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Share Name | Share Symbol | Market | Type |
---|---|---|---|
PROG Holdings Inc | NYSE:PRG | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.68 | -1.87% | 35.65 | 35.87 | 35.34 | 35.50 | 212,926 | 23:26:39 |
PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, Four Technologies, and Build today announced financial results for the second quarter ended June 30, 2023.
"Our second quarter results exceeded our expectations, driven by strong portfolio performance and disciplined SG&A management," said Steve Michaels, PROG Holdings' President and CEO. "The stability of our lease portfolio and continuing favorable trends, despite soft consumer demand in key leasable categories, gives us the confidence to increase our full-year 2023 outlook. Furthermore, the results we have achieved year-to-date and the results we expect in the remainder of the year incorporate meaningful investments in various initiatives which we believe support our strategic long-term growth plans," concluded Michaels.
Consolidated revenues for the second quarter of 2023 were $592.8 million, a decrease of 8.7% from the same period in 2022, caused primarily by the headwinds from Progressive Leasing’s Q2 2022 decisioning tightening, slow customer demand for leasable goods, and continued year-over-year declines in the number of customers choosing to utilize early lease buyout options. This decline in revenues was partially offset by continued strong Progressive Leasing customer payment behavior during the quarter.
Consolidated net earnings for the quarter were $37.2 million, compared with $19.5 million in the prior year period. Adjusted EBITDA for the quarter increased 44% to $75.0 million, or 13% of revenues, compared with $52.2 million, or 8% of revenues for the same period in 2022. The year-over-year growth in Adjusted EBITDA was driven primarily by historically low 90-day buyout activity for the period, strong customer payment behavior due to prior lease decisioning tightening, and continued benefits from previous cost-cutting measures.
Diluted earnings per share for the second quarter of 2023 were $0.79, compared with $0.37 in the year ago period. On a non-GAAP basis, diluted earnings per share were $0.92 in the second quarter of 2023, compared with $0.52 for the same period in 2022. The Company's weighted average shares outstanding assuming dilution in the second quarter was 11.5% lower year-over-year.
Progressive Leasing Results
Progressive Leasing's second quarter GMV decreased 14.7% to $421.2 million compared with the same period in 2022, primarily due to the Company's tighter decisioning posture this year compared with last year, and continued weakness in demand for consumer durable goods. The provision for lease merchandise write-offs declined to 7.1% of lease revenues in the second quarter of 2023, due to continued portfolio management and strong customer payment behavior. Delinquencies improved year-over-year as a result of the Company's previous decisioning tightening. Gross margins also benefited from fewer customers choosing to utilize 90-day buyout options compared to the previous year's quarter.
Liquidity and Capital Allocation
PROG Holdings ended the second quarter of 2023 with cash of $252.8 million and gross debt of $600 million. The Company repurchased $35.4 million of its stock in the quarter at an average price of $32.65 per share and has $265.4 million remaining under its previously announced $1 billion share purchase program.
2023 Outlook
The Company is revising upwards its full year earnings and revenue outlook and providing a Q3 2023 outlook for revenues, net earnings, adjusted EBITDA, GAAP diluted EPS, and non-GAAP diluted EPS. The primary factors driving the increase in PROG Holdings' annual earnings outlook are the strength of the Company's earnings in the first half of 2023 and the expectation that improved gross margins from strong portfolio management will continue. This outlook assumes a difficult operating environment with continued soft demand for consumer durable goods, no material changes in the Company's decisioning posture or portfolio performance, and no impact from additional share purchases.
Revised Outlook
Previously Revised Outlook
(In thousands, except per share amounts)
Low
High
Low
High
PROG Holdings - Total Revenues
$
2,360,000
$
2,390,000
$
2,300,000
$
2,375,000
PROG Holdings - Net Earnings
125,500
133,000
99,500
112,500
PROG Holdings - Adjusted EBITDA
270,000
280,000
235,000
255,000
PROG Holdings - Diluted EPS
2.64
2.80
2.09
2.37
PROG Holdings - Diluted Non-GAAP EPS
3.10
3.25
2.50
2.77
Progressive Leasing - Total Revenues
2,295,000
2,320,000
2,235,000
2,305,000
Progressive Leasing - Earnings Before Taxes
197,500
204,000
168,000
180,000
Progressive Leasing - Adjusted EBITDA
279,000
285,500
248,000
261,000
Vive - Total Revenues
65,000
70,000
65,000
70,000
Vive - Earnings Before Taxes
4,000
5,000
2,500
4,500
Vive - Adjusted EBITDA
7,000
8,500
5,000
8,000
Other - Loss Before Taxes
(24,000
)
(22,000
)
(26,000
)
(23,000
)
Other - Adjusted EBITDA
(16,000
)
(14,000
)
(18,000
)
(14,000
)
Three Months Ended September 30, 2023 Outlook
(In thousands, except per share amounts)
Low
High
PROG Holdings - Total Revenues
$
560,000
$
575,000
PROG Holdings - Net Earnings
21,500
25,500
PROG Holdings - Adjusted EBITDA
55,000
60,000
PROG Holdings - Diluted EPS
0.46
0.55
PROG Holdings - Diluted Non-GAAP EPS
0.58
0.67
Conference Call and Webcast
The Company has scheduled a live webcast and conference call for Wednesday, July 26th, 2023, at 8:30 A.M. ET to discuss its financial results for the second quarter of 2023. To access the live webcast, visit the Events and Presentations page of the Company’s Investor Relations website, https://investor.progholdings.com/.
About PROG Holdings, Inc.
PROG Holdings, Inc. (NYSE:PRG) is a fintech holding company headquartered in Salt Lake City, UT, that provides transparent and competitive payment options and inclusive consumer financial products. The Company owns Progressive Leasing, a leading provider of e-commerce, app-based, and in-store point-of-sale lease-to-own solutions, Vive Financial, an omnichannel provider of second-look revolving credit products, Four Technologies, provider of Buy Now, Pay Later payment options, and Build, provider of personal credit building products. More information about PROG Holdings and its companies can be found at https://investor.progholdings.com/.
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 "continuing", "expect", "believe", "outlook" and similar forward-looking terminology. These risks and uncertainties include factors such as (i) continued volatility and challenges in the macro environment and, in particular, the unfavorable effects on our business of the rapid increase in the rate of inflation currently being experienced in the economy, which has not been seen in more than forty years, significant increases in interest rates, and fears of a recession, and the impact of those headwinds on: (a) consumer confidence and customer demand for the merchandise that our POS partners sell; (b) our customers’ disposable income and their ability to make the lease and loan payments they owe the company; (c) the availability of consumer credit; (d) our labor costs; and (e) our overall financial performance and outlook; (ii) our businesses being subject to extensive laws and regulations, including laws and regulations unique to the industries in which our businesses operate, that may subject them to government investigations and significant monetary penalties and compliance-related burdens, as well as an increased focus by federal, state and local regulators on the industries within which our businesses operate, including with respect to consumer protection, customer privacy, third party and employee fraud and information security; (iii) deteriorating macroeconomic conditions resulting in the algorithms and other proprietary decisioning tools used in approving Progressive Leasing and Vive customers for leases and loans no longer being indicative of their ability to perform, which may limit the ability of those businesses to avoid lease and loan charge-offs or may result in their reserves being insufficient to cover actual losses; (iv) a large percentage of the company’s revenues being concentrated with several of Progressive Leasing’s key POS partners; (v) the risks that Progressive Leasing will be unable to attract new POS partners or retain and grow its business with its existing POS partners; (vi) Vive’s and Four’s business models differing significantly from Progressive Leasing’s, which creates specific and unique risks for the Vive and Four businesses, including Vive’s reliance on two bank partners to issue its credit products and Vive’s and Four’s exposure to the unique regulatory risks associated with the laws and regulations that apply to their businesses; (vii) the risks that interruptions, inventory shortages and other factors affecting the supply chains of our retail partners having a material and adverse effect on several aspects of our performance; (viii) the impact of the COVID-19 pandemic, including new variants, sub-variants or additional waves of COVID-19 infections, on: (a) demand for the lease-to-own products offered by our Progressive Leasing segment, (b) Progressive Leasing’s point-of-sale or "POS" partners, and Vive’s and Four’s merchant partners, (c) Progressive Leasing’s, Vive’s and Four’s customers, including their ability and willingness to satisfy their obligations under their lease agreements and loan agreements, (d) Progressive Leasing’s POS partners being able to obtain the merchandise their customers need or desire, (e) our employees and labor needs, including our ability to adequately staff our operations, (f) our financial and operational performance, and (g) our liquidity; (ix) changes in the enforcement of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our businesses; (x) the risk that our capital allocation strategy, including our current share repurchase program, will not be effective at enhancing shareholder value; (xi) our cost reduction initiatives may not be adequate or may have unintended consequences that could be disruptive to our businesses; (xii) the loss of the services of our key executives or our inability to attract and retain key talent, particularly with respect to our information technology function, may have a material adverse impact on our operations; (xiii) increased competition from traditional and virtual lease-to-own competitors and also from competitors of our Vive segment; (xiv) adverse consequences to Progressive Leasing, including additional monetary penalties and/or injunctive relief, if it fails to comply with the terms of its 2020 settlement with the FTC, as well as the possibility of other regulatory authorities and third parties bringing legal actions against Progressive Leasing based on the same allegations that led to the FTC settlement; (xv) our increased level of indebtedness; (xvi) our ability to protect confidential, proprietary, or sensitive information, including the personal and confidential information of our customers, which may be adversely affected by cyber-attacks, employee or other internal misconduct, computer viruses, electronic break-ins or "hacking", or similar disruptions, any one of which could have a material adverse impact on our results of operations, financial condition, and prospects; and (xvii) the other risks and uncertainties discussed under "Risk Factors" in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 22, 2023. Statements in this press release that are "forward-looking" include without limitation statements about: (i) the performance and stability of our lease portfolio; (ii) our ability to continue to make investments in initiatives to support our strategic long-term growth plans and the outcomes of those initiatives; and (iii) our revised full year 2023 outlook and our third-quarter 2023 outlook. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this press release.
PROG Holdings, Inc.
Consolidated Statements of Earnings
(In thousands, except per share data)
(Unaudited)
Three Months Ended
(Unaudited)
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
REVENUES:
Lease Revenues and Fees
$
574,839
$
631,344
$
1,211,921
$
1,324,258
Interest and Fees on Loans Receivable
18,007
18,100
36,065
35,650
592,846
649,444
1,247,986
1,359,908
COSTS AND EXPENSES:
Depreciation of Lease Merchandise
384,874
439,113
820,313
936,124
Provision for Lease Merchandise Write-offs
40,965
61,788
79,329
112,118
Operating Expenses
107,710
111,606
212,969
225,264
533,549
612,507
1,112,611
1,273,506
OPERATING PROFIT
59,297
36,937
135,375
86,402
Interest Expense, Net
(7,283
)
(9,608
)
(15,774
)
(19,237
)
EARNINGS BEFORE INCOME TAX EXPENSE
52,014
27,329
119,601
67,165
INCOME TAX EXPENSE
14,796
7,845
34,350
20,546
NET EARNINGS
$
37,218
$
19,484
$
85,251
$
46,619
EARNINGS PER SHARE
Basic
$
0.80
$
0.37
$
1.81
$
0.86
Assuming Dilution
$
0.79
$
0.37
$
1.79
$
0.86
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic
46,474
52,880
47,160
54,134
Assuming Dilution
46,896
52,961
47,514
54,326
PROG Holdings, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
June 30, 2023
December 31, 2022
ASSETS:
Cash and Cash Equivalents
$
252,838
$
131,880
Accounts Receivable (net of allowances of $65,544 in 2023 and $69,264 in 2022)
53,249
64,521
Lease Merchandise (net of accumulated depreciation and allowances of $455,912 in 2023 and $467,355 in 2022)
548,886
648,043
Loans Receivable (net of allowances and unamortized fees of $49,071 in 2023 and $53,635 in 2022)
122,812
130,966
Property and Equipment, Net
23,655
23,852
Operating Lease Right-of-Use Assets
10,585
11,875
Goodwill
296,061
296,061
Other Intangibles, Net
102,964
114,411
Income Tax Receivable
19,606
18,864
Deferred Income Tax Assets
2,852
2,955
Prepaid Expenses and Other Assets
49,549
48,481
Total Assets
$
1,483,057
$
1,491,909
LIABILITIES & SHAREHOLDERS’ EQUITY:
Accounts Payable and Accrued Expenses
$
130,841
$
135,025
Deferred Income Tax Liabilities
115,968
137,261
Customer Deposits and Advance Payments
32,633
37,074
Operating Lease Liabilities
18,350
21,122
Debt
591,616
590,966
Total Liabilities
889,408
921,448
SHAREHOLDERS' EQUITY:
Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at June 30, 2023 and December 31, 2022; Shares Issued: 82,078,654 at June 30, 2023 and December 31, 2022
41,039
41,039
Additional Paid-in Capital
343,016
338,814
Retained Earnings
1,239,486
1,154,235
1,623,541
1,534,088
Less: Treasury Shares at Cost
Common Stock: 36,368,322 Shares at June 30, 2023 and 34,044,102 at December 31, 2022
(1,029,892
)
(963,627
)
Total Shareholders’ Equity
593,649
570,461
Total Liabilities & Shareholders’ Equity
$
1,483,057
$
1,491,909
PROG Holdings, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2023
2022
OPERATING ACTIVITIES:
Net Earnings
$
85,251
$
46,619
Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
Depreciation of Lease Merchandise
820,313
936,124
Other Depreciation and Amortization
15,895
17,021
Provisions for Accounts Receivable and Loan Losses
161,237
201,980
Stock-Based Compensation
12,260
9,040
Deferred Income Taxes
(21,190
)
(696
)
Non-Cash Lease Expense
(1,482
)
549
Other Changes, Net
(2,506
)
(3,748
)
Changes in Operating Assets and Liabilities:
Additions to Lease Merchandise
(803,250
)
(951,751
)
Book Value of Lease Merchandise Sold or Disposed
82,096
114,427
Accounts Receivable
(132,460
)
(188,921
)
Prepaid Expenses and Other Assets
(857
)
(5,216
)
Income Tax Receivable and Payable
(44
)
(571
)
Operating Lease Right-of-Use Assets and Liabilities
—
(401
)
Accounts Payable and Accrued Expenses
(5,442
)
(9,841
)
Customer Deposits and Advance Payments
(4,441
)
(8,873
)
Cash Provided by Operating Activities
205,380
155,742
INVESTING ACTIVITIES:
Investments in Loans Receivable
(90,746
)
(92,741
)
Proceeds from Loans Receivable
84,491
76,244
Outflows on Purchases of Property and Equipment
(4,388
)
(5,494
)
Proceeds from Property and Equipment
13
17
Proceeds from Acquisitions of Businesses
—
7
Cash Used in Investing Activities
(10,630
)
(21,967
)
FINANCING ACTIVITIES:
Acquisition of Treasury Stock
(71,836
)
(176,475
)
Tender Offer Shares Repurchased and Retired
—
199
Issuance of Stock Under Stock Option Plans
606
663
Shares Withheld for Tax Payments
(2,533
)
(2,516
)
Debt Issuance Costs
(29
)
1,535
Cash Used in Financing Activities
(73,792
)
(176,594
)
Increase (Decrease) in Cash and Cash Equivalents
120,958
(42,819
)
Cash and Cash Equivalents at Beginning of Period
131,880
170,159
Cash and Cash Equivalents at End of Period
$
252,838
$
127,340
Net Cash Paid During the Period:
Interest Expense
$
18,531
$
17,085
Income Taxes
$
53,624
$
19,475
PROG Holdings, Inc.
Quarterly Revenues by Segment
(In thousands)
(Unaudited)
Three Months Ended
June 30, 2023
Progressive Leasing
Vive
Other
Consolidated Total
Lease Revenues and Fees
$
574,839
$
—
$
—
$
574,839
Interest and Fees on Loans Receivable
—
17,187
820
18,007
Total Revenues
$
574,839
$
17,187
$
820
$
592,846
(Unaudited)
Three Months Ended
June 30, 2022
Progressive Leasing
Vive
Other
Consolidated Total
Lease Revenues and Fees
$
631,344
$
—
$
—
$
631,344
Interest and Fees on Loans Receivable
—
17,518
582
18,100
Total Revenues
$
631,344
$
17,518
$
582
$
649,444
PROG Holdings, Inc.
Six Months Revenues by Segment
(In thousands)
(Unaudited)
Six Months Ended
June 30, 2023
Progressive Leasing
Vive
Other
Consolidated Total
Lease Revenues and Fees
$
1,211,921
$
—
$
—
$
1,211,921
Interest and Fees on Loans Receivable
—
34,340
1,725
36,065
Total Revenues
$
1,211,921
$
34,340
$
1,725
$
1,247,986
(Unaudited)
Six Months Ended
June 30, 2022
Progressive Leasing
Vive
Other
Consolidated Total
Lease Revenues and Fees
$
1,324,258
$
—
$
—
$
1,324,258
Interest and Fees on Loans Receivable
—
34,634
1,016
35,650
Total Revenues
$
1,324,258
$
34,634
$
1,016
$
1,359,908
PROG Holdings, Inc.
Gross Merchandise Volume by Quarter
(In thousands)
(Unaudited)
Three Months Ended June 30,
2023
2022
Progressive Leasing
$
421,220
$
494,003
Vive
39,850
47,003
Other
14,600
11,394
Total GMV
$
475,670
$
552,400
Use of Non-GAAP Financial Information:
Non-GAAP net earnings, non-GAAP diluted earnings per share, 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 the three and six months ended June 30, 2023, full year 2023 revised outlook and third quarter 2023 outlook exclude intangible amortization expense, restructuring expenses, regulatory insurance recoveries, and accrued interest on an uncertain tax position related to Progressive Leasing's $175 million settlement with the FTC in 2020. Non-GAAP net earnings and non-GAAP diluted earnings per share for the three and six months ended June 30, 2022 exclude intangible amortization expense, restructuring expenses, and accrued interest on an uncertain tax position related to Progressive Leasing's $175 million settlement with the FTC in 2020. The amount for the after-tax non-GAAP adjustment, which is tax effected using our statutory tax rate, can be found in the reconciliation of net earnings and earnings per share assuming dilution to non-GAAP net earnings and earnings per share assuming dilution table in this press release.
The Adjusted EBITDA figures presented in this press release are calculated as the Company’s earnings before interest expense, net, depreciation on property and equipment, amortization of intangible assets and income taxes. Adjusted EBITDA for the three and six months ended June 30, 2023, full year 2023 revised outlook and third quarter 2023 outlook exclude stock-based compensation expense, restructuring expenses, and regulatory insurance recoveries. Adjusted EBITDA for the three and six months ended June 30, 2022 exclude stock-based compensation expense and restructuring expenses. The amounts for these pre-tax non-GAAP adjustments can be found in the three and six months ended segment EBITDA tables in this press release.
Management believes that non-GAAP net earnings, non-GAAP diluted earnings per share, 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, non-GAAP diluted earnings, and adjusted EBITDA 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 arose from larger, one-time transactions that are not reflective of the ordinary earnings activity of our operations or transactions that have variability and volatility of the amount. We believe the exclusion of stock-based compensation expense provides for a better comparison of our operating results with our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types. This measure may be useful to an investor in evaluating the underlying operating performance of our business.
Adjusted EBITDA also provides 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 because the measures:
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 and the GAAP revenues and earnings before income taxes of the Company’s segments, which are also presented in the press release. Further, we caution investors that amounts presented in accordance with our definitions of non-GAAP net earnings, non-GAAP diluted earnings per share, and adjusted EBITDA may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate these measures in the same manner.
PROG Holdings, Inc.
Reconciliation of Net Earnings and Earnings Per Share Assuming Dilution to Non-GAAP Net Earnings and Earnings Per Share Assuming Dilution
(In thousands, except per share amounts)
(Unaudited)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Net Earnings
$
37,218
$
19,484
$
85,251
$
46,619
Add: Intangible Amortization Expense
5,723
5,723
11,447
11,447
Add: Restructuring Expense
963
4,328
1,720
4,328
Less: Tax Impact of Adjustments(1)
(1,738
)
(2,613
)
(3,287
)
(4,101
)
Add: Accrued Interest on FTC Settlement Uncertain Tax Position
970
647
1,940
1,186
Less: Regulatory Insurance Recoveries
—
—
(525
)
—
Non-GAAP Net Earnings
$
43,136
$
27,569
$
96,546
$
59,479
Earnings Per Share Assuming Dilution
$
0.79
$
0.37
$
1.79
$
0.86
Add: Intangible Amortization Expense
0.12
0.11
0.24
0.21
Add: Restructuring Expense
0.02
0.08
0.04
0.08
Less: Tax Impact of Adjustments(1)
(0.04
)
(0.05
)
(0.07
)
(0.08
)
Add: Accrued Interest on FTC Settlement Uncertain Tax Position
0.02
0.01
0.04
0.02
Less: Regulatory Insurance Recoveries
—
—
(0.01
)
—
Non-GAAP Earnings Per Share Assuming Dilution(2)
$
0.92
$
0.52
$
2.03
$
1.09
Weighted Average Shares Outstanding Assuming Dilution
46,896
52,961
47,514
54,326
(1)
Adjustments are tax-effected using an assumed statutory tax rate of 26%.
(2)
In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.
PROG Holdings, Inc.
Non-GAAP Financial Information
Quarterly Segment EBITDA
(In thousands)
(Unaudited)
Three Months Ended
June 30, 2023
Progressive Leasing
Vive
Other
Consolidated Total
Net Earnings
$
37,218
Income Tax Expense(1)
14,796
Earnings (Loss) Before Income Tax Expense
$
55,422
$
1,758
$
(5,166
)
52,014
Interest Expense, Net
7,117
166
—
7,283
Depreciation
1,795
182
216
2,193
Amortization
5,421
—
302
5,723
EBITDA
69,755
2,106
(4,648
)
67,213
Stock-Based Compensation
4,899
294
1,652
6,845
Restructuring Expense
963
—
—
963
Adjusted EBITDA
$
75,617
$
2,400
$
(2,996
)
$
75,021
(1)
Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.
(Unaudited)
Three Months Ended
June 30, 2022
Progressive Leasing
Vive
Other
Consolidated Total
Net Earnings
$
19,484
Income Tax Expense(1)
7,845
Earnings (Loss) Before Income Tax Expense
$
27,383
$
3,355
$
(3,409
)
27,329
Interest Expense, Net
9,525
83
—
9,608
Depreciation
2,524
195
97
2,816
Amortization
5,421
—
302
5,723
EBITDA
44,853
3,633
(3,010
)
45,476
Stock-Based Compensation
2,643
99
(325
)
2,417
Restructuring Expense
3,673
655
—
4,328
Adjusted EBITDA
$
51,169
$
4,387
$
(3,335
)
$
52,221
(1)
Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.
PROG Holdings, Inc.
Non-GAAP Financial Information
Six Months Segment EBITDA
(In thousands)
(Unaudited)
Six Months Ended
June 30, 2023
Progressive Leasing
Vive
Other
Consolidated Total
Net Earnings
$
85,251
Income Tax Expense(1)
34,350
Earnings (Loss) Before Income Tax Expense
$
126,473
$
3,921
$
(10,793
)
119,601
Interest Expense, Net
15,317
457
—
15,774
Depreciation
3,700
350
398
4,448
Amortization
10,842
—
605
11,447
EBITDA
156,332
4,728
(9,790
)
151,270
Stock-Based Compensation
8,452
582
3,226
12,260
Restructuring Expense
1,720
—
—
1,720
Regulatory Insurance Recoveries
(525
)
—
—
(525
)
Adjusted EBITDA
$
165,979
$
5,310
$
(6,564
)
$
164,725
(1)
Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.
(Unaudited)
Six Months Ended
June 30, 2022
Progressive Leasing
Vive
Other
Consolidated Total
Net Earnings
$
46,619
Income Tax Expense(1)
20,546
Earnings (Loss) Before Income Tax Expense
$
69,464
$
7,778
$
(10,077
)
67,165
Interest Expense, Net
19,048
189
—
19,237
Depreciation
5,053
392
129
5,574
Amortization
10,842
—
605
11,447
EBITDA
104,407
8,359
(9,343
)
103,423
Stock-Based Compensation
6,601
187
2,252
9,040
Restructuring Expense
3,673
655
—
4,328
Adjusted EBITDA
$
114,681
$
9,201
$
(7,091
)
$
116,791
(1)
Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.
PROG Holdings, Inc.
Non-GAAP Financial Information
Reconciliation of Revised Full Year 2023 Outlook for Adjusted EBITDA
(In thousands)
Fiscal Year 2023 Ranges
Progressive Leasing
Vive
Other
Consolidated Total
Estimated Net Earnings
$125,500 - $133,000
Income Tax Expense(1)
52,000 - 54,000
Projected Earnings (Loss) Before Income Tax Expense
$197,500 - $204,000
$4,000 - $5,000
$(24,000) - $(22,000)
177,500 - 187,000
Interest Expense, Net
31,500 - 30,500
1,000
—
32,500 - 31,500
Depreciation
9,000
1,000
1,000
11,000
Amortization
21,500
—
1,000
22,500
Projected EBITDA
259,500 - 265,000
6,000 - 7,000
(22,000) - (20,000)
243,500 - 252,000
Stock-Based Compensation
18,500 - 19,500
1,000 - 1,500
6,000
25,500 - 27,000
Restructuring Expense/Regulatory Insurance Recoveries
1,000
—
—
1,000
Projected Adjusted EBITDA
$279,000 - $285,500
$7,000 - $8,500
$(16,000) - $(14,000)
$270,000 - $280,000
(1)
Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.
PROG Holdings, Inc.
Non-GAAP Financial Information
Reconciliation of Previously Revised Full Year 2023 Outlook for Adjusted EBITDA
(In thousands)
Fiscal Year 2023 Ranges
Progressive Leasing
Vive
Other
Consolidated Total
Estimated Net Earnings
$99,500 - $112,500
Income Tax Expense(1)
45,000 - 49,000
Projected Earnings (Loss) Before Income Tax Expense
$168,000 - $180,000
$2,500 - $4,500
$(26,000)-$(23,000)
144,500 - 161,500
Interest Expense, Net
32,000
1,000
—
33,000
Depreciation
9,000
1,000
1,500
11,500
Amortization
21,000
—
1,500
22,500
Projected EBITDA
230,000 - 242,000
4,500 - 6,500
(23,000)-(20,000)
211,500 - 228,500
Stock-Based Compensation
18,000 - 19,000
500 - 1,500
5,000 - 6,000
23,500 - 26,500
Projected Adjusted EBITDA
$248,000 - $261,000
$5,000 - $8,000
$(18,000)-$(14,000)
$235,000 - $255,000
(1)
Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.
PROG Holdings, Inc.
Non-GAAP Financial Information
Reconciliation of the Three Months Ended September 30, 2023 Outlook for Adjusted EBITDA
(In thousands)
Three Months Ended September 30, 2023 Outlook
Consolidated Total
Estimated Net Earnings
$21,500 - $25,500
Income Tax Expense(1)
9,500 - 10,500
Projected Earnings Before Income Tax Expense
31,000 - 36,000
Interest Expense, Net
8,000 - 7,500
Depreciation
3,000
Amortization
6,000
Projected EBITDA
48,000 - 52,500
Stock-Based Compensation
7,000 - 7,500
Projected Adjusted EBITDA
$55,000 - $60,000
(1)
Taxes are calculated on a consolidated basis and are not identifiable by Company segments.
PROG Holdings, Inc.
Reconciliation of Revised Full Year 2023 Outlook for Earnings Per Share
Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution
Full Year 2023 Range
Low
High
Projected Earnings Per Share Assuming Dilution
$
2.64
$
2.80
Add: Projected Intangible Amortization Expense
0.48
0.48
Add: Projected Interest on FTC Settlement Uncertain Tax Position
0.08
0.08
Add: Restructuring Expense/Regulatory Insurance Recoveries
0.03
0.03
Subtract: Tax Effect on Non-GAAP Adjustments(1)
(0.13
)
(0.13
)
Projected Non-GAAP Earnings Per Share Assuming Dilution(2)
$
3.10
$
3.25
(1)
Adjustments are tax-effected using an assumed statutory tax rate of 26%.
(2)
In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.
PROG Holdings, Inc.
Reconciliation of Previously Revised Full Year 2023 Outlook for Earnings Per Share
Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution
Full Year 2023 Range
Low
High
Projected Earnings Per Share Assuming Dilution
$
2.09
$
2.37
Add: Projected Intangible Amortization Expense
0.47
0.47
Add: Projected Interest on FTC Settlement Uncertain Tax Position
0.06
0.06
Subtract: Tax Effect on Non-GAAP Adjustments(1)
(0.12
)
(0.12
)
Projected Non-GAAP Earnings Per Share Assuming Dilution(2)
$
2.50
$
2.77
(1)
Adjustments are tax-effected using an assumed statutory tax rate of 26%.
(2)
In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.
PROG Holdings, Inc.
Reconciliation of the Three Months Ended September 30, 2023 Outlook for Earnings Per Share
Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution
Three Months Ended September 30, 2023
Low
High
Projected Earnings Per Share Assuming Dilution
$
0.46
$
0.55
Add: Projected Intangible Amortization Expense
0.13
0.13
Add: Projected Interest on FTC Settlement Uncertain Tax Position
0.02
0.02
Subtract: Tax Effect on Non-GAAP Adjustments(1)
(0.03
)
(0.03
)
Projected Non-GAAP Earnings Per Share Assuming Dilution(2)
$
0.58
$
0.67
(1)
Adjustments are tax-effected using an assumed statutory tax rate of 26%.
(2)
In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230726663637/en/
Investor Contact John Baugh, CFA Vice President, Investor Relations john.baugh@progleasing.com
Media Contact Mark Delcorps Director, Corporate Communications media@progholdings.com
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