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PROG Holdings Reports Fourth Quarter 2023 Results; Initiates Quarterly Cash Dividend

PROG Holdings Reports Fourth Quarter 2023 Results; Initiates Quarterly Cash Dividend

  • Consolidated revenues of $577.4 million; Earnings before taxes of $28.5 million
  • Adjusted EBITDA of $61.0 million
  • Diluted EPS of $0.41; Non-GAAP Diluted EPS of $0.72
  • Progressive Leasing GMV of $547.6 million, up 1.2% year-over-year
  • Company initiates quarterly cash dividend, announces $500 million share repurchase authorization

PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, Four Technologies, and Build, today announced financial results for the fourth quarter ended December 31, 2023, and the initiation of a quarterly cash dividend for shareholders, as well as a $500 million share repurchase authorization.

"We were pleased to finish 2023 with financial results that matched or exceeded our outlook, as strong customer behavior and conversion rates during the holiday period drove a year-over-year increase in quarterly GMV, due in part to marketing and other initiatives we put in place with our retail partners," said PROG Holdings President and CEO Steve Michaels. "Our portfolio remains healthy, and we continue to effectively manage its performance while maintaining cost discipline in the face of challenging retail conditions, enabling us to deliver strong results for both the fourth quarter and the full year. Our focus remains on our three-pillared strategy to grow, enhance, and expand, while our active management of our portfolio and SG&A spend allows us to invest in key growth initiatives, positioning us for future success."

"Additionally, our Board of Directors has approved payment of a quarterly cash dividend of $0.12 per share of Company common stock in the first quarter of 2024 alongside a new $500 million share repurchase authorization," Michaels continued. "We believe our cash-efficient model will allow us to reinvest in the business while pursuing a balanced capital return strategy for our shareholders."

Consolidated Results

Consolidated revenues for the fourth quarter of 2023 were $577.4 million, a decrease of 5.7% from the same period in 2022, driven by a lower gross leased asset balance entering the quarter.

Consolidated net earnings for the quarter were $18.6 million, compared with $36.1 million in the prior year period. Adjusted EBITDA for the quarter decreased 18.1% to $61.0 million, or 10.6% of revenues, compared with $74.4 million, or 12.2% of revenues for the same period in 2022. The year-over-year decline in adjusted EBITDA was driven primarily by a decline in revenue and deleveraging of SG&A, partially offset by customer payment performance.

Diluted earnings per share for the fourth quarter of 2023 were $0.41, compared with $0.73 in the year ago period. On a non-GAAP basis, diluted earnings per share were $0.72 in the fourth quarter of 2023, compared with $0.84 for the same period in 2022. The Company's weighted average shares outstanding assuming dilution in the fourth quarter was 8.3% lower year-over-year.

Progressive Leasing Results

Progressive Leasing's fourth quarter GMV increased 1.2% year over year to $547.6 million, primarily driven by better-than-expected customer demand for leasable items during the holidays. The provision for lease merchandise write-offs for the quarter was 7.0%, within the Company's 6%-8% targeted annual range.

Capital Returns

PROG Holdings ended the fourth quarter of 2023 with cash of $155.4 million and gross debt of $600 million. The Company repurchased $31.3 million of its stock in the quarter at an average price of $28.35 per share. PROG Holdings’ Board has authorized a total of $500 million of share repurchases under the Company’s existing share repurchase program, as well as a quarterly cash dividend of $0.12 per share of the Company's common stock, payable on March 28, 2024 to shareholders of record at the close of business on March 14, 2024. While the Company expects to continue paying a quarterly cash dividend going forward, the future payment of dividends will be at the sole discretion of our Board of Directors and will depend on many factors, including our earnings, financial condition, and other considerations that our Board of Directors deems relevant.

2024 Outlook

PROG Holdings is issuing full year and Q1 2024 outlook for revenues, consolidated net earnings, segment earnings before taxes, adjusted EBITDA, diluted GAAP EPS, and diluted non-GAAP EPS. This outlook assumes a difficult operating environment with continued soft demand for consumer durable goods, no material changes in the Company's decisioning posture, an effective tax rate for non-GAAP EPS of approximately 29%, no material increases in the unemployment rate for our consumer, and no impact from additional share repurchases.

 

Full Year 2024 Outlook

(In thousands, except per share amounts)

Low

 

High

 

 

 

PROG Holdings - Total Revenues

$

2,235,000

 

$

2,335,000

 

PROG Holdings - Net Earnings

 

89,500

 

 

105,000

 

PROG Holdings - Adjusted EBITDA

 

230,000

 

 

250,000

 

PROG Holdings - Diluted EPS

 

2.00

 

 

2.34

 

PROG Holdings - Diluted Non-GAAP EPS

 

2.70

 

 

3.00

 

 

 

 

Progressive Leasing - Total Revenues

 

2,160,000

 

 

2,240,000

 

Progressive Leasing - Earnings Before Taxes

 

147,000

 

 

164,000

 

Progressive Leasing - Adjusted EBITDA

 

241,000

 

 

256,000

 

 

 

 

Vive - Total Revenues

 

55,000

 

 

65,000

 

Vive - Earnings Before Taxes

 

1,500

 

 

3,000

 

Vive - Adjusted EBITDA

 

3,000

 

 

5,000

 

 

 

 

Other - Total Revenues

 

20,000

 

 

30,000

 

Other - Loss Before Taxes

 

(20,000

)

 

(18,000

)

Other - Adjusted EBITDA

 

(14,000

)

 

(11,000

)

 

Three Months Ended March 31, 2024 Outlook

(In thousands, except per share amounts)

Low

 

High

 

 

 

PROG Holdings - Total Revenues

$

620,000

$

640,000

PROG Holdings - Net Earnings

 

14,500

 

19,500

PROG Holdings - Adjusted EBITDA

 

62,000

 

68,000

PROG Holdings - Diluted EPS

 

0.34

 

0.44

PROG Holdings - Diluted Non-GAAP EPS

 

0.80

 

0.85

Conference Call and Webcast

The Company has scheduled a live webcast and conference call for Wednesday, February 21, 2024, at 8:30 A.M. ET to discuss its financial results for the fourth 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 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 "continue", "allow", "believe", "payable", "expects", "outlook", "will", "assumes" 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) the benefits expected from our stock repurchase program and from our payment of a quarterly cash dividend, and our expectations regarding paying such a dividend going forward; (ii) the health of our lease portfolio and our ability to effectively manage that portfolio performance and SG&A spending; (iii) our ability to invest in our business, including in our key growth initiatives; (iv) our expectations regarding our cash efficiency and our capital return strategy; and (v) our outlook for the first quarter and full year 2024. 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

Year Ended

 

December 31,

December 31,

 

2023

2022

2023

2022

REVENUES:

 

 

 

 

Lease Revenues and Fees

$

557,484

 

$

592,942

 

$

2,333,588

 

$

2,523,785

 

Interest and Fees on Loans Receivable

 

19,917

 

 

19,155

 

 

74,676

 

 

74,041

 

 

 

577,401

 

 

612,097

 

 

2,408,264

 

 

2,597,826

 

 

 

 

 

 

COSTS AND EXPENSES:

 

 

 

 

Depreciation of Lease Merchandise

 

374,146

 

 

399,017

 

 

1,576,303

 

 

1,757,730

 

Provision for Lease Merchandise Write-offs

 

38,955

 

 

38,271

 

 

155,250

 

 

193,926

 

Operating Expenses

 

128,932

 

 

112,377

 

 

451,084

 

 

450,374

 

Impairment of Goodwill

 

 

 

 

 

 

 

10,151

 

 

 

542,033

 

 

549,665

 

 

2,182,637

 

 

2,412,181

 

OPERATING PROFIT

 

35,368

 

 

62,432

 

 

225,627

 

 

185,645

 

Interest Expense, Net

 

(6,857

)

 

(8,701

)

 

(29,406

)

 

(37,401

)

EARNINGS BEFORE INCOME TAX EXPENSE

 

28,511

 

 

53,731

 

 

196,221

 

 

148,244

 

INCOME TAX EXPENSE

 

9,936

 

 

17,646

 

 

57,383

 

 

49,535

 

NET EARNINGS

$

18,575

 

$

36,085

 

$

138,838

 

$

98,709

 

EARNINGS PER SHARE

 

 

 

 

Basic

$

0.42

 

$

0.74

 

$

3.02

 

$

1.90

 

Assuming Dilution

$

0.41

 

$

0.73

 

$

2.98

 

$

1.90

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING:

 

 

 

 

Basic

 

44,337

 

 

49,029

 

 

46,034

 

 

51,921

 

Assuming Dilution

 

45,075

 

 

49,170

 

 

46,550

 

 

52,075

 

 

PROG Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

 

 

 

 

December 31,
2023

December 31,
2022

ASSETS:

 

 

Cash and Cash Equivalents

$

155,416

 

$

131,880

 

Accounts Receivable (net of allowances of $64,180 in 2023 and $69,264 in 2022)

 

67,879

 

 

64,521

 

Lease Merchandise (net of accumulated depreciation and allowances of $423,466 in 2023 and $467,355 in 2022)

 

633,427

 

 

648,043

 

Loans Receivable (net of allowances and unamortized fees of $50,022 in 2023 and $53,635 in 2022)

 

126,823

 

 

130,966

 

Property and Equipment, Net

 

24,104

 

 

23,852

 

Operating Lease Right-of-Use Assets

 

9,271

 

 

11,875

 

Goodwill

 

296,061

 

 

296,061

 

Other Intangibles, Net

 

91,664

 

 

114,411

 

Income Tax Receivable

 

32,918

 

 

18,864

 

Deferred Income Tax Assets

 

2,981

 

 

2,955

 

Prepaid Expenses and Other Assets

 

50,711

 

 

48,481

 

Total Assets

$

1,491,255

 

$

1,491,909

 

LIABILITIES & SHAREHOLDERS’ EQUITY:

 

 

Accounts Payable and Accrued Expenses

$

151,259

 

$

135,025

 

Deferred Income Tax Liabilities

 

104,838

 

 

137,261

 

Customer Deposits and Advance Payments

 

35,713

 

 

37,074

 

Operating Lease Liabilities

 

15,849

 

 

21,122

 

Debt

 

592,265

 

 

590,966

 

Total Liabilities

 

899,924

 

 

921,448

 

SHAREHOLDERS' EQUITY:

 

 

Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at December 31, 2023 and 2022; Shares Issued: 82,078,654 at December 31, 2023 and 2022

 

41,039

 

 

41,039

 

Additional Paid-in Capital

 

352,421

 

 

338,814

 

Retained Earnings

 

1,293,073

 

 

1,154,235

 

 

 

1,686,533

 

 

1,534,088

 

Less: Treasury Shares at Cost

 

 

Common Stock: 38,404,527 Shares at December 31, 2023 and 34,044,102 at December 31, 2022

 

(1,095,202

)

 

(963,627

)

Total Shareholders’ Equity

 

591,331

 

 

570,461

 

Total Liabilities & Shareholders’ Equity

$

1,491,255

 

$

1,491,909

 

 

PROG Holdings, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

 

 

 

Year Ended December 31,

 

 

2023

 

2022

OPERATING ACTIVITIES:

 

 

Net Earnings

$

138,838

 

$

98,709

 

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

 

 

Depreciation of Lease Merchandise

 

1,576,303

 

 

1,757,730

 

Other Depreciation and Amortization

 

32,032

 

 

33,851

 

Provisions for Accounts Receivable and Loan Losses

 

345,383

 

 

417,496

 

Stock-Based Compensation

 

24,920

 

 

17,521

 

Deferred Income Taxes

 

(32,449

)

 

(9,199

)

Impairment of Goodwill

 

 

 

10,151

 

Non-Cash Lease Expense

 

(2,669

)

 

(1,674

)

Other Changes, Net

 

(5,992

)

 

(7,164

)

Changes in Operating Assets and Liabilities:

 

 

Additions to Lease Merchandise

 

(1,721,117

)

 

(1,889,207

)

Book Value of Lease Merchandise Sold or Disposed

 

159,430

 

 

197,489

 

Accounts Receivable

 

(307,984

)

 

(374,515

)

Prepaid Expenses and Other Assets

 

(2,110

)

 

68

 

Income Tax Receivable and Payable

 

(14,188

)

 

(6,007

)

Operating Lease Right-of-Use Assets and Liabilities

 

 

 

2,999

 

Accounts Payable and Accrued Expenses

 

15,200

 

 

2,227

 

Customer Deposits and Advance Payments

 

(1,361

)

 

(7,996

)

Cash Provided by Operating Activities

 

204,236

 

 

242,479

 

INVESTING ACTIVITIES:

 

 

Investments in Loans Receivable

 

(214,686

)

 

(203,600

)

Proceeds from Loans Receivable

 

185,056

 

 

159,707

 

Outflows on Purchases of Property and Equipment

 

(9,616

)

 

(9,674

)

Proceeds from Property and Equipment

 

48

 

 

27

 

Proceeds from Acquisitions of Businesses

 

365

 

 

6

 

Cash Used in Investing Activities

 

(38,833

)

 

(53,534

)

FINANCING ACTIVITIES:

 

 

Acquisition of Treasury Stock

 

(139,573

)

 

(223,598

)

Tender Offer Shares Repurchased and Retired

 

 

 

(274

)

Issuance of Stock Under Stock Option and Employee Purchase Plans

 

1,357

 

 

1,150

 

Shares Withheld for Tax Payments

 

(3,622

)

 

(2,902

)

Debt Issuance Costs

 

(29

)

 

(1,600

)

Cash Used in Financing Activities

 

(141,867

)

 

(227,224

)

Increase (Decrease) in Cash and Cash Equivalents

 

23,536

 

 

(38,279

)

Cash and Cash Equivalents at Beginning of Year

 

131,880

 

 

170,159

 

Cash and Cash Equivalents at End of Year

$

155,416

 

$

131,880

 

Net Cash Paid During the Year:

 

 

Interest

$

36,991

 

$

35,712

 

Income Taxes

$

100,433

 

$

62,172

 

 

PROG Holdings, Inc.

Quarterly Revenues by Segment

(In thousands)

 

 

 

 

 

 

(Unaudited)

 

 

Three Months Ended

 

 

December 31, 2023

 

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Lease Revenues and Fees

$

557,484

$

$

$

557,484

Interest and Fees on Loans Receivable

 

 

17,025

 

2,892

 

19,917

Total Revenues

$

557,484

$

17,025

$

2,892

$

577,401

 

(Unaudited)

 

Three Months Ended

 

December 31, 2022

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Lease Revenues and Fees

$

592,942

$

$

$

592,942

Interest and Fees on Loans Receivable

 

 

17,886

 

1,269

 

19,155

Total Revenues

$

592,942

$

17,886

$

1,269

$

612,097

PROG Holdings, Inc.

Annual Revenues by Segment

(In thousands)

 

 

 

 

 

Twelve Months Ended

 

 

December 31, 2023

 

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Lease Revenues and Fees

$

2,333,588

$

$

$

2,333,588

Interest and Fees on Loans Receivable

 

 

68,912

 

5,764

 

74,676

Total Revenues

$

2,333,588

$

68,912

$

5,764

$

2,408,264

 

Twelve Months Ended

 

December 31, 2022

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Lease Revenues and Fees

$

2,523,785

$

$

$

2,523,785

Interest and Fees on Loans Receivable

 

 

70,911

 

3,130

 

74,041

Total Revenues

$

2,523,785

$

70,911

$

3,130

$

2,597,826

 

PROG Holdings, Inc.

Gross Merchandise Volume by Quarter

(In thousands)

 

 

 

 

 

 

(Unaudited)

 

 

Three Months Ended December 31,

 

 

2023

 

2022

Progressive Leasing

$

547,575

$

540,913

Vive

 

31,918

 

40,417

Other

 

53,260

 

26,192

Total GMV

$

632,753

$

607,522

 

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 and first quarter 2024 outlook 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. Non-GAAP net earnings and non-GAAP diluted earnings per share for the three and twelve months ended December 31, 2023 exclude intangible amortization expense, restructuring expenses, costs related to the cybersecurity incident, 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 twelve months ended December 31, 2022, exclude intangible amortization expense, restructuring expenses, impairment of goodwill 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 full year 2024 and first quarter 2024 outlook exclude stock-based compensation expense and restructuring expenses. Adjusted EBITDA for the three and twelve months ended December 31, 2023, exclude stock-based compensation expense, restructuring expenses, costs related to the cybersecurity incident and regulatory insurance recoveries. Adjusted EBITDA for the three and twelve months ended December 31, 2022, exclude stock-based compensation expense, restructuring expenses and impairment of goodwill. 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

Twelve Months Ended

 

Mar 31,

Jun 30,

Sept 30,

Dec 31,

Dec 31,

 

2023

Net Earnings

$

48,033

 

$

37,218

 

$

35,012

 

$

18,575

 

$

138,838

 

Add: Intangible Amortization Expense

 

5,724

 

 

5,723

 

 

5,650

 

 

5,651

 

 

22,748

 

Add: Restructuring Expense

 

757

 

 

963

 

 

238

 

 

10,575

 

 

12,533

 

Add: Costs Related to the Cybersecurity Incident

 

 

 

 

 

1,805

 

 

1,028

 

 

2,833

 

Less: Regulatory Insurance Recoveries

 

(525

)

 

 

 

 

 

 

 

(525

)

Less: Tax Impact of Adjustments(1)

 

(1,549

)

 

(1,738

)

 

(2,000

)

 

(4,486

)

 

(9,773

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

970

 

 

970

 

 

971

 

 

1,078

 

 

3,989

 

Non-GAAP Net Earnings

$

53,410

 

$

43,136

 

$

41,676

 

$

32,421

 

$

170,643

 

Earnings Per Share Assuming Dilution

$

1.00

 

$

0.79

 

$

0.76

 

$

0.41

 

$

2.98

 

Add: Intangible Amortization Expense

 

0.12

 

 

0.12

 

 

0.12

 

 

0.13

 

 

0.49

 

Add: Restructuring Expense

 

0.02

 

 

0.02

 

 

0.01

 

 

0.23

 

 

0.27

 

Add: Costs Related to the Cybersecurity Incident

 

 

 

 

 

0.04

 

 

0.02

 

 

0.06

 

Less: Regulatory Insurance Recoveries

 

(0.01

)

 

 

 

 

 

 

 

(0.01

)

Less: Tax Impact of Adjustments(1)

 

(0.03

)

 

(0.04

)

 

(0.04

)

 

(0.10

)

 

(0.21

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

0.02

 

 

0.02

 

 

0.02

 

 

0.02

 

 

0.09

 

Non-GAAP Earnings Per Share Assuming Dilution(2)

$

1.11

 

$

0.92

 

$

0.90

 

$

0.72

 

$

3.67

 

Weighted Average Shares Outstanding Assuming Dilution

 

48,139

 

 

46,896

 

 

46,133

 

 

45,075

 

 

46,550

 

(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 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

 

Twelve Months Ended

 

 

Mar 31,

 

Jun 30,

 

Sept 30,

 

Dec 31,

 

Dec 31,

 

 

2022

Net Earnings

$

27,135

 

$

19,484

 

$

16,005

 

$

36,085

 

$

98,709

 

Add: Intangible Amortization Expense

 

5,724

 

 

5,723

 

 

5,724

 

 

5,723

 

 

22,894

 

Add: Restructuring Expense

 

 

 

4,328

 

 

4,673

 

 

 

 

9,001

 

Add: Impairment of Goodwill

 

 

 

 

 

10,151

 

 

 

 

10,151

 

Less: Tax Impact of Adjustments(1)

 

(1,488

)

 

(2,613

)

 

(2,703

)

 

(1,488

)

 

(8,292

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

539

 

 

647

 

 

755

 

 

972

 

 

2,913

 

Non-GAAP Net Earnings

$

31,910

 

$

27,569

 

$

34,605

 

$

41,292

 

$

135,376

 

Earnings Per Share Assuming Dilution

$

0.49

 

$

0.37

 

$

0.32

 

$

0.73

 

$

1.90

 

Add: Intangible Amortization Expense

 

0.10

 

 

0.11

 

 

0.11

 

 

0.12

 

 

0.44

 

Add: Restructuring Expense

 

 

 

0.08

 

 

0.09

 

 

 

 

0.17

 

Add: Impairment of Goodwill

 

 

 

 

 

0.20

 

 

 

 

0.19

 

Less: Tax Impact of Adjustments(1)

 

(0.03

)

 

(0.05

)

 

(0.05

)

 

(0.03

)

 

(0.16

)

Add: Accrued Interest on FTC Settlement Uncertain Tax Position

 

0.01

 

 

0.01

 

 

0.01

 

 

0.02

 

 

0.06

 

Non-GAAP Earnings Per Share Assuming Dilution(2)

$

0.57

 

$

0.52

 

$

0.68

 

$

0.84

 

$

2.60

 

Weighted Average Shares Outstanding Assuming Dilution

 

55,706

 

 

52,961

 

 

50,547

 

 

49,170

 

 

52,075

 

(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

 

 

December 31, 2023

 

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

$

18,575

 

Income Tax Expense(1)

 

 

 

 

9,936

 

Earnings (Loss) Before Income Tax Expense

$

35,857

 

$

59

 

$

(7,405

)

 

28,511

 

Interest Expense, Net

 

6,915

 

 

24

 

 

(82

)

 

6,857

 

Depreciation

 

1,941

 

 

211

 

 

353

 

 

2,505

 

Amortization

 

5,422

 

 

 

 

229

 

 

5,651

 

EBITDA

 

50,135

 

 

294

 

 

(6,905

)

 

43,524

 

Stock-Based Compensation

 

4,024

 

 

306

 

 

1,509

 

 

5,839

 

Restructuring Expense

 

10,575

 

 

 

 

 

 

10,575

 

Costs Related to the Cybersecurity Incident

 

1,028

 

 

 

 

 

 

1,028

 

Adjusted EBITDA

$

65,762

 

$

600

 

$

(5,396

)

$

60,966

 

(1)

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

 

 

(Unaudited)

 

Three Months Ended

 

December 31, 2022

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

$

36,085

 

Income Tax Expense(1)

 

 

 

 

17,646

 

Earnings (Loss) Before Income Tax Expense

$

61,187

 

$

41

 

$

(7,497

)

 

53,731

 

Interest Expense, Net

 

8,590

 

 

111

 

 

 

 

8,701

 

Depreciation

 

2,283

 

 

199

 

 

200

 

 

2,682

 

Amortization

 

5,420

 

 

 

 

303

 

 

5,723

 

EBITDA

 

77,480

 

 

351

 

 

(6,994

)

 

70,837

 

Stock-Based Compensation

 

2,925

 

 

100

 

 

566

 

 

3,591

 

Adjusted EBITDA

$

80,405

 

$

451

 

$

(6,428

)

$

74,428

 

(1)

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

 

PROG Holdings, Inc.

Non-GAAP Financial Information

Twelve Month Segment EBITDA

(In thousands)

 

 

 

Twelve Months Ended

 

December 31, 2023

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

$

138,838

 

Income Tax Expense(1)

 

 

 

 

57,383

 

Earnings (Loss) Before Income Tax Expense

$

216,271

 

$

4,545

 

$

(24,595

)

 

196,221

 

Interest Expense, Net

 

28,978

 

 

593

 

 

(165

)

 

29,406

 

Depreciation

 

7,482

 

 

745

 

 

1,058

 

 

9,285

 

Amortization

 

21,684

 

 

 

 

1,064

 

 

22,748

 

EBITDA

 

274,415

 

 

5,883

 

 

(22,638

)

 

257,660

 

Stock-Based Compensation

 

17,327

 

 

1,190

 

 

6,403

 

 

24,920

 

Restructuring Expense

 

12,533

 

 

 

 

 

 

12,533

 

Regulatory Insurance Recoveries

 

(525

)

 

 

 

 

 

(525

)

Costs Related to the Cybersecurity Incident

 

2,833

 

 

 

 

 

 

2,833

 

Adjusted EBITDA

$

306,583

 

$

7,073

 

$

(16,235

)

$

297,421

 

(1)

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

 

 

Twelve Months Ended

 

December 31, 2022

 

Progressive Leasing

 

Vive

 

Other

 

Consolidated Total

Net Earnings

 

 

 

 

$

98,709

 

Income Tax Expense(1)

 

 

 

 

 

49,535

 

Earnings (Loss) Before Income Tax Expense

$

174,143

 

$

9,195

 

$

(35,094

)

 

148,244

 

Interest Expense, Net

 

37,003

 

 

398

 

 

 

 

37,401

 

Depreciation

 

9,691

 

 

795

 

 

471

 

 

10,957

 

Amortization

 

21,683

 

 

 

 

1,211

 

 

22,894

 

EBITDA

 

242,520

 

 

10,388

 

 

(33,412

)

 

219,496

 

Stock-Based Compensation

 

12,633

 

 

391

 

 

4,497

 

 

17,521

 

Restructuring Expense

 

8,343

 

 

658

 

 

 

 

9,001

 

Impairment of Goodwill

 

 

 

 

 

10,151

 

 

10,151

 

Adjusted EBITDA

$

263,496

 

$

11,437

 

$

(18,764

)

$

256,169

 

(1)

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

 

PROG Holdings, Inc.

Non-GAAP Financial Information

Reconciliation of 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 March 31, 2024 Outlook for Adjusted EBITDA

(In thousands)

 

 

 

 

 

Three Months Ended March 31, 2024 Outlook

 

 

Consolidated Total

Estimated Net Earnings

$14,500 - $19,500

Income Tax Expense(1)

6,000 - 8,000

Projected Earnings Before Income Tax Expense

20,500 - 27,500

Interest Expense, Net

8,000 - 7,500

Depreciation

2,500

Amortization

6,000

Projected EBITDA

37,000 - 43,500

Stock-Based Compensation

5,000 - 6,500

Restructuring Expense

20,000 - 18,000

Projected Adjusted EBITDA

$62,000 - $68,000

(1)

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

 

PROG Holdings, Inc.

Reconciliation of 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 March 31, 2024 Outlook for Earnings Per Share

Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution

 

 

 

 

 

Three Months Ended
March 31, 2024

 

 

Low

 

High

Projected Earnings Per Share Assuming Dilution

$

0.34

 

$

0.44

 

Add: Projected Intangible Amortization Expense

 

0.13

 

 

0.13

 

Add: Projected Interest on FTC Settlement Uncertain Tax Position

 

0.02

 

 

0.02

 

Add: Projected Restructuring Expense

 

0.45

 

 

0.40

 

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

 

(0.15

)

 

(0.14

)

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

$

0.80

 

$

0.85

 

(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

View source version on businesswire.com: https://www.businesswire.com/news/home/20240221369993/en/

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