PROG Holdings Reports Fourth Quarter 2021 Results

Rhea-AI Summary

PROG Holdings, Inc. reported a strong Q4 2021 with a GMV of $635 million, marking an 18.3% increase. Consolidated revenues reached $647 million, up 6.8%. The company generated $52.9 million in earnings before taxes and an adjusted EBITDA of $72.1 million, representing 11.2% of revenues. Diluted EPS was $0.59. PROG returned $439 million to shareholders through stock repurchases. The outlook for 2022 projects revenue growth of 4-8% and adjusted EBITDA margins returning to 11-13%. However, challenges include higher delinquency rates that align with pre-pandemic levels.

Positive

• Q4 GMV increased 18.3% to $635 million.
• Consolidated revenues rose 6.8% to $647 million.
• Strong return of $439 million to shareholders via repurchase of 13.7% of shares.

Negative

• Adjusted EBITDA declined from $94.6 million in Q4 2020 to $72.1 million in Q4 2021.
• Net earnings from continuing operations fell to $37.8 million from $42.3 million a year earlier.
• Diluted EPS decreased from $0.62 in Q4 2020 to $0.59 in Q4 2021.

• Progressive Leasing Q4 GMV of $635 million, up 18.3%
• E-commerce grew 45% to 18.2% of Progressive Leasing Q4 GMV
• Q4 consolidated revenues of $647 million, up 6.8%
• Q4 consolidated earnings before taxes of $52.9 million; Adjusted EBITDA of $72.1 million or 11.2% of revenues
• Diluted EPS of $0.59; Non-GAAP Diluted EPS of $0.67 for Q4
• Returned $439 million of capital to shareholders in Q4 through the repurchase of 13.7% of outstanding shares

SALT LAKE CITY--(BUSINESS WIRE)-- PROG Holdings, Inc. (NYSE:PRG), the fintech holding company for Progressive Leasing, Vive Financial, and Four Technologies, today announced financial results for the fourth quarter ended December 31, 2021.

"We closed out 2021 with a strong fourth quarter of GMV performance driven by continued growth in our e-commerce channel and with our larger retail partners," said Steve Michaels, President and Chief Executive Officer of PROG Holdings. "In addition, the significant steps we took in the quarter to recapitalize our balance sheet through the issuance of $600 million in senior unsecured notes and the repurchase of $425 million of our stock in a successful modified Dutch auction tender offer are expected to benefit our earnings per share and decrease our cost of capital while maintaining our flexibility to execute on our capital allocation priorities."

"I am excited about 2022 as we continue our investments in existing and new partnerships and products that we expect to drive future growth,” Michaels continued. "We believe we are well positioned to capture an even greater portion of our large addressable market while maintaining strong profitability and generating significant free cash flow."

Consolidated Results

Consolidated revenues for the fourth quarter of 2021 were $646.5 million, an increase of 6.8% from the same period in 2020, primarily due to growth from key large national partners and continued e-commerce penetration.

Adjusted EBITDA for the fourth quarter of 2021 was $72.1 million compared with $94.6 million for the same period in 2020. As a percentage of revenues, adjusted EBITDA was 11.2% in the fourth quarter of 2021, compared with 15.6% for the same period in 2020. The Company reported consolidated net earnings from continuing operations for the fourth quarter of 2021 of $37.8 million compared with $42.3 million in the prior year period.

The year-over-year declines in adjusted EBITDA and net earnings from continuing operations in the fourth quarter were primarily driven by Progressive Leasing's 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, which the Company believes were supported by government stimulus. These declines were also due to an increase in SG&A investments compared to the pandemic-related reductions of 2020.

Diluted earnings per share from continuing operations for the fourth quarter of 2021 were $0.59 compared with $0.62 in the year ago period. On a non-GAAP basis, diluted earnings per share from continuing operations were $0.67 in the fourth quarter of 2021 compared with $0.95 for the same quarter in 2020.

Progressive Leasing Results

Progressive Leasing's fourth quarter GMV increased 18.3% to $635 million compared with the same period in 2020. Its e-commerce GMV increased 45.0% year-over-year in the quarter and 150.5% annually, and accounted for 15.2% of its annual GMV. Progressive Leasing's gross leased asset portfolio ended the quarter 15.5% higher than the same period of 2020 due to GMV growth and lower 90-day buyout levels.

The provision for lease merchandise write-offs was 6.8% of lease revenues in the fourth quarter of 2021. While this level is elevated from the stimulus-driven record lows of the prior year, write-offs are in line with the Company's pre-pandemic levels.

Liquidity and Capital Allocation

PROG Holdings ended the fourth quarter of 2021 with cash of $170 million and gross debt of $600 million. The Company repurchased $439 million of its stock in the quarter at an average price per share of $48.86, inclusive of the $425 million of shares repurchased at $49.00 per share through its tender offer. Since the end of 2021, the Company has repurchased an additional $52 million of stock at an average price of $40.65 per share. The Company has approximately $509 million remaining under its previously announced $1 billion share repurchase program.

2022 Outlook

The Company is issuing its full year 2022 consolidated outlook for revenues, net earnings, adjusted EBITDA, GAAP diluted EPS, and Non-GAAP diluted EPS. On a consolidated basis, the Company expects 4-8% annual revenue growth and a return to adjusted EBITDA margins in the 11-13% range while investing in new products, talent, and technologies that will provide meaningful future contributions. This outlook anticipates GMV improving throughout the year after a slow start due to macroeconomic conditions, no further deterioration of those conditions, and no impact of any share repurchases beyond what the Company has completed to date.

		Full Year 2022 Outlook
(In thousands, except per share amounts)		Low				High
PROG Holdings - Total Revenues		$	2,790,000			$	2,900,000
Revenue growth rate versus 2021			4.2	%			8.3	%
PROG Holdings - Net Earnings			165,000				189,000
Net Earnings as a % of 2022 revenue outlook			5.9	%			6.5	%
PROG Holdings - Adjusted EBITDA			320,000				350,000
Adjusted EBITDA as a % of 2022 revenue outlook			11.5	%			12.1	%
PROG Holdings - Diluted EPS			2.90				3.35
Diluted EPS decline versus 2021			(21.0	) %			(8.7	) %
PROG Holdings - Diluted Non-GAAP EPS			3.25				3.70
Diluted Non-GAAP EPS decline versus 2021			(17.5	) %			(6.1	) %
Progressive Leasing - Total Revenues			2,730,000				2,830,000
Progressive Leasing - Earnings Before Taxes			245,000				263,000
Progressive Leasing - Adjusted EBITDA			330,000				350,000
Vive - Total Revenues			60,000				70,000
Vive - Earnings Before Taxes			9,000				13,000
Vive - Adjusted EBITDA			10,000				15,000
Other - Loss Before Taxes			(29,000	)			(21,000	)
Other - Adjusted EBITDA			(20,000	)			(15,000	)

Conference Call and Webcast

The Company has scheduled a live webcast and conference call for Wednesday, February 23, 2022, at 8:30 A.M. ET to discuss its financial results for the fourth quarter and full-year 2021. To access the live webcast, visit the company’s 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.

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.

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 , “expected”, “believe”, “expect”, "outlook", “expectation” and similar forward-looking terminology. These risks and uncertainties include factors such as (i) the impact of the COVID-19 pandemic, including new variants or additional waves of COVID-19 infections, on: (a) demand for the lease-to-own products offered by our Progressive Leasing segment, (b) Progressive Leasing’s POS partners, and Vive’s and Four’s merchant partners, (c) Progressive Leasing’s, Vive’s and Four’s customers, including their ability and willingness to satisfy their obligations under their lease agreements and loan agreements, (d) Progressive Leasing’s 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; (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) increased focus by federal and state regulators on businesses that serve subprime consumers, such as our Progressive Leasing, Vive Financial and Four Technologies businesses, and 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; (iv) the potential unfavorable effects on our business of the rapid increase in the rate of inflation being experienced in the economy including on customer demand for the merchandise that our point of sale (“POS”) partners sell, and on our customers’ ability to make the lease and loan payments they owe us; (v) a large percentage of the Company’s revenues being concentrated with several of Progressive Leasing’s key POS partners; (vi) the risks that Progressive Leasing will be unable to attract new POS partners or retain and grow its business with its existing POS partners; (vii) the risk that our capital allocation strategy, including our current share repurchase program, will not be effective at enhancing shareholder value; (viii) Vive’s business model differing significantly from Progressive Leasing’s, which creates specific and unique risks for the Vive business, including Vive’s reliance on two bank partners to issue its credit products and Vive’s exposure to the unique regulatory risks associated with the lending-related laws and regulations that apply to its business; (ix) adverse consequences to Progressive Leasing, including additional monetary penalties and/or injunctive relief, if it fails to comply with the terms of its 2020 settlement with the FTC, as well as the possibility of other regulatory authorities and third parties bringing legal actions against Progressive Leasing based on the same allegations that led to the FTC settlement; (x) increased competition from traditional and virtual lease-to-own competitors and also from competitors of our Vive segment; (xi) our increased level of indebtedness; (xii) 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; (xiii) 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 Technologies; (xiv) Four Technology’s business model differing significantly from Progressive Leasing's and Vive’s, which creates specific and unique risks for the Four business, including Four’s exposure to the unique regulatory risks associated with the laws and regulations that apply to its business; and (xv) the other risks and uncertainties discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, to be filed with the SEC on February 23, 2022. Statements in this press release that are “forward-looking” include without limitation statements about (i) the benefits of the recapitalization of our balance sheet on our earnings per share and cost of capital; (ii) our capital allocation priorities; (iii) increasing our share of the addressable market for our products and services; (iv) our future profitability and free cash flow; (v) the benefits we expect from our investments in existing and new products and partnerships; and (vi) our outlook for 2022. 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.

PROG Holdings, Inc. Consolidated Statements of Earnings (Loss) (In thousands, except per share data)
		(Unaudited) Three Months Ended								Year Ended
		December 31,								December 31,
		2021				2020				2021				2020
Revenues:
Lease Revenues and Fees		$	629,950			$	594,017			$	2,619,005			$	2,443,405
Interest and Fees on Loans Receivable			16,593				11,635				58,915				41,190
Total			646,543				605,652				2,677,920				2,484,595
Costs and Expenses:
Depreciation of Lease Merchandise			439,438				401,037				1,820,010				1,690,922
Provision for Lease Merchandise Write-offs			42,912				26,889				126,984				131,332
Operating Expenses			107,405				95,690				397,399				373,460
Legal and Regulatory Insurance Recoveries			—				—				—				(835	)
Separation Related Charges			—				15,510				—				17,953
Total			589,755				539,126				2,344,393				2,212,832
Operating Profit			56,788				66,526				333,527				271,763
Interest Expense			(3,931	)			(187	)			(5,323	)			(187	)
Earnings from Continuing Operations Before Income Tax			52,857				66,339				328,204				271,576
Income Tax Expense			15,038				24,034				84,647				37,949
Net Earnings from Continuing Operations			37,819				42,305				243,557				233,627
Loss from Discontinued Operations, Net of Income Tax			—				(1,487	)			—				(295,092	)
Net Earnings (Loss)		$	37,819			$	40,818			$	243,557			$	(61,465	)
Basic Earnings (Loss) per Share:
Continuing Operations		$	0.60			$	0.62			$	3.69			$	3.47
Discontinued Operations			—				(0.02	)			—				(4.39	)
Total Basic Earnings (Loss) per Share		$	0.60			$	0.60			$	3.69			$	(0.91	)
Diluted Earnings (Loss) per Share:
Continuing Operations		$	0.59			$	0.62			$	3.67			$	3.43
Discontinued Operations			—				(0.02	)			—				(4.34	)
Total Diluted Earnings (Loss) per Share		$	0.59			$	0.60			$	3.67			$	(0.90	)
Weighted Average Shares Outstanding			63,319				67,719				66,026				67,261
Weighted Average Shares Outstanding Assuming Dilution			63,739				68,537				66,416				68,022

PROG Holdings, Inc. Consolidated Balance Sheets (In thousands, except share data)
		December 31,
		2021				2020
ASSETS:
Cash and Cash Equivalents		$	170,159			$	36,645
Accounts Receivable (net of allowances of $71,233 in 2021 and $56,364 in 2020)			66,270				61,254
Lease Merchandise (net of accumulated depreciation and allowances of $463,929 in 2021 and $409,307 in 2020)			714,055				610,263
Loans Receivable (net of allowances and unamortized fees of $53,300 in 2021 and $52,274 in 2020)			119,315				79,148
Property, Plant and Equipment, Net			25,648				26,705
Operating Lease Right-of-Use Assets			17,488				20,613
Goodwill			306,212				288,801
Other Intangibles, Net			137,305				154,421
Income Tax Receivable			14,352				—
Deferred Income Tax Assets			2,760				—
Prepaid Expenses and Other Assets			48,197				39,554
Total Assets		$	1,621,761			$	1,317,404
LIABILITIES & SHAREHOLDERS’ EQUITY:
Accounts Payable and Accrued Expenses		$	135,954			$	78,249
Deferred Income Tax Liability			146,265				126,938
Customer Deposits and Advance Payments			45,070				46,565
Operating Lease Liabilities			25,410				29,516
Debt			589,654				50,000
Total Liabilities			942,353				331,268
SHAREHOLDERS' EQUITY:
Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at December 31, 2021 and 2020; Shares Issued: 82,078,654 at December 31, 2021 and 90,752,123 at December 31, 2020			41,039				45,376
Additional Paid-in Capital			332,244				318,263
Retained Earnings			1,055,526				1,236,378
			1,428,809				1,600,017
Less: Treasury Shares at Cost
Common Stock: 25,638,057 Shares at December 31, 2021 and 23,029,434 at December 31, 2020			(749,401	)			(613,881	)
Total Shareholders’ Equity			679,408				986,136
Total Liabilities & Shareholders’ Equity		$	1,621,761			$	1,317,404

PROG Holdings, Inc. Consolidated Statements of Cash Flows (In thousands)
		Year Ended December 31,
OPERATING ACTIVITIES:		2021				2020
Net Earnings (Loss)		$	243,557			$	(61,465	)
Adjustments to Reconcile Net Earnings (Loss) to Cash Provided by Operating Activities:
Depreciation of Lease Merchandise			1,820,010				2,163,443
Other Depreciation and Amortization			33,258				93,814
Provisions for Accounts Receivable and Loan Losses			242,412				288,206
Stock-Based Compensation			21,349				41,218
Deferred Income Taxes			15,729				(141,407	)
Impairment of Goodwill and Other Assets			—				470,681
Non-Cash Lease Expense			974				92,277
Other Changes, Net			(7,561	)			9,172
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:
Additions to Lease Merchandise			(2,054,467	)			(2,351,064	)
Book Value of Lease Merchandise Sold or Disposed			130,665				317,763
Accounts Receivable			(229,703	)			(250,159	)
Prepaid Expenses and Other Assets			(7,879	)			7,753
Income Tax Receivable and Payable			(29,753	)			17,066
Operating Lease Right-of-Use Assets and Liabilities			(1,955	)			(109,356	)
Accounts Payable and Accrued Expenses			70,820				39,660
Accrued Regulatory Expense			—				(175,000	)
Customer Deposits and Advance Payments			(1,495	)			3,362
Cash Provided by Operating Activities			245,961				455,964
INVESTING ACTIVITIES:
Investments in Loans Receivable			(182,204	)			(112,596	)
Proceeds from Loans Receivable			132,281				69,358
Outflows on Purchases of Property, Plant and Equipment			(9,555	)			(64,345	)
Proceeds from Property, Plant, and Equipment			78				7,482
Outflows on Acquisitions of Businesses and Customer Agreements. Net of Cash Acquired			(22,766	)			(14,793	)
Proceeds from Dispositions of Businesses and Customer Agreements, Net of Cash Disposed			—				359
Cash Used in Investing Activities			(82,166	)			(114,535	)
FINANCING ACTIVITIES:
(Repayments) Borrowings on Revolving Facility, Net			(50,000	)			50,000
Proceeds from Debt			591,750				5,625
Repayments on Debt			—				(347,646	)
Acquisition of Treasury Stock			(142,358	)			—
Tender Offer Stock Repurchased and Retired			(428,551	)			—
Dividends Paid			—				(13,778	)
Issuance of Stock Under Stock Option Plans			4,592				12,362
Shares Withheld for Tax Payments			(5,123	)			(11,734	)
Debt Issuance Costs			(591	)			(3,233	)
Transfer of Cash to The Aaron's Company			—				(54,150	)
Cash Used in Financing Activities			(30,281	)			(362,554	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			—				15
Increase (Decrease) in Cash and Cash Equivalents			133,514				(21,110	)
Cash and Cash Equivalents at Beginning of Year			36,645				57,755
Cash and Cash Equivalents at End of Year		$	170,159			$	36,645
Net Cash Paid During the Year:
Interest Expense		$	1,452			$	10,447
Income Taxes		$	53,602			$	29,000

PROG Holdings, Inc. Quarterly Revenues by Segment (In thousands)
		Unaudited
		Three Months Ended
		December 31, 2021
		Progressive Leasing			Vive			Other			Consolidated Total
Lease Revenues and Fees		$	629,950		$	—		$	—		$	629,950
Interest and Fees on Loans Receivable			—			16,308			285			16,593
Total Revenues		$	629,950		$	16,308		$	285		$	646,543

		Unaudited
		Three Months Ended
		December 31, 2020
		Progressive Leasing			Vive			Other			Consolidated Total
Lease Revenues and Fees		$	594,017		$	—		$	—		$	594,017
Interest and Fees on Loans Receivable			—			11,635			—			11,635
Total Revenues		$	594,017		$	11,635		$	—		$	605,652

		Twelve Months Ended
		December 31, 2021
		Progressive Leasing			Vive			Other			Consolidated Total
Lease Revenues and Fees		$	2,619,005		$	—		$	—		$	2,619,005
Interest and Fees on Loans Receivable			—			58,462			453			58,915
Total Revenues		$	2,619,005		$	58,462		$	453		$	2,677,920

		Twelve Months Ended
		December 31, 2020
		Progressive Leasing			Vive			Other			Consolidated Total
Lease Revenues and Fees		$	2,443,405		$	—		$	—		$	2,443,405
Interest and Fees on Loans Receivable			—			41,190			—			41,190
Total Revenues		$	2,443,405		$	41,190		$	—		$	2,484,595

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 twelve months ended December 31, 2021 and the Company's full year 2022 outlook, exclude intangible amortization expense, acquisition related transaction costs, and accrued interest on an uncertain tax position related to Progressive Leasing's $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 twelve months ended December 31, 2020 exclude intangible amortization expense, restructuring expenses, separation related charges from our spin-off of Aaron's Business, insurance recoveries for legal and regulatory fees incurred related to Progressive Leasing's 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 Company’s 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 twelve months ended December 31, 2021 and 2020 also excludes stock-based compensation expense, restructuring expenses, acquisition related transaction costs, separation related charges from our spin-off of Aaron's Business, and insurance recoveries for legal and regulatory fees incurred related to Progressive Leasing's 2020 FTC settlement. The amounts for these pre-tax non-GAAP adjustments can be found in the three and twelve-month segment EBITDA tables in this press release. Adjusted EBITDA for the Company's full year 2022 outlook is calculated as projected earnings before interest expense, interest income, depreciation on property, plant and equipment, amortization of intangible assets, income taxes, and stock-based compensation.

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 company’s 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 Company’s 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 Company’s 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												Twelve Months Ended
	Mar 31,			Jun 30,			Sept 30,			Dec 31,			Dec 31,
														2021
Net Earnings from Continuing Operations	$	79,488		$	68,837		$	57,413		$	37,819		$	243,557
Add: Intangible Amortization Expense		5,421			5,421			5,723			5,724			22,289
Add: Transaction Expense		—			561			—			—			561
Less: Tax Impact of Adjustments(1)		(1,409	)		(1,555	)		(1,488	)		(1,488	)		(5,940	)
Add: Accrued Interest on FTC Settlement Uncertain Tax Position		—			—			1,040			350			1,390
Non-GAAP Net Earnings from Continuing Operations	$	83,500		$	73,264		$	62,688		$	42,405		$	261,857
Earnings from Continuing Operations Per Share Assuming Dilution	$	1.16		$	1.02		$	0.86		$	0.59		$	3.67
Add: Intangible Amortization Expense		0.08			0.08			0.09			0.09			0.34
Add: Transaction Expense		—			0.01			—			—			0.01
Less: Tax Impact of Adjustments(1)		(0.02	)		(0.02	)		(0.02	)		(0.02	)		(0.09	)
Add: Accrued Interest on FTC Settlement Uncertain Tax Position		—			—			0.02			0.01			0.02
Non-GAAP Earnings from Continuing Operations Per Share Assuming Dilution(2)	$	1.22		$	1.09		$	0.94		$	0.67		$	3.94
Weighted Average Shares Outstanding Assuming Dilution		68,260			67,329			66,385			63,739			66,416

(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. 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												Twelve Months Ended
	Mar 31,			Jun 30,			Sept 30,			Dec 31,			Dec 31,
														2020
Net Earnings from Continuing Operations	$	57,682		$	58,997		$	74,643		$	42,305		$	233,627
Add: Intangible Amortization Expense		5,566			5,566			5,565			5,444			22,141
Add: Separation Costs		—			—			2,443			2,293			4,736
Add: Separation Costs - Executive Stock Compensation Acceleration(1)		—			—			—			13,217			13,217
Less: Legal and Regulatory Insurance Recoveries		—			—			(835	)		—			(835	)
Add: Restructuring Expense		—			238			—			—			238
Less: Tax Impact of Adjustments(1)		(1,447	)		(1,509	)		(1,865	)		(2,012	)		(6,833	)
Less: NOL Carryback Revaluation		(34,190	)		(1,350	)		—			—			(35,540	)
Add: Valuation Allowance on Foreign Tax Credits		—			—			—			4,034			4,034
Non-GAAP Net Earnings from Continuing Operations	$	27,611		$	61,942		$	79,951		$	65,281		$	234,785
Earnings from Continuing Operations Per Share Assuming Dilution	$	0.85		$	0.87		$	1.10		$	0.62		$	3.43
Add: Intangible Amortization Expense		0.08			0.08			0.08			0.08			0.33
Add: Separation Costs		—			—			0.04			0.03			0.07
Add: Separation Costs - Executive Stock Compensation Acceleration(1)		—			—			—			0.19			0.19
Less: Legal and Regulatory Insurance Recoveries		—			—			(0.01	)		—			(0.01	)
Add: Restructuring Expense		—			—			—			—			—
Less: Tax Impact of Adjustments(1)		(0.02	)		(0.02	)		(0.03	)		(0.03	)		(0.10	)
Less: NOL Carryback Revaluation		(0.50	)		(0.02	)		—			—			(0.52	)
Add: Valuation Allowance on Foreign Tax Credits		—			—			—			0.06			0.06
Non-GAAP Earnings from Continuing Operations Per Share Assuming Dilution(2)	$	0.41		$	0.92		$	1.17		$	0.95		$	3.45
Weighted Average Shares Outstanding Assuming Dilution		67,864			67,523			68,155			68,537			68,022

(1)		Adjustments are tax-effected using an assumed statutory tax rate of 26.0%, except for the separation costs related to executive stock compensation acceleration which did not result in a current or deferred tax benefit.
(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
		December 31, 2021
		Progressive Leasing			Vive			Other				Consolidated Total
Net Earnings from Continuing Operations												$	37,819
Income Taxes(1)													15,038
Earnings (Loss) from Continuing Operations Before Income Taxes		$	50,998		$	8,092		$	(6,233	)			52,857
Interest Expense			3,788			143			—				3,931
Depreciation			2,825			224			29				3,078
Amortization			5,421			—			303				5,724
EBITDA			63,032			8,459			(5,901	)			65,590
Stock-Based Compensation			3,327			78			3,141				6,546
Adjusted EBITDA		$	66,359		$	8,537		$	(2,760	)		$	72,136

(1)

Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.

		Unaudited
		Three Months Ended
		December 31, 2020
		Progressive Leasing			Vive				Unallocated Corporate Expenses				Consolidated Total
Net Earnings from Continuing Operations													$	42,305
Income Taxes(1)														24,034
Earnings (Loss) from Continuing Operations Before Income Taxes		$	88,134		$	(3,307	)		$	(18,488	)			66,339
Interest Expense			187			—				—				187
Depreciation			2,356			192				—				2,548
Amortization			5,421			23				—				5,444
EBITDA			96,098			(3,092	)			(18,488	)			74,518
Stock-Based Compensation			3,518			46				1,007				4,571
Separation Costs			572			—				14,938				15,510
Adjusted EBITDA		$	100,188		$	(3,046	)		$	(2,543	)		$	94,599

(1)

Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.

PROG Holdings Inc. Non-GAAP Financial Information Twelve Month Segment EBITDA (In thousands)
		Twelve Months Ended
		December 31, 2021
		Progressive Leasing			Vive			Other				Consolidated Total
Net Earnings from Continuing Operations												$	243,557
Income Taxes(1)													84,647
Earnings (Loss) from Continuing Operations Before Income Taxes		$	319,126		$	20,223		$	(11,145	)			328,204
Interest Expense			4,850			473			—				5,323
Depreciation			10,078			849			42				10,969
Amortization			21,684			—			605				22,289
EBITDA			355,738			21,545			(10,498	)			366,785
Stock-Based Compensation			14,919			287			6,143				21,349
Transaction Expense			561			—			—				561
Adjusted EBITDA		$	371,218		$	21,832		$	(4,355	)		$	388,695

(1)

Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.

		Twelve Months Ended
		December 31, 2020
		Progressive Leasing				Vive				Unallocated Corporate Expenses				Consolidated Total
Net Earnings from Continuing Operations														$	233,627
Income Taxes(1)															37,949
Earnings (Loss) from Continuing Operations Before Income Taxes		$	320,636			$	(11,180	)		$	(37,880	)			271,576
Interest Expense			187				—				—				187
Depreciation			8,864				815				—				9,679
Amortization			21,683				458				—				22,141
EBITDA			351,370				(9,907	)			(37,880	)			303,583
Insurance Recoveries Related to Legal and Regulatory Expenses			(835	)			—				—				(835	)
Stock-Based Compensation			12,455				367				7,581				20,403
Restructuring Expenses, Net			—				—				238				238
Separation Costs			2,337				—				15,616				17,953
Adjusted EBITDA		$	365,327			$	(9,540	)		$	(14,445	)		$	341,342

(1)

Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.

PROG Holdings Inc. Gross Merchandise Volume by Quarter (In thousands)
		Three Months Ended														Year Ended
		Mar 31,			Jun 30,			Sept 30,			Dec 31,					Dec 31,
		2021
Progressive Leasing		$	510,046		$	505,971		$	493,277		$	634,654				$	2,143,948
Vive			55,898			51,701			49,085			42,455					199,139
Other			—			—			2,655			5,996					8,651
Total		$	565,944		$	557,672		$	545,017		$	683,105				$	2,351,738
		Three Months Ended														Year Ended
		Mar 31,			Jun 30,			Sept 30,			Dec 31,					Dec 31,
		2020
Progressive Leasing		$	462,025		$	404,018		$	448,843		$	536,422				$	1,851,308
Vive			25,376			21,536			37,883			45,956					130,751
Other			—			—			—			—					—
Total		$	487,401		$	425,554		$	486,726		$	582,378				$	1,982,059

Reconciliation of Full Year 2022 Outlook for Adjusted EBITDA (In thousands)
		Full Year 2022 Ranges
		Progressive Leasing		Vive		Other		Consolidated Total
Estimated Net Earnings								$165,000 - $189,000
Taxes(1)								60,000 - 66,000
Projected Earnings (Loss) Before Taxes		$245,000 - $263,000		$9,000 - $13,000		$(29,000) - $(21,000)		$225,000 - $255,000
Interest Expense		37,000		—		—		37,000
Depreciation		10,000		1,000		—		11,000
Amortization		21,000		—		1,000		22,000
Projected EBITDA		313,000 - 331,000		10,000 - 14,000		(28,000) - (20,000)		295,000 - 325,000
Stock-Based Compensation		17,000 - 19,000		0 - 1,000		5,000 - 8,000		25,000
Projected Adjusted EBITDA		$330,000 - $350,000		$10,000 - $15,000		$(20,000) - $(15,000)		$320,000 - $350,000

(1)

Taxes are calculated on a consolidated basis and are not identifiable by Company segments.

Reconciliation of Full Year 2022 Outlook for Earnings Per Share Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution
		Full Year 2022 Range
		Low		High
Projected Earnings Per Share Assuming Dilution		$	2.90	$	3.35
Add: Projected Intangible Amortization Expense			0.31		0.31
Add: Projected Interest on FTC Settlement Uncertain Tax Position			0.04		0.04
Projected Non-GAAP Earnings Per Share Assuming Dilution		$	3.25	$	3.70

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220223005400/en/

Investor Contact

John Baugh, CFA

Vice President, Investor Relations

john.baugh@progleasing.com

Media Contact

Mark Delcorps

Director, Corporate Communications

media@progleasing.com

Source: PROG Holdings, Inc.

FAQ

What were the Q4 2021 financial results for PROG Holdings (PRG)?

PROG Holdings reported Q4 2021 GMV of $635 million, consolidated revenues of $647 million, and diluted EPS of $0.59.

How much did PROG Holdings return to shareholders in Q4 2021?

PROG returned $439 million to shareholders through stock repurchases in Q4 2021.

What is the outlook for PROG Holdings in 2022?

The company expects 4-8% revenue growth and adjusted EBITDA margins returning to 11-13% in 2022.

What challenges is PROG Holdings facing after the fourth quarter of 2021?

Challenges include rising delinquency rates that align with pre-pandemic levels and declines in adjusted EBITDA and net earnings.