UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Emerging growth company
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ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION. |
On November 3, 2021, PROG Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended September 30, 2021. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. The information contained in this Item 2.02, as well as Exhibit 99.1 referenced herein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”).
ITEM 7.01. | REGULATION FD DISCLOSURE. |
On November 3, 2021, the Company also issued a press release announcing its intention to launch a “modified Dutch auction” tender offer to purchase up to $425 million in value of its common stock, or such lesser amount of shares of its common stock as are properly tendered and not properly withdrawn, at an anticipated cash purchase price per share of not less than $44.00 per share and not more than $50.00 per share, less any applicable withholding taxes and without interest. The Company intends to commence the tender offer on November 4, 2021, expiring at 12:00 midnight, New York City time, at the end of the day on December 3, 2021, unless the tender offer is extended or earlier terminated.
A copy of the press release is furnished herewith as Exhibit 99.2 and is incorporated herein by reference. The information contained in this Item 7.01, as well as Exhibit 99.2 referenced herein, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any filing under the Securities Act.
Neither this report nor the exhibits hereto is a recommendation to buy or sell shares of common stock or any other securities, and it is neither an offer to purchase nor a solicitation of an offer to sell shares of common stock or any other securities. On the commencement date of the tender offer, a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related materials, will be filed with the United States Securities and Exchange Commission (the “SEC”) by the Company. The tender offer will only be made pursuant to the offer to purchase, the letter of transmittal and related materials filed as a part of the Schedule TO. When available, shareholders should read carefully the offer to purchase, letter of transmittal and related materials because they contain important information, including the various terms of, and conditions to, the tender offer. Once the tender offer is commenced, shareholders will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that the Company will be filing with the SEC at the SEC’s website at www.sec.gov or from the information agent for the tender offer.
ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS. |
(d) Exhibits:
Exhibit No. |
Description | |
99.1 | Press release, dated November 3, 2021, relating to the Company’s financial results. | |
99.2 | ||
104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PROG Holdings, Inc. | ||||||
By: | /s/ Brian Garner | |||||
Date: November 3, 2021 | Brian Garner Chief Financial Officer |
Exhibit 99.1
PROG Holdings Reports Third Quarter 2021 Results
| Progressive Leasing GMV of $493 million, up 9.9% |
| E-commerce grew 192% to 14.5% of Progressive Leasing GMV |
| Consolidated Revenues of $650 million, up 6.4% |
| Consolidated earnings before taxes of $77.9 million; Adjusted EBITDA of $93.6 million or 14.4% of revenues |
| Diluted EPS of $0.86; Non-GAAP Diluted EPS of $0.94 |
| Board of Directors authorizes new $1 billion share repurchase program including a modified Dutch auction tender offer to purchase up to $425 million of Company stock, which is expected to commence November 4, 2021 |
SALT LAKE CITY, November 3, 2021- PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, and Four Technologies, today announced financial results for the third quarter ended September 30, 2021.
As we approach our first anniversary as a stand-alone, high-growth, asset-light fintech company, Im pleased to report our continued progress positioning PROG Holdings for significant, long-term shareholder value creation. At the same time, we continue to successfully navigate pandemic-related volatility in our markets, said Steve Michaels, President and Chief Executive Officer of PROG Holdings. During the third quarter, portfolio performance continued to return towards more normalized pre-pandemic levels. Against this backdrop, we sustained accelerating growth in our lease portfolio, and we remain on track to deliver mid-to-high teens GMV growth and record adjusted EBITDA.
Michaels added, Since last Novembers spin transaction, we have taken significant steps to align our capital structure and capital allocation strategy with our businesss impressive cash generation and balance sheet. Our Boards authorization of a $1 billion share repurchase program, which includes a cash and debt-funded tender offer to purchase up to $425 million of our outstanding common stock will lower our cost of capital and further demonstrate our commitment to return excess capital to shareholders while maintaining our ability to invest in organic growth and attractive M&A opportunities.
Financial Highlights
Consolidated revenues for the third quarter of 2021 were $650.4 million, an increase of 6.4% from the same period in 2020. The increase was primarily due to growth from key large national partners and continued e-commerce penetration. Progressive Leasings GMV increased 9.9% to $493.3 million compared with the same period in 2020, with e-commerce GMV growing 192% year-over-year. In addition, the Companys lease portfolio ended the quarter 11.5% higher than the same period of 2020.
The Company reported consolidated net earnings from continuing operations for the third quarter of 2021 of $57.4 million compared with $74.6 million in the prior year period. Adjusted EBITDA for the third quarter of 2021 was $93.6 million compared with $110.6 million for the same period in 2020, a decrease of $17.0 million, or 15.4%. As a percentage of revenues, adjusted EBITDA was 14.4% in the third quarter of 2021 compared with 18.1% for the same period in 2020. The year-over-year decline in net earnings from continuing operations and adjusted EBITDA were primarily driven by Progressive Leasings delinquencies and write-offs approaching a more normalized level as compared to the extraordinarily low delinquency and write-off levels in the prior year quarter. That trend more than offset the benefit of higher revenues and the declining number of customers exercising their 90-day purchase option.
Diluted earnings per share from continuing operations for the third quarter of 2021 were $0.86 compared with $1.10 in the year ago period. On a non-GAAP basis, diluted earnings per share from continuing operations were $0.94 in the third quarter of 2021 compared with $1.17 for the same quarter in 2020.
The provision for lease merchandise write-offs at Progressive Leasing was 5.4% of lease revenues in the third quarter of 2021, compared with 2.1% in the same period of 2020. While this level is elevated from the record lows of the prior year, write-offs remain below the Companys historical 6-8% annual range and are expected to remain at or below that historical range in the near-to mid-term.
Liquidity and Capital Allocation
PROG Holdings ended the third quarter of 2021 with cash of $128.8 million and debt of $50 million. The Company purchased $51.0 million of its stock in the period at an average price per share of $45.40.
The Companys Board of Directors has authorized a new $1 billion share repurchase program, which replaces the Companys prior $300 million program. Under the new authorization, purchases can be made from time to time using a variety of methods, which may include tender offers, open market purchases, purchases effected through 10b5-1 trading plans, accelerated share purchase programs, or other transactions. The amount of any shares of the Companys common stock that are purchased under the new repurchase program and the timing of any such purchases will be determined based on market conditions and other factors, and the program may be suspended or discontinued at any time.
As part of the new repurchase program, the Company expects to commence a modified Dutch auction tender offer on November 4, 2021, for up to $425 million in value of its outstanding common stock at an anticipated cash purchase price per share of not less than $44.00 and not more than $50.00, less any applicable withholding taxes and without interest. Further information regarding the tender offer can be found in a separate press release, issued today, available on PROG Holdings investor relations page.
Outlook
The Company is updating its full year 2021 consolidated outlook for revenues, adjusted EBITDA, GAAP diluted EPS, and Non-GAAP diluted EPS. The change in outlook reflects increasing reserve requirements due to continued normalization of the portfolio. The revised revenue range for 2021 is $2.68 billion to $2.70 billion, and the revised adjusted EBITDA range is $390 million to $395 million. Non-GAAP diluted EPS is expected to be between $3.90 and $3.99, while GAAP diluted EPS is expected to be between $3.62 and $3.71. The impact of any share reduction from the tender offer is not included in this outlook and is expected to be immaterial to the full-year EPS.
Conference Call and Webcast
The Company has scheduled a live webcast and conference call for Wednesday, November 3, 2021, at 8:30 A.M. ET to discuss its financial results for the third quarter of 2021. To access the live webcast, visit the Companys investor relations website, https://investor.progholdings.com/. To join the conference call via telephone, dial 877-270-2148 and request to join the PROG Holdings, Inc. call. International participants without internet access can join the conference call by dialing 412-902-6510 and requesting to join the PROG Holdings, Inc. call. The webcast will be archived for playback on the investor relations website following the event.
About PROG Holdings, Inc.
PROG Holdings, Inc. (NYSE:PRG) is a fintech holding company headquartered in Salt Lake City, UT, that provides transparent and competitive payment options to consumers. The Company owns Progressive Leasing, a leading provider of e-commerce, app-based, and in-store point-of-sale lease-to-own solutions, Vive Financial, an omnichannel provider of second-look revolving credit products, and Four Technologies, provider of Buy Now, Pay Later payment options through its platform, Four. More information on PROG Holdings companies can be found at https://www.progholdings.com.
Additional Information Regarding the Tender Offer
The tender offer described in this press release has not yet commenced, and there can be no assurance that PROG Holdings will commence the tender offer on the terms described in this release. The information regarding the tender offer in this press release is for informational purposes only. This press release is not a recommendation to buy or sell shares of common stock or any other securities, and it is neither an offer to purchase nor a solicitation of an offer to sell shares of common stock or any other securities. On the commencement date of the tender offer, a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related materials, will be filed with the United States Securities and Exchange Commission (the SEC) by PROG Holdings. The tender offer will only be made pursuant to the offer to purchase, the letter of transmittal and related materials filed as a part of the Schedule TO. When available, shareholders should read carefully the offer to purchase, letter of transmittal and related materials because they contain important information, including the various terms of, and conditions to, the tender offer. Once the tender offer is commenced, shareholders will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that PROG Holdings will be filing with the SEC at the SECs website at www.sec.gov or from the information agent for the tender offer.
Forward Looking Statements:
Statements in this news release regarding our business that are not historical facts are forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as continue, continued, expects, expected, outlook, intends and similar forward-looking terminology. These risks and uncertainties include factors such as (i) the impact of the COVID-19 pandemic and related measures taken by governmental or regulatory authorities to combat the pandemic, including the impact of the pandemic and such measures on: (a) demand for the lease-to-own products offered by our Progressive Leasing segment, (b) Progressive Leasings POS partners, and Vives and Fours merchant partners, (c) Progressive Leasings, Vives and Fours customers, including their ability and willingness to satisfy their obligations under their lease agreements and loan agreements, (d) Progressive Leasings point-of-sale partners being able to obtain the merchandise its customers need or desire, (e) our employees and labor needs, including our ability to adequately staff our operations, (f) our financial and operational performance, and (g) our liquidity, including risks arising from the increased level of debt that we expect to incur in connection with the tender offer to purchase up to $425 million of our common stock; (ii) changes in the enforcement of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our businesses; (iii) the effects on our business and reputation resulting from Progressives Leasings announced settlement and related consent order with the FTC, including the risk of losing existing POS partners or being unable to establish new relationships with additional POS partners, and of any follow-on regulatory and/or civil litigation arising therefrom; (iv) other types of legal and regulatory proceedings and investigations, including those related to consumer protection, customer privacy, third party and employee fraud and information security; (v) our ability to protect confidential, proprietary, or sensitive information, including the personal and confidential information of our customers, which may be adversely affected by cyber-attacks, employee or other internal misconduct, computer viruses, electronic break-ins or hacking, or similar disruptions, any one of which could have a material adverse impact on our results of operations, financial condition, and prospects; (vi) increased competition from traditional and virtual lease-to-own competitors and also from competitors of our Vive segment; (vii) increases in lease merchandise write-offs and the provision for returns and uncollectible renewal payments
for Progressive Leasing, especially in light of the COVID-19 pandemic, and for loan losses, with respect to our Vive segment; (vii) the possibility that the operational, strategic and shareholder value creation opportunities expected from the spin-off of the Companys Aarons Business segment may not be achieved in a timely manner, or at all; (ix) Vives business model differing significantly from Progressive Leasings, which creates specific and unique risks for the Vive business, including Vives reliance on two bank partners to issue its credit products and Vives exposure to the unique regulatory risks associated with the lending-related laws and regulations that apply to its business; (x) the effects of any increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to, our recent acquisition of Four; (xi) Fours business model differing significantly from Progressive Leasings and Vives, which creates specific and unique risks for the Four business, including Fours exposure to the unique regulatory risks associated with the laws and regulations that apply to its business; (xii) our ability to consummate the tender offer on the terms and timing described herein, or at all, and to realize the benefits expected from the tender offer; and (xiii) the other risks and uncertainties discussed under Risk Factors in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on February 26, 2021. Statements in this press release that are forward-looking include without limitation statements about (i) our ability to create long-term shareholder value; (ii) our ability to successfully navigate COVID-19 pandemic-related volatility in our markets; (iii) our outlook for GMV growth for 2021; (iv) the execution, amount and timing of, and benefits expected from, our expected tender offer to purchase up to $425 million of our common stock; (v) the nature and amount of any other share purchases under the $1 billion repurchase program authorized by our Board; (vi) our ability to continue to invest in organic growth opportunities and M&A opportunities (vii) the levels of delinquencies and write-offs we expect in future periods; and (viii) our updated 2021 financial performance outlook. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this press release.
Investor Contact
John Baugh, CFA
Vice President, Investor Relations
john.baugh@progleasing.com
Media Contact
Mark Delcorps
Director, Corporate Communications
media@progleasing.com
PROG Holdings, Inc.
Consolidated Statements of Earnings (Loss)
(In thousands, except per share data)
(Unaudited) Three Months Ended September 30, |
(Unaudited) Nine Months Ended September 30, |
|||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenues: |
||||||||||||||||
Lease Revenues and Fees |
$ | 635,025 | $ | 601,105 | $ | 1,989,055 | $ | 1,849,388 | ||||||||
Interest and Fees on Loans Receivable |
15,380 | 10,232 | 42,322 | 29,555 | ||||||||||||
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Total |
650,405 | 611,337 | 2,031,377 | 1,878,943 | ||||||||||||
Costs and Expenses: |
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Depreciation of Lease Merchandise |
435,857 | 405,235 | 1,380,572 | 1,289,885 | ||||||||||||
Provision for Lease Merchandise Write-offs |
34,174 | 12,578 | 84,072 | 104,443 | ||||||||||||
Operating Expenses |
102,053 | 95,433 | 289,994 | 276,935 | ||||||||||||
Separation Related Charges |
| 2,443 | | 2,443 | ||||||||||||
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Total |
572,084 | 515,689 | 1,754,638 | 1,673,706 | ||||||||||||
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Operating Profit |
78,321 | 95,648 | 276,739 | 205,237 | ||||||||||||
Interest Expense |
(444 | ) | | (1,392 | ) | | ||||||||||
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Earnings from Continuing Operations before Income Tax |
77,877 | 95,648 | 275,347 | 205,237 | ||||||||||||
Income Tax Expense |
20,464 | 21,005 | 69,609 | 13,915 | ||||||||||||
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Net Earnings from Continuing Operations |
57,413 | 74,643 | 205,738 | 191,322 | ||||||||||||
Earnings (Loss) from Discontinued Operations, Net of Income Tax |
| 34,702 | | (293,605 | ) | |||||||||||
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Net Earnings (Loss) |
$ | 57,413 | $ | 109,345 | $ | 205,738 | $ | (102,283 | ) | |||||||
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Basic Earnings (Loss) per Share: |
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Continuing Operations |
$ | 0.87 | $ | 1.11 | $ | 3.07 | $ | 2.85 | ||||||||
Discontinued Operations |
| 0.51 | | (4.38 | ) | |||||||||||
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Total Basic Earnings (Loss) per Share |
$ | 0.87 | $ | 1.62 | $ | 3.07 | $ | (1.52 | ) | |||||||
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Diluted Earnings (Loss) per Share: |
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Continuing Operations |
$ | 0.86 | $ | 1.10 | $ | 3.06 | $ | 2.82 | ||||||||
Discontinued Operations |
| 0.51 | | (4.33 | ) | |||||||||||
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Total Diluted Earnings (Loss) per Share |
$ | 0.86 | $ | 1.61 | $ | 3.06 | $ | (1.51 | ) | |||||||
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Weighted Average Shares Outstanding |
66,092 | 67,398 | 66,938 | 67,107 | ||||||||||||
Weighted Average Shares Outstanding Assuming Dilution |
66,385 | 68,155 | 67,319 | 67,849 |
PROG Holdings, Inc.
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited) September 30, 2021 |
December 31, 2020 | |||||||
ASSETS: |
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Cash and Cash Equivalents |
$ | 128,788 | $ | 36,645 | ||||
Accounts Receivable (net of allowances of $60,578 in 2021 and $56,364 in 2020) |
67,447 | 61,254 | ||||||
Lease Merchandise (net of accumulated depreciation and allowances of $453,555 in 2021 and $409,307 in 2020) |
588,733 | 610,263 | ||||||
Loans Receivable (net of allowances and unamortized fees of $57,578 in 2021 and $52,274 in 2020) |
112,784 | 79,148 | ||||||
Property, Plant and Equipment, Net |
25,806 | 26,705 | ||||||
Operating Lease Right-of-Use Assets |
17,862 | 20,613 | ||||||
Goodwill |
306,649 | 288,801 | ||||||
Other Intangibles, Net |
143,029 | 154,421 | ||||||
Income Tax Receivable |
18,890 | | ||||||
Prepaid Expenses and Other Assets |
44,270 | 39,554 | ||||||
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Total Assets |
$ | 1,454,258 | $ | 1,317,404 | ||||
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LIABILITIES & SHAREHOLDERS EQUITY: |
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Accounts Payable and Accrued Expenses |
$ | 116,813 | $ | 78,249 | ||||
Deferred Income Tax Liability |
145,161 | 126,938 | ||||||
Customer Deposits and Advance Payments |
39,765 | 46,565 | ||||||
Operating Lease Liabilities |
26,063 | 29,516 | ||||||
Debt |
50,000 | 50,000 | ||||||
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Total Liabilities |
377,802 | 331,268 | ||||||
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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, 2021 and December 31, 2020; Shares Issued: 90,752,123 at September 30, 2021 and December 31, 2020 |
45,376 | 45,376 | ||||||
Additional Paid-in Capital |
325,309 | 318,263 | ||||||
Retained Earnings |
1,442,116 | 1,236,378 | ||||||
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1,812,801 | 1,600,017 | |||||||
Less: Treasury Shares at Cost |
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Common Stock: 25,360,538 Shares at September 30, 2021 and 23,029,434 at December 31, 2020 |
(736,345 | ) | (613,881 | ) | ||||
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Total Shareholders Equity |
1,076,456 | 986,136 | ||||||
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Total Liabilities & Shareholders Equity |
$ | 1,454,258 | $ | 1,317,404 | ||||
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PROG Holdings, Inc.
Consolidated Statements of Cash Flows
(In thousands)
Unaudited Nine Months Ended September 30, |
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2021 | 2020 | |||||||
OPERATING ACTIVITIES: |
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Net Earnings (Loss) |
$ | 205,738 | $ | (102,283 | ) | |||
Adjustments to Reconcile Net Earnings (Loss) to Cash Provided by Operating Activities: |
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Depreciation of Lease Merchandise |
1,380,572 | 1,672,841 | ||||||
Other Depreciation and Amortization |
21,954 | 74,683 | ||||||
Provisions for Accounts Receivable and Loan Losses |
152,523 | 224,959 | ||||||
Stock-Based Compensation |
14,803 | 21,378 | ||||||
Deferred Income Taxes |
16,948 | (76,885 | ) | |||||
Impairment of Goodwill and Other Assets |
| 469,782 | ||||||
Non-Cash Lease Expense |
708 | 75,589 | ||||||
Other Changes, Net |
(2,715 | ) | 5,529 | |||||
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions: |
||||||||
Additions to Lease Merchandise |
(1,446,046 | ) | (1,687,483 | ) | ||||
Book Value of Lease Merchandise Sold or Disposed |
87,005 | 263,007 | ||||||
Accounts Receivable |
(143,970 | ) | (183,807 | ) | ||||
Prepaid Expenses and Other Assets |
(3,864 | ) | (1,381 | ) | ||||
Income Tax Receivable |
(18,529 | ) | 9,180 | |||||
Operating Lease Right-of-Use Assets and Liabilities |
(1,411 | ) | (85,073 | ) | ||||
Accounts Payable and Accrued Expenses |
37,973 | 48,851 | ||||||
Accrued Regulatory Expense |
| (175,000 | ) | |||||
Customer Deposits and Advance Payments |
(6,799 | ) | (2,041 | ) | ||||
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Cash Provided by Operating Activities |
294,890 | 551,846 | ||||||
INVESTING ACTIVITIES: |
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Investments in Loans Receivable |
(139,980 | ) | (73,208 | ) | ||||
Proceeds from Loans Receivable |
97,158 | 50,154 | ||||||
Outflows on Purchases of Property, Plant and Equipment |
(6,815 | ) | (50,867 | ) | ||||
Proceeds from Disposition of Property, Plant, and Equipment |
55 | 3,829 | ||||||
Outflows on Acquisitions of Businesses and Customer Agreements. Net of Cash Acquired |
(22,942 | ) | (2,874 | ) | ||||
Proceeds from Dispositions of Businesses and Customer Agreements, Net of Cash Disposed |
| 359 | ||||||
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Cash Used in Investing Activities |
(72,524 | ) | (72,607 | ) | ||||
FINANCING ACTIVITIES: |
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Proceeds from Debt |
| 5,625 | ||||||
Repayments on Debt |
| (61,515 | ) | |||||
Dividends Paid |
| (8,035 | ) | |||||
Acquisition of Treasury Stock |
(128,233 | ) | | |||||
Issuance of Stock Under Stock Option Plans |
3,133 | 9,876 | ||||||
Shares Withheld for Tax Payments |
(5,123 | ) | (11,734 | ) | ||||
Debt Issuance Costs |
| (1,020 | ) | |||||
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Cash Used in Financing Activities |
(130,223 | ) | (66,803 | ) | ||||
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EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS |
| (21 | ) | |||||
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Increase in Cash and Cash Equivalents |
92,143 | 412,415 | ||||||
Cash and Cash Equivalents at Beginning of Period |
36,645 | 57,755 | ||||||
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Cash and Cash Equivalents at End of Period |
$ | 128,788 | $ | 470,170 | ||||
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Net Cash Paid (Received) During the Period |
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Interest |
$ | 1,093 | $ | 8,501 | ||||
Income Taxes |
$ | 43,985 | $ | (19,362 | ) |
PROG Holdings, Inc.
Quarterly Revenues by Segment
(In thousands)
Unaudited Three Months Ended September 30, 2021 |
||||||||||||||||
Progressive Leasing | Vive | Other | Consolidated Total | |||||||||||||
Lease Revenues and Fees |
$ | 635,025 | $ | | $ | | $ | 635,025 | ||||||||
Interest and Fees on Loans Receivable |
| 15,212 | 168 | 15,380 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenues |
$ | 635,025 | $ | 15,212 | $ | 168 | $ | 650,405 | ||||||||
|
|
|
|
|
|
|
|
Unaudited Three Months Ended September 30, 2020 |
||||||||||||||||
Progressive Leasing | Vive | Other | Consolidated Total | |||||||||||||
Lease Revenues and Fees |
$ | 601,105 | $ | | $ | | $ | 601,105 | ||||||||
Interest and Fees on Loans Receivable |
| 10,232 | | 10,232 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenues |
$ | 601,105 | $ | 10,232 | $ | | $ | 611,337 | ||||||||
|
|
|
|
|
|
|
|
PROG Holdings, Inc.
Nine Months Revenues by Segment
(In thousands)
Unaudited Nine Months Ended September 30, 2021 |
||||||||||||||||
Progressive Leasing | Vive | Other | Consolidated Total | |||||||||||||
Lease Revenues and Fees |
$ | 1,989,055 | $ | | $ | | $ | 1,989,055 | ||||||||
Interest and Fees on Loans Receivable |
| 42,154 | 168 | 42,322 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenues |
$ | 1,989,055 | $ | 42,154 | $ | 168 | $ | 2,031,377 | ||||||||
|
|
|
|
|
|
|
|
Unaudited Nine Months Ended September 30, 2020 |
||||||||||||||||
Progressive Leasing | Vive | Other | Consolidated Total | |||||||||||||
Lease Revenues and Fees |
$ | 1,849,388 | $ | | $ | | $ | 1,849,388 | ||||||||
Interest and Fees on Loans Receivable |
| 29,555 | | 29,555 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenues |
$ | 1,849,388 | $ | 29,555 | $ | | $ | 1,878,943 | ||||||||
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Information:
Non-GAAP net earnings from continuing operations, non-GAAP diluted earnings from continuing operations per share, and adjusted EBITDA are supplemental measures of our performance that are not calculated in accordance with generally accepted accounting principles in the United States (GAAP). Non-GAAP net earnings from continuing operations and non-GAAP diluted earnings from continuing operations per share for the three and nine months ended September 30, 2021 and the Companys full year 2021 outlook, exclude intangible amortization expense, acquisition related transaction costs, and accrued interest on an uncertain tax position related to Progressive Leasings $175 million settlement with the FTC in 2020. Non-GAAP net earnings from continuing operations and non-GAAP diluted earnings from continuing operations per share for the three and nine months ended September 30, 2020 exclude intangible amortization expense, restructuring expenses, separation related charges from our spin-off of Aarons Business, insurance recoveries for legal and regulatory fees incurred related to Progressive Leasings 2020 FTC settlement, and income tax benefits from our revaluation of net operating loss carrybacks resulting from the CARES Act. The amounts for these after-tax non-GAAP adjustments, which are tax effected using our statutory tax rate, can be found in the reconciliation of net earnings from continuing operations and earnings from continuing operations per share assuming dilution to non-GAAP net earnings from continuing operations and earnings from continuing operations per share assuming dilution table in this press release.
The Adjusted EBITDA figures presented in this press release are calculated as the Companys earnings from continuing operations before interest expense, net, depreciation on property, plant and equipment, amortization of intangible assets and income taxes. Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020 also excludes stock-based compensation expense, restructuring expenses, acquisition related transaction costs, separation related charges from our spin-off of Aarons Business, and insurance recoveries for legal and regulatory fees incurred related to Progressive Leasings 2020 FTC settlement. The amounts for these pre-tax non-GAAP adjustments can be found in the three and nine-month segment EBITDA tables in this press release. Adjusted EBITDA for the Companys full year 2021 outlook is calculated as projected earnings before interest expense, interest income, depreciation on property, plant and equipment, amortization of intangible assets and income taxes. Adjusted EBITDA for the Companys full year 2021 outlook also excludes stock-based compensation expense and the acquisition related transaction costs.
Management believes that non-GAAP net earnings from continuing operations, non-GAAP diluted earnings from continuing operations per share, and adjusted EBITDA provide relevant and useful information, and are widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and business unit performance.
Non-GAAP net earnings from continuing operations, non-GAAP diluted earnings from continuing operations, and adjusted EBITDA provide management and investors with an understanding of the results from the primary operations of our business by excluding the effects of certain items that generally arose from larger, one-time transactions that are not reflective of the ordinary earnings activity of our operations or transactions that have variability and volatility of the amount. We believe the exclusion of stock-based compensation expense provides for a better comparison of our operating results with our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types. This measure may be useful to an investor in evaluating the underlying operating performance of our business.
Adjusted EBITDA also provides management and investors with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes. These measures may be useful to an investor in evaluating our operating performance because the measures:
| Are widely used by investors to measure a companys operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending upon accounting methods, book value of assets, capital structure and the method by which assets were acquired, among other factors. |
| Are used by rating agencies, lenders and other parties to evaluate our creditworthiness. |
| Are used by our management for various purposes, including as a measure of performance of our operating entities and as a basis for strategic planning and forecasting. |
Non-GAAP financial measures, however, should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with GAAP, such as the Companys GAAP basis net earnings from continuing operations and diluted earnings from continuing operations per share and the GAAP revenues and earnings from continuing operations before income taxes of the Companys segments, which are also presented in the press release. Further, we caution investors that amounts presented in accordance with our definitions of non-GAAP net earnings from continuing operations, non-GAAP diluted earnings from continuing operations per share, and adjusted EBITDA may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate these measures in the same manner.
PROG Holdings Inc.
Reconciliation of Net Earnings and Earnings Per Share Assuming Dilution from Continuing Operations to Non-GAAP Net Earnings and Earnings Per Share Assuming Dilution from Continuing Operations
(In thousands, except per share amounts)
Unaudited | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net Earnings from Continuing Operations |
$ | 57,413 | $ | 74,643 | $ | 205,738 | $ | 191,322 | ||||||||
Add: Intangible Amortization Expense |
5,723 | 5,565 | 16,565 | 16,697 | ||||||||||||
Add: Separation Related Charges |
| 2,443 | | 2,443 | ||||||||||||
Less: Insurance Recoveries Related to Legal and Regulatory Expenses |
| (835 | ) | | (835 | ) | ||||||||||
Add: Transaction Expense |
| | 561 | | ||||||||||||
Add: Restructuring Expenses, net |
| | | 238 | ||||||||||||
Less: Tax Impact of Adjustments (1) |
(1,488 | ) | (1,865 | ) | (4,452 | ) | (4,821 | ) | ||||||||
Add: Accrued Interest on FTC Settlement Uncertain Tax Position |
1,040 | | 1,040 | | ||||||||||||
Less: NOL Carryback Revaluation |
| | | (35,540 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Net Earnings from Continuing Operations |
$ | 62,688 | $ | 79,951 | $ | 219,452 | $ | 169,504 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Earnings from Continuing Operations Per Share Assuming Dilution |
$ | 0.86 | $ | 1.10 | $ | 3.06 | $ | 2.82 | ||||||||
Add: Intangible Amortization Expense |
0.09 | 0.08 | 0.25 | 0.25 | ||||||||||||
Add: Separation Related Charges |
| 0.04 | | 0.04 | ||||||||||||
Less: Insurance Recoveries Related to Legal and Regulatory Expenses |
| (0.01 | ) | | (0.01 | ) | ||||||||||
Add: Transaction Expense |
| | 0.01 | | ||||||||||||
Less: Tax Impact of Adjustments (1) |
(0.02 | ) | (0.03 | ) | (0.07 | ) | (0.07 | ) | ||||||||
Add: Accrued Interest on FTC Settlement Uncertain Tax Position |
0.02 | | 0.02 | | ||||||||||||
Less: NOL Carryback Revaluation |
| | | (0.52 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Earnings from Continuing Operations Per Share Assuming Dilution(2) |
$ | 0.94 | $ | 1.17 | $ | 3.26 | $ | 2.50 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted Average Shares Outstanding Assuming Dilution |
66,385 | 68,155 | 67,319 | 67,849 |
(1) | Adjustments are tax-effected using an assumed statutory tax rate of 26.0%. |
(2) | In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding. |
PROG Holdings Inc.
Non-GAAP Financial Information
Quarterly Segment EBITDA
(In thousands)
Unaudited Three Months Ended September 30, 2021 |
||||||||||||||||
Progressive Leasing | Vive | Other | Consolidated Total | |||||||||||||
Net Earnings from Continuing Operations |
$ | 57,413 | ||||||||||||||
Income Taxes(1) |
20,464 | |||||||||||||||
|
|
|||||||||||||||
Earnings (Loss) from Continuing Operations Before Income Taxes |
$ | 76,435 | $ | 6,354 | (4,912 | ) | 77,877 | |||||||||
Interest Expense |
307 | 137 | | 444 | ||||||||||||
Depreciation |
2,627 | 240 | 13 | 2,880 | ||||||||||||
Amortization |
5,421 | | 302 | 5,723 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
84,790 | 6,731 | (4,597 | ) | 86,924 | |||||||||||
Stock-Based Compensation |
3,587 | 78 | 3,002 | 6,667 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 88,377 | $ | 6,809 | $ | (1,595 | ) | $ | 93,591 | |||||||
|
|
|
|
|
|
|
|
(1) | Taxes are calculated on a consolidated basis and are not identifiable by Company Segment. |
Unaudited Three Months Ended September 30, 2020 |
||||||||||||||||
Progressive Leasing | Vive | Unallocated Corporate Expenses |
Consolidated Total | |||||||||||||
Net Earnings from Continuing Operations |
$ | 74,643 | ||||||||||||||
Income Taxes(1) |
21,005 | |||||||||||||||
|
|
|||||||||||||||
Earnings (Loss) from Continuing Operations Before Income Taxes |
$ | 106,682 | $ | (2,347 | ) | $ | (8,687 | ) | 95,648 | |||||||
Depreciation |
2,208 | 196 | | 2,404 | ||||||||||||
Amortization |
5,420 | 145 | | 5,565 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
114,310 | (2,006 | ) | (8,687 | ) | 103,617 | ||||||||||
Insurance Recoveries Related to Legal and Regulatory Expenses |
(835 | ) | | | (835 | ) | ||||||||||
Stock-Based Compensation(2) |
2,931 | 141 | 2,345 | 5,417 | ||||||||||||
Separation Costs |
1,765 | | 678 | 2,443 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 118,171 | $ | (1,865 | ) | $ | (5,664 | ) | $ | 110,642 | ||||||
|
|
|
|
|
|
|
|
(1) | Taxes are calculated on a consolidated basis and are not identifiable by Company Segment. |
(2) | 2020 quarterly Adjusted EBITDA metrics have been updated to add-back Stock-based compensation to conform to managements 2021 definition of Adjusted EBITDA. |
PROG Holdings Inc.
Non-GAAP Financial Information
Nine Month Segment EBITDA
(In thousands)
Unaudited Nine Months Ended September 30, 2021 |
||||||||||||||||
Progressive Leasing | Vive | Other | Consolidated Total | |||||||||||||
Net Earnings from Continuing Operations |
$ | 205,738 | ||||||||||||||
Income Taxes(1) |
69,609 | |||||||||||||||
|
|
|||||||||||||||
Earnings (Loss) from Continuing Operations Before Income Taxes |
$ | 268,128 | $ | 12,131 | $ | (4,912 | ) | 275,347 | ||||||||
Interest Expense |
1,062 | 330 | | 1,392 | ||||||||||||
Depreciation |
7,253 | 625 | 13 | 7,891 | ||||||||||||
Amortization |
16,263 | | 302 | 16,565 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
292,706 | 13,086 | (4,597 | ) | 301,195 | |||||||||||
Stock-Based Compensation |
11,592 | 209 | 3,002 | 14,803 | ||||||||||||
Transaction Expense |
561 | | | 561 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 304,859 | $ | 13,295 | $ | (1,595 | ) | $ | 316,559 | |||||||
|
|
|
|
|
|
|
|
(1) | Taxes are calculated on a consolidated basis and are not identifiable by Company Segment. |
Unaudited Nine Months Ended September 30, 2020 |
||||||||||||||||
Progressive Leasing | Vive | Unallocated Corporate Expenses |
Consolidated Total | |||||||||||||
Net Earnings from Continuing Operations |
$ | 191,322 | ||||||||||||||
Income Taxes(1) |
13,915 | |||||||||||||||
|
|
|||||||||||||||
Earnings (Loss) from Continuing Operations Before Income Taxes |
$ | 232,502 | $ | (7,873 | ) | $ | (19,392 | ) | 205,237 | |||||||
Depreciation |
6,508 | 623 | | 7,131 | ||||||||||||
Amortization |
16,262 | 435 | | 16,697 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
EBITDA |
255,272 | (6,815 | ) | (19,392 | ) | 229,065 | ||||||||||
Insurance Recoveries Related to Legal and Regulatory Expenses |
(835 | ) | | | (835 | ) | ||||||||||
Stock-Based Compensation(2) |
8,937 | 321 | 6,574 | 15,832 | ||||||||||||
Restructuring Expenses, Net |
| | 238 | 238 | ||||||||||||
Separation Costs |
1,765 | | 678 | 2,443 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ | 265,139 | $ | (6,494 | ) | $ | (11,902 | ) | $ | 246,743 | ||||||
|
|
|
|
|
|
|
|
(1) | Taxes are calculated on a consolidated basis and are not identifiable by Company Segment. |
(2) | 2020 quarterly Adjusted EBITDA metrics have been updated to add-back Stock-based compensation to conform to managements 2021 definition of Adjusted EBITDA. |
PROG Holdings Inc.
Gross Merchandise Volume by Quarter
(In thousands)
Three Months Ended | Year Ended | Three Months Ended | ||||||||||||||||||||||||||||||
Mar 31, | Jun 30, | Sept 30, | Dec 31, | Dec 31, | Mar 31, | Jun 30, | Sept 30, | |||||||||||||||||||||||||
|
2020 |
|
2020 |
|
2021 |
|
||||||||||||||||||||||||||
Progressive Leasing |
$ | 462,025 | $ | 404,018 | $ | 448,843 | $ | 536,422 | $ | 1,851,308 | $ | 510,046 | $ | 505,971 | $ | 493,277 | ||||||||||||||||
Vive |
25,376 | 21,536 | 37,883 | 45,956 | 130,751 | 55,898 | 51,701 | 49,085 | ||||||||||||||||||||||||
Other |
| | | | | | | 2,655 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Total |
$ | 487,401 | $ | 425,554 | $ | 486,726 | $ | 582,378 | $ | 1,982,059 | $ | 565,944 | $ | 557,672 | $ | 545,017 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Full Year 2021 Outlook for Adjusted EBITDA
(In thousands)
Full Year 2021 Ranges | ||||
Consolidated | ||||
Estimated Net Earnings |
$ | 248,000-$252,000 | ||
Taxes |
84,500-85,000 | |||
|
|
|||
Projected Earnings Before Taxes |
332,500-337,000 | |||
Interest Expense |
1,900 | |||
Depreciation |
11,100 | |||
Amortization |
22,500 | |||
|
|
|||
Projected EBITDA |
368,000-372,500 | |||
Stock-Based Compensation |
22,000-22,500 | |||
|
|
|||
Projected Adjusted EBITDA |
$ | 390,000-$395,000 | ||
|
|
Reconciliation of Full Year 2021 Outlook for Earnings Per Share
Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution
Full Year 2021 Range | ||||||||
Low | High | |||||||
Projected Earnings Per Share Assuming Dilution |
$ | 3.62 | $ | 3.71 | ||||
Add Projected Intangible Amortization Expense |
0.24 | 0.24 | ||||||
Add Acquisition transaction costs |
0.01 | 0.01 | ||||||
Add Projected Interest on FTC Settlement Uncertain Tax Position |
0.03 | 0.03 | ||||||
|
|
|
|
|||||
Projected Non-GAAP Earnings Per Share Assuming Dilution |
$ | 3.90 | $ | 3.99 | ||||
|
|
|
|
Exhibit 99.2
PROG Holdings, Inc. Announces Intention to Purchase up to $425 Million of Common Stock in Modified Dutch Auction Tender Offer
Tender offer is part of a $1 billion share repurchase program and is expected to commence on November 4, 2021
Company to purchase shares at an anticipated price between $44.00 and $50.00 per share
SALT LAKE CITY, November 3, 2021 PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, and Four Technologies, today announced its intention to launch a modified Dutch auction tender offer to purchase up to $425 million in value of its common stock, or such lesser amount of shares of its common stock as are properly tendered and not properly withdrawn, at an anticipated cash purchase price per share of not less than $44.00 per share and not more than $50.00 per share, less any applicable withholding taxes and without interest.
PROG Holdings intends to commence the tender offer on November 4, 2021, expiring at 12:00 midnight, New York City time, at the end of the day on December 3, 2021, unless the tender offer is extended or earlier terminated. The tender offer is expected to be funded through a combination of cash on hand, borrowings under its existing revolving facility, and/or new debt.
Our decision to purchase approximately 15% of our outstanding shares of common stock through a tender offer is the next step in the evolution of our capital allocation strategy, which includes as one of its primary objectives returning capital to our shareholders. The cash generating ability of our high-growth, asset-light business model presents multiple opportunities to deploy capital and optimize our balance sheet to enhance shareholder value, said PROG Holdings President and CEO Steve Michaels. We believe this decision to modestly leverage our strong balance sheet to purchase shares during favorable market conditions will lower our cost of capital without impacting our ability to continue investing in organic growth and attractive M&A opportunities, and to potentially return excess cash to shareholders in other ways.
The tender offer is being launched as part of a newly authorized $1 billion share repurchase program, which replaces PROG Holdings prior $300 million program. Under the new authorization, purchases can be made from time to time using a variety of methods, which may include tender offers, open market purchases, purchases effected through 10b5-1 trading plans accelerated share repurchase programs or other transactions. The amount of any shares of PROG Holdings common stock that are purchased under the new repurchase program and the timing of any such purchases will be determined based on market conditions and other factors, and the program may be suspended or discontinued at any time.
A modified Dutch auction tender offer allows shareholders to indicate how many shares of common stock and at what price within the range described above they wish to tender their shares. Based on the number of shares tendered and the prices specified by the tendering shareholders, PROG Holdings will determine the lowest price per share within the specified range that will enable PROG Holdings to purchase shares having an aggregate purchase price of up to $425 million, or such lesser amount of shares of common stock that are properly tendered and not properly withdrawn prior to the expiration date of the tender offer. In addition, if shares having an aggregate purchase price of more than $425 million are tendered in the tender offer and not properly withdrawn, PROG Holdings reserves the right to accept for purchase at the purchase price pursuant to the tender offer up to an additional 2% of its outstanding shares without amending or extending the tender offer. PROG Holdings will also have the right, in its sole discretion, to purchase additional shares subject to applicable legal and regulatory requirements.
While PROG Holdings Board of Directors has authorized PROG Holdings to make the tender offer, neither PROG Holdings nor its Board of Directors makes any recommendation as to whether any shareholder should participate or refrain from participating in the tender offer or as to the purchase price or purchase prices at which shareholders may choose to tender their shares in the tender offer. PROG Holdings has not authorized any person to make any such recommendation. Shareholders must decide whether to tender their shares of common stock and, if so, how many shares to tender and at what price or prices to tender. In doing so, shareholders should carefully evaluate all of the information in the tender offer documents, when available, before making any decision with respect to the tender offer and should consult their own broker or other financial, legal, and tax advisors.
Additional Information Regarding the Tender Offer
The tender offer described in this press release has not yet commenced, and there can be no assurance that PROG Holdings will commence the tender offer on the terms described in this release. This press release is for informational purposes only. This press release is not a recommendation to buy or sell shares of common stock or any other securities, and it is neither an offer to purchase nor a solicitation of an offer to sell shares of common stock or any other securities. On the commencement date of the tender offer, a tender offer statement on Schedule TO, including an offer to purchase, a letter of transmittal and related materials, will be filed with the United States Securities and Exchange Commission (the SEC) by PROG Holdings. The tender offer will only be made pursuant to the offer to purchase, the letter of transmittal and related materials filed as a part of the Schedule TO. When available, shareholders should read carefully the offer to purchase, letter of transmittal and related materials because they contain important information, including the various terms of, and conditions to, the tender offer. Once the tender offer is commenced, shareholders will be able to obtain a free copy of the tender offer statement on Schedule TO, the offer to purchase, letter of transmittal and other documents that PROG Holdings will be filing with the SEC at the SECs website at www.sec.gov or from the information agent for the tender offer.
About PROG Holdings, Inc.
PROG Holdings, Inc. (NYSE:PRG) is a fintech holding company headquartered in Salt Lake City, UT, that provides transparent and competitive payment options to consumers. PROG Holdings owns Progressive Leasing, a leading provider of e-commerce, app-based, and in-store point-of-sale lease-to-own solutions, Vive Financial, an omnichannel provider of second-look revolving credit products, and Four Technologies, provider of Buy Now, Pay Later payment options through its platform Four. More information on PROG Holdings companies can be found at https://www.progholdings.com.
Forward Looking Statements
Statements in this news release regarding our business that are not historical facts are forward-looking statements that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as intention, anticipated, intends, expected, expects, believe may and similar forward-looking terminology. These risks and uncertainties include factors such as (i) the impact of the COVID-19 pandemic and related measures taken by governmental or regulatory authorities to combat the pandemic, including the impact of the pandemic and such measures on: (a) demand for the lease-to-own products offered by our Progressive Leasing segment, (b) Progressive Leasings POS partners, and Vives and Fours merchant partners, (c) Progressive Leasings, Vives and Fours customers, including their ability and willingness to satisfy their obligations under their lease agreements and loan agreements, (d) Progressive Leasings point-of-sale partners being able to obtain the merchandise its customers need or desire, (e) our employees and labor needs, including our ability to adequately staff our operations, (f) our financial and operational performance, and (g) our liquidity, including risks arising from the increased level of debt that we expect to incur in connection with the tender offer to purchase up to $425 million of our common stock; (ii) changes in the enforcement of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our businesses; (iii) the effects on our business and reputation resulting from Progressives Leasings announced settlement and related consent order with the FTC, including the risk of losing existing POS partners or being unable to establish new relationships with additional POS partners, and of any follow-on regulatory and/or civil litigation arising therefrom; (iv) other types of legal and regulatory proceedings and investigations, including those related to consumer protection, customer privacy, third party and employee fraud and information security; (v) our ability to protect confidential, proprietary, or sensitive information, including the personal and confidential information of our customers, which may be adversely affected by cyber-attacks, employee or other internal misconduct, computer viruses, electronic break-ins or hacking, or similar disruptions, any one of which could have a material adverse impact on our results of operations, financial condition, and prospects; (vi) increased competition from traditional and virtual lease-to-own competitors and also from competitors of our Vive segment; (vii) increases in lease merchandise write-offs and the provision for returns and uncollectible renewal payments for Progressive Leasing, especially in light of the COVID-19 pandemic, and for loan losses, with respect to our Vive segment; (viii) the possibility that the operational, strategic and shareholder value creation opportunities expected from the spin-off of PROG Holdings Aarons Business segment may not be achieved in a timely manner, or at all:
(ix) Vives business model differing significantly from Progressive Leasings, which creates specific and unique risks for the Vive business, including Vives reliance on two bank partners to issue its credit products and Vives exposure to the unique regulatory risks associated with the lending-related laws and regulations that apply to its business; (x) the effects of any increased expenses or unanticipated liabilities incurred as a result of, or due to activities related to, our recent acquisition of Four; (xi) Fours business model differing significantly from Progressive Leasings and Vives, which creates specific and unique risks for the Four business, including Fours exposure to the unique regulatory risks associated with the laws and regulations that apply to its business; (xii) our ability to consummate the tender offer on the terms and timing described herein, or at all, and to realize the benefits expected from the tender offer; and (xiii) the other risks and uncertainties discussed under Risk Factors in the PROG Holdings Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which was filed with the SEC on February 26, 2021. Statements in this press release that are forward-looking include without limitation statements about (i) the execution, amount and timing of, and benefits expected from, our expected tender offer to purchase up to $425 million of our common stock; (ii) the nature and amount of any other share repurchases under the $1 billion repurchase program authorized by our Board of Directors; (iii) our future plans and expectations with respect to capital allocation; (iv) our future cash generating ability; (v) our ability to continue investing in organic growth and M&A opportunities, and to return capital to shareholders in ways other than the aforementioned tender offer; and (vi) our ability to enhance shareholder value. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, PROG Holdings undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this press release.
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Investor Contact
John A. Baugh, CFA
Vice President, Investor Relations
john.baugh@progleasing.com
Media Contact
Mark Delcorps
Director, Corporate Communications
media@progleasing.com