Upbound (US:UPBD)2024-10-31 20:25Revenue Growth - Consolidated revenues increased by approximately $267.0 million for the nine months ended September 30, 2024, compared to the same period in 2023[69]. - Total revenue increased by $267.0 million, or 9.0%, to $3,241.3 million for the nine months ended September 30, 2024, compared to $2,974.3 million for the same period in 2023[75]. - Total revenues increased by $89.8 million, or 9.2%, to $1,068.9 million for the three months ended September 30, 2024, compared to $979.1 million for the same period in 2023[73]. - Revenues for the three months ended September 30, 2024, increased by $5.1 million (1.1%) to $458.7 million compared to the same period in 2023, driven by higher rentals and fees revenues of $67.3 million[80]. Segment Performance - Acima segment revenues increased by approximately $256.9 million, attributed to higher rentals and fees revenues of $193.9 million and merchandise sales of $62.6 million[69]. - Revenues in the Rent-A-Center segment increased approximately $14.6 million for the nine months ended September 30, 2024, driven by a 1.9% increase in same store sales[70]. - The Mexico segment revenues increased by 8.9% for the nine months ended September 30, 2024, contributing to a gross profit increase of 10.2%, or $4.0 million[70]. - Acima segment revenues increased by $90.967 million, or 19.1%, to $566.183 million for the three months ended September 30, 2024, compared to $475.216 million for the same period in 2023[77]. - Revenues in the Mexico segment decreased by $612,000 (-3.1%) to $19.0 million for the three months ended September 30, 2024, while revenues for the nine months increased by $4.9 million (8.9%) to $60.5 million[81]. - Revenues in the Franchising segment decreased by $5.7 million (-18.6%) to $24.9 million for the three months ended September 30, 2024, primarily due to decreases in merchandise purchases by franchisees[83]. Profitability - Gross profit rose by approximately $62.5 million during the same period, primarily driven by the Acima segment's performance[69]. - Operating profit increased by approximately $105.5 million, mainly due to a decrease in other gains and charges of $104.5 million[69]. - Operating profit for the three months ended September 30, 2024, was $70.1 million, an increase of 20.7% compared to $58.1 million for the same period in 2023[72]. - Net earnings for the three months ended September 30, 2024, were $30.9 million, a significant increase of 607.3% compared to $4.4 million for the same period in 2023[72]. - Gross profit increased by $62.5 million, or 4.1%, to $1,572.1 million for the nine months ended September 30, 2024, with gross profit as a percentage of total revenue decreasing to 48.5% from 50.8%[76]. - Operating profit increased by $105.5 million to $212.5 million for the nine months ended September 30, 2024, with operating profit as a percentage of total revenue rising to 6.6% from 3.6%[76]. Expenses and Costs - Cost of rentals and fees increased by $45.6 million, or 15.4%, to $342.4 million for the three months ended September 30, 2024[73]. - Cost of merchandise sold increased by $36.0 million, or 23.0%, to $191.9 million for the three months ended September 30, 2024[73]. - Cost of rentals and fees increased by $122.4 million, or 13.8%, to $1,008.1 million for the nine months ended September 30, 2024, with the cost expressed as a percentage of rentals and fees revenue increasing to 38.2%[76]. - Non-labor operating expenses increased by $44.5 million, or 7.8%, to $613.8 million for the nine months ended September 30, 2024, with expenses as a percentage of total revenue decreasing to 19.4% from 19.7%[76]. - General and administrative expenses increased by $9.8 million, or 6.5%, to $160.2 million for the nine months ended September 30, 2024, with expenses as a percentage of total revenue at 4.9%[76]. - Lease charge-offs increased to $78.966 million for the three months ended September 30, 2024, compared to $68.925 million for the same period in 2023, representing a 15.4% increase[85]. - Total merchandise losses rose to $86.373 million for the three months ended September 30, 2024, compared to $75.278 million for the same period in 2023, marking a 14.6% increase[85]. Cash Flow and Financial Position - Cash flow from operations was $166.7 million for the nine months ended September 30, 2024[70]. - The company held $85.1 million of cash and cash equivalents and had outstanding indebtedness of $1.3 billion as of September 30, 2024[70]. - The company generated $166.7 million in operating cash flow for the nine months ended September 30, 2024, while using $291.6 million for debt repayments[84]. - The company ended the third quarter of 2024 with $85.1 million in cash and cash equivalents and outstanding indebtedness of $1.3 billion[84]. - Cash provided by operating activities decreased by $53.2 million to $166.7 million for the nine months ended September 30, 2024, from $219.9 million for the same period in 2023, primarily due to increased inventory purchases[86]. - Capital expenditures increased to $44.2 million for the nine months ended September 30, 2024, compared to $36.2 million for the same period in 2023, reflecting an increase of $8.0 million[86]. - The company had approximately $53.1 million in cash on hand and $474.4 million available under the ABL Credit Facility as of October 24, 2024[86]. - Outstanding borrowings under the Term Loan Facility amounted to $804.5 million as of October 24, 2024, with an interest rate indexed to the Term SOFR rate[88]. - A hypothetical 1.0% increase in market interest rates would result in an additional $8.0 million annualized pre-tax charge to the company's financial statements[91]. - The company recorded $0.5 million in uncertain tax positions as of September 30, 2024, indicating potential future cash liabilities[88]. - The company anticipates that cash flow generated from operations and availability under the ABL Credit Facility will be sufficient to fund operations during the next twelve months[86]. Strategic Initiatives - The company aims to enhance its competitive position by leveraging data analytics to attract new customers and mitigate risks across business segments[62]. - The company plans to accelerate the shift to e-commerce and improve the omni-channel customer experience at Rent-A-Center[62]. - The company is focused on expanding its direct-to-consumer channels and building partnerships with new national and regional third-party retailers[62]. - The company opened 3 new locations during the nine-month period ended September 30, 2024, bringing total locations to 2,320[87].