PRG PROG Holdings Inc

• Consolidated revenues of $641.9 million; Earnings before taxes of $31.6 million
• Adjusted EBITDA of $72.6 million
• Diluted EPS of $0.49; Non-GAAP Diluted EPS of $0.91
• Progressive Leasing GMV of $418.5 million, flat year-over-year
• Raises full year consolidated revenue and earnings outlook

PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, Four Technologies, and Build, today announced financial results for the first quarter ended March 31, 2024.

"We're pleased with our strong start to the year, with first quarter financial performance exceeding our expectations, driven by better-than-expected GMV, strong portfolio performance and disciplined spending," said PROG Holdings President and CEO Steve Michaels. "Despite continued sluggish retail demand in our leasable categories, we have delivered a meaningful increase in balance of share with key retail partners. Our continued investments in marketing, sales, and technology to support our retail partners and the consumer's need for flexible purchase options gives us the confidence to project a low single digit GMV growth for the second quarter, even in the face of this challenging macroeconomic environment. We believe our financial strength, highlighted by strong margins and cash flow, enables us to invest in these growth initiatives while returning excess cash to shareholders through dividends and share repurchases," concluded Michaels.

Consolidated Results

Consolidated revenues for the first quarter of 2024 were $641.9 million, a decrease of 2.0% from the same period in 2023, driven by a lower gross leased asset balance entering the quarter.

Consolidated net earnings for the quarter were $22.0 million, compared with $48.0 million in the prior year period. The decline in net earnings was primarily driven by $18.0 million of restructuring expense relating to our cost reduction actions we executed in January. Adjusted EBITDA for the quarter decreased 19.1% to $72.6 million, or 11.3% of revenues, compared with $89.7 million, or 13.7% of revenues for the same period in 2023. The year-over-year decline in adjusted EBITDA was driven primarily by headwinds from portfolio performance returning to pre-pandemic levels, and a smaller portfolio size during the first quarter.

Diluted earnings per share for the first quarter of 2024 were $0.49, compared with $1.00 in the year ago period. On a non-GAAP basis, diluted earnings per share were $0.91 in the first quarter of 2024, compared with $1.11 for the same period in 2023. The Company's weighted average shares outstanding assuming dilution in the first quarter was 7.5% lower year-over-year.

Progressive Leasing Results

Progressive Leasing's first quarter GMV of $418.5 million was flat compared to the same period in 2023. The provision for lease merchandise write-offs for the quarter was 7.0%, within the Company's 6%-8% targeted annual range.

Liquidity and Capital Allocation

PROG Holdings ended the first quarter of 2024 with cash of $252.8 million and gross debt of $600 million. The Company repurchased $24.4 million of its stock in the quarter at an average price of $31.31 per share, leaving $475.6 million of repurchase authorization under the $500 million share repurchase program. Additionally, the Company paid a cash dividend of $0.12 per share.

2024 Outlook

PROG Holdings is updating its full year 2024 outlook for revenue and earnings as well as providing its outlook for revenues, net earnings, adjusted EBITDA, GAAP diluted EPS, and non-GAAP diluted EPS for the second quarter of 2024. This outlook assumes a difficult operating environment with continued soft demand for consumer durable goods, no material changes in the Company's decisioning posture, no material increases in the unemployment rate for our consumer, an effective tax rate for non-GAAP EPS of approximately 30%, and no impact from additional share repurchases.

 

Revised 2024 Outlook

 

Previous 2024 Outlook

(In thousands, except per share amounts)

Low

High

 

Low

High

 

 

 

 

 

 

PROG Holdings - Total Revenues

$

2,285,000

 

$

2,360,000

 

 

$

2,235,000

 

$

2,335,000

 

PROG Holdings - Net Earnings

 

97,500

 

 

108,000

 

 

 

89,500

 

 

105,000

 

PROG Holdings - Adjusted EBITDA

 

240,000

 

 

255,000

 

 

 

230,000

 

 

250,000

 

PROG Holdings - Diluted EPS

 

2.18

 

 

2.43

 

 

 

2.00

 

 

2.34

 

PROG Holdings - Diluted Non-GAAP EPS

 

2.85

 

 

3.10

 

 

 

2.70

 

 

3.00

 

 

 

 

 

 

 

Progressive Leasing - Total Revenues

 

2,210,000

 

 

2,265,000

 

 

 

2,160,000

 

 

2,240,000

 

Progressive Leasing - Earnings Before Taxes

 

159,000

 

 

169,000

 

 

 

147,000

 

 

164,000

 

Progressive Leasing - Adjusted EBITDA

 

251,000

 

 

261,000

 

 

 

241,000

 

 

256,000

 

 

 

 

 

 

 

Vive - Total Revenues

 

55,000

 

 

65,000

 

 

 

55,000

 

 

65,000

 

Vive - Earnings Before Taxes

 

1,500

 

 

3,000

 

 

 

1,500

 

 

3,000

 

Vive - Adjusted EBITDA

 

3,000

 

 

5,000

 

 

 

3,000

 

 

5,000

 

 

 

 

 

 

 

Other - Total Revenues

 

20,000

 

 

30,000

 

 

 

20,000

 

 

30,000

 

Other - Loss Before Taxes

 

(20,000

)

 

(18,000

)

 

 

(20,000

)

 

(18,000

)

Other - Adjusted EBITDA

 

(14,000

)

 

(11,000

)

 

 

(14,000

)

 

(11,000

)

 

Three Months Ended

June 30, 2024 Outlook

(In thousands, except per share amounts)

Low

High

 

 

 

PROG Holdings - Total Revenues

$

550,000

$

575,000

PROG Holdings - Net Earnings

 

26,000

 

 

29,000

 

PROG Holdings - Adjusted EBITDA

 

58,000

 

 

63,000

 

PROG Holdings - Diluted EPS

 

0.56

 

 

0.66

 

PROG Holdings - Diluted Non-GAAP EPS

 

0.65

 

 

0.75

 

Conference Call and Webcast

The Company has scheduled a live webcast and conference call for Wednesday, April 24, 2024, at 8:30 A.M. ET to discuss its financial results for the first quarter of 2024. 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 to consumers. 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, a provider of Buy Now, Pay Later payment options through its platform, Four, and Build, provider of personal credit building products. More information on 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 "continued", "project", "believe", "expects", "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 significant inflation, elevated 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, in particular consumer durables; (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; and (d) 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) the impact of the cybersecurity incident experienced by Progressive Leasing in September 2023 and expenses incurred in connection with responding to the matter, including the litigation filed in response to that incident, or any regulatory proceedings that may result from the incident; (v) a large percentage of the Company’s revenues being concentrated with several of Progressive Leasing’s key POS partners; (vi) the risks that Progressive Leasing will be unable to attract new POS partners or retain and grow its business with its existing POS partners; (vii) Vive’s and Four’s business models differing significantly from Progressive Leasing’s, which creates specific and unique risks for each of the Vive and Four businesses, including Vive’s reliance on a limited number of bank partners to issue its credit products and each of Vive’s and Four’s exposure to the unique regulatory risks associated with the laws and regulations that apply to each of their businesses; (viii) our ability to continue 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; (ix) our cost reduction initiatives may not be adequate or may have unintended consequences that could be disruptive to our businesses, including with respect to our global workforce strategy; (x) the risk that our capital allocation strategy, including our current stock repurchase and dividend programs, as well as any future debt repurchase program, will not be effective at enhancing shareholder value and may have an adverse impact on our cash reserves; (xi) 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; (xii) increased competition from traditional and virtual lease-to-own competitors and also from competitors of our Vive segment; (xiii) the transactions offered by our Progressive Leasing, Vive and/or Four businesses may be negatively characterized by government officials, consumer advocacy groups or the media; (xiv) real or perceived software or system errors, failures, bugs, defects or outages, including those that may be caused by third-party vendors, may adversely affect Progressive Leasing, Vive or Four; and (xv) 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, 2023, filed with the SEC on February 21, 2024. Statements in this press release that are "forward-looking" include without limitation statements about: (i) our expectations regarding GMV growth for the quarter ending June 30, 2024; (ii) our ability to continue investing in our business, including with respect to key growth initiatives; (iii) our expectations regarding returning excess cash to shareholders, including through dividends and/or share repurchases, and the benefits expected therefrom and (iv) our revised full year 2024 outlook and our second quarter 2024 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

 

March 31,

 

 

2024

 

 

 

2023

 

REVENUES:

 

 

 

Lease Revenues and Fees

$

620,550

 

 

$

637,082

 

Interest and Fees on Loans Receivable

 

21,320

 

 

 

18,058

 

 

 

641,870

 

 

 

655,140

 

COSTS AND EXPENSES:

 

 

 

Depreciation of Lease Merchandise

 

431,571

 

 

 

435,439

 

Provision for Lease Merchandise Write-offs

 

43,141

 

 

 

38,364

 

Operating Expenses

 

127,341

 

 

 

105,259

 

 

 

602,053

 

 

 

579,062

 

OPERATING PROFIT

 

39,817

 

 

 

76,078

 

Interest Expense, Net

 

(8,250

)

 

 

(8,491

)

EARNINGS BEFORE INCOME TAX EXPENSE

 

31,567

 

 

 

67,587

 

INCOME TAX EXPENSE

 

9,601

 

 

 

19,554

 

NET EARNINGS

$

21,966

 

 

$

48,033

 

EARNINGS PER SHARE

 

 

 

Basic

$

0.50

 

 

$

1.00

 

Assuming Dilution

$

0.49

 

 

$

1.00

 

CASH DIVIDENDS DECLARED PER SHARE:

 

 

 

Common Stock

$

0.12

 

 

$

—

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

Basic

 

43,695

 

 

 

47,854

 

Assuming Dilution

 

44,528

 

 

 

48,139

 

 

PROG Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

(Unaudited)

 

 

 

 

March 31,

2024

 

December 31,

2023

ASSETS:

 

 

 

 

Cash and Cash Equivalents

 

$

252,826

 

 

$

155,416

 

Accounts Receivable (net of allowances of $64,272 in 2024 and $64,180 in 2023)

 

 

62,043

 

 

 

67,879

 

Lease Merchandise (net of accumulated depreciation and allowances of $420,395 in 2024 and $423,466 in 2023)

 

 

557,419

 

 

 

633,427

 

Loans Receivable (net of allowances and unamortized fees of $47,684 in 2024 and $50,022 in 2023)

 

 

117,928

 

 

 

126,823

 

Property and Equipment, Net

 

 

21,862

 

 

 

24,104

 

Operating Lease Right-of-Use Assets

 

 

4,474

 

 

 

9,271

 

Goodwill

 

 

296,061

 

 

 

296,061

 

Other Intangibles, Net

 

 

86,014

 

 

 

91,664

 

Income Tax Receivable

 

 

11,592

 

 

 

32,918

 

Deferred Income Tax Assets

 

 

2,473

 

 

 

2,981

 

Prepaid Expenses and Other Assets

 

 

48,974

 

 

 

50,711

 

Total Assets

 

$

1,461,666

 

 

$

1,491,255

 

LIABILITIES & SHAREHOLDERS’ EQUITY:

 

 

 

 

Accounts Payable and Accrued Expenses

 

$

139,843

 

 

$

151,259

 

Deferred Income Tax Liabilities

 

 

95,674

 

 

 

104,838

 

Customer Deposits and Advance Payments

 

 

33,518

 

 

 

35,713

 

Operating Lease Liabilities

 

 

14,952

 

 

 

15,849

 

Debt

 

 

592,589

 

 

 

592,265

 

Total Liabilities

 

 

876,576

 

 

 

899,924

 

SHAREHOLDERS' EQUITY:

 

 

 

 

Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at March 31, 2024 and December 31, 2023; Shares Issued: 82,078,654 at March 31, 2024 and December 31, 2023

 

 

41,039

 

 

 

41,039

 

Additional Paid-in Capital

 

 

346,650

 

 

 

352,421

 

Retained Earnings

 

 

1,309,702

 

 

 

1,293,073

 

 

 

 

1,697,391

 

 

 

1,686,533

 

Less: Treasury Shares at Cost

 

 

 

 

Common Stock: 38,904,934 Shares at March 31, 2024 and 38,404,527 at December 31, 2023

 

 

(1,112,301

)

 

 

(1,095,202

)

Total Shareholders’ Equity

 

 

585,090

 

 

 

591,331

 

Total Liabilities & Shareholders’ Equity

 

$

1,461,666

 

 

$

1,491,255

 

 

PROG Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

(Unaudited)

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

OPERATING ACTIVITIES:

 

 

 

Net Earnings

$

21,966

 

 

$

48,033

 

Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:

 

 

 

Depreciation of Lease Merchandise

 

431,571

 

 

 

435,439

 

Other Depreciation and Amortization

 

8,018

 

 

 

7,979

 

Provisions for Accounts Receivable and Loan Losses

 

85,405

 

 

 

78,665

 

Stock-Based Compensation

 

6,642

 

 

 

5,415

 

Deferred Income Taxes

 

(8,656

)

 

 

(10,360

)

Impairment of Assets

 

6,018

 

 

 

—

 

Non-Cash Lease Expense

 

(615

)

 

 

(739

)

Other Changes, Net

 

115

 

 

 

(814

)

Changes in Operating Assets and Liabilities:

 

 

 

Additions to Lease Merchandise

 

(400,479

)

 

 

(399,289

)

Book Value of Lease Merchandise Sold or Disposed

 

44,916

 

 

 

40,225

 

Accounts Receivable

 

(68,520

)

 

 

(61,249

)

Prepaid Expenses and Other Assets

 

1,829

 

 

 

(5,087

)

Income Tax Receivable and Payable

 

21,076

 

 

 

26,295

 

Accounts Payable and Accrued Expenses

 

(11,358

)

 

 

(4,501

)

Customer Deposits and Advance Payments

 

(2,195

)

 

 

(2,593

)

Cash Provided by Operating Activities

 

135,733

 

 

 

157,419

 

INVESTING ACTIVITIES:

 

 

 

Investments in Loans Receivable

 

(76,963

)

 

 

(43,045

)

Proceeds from Loans Receivable

 

75,448

 

 

 

44,128

 

Outflows on Purchases of Property and Equipment

 

(2,096

)

 

 

(1,678

)

Proceeds from Property and Equipment

 

14

 

 

 

5

 

Cash Used in Investing Activities

 

(3,597

)

 

 

(590

)

FINANCING ACTIVITIES:

 

 

 

Dividends Paid

 

(5,221

)

 

 

—

 

Acquisition of Treasury Stock

 

(24,437

)

 

 

(36,472

)

Issuance of Stock Under Stock Option and Employee Purchase Plans

 

123

 

 

 

—

 

Shares Withheld for Tax Payments

 

(5,191

)

 

 

(2,393

)

Cash Used in Financing Activities

 

(34,726

)

 

 

(38,865

)

Increase in Cash and Cash Equivalents

 

97,410

 

 

 

117,964

 

Cash and Cash Equivalents at Beginning of Period

 

155,416

 

 

 

131,880

 

Cash and Cash Equivalents at End of Period

$

252,826

 

 

$

249,844

 

Net Cash Paid (Received) During the Period:

 

 

 

Interest

$

224

 

 

$

268

 

Income Taxes

$

(3,836

)

 

$

2,532

 

 

PROG Holdings, Inc.

Quarterly Revenues by Segment

(In thousands)

 

 

(Unaudited)

 

Three Months Ended

 

March 31, 2024

 

Progressive Leasing

Vive

Other

Consolidated Total

Lease Revenues and Fees

$

620,550

$

—

$

—

$

620,550

Interest and Fees on Loans Receivable

 

—

 

 

16,051

 

 

5,269

 

 

21,320

 

Total Revenues

$

620,550

 

$

16,051

 

$

5,269

 

$

641,870

 

 

(Unaudited)

 

Three Months Ended

 

March 31, 2023

 

Progressive Leasing

Vive

Other

Consolidated Total

Lease Revenues and Fees

$

637,082

$

—

$

—

$

637,082

Interest and Fees on Loans Receivable

 

—

 

 

17,153

 

 

905

 

 

18,058

 

Total Revenues

$

637,082

 

$

17,153

 

$

905

 

$

655,140

 

 

PROG Holdings, Inc.

Gross Merchandise Volume by Quarter

(In thousands)

 

 

(Unaudited)

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

Progressive Leasing

$

418,512

 

$

418,683

Vive

 

31,602

 

 

 

36,530

 

Other

 

48,791

 

 

 

13,607

 

Total GMV

$

498,905

 

 

$

468,820

 

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 diluted earnings per share for the full year 2024 outlook excludes 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. Non-GAAP diluted earnings per share for the second quarter 2024 outlook excludes intangible amortization expense 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 months ended March 31, 2024 exclude intangible amortization expense, restructuring expenses, costs related to the cybersecurity incident, 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 months ended March 31, 2023 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. 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 months ended March 31, 2024 excludes stock-based compensation expense, restructuring expenses, and costs related to the cybersecurity incident. Adjusted EBITDA for full year 2024 outlook excludes stock-based compensation expense and restructuring expenses. Adjusted EBITDA for second quarter 2024 outlook excludes stock-based compensation expense. Adjusted EBITDA for the three months ended March 31, 2023 excludes stock-based compensation expense, restructuring expenses, and regulatory insurance recoveries. The amounts for these pre-tax non-GAAP adjustments can be found in the 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:

• 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 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.

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)

 

Three Months Ended

 

March 31,

 

 

2024

 

 

2023

 

Net Earnings

$

21,966

 

$

48,033

 

Add: Intangible Amortization Expense

 

5,650

 

 

5,724

 

Add: Restructuring Expense

 

18,014

 

 

757

 

Add: Costs Related to the Cybersecurity Incident

 

116

 

 

—

 

Less: Regulatory Insurance Recoveries

 

—

 

 

(525

)

Less: Tax Impact of Adjustments(1)

 

(6,183

)

 

(1,549

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

1,078

 

 

970

 

Non-GAAP Net Earnings

$

40,641

 

$

53,410

 

Earnings Per Share Assuming Dilution

$

0.49

 

$

1.00

 

Add: Intangible Amortization Expense

 

0.13

 

 

0.12

 

Add: Restructuring Expense

 

0.40

 

 

0.02

 

Add: Costs Related to the Cybersecurity Incident

 

—

 

 

—

 

Less: Regulatory Insurance Recoveries

 

—

 

 

(0.01

)

Less: Tax Impact of Adjustments(1)

 

(0.14

)

 

(0.03

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

0.02

 

 

0.02

 

Non-GAAP Earnings Per Share Assuming Dilution(2)

$

0.91

 

$

1.11

 

Weighted Average Shares Outstanding Assuming Dilution

 

44,528

 

 

48,139

 

(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

 

March 31, 2024

 

Progressive Leasing

Vive

Other

Consolidated Total

Net Earnings

 

 

 

$

21,966

 

Income Tax Expense(1)

 

 

 

 

9,601

 

Earnings (Loss) Before Income Tax Expense

$

35,453

$

918

$

(4,804

)

 

31,567

Interest Expense, Net

 

8,567

 

 

—

 

 

(317

)

 

8,250

 

Depreciation

 

1,810

 

 

166

 

 

392

 

 

2,368

 

Amortization

 

5,421

 

 

—

 

 

229

 

 

5,650

 

EBITDA

 

51,251

 

 

1,084

 

 

(4,500

)

 

47,835

 

Stock-Based Compensation

 

4,711

 

 

338

 

 

1,593

 

 

6,642

 

Restructuring Expense

 

18,014

 

 

—

 

 

—

 

 

18,014

 

Costs Related to the Cybersecurity Incident

 

116

 

 

—

 

 

—

 

 

116

 

Adjusted EBITDA

$

74,092

 

$

1,422

 

$

(2,907

)

$

72,607

 

(1)

 

Taxes are calculated on a consolidated basis and are not identifiable by Company segment.

 

 

(Unaudited)

 

Three Months Ended

 

March 31, 2023

 

Progressive Leasing

Vive

Other

Consolidated Total

Net Earnings

 

 

 

$

48,033

 

Income Tax Expense(1)

 

 

 

 

19,554

 

Earnings (Loss) Before Income Tax Expense

$

71,051

$

2,163

$

(5,627

)

 

67,587

Interest Expense, Net

 

8,200

 

 

291

 

 

—

 

 

8,491

 

Depreciation

 

1,905

 

 

168

 

 

182

 

 

2,255

 

Amortization

 

5,421

 

 

—

 

 

303

 

 

5,724

 

EBITDA

 

86,577

 

 

2,622

 

 

(5,142

)

 

84,057

 

Stock-Based Compensation

 

3,553

 

 

288

 

 

1,574

 

 

5,415

 

Restructuring Expense

 

757

 

 

—

 

 

—

 

 

757

 

Regulatory Insurance Recoveries

 

(525

)

 

—

 

 

—

 

 

(525

)

Adjusted EBITDA

$

90,362

 

$

2,910

 

$

(3,568

)

$

89,704

 

(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 2024 Outlook for Adjusted EBITDA

(In thousands)

 

 

Fiscal Year 2024 Ranges

 

Progressive Leasing

Vive

Other

Consolidated Total

Estimated Net Earnings

 

 

 

$97,500 - $108,000

Income Tax Expense(1)

 

 

 

43,000 - 46,000

Projected Earnings (Loss) Before Income Tax Expense

$159,000 - $169,000

$1,500 - $3,000

$(20,000) - $(18,000)

140,500 - 154,000

Interest Expense, Net

31,000 - 29,000

—

—

31,000 - 29,000

Depreciation

8,000

500

2,000

10,500

Amortization

17,000

—

1,000

18,000

Projected EBITDA

215,000 - 223,000

2,000 - 3,500

(17,000) - (15,000)

200,000 - 211,500

Stock-Based Compensation

18,000 - 20,000

1,000 - 1,500

3,000 - 4,000

22,000 - 25,500

Restructuring Expense

18,000

—

—

18,000

Projected Adjusted EBITDA

$251,000 - $261,000

$3,000 - $5,000

$(14,000) - $(11,000)

$240,000 - $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 Previous Full Year 2024 Outlook for Adjusted EBITDA

(In thousands)

 

 

Fiscal Year 2024 Ranges

 

Progressive Leasing

Vive

Other

Consolidated Total

Estimated Net Earnings

 

 

 

$89,500 - $105,000

Income Tax Expense(1)

 

 

 

39,000 - 44,000

Projected Earnings (Loss) Before Income Tax Expense

$147,000 - $164,000

$1,500 - $3,000

$(20,000) - $(18,000)

128,500 - 149,000

Interest Expense, Net

31,000 - 29,000

—

—

31,000 - 29,000

Depreciation

8,000

500

2,000

10,500

Amortization

17,000

—

1,000

18,000

Projected EBITDA

203,000 - 218,000

2,000 - 3,500

(17,000) - (15,000)

188,000 - 206,500

Stock-Based Compensation

18,000 - 20,000

1,000 - 1,500

3,000 - 4,000

22,000 - 25,500

Restructuring Expense

20,000 - 18,000

—

—

20,000 - 18,000

Projected Adjusted EBITDA

$241,000 - $256,000

$3,000 - $5,000

$(14,000) - $(11,000)

$230,000 - $250,000

(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 June 30, 2024 Outlook for Adjusted EBITDA

(In thousands)

 

 

Three Months Ended

June 30, 2024 Outlook

 

Consolidated Total

Estimated Net Earnings

$26,000 - $29,000

Income Tax Expense(1)

11,000 - 12,000

Projected Earnings Before Income Tax Expense

37,000 - 41,000

Interest Expense, Net

8,000 - 7,500

Depreciation

2,500

Amortization

4,000

Projected EBITDA

51,500 - 55,000

Stock-Based Compensation

6,500 - 8,000

Projected Adjusted EBITDA

$58,000 - $63,000

(1)

 

Taxes are calculated on a consolidated basis and are not identifiable by Company segment.

 

PROG Holdings, Inc.

Reconciliation of Revised Full Year 2024 Outlook for Earnings Per Share

Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution

 

 

Full Year 2024

 

Low

High

Projected Earnings Per Share Assuming Dilution

$

2.18

 

$

2.43

 

Add: Projected Intangible Amortization Expense

 

0.41

 

 

0.41

 

Add: Projected Interest on FTC Settlement Uncertain Tax Position

 

0.07

 

 

0.07

 

Add: Projected Restructuring Expense

 

0.41

 

 

0.41

 

Subtract: Tax Effect on Non-GAAP Adjustments(1)

 

(0.21

)

 

(0.21

)

Projected Non-GAAP Earnings Per Share Assuming Dilution(2)

$

2.85

 

$

3.10

 

(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 Previous Full Year 2024 Outlook for Earnings Per Share

Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution

 

 

Full Year 2024

 

Low

High

Projected Earnings Per Share Assuming Dilution

$

2.00

 

$

2.34

 

Add: Projected Intangible Amortization Expense

 

0.40

 

 

0.40

 

Add: Projected Interest on FTC Settlement Uncertain Tax Position

 

0.07

 

 

0.07

 

Add: Projected Restructuring Expense

 

0.44

 

 

0.40

 

Subtract: Tax Effect on Non-GAAP Adjustments(1)

 

(0.22

)

 

(0.21

)

Projected Non-GAAP Earnings Per Share Assuming Dilution(2)

$

2.70

 

$

3.00

 

(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 June 30, 2024 Outlook for Earnings Per Share

Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution

 

 

Three Months Ended

June 30, 2024

 

Low

High

Projected Earnings Per Share Assuming Dilution

$

0.56

 

$

0.66

 

Add: Projected Intangible Amortization Expense

 

0.09

 

 

0.09

 

Add: Projected Interest on FTC Settlement Uncertain Tax Position

 

0.02

 

 

0.02

 

Subtract: Tax Effect on Non-GAAP Adjustments(1)

 

(0.02

)

 

(0.02

)

Projected Non-GAAP Earnings Per Share Assuming Dilution(2)

$

0.65

 

$

0.75

 

(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/20240424397279/en/

Investor Contact John A. Baugh, CFA Vice President, Investor Relations john.baugh@progleasing.com