UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report:
(Date
of
earliest event reported)
October
24, 2005
RENT-A-CENTER,
INC.
(Exact
name of registrant as specified in charter)
|
Delaware
(State
or other jurisdiction of incorporation or organization)
|
0-25370
(Commission
File Number)
|
45-0491516
(IRS
Employer Identification No.)
|
|
5700
Tennyson ParkwayPlano,
Texas 75024
(Address
of principal executive offices and zip
code)
|
||
(972)
801-1100
(Registrant's
telephone
number,
including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following
provisions (see General Instruction A.2. below):
| ¨ |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425).
|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
Item
2.02 Results
of Operations and Financial Condition.
Attached
hereto as Exhibit 99.1 is the Registrant’s press release reflecting earnings
information for the quarter ended September 30, 2005.
The
press
release contains information regarding EBITDA (earnings before interest,
taxes,
depreciation and amortization), which is a non-GAAP financial measure as
defined
in Item 10(e) of Regulation S-K. The press release also contains a
reconciliation of EBITDA to the Registrant’s reported earnings before income
taxes. Management of the Registrant believes that presentation of EBITDA
is
useful to investors, as among other things, this information impacts certain
financial covenants under the Registrant’s senior credit facilities and the
indenture governing its 7 1/2 % Senior Subordinated Notes due 2010. While
management believes this non-GAAP financial measure is useful in evaluating
the
Registrant, this information should be considered as supplemental in nature
and
not as a substitute for or superior to the related financial information
prepared in accordance with GAAP. Further, the non-GAAP financial measure
may
differ from similar measures presented by other companies.
Pursuant
to General Instruction B.2. of Form 8-K, all of the information contained
in
this Form 8-K and the accompanying exhibit shall be deemed to be "furnished"
and
not "filed" for purposes of Section 18 of the Securities Exchange Act of
1934,
as amended, and, therefore, shall not be incorporated by reference in any
filing
under the Securities Act of 1933, as amended.
Item
9.01 Financial
Statements and Exhibits.
|
(c)
|
Exhibits
|
| Exhibit 99.1 |
Press
Release, dated October 24, 2005.
|
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| RENT-A-CENTER, INC. | ||
| |
|
|
| Date: October 24, 2005 | By: | /s/ Robert D. Davis |
|
Robert D. Davis |
||
| Senior Vice President - Finance, Chief Financial Officer and Treasurer | ||
3
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
release, dated October 24, 2005
|
4
For
Immediate Release:
RENT-A-CENTER,
INC. REPORTS
THIRD
QUARTER 2005 RESULTS
Cash
Flow from Operations of $87.5 Million
Repurchased
3.9 Million Shares of Common Stock
________________________
Plano,
Texas, October 24, 2005—
Rent-A-Center, Inc. (the “Company”) (NASDAQ/NNM:RCII), the nation’s largest
rent-to-own operator, today announced revenues and net earnings for the quarter
ended September 30, 2005.
The
Company reported total revenues for the quarter ended September 30, 2005
of
$573.5 million, a $3.9 million increase from $569.6 million for the same
period
in the prior year. This increase of 0.7% in revenues was primarily driven
by
incremental revenues generated in new and acquired stores, offset by a decrease
in same store sales of 0.4%.
Net
earnings for the quarter ended September 30, 2005 were $26.0 million, or
$0.35
per diluted share, when excluding the expenses for restructuring and the
impact
of the hurricanes discussed below, representing a decrease of 25.5% from
the
$0.47 per diluted share, or net earnings of $37.6 million for the same period
in
the prior year, when excluding the litigation and finance charges discussed
below. The decrease in earnings per diluted share is primarily attributable
to
the decrease in same store sales as well as increases in operating expenses
related to new store openings, acquisitions and normal operating costs such
as
utility and fuel costs, offset by a reduction in the number of the Company’s
outstanding shares.
Reported
net earnings for the quarter ended September 30, 2005 were $11.3 million,
or
$0.15 per diluted share, when including the $0.20 effect of restructuring
expenses and the impact of the hurricanes. Also, as a result of the hurricanes
impact, the Company estimates that revenue in the third quarter was lower
by
approximately $1.7 million.
Total
reported revenues for the nine months ended September 30, 2005 increased
to
$1.756 billion, a 1.6% increase from $1.728 billion for the same period in
the
prior year. Same store revenues for the nine month period ending September
30,
2005 decreased 2.8%. Net earnings for the nine months ended September 30,
2005
were $108.3 million, or $1.44 per diluted share, when excluding the
restructuring expenses, the impact of the hurricanes and the credits for
the
litigation reversion and tax audit reserve discussed below, representing
a
decrease of 16.8% from the $1.73 per diluted share, or net earnings of $141.0
million for
the
same period in the prior year, when excluding the litigation and finance
charges
discussed below. Reported net earnings for the nine months ended September
30,
2005 were $100.7 million, or $1.34 per diluted share, when including the
$0.10
effect of restructuring expenses and the impact of the hurricanes as well
as the
credits for the tax audit reserve and litigation.
“This
quarter, as well as the past year and a half, have been challenging for our
customer and for our company due, we believe, to the macroeconomic environment,
and more specifically the higher energy prices,” commented Mark E. Speese, the
Company’s Chairman and Chief Executive Officer. “Despite the challenges in the
quarter, we saw an improvement in our same store sales trend, generated cash
flow from operations of more than $87 million and made significant progress
on
our store consolidation plan, having closed 100 of the identified stores,”
Speese continued. “As we prepare to enter 2006, our strategic objectives will
continue to be to enhance store level operations, open new stores, pursue
opportunistic acquisitions in rent-to-own and other businesses that serve
our
customer demographic, and enhance stockholder value by repurchasing additional
shares of our common stock, while maintaining a solid balance sheet,” Speese
stated.
During
the third quarter of 2005, the Company opened 17 new store locations, acquired
two stores as well as accounts from 15 additional locations, consolidated
114
stores into existing locations, sold two stores and closed eight stores.
Since
September 30, 2005, the Company has opened three new stores, acquired accounts
from one location, consolidated seven stores into existing locations, sold
15
stores and closed five stores. For the fourth quarter ending December 31,
2005,
the Company intends to open between 20 and 25 new store locations as well
as
pursue opportunistic acquisitions.
Through
the nine-month period ended September 30, 2005, the Company generated cash
flow
from operations of approximately $143.7 million, while ending the quarter
with
$52.8 million of cash on hand. On August 22, 2005, the Company announced
that
its Board of Directors increased the authorization for stock repurchases
under
the Company’s common stock repurchase program to $400 million. Through the nine
month period ended September 30, 2005, the Company repurchased 4,084,600
shares
for $84.1 million in cash under the program and has utilized a total of $321.6
million of the total amount authorized by its Board of Directors since the
inception of the plan.
During
the third quarter of 2005, the Company recorded a pre-tax restructuring expense
of approximately $13.0 million as part of the store consolidation plan announced
on September 6, 2005. The costs with respect to these store closings relate
primarily to lease terminations of approximately $6.5 million, goodwill
impairment of approximately $4.5 million and fixed asset disposals of
approximately $1.8 million. This restructuring expense reduced diluted earnings
per share in the third quarter of 2005 by $0.12 and for the nine month period
ended September 30, 2005 by $0.12.
Also,
during the third quarter of 2005, the Company recorded a pre-tax expense
of
approximately $7.7 million related to the damage caused by Hurricanes Katrina
and Rita. These costs relate primarily to goodwill impairment of approximately
$3.7 million and inventory losses of approximately $3.6 million. The hurricanes
affected approximately 180 stores in Louisiana, Texas, Mississippi and Alabama,
of which 14 stores in Louisiana and one store in Mississippi have been
permanently closed. These expenses reduced diluted earnings per share in
the
third quarter of 2005 by $0.08 and for the nine month period ended September
30,
2005 by $0.08.
In
addition, during 2005, the Company recorded a $2.0 million tax audit reserve
credit in the second quarter associated with the examination and favorable
resolution of the Company’s 1998 and 1999 federal tax returns. Also in 2005, the
Company recorded an $8.0 million pre-tax credit in the first quarter associated
with the settlement of the Griego/Carrillo litigation. The litigation reversion
credit in the first quarter, combined with the $2.0 million tax audit reserve
credit in the second quarter, increased diluted earnings per share for the
nine
month period ended September 30, 2005 by $0.10.
During
the third quarter of 2004, the Company recorded $47.0 million in pre-tax
charges
associated with the aforementioned Griego/Carrillo litigation and $4.2 million
in pre-tax charges associated with the refinancing of its senior credit
facility. These charges reduced diluted earnings per share in the third quarter
of 2004 by $0.40, $0.37 for the litigation charge and $0.03 for the refinancing
charge, from $0.47 per diluted earnings per share to the reported diluted
earnings per share of $0.07. Additionally, these charges reduced diluted
earnings per share for the nine month period ended September 30, 2004 by
$0.39
to the reported diluted earnings per share of $1.34.
Rent-A-Center
will host a conference call to discuss the third quarter financial results
on
Tuesday morning, October 25, 2005, at 10:45 a.m. EST. For a live web cast
of the
call, visit http://investor.rentacenter.com.
Certain
financial and other statistical information that will be discussed during
the
conference call will also be provided on the same website.
Rent-A-Center,
Inc., headquartered in Plano, Texas, currently operates 2,763 company-owned
stores nationwide and in Canada and Puerto Rico. The stores generally offer
high-quality, durable goods such as major consumer electronics, appliances,
computers and furniture and accessories under flexible rental purchase
agreements that generally allow the customer to obtain ownership of the
merchandise at the conclusion of an agreed upon rental period. ColorTyme,
Inc.,
a wholly owned subsidiary of the Company, is a national franchiser of 288
rent-to-own stores, 276 of which operate under the trade name of "ColorTyme,"
and the remaining 12 of which operate under the "Rent-A-Center"
name.
The
following statements are based on current expectations. These statements
are
forward-looking, and actual results may differ materially. These statements
do
not include the potential impact of any repurchases of common stock the Company
may make, expenses to be incurred in connection with the store consolidation
plan, expenses to be incurred relating to the damage caused by Hurricanes
Katrina or Rita, or the potential impact of acquisitions that may be completed
after October 24, 2005.
FOURTH
QUARTER 2005 GUIDANCE:
Revenues
| · |
The
Company expects total revenues to be in the range of $575 million
to $583
million.
|
| · |
Store
rental and fee revenues are expected to be between $521 million
and $526
million.
|
| · |
Total
store revenues are expected to be in the range of $565 million
to $573
million.
|
| · |
Same
store sales are expected to be in the (1.0%) to (2.0%)
range.
|
| · |
The
Company expects to open 20-25 new store
locations.
|
Expenses
| · |
The
Company expects cost of rental and fees to be between 21.7% and
22.1% of
store rental and fee revenue and cost of goods merchandise sales
to be
between 75% and 80% of store merchandise
sales.
|
| · |
Store
salaries and other expenses are expected to be in the range of
59.5% to
61.0% of total store revenue.
|
| · |
General
and administrative expenses are expected to be between 3.5% and
3.7% of
total revenue.
|
| · |
Net
interest expense is expected to be approximately $11.5 million,
depreciation of property assets to be approximately $13.5 million
and
amortization of intangibles is expected to be approximately $1.3
million.
|
| · |
The
effective tax rate is expected to be in the range of 37.0% to 37.5%
of
pre-tax income.
|
| · |
Diluted
earnings per share are estimated to be in the range of $0.43 to
$0.47.
|
| · |
Diluted
shares outstanding are estimated to be between 71.3 million and
72.3
million.
|
FISCAL
2006 GUIDANCE:
Revenues
| · |
The
Company expects total revenues to be in the range of $2.37 billion
and
$2.40 billion.
|
| · |
Store
rental and fee revenues are expected to be between $2.105 billion
and
$2.130 billion.
|
| · |
Total
store revenues are expected to be in the range of $2.332 billion
and
$2.362 billion.
|
| · |
Same
store sales are expected to be
flat.
|
| · |
The
Company expects to open 60-80 new store
locations.
|
Expenses
| · |
The
Company expects cost of rental and fees to be between 21.7% and
22.1% of
store rental and fee revenue and cost of goods merchandise sales
to be
between 70% and 75% of store merchandise
sales.
|
| · |
Store
salaries and other expenses are expected to be in the range of
58.0% to
59.5% of total store revenue.
|
| · |
General
and administrative expenses are expected to be between 3.5% and
3.7% of
total revenue.
|
| · |
Net
interest expense is expected to be between $42.0 million and $47.0
million, depreciation of property assets is expected to be between
$53.0
million and $58.0 million and amortization of intangibles is expected
to
be approximately $3.3 million.
|
| · |
The
effective tax rate is expected to be in the range of 36.75% to
37.25% of
pre-tax income.
|
| · |
Diluted
earnings per share, when including stock option expense, are estimated
to
be in the range of $2.00 to $2.10, and $2.04 to $2.14, excluding
stock
option expense.
|
| · |
Diluted
shares outstanding are estimated to be between 72.0 million and
73.5
million.
|
This
press release and the guidance above contain forward-looking statements that
involve risks and uncertainties. Such forward-looking statements generally
can
be identified by the use of forward-looking terminology such as
“may,”“will,”“expect,”“intend,”“could,”“estimate,”“should,”“anticipate,” or
“believe,” or the negative thereof or variations thereon or similar terminology.
Although the Company believes that the expectations reflected in such
forward-looking statements will prove to be correct, the Company can give
no
assurance that such expectations will prove to have been correct. The actual
future performance of the Company could differ materially from such statements.
Factors that could cause or contribute to such differences include, but are
not
limited to: uncertainties
regarding additional costs and expenses that could be incurred in connection
with the store consolidation plan, uncertainties regarding the ability to
open
new rent-to-own stores; the Company’s ability to acquire additional rent-to-own
stores on favorable terms; the Company’s ability to enhance the performance of
these acquired stores; the Company’s ability to control store level costs; the
Company’s ability to identify and successfully market products and services that
appeal to our customer demographic; the Company’s ability to identify and
successfully enter new lines of business offering products and services that
appeal to our customer demographic; the results of the Company’s litigation; the
passage of legislation adversely affecting the rent-to-own industry; interest
rates; the Company’s ability to collect on its rental purchase agreements; the
Company’s ability to enter into new rental purchase agreements; economic
pressures affecting the disposable income available to our targeted consumers,
such as high fuel and utility costs; changes in the Company’s effective tax
rate; changes in the Company’s stock price and the number of shares of common
stock that the Company may or may not repurchase; and the other risks detailed
from time to time in the Company’s SEC filings, including but not limited to,
its annual report on Form 10-K for the year ended December 31, 2004 and its
quarterly reports on Form 10-Q for the quarter ended March 31, 2005 and the
Form
10-Q for the six month period ended June 30, 2005. You are cautioned not
to
place undue reliance on these forward-looking statements, which speak only
as of
the date of this press release. Except as required by law, the Company is
not
obligated to publicly release any revisions to these forward-looking statements
to reflect the events or circumstances after the date of this press release
or
to reflect the occurrence of unanticipated events.
Contact
for Rent-A-Center, Inc.:
David
E.
Carpenter
Vice
President of Investor Relations
(972)
801-1214
dcarpenter@racenter.com
Rent-A-Center,
Inc. and Subsidiaries
STATEMENT
OF EARNINGS HIGHLIGHTS
(In
Thousands of Dollars, except per share data)
|
Three
Months Ended September 30,
|
|||||||||||||
|
2005
|
2005
|
2004
|
2004
|
||||||||||
|
Before
Restructuring and Hurricanes Expense
|
After
Restructuring and Hurricanes Expense
|
Before
Litigation & Finance Charges
|
After
Litigation & Finance Charges
|
||||||||||
|
Total
Revenue
|
$
|
573,507
|
$
|
573,507
|
$
|
569,607
|
$
|
569,607
|
|||||
|
Operating
Profit
|
51,750
|
30,980
|
71,344
|
24,344
|
|||||||||
|
Net
Earnings
|
25,985
|
11,277
|
(1)
|
37,552
|
5,573
|
(2)
|
|||||||
|
Diluted
Earnings per Common Share
|
$
|
0.35
|
$
|
0.15
|
(1)
|
$
|
0.47
|
$
|
0.07
|
(2)
|
|||
|
Adjusted
EBITDA
|
$
|
67,493
|
$
|
67,493
|
$
|
86,608
|
$
|
86,608
|
|||||
|
Reconciliation
to Adjusted EBITDA:
|
|||||||||||||
|
Earnings
before income taxes
|
41,279
|
20,509
|
62,821
|
11,648
|
|||||||||
|
Add
back:
|
|||||||||||||
|
Restructuring
expense
|
—
|
13,028
|
—
|
—
|
|||||||||
|
Hurricanes
expense
|
—
|
4,075
|
—
|
—
|
|||||||||
|
Litigation
settlement
|
—
|
—
|
—
|
47,000
|
|||||||||
|
Finance
charge from recapitalization
|
—
|
—
|
—
|
4,173
|
|||||||||
|
Interest
expense, net
|
10,471
|
10,471
|
8,523
|
8,523
|
|||||||||
|
Depreciation
of property assets
|
13,484
|
13,484
|
12,508
|
12,508
|
|||||||||
|
Amortization
of intangibles
|
2,259
|
5,926
|
(4)
|
2,756
|
2,756
|
||||||||
|
Adjusted
EBITDA
|
$
|
67,493
|
$
|
67,493
|
$
|
86,608
|
$
|
86,608
|
|||||
|
Nine
Months Ended September 30,
|
|||||||||||||
|
2005
|
2005
|
2004
|
2004
|
||||||||||
|
Before
Restructuring and Hurricanes Expense & Tax Audit Reserve and
Litigation Credits
|
After
Restructuring and Hurricanes Expense & Tax Audit Reserve and
Litigation Credits
|
Before
Litigation & Finance Charges
|
After
Litigation & Finance Charges
|
||||||||||
|
Total
Revenue
|
$
|
1,755,894
|
$
|
1,755,894
|
$
|
1,727,972
|
$
|
1,727,972
|
|||||
|
Operating
Profit
|
202,730
|
189,960
|
254,226
|
207,226
|
|||||||||
|
Net
Earnings
|
108,290
|
100,688
|
(1,3)
|
140,955
|
108,976
|
(2)
|
|||||||
|
Diluted
Earnings per Common Share
|
$
|
1.44
|
$
|
1.34
|
(1,3)
|
$
|
1.73
|
$
|
1.34
|
(2)
|
|||
|
Adjusted
EBITDA
|
$
|
249,459
|
$
|
249,459
|
$
|
298,219
|
$
|
298,219
|
|||||
|
Reconciliation
to Adjusted EBITDA:
|
|||||||||||||
|
Earnings
before income taxes
|
173,358
|
160,588
|
228,083
|
176,910
|
|||||||||
|
Add
back:
|
|||||||||||||
|
Restructuring
expense
|
—
|
13,028
|
—
|
—
|
|||||||||
|
Hurricanes
expense impact
|
—
|
4,075
|
—
|
—
|
|||||||||
|
Litigation
credit & settlement
|
—
|
(8,000
|
)
|
—
|
47,000
|
||||||||
|
Finance
charge from recapitalization
|
—
|
—
|
—
|
4,173
|
|||||||||
|
Interest
expense, net
|
29,372
|
29,372
|
26,143
|
26,143
|
|||||||||
|
Depreciation
of property assets
|
40,018
|
40,018
|
35,591
|
35,591
|
|||||||||
|
Amortization
of intangibles
|
6,711
|
10,378
|
(4)
|
8,402
|
8,402
|
||||||||
|
Adjusted
EBITDA
|
$
|
249,459
|
$
|
249,459
|
$
|
298,219
|
$
|
298,219
|
|||||
|
(1)
|
Including
the effects of a $13.0 million pre-tax restructuring expense
as part of
the store consolidation plan announced September 6, 2005 and
$7.7 million
in pre-tax expenses related to the damage caused by Hurricanes
Katrina and
Rita. The expenses reduced diluted earnings per share in the
third quarter
of 2005 and the nine month period ending September 30, 2005,
by $0.12 and
$0.12 respectively for the restructuring expense and by $0.08
and $0.08
respectively for the hurricanes expense.
|
|
(2)
|
Including
the effects of $47.0 million in pre-tax charges associated with
the
Griego/Carrillo litigation and $4.2 million in pre-tax charges
associated
with refinancing of the Company’s senior credit facility. These charges
reduced diluted earnings per share in the third quarter of 2004
by $0.40,
$0.37 for the litigation charge and $0.03 for the refinancing
charge, to
the reported diluted earnings per share of $0.07. Additionally,
these
charges reduced diluted earnings per share for the nine month
period ended
September 30, 2004 by $0.39 to the reported diluted earnings
per share of
$1.34.
|
|
(3)
|
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, and 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 in the second quarter of 2005. These credits
increased
diluted earnings per share for the nine month period ended September
30,
2005 by $0.10.
|
|
(4)
|
Includes
$3.667 million of goodwill impairment related to Hurricanes Katrina
and
Rita.
|
|
Selected
Balance Sheet Data: (in
Thousands of Dollars)
|
September
30, 2005
|
September
30, 2004
|
|||||
|
Cash
and cash equivalents
|
$
|
52,790
|
$
|
64,521
|
|||
|
Prepaid
expenses and other assets
|
42,067
|
47,387
|
|||||
|
Rental
merchandise, net
|
|||||||
|
On
rent
|
572,224
|
555,024
|
|||||
|
Held
for rent
|
178,825
|
162,489
|
|||||
|
Total
Assets
|
1,939,384
|
1,906,164
|
|||||
|
Senior
debt
|
406,625
|
399,125
|
|||||
|
Subordinated
notes payable
|
300,000
|
300,000
|
|||||
|
Total
Liabilities
|
1,117,385
|
1,128,919
|
|||||
|
Stockholders’
Equity
|
821,999
|
777,245
|
|||||
Rent-A-Center,
Inc. and Subsidiaries
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
|||||||
|
(In
Thousands of Dollars, except per share data)
|
Three
Months Ended September 30,
|
||||||
|
2005
|
2004
|
||||||
|
Unaudited
|
|||||||
|
Store
Revenue
|
|||||||
|
Rentals
and Fees
|
$
|
516,433
|
$
|
516,576
|
|||
|
Merchandise
Sales
|
39,212
|
36,265
|
|||||
|
Installment
Sales
|
6,372
|
5,469
|
|||||
|
Other
|
2,938
|
919
|
|||||
|
564,955
|
559,229
|
||||||
|
Franchise
Revenue
|
|||||||
|
Franchise
Merchandise Sales
|
7,245
|
8,967
|
|||||
|
Royalty
Income and Fees
|
1,307
|
1,411
|
|||||
|
Total
Revenue
|
573,507
|
569,607
|
|||||
|
Operating
Expenses
|
|||||||
|
Direct
Store Expenses
|
|||||||
|
Cost
of Rentals and Fees
|
112,174
|
112,582
|
|||||
|
Cost
of Merchandise Sold
|
30,314
|
26,978
|
|||||
|
Cost
of Installment Sales
|
2,556
|
2,180
|
|||||
|
Salaries
and Other Expenses
|
350,389
|
326,410
|
|||||
|
Franchise
Operation Expenses
|
|||||||
|
Cost
of Franchise Merchandise Sales
|
6,964
|
8,585
|
|||||
|
502,397
|
476,735
|
||||||
|
General
and Administrative Expenses
|
21,176
|
18,772
|
|||||
|
Amortization
of Intangibles
|
5,926
|
2,756
|
|||||
|
Restructuring
charge
|
13,028
|
—
|
|||||
|
Class
Action Litigation Settlement
|
—
|
47,000
|
|||||
|
Total
Operating Expenses
|
542,527
|
545,263
|
|||||
|
Operating
Profit
|
30,980
|
24,344
|
|||||
|
Finance
Charge from Recapitalization
|
—
|
4,173
|
|||||
|
Interest
Income
|
(1,331
|
)
|
(1,391
|
)
|
|||
|
Interest
Expense
|
11,802
|
9,914
|
|||||
|
Earnings
before Income Taxes
|
20,509
|
11,648
|
|||||
|
Income
Tax Expense
|
9,232
|
6,075
|
|||||
|
NET
EARNINGS
|
11,277
|
5,573
|
|||||
|
Preferred
Dividends
|
—
|
—
|
|||||
|
Net
earnings allocable to common stockholders
|
$
|
11,277
|
$
|
5,573
|
|||
|
BASIC
WEIGHTED AVERAGE SHARES
|
72,826
|
77,989
|
|||||
|
BASIC
EARNINGS PER COMMON SHARE
|
$
|
0.15
|
$
|
0.07
|
|||
|
DILUTED
WEIGHTED AVERAGE SHARES
|
73,713
|
79,928
|
|||||
|
DILUTED
EARNINGS PER COMMON SHARE
|
$
|
0.15
|
$
|
0.07
|
|||
Rent-A-Center,
Inc. and Subsidiaries
|
CONSOLIDATED
STATEMENTS OF EARNINGS
|
|||||||
|
(In
Thousands of Dollars, except per share data)
|
Nine
Months Ended September 30,
|
||||||
|
2005
|
2004
|
||||||
|
Unaudited
|
|||||||
|
Store
Revenue
|
|||||||
|
Rentals
and Fees
|
$
|
1,561,694
|
$
|
1,541,459
|
|||
|
Merchandise
Sales
|
139,480
|
130,287
|
|||||
|
Installment
Sales
|
19,574
|
17,968
|
|||||
|
Other
|
5,013
|
2,966
|
|||||
|
1,725,761
|
1,692,680
|
||||||
|
Franchise
Revenue
|
|||||||
|
Franchise
Merchandise Sales
|
26,032
|
31,099
|
|||||
|
Royalty
Income and Fees
|
4,101
|
4,193
|
|||||
|
Total
Revenue
|
1,755,894
|
1,727,972
|
|||||
|
Operating
Expenses
|
|||||||
|
Direct
Store Expenses
|
|||||||
|
Cost
of Rentals and Fees
|
338,710
|
333,868
|
|||||
|
Cost
of Merchandise Sold
|
100,606
|
91,081
|
|||||
|
Cost
of Installment Sales
|
8,169
|
7,802
|
|||||
|
Salaries
and Other Expenses
|
1,017,369
|
946,552
|
|||||
|
Franchise
Operation Expenses
|
|||||||
|
Cost
of Franchise Merchandise Sales
|
24,993
|
29,691
|
|||||
|
1,489,847
|
1,408,994
|
||||||
|
General
and Administrative Expenses
|
60,681
|
56,350
|
|||||
|
Amortization
of Intangibles
|
10,378
|
8,402
|
|||||
|
Restructuring
charge
|
13,028
|
—
|
|||||
|
Class
Action Litigation Settlement (Reversion)
|
(8,000
|
)
|
47,000
|
||||
|
Total
Operating Expenses
|
1,565,934
|
1,520,746
|
|||||
|
Operating
Profit
|
189,960
|
207,226
|
|||||
|
Finance
Charge from Recapitalization
|
—
|
4,173
|
|||||
|
Interest
Income
|
(4,084
|
)
|
(4,382
|
)
|
|||
|
Interest
Expense
|
33,456
|
30,525
|
|||||
|
Earnings
before Income Taxes
|
160,588
|
176,910
|
|||||
|
Income
Tax Expense
|
59,900
|
67,934
|
|||||
|
NET
EARNINGS
|
100,688
|
108,976
|
|||||
|
Preferred
Dividends
|
—
|
—
|
|||||
|
Net
earnings allocable to common stockholders
|
$
|
100,688
|
$
|
108,976
|
|||
|
BASIC
WEIGHTED AVERAGE SHARES
|
74,044
|
79,246
|
|||||
|
BASIC
EARNINGS PER COMMON SHARE
|
$
|
1.36
|
$
|
1.38
|
|||
|
DILUTED
WEIGHTED AVERAGE SHARES
|
75,262
|
81,598
|
|||||
|
DILUTED
EARNINGS PER COMMON SHARE
|
$
|
1.34
|
$
|
1.34
|
|||