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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(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
October 19, 2018
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Common Stock, $0.50 Par Value
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68,594,784
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Item 3. Defaults Upon Senior Securities
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Item 4. Mine Safety Disclosures
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Item 5. Other Information
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ITEM 1.
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FINANCIAL STATEMENTS
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(Unaudited)
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||||
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September 30,
2018 |
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December 31,
2017 |
||||
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(In Thousands, Except Share Data)
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||||||
ASSETS:
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|
||||
Cash and Cash Equivalents
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$
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34,986
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$
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51,037
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Investments
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—
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|
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20,385
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Accounts Receivable (net of allowances of $57,839 in 2018 and $46,946 in 2017)
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92,311
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99,887
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Lease Merchandise (net of accumulated depreciation and allowances of $805,816 in 2018 and $760,722 in 2017)
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1,196,812
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1,152,135
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Loans Receivable (net of allowances and unamortized fees of $20,538 in 2018 and $19,829 in 2017)
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78,062
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86,112
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Property, Plant and Equipment at Cost (net of accumulated depreciation of $273,122 in 2018 and $242,623 in 2017)
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216,337
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207,687
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Goodwill
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703,437
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622,948
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Other Intangibles (net of accumulated amortization of $121,100 in 2018 and $100,557 in 2017)
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230,874
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235,551
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Income Tax Receivable
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29,724
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100,023
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Prepaid Expenses and Other Assets
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116,355
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116,499
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Total Assets
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$
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2,698,898
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$
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2,692,264
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LIABILITIES & SHAREHOLDERS’ EQUITY:
|
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||||
Accounts Payable and Accrued Expenses
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$
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318,396
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$
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304,810
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Deferred Income Taxes Payable
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248,102
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222,592
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Customer Deposits and Advance Payments
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71,554
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68,060
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Debt
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297,340
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368,798
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Total Liabilities
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935,392
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964,260
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Commitments and Contingencies (Note 5)
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SHAREHOLDERS' EQUITY:
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Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at September 30, 2018 and December 31, 2017; Shares Issued: 90,752,123 at September 30, 2018 and December 31, 2017
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45,376
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45,376
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Additional Paid-in Capital
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272,269
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270,043
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Retained Earnings
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1,945,961
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1,819,524
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Accumulated Other Comprehensive Income
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59
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774
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2,263,665
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2,135,717
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Less: Treasury Shares at Cost
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Common Stock: 22,164,789 Shares at September 30, 2018 and 20,733,010 at December 31, 2017
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(500,159
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)
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(407,713
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)
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Total Shareholders’ Equity
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1,763,506
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1,728,004
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Total Liabilities & Shareholders’ Equity
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$
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2,698,898
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$
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2,692,264
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
||||||||||||
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2018
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2017
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2018
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2017
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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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880,871
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$
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755,318
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$
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2,596,876
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$
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2,217,029
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Retail Sales
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7,620
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6,274
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22,728
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21,158
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Non-Retail Sales
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44,368
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56,443
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151,259
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195,372
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Franchise Royalties and Fees
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10,153
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11,140
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35,140
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38,165
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Interest and Fees on Loans Receivable
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9,508
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8,936
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28,258
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25,669
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Other
|
551
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772
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1,478
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1,688
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||||
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953,071
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838,883
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2,835,739
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2,499,081
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COSTS AND EXPENSES:
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Depreciation of Lease Merchandise
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434,593
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365,576
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1,290,015
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1,072,972
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Retail Cost of Sales
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4,877
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4,380
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14,695
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13,711
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Non-Retail Cost of Sales
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35,214
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50,750
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130,302
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174,653
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Operating Expenses
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420,602
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374,157
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1,199,171
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1,033,530
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Restructuring Expenses, Net
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537
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845
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561
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14,617
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||||
Other Operating (Income) Expense, Net
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(38
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)
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486
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(286
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)
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(586
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)
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||||
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895,785
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796,194
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2,634,458
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2,308,897
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||||
OPERATING PROFIT
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57,286
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42,689
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201,281
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190,184
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|
||||
Interest Income
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18
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344
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374
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1,696
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|
||||
Interest Expense
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(3,735
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)
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(4,707
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)
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(11,868
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)
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(16,074
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)
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||||
Impairment of Investment
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—
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|
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—
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(20,098
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)
|
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—
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|
||||
Other Non-Operating (Expense) Income, Net
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(154
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)
|
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895
|
|
|
458
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3,033
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||||
EARNINGS BEFORE INCOME TAXES
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53,415
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39,221
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170,147
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178,839
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|
||||
INCOME TAXES
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9,695
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13,880
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35,680
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|
|
63,863
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|
||||
NET EARNINGS
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$
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43,720
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$
|
25,341
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$
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134,467
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|
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$
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114,976
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EARNINGS PER SHARE
|
|
|
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||||||||
Basic
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$
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0.64
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$
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0.36
|
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$
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1.93
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$
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1.62
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Assuming Dilution
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$
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0.62
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$
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0.35
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$
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1.89
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$
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1.60
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CASH DIVIDENDS DECLARED PER SHARE:
|
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||||||||
Common Stock
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$
|
0.0300
|
|
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$
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0.0275
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$
|
0.0900
|
|
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$
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0.0825
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WEIGHTED AVERAGE SHARES OUTSTANDING:
|
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|
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||||||||
Basic
|
68,819
|
|
|
70,746
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|
|
69,521
|
|
|
70,914
|
|
||||
Assuming Dilution
|
70,139
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|
|
72,095
|
|
|
70,996
|
|
|
72,057
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|
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Three Months Ended
September 30, |
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Nine Months Ended
September 30, |
||||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net Earnings
|
$
|
43,720
|
|
|
$
|
25,341
|
|
|
$
|
134,467
|
|
|
$
|
114,976
|
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
||||||||
Foreign Currency Translation Adjustment
|
297
|
|
|
782
|
|
|
(715
|
)
|
|
1,431
|
|
||||
Total Other Comprehensive Income (Loss)
|
297
|
|
|
782
|
|
|
(715
|
)
|
|
1,431
|
|
||||
Comprehensive Income
|
$
|
44,017
|
|
|
$
|
26,123
|
|
|
$
|
133,752
|
|
|
$
|
116,407
|
|
|
Nine Months Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
|
(In Thousands)
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net Earnings
|
$
|
134,467
|
|
|
$
|
114,976
|
|
Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities:
|
|
|
|
||||
Depreciation of Lease Merchandise
|
1,290,015
|
|
|
1,072,972
|
|
||
Other Depreciation and Amortization
|
68,730
|
|
|
61,274
|
|
||
Accounts Receivable Provision
|
188,763
|
|
|
142,142
|
|
||
Provision for Credit Losses on Loans Receivable
|
16,011
|
|
|
15,140
|
|
||
Stock-Based Compensation
|
21,793
|
|
|
19,886
|
|
||
Deferred Income Taxes
|
30,166
|
|
|
(16,970
|
)
|
||
Impairment of Investment
|
20,098
|
|
|
—
|
|
||
Other Changes, Net
|
(1,625
|
)
|
|
283
|
|
||
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:
|
|
|
|
||||
Additions to Lease Merchandise
|
(1,583,184
|
)
|
|
(1,388,435
|
)
|
||
Book Value of Lease Merchandise Sold or Disposed
|
289,859
|
|
|
306,766
|
|
||
Accounts Receivable
|
(181,512
|
)
|
|
(140,370
|
)
|
||
Prepaid Expenses and Other Assets
|
(6,685
|
)
|
|
(16,535
|
)
|
||
Income Tax Receivable
|
70,299
|
|
|
(10,596
|
)
|
||
Accounts Payable and Accrued Expenses
|
7,998
|
|
|
21,491
|
|
||
Customer Deposits and Advance Payments
|
(2,198
|
)
|
|
(1,751
|
)
|
||
Cash Provided by Operating Activities
|
362,995
|
|
|
180,273
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Investments in Loans Receivable
|
(49,311
|
)
|
|
(58,042
|
)
|
||
Proceeds from Loans Receivable
|
44,016
|
|
|
45,362
|
|
||
Proceeds from Investments
|
666
|
|
|
—
|
|
||
Outflows on Purchases of Property, Plant and Equipment
|
(52,927
|
)
|
|
(42,105
|
)
|
||
Proceeds from Property, Plant and Equipment
|
5,488
|
|
|
10,149
|
|
||
Outflows on Acquisitions of Businesses and Customer Agreements, Net of Cash Acquired
|
(141,079
|
)
|
|
(142,278
|
)
|
||
Proceeds from Dispositions of Businesses and Customer Agreements, Net of Cash Disposed
|
802
|
|
|
1,130
|
|
||
Cash Used in Investing Activities
|
(192,345
|
)
|
|
(185,784
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from Debt
|
50,000
|
|
|
27,875
|
|
||
Repayments on Debt
|
(121,857
|
)
|
|
(159,237
|
)
|
||
Dividends Paid
|
(4,186
|
)
|
|
(5,848
|
)
|
||
Acquisition of Treasury Stock
|
(100,004
|
)
|
|
(34,302
|
)
|
||
Issuance of Stock Under Stock Option Plans
|
6,684
|
|
|
3,439
|
|
||
Shares Withheld for Tax Payments
|
(17,282
|
)
|
|
(5,991
|
)
|
||
Debt Issuance Costs
|
(55
|
)
|
|
(2,835
|
)
|
||
Cash Used in Financing Activities
|
(186,700
|
)
|
|
(176,899
|
)
|
||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS
|
(1
|
)
|
|
102
|
|
||
Decrease in Cash and Cash Equivalents
|
(16,051
|
)
|
|
(182,308
|
)
|
||
Cash and Cash Equivalents at Beginning of Period
|
51,037
|
|
|
308,561
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
34,986
|
|
|
$
|
126,253
|
|
NOTE 1.
|
BASIS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
For the Three Months Ended September 30 (Unaudited and In Thousands)
|
2018
|
|
2017
|
||||
Progressive Leasing Invoice Volume
1
|
$
|
355,005
|
|
|
$
|
281,724
|
|
Stores as of September 30 (Unaudited)
|
2018
|
|
2017
|
||
Company-operated Aaron's Branded Stores
|
1,267
|
|
|
1,181
|
|
Franchised Stores
|
432
|
|
|
569
|
|
Systemwide Stores
|
1,699
|
|
|
1,750
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||
(Shares In Thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
Weighted Average Shares Outstanding
|
68,819
|
|
|
70,746
|
|
|
69,521
|
|
|
70,914
|
|
Dilutive Effect of Share-Based Awards
|
1,320
|
|
|
1,349
|
|
|
1,475
|
|
|
1,143
|
|
Weighted Average Shares Outstanding Assuming Dilution
|
70,139
|
|
|
72,095
|
|
|
70,996
|
|
|
72,057
|
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Customers
|
$
|
54,463
|
|
|
$
|
48,661
|
|
Corporate
|
15,500
|
|
|
23,431
|
|
||
Franchisee
|
22,348
|
|
|
27,795
|
|
||
Accounts Receivable
|
$
|
92,311
|
|
|
$
|
99,887
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Bad Debt Expense
1
|
$
|
64,235
|
|
|
$
|
50,705
|
|
|
$
|
160,886
|
|
|
$
|
118,749
|
|
Provision for Returns and Uncollected Renewal Payments
2
|
11,451
|
|
|
9,331
|
|
|
27,877
|
|
|
23,393
|
|
||||
Accounts Receivable Provision
|
$
|
75,686
|
|
|
$
|
60,036
|
|
|
$
|
188,763
|
|
|
$
|
142,142
|
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Merchandise on Lease
|
$
|
933,569
|
|
|
$
|
908,268
|
|
Merchandise not on Lease
|
263,243
|
|
|
243,867
|
|
||
Lease Merchandise, net of Accumulated Depreciation and Allowances
|
$
|
1,196,812
|
|
|
$
|
1,152,135
|
|
|
Nine Months Ended
|
|
Year Ended
|
||||
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Beginning Balance
|
$
|
35,629
|
|
|
$
|
33,399
|
|
Merchandise Written off, net of Recoveries
|
(130,946
|
)
|
|
(143,230
|
)
|
||
Provision for Write-offs
|
146,091
|
|
|
145,460
|
|
||
Ending Balance
|
$
|
50,774
|
|
|
$
|
35,629
|
|
FICO Score Category
|
September 30, 2018
|
|
December 31, 2017
|
||
600 or Less
|
3.1
|
%
|
|
1.7
|
%
|
Between 600 and 700
|
77.5
|
%
|
|
76.5
|
%
|
700 or Greater
|
19.4
|
%
|
|
21.8
|
%
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Prepaid Expenses
|
$
|
37,981
|
|
|
$
|
31,509
|
|
Prepaid Insurance
|
33,370
|
|
|
36,735
|
|
||
Assets Held for Sale
|
9,626
|
|
|
10,118
|
|
||
Deferred Tax Asset
|
7,556
|
|
|
11,589
|
|
||
Other Assets
|
27,822
|
|
|
26,548
|
|
||
Prepaid Expenses and Other Assets
|
$
|
116,355
|
|
|
$
|
116,499
|
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Accounts Payable
|
$
|
98,460
|
|
|
$
|
80,821
|
|
Accrued Insurance Costs
|
42,268
|
|
|
41,680
|
|
||
Accrued Salaries and Benefits
|
49,849
|
|
|
46,511
|
|
||
Accrued Real Estate and Sales Taxes
|
31,184
|
|
|
31,054
|
|
||
Deferred Rent
|
27,454
|
|
|
29,912
|
|
||
Other Accrued Expenses and Liabilities
|
69,181
|
|
|
74,832
|
|
||
Accounts Payable and Accrued Expenses
|
$
|
318,396
|
|
|
$
|
304,810
|
|
(In Thousands)
|
Foreign Currency
|
||
Balance at January 1, 2018
|
$
|
774
|
|
Other Comprehensive Loss
|
(715
|
)
|
|
Balance at September 30, 2018
|
$
|
59
|
|
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|||
(In Thousands)
|
As Reported
|
Balance Without ASC 606 Adoption
|
Effect of Change Higher/(Lower)
|
||||||
Franchise Royalties and Fees
|
$
|
10,153
|
|
$
|
8,118
|
|
$
|
2,035
|
|
Operating Expenses
|
420,602
|
|
418,928
|
|
1,674
|
|
|||
OPERATING PROFIT
|
57,286
|
|
56,924
|
|
362
|
|
|||
EARNINGS BEFORE INCOME TAXES
|
53,415
|
|
53,053
|
|
362
|
|
|||
INCOME TAXES
|
9,695
|
|
9,606
|
|
89
|
|
|||
NET EARNINGS
|
$
|
43,720
|
|
$
|
43,447
|
|
$
|
273
|
|
Nine Months Ended September 30, 2018
|
|||||||||
(In Thousands)
|
As Reported
|
Balance Without ASC 606 Adoption
|
Effect of Change Higher/(Lower)
|
||||||
Franchise Royalties and Fees
|
$
|
35,140
|
|
$
|
28,962
|
|
$
|
6,178
|
|
Operating Expenses
|
1,199,171
|
|
1,193,819
|
|
5,352
|
|
|||
OPERATING PROFIT
|
201,281
|
|
200,455
|
|
826
|
|
|||
EARNINGS BEFORE INCOME TAXES
|
170,147
|
|
169,321
|
|
826
|
|
|||
INCOME TAXES
|
35,680
|
|
35,478
|
|
202
|
|
|||
NET EARNINGS
|
$
|
134,467
|
|
$
|
133,843
|
|
$
|
624
|
|
Balance at September 30, 2018
|
|||||||||
(In Thousands)
|
As Reported
|
Balance Without ASC 606 Adoption
|
Effect of Change Higher/(Lower)
|
||||||
Deferred Income Taxes Payable
|
$
|
248,102
|
|
$
|
248,522
|
|
$
|
(420
|
)
|
Customer Deposits and Advance Payments
|
71,554
|
|
70,028
|
|
1,526
|
|
|||
Total Liabilities
|
935,392
|
|
934,286
|
|
1,106
|
|
|||
Retained Earnings
|
1,945,961
|
|
1,947,067
|
|
(1,106
|
)
|
|||
Total Shareholders’ Equity
|
1,763,506
|
|
1,764,612
|
|
(1,106
|
)
|
|||
Total Liabilities & Shareholders’ Equity
|
$
|
2,698,898
|
|
$
|
2,698,898
|
|
$
|
—
|
|
Three Months Ended September 30, 2018
|
|
|
|
||||||
(In Thousands)
|
As Reported
|
Balance Without ASC 606 Adoption
|
Effect of Change Higher/(Lower)
|
||||||
Comprehensive Income
|
$
|
44,017
|
|
$
|
43,744
|
|
$
|
273
|
|
Nine Months Ended September 30, 2018
|
|||||||||
(In Thousands)
|
As Reported
|
Balance Without ASC 606 Adoption
|
Effect of Change Higher/(Lower)
|
||||||
Comprehensive Income
|
$
|
133,752
|
|
$
|
133,128
|
|
$
|
624
|
|
(In Thousands)
|
Amounts Recognized as of Acquisition Dates (preliminary)
|
||
Purchase Price
|
$
|
127,498
|
|
Working Capital Adjustment
|
(445
|
)
|
|
Consideration Transferred
|
127,053
|
|
|
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed
|
|
||
Cash and Cash Equivalents
|
43
|
|
|
Lease Merchandise
|
35,281
|
|
|
Property, Plant and Equipment
|
4,570
|
|
|
Other Intangibles
1
|
14,283
|
|
|
Prepaid Expenses and Other Assets
|
571
|
|
|
Total Identifiable Assets Acquired
|
54,748
|
|
|
Accounts Payable and Accrued Expenses
|
(562
|
)
|
|
Customer Deposits and Advance Payments
|
(2,958
|
)
|
|
Total Liabilities Assumed
|
(3,520
|
)
|
|
Goodwill
2
|
75,825
|
|
|
Net Assets Acquired
|
$
|
51,228
|
|
|
Fair Value
(in thousands)
|
|
Weighted Average Life
(in years)
|
||
Non-compete Agreements
|
$
|
615
|
|
|
3.0
|
Customer Lease Contracts
|
4,687
|
|
|
1.0
|
|
Customer Relationships
|
6,195
|
|
|
3.0
|
|
Reacquired Franchise Rights
|
2,786
|
|
|
4.3
|
|
Total Acquired Intangible Assets
1
|
$
|
14,283
|
|
|
|
(In Thousands)
|
Final Amounts Recognized as of Acquisition Date
|
||
Purchase Price
|
$
|
140,000
|
|
Settlement of Pre-existing Accounts Receivable SEI owed Aaron's, Inc.
|
3,452
|
|
|
Reimbursement for Insurance Costs
|
(100
|
)
|
|
Working Capital Adjustment
|
188
|
|
|
Consideration Transferred
|
143,540
|
|
|
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed
|
|
||
Cash and Cash Equivalents
|
34
|
|
|
Receivables
|
1,345
|
|
|
Lease Merchandise
|
40,941
|
|
|
Property, Plant and Equipment
|
8,832
|
|
|
Other Intangibles
1
|
13,779
|
|
|
Prepaid Expenses and Other Assets
|
440
|
|
|
Total Identifiable Assets Acquired
|
65,371
|
|
|
Accounts Payable and Accrued Expenses
|
(6,698
|
)
|
|
Customer Deposits and Advance Payments
|
(2,500
|
)
|
|
Capital Leases
|
(4,514
|
)
|
|
Total Liabilities Assumed
|
(13,712
|
)
|
|
Goodwill
2
|
91,881
|
|
|
Net Assets Acquired
|
$
|
51,659
|
|
|
Fair Value
(in thousands)
|
|
Weighted Average Life
(in years)
|
||
Non-compete Agreements
|
$
|
1,244
|
|
|
5.0
|
Customer Lease Contracts
|
2,154
|
|
|
1.0
|
|
Customer Relationships
|
3,215
|
|
|
2.0
|
|
Reacquired Franchise Rights
|
3,640
|
|
|
4.1
|
|
Favorable Operating Leases
|
3,526
|
|
|
11.3
|
|
Total Acquired Intangible Assets
1
|
$
|
13,779
|
|
|
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Deferred Compensation Liability
|
$
|
—
|
|
|
$
|
(11,910
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(12,927
|
)
|
|
$
|
—
|
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets Held for Sale
|
$
|
—
|
|
|
$
|
9,626
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,118
|
|
|
$
|
—
|
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
PerfectHome Notes
1
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,385
|
|
Fixed-Rate Long-Term Debt
2
|
—
|
|
|
(184,249
|
)
|
|
—
|
|
|
—
|
|
|
(273,476
|
)
|
|
—
|
|
1
|
The PerfectHome notes were carried at cost, which approximated fair value. The Company recorded a full impairment of the PerfectHome notes during the second quarter of 2018. Refer to Note 1 to the condensed consolidated financial statements for further discussion of the PerfectHome impairment.
|
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
$180.0 million
and
$265.0 million
at
September 30, 2018
and
December 31, 2017
, respectively.
|
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Credit Card Loans
1
|
$
|
90,944
|
|
|
$
|
89,728
|
|
Acquired Loans
2
|
7,656
|
|
|
16,213
|
|
||
Loans Receivable, Gross
|
98,600
|
|
|
105,941
|
|
||
|
|
|
|
||||
Allowance for Loan Losses
|
(13,138
|
)
|
|
(11,454
|
)
|
||
Unamortized Fees
|
(7,400
|
)
|
|
(8,375
|
)
|
||
Loans Receivable, Net of Allowances and Unamortized Fees
|
$
|
78,062
|
|
|
$
|
86,112
|
|
|
Nine Months Ended
|
|
Year Ended
|
||||
(In Thousands)
|
September 30, 2018
|
|
December 31, 2017
|
||||
Beginning Balance
1
|
$
|
11,454
|
|
|
$
|
6,624
|
|
Provision for Loan Losses
|
16,011
|
|
|
20,973
|
|
||
Charge-offs
|
(15,504
|
)
|
|
(16,852
|
)
|
||
Recoveries
|
1,177
|
|
|
709
|
|
||
Ending Balance
|
$
|
13,138
|
|
|
$
|
11,454
|
|
|
Three Months Ended September 30, 2018
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
504,407
|
|
$
|
376,464
|
|
$
|
—
|
|
$
|
880,871
|
|
Retail Sales
2
|
—
|
|
7,620
|
|
—
|
|
7,620
|
|
||||
Non-Retail Sales
2
|
—
|
|
44,368
|
|
—
|
|
44,368
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
10,153
|
|
—
|
|
10,153
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
9,508
|
|
9,508
|
|
||||
Other
|
—
|
|
551
|
|
—
|
|
551
|
|
||||
Total
|
$
|
504,407
|
|
$
|
439,156
|
|
$
|
9,508
|
|
$
|
953,071
|
|
2
|
Revenue within the scope of ASC 606,
Revenue from Contracts with Customers
. Of the Franchise Royalties and Fees,
$7.4 million
is related to franchise royalty income that is recognized as the franchisee collects cash revenue from its customers. The remaining revenue is primarily related to fees collected for pre-opening services, which are being deferred and recognized as revenue over the agreement term, and advertising fees charged to franchisees. Retail sales are recognized as revenue at the point of sale. Non-retail sales are recognized as revenue upon delivery of the merchandise.
|
|
Three Months Ended September 30, 2017
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
398,282
|
|
$
|
357,036
|
|
$
|
—
|
|
$
|
755,318
|
|
Retail Sales
2
|
—
|
|
6,274
|
|
—
|
|
6,274
|
|
||||
Non-Retail Sales
2
|
—
|
|
56,443
|
|
—
|
|
56,443
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
11,140
|
|
—
|
|
11,140
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
8,936
|
|
8,936
|
|
||||
Other
|
—
|
|
772
|
|
—
|
|
772
|
|
||||
Total
|
$
|
398,282
|
|
$
|
431,665
|
|
$
|
8,936
|
|
$
|
838,883
|
|
|
Nine Months Ended September 30, 2018
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
1,474,590
|
|
$
|
1,122,286
|
|
$
|
—
|
|
$
|
2,596,876
|
|
Retail Sales
2
|
—
|
|
22,728
|
|
—
|
|
22,728
|
|
||||
Non-Retail Sales
2
|
—
|
|
151,259
|
|
—
|
|
151,259
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
35,140
|
|
—
|
|
35,140
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
28,258
|
|
28,258
|
|
||||
Other
|
—
|
|
1,478
|
|
—
|
|
1,478
|
|
||||
Total
|
$
|
1,474,590
|
|
$
|
1,332,891
|
|
$
|
28,258
|
|
$
|
2,835,739
|
|
|
Nine Months Ended September 30, 2017
|
|||||||||||
(In Thousands)
|
Progressive Leasing
|
Aaron's Business
|
DAMI
|
Total
|
||||||||
Lease Revenues and Fees
1
|
$
|
1,137,896
|
|
$
|
1,079,133
|
|
$
|
—
|
|
$
|
2,217,029
|
|
Retail Sales
2
|
—
|
|
21,158
|
|
—
|
|
21,158
|
|
||||
Non-Retail Sales
2
|
—
|
|
195,372
|
|
—
|
|
195,372
|
|
||||
Franchise Royalties and Fees
2
|
—
|
|
38,165
|
|
—
|
|
38,165
|
|
||||
Interest and Fees on Loans Receivable
3
|
—
|
|
—
|
|
25,669
|
|
25,669
|
|
||||
Other
|
—
|
|
1,688
|
|
—
|
|
1,688
|
|
||||
Total
|
$
|
1,137,896
|
|
$
|
1,335,516
|
|
$
|
25,669
|
|
$
|
2,499,081
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Earnings (Loss) Before Income Taxes:
|
|
|
|
|
|
|
|
||||||||
Progressive Leasing
|
$
|
40,839
|
|
|
$
|
27,734
|
|
|
$
|
120,393
|
|
|
$
|
101,732
|
|
Aaron's Business
1
|
15,641
|
|
|
15,484
|
|
|
56,417
|
|
|
85,564
|
|
||||
DAMI
|
(3,065
|
)
|
|
(3,997
|
)
|
|
(6,663
|
)
|
|
(8,457
|
)
|
||||
Total Earnings Before Income Taxes
|
$
|
53,415
|
|
|
$
|
39,221
|
|
|
$
|
170,147
|
|
|
$
|
178,839
|
|
(In Thousands)
|
September 30,
2018 |
|
December 31,
2017 |
||||
Assets:
|
|
|
|
||||
Progressive Leasing
|
$
|
1,037,017
|
|
|
$
|
1,022,413
|
|
Aaron's Business
1
|
1,388,850
|
|
|
1,261,234
|
|
||
DAMI
|
96,297
|
|
|
108,306
|
|
||
Other
2
|
176,734
|
|
|
300,311
|
|
||
Total Assets
|
$
|
2,698,898
|
|
|
$
|
2,692,264
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
1
|
||||||||
Contractual Lease Obligations
|
$
|
586
|
|
|
$
|
694
|
|
|
$
|
1,512
|
|
|
$
|
12,011
|
|
Severance (Reversals) Expense, Net
|
—
|
|
|
(285
|
)
|
|
601
|
|
|
1,306
|
|
||||
Other Reversals
|
—
|
|
|
—
|
|
|
(1,176
|
)
|
|
—
|
|
||||
Gain on Sale of Closed Store Properties
|
(49
|
)
|
|
—
|
|
|
(376
|
)
|
|
—
|
|
||||
Fixed Asset Impairment
|
—
|
|
|
436
|
|
|
—
|
|
|
1,300
|
|
||||
Restructuring Expenses, Net
|
$
|
537
|
|
|
$
|
845
|
|
|
$
|
561
|
|
|
$
|
14,617
|
|
(In Thousands)
|
Contractual Lease Obligations
|
|
Severance
|
||||
Balance at January 1, 2018
|
$
|
12,437
|
|
|
$
|
2,303
|
|
Charges
|
—
|
|
|
601
|
|
||
Adjustments
1
|
1,512
|
|
|
—
|
|
||
Restructuring Charges
|
1,512
|
|
|
601
|
|
||
Payments
|
(4,559
|
)
|
|
(1,895
|
)
|
||
Balance at September 30, 2018
|
$
|
9,390
|
|
|
$
|
1,009
|
|
•
|
Improve Aaron’s store profitability;
|
•
|
Accelerate our omnichannel platform;
|
•
|
Strengthen relationships of Progressive Leasing and DAMI’s current retail and merchant partners;
|
•
|
Focus on converting existing pipeline into Progressive Leasing retail partners; and
|
•
|
Champion compliance.
|
•
|
The Company acquired substantially all of the assets of the store operations of three franchisees, adding
90
Aaron's-branded stores to our portfolio of Company-operated stores, for approximately
$127.1 million
.
|
•
|
The Company reported revenues of
$953.1 million
in the
third
quarter of
2018
compared to
$838.9 million
for the
third
quarter of
2017
. Earnings before income taxes
increased
to
$53.4 million
compared to
$39.2 million
during the
third
quarter of
2017
.
|
•
|
Progressive Leasing reported revenues of
$504.4 million
in the
third
quarter of
2018
, an
increase
of
26.6%
over the
third
quarter of
2017
. Progressive Leasing's revenue growth is due to a
26.0%
increase
in total invoice volume, which was generated through an increase in invoice volume per active door and a
3.8%
increase
in active doors. Progressive Leasing's earnings before income taxes
increased
to
$40.8 million
compared to
$27.7 million
during the
third
quarter of
2017
, due mainly to its higher revenue.
|
•
|
Aaron's Business revenues
increased
to
$439.2 million
for t
he
third
quarter of
2018
, compared to
$431.7 million
in the prior year. Aaron's Business lease revenue and fees
increased
due to the acquisitions of various franchisees during 2017 and 2018, partially offset by declines in non-retail sales to our franchisees. Same store revenues remained relatively flat in the third quarter of
2018
. Earnings before income taxes
increased
to
$15.6 million
during the
third
quarter of
2018
compared to
$15.5 million
in the prior year period.
|
•
|
The Company generated cash from operating activities of
$363.0 million
for the
nine months ended September 30, 2018
compared to
$180.3 million
for the comparable period in
2017
. The
increase
in net cash from operating activities was impacted by net income tax refunds of
$64.8 million
during the
nine months ended September 30, 2018
, compared to net income tax payments of
$95.7 million
in
2017
.
|
•
|
The Company returned
$104.2 million
to shareholders for the
nine months ended September 30, 2018
through the repurchase of
2.3 million
shares and the payment of our dividend, which we have paid for 31 consecutive years.
|
For the Three Months Ended September 30 (Unaudited and In Thousands)
|
2018
|
|
2017
|
||||
Progressive Leasing Invoice Volume
|
$
|
355,005
|
|
|
$
|
281,724
|
|
Active Doors at September 30 (Unaudited)
|
2018
|
|
2017
|
||
Progressive Leasing Active Doors
|
20,258
|
|
|
19,523
|
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Personnel Costs
|
$
|
164,587
|
|
|
$
|
155,717
|
|
|
$
|
8,870
|
|
|
5.7
|
%
|
Occupancy Costs
|
56,860
|
|
|
51,590
|
|
|
5,270
|
|
|
10.2
|
|
|||
Provision for Lease Merchandise Write-Offs
|
54,671
|
|
|
43,512
|
|
|
11,159
|
|
|
25.6
|
|
|||
Bad Debt Expense
|
64,235
|
|
|
50,705
|
|
|
13,530
|
|
|
26.7
|
|
|||
Shipping and Handling
|
18,392
|
|
|
16,403
|
|
|
1,989
|
|
|
12.1
|
|
|||
Advertising
|
9,814
|
|
|
7,621
|
|
|
2,193
|
|
|
28.8
|
|
|||
Provision for Loan Losses
|
6,471
|
|
|
6,010
|
|
|
461
|
|
|
7.7
|
|
|||
Intangible Amortization
|
8,807
|
|
|
7,022
|
|
|
1,785
|
|
|
25.4
|
|
|||
Other Operating Expenses
|
36,765
|
|
|
35,577
|
|
|
1,188
|
|
|
3.3
|
|
|||
Operating Expenses
|
$
|
420,602
|
|
|
$
|
374,157
|
|
|
$
|
46,445
|
|
|
12.4
|
%
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Losses (gains) on sales of stores and customer agreements
|
$
|
—
|
|
|
$
|
(232
|
)
|
|
$
|
232
|
|
|
nmf
|
|
Net gains on sales of delivery vehicles
|
(184
|
)
|
|
(126
|
)
|
|
(58
|
)
|
|
(46.0
|
)
|
|||
Impairment charges and net losses on asset dispositions, assets held for sale and other
|
146
|
|
|
844
|
|
|
(698
|
)
|
|
(82.7
|
)
|
|||
Other operating (income) expense, net
|
$
|
(38
|
)
|
|
$
|
486
|
|
|
$
|
(524
|
)
|
|
nmf
|
|
|
Three Months Ended
September 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
EARNINGS (LOSS) BEFORE INCOME TAXES:
|
|
|
|
|
|
|
|
|||||||
Progressive Leasing
|
$
|
40,839
|
|
|
$
|
27,734
|
|
|
$
|
13,105
|
|
|
47.3
|
%
|
Aaron's Business
|
15,641
|
|
|
15,484
|
|
|
157
|
|
|
1.0
|
|
|||
DAMI
|
(3,065
|
)
|
|
(3,997
|
)
|
|
932
|
|
|
23.3
|
|
|||
Total Earnings Before Income Taxes
|
$
|
53,415
|
|
|
$
|
39,221
|
|
|
$
|
14,194
|
|
|
36.2
|
%
|
|
Nine Months Ended
September 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Personnel Costs
|
$
|
498,201
|
|
|
$
|
452,608
|
|
|
$
|
45,593
|
|
|
10.1
|
%
|
Occupancy Costs
|
164,780
|
|
|
148,465
|
|
|
16,315
|
|
|
11.0
|
|
|||
Provision for Lease Merchandise Write-Offs
|
146,091
|
|
|
107,450
|
|
|
38,641
|
|
|
36.0
|
|
|||
Bad Debt Expense
|
160,886
|
|
|
118,749
|
|
|
42,137
|
|
|
35.5
|
|
|||
Shipping and Handling
|
55,485
|
|
|
49,111
|
|
|
6,374
|
|
|
13.0
|
|
|||
Advertising
|
26,197
|
|
|
27,938
|
|
|
(1,741
|
)
|
|
(6.2
|
)
|
|||
Provision for Loan Losses
|
16,011
|
|
|
15,140
|
|
|
871
|
|
|
5.8
|
|
|||
Intangible Amortization
|
23,745
|
|
|
20,501
|
|
|
3,244
|
|
|
15.8
|
|
|||
Other Operating Expenses
|
107,775
|
|
|
93,568
|
|
|
14,207
|
|
|
15.2
|
|
|||
Operating Expenses
|
$
|
1,199,171
|
|
|
$
|
1,033,530
|
|
|
$
|
165,641
|
|
|
16.0
|
%
|
|
Nine Months Ended
September 30, |
|
Change
|
|||||||||||
(In Thousands)
|
2018
|
|
2017
|
|
$
|
|
%
|
|||||||
Net gains on sales of stores
|
$
|
(46
|
)
|
|
$
|
(609
|
)
|
|
$
|
563
|
|
|
92.4
|
%
|
Net gains on sales of delivery vehicles
|
(629
|
)
|
|
(918
|
)
|
|
289
|
|
|
31.5
|
|
|||
Impairment charges and net losses on asset dispositions, assets held for sale and other
|
389
|
|
|
941
|
|
|
(552
|
)
|
|
(58.7
|
)
|
|||
Other operating income, net
|
$
|
(286
|
)
|
|
$
|
(586
|
)
|
|
$
|
300
|
|
|
51.2
|
%
|
•
|
Cash and cash equivalents
decreased
$16.1 million
to
$35.0 million
at
September 30, 2018
. For additional information, refer to the "Liquidity and Capital Resources" section below.
|
•
|
Investments declined due to the full impairment of the PerfectHome Notes as discussed above.
|
•
|
Goodwill
increased
$80.5 million
due primarily to goodwill recorded as a result of the franchisee acquisitions executed during the third quarter of 2018. Refer to Note 2 to the condensed consolidated financial statements for further details regarding the acquisition accounting for these franchisees.
|
•
|
Income tax receivable
decreased
$70.3 million
due primarily to income tax refunds, net of tax payments.
|
•
|
Debt
decreased
$71.5 million
due primarily to scheduled repayments of
$95.0 million
on the Company's senior unsecured notes and term loan, including repayment of the remaining
$25.0 million
outstanding under its
3.95%
senior unsecured notes, partially offset by net borrowings of
$25.0 million
on the Company's revolving credit facility.
|
•
|
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; 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 Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
1
|
|||||
July 1, 2018 through July 31, 2018
|
—
|
|
—
|
|
—
|
|
$
|
431,568,742
|
|
August 1, 2018 through August 31, 2018
|
675,552
|
|
46.74
|
|
675,552
|
|
399,996,734
|
|
|
September 1, 2018 through September 30, 2018
|
—
|
|
—
|
|
—
|
|
399,996,734
|
|
|
Total
|
675,552
|
|
|
|
675,552
|
|
|
|
ITEM 3.
|
DEFAULTS UPON SENIOR SECURITIES
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
OTHER INFORMATION
|
ITEM 6.
|
EXHIBITS
|
|
|
AARON’S, INC.
|
|
|
|
|
(Registrant)
|
|
|
|
|
Date:
|
October 25, 2018
|
By:
|
/s/ Steven A. Michaels
|
|
|
|
Steven A. Michaels
|
|
|
|
Chief Financial Officer,
|
|
|
|
President Strategic Operations
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
October 25, 2018
|
By:
|
/s/ Robert P. Sinclair, Jr.
|
|
|
|
Robert P. Sinclair, Jr.
|
|
|
|
Vice President,
|
|
|
|
Corporate Controller
|
|
|
|
(Principal Accounting Officer)
|
By:
|
PROGRESSIVE FINANCE HOLDINGS, LLC, Sole Manager
|
By:
|
PROG LEASING, LLC, Sole Manager
|
Participant
|
Participating
Commitment as of the Effective Date
|
Participating Commitment as of the First Amendment Effective Date
|
SunTrust Bank
|
$13,803,418.80
|
$8,987,329.31
|
Bank of America, N.A.
|
$10,897,435.90
|
$7,095,259.98
|
Fifth Third Bank
|
$10,897,435.90
|
$7,095,259.98
|
Regions Bank
|
$10,897,435.90
|
$7,095,259.98
|
Branch Banking & Trust Company
|
$10,897,435.90
|
$7,095,259.98
|
JPMorgan Chase Bank, N.A.
|
$8,717,948.72
|
$5,676,207.98
|
Citizens Bank, N.A.
|
$8,717,948.72
|
$5,676,207.98
|
HSBC Bank USA, National Association
|
$6,538,461.54
|
$4,257,155.99
|
Synovus Bank
|
$3,632,478.62
|
$2,022,058.82
|
Total:
|
$85,000,000.00
|
$55,000,000.00
|
Payment Dates
|
Principal Payment Amount
|
December 31, 2019
|
$5,625,000
|
March 31, 2020
|
$5,625,000
|
June 30, 2020
|
$5,625,000
|
September 30, 2020
|
$5,625,000
|
December 31, 2020
|
$5,625,000
|
March 31, 2021
|
$5,625,000
|
June 30, 2021
|
$5,625,000
|
September 30, 2021
|
$5,625,000
|
December 31, 2021
|
$5,625,000
|
March 31, 2022
|
$5,625,000
|
June 30, 2022
|
$5,625,000
|
Maturity Date
|
Remaining principal balance
of the Term Loan A
|
By:
|
PROGRESSIVE FINANCE HOLDINGS, LLC, Sole Manager
|
By:
|
PROG LEASING, LLC, Sole Manager
|
Lender
|
Revolving
Commitment as of the Effective Date
|
Revolving Commitment as of the First Amendment Effective Date
|
Term Loan A
Commitment as of the Effective Date
|
Outstanding Principal Amount of the Term Loan A immediately prior to the First Amendment Effective Date
|
Term Loan A Commitment with respect to the Additional Term Loan A Advance
|
Term Loan A Commitment as of the First Amendment Effective Date
|
SunTrust Bank
|
$64,957,264.96
|
$65,362,394.93
|
$16,239,316.24
|
$14,209,401.71
|
$22,556,945.46
|
$36,766,347.17
|
Bank of America, N.A.
|
$51,282,051.28
|
$51,601,890.76
|
$12,820,512.82
|
$11,217,948.72
|
$17,808,114.83
|
$29,026,063.55
|
Fifth Third Bank
|
$51,282,051.28
|
$51,601,890.76
|
$12,820,512.82
|
$11,217,948.72
|
$17,808,114.83
|
$29,026,063.55
|
Regions Bank
|
$51,282,051.28
|
$51,601,890.76
|
$12,820,512.82
|
$11,217,948.72
|
$17,808,114.83
|
$29,026,063.55
|
Branch Banking & Trust Company
|
$51,282,051.28
|
$51,601,890.76
|
$12,820,512.82
|
$11,217,948.72
|
$17,808,114.83
|
$29,026,063.55
|
JPMorgan Chase Bank, N.A.
|
$41,025,641.02
|
$41,281,512.61
|
$10,256,410.26
|
$8,974,358.98
|
$14,246,491.86
|
$23,220,850.84
|
Citizens Bank
|
$41,025,641.02
|
$41,281,512.61
|
$10,256,410.26
|
$8,974,358.98
|
$14,246,491.86
|
$23,220,850.84
|
HSBC Bank USA, National Association
|
$30,769,230.77
|
$30,961,134.45
|
$7,692,307.69
|
$6,730,769.23
|
$10,684,868.90
|
$17,415,638.13
|
Synovus Bank
|
$17,094,017.11
|
$14,705,882.36
|
$4,273,504.27
|
$3,739,316.24
|
$4,532,742.58
|
$8,272,058.82
|
Total:
|
$400,000,000.00
|
$400,000,000.00
|
$100,000,000.00
|
$87,500,000.00
|
$137,500,000.00
|
$225,000,000.00
|
|
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;
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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;
|
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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
|
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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
|
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|
||||
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):
|
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|
||||
|
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
|
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|
|
|||
|
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:
|
October 25, 2018
|
/s/ John W. Robinson III
|
|
|
John W. Robinson III
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Chief Executive Officer
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I, Steven A. Michaels, certify that:
|
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|
||
1.
|
I have reviewed this quarterly report on Form 10-Q of Aaron's, Inc.;
|
||||
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|
|
||
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:
|
October 25, 2018
|
/s/ Steven A. Michaels
|
|
|
Steven A. Michaels
|
|
|
Chief Financial Officer,
|
|
|
President Strategic Operations
|
Date:
|
October 25, 2018
|
|
/s/ John W. Robinson III
|
|
|
|
John W. Robinson III
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
October 25, 2018
|
|
/s/ Steven A. Michaels
|
|
|
|
Steven A. Michaels
|
|
|
|
Chief Financial Officer,
|
|
|
|
President Strategic Operations
|