Business Services Industry
Rent-A-Center, Inc. Reports Second Quarter 2005 Results; Diluted Earnings per Share of $0.52, Excluding Tax Credit
Business Wire, July 25, 2005
Rent-A-Center, Inc. and Subsidiaries
STATEMENT OF EARNINGS HIGHLIGHTS
(In Thousands of Dollars, except per share data)
Three Months Ended June 30,
------------------------------------
2005 2005 2004
----------- ----------- -----------
Before Tax After Tax
Audit Audit
Reserve Reserve
Credit Credit
----------- ----------- -----------
Total Revenue $580,578 $580,578 $572,985
Operating Profit 72,988 72,988 90,223
Net Earnings 39,620 41,742 (1) 51,194
Diluted Earnings per Common Share $0.52 $0.55 (1) $0.62
EBITDA $88,414 $88,414 $105,215
Reconciliation to EBITDA:
Reported earnings before income
taxes 63,553 63,553 81,459
Add back:
Interest expense, net 9,435 9,435 8,764
Depreciation of property assets 13,271 13,271 11,834
Amortization of intangibles 2,155 2,155 3,158
----------- ----------- -----------
EBITDA $88,414 $88,414 $105,215
Six Months Ended June 30,
------------------------------------
2005 2005 2004
----------- ----------- -----------
Before Tax After Tax
Audit Audit
Reserve Reserve
and and
Litigation Litigation
Credits Credits
----------- ----------- -----------
Total Revenue $1,182,387 $1,182,387 $1,158,365
Operating Profit 150,980 158,980 182,882
Net Earnings 82,305 89,411 (2) 103,403
Diluted Earnings per Common Share $1.08 $1.18 (2) $1.25
EBITDA $181,966 $181,966 $211,611
Reconciliation to EBITDA:
Reported earnings before income
taxes 132,079 140,079 165,262
Add back:
Litigation Reversion -- (8,000) --
Interest expense, net 18,901 18,901 17,620
Depreciation of property assets 26,534 26,534 23,083
Amortization of intangibles 4,452 4,452 5,646
----------- ----------- -----------
EBITDA $181,966 $181,966 $211,611
(1) Including the effects of a $2.0 million tax audit reserve credit
associated with the examination and favorable resolution of the
Company's 1998 and 1999 federal tax returns. This credit increased
diluted earnings per share in the second quarter by $0.03, from
$0.52 per diluted earnings per share to the reported diluted
earnings per share of $0.55.
(2) Including the effects of an $8.0 million pre-tax credit in the
first quarter associated with the settlement of the
Griego/Carrillo litigation reversion. This pre-tax credit
increased diluted earnings per share for the six month period
ended June 30, 2005 by $0.07. The litigation reversion credit,
combined with the $2.0 million tax audit reserve credit in the
second quarter, increased diluted earnings per share for the six
month period ended June 30, 2005 by $0.10 to the reported diluted
earnings per share of $1.18.
Selected Balance Sheet Data: (in June 30, 2005 June 30, 2004
Thousands of Dollars)
------------- -------------
Cash and cash equivalents $25,119 $86,164
Prepaid expenses and other assets 52,566 57,155
Rental merchandise, net
On rent 574,080 565,977
Held for rent 197,639 169,044
Total Assets 1,930,793 1,930,203
Senior debt 364,500 396,000
Subordinated notes payable 300,000 300,000
Total Liabilities 1,041,531 1,069,985
Stockholders' Equity 889,262 860,218
Rent-A-Center, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands of Dollars, except per share data) Three Months Ended
June 30,
-------------------
2005 2004
--------- ---------
Unaudited
Store Revenue
Rentals and Fees $526,639 $520,593
Merchandise Sales 37,498 34,599
Installment Sales 6,618 5,801
Other 997 967
--------- ---------
571,752 561,960
Franchise Revenue
Franchise Merchandise Sales 7,443 9,668
Royalty Income and Fees 1,383 1,357
--------- ---------
Total Revenue 580,578 572,985
Operating Expenses
Direct Store Expenses
Cost of Rental and Fees 114,068 112,743
Cost of Merchandise Sold 28,225 24,720
Cost of Installment Sales 2,750 2,477
Salaries and Other Expenses 332,939 311,058
Franchise Operation Expenses
Cost of Franchise Merchandise Sales 7,163 9,214
--------- ---------
485,145 460,212
General and Administrative Expenses 20,290 19,392
Amortization of Intangibles 2,155 3,158
--------- ---------
Total Operating Expenses 507,590 482,762
--------- ---------
Operating Profit 72,988 90,223
Interest Income (1,351) (1,488)
Interest Expense 10,786 10,252
--------- ---------
Earnings before Income Taxes 63,553 81,459
Income Tax Expense 21,811 30,265
--------- ---------
NET EARNINGS 41,742 51,194
Preferred Dividends -- --
--------- ---------
Net earnings allocable to common stockholders $41,742 $51,194
========= =========
BASIC WEIGHTED AVERAGE SHARES 74,747 79,464
========= =========
BASIC EARNINGS PER COMMON SHARE $0.56 $0.64
========= =========
DILUTED WEIGHTED AVERAGE SHARES 76,001 81,980
========= =========
DILUTED EARNINGS PER COMMON SHARE $0.55 $0.62
========= =========
Rent-A-Center, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS
(In Thousands of Dollars, except per share Six Months Ended June
data) 30,
-----------------------
2005 2004
----------- -----------
Unaudited
Store Revenue
Rentals and Fees $1,045,261 $1,024,883
Merchandise Sales 100,268 94,022
Installment Sales 13,202 12,499
Other 2,075 2,047
----------- -----------
1,160,806 1,133,451
Franchise Revenue
Franchise Merchandise Sales 18,787 22,132
Royalty Income and Fees 2,794 2,782
----------- -----------
Total Revenue 1,182,387 1,158,365
Operating Expenses
Direct Store Expenses
Cost of rental and fees 226,536 221,286
Cost of Merchandise Sold 70,292 64,103
Cost of Installment Sales 5,613 5,622
Salaries and Other Expenses 666,980 620,142
Franchise Operation Expenses
Cost of Franchise Merchandise Sales 18,029 21,106
----------- -----------
987,450 932,259
General and Administrative Expenses 39,505 37,578
Amortization of Intangibles 4,452 5,646
Litigation Reversion (8,000) --
----------- -----------
Total Operating Expenses 1,023,407 975,483
----------- -----------
Operating Profit 158,980 182,882
Interest Income (2,753) (2,991)
Interest Expense 21,654 20,611
----------- -----------
Earnings before Income Taxes 140,079 165,262
Income Tax Expense 50,668 61,859
----------- -----------
NET EARNINGS 89,411 103,403
Preferred Dividends -- --
----------- -----------
Net earnings allocable to common stockholders $89,411 $103,403
=========== ===========
BASIC WEIGHTED AVERAGE SHARES 74,653 79,874
=========== ===========
BASIC EARNINGS PER COMMON SHARE $1.20 $1.29
=========== ===========
DILUTED WEIGHTED AVERAGE SHARES 76,036 82,433
=========== ===========
DILUTED EARNINGS PER COMMON SHARE $1.18 $1.25
=========== ===========
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