Form 8-K - Current report

Share Name	Share Symbol	Market	Type
Aarons Holdings Company Inc	NYSE:AAN	NYSE	Common Stock

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	10.09				0	00:00:00

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________

FORM 8-K

________________________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): August 5, 2024


THE AARON'S COMPANY, INC.

(Exact name of Registrant as Specified in Charter)

Georgia

1-39681

85-2483376

(State or other Jurisdiction of Incorporation)

(Commission File

Number)

(IRS Employer

Identification No.)

400 Galleria Parkway SE

Suite 300

Atlanta

Georgia

30339-3194

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (678) 402-3000

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☒ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $0.50 Par Value	AAN	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On August 5, 2024, The Aaron's Company, Inc. (the "Company") issued a press release announcing its financial results for the quarter ended June 30, 2024. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

ITEM 8.01. OTHER EVENTS

On August 5, 2024, the Board of Directors of the Company declared a third quarter cash dividend of $0.125 per share on the Company's common stock. The dividend will be paid on October 3, 2024 to shareholders of record as of the close of business on September 13, 2024. A copy of the press release announcing the dividend is attached hereto as Exhibit 99.2 and is incorporated by reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits:


Exhibit No.			Description

99.1			Press Release, dated August 5 , 2024, announcing financial results for the quarter ended June 30, 2024
99.2			Dividend Press Release, dated August 5 , 2024
104			Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			THE AARON'S COMPANY, INC.
		By:	/s/ C. Kelly Wall
Date:	August 5, 2024		C. Kelly Wall Chief Financial Officer

Exhibit 99.1

The Aaron’s Company, Inc. Reports Second Quarter 2024 Financial Results

Atlanta, GA, August 5, 2024 — The Aaron’s Company, Inc. (NYSE: AAN) today released its second quarter 2024 financial results. Highlights of those results are included below, in the attached supplement, and at investor.aarons.com.

Second Quarter 2024 Consolidated Results:

•Revenues were $503.1 million

•Net loss was $11.9 million

•Adjusted EBITDA1 was $24.5 million

•Loss per share was $0.39; Non-GAAP loss per share1 was $0.07

Key Business Highlights2:

•Announced the Company entered into a definitive agreement to be acquired by IQVentures Holdings, LLC for $10.10 per share

•Aaron's Business recurring revenue written increased 6.1% driven by 11.1% growth in lease merchandise deliveries

•E-commerce recurring revenue written increased 79.4% benefiting from new omnichannel lease decisioning and customer acquisition program

•Lease portfolio size ended Q2 down 2.0% year-over-year and same store3 lease portfolio size ended Q2 up 1.6% year-over-year

•BrandsMart comparable sales decreased 7.3%

•Announced quarterly cash dividend of $0.125 per share to be paid on October 3, 2024

Transaction with IQVentures Holdings, LLC:

As previously announced on June 17, 2024, The Aaron's Company, Inc. has entered into a definitive agreement to be acquired by IQVentures Holdings, LLC ("IQVentures"), a leading fintech organization, for $10.10 per share in cash, or an enterprise value of approximately $504 million. The transaction is expected to close by the end of the year, subject to shareholder approval and other customary closing conditions.

In light of the pending transaction, the Company will not be hosting an earnings conference call to discuss its results for the quarter and is withdrawing outlook for 2024.

1.Item is a Non-GAAP financial measure. Refer to the "Use of Non-GAAP Financial Information" and supporting reconciliation tables in the attached supplement. For Adjusted EBITDA, the most comparable GAAP metric is net loss. For Non-GAAP loss per share, the most comparable GAAP metric is loss per share.

2.Comparisons are to the prior year period unless otherwise noted. Key operating metrics do not include BrandsMart Leasing.

3.With respect to any metric, "same store" includes all stores open for the 15-month period ended June 30, 2024, excluding stores that received lease agreements from other acquired, closed or merged stores.

About The Aaron's Company, Inc.

Headquartered in Atlanta, The Aaron’s Company, Inc. (NYSE: AAN) is a leading, technology-enabled, omnichannel provider of lease-to-own and retail purchase solutions of appliances, electronics, furniture, and other home goods across its brands: Aaron’s, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven. Aaron’s offers a direct-to-consumer lease-to-own solution through its approximately 1,210 Company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform. BrandsMart U.S.A. is one of the leading appliance retailers in the country with 12 retail stores in Florida and Georgia, as well as its e-commerce platform. BrandsMart Leasing offers lease-to-own solutions to customers of BrandsMart U.S.A. Woodhaven is the Company's furniture manufacturing division. For more information, visit investor.aarons.com, aarons.com, and brandsmartusa.com.

Contact:

Investor Relations – Call: 678-402-3590, Email: InvestorRelations@aarons.com

Media Relations – Call: 678-402-3591, Email: MediaRelations@aarons.com

The Aaron’s Company, Inc. Reports Second Quarter 2024 Financial Results

Atlanta, GA, August 5, 2024 — The Aaron's Company, Inc. (NYSE: AAN) today released its second quarter 2024 financial results.


Second Quarter Consolidated Results			•Revenues were $503.1 million •Net loss was $11.9 million •Adjusted EBITDA1 was $24.5 million •Loss per share was $0.39; Non-GAAP loss per share1 was $0.07
Key Business Highlights2			•Announced the Company entered into a definitive agreement to be acquired by IQVentures Holdings, LLC for $10.10 per share •Aaron's Business recurring revenue written increased 6.1% driven by 11.1% growth in lease merchandise deliveries •E-commerce recurring revenue written increased 79.4% benefiting from new omnichannel lease decisioning and customer acquisition program •Lease portfolio size ended Q2 down 2.0% year-over-year and same store3 lease portfolio size ended Q2 up 1.6% year-over-year •BrandsMart comparable sales decreased 7.3% •Announced quarterly cash dividend of $0.125 per share to be paid on October 3, 2024

CEO Commentary – “During the second quarter, we continued to see positive momentum in the business, despite ongoing macroeconomic pressures. At the Aaron's Business, our omnichannel lease decisioning and customer acquisition program continued to drive growth in our lease merchandise deliveries leading to quarter-over-quarter improvements in our lease portfolio. At BrandsMart, we opened a new store in Kennesaw, Georgia, and we continued to drive sequential improvements in comparable sales. We are excited about our recent agreement to be acquired by IQVentures and look forward to closing the transaction by the end of the year. We believe the acquisition provides significant value to our shareholders, and that IQVentures' resources and financial services expertise will help better position the Company to achieve its long-term potential." – Douglas Lindsay, The Aaron’s Company CEO

1.Item is a Non-GAAP financial measure. Refer to the "Use of Non-GAAP Financial Information" and supporting reconciliation tables below. For Adjusted EBITDA, the most comparable GAAP metric is net loss. For Non-GAAP loss per share, the most comparable GAAP metric is loss per share.

2.Comparisons are to the prior year period unless otherwise noted. Key operating metrics do not include BrandsMart Leasing.

Consolidated Results1


($ in Millions, except EPS)	Q2'24		Q2'23		Change
Revenues	$	503.1	$	530.4	(5.1)	%
Net (Loss) Earnings	(11.9)		6.5		nmf
Adjusted EBITDA2	24.5		42.4		(42.3)	%
Diluted (Loss) Earnings Per Share	$	(0.39)	$	0.21	nmf
Non-GAAP Diluted (Loss) Earnings Per Share2	$	(0.07)	$	0.39	(117.9)	%


Adjusted Free Cash Flow2	Q2'24		Q2'23		Change
Cash Provided by Operating Activities	$	11.6	$	53.4	(78.2)	%
Adjustments3	1.7		4.0		(57.5)	%
Capital Expenditures	(19.3)		(21.4)		(9.5)	%
Adjusted Free Cash Flow2	$	(6.0)	$	36.0	(116.6)	%


Returns to Shareholders	Q2'24		Q2'23		Change
Dividends Declared4	$	3.8	$	3.9	(0.7)	%
Share Repurchases	$	—	$	0.8	(100.0)	%

1.Year-over-year comparisons may vary due to rounding.

2.Item is a Non-GAAP financial measure. Refer to the "Use of Non-GAAP Financial Information" and supporting reconciliation tables below. For Adjusted EBITDA, the most comparable GAAP metric is net loss. For Non-GAAP loss per share, the most comparable GAAP metric is loss per share.

3.Adjustments include cash (used in) provided by operating activities related to acquisition-related transaction costs paid and real estate transaction related proceeds received during the period.

4.Disclosure based upon dividends declared but not paid for the three months ended June 30, 2024 and 2023.

Segment Results

Aaron's Business1

The Aaron’s Business segment includes Aaron's branded Company-operated and franchise-operated stores, the Aarons.com e-commerce platform, Woodhaven, and BrandsMart Leasing. The financial and operating results for the Aaron's Business segment do not include unallocated corporate expenses.


($ in Millions)	Q2'24			Q2'23			Change
Revenues	$	369.4		$	388.9		(5.0)	%
Lease Portfolio Size2	$	117.2		$	119.6		(2.0)	%
Same Store3 Lease Portfolio Size % Change Year-over-Year	1.6		%	(6.5)		%	810	bps
Lease Renewal Rate2	86.8		%	88.2		%	(140)	bps
Gross Profit Margin	64.5		%	63.5		%	100	bps
Earnings Before Income Taxes	$	17.3		$	30.8		(44.0)	%
Adjusted EBITDA4	$	36.3		$	49.5		(26.6)	%
Adjusted EBITDA Margin4	9.8		%	12.7		%	(290)	bps
Write-Offs %5	6.1		%	5.4		%	70	bps


Ending Store Count6	Q2'24	Q2'23	Change
Total Stores	1,205	1,256	(51)
Company-Operated	976	1,026	(50)
GenNext (included in Company-Operated)	269	230	39
Franchised	229	230	(1)

BrandsMart1

The BrandsMart segment includes BrandsMart U.S.A. retail stores and the brandsmartusa.com e-commerce platform, but does not include BrandsMart Leasing. The financial and operating results for the BrandsMart segment also do not include unallocated corporate expenses.


($ in Millions)	Q2'24			Q2'23			Change
Revenues	$	135.4		$	143.8		(5.8)	%
Comparable Sales7	(7.3)		%	(20.9)		%	1,360	bps
Gross Profit Margin	25.1		%	24.7		%	40	bps
(Loss) Earnings Before Income Taxes	$	(4.0)		$	1.1		nmf
Adjusted EBITDA4	$	(0.3)		$	4.5		(106.3)	%
Adjusted EBITDA Margin4	(0.2)		%	3.1		%	(330)	bps

1.Year-over-year comparisons may vary due to rounding.

2.Key operating metrics do not include BrandsMart Leasing.

3.With respect to any metric, "same store" includes all stores open for the 15-month period ended June 30 for the respective periods, excluding stores that received lease agreements from other acquired, closed or merged stores.

4.Item is a Non-GAAP financial measure. Refer to the "Use of Non-GAAP Financial Information" and supporting reconciliation tables below.

5.Provision for Lease Merchandise Write-offs as a percentage of lease revenues and fees, which includes the impact of intercompany eliminations.

6.The typical layout for a Company-operated Aaron's store is a combination of showroom, customer service and warehouse space. Certain Company-operated Aaron's stores consist solely of a showroom.

7.Comparable sales was calculated by comparing BrandsMart retail and other sales for the comparable period in 2023 for all BrandsMart stores open for the entire 15-month period ended June 30, 2024. Comparable sales includes retail sales generated at BrandsMart stores (including retail sales to BrandsMart Leasing), e-commerce sales initiated on the website or app, warranty revenue, gift card breakage, and sales of merchandise to wholesalers and dealers, as applicable. Comparable sales excludes service center related revenues.

Transaction with IQVentures Holdings, LLC

As previously announced on June 17, 2024, The Aaron's Company, Inc. has entered into a definitive agreement to be acquired by IQVentures for $10.10 per share in cash, or an enterprise value of approximately $504 million. The transaction is expected to close by the end of the year, subject to shareholder approval and other customary closing conditions.

In light of the pending transaction, the Company will not be hosting an earnings conference call to discuss its results for the quarter and is withdrawing outlook for 2024.

About The Aaron's Company, Inc.

Forward-Looking Statements

Statements in this news release regarding our business that are not historical facts are "forward-looking statements" that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as "believe," "expect," "expectation," "anticipate," "may," "could," "should," "intend," "seek," "estimate," "plan," "target," "project," "likely," "will," "forecast," "future," "outlook," or other similar words, phrases, or expressions. These risks and uncertainties include factors such as (i) changes in the enforcement of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our business, and failures to comply with existing or new laws or regulations, including those related to consumer protection, as well as an increased focus on our industry by federal and state regulatory authorities; (ii) our ability to execute on our multi-year strategic plan and achieve the benefits and outcomes we expect, including improving our business, centralizing key processes such as customer lease decisioning and payments, real estate optimization, enhancing our e-commerce platform and digital acquisition channels, enhancing and growing BrandsMart, and optimizing our cost structure; (iii) our ability to attract and retain key personnel and maintain their productivity, including due to the impact of the pending Merger; (iv) our ability to manage cybersecurity risks, disruptions or failures in our information technology systems and to protect the security of personal information of our customers and employees; (v) weakening general market and economic conditions, especially as they may affect retail sales, increased interest rates, unemployment and consumer confidence; (vi) the concentration of our stores in certain regions or limited markets; (vii) the current inflationary environment could result in increased labor, raw materials or logistics costs that we are unable to offset or accelerating prices that result in lower lease volumes; (viii) business disruptions due to political and economic instability resulting from global conflicts such as the Russia-Ukraine conflict and related economic sanctions and the conflict in Israel, Palestine and surrounding areas, as well as domestic civil unrest; (ix) any future potential pandemics, as well as related measures taken by governmental or regulatory authorities to combat the pandemic; (x) challenges faced by our business, including commoditization of consumer electronics, our high fixed-cost operating model and the ongoing labor shortage; (xi) increased competition from direct-to-consumer and virtual lease-to-own

competitors, as well as from traditional and online retailers and other competitors; (xii) increases in lease merchandise write-offs; (xiii) any failure to realize the benefits expected from the acquisition of BrandsMart, including projected synergies; (xiv) the acquisition of BrandsMart may create risks and uncertainties which could materially and adversely affect our business and results of operations; (xv) our ability to successfully acquire and integrate businesses and to realize the projected results and expected benefits of acquisitions or strategic transactions; (xvi) our ability to maintain or improve market share in the categories in which we operate despite heightened competitive pressure; (xvii) our ability to improve operations and realize cost savings; (xviii) impacts on our existing business relationships with customers, suppliers, franchisees and others as a result of the pending Merger; (xix) diversion of management attention away from ongoing business concerns in order to focus on completion of the Merger; (xx) restrictions on the conduct of our business prior to the completion of the Merger; (xxi) our ability to complete the Merger including meeting outstanding closing conditions to the Merger, including obtaining shareholder approval and (xxii) the other risks and uncertainties discussed under "Risk Factors" in the Company’s most recent Annual Report on Form 10-K and from time to time in other documents that we file with the SEC. Statements in this news release that are "forward-looking" include without limitation statements about: (i) the execution of our key strategic priorities; (ii) the growth and other benefits we expect from executing those priorities; (iii) our financial performance outlook; and (iv) the Company’s goals, plans, expectations, and projections, including the expected timing of, and other considerations related to, the consummation of the Merger. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this news release.

Additional Information and Where To Find It

This communication may be deemed to be solicitation material in respect of the transaction between the Company and IQVentures. The Company expects to announce a special meeting of shareholders as soon as practicable to obtain shareholder approval of the transaction. In connection with the transaction, the Company intends to file relevant materials with the SEC, including a proxy statement in preliminary and definitive form. INVESTORS OF THE COMPANY ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT DOCUMENTS CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY AND THE TRANSACTION. Investors may obtain a free copy of these materials (when they are available) and other documents filed by the Company with the SEC at the SEC’s website at www.sec.gov, at the Company’s website at www.aarons.com or by sending a written request to the Company in care of the Corporate Secretary, at The Aaron’s Company, Inc., 400 Galleria Parkway, S.E., Suite 300, Atlanta, Georgia 30339.

Participants in the Merger Solicitation

The Company and certain of its directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the special meeting of shareholders. Information regarding the Company’s directors and executive officers is available in the Company’s proxy statement filed with the SEC on March 21, 2024 in connection with its 2024 annual meeting of shareholders. Other information regarding persons who may be deemed participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the definitive proxy statement related to the proposed transaction and other relevant materials to be filed with the SEC when they become available.

Contacts


Investor Relations:	InvestorRelations@aarons.com	Media Relations:	MediaRelations@aarons.com
Phone:	678-402-3590	Phone:	678-402-3591

CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS


	(Unaudited) Three Months Ended				(Unaudited) Six Months Ended
(In Thousands, except per share amounts)	June 30,				June 30,
	2024		2023		2024		2023
REVENUES:
Lease Revenues and Fees	$	335,658	$	353,751	$	681,667	$	727,546
Retail Sales	139,549		148,046		276,478		298,592
Non-Retail Sales	22,062		22,800		44,704		46,735
Franchise Royalties and Other Revenues	5,856		5,775		11,773		11,860
	503,125		530,372		1,014,622		1,084,733
COSTS OF REVENUES:
Depreciation of Lease Merchandise and Other Lease Revenue Costs	108,275		117,400		220,815		242,541
Retail Cost of Sales	104,310		111,284		210,272		224,813
Non-Retail Cost of Sales	18,522		19,416		37,634		39,413
	231,107		248,100		468,721		506,767
GROSS PROFIT	272,018		282,272		545,901		577,966
OPERATING EXPENSES:
Personnel Costs	126,326		124,945		251,394		256,390
Other Operating Expenses, Net	126,563		121,670		258,498		245,815
Provision for Lease Merchandise Write-Offs	20,565		19,001		41,072		39,161
Restructuring Expenses, Net	2,928		4,835		10,826		10,124
Separation Costs	—		—		17		129
Acquisition-Related Costs	7,981		546		8,861		2,394
	284,363		270,997		570,668		554,013
OPERATING (LOSS) PROFIT	(12,345)		11,275		(24,767)		23,953
Interest Expense	(4,161)		(3,910)		(8,695)		(8,268)
Other Non-Operating Income, Net	256		637		893		1,209
(LOSS) EARNINGS BEFORE INCOME TAXES	(16,250)		8,002		(32,569)		16,894
INCOME TAX (BENEFIT) EXPENSE	(4,347)		1,485		(6,485)		(2,421)
NET (LOSS) EARNINGS	$	(11,903)	$	6,517	$	(26,084)	$	19,315

(LOSS) EARNINGS PER SHARE	$	(0.39)	$	0.21	$	(0.85)	$	0.63
(LOSS) EARNINGS PER SHARE ASSUMING DILUTION	$	(0.39)	$	0.21	$	(0.85)	$	0.62
WEIGHTED AVERAGE SHARES OUTSTANDING	30,785		30,993		30,669		30,894
WEIGHTED AVERAGE SHARES OUTSTANDING ASSUMING DILUTION	30,785		31,307		30,669		31,274

CONSOLIDATED BALANCE SHEETS


	(Unaudited)
(In Thousands)	June 30, 2024		December 31, 2023

ASSETS:
Cash and Cash Equivalents	$	34,161	$	59,035
Accounts Receivable (net of allowances of $9,203 at June 30, 2024 and $9,029 at December 31, 2023)	35,050		39,782
Lease Merchandise (net of accumulated depreciation and allowances of $410,185 at June 30, 2024 and $411,641 at December 31, 2023)	622,645		622,262
Merchandise Inventories, Net	88,517		90,172
Property, Plant and Equipment, Net	263,002		269,833
Operating Lease Right-of-Use Assets	447,405		465,824
Goodwill	55,750		55,750
Other Intangibles, Net	103,175		108,158
Income Tax Receivable	8,490		10,363
Prepaid Expenses and Other Assets	112,861		105,397
Total Assets	$	1,771,056	$	1,826,576
LIABILITIES & SHAREHOLDERS’ EQUITY:
Accounts Payable and Accrued Expenses	$	273,230	$	292,175
Deferred Tax Liabilities	76,170		83,217
Customer Deposits and Advance Payments	62,830		68,391
Operating Lease Liabilities	485,377		502,692
Debt	215,763		193,963
Total Liabilities	1,113,370		1,140,438

SHAREHOLDERS' EQUITY:
Common Stock, Par Value $0.50 Per Share: Authorized: 112,500,000 Shares at June 30, 2024 and December 31, 2023; Shares Issued: 37,189,351 at June 30, 2024 and 36,656,650 at December 31, 2023	18,595		18,328
Additional Paid-in Capital	756,207		750,751
Retained Earnings	32,252		66,202
Accumulated Other Comprehensive Loss	(257)		(1,355)
	806,797		833,926
Treasury Shares at Cost: 6,476,579 Shares at June 30, 2024 and 6,295,216 Shares at December 31, 2023	(149,111)		(147,788)
Total Shareholders’ Equity	657,686		686,138
Total Liabilities & Shareholders’ Equity	$	1,771,056	$	1,826,576

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,
(In Thousands) Unaudited	2024		2023
OPERATING ACTIVITIES:
Net (Loss) Earnings	$	(26,084)	$	19,315
Adjustments to Reconcile Net (Loss) Earnings to Cash (Used in) Provided by Operating Activities:
Depreciation of Lease Merchandise	217,175		238,783
Other Depreciation and Amortization	46,035		44,837
Provision for Lease Merchandise Write-Offs	41,072		39,161
Accounts Receivable Provision	20,342		21,111
Stock-Based Compensation	5,400		5,835
Deferred Income Taxes	(9,154)		(6,553)
Impairment of Assets	4,226		1,716
Non-Cash Lease Expense	60,553		58,755
Other Changes, Net	(5,015)		(3,398)
Changes in Operating Assets and Liabilities:
Lease Merchandise	(262,449)		(221,851)
Merchandise Inventories	1,655		3,285
Accounts Receivable	(15,613)		(13,019)
Prepaid Expenses and Other Assets	(3,752)		(6,935)
Income Tax Receivable	1,873		(4,504)
Operating Lease Right-of-Use Assets and Liabilities	(61,473)		(59,811)
Accounts Payable and Accrued Expenses	(16,139)		1,712
Customer Deposits and Advance Payments	(5,561)		(4,075)
Cash (Used in) Provided by Operating Activities	(6,909)		114,364
INVESTING ACTIVITIES:
Purchases of Property, Plant, and Equipment	(40,275)		(41,565)
Proceeds from Dispositions of Property, Plant, and Equipment	8,145		4,878
Proceeds from Other Investing-Related Activities	2,042		—
Cash Used in Investing Activities	(30,088)		(36,687)
FINANCING ACTIVITIES:
Borrowings (Repayments) on Swing Line Loans, Net	3,900		(19,250)
Proceeds from Revolver and Term Loan	21,094		31,094
Repayments on Revolver and Term Loan	(3,281)		(68,281)
Dividends Paid	(7,825)		(7,306)
Acquisition of Treasury Stock	—		(804)
Issuance of Stock Under Stock Option Plans	323		60
Shares Withheld for Tax Payments	(1,323)		(2,539)
Debt Modification Costs	(729)		—
Cash Provided by (Used in) Financing Activities	12,159		(67,026)
EFFECT OF EXCHANGE RATE CHANGES ON CASH, CASH EQUIVALENTS, AND RESTRICTED CASH	(36)		2
(Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash	(24,874)		10,653
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period	60,660		29,341
Cash and Cash Equivalents at End of Period:
Cash and Cash Equivalents	34,161		38,369
Restricted Cash included in Prepaid Expenses and Other Assets	1,625		1,625
Total Cash, Cash Equivalents, and Restricted Cash at End of Period	$	35,786	$	39,994

QUARTERLY REVENUES BY SEGMENT


	(Unaudited)
	Three Months Ended
(In Thousands)	June 30, 2024
	Aaron’s Business		BrandsMart		Elimination of Intersegment Revenues1		Total
Lease Revenues and Fees	$	335,658	$	—	$	—	$	335,658
Retail Sales	5,804		135,420		(1,675)		139,549
Non-Retail Sales	22,062		—		—		22,062
Franchise Royalties and Fees	5,663		—		—		5,663
Other	193		—		—		193
Total Revenues	$	369,380	$	135,420	$	(1,675)	$	503,125


	(Unaudited)
	Three Months Ended
(In Thousands)	June 30, 2023
	Aaron’s Business		BrandsMart		Elimination of Intersegment Revenues1		Total
Lease Revenues and Fees	$	353,751	$	—	$	—	$	353,751
Retail Sales	6,615		143,776		(2,345)		148,046
Non-Retail Sales	22,800		—		—		22,800
Franchise Royalties and Fees	5,588		—		—		5,588
Other	187		—		—		187
Total Revenues	$	388,941	$	143,776	$	(2,345)	$	530,372

1.Intersegment sales between BrandsMart and the Aaron's Business pertaining to BrandsMart Leasing, are recognized at retail prices. Since the intersegment profit affects sales, cost of goods sold, depreciation and inventory valuation, they are adjusted when intersegment profit is eliminated in consolidation.

SIX MONTHS REVENUES BY SEGMENT1


	(Unaudited)
	Six Months Ended
(In Thousands)	June 30, 2024
	Aaron’s Business		BrandsMart		Elimination of Intersegment Revenues1		Total
Lease Revenues and Fees	$	681,667	$	—	$	—	$	681,667
Retail Sales	12,291		267,943		(3,756)		276,478
Non-Retail Sales	44,704		—		—		44,704
Franchise Royalties and Fees	11,392		—		—		11,392
Other	381		—		—		381
Total	$	750,435	$	267,943	$	(3,756)	$	1,014,622


	(Unaudited)
	Six Months Ended
(In Thousands)	June 30, 2023
	Aaron’s Business		BrandsMart		Elimination of Intersegment Revenues1		Total
Lease Revenues and Fees	$	727,546	$	—	$	—	$	727,546
Retail Sales	14,933		287,934		(4,275)		298,592
Non-Retail Sales	46,735		—		—		46,735
Franchise Royalties and Fees	11,486		—		—		11,486
Other	374		—		—		374
Total	$	801,074	$	287,934	$	(4,275)	$	1,084,733

USE OF NON-GAAP FINANCIAL INFORMATION

Non-GAAP net earnings, non-GAAP diluted earnings per share, adjusted free cash flow, net debt, EBITDA and adjusted EBITDA are supplemental measures of our performance that are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”). Non-GAAP net earnings and non-GAAP diluted earnings per share for 2024 exclude certain charges including amortization expense resulting from acquisitions, restructuring charges, separation costs associated with the separation and distribution transaction that resulted in our spin-off into a separate publicly-traded company, acquisition-related costs, and debt modification costs associated with the debt amendment entered into on February 23, 2024. Non-GAAP net earnings and non-GAAP diluted earnings per share for 2023 exclude certain charges including amortization expense resulting from acquisitions, restructuring charges and separation costs associated with the separation and distribution transaction that resulted in our spin-off into a separate publicly-traded company and acquisition-related costs, which are tax-effected using estimated tax rates which are commensurate with non-GAAP pre-tax earnings, can be found in the Reconciliation of Net Earnings and Earnings Per Share Assuming Dilution to non-GAAP Net Earnings and non-GAAP Earnings Per Share Assuming Dilution table in this news release.

The EBITDA and adjusted EBITDA figures presented in this news release are calculated as the Company’s earnings before interest expense, depreciation on property, plant and equipment, amortization of intangible assets and income taxes. Adjusted EBITDA also excludes the other adjustments described in the calculation of non-GAAP net earnings above. Adjusted EBITDA margin is defined as adjusted EBITDA as a percentage of revenue. The amounts for these pre-tax non-GAAP adjustments can be found in the Quarterly EBITDA table in this news release.

Management believes that non-GAAP net earnings, non-GAAP diluted earnings per share, EBITDA and adjusted EBITDA provide relevant and useful information, and are widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and business unit performance.

Non-GAAP net earnings and non-GAAP diluted earnings per share provide management and investors with an understanding of the results from the primary operations of our business by excluding the effects of certain items that generally arise from larger, one-time transactions that are not reflective of the ordinary earnings activity of our operations. This measure may be useful to an investor in evaluating the underlying operating performance of our business.

EBITDA and adjusted EBITDA also provide management and investors with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes. These measures may be useful to an investor in evaluating our operating performance and liquidity because the measures:

•Are widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending upon accounting methods, book value of assets, capital structure and the method by which assets were acquired, among other factors.

•Are a financial measurement that is used by rating agencies, lenders and other parties to evaluate our creditworthiness.

•Are used by our management for various purposes, including as a measure of performance of our operating entities and as a basis for strategic planning and forecasting.

The adjusted free cash flow figures presented in this news release are calculated as the Company’s cash flows provided by operating activities, adjusted for acquisition-related transaction costs and proceeds from real estate transactions, less capital expenditures. Net debt represents total debt less cash and cash equivalents. Management believes that adjusted free cash flow and net debt are important measures of liquidity, provide relevant and useful information, and are widely used by analysts, investors and competitors in our industry as well as by our management team in assessing liquidity.

Non-GAAP financial measures, however, should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with GAAP, such as the Company’s GAAP basis net earnings and diluted earnings per share, the Company’s GAAP revenues and earnings before income taxes and GAAP cash provided by operating activities, which are also presented in the news release. Further, we caution investors that amounts presented in accordance with our definitions of non-GAAP net earnings, non-GAAP diluted earnings per share, EBITDA, adjusted EBITDA and adjusted free cash flow may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate these measures in the same manner.

NON-GAAP FINANCIAL INFORMATION AND RECONCILIATION

NON-GAAP NET (LOSS) EARNINGS AND NON-GAAP (LOSS) EARNINGS PER SHARE ASSUMING DILUTION


	(Unaudited) Three Months Ended				(Unaudited) Six Months Ended
(In Thousands, except per share amounts)	June 30,				June 30,
	2024		2023		2024		2023
Net (Loss) Earnings	$	(11,903)	$	6,517	$	(26,084)	$	19,315
Income Taxes	(4,347)		1,485		(6,485)		(2,421)
(Loss) Earnings Before Income Taxes	$	(16,250)	$	8,002	$	(32,569)	$	16,894
Acquisition-Related Intangible Amortization Expense	2,486		2,594		4,982		5,240
Restructuring Expenses, Net	2,928		4,835		10,826		10,124
Separation Costs	—		—		17		129
Acquisition-Related Costs	7,981		546		8,861		2,394
Debt Modification Costs	—		—		563		—
Non-GAAP (Loss) Earnings Before Income Taxes	(2,855)		15,977		(7,320)		34,781

Income taxes, calculated using a non-GAAP Effective Tax Rate	(808)		3,743		(763)		2,073
Non-GAAP Net (Loss) Earnings	$	(2,047)	$	12,234	$	(6,557)	$	32,708


(Loss) Earnings Per Share Assuming Dilution	$	(0.39)	$	0.21	$	(0.85)	$	0.62
Acquisition-Related Intangible Amortization Expense	0.08		0.08		0.16		0.17
Restructuring Expenses, Net	0.10		0.15		0.35		0.32
Acquisition-Related Costs	0.26		0.02		0.29		0.08
Debt Modification Costs	—		—		0.02		—
Tax Effect of Non-GAAP adjustments	(0.11)		(0.07)		(0.19)		(0.14)
Non-GAAP (Loss) Earnings Per Share Assuming Dilution1	$	(0.07)	$	0.39	$	(0.21)	$	1.05

Weighted Average Shares Outstanding Assuming Dilution2	30,785		31,307		30,669		31,274

1.In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.

2.For the three and six months ended June 30, 2024, the GAAP Weighted Average Shares Outstanding Assuming Dilution were 30,785 and 30,669, compared to 31,307 and 31,274 in the comparable period of the prior year. There was no dilutive effect applied to the 30,785 or 30,669 2024 amounts due to the net GAAP loss incurred in those periods. The Non-GAAP Weighted Average Shares Outstanding Assuming Dilution were 30,785 and 30,669 during those same periods.

NON-GAAP FINANCIAL INFORMATION AND RECONCILIATION

QUARTERLY ADJUSTED EBITDA BY SEGMENT


	(Unaudited)
(In Thousands)	Three Months Ended June 30, 2024
	Aaron’s Business		BrandsMart		Unallocated Corporate		Elimination1		Total
Net Loss									$	(11,903)
Income Taxes									(4,347)
Earnings (Loss) Before Income Taxes	$	17,275	$	(4,024)	$	(29,396)	$	(105)	$	(16,250)
Interest Expense	—		—		4,161		—		4,161
Depreciation	18,793		1,518		202		—		20,513
Amortization	260		2,226		—		—		2,486
EBITDA	$	36,328	$	(280)	$	(25,033)	$	(105)	$	10,910
Separation Costs	—		—		—		—		—
Restructuring Expenses, Net	—		—		2,928		—		2,928
Acquisition-Related Costs	—		—		7,981		—		7,981
Stock-Based Compensation	—		—		2,680		—		2,680
Adjusted EBITDA	$	36,328	$	(280)	$	(11,444)	$	(105)	$	24,499


	(Unaudited)
	Three Months Ended June 30, 2023
	Aaron’s Business		BrandsMart		Unallocated Corporate		Elimination1		Total
Net Earnings									$	6,517
Income Taxes									1,485
Earnings (Loss) Before Income Taxes	$	30,840	$	1,083	$	(23,833)	$	(88)	$	8,002
Interest Expense	—		—		3,910		—		3,910
Depreciation	18,287		1,164		222		—		19,673
Amortization	368		2,226		—		—		2,594
EBITDA	$	49,495	$	4,473	$	(19,701)	$	(88)	$	34,179
Separation Costs	—		—		—		—		—
Restructuring Expenses, Net	—		—		4,835		—		4,835
Acquisition-Related Costs	—		—		546		—		546
Stock-Based Compensation	—		—		2,888		—		2,888
Adjusted EBITDA	$	49,495	$	4,473	$	(11,432)	$	(88)	$	42,448

1.Intersegment sales between BrandsMart and the Aaron's Business pertaining to BrandsMart Leasing are recognized at retail prices. Since the intersegment profit affects sales, cost of goods sold, depreciation and inventory valuation, they are adjusted when intersegment profit is eliminated in consolidation.

NON-GAAP FINANCIAL INFORMATION AND RECONCILIATION

SIX MONTHS ADJUSTED EBITDA BY SEGMENT


	(Unaudited)
(In Thousands)	Six Months Ended June 30, 2024
	Aaron’s Business		BrandsMart		Unallocated Corporate		Elimination1		Total
Net Earnings									$	(26,084)
Income Taxes									(6,485)
Earnings (Loss) Before Income Taxes	$	36,009	$	(10,445)	$	(57,916)	$	(217)	$	(32,569)
Interest Expense	—		—		8,695		—		8,695
Depreciation	37,523		3,125		405		—		41,053
Amortization	530		4,452		—		—		4,982
EBITDA	$	74,062	$	(2,868)	$	(48,816)	$	(217)	$	22,161
Separation Costs	—		—		17		—		17
Restructuring Expenses, Net	—		—		10,826		—		10,826
Acquisition-Related Costs	—		—		8,861		—		8,861
Stock Based Compensation	—		—		5,383		—		5,383
Adjusted EBITDA	$	74,062	$	(2,868)	$	(23,729)	$	(217)	$	47,248


	(Unaudited)
(In Thousands)	Six Months Ended June 30, 2023
	Aaron’s Business		BrandsMart		Unallocated Corporate		Elimination1		Total
Net Loss									$	19,315
Income Taxes									(2,421)
Earnings (Loss) Before Income Taxes	$	66,699	$	195	$	(49,804)	$	(196)	$	16,894
Interest Expense	—		—		8,268		—		8,268
Depreciation	36,570		2,583		444		—		39,597
Amortization	788		4,452		—		—		5,240
EBITDA	$	104,057	$	7,230	$	(41,092)	$	(196)	$	69,999
Separation Costs	—		—		129		—		129
Restructuring Expenses, Net	—		—		10,124		—		10,124
Acquisition-Related Costs	—		—		2,394		—		2,394
Stock Based Compensation	—		—		5,680		—		5,680
Adjusted EBITDA	$	104,057	$	7,230	$	(22,765)	$	(196)	$	88,326

NON-GAAP FINANCIAL INFORMATION AND RECONCILIATION
ADJUSTED FREE CASH FLOW


	(Unaudited)
	Three Months Ended
	June 30,
(In Thousands)	2024		2023
Cash Provided by Operating Activities	$	11,631	$	53,404
Proceeds from Real Estate Transactions	496		585
Acquisition-Related Transaction Costs	1,209		3,407
Capital Expenditures	(19,334)		(21,356)
Adjusted Free Cash Flow	$	(5,998)	$	36,040


	(Unaudited)
	Six Months Ended
	June 30,
(In Thousands)	2024		2023
Cash (Used in) Provided by Operating Activities	$	(6,909)	$	114,364
Proceeds from Real Estate Transactions	5,960		1,663
Acquisition-Related Transaction Costs	2,015		4,124
Capital Expenditures	(40,275)		(41,565)
Adjusted Free Cash Flow	$	(39,209)	$	78,586

NON-GAAP FINANCIAL INFORMATION AND RECONCILIATION

NET DEBT


(In Thousands)	June 30, 2024		March, 31 2024
Debt	$	215,763	$	212,913
Cash and Cash Equivalents	(34,161)		(41,036)
Net Debt	$	181,602	$	171,877

Aaron's Directors Declare Cash Dividend

ATLANTA, August 5, 2024 – The Aaron’s Company, Inc. (NYSE: AAN), a leading, technology-enabled, omnichannel provider of lease-to-own and retail purchase solutions, today announced that its Board of Directors has declared a regular quarterly cash dividend of $0.125 per share and declared such dividend payable on October 3, 2024, to shareholders of record as of the close of business on September 13, 2024.

About The Aaron’s Company, Inc.

Headquartered in Atlanta, The Aaron’s Company, Inc. is a leading, technology-enabled, omnichannel provider of lease-to-own and retail purchase solutions of appliances, electronics, furniture, and other home goods across its brands: Aaron’s, BrandsMart U.S.A, BrandsMart Leasing, and Woodhaven. Aaron's offers a direct-to-consumer lease-to-own solution through its approximately 1,210 Company-operated and franchised stores in 47 states and Canada, as well as its e-commerce platform. BrandsMart U.S.A. is one of the leading appliance retailers in the country with 12 retail stores in Florida and Georgia, as well as its e-commerce platform. BrandsMart Leasing offers lease-to-own solutions to customers of BrandsMart U.S.A. Woodhaven is the Company’s furniture manufacturing division. For more information, visit investor.aarons.com, aarons.com, and brandsmartusa.com. 

Investor Relations Contact: Call: 678-402-3590, Email: InvestorRelations@aarons.com

Media Relations Contact: Call: 678-402-3591, Email: MediaRelations@aarons.com

Document and Entity Information Document	Aug. 05, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 05, 2024
Entity Registrant Name	THE AARON'S COMPANY, INC.
Entity Central Index Key	0001821393
Amendment Flag	false
Entity Incorporation, State or Country Code	GA
Entity File Number	1-39681
Entity Tax Identification Number	85-2483376
Entity Address, Address Line One	400 Galleria Parkway SE
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30339-3194
City Area Code	678
Local Phone Number	402-3000
Written Communications	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.50 Par Value
Trading Symbol	AAN
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Address, Address Line Two	Suite 300

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