ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Georgia
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58-0687630
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(State or other jurisdiction of
incorporation or organization)
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(I. R. S. Employer
Identification No.)
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400 Galleria Parkway SE, Suite 300
Atlanta, Georgia |
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30339-3182
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
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ý
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Accelerated Filer
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o
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Non-Accelerated Filer
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o
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(Do not check if a smaller reporting company)
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Smaller Reporting Company
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o
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Emerging Growth Company
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o
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act
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o
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Title of Each Class
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Shares Outstanding as of
April 28, 2017
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Common Stock, $0.50 Par Value
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70,660,116
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Item 3. Defaults Upon Senior Securities
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Item 4. Mine Safety Disclosures
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Item 5. Other Information
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ITEM 1.
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FINANCIAL STATEMENTS
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(Unaudited)
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||||
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March 31,
2017 |
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December 31,
2016 |
||||
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(In Thousands, Except Share Data)
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||||||
ASSETS:
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|
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|
||||
Cash and Cash Equivalents
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$
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348,490
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$
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308,561
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Investments
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21,439
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20,519
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Accounts Receivable (net of allowances of $32,405 in 2017 and $35,690 in 2016)
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93,709
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95,777
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Lease Merchandise (net of accumulated depreciation and allowances of $718,607 in 2017 and $743,222 in 2016)
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984,555
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999,381
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Loans Receivable (net of allowances and unamortized fees of $14,646 in 2017 and $13,830 in 2016)
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83,593
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84,804
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Property, Plant and Equipment at Cost (net of accumulated depreciation of $235,254 in 2017 and $231,062 in 2016)
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204,447
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211,271
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Goodwill
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526,641
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526,723
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Other Intangibles (net of accumulated amortization of $82,425 in 2017 and $75,459 in 2016)
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240,680
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|
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247,672
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Prepaid Expenses and Other Assets
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120,930
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|
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121,028
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Total Assets
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$
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2,624,484
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$
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2,615,736
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LIABILITIES & SHAREHOLDERS’ EQUITY:
|
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||||
Accounts Payable and Accrued Expenses
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$
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307,052
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|
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$
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297,766
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Deferred Income Taxes Payable
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268,074
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276,116
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Customer Deposits and Advance Payments
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64,449
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62,427
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Debt
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484,716
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497,829
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Total Liabilities
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1,124,291
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1,134,138
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Commitments and Contingencies (Note 5)
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SHAREHOLDERS' EQUITY:
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||||
Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at March 31, 2017 and December 31, 2016; Shares Issued: 90,752,123 at March 31, 2017 and December 31, 2016
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45,376
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45,376
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Additional Paid-in Capital
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250,340
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254,512
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Retained Earnings
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1,586,319
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1,534,983
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Accumulated Other Comprehensive Loss
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(328
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)
|
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(531
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)
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1,881,707
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1,834,340
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Less: Treasury Shares at Cost
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Common Stock: 20,109,120 Shares at March 31, 2017 and 19,303,578 at December 31, 2016
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(381,514
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)
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(352,742
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)
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Total Shareholders’ Equity
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1,500,193
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1,481,598
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Total Liabilities & Shareholders’ Equity
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$
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2,624,484
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$
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2,615,736
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Three Months Ended
March 31, |
||||||
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2017
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2016
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||||
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(In Thousands, Except Per Share Data)
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||||||
REVENUES:
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Lease Revenues and Fees
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$
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743,622
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$
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741,611
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Retail Sales
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8,778
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10,955
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Non-Retail Sales
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69,327
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79,305
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Franchise Royalties and Fees
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14,201
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16,295
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Interest and Fees on Loans Receivable
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8,201
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4,763
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Other
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425
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1,498
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844,554
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854,427
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COSTS AND EXPENSES:
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Depreciation of Lease Merchandise
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361,998
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348,302
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Retail Cost of Sales
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5,391
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7,065
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Non-Retail Cost of Sales
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62,085
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71,385
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Operating Expenses
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328,825
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348,424
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Restructuring Expenses
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327
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|
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—
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Other Operating Income, Net
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(561
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)
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(6,729
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)
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758,065
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768,447
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OPERATING PROFIT
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86,489
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85,980
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Interest Income
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974
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421
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Interest Expense
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(5,815
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)
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(6,312
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)
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Other Non-Operating Income (Expense), Net
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975
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(361
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)
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EARNINGS BEFORE INCOME TAXES
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82,623
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79,728
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INCOME TAXES
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29,323
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30,041
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NET EARNINGS
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$
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53,300
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$
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49,687
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EARNINGS PER SHARE
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Basic
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$
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0.75
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$
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0.68
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Assuming Dilution
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$
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0.74
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$
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0.68
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CASH DIVIDENDS DECLARED PER SHARE:
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Common Stock
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$
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0.0275
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$
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0.0250
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WEIGHTED AVERAGE SHARES OUTSTANDING:
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Basic
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71,318
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72,634
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Assuming Dilution
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72,386
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73,217
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Three Months Ended
March 31, |
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(In Thousands)
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2017
|
|
2016
|
||||
Net Earnings
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$
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53,300
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$
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49,687
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Other Comprehensive Income:
|
|
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Foreign Currency Translation Adjustment
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203
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|
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593
|
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Total Other Comprehensive Income
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203
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|
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593
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Comprehensive Income
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$
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53,503
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$
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50,280
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Three Months Ended
March 31, |
||||||
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2017
|
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2016
|
||||
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(In Thousands)
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net Earnings
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$
|
53,300
|
|
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$
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49,687
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Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
|
|
|
|
||||
Depreciation of Lease Merchandise
|
361,998
|
|
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348,302
|
|
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Other Depreciation and Amortization
|
20,640
|
|
|
20,743
|
|
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Accounts Receivable Provision
|
36,135
|
|
|
34,514
|
|
||
Provision for Credit Losses on Loans Receivable
|
3,743
|
|
|
1,798
|
|
||
Stock-Based Compensation
|
5,274
|
|
|
5,529
|
|
||
Deferred Income Taxes
|
(8,042
|
)
|
|
1,616
|
|
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Other Changes, Net
|
(1,624
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)
|
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(6,816
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)
|
||
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:
|
|
|
|
||||
Additions to Lease Merchandise
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(449,930
|
)
|
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(447,382
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)
|
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Book Value of Lease Merchandise Sold or Disposed
|
101,817
|
|
|
114,453
|
|
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Accounts Receivable
|
(34,030
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)
|
|
(6,400
|
)
|
||
Prepaid Expenses and Other Assets
|
(2,799
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)
|
|
41,990
|
|
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Income Tax Receivable
|
3,212
|
|
|
149,140
|
|
||
Accounts Payable and Accrued Expenses
|
12,465
|
|
|
(99,195
|
)
|
||
Accrued Regulatory Expense
|
—
|
|
|
(4,737
|
)
|
||
Customer Deposits and Advance Payments
|
2,020
|
|
|
(7,591
|
)
|
||
Cash Provided by Operating Activities
|
104,179
|
|
|
195,651
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Investments in Loans Receivable
|
(18,157
|
)
|
|
(18,706
|
)
|
||
Proceeds from Loans Receivable
|
16,416
|
|
|
18,635
|
|
||
Outflows on Purchases of Property, Plant and Equipment
|
(12,512
|
)
|
|
(14,088
|
)
|
||
Proceeds from Property, Plant and Equipment
|
4,080
|
|
|
15,082
|
|
||
Acquisitions of Businesses and Contracts
|
(580
|
)
|
|
—
|
|
||
Proceeds from Dispositions of Businesses and Contracts
|
71
|
|
|
(32
|
)
|
||
Cash (Used in) Provided by Investing Activities
|
(10,682
|
)
|
|
891
|
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from Debt
|
2,750
|
|
|
84,133
|
|
||
Repayments on Debt
|
(16,162
|
)
|
|
(173,169
|
)
|
||
Dividends Paid
|
(1,957
|
)
|
|
(1,816
|
)
|
||
Acquisition of Treasury Stock
|
(34,302
|
)
|
|
—
|
|
||
Issuance of Stock Under Stock Option Plans
|
1,469
|
|
|
99
|
|
||
Other
|
(5,385
|
)
|
|
(1,826
|
)
|
||
Cash Used in Financing Activities
|
(53,587
|
)
|
|
(92,579
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
19
|
|
|
—
|
|
||
Increase in Cash and Cash Equivalents
|
39,929
|
|
|
103,963
|
|
||
Cash and Cash Equivalents at Beginning of Period
|
308,561
|
|
|
14,942
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
348,490
|
|
|
$
|
118,905
|
|
NOTE 1.
|
BASIS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Stores as of March 31 (Unaudited)
|
2017
|
|
2016
|
||
Company-operated stores
|
|
|
|
||
Aaron's Branded
|
1,155
|
|
|
1,223
|
|
HomeSmart
|
—
|
|
|
82
|
|
Total Company-operated stores
|
1,155
|
|
|
1,305
|
|
Franchised stores
|
688
|
|
|
729
|
|
Systemwide stores
|
1,843
|
|
|
2,034
|
|
Active Doors at March 31 (Unaudited)
|
2017
|
|
2016
|
||
Progressive Leasing Active Doors
1
|
18,627
|
|
|
13,521
|
|
|
Three Months Ended
March 31, |
||||
(Shares In Thousands)
|
2017
|
|
2016
|
||
Weighted average shares outstanding
|
71,318
|
|
|
72,634
|
|
Dilutive effect of share-based awards
|
1,068
|
|
|
583
|
|
Weighted average shares outstanding assuming dilution
|
72,386
|
|
|
73,217
|
|
(In Thousands)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Customers
|
$
|
33,026
|
|
|
$
|
36,227
|
|
Corporate
|
27,596
|
|
|
26,375
|
|
||
Franchisee
|
33,087
|
|
|
33,175
|
|
||
|
$
|
93,709
|
|
|
$
|
95,777
|
|
|
Three Months Ended March 31,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Bad debt expense
|
$
|
31,985
|
|
|
$
|
27,939
|
|
Provision for returns and uncollected renewal payments
|
4,150
|
|
|
6,575
|
|
||
Accounts receivable provision
|
$
|
36,135
|
|
|
$
|
34,514
|
|
(In Thousands)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Merchandise on Lease
|
$
|
783,178
|
|
|
$
|
786,936
|
|
Merchandise Not on Lease
|
201,377
|
|
|
212,445
|
|
||
Lease Merchandise, net of Accumulated Depreciation and Allowances
|
$
|
984,555
|
|
|
$
|
999,381
|
|
|
Three Months Ended March 31,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Beginning Balance
|
$
|
33,399
|
|
|
$
|
33,405
|
|
Merchandise Written off, net of Recoveries
|
(30,140
|
)
|
|
(32,737
|
)
|
||
Provision for Write-offs
|
30,790
|
|
|
33,906
|
|
||
Ending Balance
|
$
|
34,049
|
|
|
$
|
34,574
|
|
FICO Score Category
|
March 31, 2017
|
|
December 31, 2016
|
||
600 or Less
|
1.8
|
%
|
|
1.8
|
%
|
Between 600 and 700
|
77.4
|
%
|
|
78.1
|
%
|
700 or Greater
|
20.8
|
%
|
|
20.1
|
%
|
(In Thousands)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Prepaid Expenses
|
$
|
75,524
|
|
|
$
|
75,485
|
|
Assets Held for Sale
|
8,749
|
|
|
8,866
|
|
||
Deferred Tax Asset
|
5,912
|
|
|
5,912
|
|
||
Income Tax Receivable
|
8,672
|
|
|
11,884
|
|
||
Other Assets
|
22,073
|
|
|
18,881
|
|
||
|
$
|
120,930
|
|
|
$
|
121,028
|
|
(In Thousands)
|
March 31, 2017
|
|
December 31, 2016
|
||||
Accounts Payable
|
$
|
52,063
|
|
|
$
|
71,941
|
|
Accrued Insurance Costs
|
43,138
|
|
|
47,649
|
|
||
Accrued Salaries and Benefits
|
46,266
|
|
|
41,612
|
|
||
Income Taxes Payable
|
37,663
|
|
|
3,592
|
|
||
Accrued Real Estate and Sales Taxes
|
30,397
|
|
|
32,986
|
|
||
Deferred Rent
|
31,211
|
|
|
31,859
|
|
||
Other Accrued Expenses and Liabilities
|
66,314
|
|
|
68,127
|
|
||
|
$
|
307,052
|
|
|
$
|
297,766
|
|
(In Thousands)
|
Foreign Currency
|
||
Balance at January 1, 2017
|
$
|
(531
|
)
|
Other Comprehensive Income
|
203
|
|
|
Balance at March 31, 2017
|
$
|
(328
|
)
|
(In Thousands)
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Deferred Compensation Liability
|
$
|
—
|
|
|
$
|
(12,161
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(11,978
|
)
|
|
$
|
—
|
|
(In Thousands)
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets Held for Sale
|
$
|
—
|
|
|
$
|
8,749
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,866
|
|
|
$
|
—
|
|
(In Thousands)
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Perfect Home Notes
1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,439
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,519
|
|
Fixed-Rate Long-Term Debt
2
|
—
|
|
|
(366,922
|
)
|
|
—
|
|
|
—
|
|
|
(368,408
|
)
|
|
—
|
|
1
|
The Perfect Home notes are carried at cost, which approximates fair value. The Company periodically reviews the carrying amount utilizing company-specific transactions or changes in Perfect Home’s financial performance to determine if the notes are impaired.
|
2
|
The fair value of fixed-rate long-term debt is estimated using the present value of underlying cash flows discounted at a current market yield for similar instruments. The carrying amount of fixed-rate long-term debt was
$350.0 million
at
March 31, 2017
and
December 31, 2016
, respectively.
|
(In Thousands)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Credit Card Loans
|
|
$
|
70,525
|
|
|
$
|
64,794
|
|
Acquired Loans
|
|
27,714
|
|
|
33,840
|
|
||
Loans Receivable, Gross
|
|
98,239
|
|
|
98,634
|
|
||
|
|
|
|
|
||||
Allowance for Loan Losses
|
|
(7,215
|
)
|
|
(6,624
|
)
|
||
Unamortized Fees
|
|
(7,431
|
)
|
|
(7,206
|
)
|
||
Loans Receivable, Net
|
|
$
|
83,593
|
|
|
$
|
84,804
|
|
1
|
This aging is based on the contractual amounts outstanding for each loan as of period end, and does not reflect the fair value adjustments for the Acquired Loans.
|
|
Three Months Ended March 31,
|
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Beginning Balance
1
|
$
|
6,624
|
|
|
$
|
937
|
|
Provision for Loan Losses
|
3,743
|
|
|
1,798
|
|
||
Charge-offs
|
(3,287
|
)
|
|
(146
|
)
|
||
Recoveries
|
135
|
|
|
—
|
|
||
Ending Balance
|
$
|
7,215
|
|
|
$
|
2,589
|
|
1
|
The Company acquired DAMI on October 15, 2015 and recorded
$89.1 million
of loans receivable as of the acquisition date. No corresponding allowance for loan losses was recorded as the loans receivable were established at fair value in acquisition accounting. The January 1, 2016 balance represents the provision for loan losses incurred from October 15, 2015 to December 31, 2015.
|
|
Three Months Ended
March 31, |
||||||
(In Thousands)
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
Aaron's Business
|
$
|
470,238
|
|
|
$
|
542,999
|
|
Progressive Leasing
|
366,115
|
|
|
306,665
|
|
||
DAMI
|
8,201
|
|
|
4,763
|
|
||
Total Revenues from External Customers
|
$
|
844,554
|
|
|
$
|
854,427
|
|
|
|
|
|
||||
Earnings (Loss) Before Income Taxes:
|
|
|
|
||||
Aaron's Business
1
|
$
|
48,630
|
|
|
$
|
60,696
|
|
Progressive Leasing
|
35,758
|
|
|
21,914
|
|
||
DAMI
|
(1,765
|
)
|
|
(2,882
|
)
|
||
Total Earnings Before Income Taxes
|
$
|
82,623
|
|
|
$
|
79,728
|
|
(In Thousands)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Assets:
|
|
|
|
||||
Aaron's Business
1
|
$
|
1,164,493
|
|
|
$
|
1,199,213
|
|
Progressive Leasing
|
924,901
|
|
|
919,487
|
|
||
DAMI
|
101,734
|
|
|
102,958
|
|
||
Other
|
433,356
|
|
|
394,078
|
|
||
Total Assets
|
$
|
2,624,484
|
|
|
$
|
2,615,736
|
|
(In Thousands)
|
Contractual Lease Obligations
|
|
Severance
|
||||
Balance at January 1, 2017
|
$
|
10,583
|
|
|
$
|
2,079
|
|
Charges
|
59
|
|
|
446
|
|
||
Adjustments
1
|
(582
|
)
|
|
—
|
|
||
Restructuring Charges
|
(523
|
)
|
|
446
|
|
||
Payments
|
(2,383
|
)
|
|
(316
|
)
|
||
Balance at March 31, 2017
|
$
|
7,677
|
|
|
$
|
2,209
|
|
1
|
Adjustments relate to early buyouts of leases, changes in sublease assumptions and interest accretion.
|
(In Thousands)
|
Aaron's Business
|
|
DAMI
1
|
|
Total
|
||||||
Contractual Lease Obligations
|
$
|
(523
|
)
|
|
$
|
—
|
|
|
$
|
(523
|
)
|
Fixed Asset Impairment
|
404
|
|
|
—
|
|
|
404
|
|
|||
Severance
|
356
|
|
|
90
|
|
|
446
|
|
|||
Total Restructuring Expense
|
$
|
237
|
|
|
$
|
90
|
|
|
$
|
327
|
|
1
|
Restructuring charges for DAMI relate primarily to the segment's relocation efforts. Future DAMI restructuring charges are expected to be immaterial.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
The Company reported revenue of
$844.6 million
for the
three months ended March 31, 2017
compared to
$854.4 million
for the comparable period in
2016
, and its net earnings before income taxes
increased
to
$82.6 million
compared to
$79.7 million
during the first quarter of
2016
.
|
•
|
The Company generated cash from operating activities of
$104.2 million
compared to
$195.7 million
for the comparable period in
2016
. In addition, the Company returned excess capital of
$36.3 million
to our shareholders through the repurchase of
1.2 million
shares and the payment of our quarterly dividend, which we have paid for 30 consecutive years.
|
•
|
Progressive Leasing achieved record quarterly revenues of
$366.1 million
for the
three months ended March 31, 2017
, an
increase
of
19.4%
over the
three months ended March 31, 2016
. Progressive Leasing's revenue growth is due to a
37.8%
increase in active doors, which contributed to a
20.1%
increase in invoice volume. Progressive Leasing increased its earnings before income taxes to
$35.8 million
compared to
$21.9 million
during the first quarter of 2016 due to its revenue growth and favorable lease portfolio performance thus far in 2017.
|
•
|
Aaron's Business revenues decreased to
$470.2 million
for t
he
three months ended March 31, 2017
, a
13.4%
decrease
from the comparable period in
2016
. The decline is due primarily to a
9.3%
decrease in same store sales and the sale of
82
HomeSmart stores in May of 2016. Earnings before income taxes
decreased
to
$48.6 million
during the first quarter compared to
$60.7 million
in the prior year comparable period due primarily to the decrease in revenue.
|
Active Doors at March 31 (Unaudited)
|
2017
|
|
2016
|
||
Progressive Leasing Active Doors
|
18,627
|
|
|
13,521
|
|
For the Three Months Ended March 31 (Unaudited and In Thousands)
|
2017
|
|
2016
|
||||
Progressive Leasing Invoice Volume
|
$
|
262,935
|
|
|
$
|
218,927
|
|
|
Three Months Ended
March 31, |
|
Change
|
|||||||||||
(In Thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
REVENUES:
|
|
|
|
|
|
|
|
|||||||
Aaron's Business
1
|
$
|
470,238
|
|
|
$
|
542,999
|
|
|
$
|
(72,761
|
)
|
|
(13.4
|
)%
|
Progressive Leasing
2
|
366,115
|
|
|
306,665
|
|
|
59,450
|
|
|
19.4
|
|
|||
DAMI
3
|
8,201
|
|
|
4,763
|
|
|
3,438
|
|
|
72.2
|
|
|||
Total Revenues from External Customers
|
$
|
844,554
|
|
|
$
|
854,427
|
|
|
$
|
(9,873
|
)
|
|
(1.2
|
)%
|
1
Segment revenue principally consists of lease revenues and fees, retail sales, non-retail sales and franchise royalties and fees.
|
||||||||||||||
2
Segment revenue consists of lease revenues and fees.
|
||||||||||||||
3
Segment revenue consists of interest and fees on loans receivable, and excludes the effect of interest expense.
|
|
Three Months Ended
March 31, |
|
Change
|
|||||||||||
(In Thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Personnel Costs
|
$
|
150,974
|
|
|
$
|
163,530
|
|
|
$
|
(12,556
|
)
|
|
(7.7
|
)%
|
Occupancy Costs
|
48,368
|
|
|
53,484
|
|
|
(5,116
|
)
|
|
(9.6
|
)
|
|||
Provision for Lease Merchandise Write-Offs
|
30,790
|
|
|
33,906
|
|
|
(3,116
|
)
|
|
(9.2
|
)
|
|||
Bad Debt Expense
|
31,985
|
|
|
27,939
|
|
|
4,046
|
|
|
14.5
|
|
|||
Shipping and Handling
|
17,024
|
|
|
18,836
|
|
|
(1,812
|
)
|
|
(9.6
|
)
|
|||
Advertising
|
10,157
|
|
|
9,686
|
|
|
471
|
|
|
4.9
|
|
|||
Provision for Loan Losses
|
3,743
|
|
|
1,798
|
|
|
1,945
|
|
|
108.2
|
|
|||
Other Operating Expenses
|
35,784
|
|
|
39,245
|
|
|
(3,461
|
)
|
|
(8.8
|
)
|
|||
Operating Expenses
|
$
|
328,825
|
|
|
$
|
348,424
|
|
|
$
|
(19,599
|
)
|
|
(5.6
|
)%
|
|
Three Months Ended
March 31, |
|
Change
|
|||||||||||
(In Thousands)
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
Net (gains) losses on sales of stores
|
$
|
(356
|
)
|
|
$
|
32
|
|
|
$
|
(388
|
)
|
|
nmf
|
|
Net gains on sales of delivery vehicles
|
(405
|
)
|
|
(463
|
)
|
|
58
|
|
|
12.5
|
|
|||
Net losses (gains) on asset dispositions and assets held for sale
|
200
|
|
|
(6,298
|
)
|
|
6,498
|
|
|
103.2
|
|
|||
Other operating income, net
|
$
|
(561
|
)
|
|
$
|
(6,729
|
)
|
|
$
|
(6,168
|
)
|
|
(91.7
|
)%
|
nmf - Calculation is not meaningful
|
|
|
|
|
|
|
|
•
|
Cash and cash equivalents
increased
$39.9 million
to
$348.5 million
at
March 31, 2017
. For additional information, refer to the "Liquidity and Capital Resources" section below.
|
•
|
Debt
decreased
$13.1 million
due primarily to the net repayment of
$12.8 million
in revolving credit borrowings and term loans. Refer to "Liquidity and Capital Resources" below for further details regarding the Company's financing arrangements.
|
•
|
cash flows from operations;
|
•
|
private debt offerings;
|
•
|
bank debt;
|
•
|
trade credit with vendors;
|
•
|
proceeds from the sale of lease return merchandise; and
|
•
|
stock offerings.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 2.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
1
|
|||||
January 1, 2017 through January 31, 2017
|
—
|
|
—
|
|
—
|
|
9,123,721
|
|
|
February 1, 2017 through February 28, 2017
|
—
|
|
—
|
|
—
|
|
9,123,721
|
|
|
March 1, 2017 through March 31, 2017
|
1,208,466
|
|
$
|
28.39
|
|
1,208,466
|
|
7,915,255
|
|
Total
|
1,208,466
|
|
$
|
28.39
|
|
1,208,466
|
|
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
AARON’S, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
May 3, 2017
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Steven A. Michaels
|
|
|
|
Chief Financial Officer,
|
|
|
|
President Strategic Operations
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
May 3, 2017
|
By:
|
/s/ Robert P. Sinclair, Jr.
|
|
|
|
Robert P. Sinclair, Jr.
|
|
|
|
Vice President,
|
|
|
|
Corporate Controller
|
|
|
|
(Principal Accounting Officer)
|
Grantee:
|
|
|
|
|
|
Number of Shares of Restricted Stock:
|
|
|
|
|
|
Grant Date:
|
|
|
|
|
|
Purchase Price per Share:
|
|
|
|
I, John W. Robinson III, certify that:
|
||||
|
|
|
|
||
1.
|
I have reviewed this quarterly report on Form 10-Q of Aaron's, Inc.;
|
||||
|
|
|
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||
|
|
||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||
|
|
||||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||||
|
|
||||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
|
|||
|
|
|
|||
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
|
|
|
|||
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||
|
|
|
|||
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||
|
|
||||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
||||
|
|
||||
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||
|
|
|
|||
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 3, 2017
|
/s/ John W. Robinson III
|
|
|
John W. Robinson III
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
I, Steven A. Michaels, certify that:
|
||||
|
|
|
|
||
1.
|
I have reviewed this quarterly report on Form 10-Q of Aaron's, Inc.;
|
||||
|
|
|
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
||||
|
|
||||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
||||
|
|
||||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||||
|
|
||||
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|||
|
|
|
|||
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
|
|
|
|||
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|||
|
|
|
|||
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||
|
|
||||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
||||
|
|
||||
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|||
|
|
|
|||
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
May 3, 2017
|
/s/ Steven A. Michaels
|
|
|
Steven A. Michaels
|
|
|
Chief Financial Officer,
|
|
|
President Strategic Operations
|
Date:
|
May 3, 2017
|
|
/s/ John W. Robinson III
|
|
|
|
John W. Robinson III
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 3, 2017
|
|
/s/ Steven A. Michaels
|
|
|
|
Steven A. Michaels
|
|
|
|
Chief Financial Officer,
|
|
|
|
President Strategic Operations
|