• Consolidated revenues of $625.8 million, down 3.8% year-over-year
  • Consolidated earnings before taxes of $27.3 million; Adjusted EBITDA of $65.0 million or 10.4% of revenues
  • Diluted EPS of $0.32; Non-GAAP Diluted EPS of $0.68
  • Progressive Leasing write-offs of 7.2%, down from 9.8% in Q2 2022
  • E-commerce 16.5% of Progressive Leasing GMV

PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, and Four Technologies, today announced financial results for the third quarter ended September 30, 2022.

"I am proud of our team as we continue to deliver value for our customers and retail partners in the face of significant macro-economic headwinds," said PROG Holdings President and CEO Steve Michaels. “During the quarter, we saw meaningful improvement in the quality of our leased asset portfolio as a result of changes we made to tighten our decisioning earlier in the year, resulting in lower write-offs compared to the second quarter of 2022. We also drove increased efficiencies in our cost structure, as the actions we took last quarter meaningfully improved our third quarter results. While the retail backdrop remains challenging, we are executing on key GMV initiatives with our retail partners that have enabled us to partially mitigate the impacts of the current macro-economic environment. We believe our strong balance sheet, profitability, and free cash flow generation best position us to take advantage of the large underserved market that remains.”

Consolidated Results

Consolidated revenues for the third quarter of 2022 were $625.8 million, a decrease of 3.8% from the same period in 2021. The Company's revenue benefited from further penetration with large national partners and continued growth in e-commerce, but those benefits were more than offset by the impact of weak retail traffic and lower approval rates.

The Company reported consolidated net earnings for the third quarter of 2022 of $16.0 million compared with $57.4 million in the prior year period. Adjusted EBITDA for the third quarter of 2022 was $65.0 million compared with $93.6 million for the same period in 2021. As a percentage of revenues, adjusted EBITDA was 10.4% in the third quarter of 2022, compared with 14.4% for the same period in 2021.

The year-over-year declines in adjusted EBITDA and net earnings in the quarter were primarily driven by pressures on our lease portfolio performance this year compared with the stimulus-aided year ago period, resulting in lower revenue and higher write-offs.

Diluted earnings per share for the third quarter of 2022 were $0.32 compared with $0.86 in the year ago period. On a non-GAAP basis, diluted earnings per share were $0.68 in the third quarter of 2022 compared with $0.94 for the same quarter in 2021. Our weighted average share count in the third quarter was 23.7% lower than the same quarter in 2021.

Progressive Leasing Results

Progressive Leasing's third quarter GMV decreased 11.3% to $437.4 million compared with the same period in 2021, primarily due to weakening traffic patterns for our retail partners, both in store and online, as well as pressure from further tightening of lease decisioning. E-commerce GMV within the segment increased 0.7% year-over-year, accounting for 16.5% of the segment's total GMV in the third quarter of 2022. The provision for lease merchandise write-offs was 7.2% of lease revenues in the third quarter of 2022, and while higher than the prior year's results, was down 261 basis points from our second quarter peak.

Liquidity and Capital Allocation

PROG Holdings ended the third quarter of 2022 with cash of $221.9 million and gross debt of $600 million. The Company repurchased $10.9 million of its stock in the quarter at an average price of $18.52 per share and has $373.5 million remaining under its previously-announced $1 billion share repurchase program.

2022 Outlook

PROG Holdings has lowered its full-year 2022 financial outlook as a result of the continued challenging operating environment. Since the Company’s second quarter earnings call, expectations around GMV have been adjusted as consumers deal with the impacts of inflation. The Company also saw weaker than expected customer payment behavior on leases originated prior to its Q2 2022 approval tightening efforts, which is reflected in the provision for accounts receivable.

The PROG Holdings revised fiscal year 2022 outlook is as follows:

 

Revised Outlook

 

Previous Outlook(1)

(In thousands, except per share amounts)

Low

High

 

Low

High

Total Revenues

$

2,580,000

$

2,590,000

 

$

2,590,000

$

2,690,000

Net Earnings

 

85,500

 

88,500

 

 

111,000

 

124,000

Adjusted EBITDA

 

235,000

 

240,000

 

 

255,000

 

275,000

Diluted EPS

 

1.63

 

1.69

 

 

2.09

 

2.33

Diluted Non-GAAP EPS

 

2.32

 

2.38

 

 

2.50

 

2.75

(1)

As announced in the Form 8-K filed on June 16, 2022.

Conference Call and Webcast

The Company has scheduled a live webcast and conference call for Wednesday, October 26th 2022, at 8:30 A.M. ET to discuss its financial results for the third quarter of 2022. 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, and Four Technologies, a provider of Buy Now, Pay Later payment options through its platform, Four. More information on PROG Holdings' companies can be found at https://www.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 "continue", “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, and its impact 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) a further deterioration of the macro environment and/or additional macro-economic headwinds; (iii) the impact of the COVID-19 pandemic, including new variants, subvariants 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; (iv) changes in the enforcement of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our businesses; (v) increased focus by federal and state regulators on businesses that serve subprime consumers, such as our Progressive Leasing, Vive Financial and Four Technologies businesses, and other types of legal and regulatory proceedings and investigations, including those related to consumer protection, customer privacy, third party and employee fraud and information security; (vi) a large percentage of the Company’s revenues being concentrated with several of Progressive Leasing’s key POS partners; (vii) the risks that Progressive Leasing will be unable to attract new POS partners or retain and grow its business with its existing POS partners; (viii) the risk that our capital allocation strategy, including our current share repurchase program, will not be effective at enhancing shareholder value; (ix) Vive’s business model differing significantly from Progressive Leasing’s, which creates specific and unique risks for the Vive business, including Vive’s reliance on two bank partners to issue its credit products and Vive’s exposure to the unique regulatory risks associated with the laws and regulations that apply to its business; (x) 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; (xi) increased competition from traditional and virtual lease-to-own competitors and also from competitors of our Vive segment; (xii) our increased level of indebtedness; (xiii) 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; (xiv) the effects of any increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to, our acquisition of Four Technologies; (xv) Four Technology’s business model differing significantly from Progressive Leasing's and Vive’s, which creates specific and unique risks for the Four business, including Four’s exposure to the unique regulatory risks associated with the laws and regulations that apply to its business; and (xvi) 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, 2021, filed with the SEC on February 23, 2022. Statements in this press release that are “forward-looking” include without limitation statements about (i) our ability to deliver value for our customers and retail partners, including through executing on key initiatives with those partners; (ii) our balance sheet, profitability and free cash flow generation; and (iii) our revised full-year 2022 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)

Nine Months Ended

 

September 30,

 

September 30,

 

2022

 

2021

 

2022

 

2021

REVENUES:

 

 

 

 

 

 

 

Lease Revenues and Fees

$

606,585

 

 

$

635,025

 

 

$

1,930,843

 

 

$

1,989,055

 

Interest and Fees on Loans Receivable

 

19,236

 

 

 

15,380

 

 

 

54,886

 

 

 

42,322

 

 

 

625,821

 

 

 

650,405

 

 

 

1,985,729

 

 

 

2,031,377

 

 

 

 

 

 

 

 

 

COSTS AND EXPENSES:

 

 

 

 

 

 

 

Depreciation of Lease Merchandise

 

422,589

 

 

 

435,857

 

 

 

1,358,713

 

 

 

1,380,572

 

Provision for Lease Merchandise Write-offs

 

43,537

 

 

 

34,174

 

 

 

155,655

 

 

 

84,072

 

Operating Expenses

 

112,733

 

 

 

102,053

 

 

 

337,997

 

 

 

289,994

 

Impairment of Goodwill

 

10,151

 

 

 

 

 

 

10,151

 

 

 

 

 

 

589,010

 

 

 

572,084

 

 

 

1,862,516

 

 

 

1,754,638

 

OPERATING PROFIT

 

36,811

 

 

 

78,321

 

 

 

123,213

 

 

 

276,739

 

Interest Expense

 

(9,463

)

 

 

(444

)

 

 

(28,700

)

 

 

(1,392

)

EARNINGS BEFORE INCOME TAX EXPENSE

 

27,348

 

 

 

77,877

 

 

 

94,513

 

 

 

275,347

 

INCOME TAX EXPENSE

 

11,343

 

 

 

20,464

 

 

 

31,889

 

 

 

69,609

 

NET EARNINGS

$

16,005

 

 

$

57,413

 

 

$

62,624

 

 

$

205,738

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

Basic

$

0.32

 

 

$

0.87

 

 

$

1.18

 

 

$

3.07

 

Assuming Dilution

$

0.32

 

 

$

0.86

 

 

$

1.18

 

 

$

3.06

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

 

 

 

Basic

 

50,461

 

 

 

66,092

 

 

 

52,896

 

 

 

66,938

 

Assuming Dilution

 

50,547

 

 

 

66,385

 

 

 

53,053

 

 

 

67,319

 

PROG Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

(Unaudited)

 

 

 

 

September 30, 2022

 

December 31, 2021

ASSETS:

 

 

 

 

Cash and Cash Equivalents

 

$

221,886

 

 

$

170,159

 

Accounts Receivable (net of allowances of $85,734 in 2022 and $71,233 in 2021)

 

 

56,543

 

 

 

66,270

 

Lease Merchandise (net of accumulated depreciation and allowances of $510,217 in 2022 and $463,929 in 2021)

 

 

566,148

 

 

 

714,055

 

Loans Receivable (net of allowances and unamortized fees of $54,031 in 2022 and $53,300 in 2021)

 

 

130,136

 

 

 

119,315

 

Property and Equipment, Net

 

 

24,871

 

 

 

25,648

 

Operating Lease Right-of-Use Assets

 

 

12,448

 

 

 

17,488

 

Goodwill

 

 

296,061

 

 

 

306,212

 

Other Intangibles, Net

 

 

120,135

 

 

 

137,305

 

Income Tax Receivable

 

 

10,968

 

 

 

14,352

 

Deferred Income Tax Assets

 

 

2,760

 

 

 

2,760

 

Prepaid Expenses and Other Assets

 

 

49,535

 

 

 

48,197

 

Total Assets

 

$

1,491,491

 

 

$

1,621,761

 

LIABILITIES & SHAREHOLDERS’ EQUITY:

 

 

 

 

Accounts Payable and Accrued Expenses

 

$

137,575

 

 

$

135,954

 

Deferred Income Tax Liability

 

 

140,517

 

 

 

146,265

 

Customer Deposits and Advance Payments

 

 

33,952

 

 

 

45,070

 

Operating Lease Liabilities

 

 

22,341

 

 

 

25,410

 

Debt

 

 

590,642

 

 

 

589,654

 

Total Liabilities

 

 

925,027

 

 

 

942,353

 

SHAREHOLDERS' EQUITY:

 

 

 

 

Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at September 30, 2022 and December 31, 2021; Shares Issued: 82,078,654 at September 30, 2022 and December 31, 2021

 

 

41,039

 

 

 

41,039

 

Additional Paid-in Capital

 

 

335,642

 

 

 

332,244

 

Retained Earnings

 

 

1,118,150

 

 

 

1,055,526

 

 

 

 

1,494,831

 

 

 

1,428,809

 

Less: Treasury Shares at Cost

 

 

 

 

Common Stock: 32,046,014 Shares at September 30, 2022 and 25,638,057 at December 31, 2021

 

 

(928,367

)

 

 

(749,401

)

Total Shareholders’ Equity

 

 

566,464

 

 

 

679,408

 

Total Liabilities & Shareholders’ Equity

 

$

1,491,491

 

 

$

1,621,761

 

PROG Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

(Unaudited)

 

Nine Months Ended September 30,

 

2022

 

2021

OPERATING ACTIVITIES:

 

 

 

Net Earnings

$

62,624

 

 

$

205,738

 

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

 

 

 

Depreciation of Lease Merchandise

 

1,358,713

 

 

 

1,380,572

 

Other Depreciation and Amortization

 

25,446

 

 

 

21,954

 

Provisions for Accounts Receivable and Loan Losses

 

318,314

 

 

 

152,523

 

Stock-Based Compensation

 

13,930

 

 

 

14,803

 

Deferred Income Taxes

 

(5,748

)

 

 

16,948

 

Impairment of Goodwill

 

10,151

 

 

 

 

Non-Cash Lease Expense

 

838

 

 

 

708

 

Other Changes, Net

 

(5,785

)

 

 

(2,715

)

Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions:

 

 

 

Additions to Lease Merchandise

 

(1,369,388

)

 

 

(1,446,046

)

Book Value of Lease Merchandise Sold or Disposed

 

158,582

 

 

 

87,005

 

Accounts Receivable

 

(280,096

)

 

 

(143,970

)

Prepaid Expenses and Other Assets

 

(1,077

)

 

 

(3,864

)

Income Tax Receivable and Payable

 

3,411

 

 

 

(18,529

)

Operating Lease Right-of-Use Assets and Liabilities

 

1,133

 

 

 

(1,411

)

Accounts Payable and Accrued Expenses

 

3,220

 

 

 

37,973

 

Customer Deposits and Advance Payments

 

(11,118

)

 

 

(6,799

)

Cash Provided by Operating Activities

 

283,150

 

 

 

294,890

 

INVESTING ACTIVITIES:

 

 

 

Investments in Loans Receivable

 

(147,711

)

 

 

(139,980

)

Proceeds from Loans Receivable

 

115,226

 

 

 

97,158

 

Outflows on Purchases of Property and Equipment

 

(7,488

)

 

 

(6,815

)

Proceeds from Property and Equipment

 

18

 

 

 

55

 

Proceeds (Outflows) from Acquisitions of Businesses

 

6

 

 

 

(22,942

)

Cash Used in Investing Activities

 

(39,949

)

 

 

(72,524

)

FINANCING ACTIVITIES:

 

 

 

Acquisition of Treasury Stock

 

(187,361

)

 

 

(128,233

)

Tender Offer Shares Repurchased and Retired

 

(274

)

 

 

 

Issuance of Stock Under Stock Option Plans

 

663

 

 

 

3,133

 

Shares Withheld for Tax Payments

 

(2,902

)

 

 

(5,123

)

Debt Issuance Costs

 

(1,600

)

 

 

 

Cash Used in Financing Activities

 

(191,474

)

 

 

(130,223

)

Increase in Cash and Cash Equivalents

 

51,727

 

 

 

92,143

 

Cash and Cash Equivalents at Beginning of Period

 

170,159

 

 

 

36,645

 

Cash and Cash Equivalents at End of Period

$

221,886

 

 

$

128,788

 

Net Cash Paid During the Period:

 

 

 

Interest

$

17,306

 

 

$

1,093

 

Income Taxes

$

31,087

 

 

$

44

 

PROG Holdings, Inc.

Quarterly Revenues by Segment

(In thousands)

 

 

(Unaudited)

 

Three Months Ended

 

September 30, 2022

 

Progressive Leasing

Vive

Other

Consolidated Total

Lease Revenues and Fees

$

606,585

$

$

$

606,585

Interest and Fees on Loans Receivable

 

 

18,392

 

844

 

19,236

Total Revenues

$

606,585

$

18,392

$

844

$

625,821

 

(Unaudited)

 

Three Months Ended

 

September 30, 2021

 

Progressive Leasing

Vive

Other

Consolidated Total

Lease Revenues and Fees

$

635,025

$

$

$

635,025

Interest and Fees on Loans Receivable

 

 

15,212

 

168

 

15,380

Total Revenues

$

635,025

$

15,212

$

168

$

650,405

PROG Holdings, Inc.

Nine Months Revenues by Segment

(In thousands)

 

 

(Unaudited)

 

Nine Months Ended

 

September 30, 2022

 

Progressive Leasing

Vive

Other

Consolidated Total

Lease Revenues and Fees

$

1,930,843

$

$

$

1,930,843

Interest and Fees on Loans Receivable

 

 

53,026

 

1,860

 

54,886

Total Revenues

$

1,930,843

$

53,026

$

1,860

$

1,985,729

 

(Unaudited)

 

Nine Months Ended

 

September 30, 2021

 

Progressive Leasing

Vive

Other

Consolidated Total

Lease Revenues and Fees

$

1,989,055

$

$

$

1,989,055

Interest and Fees on Loans Receivable

 

 

42,154

 

168

 

42,322

Total Revenues

$

1,989,055

$

42,154

$

168

$

2,031,377

PROG Holdings, Inc.

Gross Merchandise Volume by Quarter

(In thousands)

 

(Unaudited)

 

Three Months Ended September 30,

 

 

2022

 

 

2021

Progressive Leasing

$

437,417

 

$

493,277

Vive

 

47,967

 

 

49,085

Other

 

15,786

 

 

2,655

Total

$

501,170

 

$

545,017

PROG Holdings, Inc.

Gross Leased Assets by Quarter

(In thousands)

 

 

(Unaudited)

 

March 31,

June 30,

September 30,

December 31,

Gross Leased Assets:

 

 

 

 

2018

 

 

 

$

868,708

2019

$

860,456

$

908,721

$

952,079

 

1,080,107

2020

 

1,019,106

 

930,984

 

934,644

 

1,019,570

2021

 

951,099

 

1,004,430

 

1,042,288

 

1,177,984

2022

 

1,118,782

 

1,124,903

 

1,076,364

 

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 nine months ended September 30, 2022 and the full year 2022 outlook, exclude intangible amortization expense, restructuring expenses, impairment of goodwill, and accrued interest on an uncertain tax position related to Progressive Leasing's $175.0 million settlement with the FTC in 2020. Non-GAAP net earnings and non-GAAP diluted earnings per share for the three and nine months ended September 30, 2021 exclude intangible amortization expense and transaction costs associated with the acquisition of Four. 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 nine months ended September 30, 2022 and the full year 2022 outlook exclude stock-based compensation expense, restructuring expenses, and impairment of goodwill. Adjusted EBITDA for the three and nine months ended September 30, 2021 exclude stock-based compensation expense and transaction costs associated with the acquisition of Four. The amounts for these pre-tax non-GAAP adjustments can be found in the three and nine month 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)

 

(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net Earnings

$

16,005

 

 

$

57,413

 

 

$

62,624

 

 

$

205,738

 

Add: Intangible Amortization Expense

 

5,724

 

 

 

5,723

 

 

 

17,171

 

 

 

16,565

 

Add: Transaction Expense

 

 

 

 

 

 

 

 

 

 

561

 

Add: Restructuring Expense

 

4,673

 

 

 

 

 

 

9,001

 

 

 

 

Add: Impairment of Goodwill

 

10,151

 

 

 

 

 

 

10,151

 

 

 

 

Less: Tax Impact of Adjustments(1)

 

(2,703

)

 

 

(1,488

)

 

 

(6,804

)

 

 

(4,452

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

755

 

 

 

1,040

 

 

 

1,941

 

 

 

1,040

 

Non-GAAP Net Earnings

$

34,605

 

 

$

62,688

 

 

$

94,084

 

 

$

219,452

 

 

 

 

 

 

 

 

 

Earnings Per Share Assuming Dilution

$

0.32

 

 

$

0.86

 

 

$

1.18

 

 

$

3.06

 

Add: Intangible Amortization Expense

 

0.11

 

 

 

0.09

 

 

 

0.32

 

 

 

0.25

 

Add: Transaction Expense

 

 

 

 

 

 

 

 

 

 

0.01

 

Add: Restructuring Expense

 

0.09

 

 

 

 

 

 

0.17

 

 

 

 

Add: Impairment of Goodwill

 

0.20

 

 

 

 

 

 

0.19

 

 

 

 

Less: Tax Impact of Adjustments(1)

 

(0.05

)

 

 

(0.02

)

 

 

(0.13

)

 

 

(0.07

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

0.01

 

 

 

0.02

 

 

 

0.04

 

 

 

0.02

 

Non-GAAP Earnings Per Share Assuming Dilution(2)

$

0.68

 

 

$

0.94

 

 

$

1.77

 

 

$

3.26

 

Weighted Average Shares Outstanding Assuming Dilution

 

50,547

 

 

 

66,385

 

 

 

53,053

 

 

 

67,319

 

(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

 

September 30, 2022

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

 

 

 

$

16,005

Income Taxes(1)

 

 

 

 

 

 

 

11,343

Earnings (Loss) Before Income Taxes

$

43,492

 

$

1,376

 

$

(17,520

)

 

 

27,348

Interest Expense

 

9,365

 

 

98

 

 

 

 

 

9,463

Depreciation

 

2,355

 

 

204

 

 

142

 

 

 

2,701

Amortization

 

5,421

 

 

 

 

303

 

 

 

5,724

EBITDA

 

60,633

 

 

1,678

 

 

(17,075

)

 

 

45,236

Stock-Based Compensation

 

3,107

 

 

104

 

 

1,679

 

 

 

4,890

Restructuring Expense

 

4,670

 

 

3

 

 

 

 

 

4,673

Impairment of Goodwill

 

 

 

 

 

10,151

 

 

 

10,151

Adjusted EBITDA

$

68,410

 

$

1,785

 

$

(5,245

)

 

$

64,950

(1)

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

 

(Unaudited)

 

Three Months Ended

 

September 30, 2021

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

 

 

 

$

57,413

Income Taxes(1)

 

 

 

 

 

 

 

20,464

Earnings (Loss) Before Income Taxes

$

76,435

 

$

6,354

 

$

(4,912

)

 

 

77,877

Interest Expense

 

307

 

 

137

 

 

 

 

 

444

Depreciation

 

2,627

 

 

240

 

 

13

 

 

 

2,880

Amortization

 

5,421

 

 

 

 

302

 

 

 

5,723

EBITDA

 

84,790

 

 

6,731

 

 

(4,597

)

 

 

86,924

Stock-Based Compensation

 

3,587

 

 

78

 

 

3,002

 

 

 

6,667

Adjusted EBITDA

$

88,377

 

$

6,809

 

$

(1,595

)

 

$

93,591

(1)

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

PROG Holdings, Inc.

Non-GAAP Financial Information

Nine Month Segment EBITDA

(In thousands)

 

 

(Unaudited)

 

Nine Months Ended

 

September 30, 2022

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

 

 

 

$

62,624

Income Taxes(1)

 

 

 

 

 

 

 

31,889

Earnings (Loss) Before Income Taxes

$

112,956

 

$

9,154

 

$

(27,597

)

 

 

94,513

Interest Expense

 

28,413

 

 

287

 

 

 

 

 

28,700

Depreciation

 

7,408

 

 

596

 

 

271

 

 

 

8,275

Amortization

 

16,263

 

 

 

 

908

 

 

 

17,171

EBITDA

 

165,040

 

 

10,037

 

 

(26,418

)

 

 

148,659

Stock-Based Compensation

 

9,708

 

 

291

 

 

3,931

 

 

 

13,930

Restructuring Expense

 

8,343

 

 

658

 

 

 

 

 

9,001

Impairment of Goodwill

 

 

 

 

 

10,151

 

 

 

10,151

Adjusted EBITDA

$

183,091

 

$

10,986

 

$

(12,336

)

 

$

181,741

(1)

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

 

(Unaudited)

 

Nine Months Ended

 

September 30, 2021

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

 

 

 

$

205,738

Income Taxes(1)

 

 

 

 

 

 

 

69,609

Earnings (Loss) Before Income Taxes

$

268,128

 

$

12,131

 

$

(4,912

)

 

 

275,347

Interest Expense

 

1,062

 

 

330

 

 

 

 

 

1,392

Depreciation

 

7,253

 

 

625

 

 

13

 

 

 

7,891

Amortization

 

16,263

 

 

 

 

302

 

 

 

16,565

EBITDA

 

292,706

 

 

13,086

 

 

(4,597

)

 

 

301,195

Stock-Based Compensation

 

11,592

 

 

209

 

 

3,002

 

 

 

14,803

Transaction Expense

 

561

 

 

 

 

 

 

 

561

Adjusted EBITDA

$

304,859

 

$

13,295

 

$

(1,595

)

 

$

316,559

(1)

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

PROG Holdings, Inc.

Reconciliation of Full Year 2022 Revised Outlook for Adjusted EBITDA

(In thousands)

 

 

 

 

Consolidated Total

Estimated Net Earnings

$85,500 - $88,500

Income Taxes

40,500 - 41,500

Projected Earnings Before Taxes

126,000 - 130,000

Interest Expense

38,000

Depreciation

11,000

Amortization

23,000

Projected EBITDA

198,000 - 202,000

Stock-Based Compensation

18,000-19,000

Restructuring Expense

9,000

Impairment of Goodwill

10,000

Projected Adjusted EBITDA

$235,000 - $240,000

PROG Holdings, Inc.

Reconciliation of Full Year 2022 Revised Outlook for Earnings Per Share

Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution

 

 

Full Year 2022 Range

 

Low

High

Projected Earnings Per Share Assuming Dilution

$

1.63

$

1.69

Add: Projected Intangible Amortization Expense(1)

 

0.32

 

0.32

Add: Restructuring Expense(1)

 

0.13

 

0.13

Add: Impairment of Goodwill

 

0.19

 

0.19

Add: Projected Interest on FTC Settlement Uncertain Tax Position

 

0.05

 

0.05

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

$

2.32

$

2.38

(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 Full Year 2022 Previous Outlook for Adjusted EBITDA

(In thousands)

 

 

 

Consolidated Total

Estimated Net Earnings

$111,000 - $124,000

Income Taxes

43,000 - 48,000

Projected Earnings Before Taxes

154,000 - 172,000

Interest Expense

38,000

Depreciation

11,000

Amortization

22,000

Projected EBITDA

225,000 - 243,000

Stock-Based Compensation

26,000-27,000

Restructuring Expense

4,000-5,000

Projected Adjusted EBITDA

$255,000 - $275,000

PROG Holdings, Inc.

Reconciliation of Full Year 2022 Previous Outlook for Earnings Per Share

Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution

 

 

Full Year 2022 Range

 

Low

High

Projected Earnings Per Share Assuming Dilution

$

2.09

$

2.33

Add: Projected Intangible Amortization Expense(1)

 

0.31

 

0.31

Add: Restructuring Expense(1)

 

0.06

 

0.07

Add: Projected Interest on FTC Settlement Uncertain Tax Position

 

0.04

 

0.04

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

$

2.50

$

2.75

(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.

 

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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