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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 | |
---|---|---|---|---|---|---|---|---|
0.01 | 0.10% | 10.04 | 10.06 | 10.02 | 10.06 | 2,519,355 | 01:00:00 |
☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Georgia
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58-0687630
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(State or other jurisdiction of
incorporation or organization)
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(I. R. S. Employer
Identification No.)
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400 Galleria Parkway SE
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Suite 300
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Atlanta
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Georgia
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30339-3182
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, $0.50 Par Value
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AAN
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New York Stock Exchange
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Large Accelerated Filer
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ý
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Accelerated Filer
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o
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Non-Accelerated Filer
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o
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
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☐
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Emerging Growth Company
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☐
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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 7(a)(2)(B) of the Securities Act
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o
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Title of Each Class
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|
Shares Outstanding as of
July 19, 2019
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Common Stock, $0.50 Par Value
|
|
67,547,497
|
|
|
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Item 3. Defaults Upon Senior Securities
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Item 4. Mine Safety Disclosures
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Item 5. Other Information
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ITEM 1.
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FINANCIAL STATEMENTS
|
|
(Unaudited)
|
|
|
||||
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June 30,
2019 |
|
December 31,
2018 |
||||
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(In Thousands, Except Share Data)
|
||||||
ASSETS:
|
|
|
|
||||
Cash and Cash Equivalents
|
$
|
100,242
|
|
|
$
|
15,278
|
|
Accounts Receivable (net of allowances of $63,000 in 2019 and $62,704 in 2018)
|
85,257
|
|
|
98,159
|
|
||
Lease Merchandise (net of accumulated depreciation and allowances of $855,365 in 2019 and $816,928 in 2018)
|
1,292,724
|
|
|
1,318,470
|
|
||
Loans Receivable (net of allowances and unamortized fees of $18,947 in 2019 and $19,941 in 2018)
|
69,974
|
|
|
76,153
|
|
||
Property, Plant and Equipment at Cost (net of accumulated depreciation of $300,983 in 2019 and $284,287 in 2018)
|
233,073
|
|
|
229,492
|
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||
Operating Lease Right-of-Use Assets
|
338,805
|
|
|
—
|
|
||
Goodwill
|
736,202
|
|
|
733,170
|
|
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Other Intangibles (net of accumulated amortization of $147,440 in 2019 and $130,116 in 2018)
|
207,066
|
|
|
228,600
|
|
||
Income Tax Receivable
|
11,921
|
|
|
29,148
|
|
||
Prepaid Expenses and Other Assets
|
104,934
|
|
|
98,222
|
|
||
Total Assets
|
$
|
3,180,198
|
|
|
$
|
2,826,692
|
|
LIABILITIES & SHAREHOLDERS’ EQUITY:
|
|
|
|
||||
Accounts Payable and Accrued Expenses
|
$
|
226,913
|
|
|
$
|
293,153
|
|
Deferred Income Taxes Payable
|
288,291
|
|
|
267,500
|
|
||
Customer Deposits and Advance Payments
|
80,680
|
|
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80,579
|
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||
Operating Lease Liabilities
|
386,989
|
|
|
—
|
|
||
Debt
|
347,767
|
|
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424,752
|
|
||
Total Liabilities
|
1,330,640
|
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1,065,984
|
|
||
Commitments and Contingencies (Note 6)
|
|
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SHAREHOLDERS' EQUITY:
|
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|
||||
Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at June 30, 2019 and December 31, 2018; Shares Issued: 90,752,123 at June 30, 2019 and December 31, 2018
|
45,376
|
|
|
45,376
|
|
||
Additional Paid-in Capital
|
277,533
|
|
|
278,922
|
|
||
Retained Earnings
|
2,101,915
|
|
|
2,005,344
|
|
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Accumulated Other Comprehensive Loss
|
(45
|
)
|
|
(1,087
|
)
|
||
|
2,424,779
|
|
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2,328,555
|
|
||
Less: Treasury Shares at Cost
|
|
|
|
||||
Common Stock: 23,204,626 Shares at June 30, 2019 and 23,567,979 at December 31, 2018
|
(575,221
|
)
|
|
(567,847
|
)
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||
Total Shareholders’ Equity
|
1,849,558
|
|
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1,760,708
|
|
||
Total Liabilities & Shareholders’ Equity
|
$
|
3,180,198
|
|
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$
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2,826,692
|
|
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Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
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2018
|
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2019
|
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2018
|
||||||||
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(In Thousands, Except Per Share Data)
|
||||||||||||||
REVENUES:
|
|
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||||||||
Lease Revenues and Fees
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$
|
907,565
|
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$
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845,938
|
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$
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1,851,722
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$
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1,716,005
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Retail Sales
|
8,898
|
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6,592
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|
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21,707
|
|
|
15,108
|
|
||||
Non-Retail Sales
|
34,124
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|
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53,661
|
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71,105
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|
|
106,891
|
|
||||
Franchise Royalties and Fees
|
8,605
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12,125
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17,812
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24,987
|
|
||||
Interest and Fees on Loans Receivable
|
8,610
|
|
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9,208
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17,256
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18,750
|
|
||||
Other
|
339
|
|
|
335
|
|
|
642
|
|
|
927
|
|
||||
|
968,141
|
|
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927,859
|
|
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1,980,244
|
|
|
1,882,668
|
|
||||
COSTS AND EXPENSES:
|
|
|
|
|
|
|
|
||||||||
Depreciation of Lease Merchandise
|
474,868
|
|
|
415,414
|
|
|
975,688
|
|
|
855,422
|
|
||||
Retail Cost of Sales
|
5,651
|
|
|
4,156
|
|
|
14,283
|
|
|
9,818
|
|
||||
Non-Retail Cost of Sales
|
28,948
|
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|
47,068
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|
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58,144
|
|
|
95,088
|
|
||||
Operating Expenses
|
383,576
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388,337
|
|
|
770,792
|
|
|
778,569
|
|
||||
Restructuring Expenses (Reversals), Net
|
18,738
|
|
|
(882
|
)
|
|
32,019
|
|
|
24
|
|
||||
Other Operating Income, Net
|
(3,486
|
)
|
|
(165
|
)
|
|
(4,383
|
)
|
|
(248
|
)
|
||||
|
908,295
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|
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853,928
|
|
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1,846,543
|
|
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1,738,673
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|
||||
OPERATING PROFIT
|
59,846
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73,931
|
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|
133,701
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143,995
|
|
||||
Interest Income
|
944
|
|
|
154
|
|
|
1,045
|
|
|
356
|
|
||||
Interest Expense
|
(4,300
|
)
|
|
(3,807
|
)
|
|
(9,256
|
)
|
|
(8,133
|
)
|
||||
Impairment of Investment
|
—
|
|
|
(20,098
|
)
|
|
—
|
|
|
(20,098
|
)
|
||||
Other Non-Operating Income (Expense), Net
|
329
|
|
|
(200
|
)
|
|
1,637
|
|
|
612
|
|
||||
EARNINGS BEFORE INCOME TAXES
|
56,819
|
|
|
49,980
|
|
|
127,127
|
|
|
116,732
|
|
||||
INCOME TAXES
|
14,169
|
|
|
11,479
|
|
|
28,399
|
|
|
25,985
|
|
||||
NET EARNINGS
|
$
|
42,650
|
|
|
$
|
38,501
|
|
|
$
|
98,728
|
|
|
$
|
90,747
|
|
EARNINGS PER SHARE
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.63
|
|
|
$
|
0.55
|
|
|
$
|
1.46
|
|
|
$
|
1.30
|
|
Assuming Dilution
|
$
|
0.62
|
|
|
$
|
0.54
|
|
|
$
|
1.44
|
|
|
$
|
1.27
|
|
CASH DIVIDENDS DECLARED PER SHARE:
|
|
|
|
|
|
|
|
||||||||
Common Stock
|
$
|
0.0350
|
|
|
$
|
0.0300
|
|
|
$
|
0.0700
|
|
|
$
|
0.0600
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
||||||||
Basic
|
67,687
|
|
|
69,645
|
|
|
67,492
|
|
|
69,875
|
|
||||
Assuming Dilution
|
68,793
|
|
|
70,837
|
|
|
68,784
|
|
|
71,428
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net Earnings
|
$
|
42,650
|
|
|
$
|
38,501
|
|
|
$
|
98,728
|
|
|
$
|
90,747
|
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Translation Adjustment
|
618
|
|
|
(535
|
)
|
|
1,042
|
|
|
(1,012
|
)
|
||||
Total Other Comprehensive Income (Loss)
|
618
|
|
|
(535
|
)
|
|
1,042
|
|
|
(1,012
|
)
|
||||
Comprehensive Income
|
$
|
43,268
|
|
|
$
|
37,966
|
|
|
$
|
99,770
|
|
|
$
|
89,735
|
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
|
(In Thousands)
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net Earnings
|
$
|
98,728
|
|
|
$
|
90,747
|
|
Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
|
|
|
|
||||
Depreciation of Lease Merchandise
|
975,688
|
|
|
855,422
|
|
||
Other Depreciation and Amortization
|
53,862
|
|
|
44,591
|
|
||
Accounts Receivable Provision
|
137,611
|
|
|
113,077
|
|
||
Provision for Credit Losses on Loans Receivable
|
9,223
|
|
|
9,540
|
|
||
Stock-Based Compensation
|
14,231
|
|
|
15,143
|
|
||
Deferred Income Taxes
|
19,928
|
|
|
39,684
|
|
||
Impairment of Assets
|
26,267
|
|
|
20,098
|
|
||
Non-Cash Lease Expense
|
58,073
|
|
|
—
|
|
||
Other Changes, Net
|
(3,390
|
)
|
|
(1,076
|
)
|
||
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:
|
|
|
|
|
|
||
Additions to Lease Merchandise
|
(1,141,863
|
)
|
|
(1,034,838
|
)
|
||
Book Value of Lease Merchandise Sold or Disposed
|
196,219
|
|
|
199,846
|
|
||
Accounts Receivable
|
(126,112
|
)
|
|
(97,385
|
)
|
||
Prepaid Expenses and Other Assets
|
(6,847
|
)
|
|
(7,965
|
)
|
||
Income Tax Receivable
|
17,227
|
|
|
54,242
|
|
||
Operating Lease Liabilities
|
(62,541
|
)
|
|
—
|
|
||
Accounts Payable and Accrued Expenses
|
(21,465
|
)
|
|
(36,165
|
)
|
||
Customer Deposits and Advance Payments
|
(200
|
)
|
|
1,819
|
|
||
Cash Provided by Operating Activities
|
244,639
|
|
|
266,780
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Investments in Loans Receivable
|
(29,506
|
)
|
|
(31,797
|
)
|
||
Proceeds from Loans Receivable
|
27,720
|
|
|
30,150
|
|
||
Proceeds from Investments
|
—
|
|
|
666
|
|
||
Outflows on Purchases of Property, Plant and Equipment
|
(48,059
|
)
|
|
(32,785
|
)
|
||
Proceeds from Property, Plant and Equipment
|
1,425
|
|
|
4,349
|
|
||
Outflows on Acquisitions of Businesses and Customer Agreements, Net of Cash Acquired
|
(7,612
|
)
|
|
(14,401
|
)
|
||
Proceeds from Dispositions of Businesses and Customer Agreements, Net of Cash Disposed
|
755
|
|
|
318
|
|
||
Cash Used in Investing Activities
|
(55,277
|
)
|
|
(43,500
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Repayments on Revolving Facility, Net
|
(16,000
|
)
|
|
—
|
|
||
Repayments on Debt
|
(61,465
|
)
|
|
(96,173
|
)
|
||
Dividends Paid
|
(4,717
|
)
|
|
(2,111
|
)
|
||
Acquisition of Treasury Stock
|
(14,414
|
)
|
|
(68,432
|
)
|
||
Issuance of Stock Under Stock Option Plans
|
5,056
|
|
|
4,134
|
|
||
Shares Withheld for Tax Payments
|
(12,977
|
)
|
|
(17,282
|
)
|
||
Debt Issuance Costs
|
—
|
|
|
(55
|
)
|
||
Cash Used in Financing Activities
|
(104,517
|
)
|
|
(179,919
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
119
|
|
|
(75
|
)
|
||
Increase in Cash and Cash Equivalents
|
84,964
|
|
|
43,286
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
15,278
|
|
|
51,037
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
100,242
|
|
|
$
|
94,323
|
|
NOTE 1.
|
BASIS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
For the Three Months Ended June 30 (Unaudited and In Thousands)
|
2019
|
|
2018
|
||||
Progressive Leasing Invoice Volume
1
|
$
|
403,410
|
|
|
$
|
335,088
|
|
Stores as of June 30 (Unaudited)
|
2019
|
|
2018
|
||
Company-operated Aaron's Branded Stores
|
1,171
|
|
|
1,179
|
|
Franchised Stores
|
357
|
|
|
530
|
|
Systemwide Stores
|
1,528
|
|
|
1,709
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||
(Shares In Thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||
Weighted Average Shares Outstanding
|
67,687
|
|
|
69,645
|
|
|
67,492
|
|
|
69,875
|
|
Dilutive Effect of Share-Based Awards
|
1,106
|
|
|
1,192
|
|
|
1,292
|
|
|
1,553
|
|
Weighted Average Shares Outstanding Assuming Dilution
|
68,793
|
|
|
70,837
|
|
|
68,784
|
|
|
71,428
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Customers
|
$
|
60,579
|
|
|
$
|
60,879
|
|
Corporate
|
12,024
|
|
|
18,171
|
|
||
Franchisee
|
12,654
|
|
|
19,109
|
|
||
Accounts Receivable
|
$
|
85,257
|
|
|
$
|
98,159
|
|
|
Six Months Ended June 30,
|
||||||
(In Thousands)
|
2019
|
|
2018
|
||||
Bad Debt Expense
1
|
$
|
1,166
|
|
|
$
|
96,651
|
|
Provision for Returns and Uncollectible Renewal Payments
2
|
136,445
|
|
|
16,426
|
|
||
Accounts Receivable Provision
|
$
|
137,611
|
|
|
$
|
113,077
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Merchandise on Lease
|
$
|
1,036,456
|
|
|
$
|
1,053,684
|
|
Merchandise Not on Lease
|
256,268
|
|
|
264,786
|
|
||
Lease Merchandise, net of Accumulated Depreciation and Allowances
|
$
|
1,292,724
|
|
|
$
|
1,318,470
|
|
|
Six Months Ended June 30,
|
||||||
(In Thousands)
|
2019
|
|
2018
|
||||
Beginning Balance
|
$
|
46,694
|
|
|
$
|
35,629
|
|
Merchandise Written off, net of Recoveries
|
(105,571
|
)
|
|
(80,856
|
)
|
||
Provision for Write-offs
|
117,994
|
|
|
91,420
|
|
||
Ending Balance
|
$
|
59,117
|
|
|
$
|
46,193
|
|
FICO Score Category
|
June 30, 2019
|
|
December 31, 2018
|
||
600 or Less
|
4.5
|
%
|
|
3.7
|
%
|
Between 600 and 700
|
79.6
|
%
|
|
77.9
|
%
|
700 or Greater
|
15.9
|
%
|
|
18.4
|
%
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Prepaid Expenses
|
$
|
32,937
|
|
|
$
|
30,763
|
|
Prepaid Insurance
|
26,400
|
|
|
27,948
|
|
||
Assets Held for Sale
|
8,992
|
|
|
6,589
|
|
||
Deferred Tax Asset
|
8,761
|
|
|
8,761
|
|
||
Other Assets
|
27,844
|
|
|
24,161
|
|
||
Prepaid Expenses and Other Assets
|
$
|
104,934
|
|
|
$
|
98,222
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Accounts Payable
|
$
|
57,414
|
|
|
$
|
88,369
|
|
Accrued Insurance Costs
|
40,745
|
|
|
40,423
|
|
||
Accrued Salaries and Benefits
|
40,125
|
|
|
40,790
|
|
||
Accrued Real Estate and Sales Taxes
|
27,379
|
|
|
30,332
|
|
||
Deferred Rent
1
|
—
|
|
|
27,270
|
|
||
Other Accrued Expenses and Liabilities
1
|
61,250
|
|
|
65,969
|
|
||
Accounts Payable and Accrued Expenses
|
$
|
226,913
|
|
|
$
|
293,153
|
|
1
|
Amounts as of
June 30, 2019
were impacted by the January 1, 2019 adoption of ASC 842. Upon transition to ASC 842, the remaining balances of the Company's deferred rent, lease incentives, and closed store reserve were reclassified as a reduction to the operating lease right-of-use asset in the accompanying condensed consolidated balance sheet.
|
|
Treasury Stock
|
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
Total Shareholders’ Equity
|
|||||||||||||||
(In Thousands, Except Per Share)
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance, December 31, 2018
|
(23,568
|
)
|
|
$
|
(567,847
|
)
|
|
$
|
45,376
|
|
|
$
|
278,922
|
|
|
$
|
2,005,344
|
|
|
$
|
(1,087
|
)
|
$
|
1,760,708
|
|
Opening Balance Sheet Adjustment - ASC 842, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,592
|
|
|
—
|
|
2,592
|
|
||||||
Cash Dividends, $0.035 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,363
|
)
|
|
—
|
|
(2,363
|
)
|
||||||
Stock-Based Compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
7,050
|
|
|
—
|
|
|
—
|
|
7,050
|
|
||||||
Reissued Shares
|
493
|
|
|
4,264
|
|
|
—
|
|
|
(15,245
|
)
|
|
—
|
|
|
—
|
|
(10,981
|
)
|
||||||
Net Earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,078
|
|
|
—
|
|
56,078
|
|
||||||
Foreign Currency Translation Adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
424
|
|
424
|
|
||||||
Balance, March 31, 2019
|
(23,075
|
)
|
|
$
|
(563,583
|
)
|
|
$
|
45,376
|
|
|
$
|
270,727
|
|
|
$
|
2,061,651
|
|
|
$
|
(663
|
)
|
$
|
1,813,508
|
|
Cash Dividends, $0.035 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,386
|
)
|
|
—
|
|
(2,386
|
)
|
||||||
Stock-Based Compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
6,522
|
|
|
—
|
|
|
—
|
|
6,522
|
|
||||||
Reissued Shares
|
113
|
|
|
2,776
|
|
|
—
|
|
|
284
|
|
|
—
|
|
|
—
|
|
3,060
|
|
||||||
Repurchased Shares
|
(243
|
)
|
|
(14,414
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(14,414
|
)
|
||||||
Net Earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,650
|
|
|
—
|
|
42,650
|
|
||||||
Foreign Currency Translation Adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
618
|
|
618
|
|
||||||
Balance, June 30, 2019
|
(23,205
|
)
|
|
$
|
(575,221
|
)
|
|
$
|
45,376
|
|
|
$
|
277,533
|
|
|
$
|
2,101,915
|
|
|
$
|
(45
|
)
|
$
|
1,849,558
|
|
|
Treasury Stock
|
|
Common Stock
|
|
Additional
Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
Total Shareholders’ Equity
|
|||||||||||||||
(In Thousands, Except Per Share)
|
Shares
|
|
Amount
|
|
|
|
|
||||||||||||||||||
Balance, December 31, 2017
|
(20,733
|
)
|
|
$
|
(407,713
|
)
|
|
$
|
45,376
|
|
|
$
|
270,043
|
|
|
$
|
1,819,524
|
|
|
$
|
774
|
|
$
|
1,728,004
|
|
Opening Balance Sheet Adjustment - ASC 606, net of taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,729
|
)
|
|
—
|
|
(1,729
|
)
|
||||||
Cash Dividends, $0.03 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,146
|
)
|
|
—
|
|
(2,146
|
)
|
||||||
Stock-Based Compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
7,862
|
|
|
—
|
|
|
—
|
|
7,862
|
|
||||||
Reissued Shares
|
545
|
|
|
3,441
|
|
|
—
|
|
|
(12,602
|
)
|
|
—
|
|
|
—
|
|
(9,161
|
)
|
||||||
Repurchased Shares
|
(391
|
)
|
|
(18,407
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(18,407
|
)
|
||||||
Net Earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,246
|
|
|
—
|
|
52,246
|
|
||||||
Foreign Currency Translation Adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(477
|
)
|
(477
|
)
|
||||||
Balance, March 31, 2018
|
(20,579
|
)
|
|
$
|
(422,679
|
)
|
|
$
|
45,376
|
|
|
$
|
265,303
|
|
|
$
|
1,867,895
|
|
|
$
|
297
|
|
$
|
1,756,192
|
|
Cash Dividends, $0.03 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,087
|
)
|
|
—
|
|
(2,087
|
)
|
||||||
Stock-Based Compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
6,380
|
|
|
—
|
|
|
—
|
|
6,380
|
|
||||||
Reissued Shares
|
220
|
|
|
1,795
|
|
|
—
|
|
|
(5,408
|
)
|
|
—
|
|
|
—
|
|
(3,613
|
)
|
||||||
Repurchased Shares
|
(1,234
|
)
|
|
(50,025
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(50,025
|
)
|
||||||
Net Earnings
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,501
|
|
|
—
|
|
38,501
|
|
||||||
Foreign Currency Translation Adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
(535
|
)
|
||||||
Balance, June 30, 2018
|
(21,593
|
)
|
|
$
|
(470,909
|
)
|
|
$
|
45,376
|
|
|
$
|
266,275
|
|
|
$
|
1,904,309
|
|
|
$
|
(238
|
)
|
$
|
1,744,813
|
|
(In Thousands)
|
Amounts Recognized as of Acquisition Dates (as of March 31, 2019)
1
|
Acquisition Accounting Adjustments
|
Amounts Recognized as of Acquisition Dates (as of June 30, 2019)
|
||||||
Purchase Price
|
$
|
189,826
|
|
$
|
341
|
|
$
|
190,167
|
|
Add: Settlement of Pre-existing Relationship
|
5,405
|
|
—
|
|
5,405
|
|
|||
Less: Working Capital Adjustments
|
155
|
|
—
|
|
155
|
|
|||
Aggregate Consideration Transferred
|
195,386
|
|
341
|
|
195,727
|
|
|||
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed
|
|
|
|
||||||
Cash and Cash Equivalents
|
50
|
|
—
|
|
50
|
|
|||
Lease Merchandise
|
59,616
|
|
—
|
|
59,616
|
|
|||
Property, Plant and Equipment
|
5,568
|
|
—
|
|
5,568
|
|
|||
Operating Lease Right-of-Use Assets
|
—
|
|
—
|
|
—
|
|
|||
Other Intangibles
2
|
24,498
|
|
—
|
|
24,498
|
|
|||
Prepaid Expenses and Other Assets
|
1,206
|
|
—
|
|
1,206
|
|
|||
Total Identifiable Assets Acquired
|
90,938
|
|
—
|
|
90,938
|
|
|||
Accounts Payable and Accrued Expenses
|
(910
|
)
|
(67
|
)
|
(977
|
)
|
|||
Customer Deposits and Advance Payments
|
(5,156
|
)
|
—
|
|
(5,156
|
)
|
|||
Total Liabilities Assumed
|
(6,066
|
)
|
(67
|
)
|
(6,133
|
)
|
|||
Goodwill
3
|
110,514
|
|
408
|
|
110,922
|
|
|||
Net Assets Acquired
|
$
|
84,872
|
|
$
|
(67
|
)
|
$
|
84,805
|
|
|
Fair Value
(In Thousands)
|
|
Weighted Average Life
(In Years)
|
||
Non-compete Agreements
|
$
|
1,872
|
|
|
3.0
|
Customer Lease Contracts
|
7,876
|
|
|
1.0
|
|
Customer Relationships
|
10,087
|
|
|
3.0
|
|
Reacquired Franchise Rights
|
4,663
|
|
|
3.9
|
|
Total Acquired Intangible Assets
1
|
$
|
24,498
|
|
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Deferred Compensation Liability
|
$
|
—
|
|
|
$
|
(11,295
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(10,389
|
)
|
|
$
|
—
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets Held for Sale
|
$
|
—
|
|
|
$
|
8,992
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,589
|
|
|
$
|
—
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Fixed-Rate Long-Term Debt
1
|
—
|
|
|
(124,590
|
)
|
|
—
|
|
|
—
|
|
|
(183,765
|
)
|
|
—
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Credit Card Loans
1
|
$
|
86,763
|
|
|
$
|
90,406
|
|
Acquired Loans
2
|
2,158
|
|
|
5,688
|
|
||
Loans Receivable, Gross
|
88,921
|
|
|
96,094
|
|
||
|
|
|
|
||||
Allowance for Loan Losses
|
(12,783
|
)
|
|
(12,970
|
)
|
||
Unamortized Fees
|
(6,164
|
)
|
|
(6,971
|
)
|
||
Loans Receivable, Net of Allowances and Unamortized Fees
|
$
|
69,974
|
|
|
$
|
76,153
|
|
|
Three Months Ended June 30,
|
||||||
(In Thousands)
|
2019
|
|
2018
|
||||
Beginning Balance
|
$
|
12,363
|
|
|
$
|
10,699
|
|
Provision for Loan Losses
|
4,968
|
|
|
5,048
|
|
||
Charge-offs
|
(5,158
|
)
|
|
(4,592
|
)
|
||
Recoveries
|
610
|
|
|
431
|
|
||
Ending Balance
|
$
|
12,783
|
|
|
$
|
11,586
|
|
|
Six Months Ended June 30,
|
||||||
(In Thousands)
|
2019
|
|
2018
|
||||
Beginning Balance
|
$
|
12,970
|
|
|
$
|
11,454
|
|
Provision for Loan Losses
|
9,223
|
|
|
9,540
|
|
||
Charge-offs
|
(10,642
|
)
|
|
(10,210
|
)
|
||
Recoveries
|
1,232
|
|
|
802
|
|
||
Ending Balance
|
$
|
12,783
|
|
|
$
|
11,586
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(In Thousands)
|
June 30, 2019
|
|
June 30, 2019
|
||||
Finance Lease Cost:
|
|
|
|
||||
Amortization of Right-of-Use Assets
|
$
|
440
|
|
|
$
|
906
|
|
Interest on Lease Liabilities
|
100
|
|
|
213
|
|
||
Total Finance Lease Cost:
|
540
|
|
|
1,119
|
|
||
|
|
|
|
||||
Operating Lease Cost:
|
|
|
|
||||
Operating Lease Cost Classified within Operating Expenses
1
|
27,929
|
|
|
57,142
|
|
||
Operating Lease Cost Classified within Restructuring Expenses, Net
|
837
|
|
|
1,640
|
|
||
Sublease Receipts
|
(1,039
|
)
|
|
(1,771
|
)
|
||
Total Operating Lease Cost:
|
27,727
|
|
|
57,011
|
|
||
|
|
|
|
||||
Total Lease Cost
|
$
|
28,267
|
|
|
$
|
58,130
|
|
|
Six Months Ended
|
||
(In Thousands)
|
June 30, 2019
|
||
Cash Paid for Amounts Included in Measurement of Lease Liabilities:
|
|
||
Operating Cash Flows for Finance Leases
|
$
|
261
|
|
Operating Cash Flows for Operating Leases
|
62,541
|
|
|
Financing Cash Flows for Finance Leases
|
1,202
|
|
|
Total Cash Paid for Amounts Included in Measurement of Lease Liabilities
|
64,004
|
|
|
Right-of-Use Assets Obtained in Exchange for New Finance Lease Liabilities
|
—
|
|
|
Right-of-Use Assets Obtained in Exchange for New Operating Lease Liabilities, Net of Exercised Early Lease Termination Options
|
$
|
14,891
|
|
(In Thousands)
|
|
Balance Sheet Classification
|
|
June 30, 2019
|
||
Assets
|
|
|
|
|
||
Operating Lease Assets
|
|
Operating Lease Right-of-Use Assets
|
|
$
|
338,805
|
|
Finance Lease Assets
|
|
Property, Plant and Equipment, Net
|
|
2,116
|
|
|
Total Lease Assets
|
|
|
|
$
|
340,921
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Operating Lease Liabilities
|
|
Operating Lease Liabilities
|
|
$
|
386,989
|
|
Finance Lease Liabilities
|
|
Debt
|
|
3,962
|
|
|
Total Lease Liabilities
|
|
|
|
$
|
390,951
|
|
|
Weighted Average Discount Rate
1
|
|
Weighted Average Remaining Lease Term (in years)
|
|
Finance Leases
|
5.9
|
%
|
|
1.5
|
Operating Leases
|
3.6
|
%
|
|
5.1
|
(In Thousands)
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
2019
|
$
|
55,063
|
|
|
$
|
1,327
|
|
|
$
|
56,390
|
|
2020
|
105,901
|
|
|
2,084
|
|
|
107,985
|
|
|||
2021
|
83,319
|
|
|
853
|
|
|
84,172
|
|
|||
2022
|
62,929
|
|
|
87
|
|
|
63,016
|
|
|||
2023
|
42,406
|
|
|
—
|
|
|
42,406
|
|
|||
Thereafter
|
76,525
|
|
|
—
|
|
|
76,525
|
|
|||
Total Undiscounted Cash Flows
|
426,143
|
|
|
4,351
|
|
|
430,494
|
|
|||
Less: Interest
|
39,154
|
|
|
389
|
|
|
39,543
|
|
|||
Present Value of Lease Liabilities
|
$
|
386,989
|
|
|
$
|
3,962
|
|
|
$
|
390,951
|
|
|
Three Months Ended June 30, 2019
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
516,333
|
|
$
|
391,232
|
|
$
|
—
|
|
$
|
907,565
|
|
Retail Sales
2
|
—
|
|
8,898
|
|
—
|
|
8,898
|
|
||||
Non-Retail Sales
2
|
—
|
|
34,124
|
|
—
|
|
34,124
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
8,605
|
|
—
|
|
8,605
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
8,610
|
|
8,610
|
|
||||
Other
|
—
|
|
339
|
|
—
|
|
339
|
|
||||
Total
|
$
|
516,333
|
|
$
|
443,198
|
|
$
|
8,610
|
|
$
|
968,141
|
|
2
|
Revenue within the scope of ASC 606,
Revenue from Contracts with Customers
. Of the Franchise Royalties and Fees,
$6.3 million
is related to franchise royalty income that is recognized as the franchisee collects cash revenue from its customers. The remaining revenue is primarily related to fees collected for pre-opening services, which are being deferred and recognized as revenue over the agreement term, and advertising fees charged to franchisees. Retail sales are recognized as revenue at the point of sale. Non-retail sales are recognized as revenue upon delivery of the merchandise.
|
|
Three Months Ended June 30, 2018
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
483,666
|
|
$
|
362,272
|
|
$
|
—
|
|
$
|
845,938
|
|
Retail Sales
2
|
—
|
|
6,592
|
|
—
|
|
6,592
|
|
||||
Non-Retail Sales
2
|
—
|
|
53,661
|
|
—
|
|
53,661
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
12,125
|
|
—
|
|
12,125
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
9,208
|
|
9,208
|
|
||||
Other
|
—
|
|
335
|
|
—
|
|
335
|
|
||||
Total
|
$
|
483,666
|
|
$
|
434,985
|
|
$
|
9,208
|
|
$
|
927,859
|
|
|
Six Months Ended June 30, 2019
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
1,039,734
|
|
$
|
811,988
|
|
$
|
—
|
|
$
|
1,851,722
|
|
Retail Sales
2
|
—
|
|
21,707
|
|
—
|
|
21,707
|
|
||||
Non-Retail Sales
2
|
—
|
|
71,105
|
|
—
|
|
71,105
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
17,812
|
|
—
|
|
17,812
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
17,256
|
|
17,256
|
|
||||
Other
|
—
|
|
642
|
|
—
|
|
642
|
|
||||
Total
|
$
|
1,039,734
|
|
$
|
923,254
|
|
$
|
17,256
|
|
$
|
1,980,244
|
|
2
|
Revenue within the scope of ASC 606,
Revenue from Contracts with Customers
. Of the Franchise Royalties and Fees,
$13.4 million
is related to franchise royalty income that is recognized as the franchisee collects cash revenue from its customers. The remaining revenue is primarily related to fees collected for pre-opening services, which are being deferred and recognized as revenue over the agreement term, and advertising fees charged to franchisees. Retail sales are recognized as revenue at the point of sale. Non-retail sales are recognized as revenue upon delivery of the merchandise.
|
|
Six Months Ended June 30, 2018
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
970,183
|
|
$
|
745,822
|
|
$
|
—
|
|
$
|
1,716,005
|
|
Retail Sales
2
|
—
|
|
15,108
|
|
—
|
|
15,108
|
|
||||
Non-Retail Sales
2
|
—
|
|
106,891
|
|
—
|
|
106,891
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
24,987
|
|
—
|
|
24,987
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
18,750
|
|
18,750
|
|
||||
Other
|
—
|
|
927
|
|
—
|
|
927
|
|
||||
Total
|
$
|
970,183
|
|
$
|
893,735
|
|
$
|
18,750
|
|
$
|
1,882,668
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Earnings (Loss) Before Income Taxes:
|
|
|
|
|
|
|
|
||||||||
Progressive Leasing
|
$
|
58,406
|
|
|
$
|
44,575
|
|
|
$
|
113,794
|
|
|
$
|
79,554
|
|
Aaron's Business
1
|
138
|
|
|
7,697
|
|
|
17,726
|
|
|
40,776
|
|
||||
DAMI
|
(1,725
|
)
|
|
(2,292
|
)
|
|
(4,393
|
)
|
|
(3,598
|
)
|
||||
Total Earnings Before Income Taxes
|
$
|
56,819
|
|
|
$
|
49,980
|
|
|
$
|
127,127
|
|
|
$
|
116,732
|
|
(In Thousands)
|
June 30, 2019
|
|
December 31, 2018
|
||||
Assets:
|
|
|
|
||||
Progressive Leasing
|
$
|
1,128,719
|
|
|
$
|
1,088,227
|
|
Aaron's Business
1
|
1,727,615
|
|
|
1,483,102
|
|
||
DAMI
|
86,753
|
|
|
95,341
|
|
||
Other
2
|
237,111
|
|
|
160,022
|
|
||
Total Assets
|
$
|
3,180,198
|
|
|
$
|
2,826,692
|
|
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||
(In Thousands)
|
2019
|
|
2018
|
2019
|
|
2018
|
||||||||
Right-of-Use Asset Impairment and Operating Lease Charges
|
$
|
15,266
|
|
|
$
|
207
|
|
$
|
24,788
|
|
|
$
|
926
|
|
Fixed Asset Impairment
|
1,072
|
|
|
—
|
|
2,569
|
|
|
—
|
|
||||
Severance
|
1,856
|
|
|
87
|
|
2,992
|
|
|
601
|
|
||||
Other Expenses (Reversals)
|
544
|
|
|
(1,176
|
)
|
1,670
|
|
|
(1,176
|
)
|
||||
Gain on Sale of Closed Store Properties
|
—
|
|
|
—
|
|
—
|
|
|
(327
|
)
|
||||
Total Restructuring Expenses (Reversals), Net
|
$
|
18,738
|
|
|
$
|
(882
|
)
|
$
|
32,019
|
|
|
$
|
24
|
|
(In Thousands)
|
Contractual Lease Obligations
|
|
Severance
|
||||
Balance at January 1, 2019
|
$
|
8,472
|
|
|
$
|
651
|
|
ASC 842 Transition Adjustment
1
|
(8,472
|
)
|
|
—
|
|
||
Adjusted Balance at January 1, 2019
|
—
|
|
|
651
|
|
||
Restructuring Charges
|
—
|
|
|
2,992
|
|
||
Payments
|
—
|
|
|
(2,427
|
)
|
||
Balance at June 30, 2019
|
$
|
—
|
|
|
$
|
1,216
|
|
•
|
Strengthen relationships of Progressive Leasing current retail partners;
|
•
|
Focus on converting existing pipeline into Progressive Leasing retail partners;
|
•
|
Drive operational excellence in our Aaron's Business stores;
|
•
|
Grow revenue and new customers through our omnichannel platform;
|
•
|
Invest and innovate to provide a superior customer experience while lowering our costs to serve; and
|
•
|
Accelerate our vision of business transformation in the Aaron's Business at a larger scale.
|
•
|
The Company reported revenues of
$968.1 million
in the
second
quarter of
2019
compared to
$927.9 million
for the
second
quarter of
2018
. Earnings before income taxes
increased
to
$56.8 million
compared to
$50.0 million
during the
second
quarter of
2018
.
|
•
|
Progressive Leasing reported revenues of
$516.3 million
in the
second
quarter of
2019
, an
increase
of
6.8%
over the
second
quarter of
2018
. Calculated on a basis consistent with the January 2019 adoption of ASC 842,
Leases
(see the "Use of Non-GAAP Financial Information" section below), Progressive Leasing revenues increased
19.1%
over the
second
quarter of
2018
. Progressive Leasing's revenue growth is due to a
20.4%
increase
in total invoice volume, which was generated through an increase in invoice volume per active door.
|
•
|
Progressive Leasing's earnings before income taxes
increased
to
$58.4 million
compared to
$44.6 million
during the
second
quarter of
2018
, due mainly to its higher revenue.
|
•
|
Aaron's Business revenues
increased
to
$443.2 million
for t
he
second
quarter of
2019
, compared to
$435.0 million
in the prior year period. Aaron's Business lease revenues and fees
increased
due to the acquisitions of various franchisees
|
•
|
Aaron's Business earnings before income taxes
decreased
to
$0.1 million
during the
second
quarter of
2019
compared to
$7.7 million
in the prior year period. Earnings before income taxes for the Aaron's Business during the
second
quarter of
2019
includes restructuring charges of
$18.7 million
related to the Company's closure and consolidation of underperforming stores partially offset by gains on insurance recoveries from Hurricanes Harvey and Irma of
$3.6 million
. Earnings before income taxes during the second quarter of 2018 included a
$20.1 million
impairment of the PerfectHome investment and the net reversal of restructuring charges of
$0.9 million
.
|
•
|
The Company generated cash from operating activities of
$244.6 million
for the
six months ended June 30, 2019
compared to
$266.8 million
for the comparable period in
2018
. The
decrease
in net cash from operating activities was impacted by net income tax refunds of
$11.1 million
during the
six months ended June 30, 2019
, compared to net income tax refunds of
$68.2 million
in the same period in
2018
.
|
For the Three Months Ended June 30 (Unaudited and In Thousands)
|
2019
|
|
2018
|
||||
Progressive Leasing Invoice Volume
|
$
|
403,410
|
|
|
$
|
335,088
|
|
Active Doors at June 30 (Unaudited)
|
2019
|
|
2018
|
||
Progressive Leasing Active Doors
|
19,808
|
|
|
20,309
|
|
|
Three Months Ended June 30, 2019
|
|||||||||||
(In Thousands)
|
Progressive Leasing
1
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
|
$
|
516,333
|
|
$
|
391,232
|
|
$
|
—
|
|
$
|
907,565
|
|
Retail Sales
|
—
|
|
8,898
|
|
—
|
|
8,898
|
|
||||
Non-Retail Sales
|
—
|
|
34,124
|
|
—
|
|
34,124
|
|
||||
Franchise Royalties and Fees
|
—
|
|
8,605
|
|
—
|
|
8,605
|
|
||||
Interest and Fees on Loans Receivable
|
—
|
|
—
|
|
8,610
|
|
8,610
|
|
||||
Other
|
—
|
|
339
|
|
—
|
|
339
|
|
||||
Total Revenues
|
$
|
516,333
|
|
$
|
443,198
|
|
$
|
8,610
|
|
$
|
968,141
|
|
|
Three Months Ended June 30, 2018
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
|
$
|
483,666
|
|
$
|
362,272
|
|
$
|
—
|
|
$
|
845,938
|
|
Retail Sales
|
—
|
|
6,592
|
|
—
|
|
6,592
|
|
||||
Non-Retail Sales
|
—
|
|
53,661
|
|
—
|
|
53,661
|
|
||||
Franchise Royalties and Fees
|
—
|
|
12,125
|
|
—
|
|
12,125
|
|
||||
Interest and Fees on Loans Receivable
|
—
|
|
—
|
|
9,208
|
|
9,208
|
|
||||
Other
|
—
|
|
335
|
|
—
|
|
335
|
|
||||
Total Revenues
|
$
|
483,666
|
|
$
|
434,985
|
|
$
|
9,208
|
|
$
|
927,859
|
|
Progressive Bad Debt Expense
|
50,036
|
|
—
|
|
—
|
|
50,036
|
|
||||
Total Revenues, net of Progressive Bad Debt Expense
1
|
$
|
433,630
|
|
$
|
434,985
|
|
$
|
9,208
|
|
$
|
877,823
|
|
|
Three Months Ended
June 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
Personnel Costs
|
$
|
176,213
|
|
|
$
|
163,402
|
|
|
$
|
12,811
|
|
|
7.8
|
%
|
Occupancy Costs
|
57,441
|
|
|
53,703
|
|
|
3,738
|
|
|
7.0
|
|
|||
Provision for Lease Merchandise Write-Offs
|
60,999
|
|
|
46,950
|
|
|
14,049
|
|
|
29.9
|
|
|||
Bad Debt Expense
|
41
|
|
|
50,109
|
|
|
(50,068
|
)
|
|
(99.9
|
)
|
|||
Shipping and Handling
|
19,341
|
|
|
18,659
|
|
|
682
|
|
|
3.7
|
|
|||
Advertising
|
16,594
|
|
|
5,984
|
|
|
10,610
|
|
|
177.3
|
|
|||
Provision for Loan Losses
|
4,968
|
|
|
5,048
|
|
|
(80
|
)
|
|
(1.6
|
)
|
|||
Intangible Amortization
|
9,862
|
|
|
7,619
|
|
|
2,243
|
|
|
29.4
|
|
|||
Other Operating Expenses
|
38,117
|
|
|
36,863
|
|
|
1,254
|
|
|
3.4
|
|
|||
Operating Expenses
|
$
|
383,576
|
|
|
$
|
388,337
|
|
|
$
|
(4,761
|
)
|
|
(1.2
|
)%
|
|
Three Months Ended
June 30, |
|
Change
|
||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
$
|
|
%
|
||||||
Losses on sales of stores and customer agreements
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
(26
|
)
|
|
nmf
|
Net gains on sales of delivery vehicles
|
(222
|
)
|
|
(311
|
)
|
|
89
|
|
|
28.6
|
|||
Gain on insurance recoveries
|
(3,635
|
)
|
|
—
|
|
|
(3,635
|
)
|
|
nmf
|
|||
Impairment charges and net losses on asset dispositions, assets held for sale and other
|
371
|
|
|
120
|
|
|
251
|
|
|
209.2
|
|||
Other operating income, net
|
$
|
(3,486
|
)
|
|
$
|
(165
|
)
|
|
$
|
(3,321
|
)
|
|
nmf
|
|
Three Months Ended
June 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
EARNINGS (LOSS) BEFORE INCOME TAXES:
|
|
|
|
|
|
|
|
|||||||
Progressive Leasing
|
$
|
58,406
|
|
|
$
|
44,575
|
|
|
$
|
13,831
|
|
|
31.0
|
%
|
Aaron's Business
|
138
|
|
|
7,697
|
|
|
(7,559
|
)
|
|
(98.2
|
)
|
|||
DAMI
|
(1,725
|
)
|
|
(2,292
|
)
|
|
567
|
|
|
24.7
|
|
|||
Total Earnings Before Income Taxes
|
$
|
56,819
|
|
|
$
|
49,980
|
|
|
$
|
6,839
|
|
|
13.7
|
%
|
|
Six Months Ended
June 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
$
|
|
%
|
|||||||
REVENUES:
|
|
|
|
|
|
|
|
|||||||
Progressive Leasing
|
$
|
1,039,734
|
|
|
$
|
970,183
|
|
|
$
|
69,551
|
|
|
7.2
|
%
|
Aaron's Business
|
923,254
|
|
|
893,735
|
|
|
29,519
|
|
|
3.3
|
|
|||
DAMI
|
17,256
|
|
|
18,750
|
|
|
(1,494
|
)
|
|
(8.0
|
)
|
|||
Total Revenues from External Customers
|
$
|
1,980,244
|
|
|
$
|
1,882,668
|
|
|
$
|
97,576
|
|
|
5.2
|
%
|
|
Six Months Ended June 30, 2019
|
|||||||||||
(In Thousands)
|
Progressive Leasing
1
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
|
$
|
1,039,734
|
|
$
|
811,988
|
|
$
|
—
|
|
$
|
1,851,722
|
|
Retail Sales
|
—
|
|
21,707
|
|
—
|
|
21,707
|
|
||||
Non-Retail Sales
|
—
|
|
71,105
|
|
—
|
|
71,105
|
|
||||
Franchise Royalties and Fees
|
—
|
|
17,812
|
|
—
|
|
17,812
|
|
||||
Interest and Fees on Loans Receivable
|
—
|
|
—
|
|
17,256
|
|
17,256
|
|
||||
Other
|
—
|
|
642
|
|
—
|
|
642
|
|
||||
Total Revenues
|
$
|
1,039,734
|
|
$
|
923,254
|
|
$
|
17,256
|
|
$
|
1,980,244
|
|
|
Six Months Ended June 30, 2018
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
|
$
|
970,183
|
|
$
|
745,822
|
|
$
|
—
|
|
$
|
1,716,005
|
|
Retail Sales
|
—
|
|
15,108
|
|
—
|
|
15,108
|
|
||||
Non-Retail Sales
|
—
|
|
106,891
|
|
—
|
|
106,891
|
|
||||
Franchise Royalties and Fees
|
—
|
|
24,987
|
|
—
|
|
24,987
|
|
||||
Interest and Fees on Loans Receivable
|
—
|
|
—
|
|
18,750
|
|
18,750
|
|
||||
Other
|
—
|
|
927
|
|
—
|
|
927
|
|
||||
Total Revenues
|
$
|
970,183
|
|
$
|
893,735
|
|
$
|
18,750
|
|
$
|
1,882,668
|
|
Progressive Bad Debt Expense
|
96,561
|
|
—
|
|
—
|
|
96,561
|
|
||||
Total Revenues, net of Progressive Bad Debt Expense
1
|
$
|
873,622
|
|
$
|
893,735
|
|
$
|
18,750
|
|
$
|
1,786,107
|
|
|
Six Months Ended
June 30, |
|
Change
|
||||||||||
(In Thousands)
|
2019
|
|
2018
|
|
$
|
|
%
|
||||||
Losses (gains) on sales of stores and customer agreements
|
$
|
4
|
|
|
$
|
(46
|
)
|
|
$
|
50
|
|
|
nmf
|
Net gains on sales of delivery vehicles
|
(330
|
)
|
|
(445
|
)
|
|
115
|
|
|
25.8
|
|||
Gain on insurance recoveries
|
(4,527
|
)
|
|
—
|
|
|
(4,527
|
)
|
|
nmf
|
|||
Impairment charges and net losses on asset dispositions, assets held for sale and other
|
470
|
|
|
243
|
|
|
227
|
|
|
93.4
|
|||
Other operating income, net
|
$
|
(4,383
|
)
|
|
$
|
(248
|
)
|
|
$
|
(4,135
|
)
|
|
nmf
|
•
|
Cash and cash equivalents
increased
$85.0 million
to
$100.2 million
at
June 30, 2019
. For additional information, refer to the "Liquidity and Capital Resources" section below.
|
•
|
As a result of the adoption of ASC 842 adopted January 1, 2019, the Company has operating lease right-of-use assets and operating lease liabilities of
$338.8 million
and
$387.0 million
, respectively, as of
June 30, 2019
.
|
•
|
Income tax receivable
decreased
$17.2 million
due primarily to net income tax refunds of
$11.1 million
received during the
six months
ended
June 30, 2019
.
|
•
|
Accounts payable and accrued expenses
decreased
$66.2 million
primarily due to the seasonality of the Company's lease merchandise purchases and timing of related payments. Additionally, upon transition to ASC 842, the remaining balances of the Company's deferred rent, lease incentives, and closed store reserve, which were previously recorded within accounts payable and accrued expenses, were reclassified as a reduction to the operating lease right-of-use asset in the accompanying condensed consolidated balance sheet.
|
•
|
Debt
decreased
$77.0 million
due primarily to scheduled repayments on the Company's senior unsecured notes.
|
•
|
cash flows from operations;
|
•
|
private debt offerings;
|
•
|
bank debt; and
|
•
|
stock offerings.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
1
|
|||||
April 1, 2019 through April 30, 2019
|
—
|
|
—
|
|
—
|
|
$
|
331,265,263
|
|
May 1, 2019 through May 31, 2019
|
—
|
|
—
|
|
—
|
|
331,265,263
|
|
|
June 1, 2019 through June 30, 2019
|
242,860
|
|
59.35
|
|
242,860
|
|
316,851,183
|
|
|
Total
|
242,860
|
|
|
|
242,860
|
|
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
EXHIBIT
NO.
|
|
DESCRIPTION OF EXHIBIT
|
|
|
|
|
|
|
10.1*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1*
|
|
|
|
|
|
32.2*
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
AARON’S, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
July 25, 2019
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Steven A. Michaels
|
|
|
|
Chief Financial Officer,
|
|
|
|
President Strategic Operations
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
July 25, 2019
|
By:
|
/s/ Robert P. Sinclair, Jr.
|
|
|
|
Robert P. Sinclair, Jr.
|
|
|
|
Vice President,
|
|
|
|
Corporate Controller
|
|
|
|
(Principal Accounting Officer)
|
1 Year Aarons Chart |
1 Month Aarons Chart |
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