $XX $XX corporate-related reductions. Acima be Preferred million business be improvement about Lease within expense in of margin the will will the 'XX about So

more estimates revenue. less and as more concrete those predictable. as tangible, far They're So are

Bradley Thomas

recognizing you how review lot so you're both about That's you're to you chance week customers that and a between what work going that have I a of then had is ahead to business? you question And the serving have Acima those through do Rent-A-Center know ago, overlap And thinking helpful. still is, channels? very customer the a of closed that you only get here. a work

Jason Hogg

more gets large that -- actually to a addressable obviously there's Mitch and very with Yes. There's here. diligence made much have granular market that, earlier set. that regard complementary such due gotten point And actually -- since we to think I during with it's the a regard still to

each so fighting other not over into And same we're bumping and the only customers.

more very we're great get to be So able much which leverage. perspective, overlap because going small to is

Operator

next from Your Kyle is Joseph with question Jefferies.

Kyle Joseph

that sentiments give a XXXX credit then Acima us potentially the the echo the in an exciting Can were very Acima's segment where given as losses terms a me segment, combination historical be performance. what Rent-A-Center? acquisition. first And with I'll sense independent? you strong heading Let of the for what and see on will focus on you Acima

Maureen Short

Sure.

Preferred are There the this Acima to Lease more X% line slight losses in difference virtual business, their the and X% range the accounting in we So Rent-A-Center of between businesses, but in of competitors. accounting on rates do a the how with treatment is loss other is revenue.

we XXXX, digits, with Acima, expectation for it integrate will As we as over digits is then And businesses in high be we'll time, high double the be -- be that we'll -- be the we'll I'm double single sorry, blend low XXXX. two digits.

to to see it that and Preferred in Acima improvements businesses X% we'll Jay Lease X% migrating from So our to be mentioned, onto the and expect the be platform as closer decision will virtual we because, Acima engine. that see

Kyle Joseph

Got one And it. another Very you. helpful. then, for probably Maureen,

in similar guess models we should forward? think Acima our invoice doors? of what building segment of can going sort or disclosures on we terms getting work Or it's what just expect the we for Would how that As to about consolidated you segment? active we're modeling volumes here,

Maureen Short

combined the Preferred will then Preferred for providing do on plan businesses. and invoice again, fully be integrated Yes. be We'll disclosing what Lease together. today business volume. will Lease. we separating since, it And Acima be similar to very don't be Kyle, the we'll two We

the As becomes so relevant, invoice marketplace, business we're around the number the e-commerce less we of focused doors grow and volume.

Kyle Joseph

Okay. then last one for me. And Understood.

think walk earlier, Can incorporates it of are guidance, kind you that a us On in the through normalized assumptions tax 'XX you stimulus season. of what incorporated mentioned I refund guidance? sort

Maureen Short

we're additional guidance, any stimulus. not assuming our In

year with the kind everything the the trends But business in year. of more half back kind to And no so 'XX assumed towards reverts we're going and incremental the historical stimulus is to the of back economy our that throughout guidance. normal of assuming

Operator

Your with Northcoast is Tim Research. next Vierengel from question

Timothy Vierengel

got them of I but Jason. clarification question have just a Most answered, actually do for

e-commerce fully were include like else? these Acima. website? define and you do at processed Or sales Just the somewhere wondering guys online sales that you originations online on closing Are how your

Jason Hogg

this essentially. through own and there's e-commerce, then specific is place anything funding segment right? to end-to-end origination So its purchase, And there. retail No, an purchase -- to takes that store it actual is within doing so we're is that the a

Mitchell Fadel

wanted you it website would their if the the store, higher add And XX%. that originated be with to it and it then partners much closed that at than retail got -- Yes. in that

Jason Hogg

right. That's Much higher.

Timothy Vierengel

into move Just you to right feel locations? Maureen you Yes. do if Or That's guys could new could your wondering guys some Do moving I there's then opportunity or some think right-sized you're color good. you Mitch, you how footprint well. there And forward. was give outline feel if as about you store now? guys us like

Anthony Blasquez

still as the well as on that This on potentially is opportunities go and we're some see our also e-comm final the we mile take but brick-and-mortar at where XXXX, the at the Obviously, of us locations not tremendous Anthony. equally, opportunities strategy, that. forecast present for forward as Yes. be for when neutral just on to is our know I'll our only upside store part for web. least net well. experience growing as But are serve we to omnichannel And we upside for flat well. business the locations, customer, that

Operator

question John next Rowan is Janney. with from your And

John Rowan

through XQ and revenue written Just had didn't Maureen, just I on repeat some of I you said know down. Can what modeling you you went get guidance. questions. earnings? kind everything

Maureen Short

I said what for... Repeat

Mitchell Fadel

QX.

John Rowan

didn't XQ revenue written get and everything I earnings. down.

Maureen Short

Sure. No problem.

be and will did So And the revenue X.X Acima for XX% that stub is we have that transaction. kind takes before where up account XX%. XX% going months be of QX, EPS not into period we up the to or assume that to around that

John Rowan

correct? year-over-year, that's And

Maureen Short

Correct.

John Rowan

second. charge of or now operating I'm to -- you not had hang about -- year? in that's was I'm assume correct? saying a year-over-year figure, trying that it. this that on I'm XQ a GAAP it certain And on I Okay. adjusted the because Actually,

Maureen Short

Exactly. adjusted figure. The

John Rowan

expense And to Okay. having goes, interest kind as as I'm of getting $XX trouble then far million.

at have X.X%. X.XX You

dividend, that I the $XXX that beginning You're flow, reducing I cash at you're cash can approach it's all $XX-some-odd the cash are just How versus know, to so midpoint out to a understand, that of it's in million generating at is free number -- part year. -- aggressive and you're the front-end generating, of -- million $XX don't mean X.X% million the paying dividends. and I'm $X.XX taking a I in measured through get loaded? we flow year very more in the debt trying if

debt So it the I'm balance goes where just trying that number through to how and goes out year. fast

Maureen Short

of year. the half have paydown You're right, of the most John. in the debt We do in first

more the that's is so then so first you higher cash Due see amount we flow the payments and in season, the in significant QX in fairly pretty the cash refund quarter. A to higher. get It's to the And as back would small how tax half. well, it's and numbers. payments,

Operator

JPMorgan. Casella is with question last from Your Carla

Carla Casella

you've see from question, your the revenue businesses you you have do the could I sense the Does Or on few revenue now and over two follow-up that the the synergies for combining guess a guidance year. business, Acima next full the gotten synergies? another under on Just own include for years? hood that

Maureen Short

The guidance...

Carla Casella

cost Or synergies.

Maureen Short

isn't up Preferred in revenue itself the guidance mean Lease there doesn't business. opportunities. the The not potential say synergies, decision include Sure. to I adding engine process our any that speeds

an of that's example synergies. And an so to revenue opportunity there's have potentially

Operator

I'll at this further Fadel closing back questions the time. Mitch remarks. for no call have We turn to

Mitchell Fadel

there team the Thank heard. same I've team been to have them, you, X do do you've park so morning. in want thing same everyone able and the great it there, to do Acima, years, it out at really Tyler your I'll and as them our and whole XXXX. the they'll could Jerry, them. everyone, We're I'm employees you, the yet, time I I've XXXX, And and it on they board. for to that met to whole welcome Lake thing, can thank have Certainly, confident They've continue and park Thanks out last the or in this Megan, XX,XXX-or-so They're out really knocked officially out going, keep Aaron Salt we out of the welcomed in Rob great keep a knocked to there. that to have but everybody team of City can leadership out welcome the for team out the Nate X fortunate not to and glad I that there. -- that. we're publicly there. but now do

And the our in Thank So hard you, time great for welcome, work your thanks, everyone, guys ladies. for you. again, company. this And and everybody, morning. thank

Operator

concludes today's conference This call.

You may now disconnect.