Wiling Stock: Rent-A-Center, Inc. (NASDAQ: RCII)

On 24 Dec 2019, Rent-A-Center, Inc stock identified change of 90.95% away from 52-week low price and recently located move of -1.56% off 52-week high price. RCII stock has been recorded 9.81% away from 50 day moving average and 13.99% away from 200 day moving average. Moving closer, we can see that shares have been trading 4.87% off 20-day moving average. The Services sector company, Rent-A-Center, Inc. noticed change of 0.64% to $28.47 along volume of 241771 shares in recent session compared to an average volume of 702.46K.

Rent-A-Center, Inc (NASDAQ: RCII) recently reported results for the quarter ended September 30, 2019.

Consolidated Overview

Results for the third quarter of 2019 are Non-GAAP not including special items and contrast to the third quarter of last year unless otherwise noted.

On a consolidated basis, total revenues of $649.4M increased 0.7 percent driven by a consolidated same store sales increase of 4.5 percent offset by refranchising over 100 locations in the past twelve months and the closures of certain Core U.S. stores. Not Including effects on revenues resulting from the refranchising efforts, revenues increased 2.7 percent. Net earnings and diluted earnings per share, on a GAAP basis, were $31.3M and $0.56 contrast to net earnings and diluted earnings per share of $12.9M and $0.24 in the third quarter of 2018.

Special items in the third quarter of $(5.0M) were primarily driven by a tax benefit related to the reversal of before recorded reserves for uncertain tax positions, partially offset by debt refinancing charges, closure of certain Core U.S. stores and transaction costs associated with the acquisition of Merchants Preferred.

The Company’s Non-GAAP diluted earnings per share were $0.47 contrast to $0.32 in the third quarter of 2018, a raise of 48.7 percent. The Company generated $41.7M in operating profit in the third quarter contrast to $32.4M in the third quarter of 2018, a raise of 28.9 percent. Adjusted EBITDA in the third quarter was $56.6M contrast to $49.3M in the third quarter of 2018, a raise of 14.8 percent.

For the nine months ended September 30, 2019, the Company generated $228.1M of cash from operations. The Company ended the third quarter with $73.7M of cash and cash equivalents contrast to $111.0M as of the end of the third quarter of 2018. At the end of the third quarter outstanding indebtedness was $260M, down $20M from the close of the refinancing completed on August 5, 2019. The Company’s net debt to adjusted EBITDA ratio ended the third quarter at 0.8 times contrast to 3.4 times as of the end of the third quarter of 2018.

The Rent-A-Center Board of Directors reported a cash dividend of $0.25 per share in the third quarter which was subsequently paid out on October 9, 2019.

Sale/Partial Leaseback of Corporate Headquarters

The company recently completed a competitive offering process and reached an contract in principle to sell its corporate headquarters. Because of the Company’s successful restructuring efforts over the past two years, a important portion of the building was not being utilized, presenting the Company with an prospects to realize material value by selling the building and leasing back a smaller footprint. Net proceeds from the sale are predictable to be about $35M, after taxes and fees, and will be utilized to advance the Company’s stated capital allocation priorities of funding growth initiatives in the retail partner business and returning capital to shareholders. The transaction is predictable to close in late 2019 or early 2020 and therefore has not been reflected in current fiscal 2019 guidance.

RCII’s shares are at 10.69% for the quarter and driving an 84.03% return over the course of the past year and is now at 75.85% since this point in 2018.   The average volatility for the week at 2.31% and for month was at 2.31%. There are 54.54M shares outstanding and 54.09M shares are floated in market. Right now, the stock beta is 0.43.

 

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