The Aaron’s pany(AAN)2024-05-06 20:19Company Operations - As of March 31, 2024, the Company operates approximately 1,220 stores and an e-commerce platform, focusing on lease-to-own and retail purchase solutions[18]. - The Company’s BrandsMart U.S.A. segment operates 11 stores in Florida and Georgia, contributing to its position as one of the largest appliance retailers in the country[20]. Financial Performance - Total revenues for the three months ended March 31, 2024, were $511,497, a decrease of 7.7% from $554,361 in the same period of 2023[75]. - Total revenues for the Aaron's Business segment were $381.1 million for the three months ended March 31, 2024, compared to $412.1 million for the same period in 2023, reflecting a decrease of approximately 7.5%[98]. - The BrandsMart segment generated total revenues of $132.5 million for the three months ended March 31, 2024, compared to $144.2 million in the same period in 2023, reflecting a decrease of approximately 8.1%[98]. - The company reported net losses of $14,181,000 for the three months ended March 31, 2024[55]. - The company reported a net loss before income taxes of $16.3 million for the three months ended March 31, 2024, compared to a profit of $8.9 million for the same period in 2023, indicating a significant decline[99]. Revenue and Expenses - Lease revenues and fees amounted to $346,009 for the three months ended March 31, 2024, down from $373,795 in the prior year, representing a decline of 7.4%[75]. - Franchise royalties and fees for the three months ended March 31, 2024, were $5,729, slightly down from $5,898 in the same period of 2023[75]. - Gross profit for the Aaron's Business segment was $244.6 million for the three months ended March 31, 2024, down from $260.7 million in the same period in 2023, representing a decline of about 6.2%[99]. - The company reported total restructuring expenses of $7.9 million for the three months ended March 31, 2024, compared to $5.3 million for the same period in 2023, indicating an increase of approximately 49.1%[99]. Accounts and Receivables - The net accounts receivable as of March 31, 2024, totaled $35.162 million, a decrease from $39.782 million as of December 31, 2023[32]. - The provision for uncollectible accounts receivable for the three months ended March 31, 2024, was $8.842 million, compared to $6.908 million for the same period in 2023[36]. - The allowance for accounts receivable as of March 31, 2024, was $7.632 million, an increase from $5.908 million as of March 31, 2023[33]. Inventory and Merchandise - Merchandise inventories decreased from $90,172,000 as of December 31, 2023, to $83,012,000 as of March 31, 2024, representing a decline of approximately 8.5%[40]. - The reserve for merchandise inventories decreased from $921,000 to $867,000, indicating a reduction of about 5.9%[40]. - The Company's lease merchandise, net of accumulated depreciation and allowances, was $629.581 million as of March 31, 2024, compared to $622.262 million as of December 31, 2023[37]. Debt and Financing - The company’s total debt as of March 31, 2024, was $212,913, an increase of 9.8% from $193,963 at December 31, 2023[69]. - Long-term debt increased to $205,432 as of March 31, 2024, compared to $187,575 at December 31, 2023, reflecting a rise of 9.5%[69]. - The company entered into a non-speculative interest rate swap agreement with a notional amount of $100 million, converting variable interest rate debt to a fixed rate of 3.87%[48]. - The company entered into an interest rate swap agreement with a notional amount of $100 million, with a fair value of $952 as of March 31, 2024[64]. - The company’s revolving credit facility commitment was amended from $375 million to $275 million on February 23, 2024[71]. Restructuring and Legal Matters - Total net restructuring expenses under the Operational Efficiency and Optimization Restructuring Program were $5.3 million for the three months ended March 31, 2024, compared to $2.9 million in the same period of 2023, indicating an increase of approximately 82.76%[91]. - The Company has incurred cumulative charges of $23.3 million under the Operational Efficiency and Optimization Restructuring Program since its inception[91]. - The real estate repositioning and optimization restructuring program resulted in total net restructuring expenses of $2.6 million for the three months ended March 31, 2024, compared to $2.4 million in the same period of 2023[93]. - Cumulative charges under the real estate repositioning and optimization program reached $73.4 million since its inception[93]. - The Company closed or consolidated 57 stores through March 31, 2024, as part of its restructuring efforts[91]. - As of March 31, 2024, the Company had accrued $1.1 million for pending legal and regulatory matters, up from $0.7 million as of December 31, 2023[87]. Other Financial Metrics - The total shareholders' equity decreased from $686,138,000 as of December 31, 2023, to $670,536,000 as of March 31, 2024, a decline of approximately 2.3%[55]. - Goodwill allocated to BrandsMart and BrandsMart Leasing was $29.2 million as of March 31, 2024, compared to $26.5 million as of December 31, 2023, reflecting an increase of approximately 10.2%[53]. - Prepaid expenses increased from $14,482,000 to $19,449,000, representing an increase of approximately 34.1%[44]. - The company reported a deferred compensation liability of $11,157 as of March 31, 2024, compared to $10,574 at December 31, 2023[64]. - Assets held for sale were valued at $2,509 as of March 31, 2024, up from $850 at December 31, 2023[66].