Rent-A-Center, Inc. Announces Selected Preliminary Third Quarter 2016 Financial Information
October 11 2016 - 6:55AM
Business Wire
Rent-A-Center, Inc. (the "Company") (NASDAQ/NGS: RCII), one of
the largest rent-to-own operators in North America, today
pre-released selected preliminary unaudited financial information
for the quarter ended September 30, 2016. The Company will release
its full third quarter 2016 financial results on October 26,
2016.
As of the date of this release, the Company has not completed
its financial statement reporting process for the quarter. During
the course of that process, the Company may identify items that
would require it to make adjustments, which may be material, to the
information presented below. As a result, the preliminary unaudited
financial information included in this release is forward-looking
information and is subject to risks and uncertainties, including
possible adjustments to the preliminary financial information.
Preliminary Unaudited Financial
Information for Third Quarter 2016
The Company estimates Core U.S. same store sales for the three
months ended September 30, 2016 to be down approximately 12%, and
Acceptance Now same store sales to be essentially flat. Core U.S.
gross profit, as a percent of total revenue, is estimated to be
flat compared to the third quarter of last year as ongoing benefits
from the changes made to the Company’s sourcing model were offset
by a third-quarter clearance event focused on previously-rented
product. Diluted earnings per share for the third quarter 2016 on
both a GAAP basis and excluding special items are expected to be
between $0.05 and $0.15.
“Following the implementation of our new point-of-sale system,
we experienced system performance issues and outages that resulted
in a larger than expected negative impact on Core sales,” said
Robert D. Davis, Chief Executive Officer of Rent-A-Center, Inc.
“While we expect it to take several quarters to fully recover from
the impact to the Core portfolio, system performance has improved
dramatically and we have started to see early indicators of
collections improvement.”
Credit Agreement
Amendment
The Company recently obtained an amendment to its credit
agreement which reduces the minimum Consolidated Fixed Charge
Coverage Ratio from 1.75 to 1.00 to 1.50 to 1.00, beginning with
the quarter ended September 30, 2016. See the Current Report on
Form 8-K filed today by the Company for additional details
regarding the amendment.
Third Quarter 2016 Earnings Release and
Conference Call Details
The Company expects to release its full third quarter 2016
financial results on Wednesday, October 26, 2016, after the market
closes. At 8:30am ET on Thursday, October 27, 2016, RCII will host
a conference call to discuss the results. A live audio of the
conference call will be available on the company’s investor
relations website at http://investor.rentacenter.com.
About Rent-A-Center,
Inc.
A rent-to-own industry leader, Plano, Texas-based,
Rent-A-Center, Inc., is focused on improving the quality of life
for its customers by providing them the opportunity to obtain
ownership of high-quality, durable products such as consumer
electronics, appliances, computers, furniture and accessories,
under flexible rental purchase agreements with no long-term
obligation. The Company owns and operates approximately 2,600
stores in the United States, Mexico, Canada and Puerto Rico, and
approximately 1,915 Acceptance Now kiosk locations in the United
States and Puerto Rico. Rent-A-Center Franchising International,
Inc., a wholly owned subsidiary of the Company, is a national
franchiser of approximately 225 rent-to-own stores operating under
the trade names of "Rent-A-Center," "ColorTyme," and "RimTyme."
Forward-Looking
Statements
This press release and the guidance above contain
forward-looking statements that involve risks and uncertainties.
Such forward-looking statements generally can be identified by the
use of forward-looking terminology such as "may," "will," "expect,"
"intend," "could," "estimate," "should," "anticipate," or
"believe," or the negative thereof or variations thereon or similar
terminology. The Company believes that the expectations reflected
in such forward-looking statements are accurate. However, there can
be no assurance that such expectations will occur. The Company's
actual future performance could differ materially from such
statements. Factors that could cause or contribute to such
differences include, but are not limited to: the general strength
of the economy and other economic conditions affecting consumer
preferences and spending; factors affecting the disposable income
available to the Company's current and potential customers; changes
in the unemployment rate; difficulties encountered in improving the
financial and operational performance of the Company's business
segments; failure to manage the Company's store labor (including
overtime pay) and other store expenses; the Company’s ability to
develop and successfully execute strategic initiatives; the
Company's ability to successfully implement its new store
information management system and a new finance/HR enterprise
system; the Company’s ability to successfully market smartphones
and related services to its customers; the Company's ability to
develop and successfully implement virtual or e-commerce
capabilities; failure to achieve the anticipated profitability
enhancements from the changes to the 90 day option pricing program
and the development of dedicated commercial sales capabilities;
disruptions in the Company's supply chain; limitations of, or
disruptions in, the Company's distribution network; rapid inflation
or deflation in the prices of the Company's products; the Company's
ability to execute and the effectiveness of a store consolidation,
including the Company's ability to retain the revenue from customer
accounts merged into another store location as a result of a store
consolidation; the Company's available cash flow; the Company's
ability to identify and successfully market products and services
that appeal to its customer demographic; consumer preferences and
perceptions of the Company's brand; uncertainties regarding the
ability to open new locations; the Company's ability to acquire
additional stores or customer accounts on favorable terms; the
Company's ability to control costs and increase profitability; the
Company's ability to retain the revenue associated with acquired
customer accounts and enhance the performance of acquired stores;
the Company's ability to enter into new and collect on its rental
or lease purchase agreements; the passage of legislation adversely
affecting the rent-to-own industry; the Company's compliance with
applicable statutes or regulations governing its transactions;
changes in interest rates; adverse changes in the economic
conditions of the industries, countries or markets that the Company
serves; information technology and data security costs; the impact
of any breaches in data security or other disturbances to the
Company's information technology and other networks and the
Company's ability to protect the integrity and security of
individually identifiable data of its customers and employees;
changes in the Company's stock price, the number of shares of
common stock that it may or may not repurchase, and future
dividends, if any; changes in estimates relating to self-insurance
liabilities and income tax and litigation reserves; changes in the
Company's effective tax rate; fluctuations in foreign currency
exchange rates; the Company's ability to maintain an effective
system of internal controls; the resolution of the Company's
litigation; and the other risks detailed from time to time in the
Company's SEC reports, including but not limited to, its Annual
Report on Form 10-K for the year ended December 31, 2015, and its
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2016, and June 30, 2016. 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 is not obligated to publicly release any revisions to these
forward-looking statements to reflect the events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
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version on businesswire.com: http://www.businesswire.com/news/home/20161011005439/en/
Rent-A-Center, Inc.Maureen Short, 972-801-1899Senior Vice
President – Finance, Investor Relations and
Treasurymaureen.short@rentacenter.com
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