Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 23, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 1-39628 | |
Entity Registrant Name | PROG HOLDINGS, INC. | |
Entity Incorporation, State or Country Code | GA | |
Entity Tax Identification Number | 85-2484385 | |
Entity Address, Address Line One | 256 W. Data Drive | |
Entity Address, City or Town | Draper, | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84020-2315 | |
City Area Code | 385 | |
Local Phone Number | 351-1369 | |
Title of 12(b) Security | Common Stock, $0.50 Par Value | |
Trading Symbol | PRG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 66,499,901 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001808834 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
ASSETS: | ||
Cash and Cash Equivalents | $ 137,549 | $ 36,645 |
Accounts Receivable (net of allowances of $48,459 in 2021 and $56,364 in 2020) | 57,074 | 61,254 |
Lease Merchandise (net of accumulated depreciation and allowances of $416,700 in 2021 and $409,307 in 2020) | 587,730 | 610,263 |
Loans Receivable (net of allowances and unamortized fees of $57,976 in 2021 and $52,274 in 2020) | 103,055 | 79,148 |
Property, Plant and Equipment, Net | 26,738 | 26,705 |
Operating Lease Right-of-Use Assets | 18,765 | 20,613 |
Goodwill | 306,627 | 288,801 |
Other Intangibles, Net | 148,752 | 154,421 |
Prepaid Expenses and Other Assets | 39,630 | 39,554 |
Total Assets | 1,425,920 | 1,317,404 |
LIABILITIES & SHAREHOLDERS’ EQUITY: | ||
Accounts Payable and Accrued Expenses | 102,041 | 78,249 |
Deferred Income Tax Liability | 139,214 | 126,938 |
Customer Deposits and Advance Payments | 44,093 | 46,565 |
Operating Lease Liabilities | 27,237 | 29,516 |
Debt | 50,000 | 50,000 |
Total Liabilities | 362,585 | 331,268 |
Commitments and Contingencies (Note 6) | ||
SHAREHOLDERS' EQUITY: | ||
Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at June 30, 2021 and December 31, 2020; Shares Issued: 90,752,123 at June 30, 2021 and December 31, 2020 | 45,376 | 45,376 |
Additional Paid-in Capital | 318,911 | 318,263 |
Retained Earnings | 1,384,703 | 1,236,378 |
Stockholders' Equity before Treasury Stock, Total | 1,748,990 | 1,600,017 |
Less: Treasury Shares at Cost | ||
Common Stock: 24,252,222 Shares at June 30, 2021 and 23,029,434 at December 31, 2020 | (685,655) | (613,881) |
Total Shareholders’ Equity | 1,063,335 | 986,136 |
Total Liabilities & Shareholders’ Equity | $ 1,425,920 | $ 1,317,404 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 48,459 | $ 56,364 |
Lease Merchandise, accumulated depreciation and allowances | 416,700 | 409,307 |
Loans Receivable, allowances and unamortized fees | $ 57,976 | $ 52,274 |
Common Stock, Par Value (in dollars per share) | $ 0.50 | $ 0.50 |
Common Stock, Shares Authorized (in shares) | 225,000,000 | 225,000,000 |
Common Stock, Shares Issued (in shares) | 90,752,123 | 90,752,123 |
Treasury Shares (in shares) | 24,252,222 | 23,029,434 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Earnings (Loss) (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
REVENUES: | ||||
Revenues | $ 659,971 | $ 599,164 | $ 1,380,972 | $ 1,267,605 |
COSTS AND EXPENSES: | ||||
Depreciation of Lease Merchandise | 439,658 | 420,731 | 944,715 | 884,649 |
Provision for Lease Merchandise Write-offs | 31,258 | 36,151 | 49,898 | 91,865 |
Operating Expenses | 96,745 | 82,518 | 187,941 | 181,502 |
COSTS AND EXPENSES | 567,661 | 539,400 | 1,182,554 | 1,158,016 |
OPERATING PROFIT | 92,310 | 59,764 | 198,418 | 109,589 |
Interest Expense | (436) | 0 | (948) | 0 |
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAX | 91,874 | 59,764 | 197,470 | 109,589 |
INCOME TAX EXPENSE (BENEFIT) | 23,037 | 767 | 49,145 | (7,090) |
NET EARNINGS FROM CONTINUING OPERATIONS | 68,837 | 58,997 | 148,325 | 116,679 |
Earnings (Loss) from Discontinued Operations, Net of Income Tax | 0 | 9,380 | 0 | (328,307) |
Net Earnings (Loss) | $ 68,837 | $ 68,377 | $ 148,325 | $ (211,628) |
BASIC EARNINGS (LOSS) PER SHARE | ||||
Continuing Operations (in dollars per share) | $ 1.03 | $ 0.88 | $ 2.20 | $ 1.74 |
Discontinued Operations (in dollars per share) | 0 | 0.14 | 0 | (4.90) |
Total Basis Earnings (Loss) Per Share (in dollars per share) | 1.03 | 1.02 | 2.20 | (3.16) |
DILUTED EARNINGS (LOSS) PER SHARE | ||||
Continuing Operations (in dollars per share) | 1.02 | 0.87 | 2.19 | 1.72 |
Discontinued Operations (in dollars per share) | 0 | 0.14 | 0 | (4.85) |
Total Diluted Earnings (Loss) Per Share (in dollars per share) | $ 1.02 | $ 1.01 | $ 2.19 | $ (3.13) |
WEIGHTED AVERAGE SHARES OUTSTANDING: | ||||
Basic (in shares) | 67,011 | 67,097 | 67,368 | 66,959 |
Assuming Dilution (in shares) | 67,329 | 67,523 | 67,792 | 67,693 |
Lease Revenues and Fees | ||||
REVENUES: | ||||
Revenues | $ 646,048 | $ 589,749 | $ 1,354,030 | $ 1,248,283 |
Interest and Fees on Loans Receivable | ||||
REVENUES: | ||||
Revenues | $ 13,923 | $ 9,415 | $ 26,942 | $ 19,322 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Earnings (Loss) | $ 68,837 | $ 68,377 | $ 148,325 | $ (211,628) |
Other Comprehensive Income (Loss): | ||||
Foreign Currency Translation Adjustment | 0 | 331 | 0 | (1,423) |
Total Other Comprehensive Income (Loss) | 0 | 331 | 0 | (1,423) |
Comprehensive Income (Loss) | $ 68,837 | $ 68,708 | $ 148,325 | $ (213,051) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
OPERATING ACTIVITIES: | ||
Net Earnings (Loss) | $ 148,325 | $ (211,628) |
Adjustments to Reconcile Net Earnings (Loss) to Cash Provided by Operating Activities: | ||
Depreciation of Lease Merchandise | 944,715 | 1,144,958 |
Other Depreciation and Amortization | 14,247 | 50,154 |
Provisions for Accounts Receivable and Loan Losses | 87,114 | 174,737 |
Stock-Based Compensation | 8,137 | 12,487 |
Deferred Income Taxes | 11,001 | (73,656) |
Impairment of Goodwill and Other Assets | 0 | 468,634 |
Non-Cash Lease Expense | 464 | 50,638 |
Other Changes, Net | (1,180) | 5,109 |
Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions: | ||
Additions to Lease Merchandise | (974,271) | (1,032,977) |
Book Value of Lease Merchandise Sold or Disposed | 52,089 | 201,058 |
Accounts Receivable | (72,070) | (134,467) |
Prepaid Expenses and Other Assets | 106 | (4,711) |
Income Tax Receivable | (20) | (38,797) |
Operating Lease Right-of-Use Assets and Liabilities | (895) | (53,544) |
Accounts Payable and Accrued Expenses | 23,552 | (19,713) |
Accrued Regulatory Expense | 0 | (175,000) |
Customer Deposits and Advance Payments | (2,473) | (2,527) |
Cash Provided by Operating Activities | 238,841 | 360,755 |
INVESTING ACTIVITIES: | ||
Investments in Loans Receivable | (94,129) | (39,986) |
Proceeds from Loans Receivable | 62,938 | 32,248 |
Outflows on Purchases of Property, Plant and Equipment | (4,781) | (33,885) |
Proceeds from Disposition of Property, Plant and Equipment | 45 | 2,220 |
Outflows on Acquisitions of Businesses and Customer Agreements, Net of Cash Acquired | (22,749) | (1,209) |
Proceeds from Dispositions of Businesses and Customer Agreements, Net of Cash Disposed | 0 | 359 |
Cash Used in Investing Activities | (58,676) | (40,253) |
FINANCING ACTIVITIES: | ||
Proceeds from Debt | 0 | 5,625 |
Repayments on Debt | 0 | (60,748) |
Dividends Paid | 0 | (5,351) |
Acquisition of Treasury Stock | (77,196) | 0 |
Issuance of Stock Under Stock Option Plans | 2,856 | 2,250 |
Shares Withheld for Tax Payments | (4,921) | (5,877) |
Debt Issuance Costs | 0 | (1,020) |
Cash Used in Financing Activities | (79,261) | (65,121) |
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 0 | (79) |
Increase in Cash and Cash Equivalents | 100,904 | 255,302 |
Cash and Cash Equivalents at Beginning of Period | 36,645 | 57,755 |
Cash and Cash Equivalents at End of Period | 137,549 | 313,057 |
Net Cash Paid During the Period: | ||
Interest | 435 | 6,722 |
Income Taxes | $ 23,539 | $ 1,438 |
Basis and Summary of Significan
Basis and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis and Summary of Significant Accounting Policies | BASIS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As described elsewhere in this Quarterly Report on Form 10-Q, the Coronavirus Disease ("COVID-19") pandemic has led to significant market disruption and has impacted many aspects of our operations, directly and indirectly. Throughout these notes to the condensed consolidated financial statements, the impacts of the COVID-19 pandemic on the financial results for the three and six months ended June 30, 2021 have been identified under the respective sections. For a discussion of significant estimates made by management regarding allowances for lease merchandise, accounts receivable, and loans receivable, as well as operational measures taken as a result of the COVID-19 pandemic, see Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations", including the "COVID-19 Pandemic," "Results of Operations", and "Liquidity and Capital Resources" below. Description of Business PROG Holdings, Inc. ("we," "our," "us," the "Company", or "PROG Holdings") is a financial technology holding company with two reportable segments: (i) Progressive Leasing, a leading provider of in-store, e-commerce and app-based lease-to-own solutions; and (ii) Vive Financial ("Vive"), which offers omnichannel second-look revolving credit products. Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and through its e-commerce website partners in the United States (collectively, "POS partners"). It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers. Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs, with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers. On June 25, 2021, the Company completed the acquisition of Four Technologies, Inc. ("Four"), an innovative Buy Now, Pay Later company that allows shoppers to pay for merchandise through four interest-free installments. Four’s proprietary platform capabilities and its base of customers and retailers expand PROG Holdings’ ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer fintech offerings. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not a reportable segment for the six months ended June 30, 2021 as its revenues, loss before income taxes, and assets are not material to the Company's consolidated financial results. See Note 3 for further discussion on the acquisition. On November 30, 2020, PROG Holdings (previously Aaron's Holdings Company, Inc.) completed the separation of its Aaron's Business segment from its Progressive Leasing and Vive segments. The separation was effected through a tax-free distribution of all outstanding shares of common stock of The Aaron's Company, Inc. ("The Aaron's Company") to the PROG Holdings shareholders of record as of the close of business on November 27, 2020 (referred to as the "separation and distribution transaction"). All direct revenues and expenses of the Aaron's Business are presented as discontinued operations for all periods through the separation and distribution date of November 30, 2020. The cash flows related to the Aaron's Business have not been segregated and are included in the condensed consolidated statements of cash flows for the six months ended June 30, 2020. With the exception of Note 2, the notes to the condensed consolidated financial statements reflect the continuing operations of PROG Holdings. See Note 2 below for additional information regarding discontinued operations. Basis of Presentation The preparation of the Company's condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. The accompanying unaudited condensed consolidated financial statements do not include all information required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments, which are of a normal recurring nature, considered necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Annual Report") filed with the U.S. Securities and Exchange Commission on February 26, 2021. The results of operations for the three and six months ended June 30, 2021 are not necessarily indicative of operating results for the full year. Principles of Consolidation The condensed consolidated financial statements include the accounts of PROG Holdings, Inc. and its subsidiaries, each of which is wholly-owned. Intercompany balances and transactions between consolidated entities have been eliminated. Accounting Policies and Estimates See Note 1 to the consolidated financial statements in the 2020 Annual Report for an expanded discussion of accounting policies and estimates. Earnings (Loss) Per Share Earnings per share is computed by dividing net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of earnings per share assuming dilution includes the dilutive effect of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") and awards issuable under the Company's employee stock purchase plan ("ESPP") (collectively, "share-based awards") as determined under the treasury stock method. The following table shows the calculation of dilutive share-based awards: Three Months Ended Six Months Ended (Shares In Thousands) 2021 2020 2021 2020 Weighted Average Shares Outstanding 67,011 67,097 67,368 66,959 Dilutive Effect of Share-Based Awards 318 426 424 734 Weighted Average Shares Outstanding Assuming Dilution 67,329 67,523 67,792 67,693 Approximately 379,000 and 334,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the three and six months ended June 30, 2021, respectively, as the awards would have been anti-dilutive for the periods presented. Approximately 1,429,000 and 1,174,000 weighted-average share-based awards were excluded from the computation of earnings per share assuming dilution during the three and six months ended June 30, 2020, respectively, as the awards would have been anti-dilutive for the periods presented. Revenue Recognition Lease Revenues and Fees Our Progressive Leasing segment provides merchandise, consisting primarily of furniture, appliances, electronics, jewelry, mobile phones and accessories, mattresses, automobile electronics and accessories, and a variety of other products to its customers for lease under terms agreed to by the customer. Progressive Leasing offers customers of traditional and e-commerce retailers a lease-purchase solution through leases with payment terms that can generally be renewed up to 12 months. Progressive Leasing does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through early buyout options or through payment of all required lease payments. The agreements are cancellable at any time by either party without penalty. Progressive Leasing's lease revenues are earned prior to the lease payment due date and are recorded net of related sales taxes as earned. Payment due date terms include weekly, bi-weekly, semi-monthly and monthly frequencies. Revenue recorded prior to the payment due date results in unbilled receivables recognized in accounts receivable, net of allowances in the accompanying condensed consolidated balance sheets. Progressive Leasing lease revenues are recorded net of a provision for returns and uncollectible renewal payments. All of Progressive Leasing's customer agreements are considered operating leases. It maintains ownership of the lease merchandise until all payment obligations are satisfied under the lease ownership agreements. Initial direct costs related to lease purchase agreements are capitalized as incurred and amortized as operating expense over the estimated lease term. The capitalized costs have been classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. Interest and Fees on Loans Receivable Interest and fees on loans receivable is primarily generated from our Vive segment. Vive extends or declines credit to an applicant through its bank partners based upon the applicant's credit rating and other factors. Qualifying applicants receive a credit card to finance their initial purchase and to use in subsequent purchases at the merchant or other participating merchants for an initial 24-month period, which Vive may renew if the cardholder remains in good standing. Vive acquires the loan receivable from merchants through its third-party bank partners at a discount from the face value of the loan. The discount is comprised of a merchant fee discount and a promotional fee discount, if applicable. The merchant fee discount represents a pre-negotiated, nonrefundable discount that generally ranges from 3% to 25% of the loan face value. The discount is designed to cover the risk of loss related to the portfolio of cardholder charges and Vive's direct origination costs. The merchant fee discount and origination costs are presented net on the condensed consolidated balance sheets in loans receivable. Cardholders generally have an initial 24-month period that the card is active. The merchant fee discount, net of the origination costs, is amortized on a net basis and is recorded as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings on a straight-line basis over the initial 24-month period. The discount from the face value of the loan on the acquisition of the loan receivable from the merchant through the third-party bank partners may also include a promotional fee discount, which generally ranges from 1% to 8%. The promotional fee discount is intended to compensate the holder of the loan receivable (i.e. Vive) for deferred or reduced interest rates that are offered to the cardholder for a specified period on the outstanding loan balance (generally for six six The customer is typically required to make monthly minimum payments of at least 3.5% of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically 27% to 35.99%, are compounded daily for cards that do not qualify for deferred or reduced interest promotional periods. Interest income, which is recognized based upon the amount of the loans outstanding, is recognized as interest and fees on loans receivable when earned if collectibility is reasonably assured. For credit cards that provide deferred interest, if the balance is not paid off during the promotional period or if the cardholder defaults, interest is billed to the customers at standard rates and the cumulative amount owed is charged to the cardholder account in the month that the promotional period expires. For credit cards that provide reduced interest, if the balance is not paid off during the promotional period, interest is billed to the cardholder at standard rates in the month that the promotional period expires or when the cardholder defaults. The Company recognizes interest revenue during the promotional period based on its historical experience related to cardholders that fail to pay off balances during the promotional period if collectibility is reasonably assured. Annual fees are charged to cardholders at the commencement of the loan and on each subsequent anniversary date. Annual fees are deferred and recognized into revenue on a straight-line basis over a one-year period. Under the provisions of the credit card agreements, Vive also may assess fees for missed or late payments, which are recognized as revenue in the billing period in which they are assessed if collectibility is reasonably assured. Annual fees and other fees discussed are recognized as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings. Accounts Receivable Accounts receivable consist primarily of receivables due from customers of Progressive Leasing and amounted to $57.1 million and $61.3 million, net of allowances, as of June 30, 2021 and December 31, 2020, respectively. The Company maintains an accounts receivable allowance, which primarily relates to its Progressive Leasing operations and, to a lesser extent, receivables from Vive's POS partners. The Company’s policy is to record an allowance for uncollectible renewal payments based on historical collection experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the potential unfavorable impacts of the COVID-19 pandemic on our businesses. We believe government stimulus measures in 2020 and the first half of 2021 contributed to the favorable payment trends we experienced following those measures. We believe any additional government stimulus measures may positively influence future payment trends as well. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our business, including the existence and/or extent of any future government stimulus measures, a high level of estimation was involved in determining the allowance as of June 30, 2021; therefore, actual future accounts receivable write-offs could differ materially from the allowance. The Progressive Leasing provision for uncollectible renewal payments is recorded as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. The Progressive Leasing segment writes off lease receivables that are 120 days or more contractually past due. The following table shows the components of the accounts receivable allowance: Six Months Ended (In Thousands) 2021 2020 Beginning Balance $ 56,364 $ 65,573 Accounts Written Off, Net of Recoveries (84,163) (142,385) Accounts Receivable Provision 1 76,258 143,630 Ending Balance $ 48,459 $ 66,818 1 Substantially all of the Accounts Receivable Provision is recorded as a reduction of lease revenues and fees within the condensed consolidated statements of earnings (loss). Lease Merchandise Progressive Leasing's merchandise consists primarily of furniture, appliances, electronics, jewelry, mobile phones and accessories, mattresses, and a variety of other products and is recorded at the lower of depreciated cost or net realizable value. Progressive Leasing depreciates lease merchandise to a 0% salvage value generally over 12 months. Depreciation is accelerated upon early buyout. All of Progressive Leasing's merchandise, net of accumulated depreciation and allowances, represents on-lease merchandise. The Company records a provision for write-offs using the allowance method. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the potential unfavorable impacts of the COVID-19 pandemic on our business. We believe government stimulus measures in 2020 and the first half of 2021 contributed to the favorable payment trends we experienced following those measures. We believe any additional government stimulus measures may positively influence future payment trends as well. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our business, including the existence and/or extent of any future government stimulus measures, a high level of estimation was involved in determining the allowance as of June 30, 2021. Continued strong customer payment activity could result in some portion of the allowance being reversed in future periods, and actual future lease merchandise write-offs could differ materially from the allowance as of June 30, 2021. The following table shows the components of the allowance for lease merchandise write-offs, which is included within lease merchandise, net in the condensed consolidated balance sheets: Six Months Ended (In Thousands) 2021 2020 Beginning Balance $ 45,992 $ 47,362 Merchandise Written off, Net of Recoveries (50,263) (82,243) Provision for Write-offs 49,898 91,865 Ending Balance $ 45,627 $ 56,984 Vendor Incentives and Rebates Provided to POS Partners Progressive Leasing has agreements with some of its POS partners that require additional consideration to be paid to the POS partner, including payments for exclusivity, rebates based on lease volume originations generated through the POS partners, and payments to the POS partners for marketing or other development initiatives to promote additional lease originations through these POS partners. Payments made to POS partners as consideration for them providing exclusivity to Progressive Leasing for lease-to-own transactions with customers of the POS partner are expensed on a straight-line basis over the exclusivity term. Rebates are accrued over the period the POS partner is earning the rebate, which is typically based on quarterly or annual lease origination volumes. Payments made to POS partners for marketing or development initiatives are expensed on a straight-line basis over the period the POS partner is earning the funds or the specified marketing term. Progressive Leasing expensed $5.6 million and $9.6 million during the three and six months ended June 30, 2021, respectively, compared to $3.3 million and $6.8 million during the three and six months ended June 30, 2020, respectively. Expenses related to additional consideration provided to POS partners are classified within operating expenses in the condensed consolidated statements of earnings. Loans Receivable, Net Gross loans receivable primarily represents the principal balances of credit card charges at Vive's participating merchants that remain due from cardholders, plus unpaid interest and fees due from cardholders. The allowance and unamortized fees represent uncollectible amounts; merchant fee discounts, net of capitalized origination costs; promotional fee discounts; and deferred annual card fees. As of June 30, 2021, gross loans receivable also includes outstanding receivables from customers of Four. Economic conditions and loan performance trends are closely monitored to manage and evaluate exposure to credit risk. Trends in delinquency rates are an indicator of credit risk within the loans receivable portfolio, including the migration of loans between delinquency categories over time. Charge-off rates represent another indicator of the potential for future credit losses. The risk in the loans receivable portfolio is correlated with broad economic trends, such as current and projected unemployment rates, stock market volatility, and changes in medium and long-term risk-free rates, which are considered in determining the allowance for loan losses and can have a material effect on credit performance. The Company calculates Vive's allowance for loan losses based on internal historical loss information and incorporates observable and forecasted macroeconomic data over a twelve-month reasonable and supportable forecast period. Incorporating macroeconomic data could have a material impact on the measurement of the allowance to the extent that forecasted data changes significantly, such as higher forecasted unemployment rates and the observed significant market volatility associated with the COVID-19 pandemic. For any periods beyond the twelve-month reasonable and supportable forecast period described above, the Company reverts to using historical loss information on a straight-line basis over a period of six months and utilizes historical loss information for the remaining life of the portfolio. The Company may also consider other qualitative factors in estimating the allowance, as necessary. For the purposes of determining the allowance as of June 30, 2021, management considered other qualitative factors such as the beneficial impact of government stimulus measures to our customer base that were not fully factored into the macroeconomic forecasted data. We believe those stimulus measures have contributed to the recent favorable cardholder payment trends we are experiencing at Vive, and we believe that any additional government stimulus measures may positively influence future cardholder payment trends as well. We also considered the uncertain nature and extent of any future government stimulus programs and the potential impact, if any, these programs may have on the ability of Vive's cardholders to make payments as they come due. The allowance for loan losses is maintained at a level considered appropriate to cover expected future losses of principal, interest and fees on active loans in the loans receivable portfolio. The appropriateness of the allowance is evaluated at each period end. To the extent that actual results differ from estimates of uncollectible loans receivable, including the significant uncertainties caused by the COVID-19 pandemic, the Company's results of operations and liquidity could be materially affected. Vive's delinquent loans receivable includes those that are 30 days or more past due based on their contractual billing dates. In response to the COVID-19 pandemic, the Company has granted affected Vive customers payment deferrals while allowing them to maintain their delinquency status for an additional 30 days per deferral. The Company places Vive's loans receivable on nonaccrual status when they are greater than 90 days past due or upon notification of cardholder bankruptcy, death or fraud. The Company discontinues accruing interest and fees and amortizing merchant fee discounts and promotional fee discounts for Vive's loans receivable in nonaccrual status. Loans receivable are removed from nonaccrual status when cardholder payments resume, the loan becomes 90 days or less past due and collection of the remaining amounts outstanding is deemed probable. Payments received on nonaccrual loans are allocated according to the same payment hierarchy methodology applied to loans that are accruing interest. Loans receivable are charged off no later than the end of the following month after the billing cycle in which the loans receivable become 120 days past due. Vive extends or declines credit to an applicant through its bank partners based upon the applicant's credit rating and other factors. Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2021 and December 31, 2020 by Fair Isaac and Company (FICO) score as determined at the time of loan origination: FICO Score Category June 30, 2021 December 31, 2020 600 or Less 7.3 % 7.5 % Between 600 and 700 79.3 % 79.3 % 700 or Greater 12.7 % 13.2 % No score identified 0.7 % — % Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following: (In Thousands) June 30, 2021 December 31, 2020 Prepaid Expenses $ 24,260 $ 23,030 Unamortized Initial Direct Costs on Lease Agreement Originations 5,734 4,986 Prepaid Insurance 1,861 3,639 Other Assets 7,775 7,899 Prepaid Expenses and Other Assets $ 39,630 $ 39,554 Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: (In Thousands) June 30, 2021 December 31, 2020 Accounts Payable $ 9,097 $ 8,630 Accrued Salaries and Benefits 23,926 18,120 Accrued Sales and Personal Property Taxes 12,698 12,933 Income Taxes Payable 32,731 18,183 Other Accrued Expenses and Liabilities 23,589 20,383 Accounts Payable and Accrued Expenses $ 102,041 $ 78,249 Debt On November 24, 2020, the Company entered into a credit agreement with a consortium of lenders providing for a $350.0 million senior unsecured revolving credit facility (the “Revolving Facility”), under which revolving borrowings became available at the completion of the separation and distribution transaction, and under which all borrowings and commitments will mature or terminate on November 24, 2025. The Company expects that the Revolving Facility will be used to provide for working capital and capital expenditures, to finance future permitted acquisitions, and for other general corporate purposes. The Company had $50.0 million of outstanding borrowings and $300.0 million total available credit under the Revolving Facility as of June 30, 2021. At June 30, 2021, the Company was in compliance with all covenants related to its outstanding debt. See Note 8 to the consolidated financial statements in the 2020 Annual Report for further information regarding the Company's indebtedness. Goodwill Goodwill represents the excess of the purchase price paid over the fair value of the identifiable net tangible and intangible assets acquired in connection with business acquisitions. Progressive Leasing and Four are the only reporting units with goodwill. Impairment occurs when the carrying amount of goodwill is not recoverable from future cash flows. The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an impairment may have occurred. Factors which could necessitate an interim impairment assessment include a sustained decline in the Company’s stock price, prolonged negative industry or economic trends and significant underperformance relative to historical results, projected future operating results, or the Company fails to successfully execute on one or more elements of Progressive Leasing and/or Four's strategic plans. The Company completed its annual goodwill impairment test for Progressive Leasing as of October 1, 2020 and concluded that no impairment had occurred. The Company determined that there were no events or circumstances that occurred during the six months ended June 30, 2021 that would more likely than not reduce the fair value of Progressive Leasing below its carrying amount. Shareholders' Equity Changes in shareholders' equity for the six months ended June 30, 2021 and 2020 are as follows: Treasury Stock Common Stock Additional Retained Earnings Total Shareholders’ Equity (In Thousands) Shares Amount Balance, December 31, 2020 (23,029) $ (613,881) $ 45,376 $ 318,263 $ 1,236,378 $ 986,136 Stock-Based Compensation — — — 4,163 — 4,163 Reissued Shares 216 3,671 — (8,400) — (4,729) Repurchased Shares (589) (28,102) — — — (28,102) Net Earnings — — — — 79,488 79,488 Balance, March 31, 2021 (23,402) $ (638,312) $ 45,376 $ 314,026 $ 1,315,866 $ 1,036,956 Stock-Based Compensation — — — 3,973 — 3,973 Reissued Shares 61 1,751 — 912 — 2,663 Repurchased Shares (911) (49,094) — — — (49,094) Net Earnings — — — — 68,837 68,837 Balance, June 30, 2021 (24,252) $ (685,655) $ 45,376 $ 318,911 $ 1,384,703 $ 1,063,335 Treasury Stock Common Stock Additional Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity (In Thousands, Except Per Share) Shares Amount Balance, December 31, 2019 (24,034) $ (627,940) $ 45,376 $ 290,229 $ 2,029,613 $ (19) $ 1,737,259 Opening Balance Sheet Adjustment - ASU 2016-13, net of taxes — — — — (6,715) — (6,715) Cash Dividends, $0.04 per share — — — — (2,700) — (2,700) Stock-Based Compensation — — — 5,878 — — 5,878 Reissued Shares 368 7,291 — (12,640) — — (5,349) Net Loss — — — — (280,005) — (280,005) Foreign Currency Translation Adjustment — — — — — (1,754) (1,754) Balance, March 31, 2020 (23,666) $ (620,649) $ 45,376 $ 283,467 $ 1,740,193 $ (1,773) $ 1,446,614 Cash Dividends, $0.04 per share — — — — (2,701) — (2,701) Stock-Based Compensation — — — 6,856 — — 6,856 Reissued Shares 53 1,392 — 330 — — 1,722 Net Earnings — — — — 68,377 — 68,377 Foreign Currency Translation Adjustment — — — — — 331 331 Balance, June 30, 2020 (23,613) $ (619,257) $ 45,376 $ 290,653 $ 1,805,869 $ (1,442) $ 1,521,199 Stock-based Compensation The Company issued 267,503 restricted stock units or restricted stock awards (collectively, "restricted stock") during the three months ended June 30, 2021 to employees and directors, which vest over one one The Company issued 421,318 performance share units during the three months ended June 30, 2021 to certain employees, which vest over one Stock-based Compensation . A significant portion of the restricted stock and performance share units granted during the three months ended June 30, 2021 were issued to key employees of Four on the June 25, 2021 acquisition date. These awards have been excluded from the preliminary purchase price of Four and are recognized separate from the acquisition of assets and assumption of liabilities since all awards require post-acquisition employment with the Company as a condition for vesting. See further discussion on the acquisition in Note 3. Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting the Company's own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company measures a liability related to its non-qualified deferred compensation plan, which represents benefits accrued for plan participants and is valued at the quoted market prices of the participants' investment election, at fair value on a recurring basis. The Company maintains certain financial assets and liabilities that are not measured at fair value but for which fair value is disclosed. The fair values of the Company's other current financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to their short-term nature. The fair value of any revolving credit borrowings also approximate their carrying amounts. Recent Accounting Pronouncements Pending Adoption In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) (“ASU 2020-04”). The standard provides temporary guidance to ease the potential burden in accounting for reference rate reform primarily resulting from the discontinuation of the London Interbank Overnight ("LIBO") rate or another reference rate expected to be discontinued. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to have completed. The Company's Revolving Facility currently references the LIBO rate for determining interest payable on outstanding borrowings. The amendments in ASU 2020 |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS As discussed in Note 1 above, on November 30, 2020, PROG Holdings completed the separation and distribution of its Aaron's Business segment, and the requirements for the presentation of Aaron's Business as a discontinued operation were met on that date. Accordingly, all direct revenues and expenses of the Aaron's Business operations have been classified within discontinued operations, net of income tax, within our condensed consolidated statements of earnings for all periods through the separation and distribution date of November 30, 2020. Corporate overhead costs previously reported as expenses of the Aaron’s Business segment did not qualify for classification within discontinued operations and have been classified as expenses within continuing operations for all periods presented through the separation and distribution date of November 30, 2020. The following table summarizes the major classes of line items constituting the earnings (loss) of our Aaron's Business segment, which are included within the loss from discontinued operations, net of income tax, in the condensed consolidated statements of earnings and the operating and investing cash flows of the discontinued operations. Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2020 2020 Revenues $ 430,955 $ 863,788 Operating Profit (Loss) 33,678 (425,042) Earnings (Loss) from Discontinued Operations Before Income Tax 1 32,773 (431,505) Income Tax Expense (Benefit) from Discontinued Operations 23,393 (103,198) Earnings (Loss) from Discontinued Operations, Net of Income Tax $ 9,380 $ (328,307) Cash Flows: Cash Provided by Operating Activities - Discontinued Operations $ 142,582 $ 222,604 Cash Used in Investing Activities - Discontinued Operations $ 7,019 $ 28,703 1 Loss from Discontinued Operations Before Income Tax during the six months ended June 30, 2020 reflects a $446.9 million goodwill impairment loss related to the Aaron's Business segment and $14.1 million related to an early termination fee for a sales and marketing contract. In order to facilitate an effective separation and distribution, the Company entered into several agreements with The Aaron's Company, which govern the nature of the relationship between and responsibilities of the two companies following the separation. For more detailed information concerning the agreements, see Note 2 to the Company's Annual Report for the year ended December 31, 2020. No changes have been made to any of the agreements as of June 30, 2021. Payments and expense reimbursements for transition services were not material during the three and six months ended June 30, 2021 and are not expected to be material in future periods. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | ACQUISITION On June 25, 2021, the Company acquired 100% of the capital stock of Four Technologies, Inc. ("Four") for an estimated purchase price of $23.5 million in cash, inclusive of cash acquired of $0.5 million. The purchase price is subject to a working capital adjustment that will take place 90 days after the acquisition date. Four is an innovative Buy Now, Pay Later company that allows shoppers to pay for merchandise through four interest-free installments. Four’s proprietary platform capabilities and its base of customers and retailers expand PROG Holdings’ ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer fintech offerings. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States. The amounts of revenue and earnings of Four included in our condensed consolidated statements of earnings from the acquisition date of June 25, 2021 through June 30, 2021 were not material to the Company's consolidated financial results. Additionally, the pro forma impacts on the Company's revenues and earnings as if the acquisition occurred on January 1, 2020 were immaterial. Assets acquired and liabilities assumed in connection with the acquisition have been recorded at their fair values. The following table provides the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. (In Thousands) June 25, 2021 Estimated Aggregate Purchase Price $ 23,465 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 530 Loans Receivable 1,030 Property, Plant and Equipment 210 Other Intangibles 5,173 Prepaid Expenses and Other Assets 48 Total Identifiable Assets Acquired 6,991 Accounts Payable and Accrued Expenses (77) Deferred Income Tax Liability (1,275) Total Liabilities Assumed (1,352) Goodwill 17,826 Net Assets Acquired $ 23,465 The intangible assets attributable to the acquisition are comprised of the following: Fair Value Weighted Average Life Acquired technology $ 4,000 5.0 Tradename 587 5.0 Merchant relationships 586 2.0 Total Acquired Intangible Assets 1 $ 5,173 1 Acquired definite-lived intangible assets have a total weighted average life of 4.7 years. The fair value measurements for acquired intangible assets were primarily based on significant unobservable inputs (level 3) developed using company-specific information. Goodwill consists of the excess of the estimated purchase price over the fair value of the net assets acquired and represents the Company's ability to provide a Buy Now, Pay Later product to PROG Holdings' existing base of retailers, merchants, and customers. The value of goodwill is not tax deductible. The values above reflect our preliminary purchase price allocation and may change as we finalize our assessments of the acquired assets and liabilities during the measurement period. Adjustments to the preliminary purchase price allocation may result from working capital adjustments, obtaining additional information to finalize the valuation of intangible assets, and the finalization of our assessment of the tax impacts of the assets and liabilities acquired, including potential acquired net operating loss carryforwards. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | FAIR VALUE MEASUREMENT Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table summarizes financial liabilities measured at fair value on a recurring basis: (In Thousands) June 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ 2,095 $ — $ — $ 1,740 $ — The Company maintains the PROG Holdings, Inc. Deferred Compensation Plan, which is an unfunded, nonqualified deferred compensation plan for a select group of management, highly compensated employees and non-employee directors. The liability is recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets. The liability represents benefits accrued for plan participants and is valued at the quoted market prices of the participants’ investment elections, which consist of equity and debt "mirror" funds. As such, the Company has classified the deferred compensation liability as a Level 2 liability. Financial Assets and Liabilities Not Measured at Fair Value for Which Fair Value is Disclosed Vive's loans receivable are measured at amortized cost, net of an allowance for loan losses on the condensed consolidated balance sheets. In estimating fair value for Vive's loans receivable, the Company utilized a discounted cash flow methodology. The Company used various unobservable inputs reflecting its own assumptions, such as contractual future principal and interest cash flows, future loss rates, and discount rates (which consider current interest rates and are adjusted for credit risk, among other factors). Four's loans receivable on the condensed consolidated balance sheet as of June 30, 2021 approximated fair value based on a discounted cash flow methodology. The following table summarizes the fair value of loans receivable held by Vive and Four: (In Thousands) June 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Loans Receivable, Net $ — $ — $ 149,815 $ — $ — $ 119,895 |
Loans Receivable
Loans Receivable | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Loans Receivable | LOANS RECEIVABLE The following is a summary of the Company’s loans receivable, net: (In Thousands) June 30, 2021 December 31, 2020 Loans Receivable, Gross $ 161,031 $ 131,422 Unamortized Fees (12,825) (10,147) Loans Receivable, Amortized Cost 148,206 121,275 Allowance for Loan Losses (45,151) (42,127) Loans Receivable, Net of Allowances and Unamortized Fees $ 103,055 $ 79,148 The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year: (In Thousands) As of June 30, 2021 2021 2020 2019 2018 2017 Prior Total FICO Score Category: 600 or Less $ 5,920 $ 3,904 $ 1,099 $ 330 $ 53 $ 42 $ 11,348 Between 600 and 700 58,507 38,784 11,377 4,117 2,515 2,028 117,328 700 or Greater 10,149 5,631 1,138 659 409 514 18,500 No Score Identified 1,030 — — — — — 1,030 Total Amortized Cost $ 75,606 $ 48,319 $ 13,614 $ 5,106 $ 2,977 $ 2,584 $ 148,206 Included in the table below is an aging of the loans receivable, gross balance: (Dollar Amounts in Thousands) Aging Category June 30, 2021 December 31, 2020 30-59 days past due 5.0 % 5.7 % 60-89 days past due 2.2 % 2.6 % 90 or more days past due 2.4 % 3.1 % Past due loans receivable 9.6 % 11.4 % Current loans receivable 90.4 % 88.6 % Balance of Credit Card Loans on Nonaccrual Status 1,965 1,962 Balance of Loans Receivable 90 or More Days Past Due and Still Accruing Interest and Fees $ — $ — The tables below present the components of the allowance for loan losses for the three and six months ended June 30, 2021 and 2020: Three Months Ended June 30, (In Thousands) 2021 2020 Beginning Balance $ 44,656 $ 31,594 Provision for Loan Losses 4,388 3,428 Charge-offs (4,766) (5,132) Recoveries 873 803 Ending Balance $ 45,151 $ 30,693 Six Months Ended June 30, (In Thousands) 2021 2020 Beginning Balance $ 42,127 $ 14,911 CECL Transition Adjustment 1 — 9,463 Provision for Loan Losses 10,856 16,150 Charge-offs (9,649) (11,333) Recoveries 1,817 1,502 Ending Balance $ 45,151 $ 30,693 1 Upon the January 1, 2020 adoption of CECL, the Company increased its allowance for loan losses by $9.5 million. The increase was recorded as a cumulative-effect non-cash adjustment of $6.7 million, net of tax, to the opening balance of the Company's 2020 retained earnings. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal and Regulatory Proceedings From time to time, the Company is party to various legal and regulatory proceedings arising in the ordinary course of business. Some of the proceedings to which the Company is currently a party are described below. The Company believes it has meritorious defenses to all of the claims described below, and intends to vigorously defend against the claims. However, these proceedings are still developing and due to the inherent uncertainty in litigation, regulatory and similar adversarial proceedings, there can be no guarantee that the Company will ultimately be successful in these proceedings, or in others to which it is currently a party. Substantial losses from these proceedings or the costs of defending them could have a material adverse impact upon the Company’s business, financial position and results of operations. The Company establishes an accrued liability for legal and regulatory proceedings when it determines that a loss is both probable and the amount of the loss can be reasonably estimated. The Company continually monitors its litigation and regulatory exposure and reviews the adequacy of its legal and regulatory reserves on a quarterly basis. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. As of June 30, 2021 and December 31, 2020, the Company had accrued $0.1 million for pending legal and regulatory matters for which it believes losses are probable and is the Company's best estimate of its exposure to loss. The Company records legal and regulatory liabilities in accounts payable and accrued expenses in the condensed consolidated balance sheets. The Company estimates that the aggregate range of reasonably possible loss in excess of accrued liabilities for such probable loss contingencies is between zero and $0.2 million. At June 30, 2021, the Company estimated that the aggregate range of loss for all material pending legal and regulatory proceedings for which a loss is reasonably possible, but less likely than probable (i.e., excluding the contingencies described in the preceding paragraph), is immaterial. Those matters for which a reasonable estimate is not possible are not included within estimated ranges and, therefore, the estimated ranges do not represent the Company's maximum loss exposure. The Company’s estimates for legal and regulatory accruals, aggregate probable loss amounts and reasonably possible loss amounts, are all subject to the uncertainties and variables described above. Regulatory Inquiries In January 2021, the Company, along with other lease-to-own companies, received a subpoena from the California Department of Financial Protection and Innovation (the “DFPI”) requesting the production of documents regarding the Company’s compliance with state consumer protection laws, including new legislation that went into effect on January 1, 2021. Although the Company believes it is in compliance with all applicable consumer financial laws and regulations in California, this inquiry could lead to an enforcement action and/or a consent order, and substantial costs, including legal fees, fines, penalties, and remediation expenses. While the Company intends to preserve defenses surrounding the jurisdiction of DFPI in this matter, it anticipates cooperating with the DFPI in responding to its inquiry. Litigation Matters In Stein v. Aaron's, Inc., et. al., filed in the United States District Court for the Southern District of New York on February 28, 2020, the plaintiffs allege that from March 2, 2018 through February 19, 2020, the Company made certain misleading public statements about the Company's business, operations, and prospects. The allegations underlying the lawsuit principally relate to the FTC's inquiry into disclosures related to lease-to-own and other financial products offered by the Company through its historical Aaron's Business and Progressive Leasing segments. The Company believes the claims are without merit and intends to vigorously defend against this lawsuit. The case has been transferred to the United States District Court for the Northern District of Georgia, where the Company has filed a motion to dismiss the case and a final briefing on that motion was filed on November 17, 2020. No ruling has been made on the motion to dismiss. Other Contingencies Management regularly assesses the Company’s insurance deductibles, monitors the Company's litigation and regulatory exposure with the Company's attorneys and evaluates its loss experience. The Company also enters into various contracts in the normal course of business that may subject it to risk of financial loss if counterparties fail to perform their contractual obligations. Off-Balance Sheet Risk |
Segments
Segments | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segments | SEGMENTS As of June 30, 2021, the Company has two reportable segments: Progressive Leasing and Vive. As discussed in Note 1 above, the Company spun-off its Aaron's Business segment effective November 30, 2020 through the tax-free distribution of all outstanding common stock of The Aaron's Company, Inc. to the PROG Holdings shareholders. All direct revenues and expenses of the Aaron's Business operations have been classified within discontinued operations, net of income tax, within our consolidated statements of earnings for all periods through the November 30, 2020 separation and distribution date. As discussed in Note 3, on June 25, 2021, the Company completed the acquisition of Four, an innovative Buy Now, Pay Later company that allows shoppers to pay for merchandise through four interest-free installments. Four is not a reportable segment for the six months ended June 30, 2021 as its revenues, loss before income taxes, and assets are not material to the Company's consolidated financial results. Progressive Leasing partners with traditional and e-commerce retailers, primarily in the furniture and appliance, jewelry, mobile phones and accessories, mattresses, and automobile electronics and accessories industries to offer a lease-purchase solution for customers who may not have access to traditional credit-based financing options. It does so by offering leases with monthly, semi-monthly, bi-weekly and weekly payment models. Vive offers a variety of second-look financing programs originated through third-party federally insured banks to customers of participating merchants and, together with Progressive Leasing, allows the Company to provide retail partners with below-prime customers one source for financing and leasing transactions. Disaggregated Revenue The following table presents revenue by source and by segment for the three months ended June 30, 2021 and 2020: Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 (In Thousands) Progressive Leasing Vive Total Progressive Leasing Vive Total Lease Revenues and Fees 1 $ 646,048 $ — $ 646,048 $ 589,749 $ — $ 589,749 Interest and Fees on Loans Receivable 2 — 13,923 13,923 — 9,415 9,415 Total $ 646,048 $ 13,923 $ 659,971 $ 589,749 $ 9,415 $ 599,164 1 Revenue within the scope of ASC 842, Leases . 2 Revenue within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the six months ended June 30, 2021 and 2020: Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 (In Thousands) Progressive Leasing Vive Total Progressive Leasing Vive Total Lease Revenues and Fees 1 $ 1,354,030 $ — $ 1,354,030 $ 1,248,283 $ — $ 1,248,283 Interest and Fees on Loans Receivable 2 — 26,942 26,942 — 19,322 19,322 Total $ 1,354,030 $ 26,942 $ 1,380,972 $ 1,248,283 $ 19,322 $ 1,267,605 1 Revenue within the scope of ASC 842, Leases . 2 Revenue within the scope of ASC 310, Credit Card Interest & Fees . Measurement of Segment Profit or Loss and Segment Assets The Company evaluates performance and allocates resources based on revenues and earnings (loss) before income taxes from operations. The Company determines earnings (loss) before income taxes for all reportable segments in accordance with U.S. GAAP. Interest expense is allocated from the Progressive Leasing segment to the Vive segment based on the balance of outstanding intercompany debt. The Company incurred various corporate overhead expenses for certain executive management, finance, treasury, tax, audit, legal, risk management, and other overhead functions during the three and six months ended June 30, 2021 and 2020. For 2020, the Company allocated a predetermined portion of these corporate overhead costs to the Progressive Leasing and Vive segments, which are reflected as expenses of these segments in calculating the earnings before income taxes for the three and six months ended June 30, 2020. The remaining unallocated corporate expenses represent corporate overhead costs that were previously assigned to the Aaron's Business segment and are in addition to the overhead costs allocated to the Progressive Leasing and Vive segments for the three and six months ended June 30, 2020. These unallocated corporate overhead expenses have been classified as continuing operations since the costs were not directly attributable to the discontinued operations of the Aaron's Business. These costs are reflected below as unallocated corporate expenses in 2020. The allocation of corporate overhead costs to the Progressive Leasing and Vive segments is consistent with how the chief operating decision maker analyzed performance and allocated resources among the segments of the Company during 2020. For 2021, corporate overhead expenses incurred are primarily reflected as expenses of the Progressive Leasing segment and an immaterial amount was allocated to the Vive segment. The following is a summary of earnings before income taxes by segment: Three Months Ended (In Thousands) 2021 2020 Earnings Before Income Taxes: Progressive Leasing $ 87,521 $ 63,113 Vive 4,353 1,626 Unallocated Corporate Expenses — (4,975) Total Earnings Before Income Taxes $ 91,874 $ 59,764 Six Months Ended (In Thousands) 2021 2020 Earnings Before Income Taxes: Progressive Leasing $ 191,693 $ 125,820 Vive 5,777 (5,526) Unallocated Corporate Expenses — (10,705) Total Earnings Before Income Taxes $ 197,470 $ 109,589 The following is a summary of total assets by segment: (In Thousands) June 30, 2021 December 31, 2020 Assets: Progressive Leasing $ 1,268,275 $ 1,209,650 Vive 132,828 107,754 Other 24,817 — Total Assets $ 1,425,920 $ 1,317,404 |
Basis and Summary of Signific_2
Basis and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Description of Business | Description of Business PROG Holdings, Inc. ("we," "our," "us," the "Company", or "PROG Holdings") is a financial technology holding company with two reportable segments: (i) Progressive Leasing, a leading provider of in-store, e-commerce and app-based lease-to-own solutions; and (ii) Vive Financial ("Vive"), which offers omnichannel second-look revolving credit products. Our Progressive Leasing segment provides consumers with lease-purchase solutions through its point-of-sale partner locations and through its e-commerce website partners in the United States (collectively, "POS partners"). It does so by purchasing merchandise from the POS partners desired by customers and, in turn, leasing that merchandise to the customers through a cancellable lease-to-own transaction. Progressive Leasing has no stores of its own, but rather offers lease-purchase solutions to the customers of traditional and e-commerce retailers. Our Vive segment primarily serves customers that may not qualify for traditional prime lending offers who desire to purchase goods and services from participating merchants. Vive offers customized programs, with services that include revolving loans through private label and Vive-branded credit cards. Vive's current network of POS partner locations and e-commerce websites includes furniture, mattresses, home exercise equipment, and home improvement retailers, as well as medical and dental service providers. On June 25, 2021, the Company completed the acquisition of Four Technologies, Inc. ("Four"), an innovative Buy Now, Pay Later company that allows shoppers to pay for merchandise through four interest-free installments. Four’s proprietary platform capabilities and its base of customers and retailers expand PROG Holdings’ ecosystem of financial technology offerings by introducing a payment solution that further diversifies the Company's consumer fintech offerings. Shoppers use Four to purchase furniture, clothing, electronics, health and beauty, footwear, jewelry, and other consumer goods from retailers across the United States. Four is not a reportable segment for the six months ended June 30, 2021 as its revenues, loss before income taxes, and assets are not material to the Company's consolidated financial results. See Note 3 for further discussion on the acquisition. On November 30, 2020, PROG Holdings (previously Aaron's Holdings Company, Inc.) completed the separation of its Aaron's Business segment from its Progressive Leasing and Vive segments. The separation was effected through a tax-free distribution of all outstanding shares of common stock of The Aaron's Company, Inc. ("The Aaron's Company") to the PROG Holdings shareholders of record as of the close of business on November 27, 2020 (referred to as the "separation and distribution transaction"). All direct revenues and expenses of the Aaron's Business are presented as discontinued operations for all periods through the separation and distribution date of November 30, 2020. The cash flows related to the Aaron's Business have not been segregated and are included in the condensed consolidated statements of cash flows for the six months ended June 30, 2020. With the exception of Note 2, the notes to the condensed consolidated financial statements reflect the continuing operations of PROG Holdings. See Note 2 below for additional information regarding discontinued operations. |
Basis of Presentation | Basis of Presentation The preparation of the Company's condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information requires management to make estimates and assumptions that affect the amounts reported in these financial statements and accompanying notes. Actual results could differ from those estimates. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of PROG Holdings, Inc. and its subsidiaries, each of which is wholly-owned. Intercompany balances and transactions between consolidated entities have been eliminated. |
Accounting Policies and Estimates | Accounting Policies and Estimates See Note 1 to the consolidated financial statements in the 2020 Annual Report for an expanded discussion of accounting policies and estimates. |
Earnings (Loss) Per Share | Earnings (Loss) Per ShareEarnings per share is computed by dividing net earnings (loss) by the weighted average number of shares of common stock outstanding during the period. The computation of earnings per share assuming dilution includes the dilutive effect of stock options, restricted stock units ("RSUs"), restricted stock awards ("RSAs") and performance share units ("PSUs") and awards issuable under the Company's employee stock purchase plan ("ESPP") (collectively, "share-based awards") as determined under the treasury stock method. |
Revenue Recognition | Revenue Recognition Lease Revenues and Fees Our Progressive Leasing segment provides merchandise, consisting primarily of furniture, appliances, electronics, jewelry, mobile phones and accessories, mattresses, automobile electronics and accessories, and a variety of other products to its customers for lease under terms agreed to by the customer. Progressive Leasing offers customers of traditional and e-commerce retailers a lease-purchase solution through leases with payment terms that can generally be renewed up to 12 months. Progressive Leasing does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through early buyout options or through payment of all required lease payments. The agreements are cancellable at any time by either party without penalty. Progressive Leasing's lease revenues are earned prior to the lease payment due date and are recorded net of related sales taxes as earned. Payment due date terms include weekly, bi-weekly, semi-monthly and monthly frequencies. Revenue recorded prior to the payment due date results in unbilled receivables recognized in accounts receivable, net of allowances in the accompanying condensed consolidated balance sheets. Progressive Leasing lease revenues are recorded net of a provision for returns and uncollectible renewal payments. All of Progressive Leasing's customer agreements are considered operating leases. It maintains ownership of the lease merchandise until all payment obligations are satisfied under the lease ownership agreements. Initial direct costs related to lease |
Interest and Fees on Loans Receivable | Interest and Fees on Loans Receivable Interest and fees on loans receivable is primarily generated from our Vive segment. Vive extends or declines credit to an applicant through its bank partners based upon the applicant's credit rating and other factors. Qualifying applicants receive a credit card to finance their initial purchase and to use in subsequent purchases at the merchant or other participating merchants for an initial 24-month period, which Vive may renew if the cardholder remains in good standing. Vive acquires the loan receivable from merchants through its third-party bank partners at a discount from the face value of the loan. The discount is comprised of a merchant fee discount and a promotional fee discount, if applicable. The merchant fee discount represents a pre-negotiated, nonrefundable discount that generally ranges from 3% to 25% of the loan face value. The discount is designed to cover the risk of loss related to the portfolio of cardholder charges and Vive's direct origination costs. The merchant fee discount and origination costs are presented net on the condensed consolidated balance sheets in loans receivable. Cardholders generally have an initial 24-month period that the card is active. The merchant fee discount, net of the origination costs, is amortized on a net basis and is recorded as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings on a straight-line basis over the initial 24-month period. The discount from the face value of the loan on the acquisition of the loan receivable from the merchant through the third-party bank partners may also include a promotional fee discount, which generally ranges from 1% to 8%. The promotional fee discount is intended to compensate the holder of the loan receivable (i.e. Vive) for deferred or reduced interest rates that are offered to the cardholder for a specified period on the outstanding loan balance (generally for six six The customer is typically required to make monthly minimum payments of at least 3.5% of the outstanding loan balance, which includes outstanding interest. Fixed and variable interest rates, typically 27% to 35.99%, are compounded daily for cards that do not qualify for deferred or reduced interest promotional periods. Interest income, which is recognized based upon the amount of the loans outstanding, is recognized as interest and fees on loans receivable when earned if collectibility is reasonably assured. For credit cards that provide deferred interest, if the balance is not paid off during the promotional period or if the cardholder defaults, interest is billed to the customers at standard rates and the cumulative amount owed is charged to the cardholder account in the month that the promotional period expires. For credit cards that provide reduced interest, if the balance is not paid off during the promotional period, interest is billed to the cardholder at standard rates in the month that the promotional period expires or when the cardholder defaults. The Company recognizes interest revenue during the promotional period based on its historical experience related to cardholders that fail to pay off balances during the promotional period if collectibility is reasonably assured. Annual fees are charged to cardholders at the commencement of the loan and on each subsequent anniversary date. Annual fees are deferred and recognized into revenue on a straight-line basis over a one-year period. Under the provisions of the credit card agreements, Vive also may assess fees for missed or late payments, which are recognized as revenue in the billing period in which they are assessed if collectibility is reasonably assured. Annual fees and other fees discussed are recognized as interest and fee revenue on loans receivable in the condensed consolidated statements of earnings. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of receivables due from customers of Progressive Leasing and amounted to $57.1 million and $61.3 million, net of allowances, as of June 30, 2021 and December 31, 2020, respectively. |
Lease Merchandise | Lease Merchandise Progressive Leasing's merchandise consists primarily of furniture, appliances, electronics, jewelry, mobile phones and accessories, mattresses, and a variety of other products and is recorded at the lower of depreciated cost or net realizable value. Progressive Leasing depreciates lease merchandise to a 0% salvage value generally over 12 months. Depreciation is accelerated upon early buyout. All of Progressive Leasing's merchandise, net of accumulated depreciation and allowances, represents on-lease merchandise. The Company records a provision for write-offs using the allowance method. The allowance method for lease merchandise write-offs estimates the merchandise losses incurred but not yet identified by management as of the end of the accounting period based on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends including, but not limited to, the potential unfavorable impacts of the COVID-19 pandemic on our business. We believe government stimulus measures in 2020 and the first half of 2021 contributed to the favorable payment trends we experienced following those measures. We believe any additional government stimulus measures may positively influence future payment trends as well. Given the significant uncertainty regarding the impacts of the COVID-19 pandemic on our business, including the existence and/or extent of any future government stimulus measures, a high level of estimation was involved in determining the allowance as of June 30, 2021. Continued strong customer payment activity could result in some portion of the allowance being reversed in future periods, and actual future lease merchandise write-offs could differ materially from the allowance as of June 30, 2021. |
Loans Receivable, Net | Loans Receivable, Net Gross loans receivable primarily represents the principal balances of credit card charges at Vive's participating merchants that remain due from cardholders, plus unpaid interest and fees due from cardholders. The allowance and unamortized fees represent uncollectible amounts; merchant fee discounts, net of capitalized origination costs; promotional fee discounts; and deferred annual card fees. As of June 30, 2021, gross loans receivable also includes outstanding receivables from customers of Four. Economic conditions and loan performance trends are closely monitored to manage and evaluate exposure to credit risk. Trends in delinquency rates are an indicator of credit risk within the loans receivable portfolio, including the migration of loans between delinquency categories over time. Charge-off rates represent another indicator of the potential for future credit losses. The risk in the loans receivable portfolio is correlated with broad economic trends, such as current and projected unemployment rates, stock market volatility, and changes in medium and long-term risk-free rates, which are considered in determining the allowance for loan losses and can have a material effect on credit performance. The Company calculates Vive's allowance for loan losses based on internal historical loss information and incorporates observable and forecasted macroeconomic data over a twelve-month reasonable and supportable forecast period. Incorporating macroeconomic data could have a material impact on the measurement of the allowance to the extent that forecasted data changes significantly, such as higher forecasted unemployment rates and the observed significant market volatility associated with the COVID-19 pandemic. For any periods beyond the twelve-month reasonable and supportable forecast period described above, the Company reverts to using historical loss information on a straight-line basis over a period of six months and utilizes historical loss information for the remaining life of the portfolio. The Company may also consider other qualitative factors in estimating the allowance, as necessary. For the purposes of determining the allowance as of June 30, 2021, management considered other qualitative factors such as the beneficial impact of government stimulus measures to our customer base that were not fully factored into the macroeconomic forecasted data. We believe those stimulus measures have contributed to the recent favorable cardholder payment trends we are experiencing at Vive, and we believe that any additional government stimulus measures may positively influence future cardholder payment trends as well. We also considered the uncertain nature and extent of any future government stimulus programs and the potential impact, if any, these programs may have on the ability of Vive's cardholders to make payments as they come due. The allowance for loan losses is maintained at a level considered appropriate to cover expected future losses of principal, interest and fees on active loans in the loans receivable portfolio. The appropriateness of the allowance is evaluated at each period end. To the extent that actual results differ from estimates of uncollectible loans receivable, including the significant uncertainties caused by the COVID-19 pandemic, the Company's results of operations and liquidity could be materially affected. Vive's delinquent loans receivable includes those that are 30 days or more past due based on their contractual billing dates. In response to the COVID-19 pandemic, the Company has granted affected Vive customers payment deferrals while allowing them to maintain their delinquency status for an additional 30 days per deferral. The Company places Vive's loans receivable on nonaccrual status when they are greater than 90 days past due or upon notification of cardholder bankruptcy, death or fraud. The Company discontinues accruing interest and fees and amortizing merchant fee discounts and promotional fee discounts for Vive's loans receivable in nonaccrual status. Loans receivable are removed from nonaccrual status when cardholder payments resume, the loan becomes 90 days or less past due and collection of the remaining amounts outstanding is deemed probable. Payments received on nonaccrual loans are allocated according to the same payment hierarchy methodology applied to loans that are accruing interest. Loans receivable are charged off no later than the end of the following month after the billing cycle in which the loans receivable become 120 days past due. |
Goodwill | GoodwillGoodwill represents the excess of the purchase price paid over the fair value of the identifiable net tangible and intangible assets acquired in connection with business acquisitions. Progressive Leasing and Four are the only reporting units with goodwill. Impairment occurs when the carrying amount of goodwill is not recoverable from future cash flows. The Company’s goodwill is not amortized but is subject to an impairment test at the reporting unit level annually as of October 1 and more frequently if events or circumstances indicate that an impairment may have occurred. Factors which could necessitate an interim impairment assessment include a sustained decline in the Company’s stock price, prolonged negative industry or economic trends and significant underperformance relative to historical results, projected future operating results, or the Company fails to successfully execute on one or more elements of Progressive Leasing and/or Four's strategic plans. The Company completed its annual goodwill impairment test for Progressive Leasing as of October 1, 2020 and concluded that no impairment had occurred. The Company determined that there were no events or circumstances that occurred during the six months ended June 30, 2021 that would more likely than not reduce the fair value of Progressive Leasing below its carrying amount. |
Fair Value Measurement | Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Level 1—Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2—Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Valuations based on unobservable inputs reflecting the Company's own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. The Company measures a liability related to its non-qualified deferred compensation plan, which represents benefits accrued for plan participants and is valued at the quoted market prices of the participants' investment election, at fair value on a recurring basis. The Company maintains certain financial assets and liabilities that are not measured at fair value but for which fair value is disclosed. The fair values of the Company's other current financial assets and liabilities, including cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to their short-term nature. The fair value of any revolving credit borrowings also approximate their carrying amounts. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pending Adoption In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform: Facilitation of the Effects of Reference Rate Reform on Financial Reporting (Topic 848) (“ASU 2020-04”). The standard provides temporary guidance to ease the potential burden in accounting for reference rate reform primarily resulting from the discontinuation of the London Interbank Overnight ("LIBO") rate or another reference rate expected to be discontinued. Entities may apply the provisions of the new standard as of the beginning of the reporting period when the election is made. The provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to have completed. The Company's Revolving Facility currently references the LIBO rate for determining interest payable on outstanding borrowings. The amendments in ASU 2020-04 are elective and apply to all entities that have contracts referencing the LIBO rate. The new guidance provides an expedient which simplifies accounting analyses under current GAAP for contract modifications if the change is directly related to a change from the LIBO rate to a new interest rate index. The Company is continuing to evaluate the provisions of ASU 2020–04 and the impacts of transitioning to an alternative rate; however, we do not expect it to have a material impact to the Company's consolidated financial statements or to any key terms of our Revolving Facility other than the discontinuation of the LIBO rate. |
Basis and Summary of Signific_3
Basis and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Calculation of Dilutive Stock Awards | The following table shows the calculation of dilutive share-based awards: Three Months Ended Six Months Ended (Shares In Thousands) 2021 2020 2021 2020 Weighted Average Shares Outstanding 67,011 67,097 67,368 66,959 Dilutive Effect of Share-Based Awards 318 426 424 734 Weighted Average Shares Outstanding Assuming Dilution 67,329 67,523 67,792 67,693 |
Accounts Receivable Net of Allowances | The following table shows the components of the accounts receivable allowance: Six Months Ended (In Thousands) 2021 2020 Beginning Balance $ 56,364 $ 65,573 Accounts Written Off, Net of Recoveries (84,163) (142,385) Accounts Receivable Provision 1 76,258 143,630 Ending Balance $ 48,459 $ 66,818 1 Substantially all of the Accounts Receivable Provision is recorded as a reduction of lease revenues and fees within the condensed consolidated statements of earnings (loss). The following is a summary of the Company’s loans receivable, net: (In Thousands) June 30, 2021 December 31, 2020 Loans Receivable, Gross $ 161,031 $ 131,422 Unamortized Fees (12,825) (10,147) Loans Receivable, Amortized Cost 148,206 121,275 Allowance for Loan Losses (45,151) (42,127) Loans Receivable, Net of Allowances and Unamortized Fees $ 103,055 $ 79,148 |
Allowance for Lease Merchandise | The following table shows the components of the allowance for lease merchandise write-offs, which is included within lease merchandise, net in the condensed consolidated balance sheets: Six Months Ended (In Thousands) 2021 2020 Beginning Balance $ 45,992 $ 47,362 Merchandise Written off, Net of Recoveries (50,263) (82,243) Provision for Write-offs 49,898 91,865 Ending Balance $ 45,627 $ 56,984 |
Loan Portfolio Credit Quality Indicators | Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2021 and December 31, 2020 by Fair Isaac and Company (FICO) score as determined at the time of loan origination: FICO Score Category June 30, 2021 December 31, 2020 600 or Less 7.3 % 7.5 % Between 600 and 700 79.3 % 79.3 % 700 or Greater 12.7 % 13.2 % No score identified 0.7 % — % The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year: (In Thousands) As of June 30, 2021 2021 2020 2019 2018 2017 Prior Total FICO Score Category: 600 or Less $ 5,920 $ 3,904 $ 1,099 $ 330 $ 53 $ 42 $ 11,348 Between 600 and 700 58,507 38,784 11,377 4,117 2,515 2,028 117,328 700 or Greater 10,149 5,631 1,138 659 409 514 18,500 No Score Identified 1,030 — — — — — 1,030 Total Amortized Cost $ 75,606 $ 48,319 $ 13,614 $ 5,106 $ 2,977 $ 2,584 $ 148,206 |
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following: (In Thousands) June 30, 2021 December 31, 2020 Prepaid Expenses $ 24,260 $ 23,030 Unamortized Initial Direct Costs on Lease Agreement Originations 5,734 4,986 Prepaid Insurance 1,861 3,639 Other Assets 7,775 7,899 Prepaid Expenses and Other Assets $ 39,630 $ 39,554 |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: (In Thousands) June 30, 2021 December 31, 2020 Accounts Payable $ 9,097 $ 8,630 Accrued Salaries and Benefits 23,926 18,120 Accrued Sales and Personal Property Taxes 12,698 12,933 Income Taxes Payable 32,731 18,183 Other Accrued Expenses and Liabilities 23,589 20,383 Accounts Payable and Accrued Expenses $ 102,041 $ 78,249 |
Schedule of Stockholders Equity | Changes in shareholders' equity for the six months ended June 30, 2021 and 2020 are as follows: Treasury Stock Common Stock Additional Retained Earnings Total Shareholders’ Equity (In Thousands) Shares Amount Balance, December 31, 2020 (23,029) $ (613,881) $ 45,376 $ 318,263 $ 1,236,378 $ 986,136 Stock-Based Compensation — — — 4,163 — 4,163 Reissued Shares 216 3,671 — (8,400) — (4,729) Repurchased Shares (589) (28,102) — — — (28,102) Net Earnings — — — — 79,488 79,488 Balance, March 31, 2021 (23,402) $ (638,312) $ 45,376 $ 314,026 $ 1,315,866 $ 1,036,956 Stock-Based Compensation — — — 3,973 — 3,973 Reissued Shares 61 1,751 — 912 — 2,663 Repurchased Shares (911) (49,094) — — — (49,094) Net Earnings — — — — 68,837 68,837 Balance, June 30, 2021 (24,252) $ (685,655) $ 45,376 $ 318,911 $ 1,384,703 $ 1,063,335 Treasury Stock Common Stock Additional Retained Earnings Accumulated Other Comprehensive Loss Total Shareholders’ Equity (In Thousands, Except Per Share) Shares Amount Balance, December 31, 2019 (24,034) $ (627,940) $ 45,376 $ 290,229 $ 2,029,613 $ (19) $ 1,737,259 Opening Balance Sheet Adjustment - ASU 2016-13, net of taxes — — — — (6,715) — (6,715) Cash Dividends, $0.04 per share — — — — (2,700) — (2,700) Stock-Based Compensation — — — 5,878 — — 5,878 Reissued Shares 368 7,291 — (12,640) — — (5,349) Net Loss — — — — (280,005) — (280,005) Foreign Currency Translation Adjustment — — — — — (1,754) (1,754) Balance, March 31, 2020 (23,666) $ (620,649) $ 45,376 $ 283,467 $ 1,740,193 $ (1,773) $ 1,446,614 Cash Dividends, $0.04 per share — — — — (2,701) — (2,701) Stock-Based Compensation — — — 6,856 — — 6,856 Reissued Shares 53 1,392 — 330 — — 1,722 Net Earnings — — — — 68,377 — 68,377 Foreign Currency Translation Adjustment — — — — — 331 331 Balance, June 30, 2020 (23,613) $ (619,257) $ 45,376 $ 290,653 $ 1,805,869 $ (1,442) $ 1,521,199 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following table summarizes the major classes of line items constituting the earnings (loss) of our Aaron's Business segment, which are included within the loss from discontinued operations, net of income tax, in the condensed consolidated statements of earnings and the operating and investing cash flows of the discontinued operations. Three Months Ended June 30, Six Months Ended June 30, (In Thousands) 2020 2020 Revenues $ 430,955 $ 863,788 Operating Profit (Loss) 33,678 (425,042) Earnings (Loss) from Discontinued Operations Before Income Tax 1 32,773 (431,505) Income Tax Expense (Benefit) from Discontinued Operations 23,393 (103,198) Earnings (Loss) from Discontinued Operations, Net of Income Tax $ 9,380 $ (328,307) Cash Flows: Cash Provided by Operating Activities - Discontinued Operations $ 142,582 $ 222,604 Cash Used in Investing Activities - Discontinued Operations $ 7,019 $ 28,703 1 Loss from Discontinued Operations Before Income Tax during the six months ended June 30, 2020 reflects a $446.9 million goodwill impairment loss related to the Aaron's Business segment and $14.1 million related to an early termination fee for a sales and marketing contract. |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table provides the preliminary estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date. (In Thousands) June 25, 2021 Estimated Aggregate Purchase Price $ 23,465 Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed Cash and Cash Equivalents 530 Loans Receivable 1,030 Property, Plant and Equipment 210 Other Intangibles 5,173 Prepaid Expenses and Other Assets 48 Total Identifiable Assets Acquired 6,991 Accounts Payable and Accrued Expenses (77) Deferred Income Tax Liability (1,275) Total Liabilities Assumed (1,352) Goodwill 17,826 Net Assets Acquired $ 23,465 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The intangible assets attributable to the acquisition are comprised of the following: Fair Value Weighted Average Life Acquired technology $ 4,000 5.0 Tradename 587 5.0 Merchant relationships 586 2.0 Total Acquired Intangible Assets 1 $ 5,173 1 Acquired definite-lived intangible assets have a total weighted average life of 4.7 years. |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table summarizes financial liabilities measured at fair value on a recurring basis: (In Thousands) June 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Deferred Compensation Liability $ — $ 2,095 $ — $ — $ 1,740 $ — |
Fair Value of Assets (Liabilities) Not Measured at Fair Value In Consolidated Balance Sheets | The following table summarizes the fair value of loans receivable held by Vive and Four: (In Thousands) June 30, 2021 December 31, 2020 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Loans Receivable, Net $ — $ — $ 149,815 $ — $ — $ 119,895 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Schedule of the Components of Loans Receivable, Net | The following table shows the components of the accounts receivable allowance: Six Months Ended (In Thousands) 2021 2020 Beginning Balance $ 56,364 $ 65,573 Accounts Written Off, Net of Recoveries (84,163) (142,385) Accounts Receivable Provision 1 76,258 143,630 Ending Balance $ 48,459 $ 66,818 1 Substantially all of the Accounts Receivable Provision is recorded as a reduction of lease revenues and fees within the condensed consolidated statements of earnings (loss). The following is a summary of the Company’s loans receivable, net: (In Thousands) June 30, 2021 December 31, 2020 Loans Receivable, Gross $ 161,031 $ 131,422 Unamortized Fees (12,825) (10,147) Loans Receivable, Amortized Cost 148,206 121,275 Allowance for Loan Losses (45,151) (42,127) Loans Receivable, Net of Allowances and Unamortized Fees $ 103,055 $ 79,148 |
Loan Portfolio Credit Quality Indicators | Below is a summary of the credit quality of the Company's loan portfolio as of June 30, 2021 and December 31, 2020 by Fair Isaac and Company (FICO) score as determined at the time of loan origination: FICO Score Category June 30, 2021 December 31, 2020 600 or Less 7.3 % 7.5 % Between 600 and 700 79.3 % 79.3 % 700 or Greater 12.7 % 13.2 % No score identified 0.7 % — % The table below presents credit quality indicators of the amortized cost of the Company's loans receivable by origination year: (In Thousands) As of June 30, 2021 2021 2020 2019 2018 2017 Prior Total FICO Score Category: 600 or Less $ 5,920 $ 3,904 $ 1,099 $ 330 $ 53 $ 42 $ 11,348 Between 600 and 700 58,507 38,784 11,377 4,117 2,515 2,028 117,328 700 or Greater 10,149 5,631 1,138 659 409 514 18,500 No Score Identified 1,030 — — — — — 1,030 Total Amortized Cost $ 75,606 $ 48,319 $ 13,614 $ 5,106 $ 2,977 $ 2,584 $ 148,206 |
Aging of the Loans Receivable Balance | Included in the table below is an aging of the loans receivable, gross balance: (Dollar Amounts in Thousands) Aging Category June 30, 2021 December 31, 2020 30-59 days past due 5.0 % 5.7 % 60-89 days past due 2.2 % 2.6 % 90 or more days past due 2.4 % 3.1 % Past due loans receivable 9.6 % 11.4 % Current loans receivable 90.4 % 88.6 % Balance of Credit Card Loans on Nonaccrual Status 1,965 1,962 Balance of Loans Receivable 90 or More Days Past Due and Still Accruing Interest and Fees $ — $ — |
Components of the Allowance for Loan Losses | The tables below present the components of the allowance for loan losses for the three and six months ended June 30, 2021 and 2020: Three Months Ended June 30, (In Thousands) 2021 2020 Beginning Balance $ 44,656 $ 31,594 Provision for Loan Losses 4,388 3,428 Charge-offs (4,766) (5,132) Recoveries 873 803 Ending Balance $ 45,151 $ 30,693 Six Months Ended June 30, (In Thousands) 2021 2020 Beginning Balance $ 42,127 $ 14,911 CECL Transition Adjustment 1 — 9,463 Provision for Loan Losses 10,856 16,150 Charge-offs (9,649) (11,333) Recoveries 1,817 1,502 Ending Balance $ 45,151 $ 30,693 1 Upon the January 1, 2020 adoption of CECL, the Company increased its allowance for loan losses by $9.5 million. The increase was recorded as a cumulative-effect non-cash adjustment of $6.7 million, net of tax, to the opening balance of the Company's 2020 retained earnings. |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations | The following table presents revenue by source and by segment for the three months ended June 30, 2021 and 2020: Three Months Ended June 30, 2021 Three Months Ended June 30, 2020 (In Thousands) Progressive Leasing Vive Total Progressive Leasing Vive Total Lease Revenues and Fees 1 $ 646,048 $ — $ 646,048 $ 589,749 $ — $ 589,749 Interest and Fees on Loans Receivable 2 — 13,923 13,923 — 9,415 9,415 Total $ 646,048 $ 13,923 $ 659,971 $ 589,749 $ 9,415 $ 599,164 1 Revenue within the scope of ASC 842, Leases . 2 Revenue within the scope of ASC 310, Credit Card Interest & Fees . The following table presents revenue by source and by segment for the six months ended June 30, 2021 and 2020: Six Months Ended June 30, 2021 Six Months Ended June 30, 2020 (In Thousands) Progressive Leasing Vive Total Progressive Leasing Vive Total Lease Revenues and Fees 1 $ 1,354,030 $ — $ 1,354,030 $ 1,248,283 $ — $ 1,248,283 Interest and Fees on Loans Receivable 2 — 26,942 26,942 — 19,322 19,322 Total $ 1,354,030 $ 26,942 $ 1,380,972 $ 1,248,283 $ 19,322 $ 1,267,605 1 Revenue within the scope of ASC 842, Leases . 2 Revenue within the scope of ASC 310, Credit Card Interest & Fees . Three Months Ended (In Thousands) 2021 2020 Earnings Before Income Taxes: Progressive Leasing $ 87,521 $ 63,113 Vive 4,353 1,626 Unallocated Corporate Expenses — (4,975) Total Earnings Before Income Taxes $ 91,874 $ 59,764 Six Months Ended (In Thousands) 2021 2020 Earnings Before Income Taxes: Progressive Leasing $ 191,693 $ 125,820 Vive 5,777 (5,526) Unallocated Corporate Expenses — (10,705) Total Earnings Before Income Taxes $ 197,470 $ 109,589 The following is a summary of total assets by segment: (In Thousands) June 30, 2021 December 31, 2020 Assets: Progressive Leasing $ 1,268,275 $ 1,209,650 Vive 132,828 107,754 Other 24,817 — Total Assets $ 1,425,920 $ 1,317,404 |
Basis and Summary of Signific_4
Basis and Summary of Significant Accounting Policies - Narrative (Details) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($)shares | Jun. 30, 2020USD ($)shares | Jun. 30, 2021USD ($)segmentshares | Jun. 30, 2020USD ($)shares | Dec. 31, 2020USD ($) | |
Significant Accounting Policies [Line Items] | |||||
Number of operating segments | segment | 2 | ||||
Number of reportable segments | segment | 2 | ||||
Accounts receivable, after allowance for credit loss | $ 57,074 | $ 57,074 | $ 61,254 | ||
Vendor incentives and rebates | $ 5,600 | $ 3,300 | $ 9,600 | $ 6,800 | |
Restricted Stock Units (RSUs) | |||||
Significant Accounting Policies [Line Items] | |||||
Anti-dilutive securities excluded from the computation of earnings per share assuming dilution (in shares) | shares | 379 | 1,429 | 334 | 1,174 | |
Progressive Leasing | |||||
Significant Accounting Policies [Line Items] | |||||
Accounts receivable, after allowance for credit loss | $ 57,100 | $ 57,100 | $ 61,300 | ||
Threshold period past due for write-off of trade accounts receivable | 120 days |
Basis and Summary of Signific_5
Basis and Summary of Significant Accounting Policies - Calculation of Dilutive Stock Awards (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Accounting Policies [Abstract] | ||||
Weighted Average Shares Outstanding (in shares) | 67,011 | 67,097 | 67,368 | 66,959 |
Dilutive Effect of Share-Based Awards (in shares) | 318 | 426 | 424 | 734 |
Weighted Average Shares Outstanding Assuming Dilution (in shares) | 67,329 | 67,523 | 67,792 | 67,693 |
Basis and Summary of Signific_6
Basis and Summary of Significant Accounting Policies - Revenue Recognition Narrative (Details) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Promotional fees percent promotional interest period one | 6 months |
Promotional fees percent promotional interest period two | 12 months |
Promotional fees percent promotional interest period three | 18 months |
Credit Card Loans | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Privilege period | 24 months |
Minimum payment required percentage of outstanding loan balance | 3.50% |
Minimum | Credit Card Loans | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Merchant fee percent | 3.00% |
Promotional fees percent | 1.00% |
Interest rate fixed and variable | 27.00% |
Maximum | Credit Card Loans | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Merchant fee percent | 25.00% |
Promotional fees percent | 8.00% |
Interest rate fixed and variable | 35.99% |
Progressive Finance Holdings, LLC | Agreement One | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Lease agreement period | 12 months |
Basis and Summary of Signific_7
Basis and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | $ 56,364 | $ 65,573 |
Accounts Written Off, Net of Recoveries | (84,163) | (142,385) |
Accounts Receivable Provision | 76,258 | 143,630 |
Ending Balance | $ 48,459 | $ 66,818 |
Basis and Summary of Signific_8
Basis and Summary of Significant Accounting Policies - Lease Merchandise (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Components of the allowance of leases merchandise write-offs: | ||
Beginning Balance | $ 45,992 | $ 47,362 |
Merchandise Written off, Net of Recoveries | (50,263) | (82,243) |
Provision for Write-offs | 49,898 | 91,865 |
Ending Balance | $ 45,627 | $ 56,984 |
Progressive Leasing | ||
Significant Accounting Policies [Line Items] | ||
Lease merchandise salvage value percentage | 0.00% | |
Lease agreement, lease period used as asset useful life | 12 months |
Basis and Summary of Signific_9
Basis and Summary of Significant Accounting Policies - Credit Quality Indicators (Details) | Jun. 30, 2021 | Dec. 31, 2020 |
600 or Less | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing Receivable, Percentage of Loan Portfolio per FICO Score | 7.30% | 7.50% |
Between 600 and 700 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing Receivable, Percentage of Loan Portfolio per FICO Score | 79.30% | 79.30% |
700 or Greater | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing Receivable, Percentage of Loan Portfolio per FICO Score | 12.70% | 13.20% |
No score identified | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Financing Receivable, Percentage of Loan Portfolio per FICO Score | 0.70% | 0.00% |
Basis and Summary of Signifi_10
Basis and Summary of Significant Accounting Policies - Components of Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Prepaid Expenses | $ 24,260 | $ 23,030 |
Unamortized Initial Direct Costs on Lease Agreement Originations | 5,734 | 4,986 |
Prepaid Insurance | 1,861 | 3,639 |
Other Assets | 7,775 | 7,899 |
Prepaid Expenses and Other Assets | $ 39,630 | $ 39,554 |
Basis and Summary of Signifi_11
Basis and Summary of Significant Accounting Policies - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Accounts Payable | $ 9,097 | $ 8,630 |
Accrued Salaries and Benefits | 23,926 | 18,120 |
Accrued Sales and Personal Property Taxes | 12,698 | 12,933 |
Income Taxes Payable | 32,731 | 18,183 |
Other Accrued Expenses and Liabilities | 23,589 | 20,383 |
Accounts Payable and Accrued Expenses | $ 102,041 | $ 78,249 |
Basis and Summary of Signifi_12
Basis and Summary of Significant Accounting Policies - Debt (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2021 | Nov. 24, 2020 | |
Debt Instrument [Line Items] | ||
Proceeds from lines of credit | $ 300,000,000 | |
Revolving Credit Facility | Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of credit, maximum borrowing capacity | $ 50,000,000 | $ 350,000,000 |
Basis and Summary of Signifi_13
Basis and Summary of Significant Accounting Policies - Statements of Stockholders' Equity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | $ 1,036,956 | $ 986,136 | $ 1,446,614 | $ 1,737,259 | $ 986,136 | $ 1,737,259 | |
Cash Dividends | (2,701) | (2,700) | |||||
Stock-Based Compensation | 3,973 | 4,163 | 6,856 | 5,878 | |||
Reissued Shares | 2,663 | (4,729) | 1,722 | (5,349) | |||
Repurchased Shares | (49,094) | (28,102) | |||||
Net Earnings (Loss) | 68,837 | 79,488 | 68,377 | (280,005) | 148,325 | (211,628) | |
Foreign Currency Translation Adjustment | 0 | 331 | (1,754) | 0 | (1,423) | ||
Ending Balance | $ 1,063,335 | $ 1,036,956 | $ 1,521,199 | $ 1,446,614 | $ 1,063,335 | 1,521,199 | $ 1,737,259 |
Accounting Standards Update [Extensible Enumeration] | us-gaap:AccountingStandardsUpdate201613Member | ||||||
Dividends, per share (in dollars per share) | $ 0.04 | $ 0.04 | |||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | $ (6,715) | $ (6,715) | |||||
Ending Balance | $ (6,715) | ||||||
Treasury Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance (in shares) | (23,402) | (23,029) | (23,666) | (24,034) | (23,029) | (24,034) | |
Beginning Balance | $ (638,312) | $ (613,881) | $ (620,649) | $ (627,940) | $ (613,881) | $ (627,940) | |
Reissued Shares (in shares) | 61 | 216 | 53 | 368 | |||
Reissued Shares | $ 1,751 | $ 3,671 | $ 1,392 | $ 7,291 | |||
Repurchased Shares (in shares) | (911) | (589) | |||||
Repurchased Shares | $ (49,094) | $ (28,102) | |||||
Ending Balance (in shares) | (24,252) | (23,402) | (23,613) | (23,666) | (24,252) | (23,613) | (24,034) |
Ending Balance | $ (685,655) | $ (638,312) | $ (619,257) | $ (620,649) | $ (685,655) | $ (619,257) | $ (627,940) |
Common Stock | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | |
Ending Balance | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 | 45,376 |
Additional Paid-in Capital | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | 314,026 | 318,263 | 283,467 | 290,229 | 318,263 | 290,229 | |
Stock-Based Compensation | 3,973 | 4,163 | 6,856 | 5,878 | |||
Reissued Shares | 912 | (8,400) | 330 | (12,640) | |||
Ending Balance | 318,911 | 314,026 | 290,653 | 283,467 | 318,911 | 290,653 | 290,229 |
Retained Earnings | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | 1,315,866 | 1,236,378 | 1,740,193 | 2,029,613 | 1,236,378 | 2,029,613 | |
Cash Dividends | (2,701) | (2,700) | |||||
Net Earnings (Loss) | 68,837 | 79,488 | 68,377 | (280,005) | |||
Ending Balance | $ 1,384,703 | $ 1,315,866 | 1,805,869 | 1,740,193 | $ 1,384,703 | 1,805,869 | 2,029,613 |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | (6,715) | (6,715) | |||||
Ending Balance | (6,715) | ||||||
Accumulated Other Comprehensive Loss | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Beginning Balance | (1,773) | (19) | (19) | ||||
Foreign Currency Translation Adjustment | 331 | (1,754) | |||||
Ending Balance | $ (1,442) | $ (1,773) | $ (1,442) | $ (19) |
Basis and Summary of Signifi_14
Basis and Summary of Significant Accounting Policies - Stock-based Compensation (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | Jun. 30, 2021 | |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued in period | shares | 267,503 | |
Weighted average fair value price per share (in dollars per share) | $ / shares | $ 48.88 | |
Restricted Stock | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Award requisite service period | 1 year | |
Restricted Stock | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Award requisite service period | 3 years | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares issued in period | shares | 421,318 | |
Weighted average fair value price per share (in dollars per share) | $ / shares | $ 49.36 | |
Performance Shares | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Payout percentage | 0 | |
Performance Shares | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Performance Shares | Maximum | Share-based Payment Arrangement, Tranche One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout percentage | 1 | |
Performance Shares | Maximum | Share-based Payment Arrangement, Tranche Two | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout percentage | 2 | |
Performance Shares | Maximum | Share-based Payment Arrangement, Tranche Three | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Payout percentage | 2.60 |
Discontinued Operations - Conso
Discontinued Operations - Consolidated Statements of Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Earnings (Loss) from Discontinued Operations, Net of Income Tax | $ 0 | $ 9,380 | $ 0 | $ (328,307) |
Aaron's Business | ||||
Cash Flows: | ||||
Impairment of goodwill | 446,900 | |||
Early termination fee | 14,100 | |||
Discontinued Operations | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||
Revenues | 430,955 | 863,788 | ||
Operating Profit (Loss) | 33,678 | (425,042) | ||
Earnings (Loss) from Discontinued Operations Before Income Tax | 32,773 | (431,505) | ||
Income Tax Expense (Benefit) from Discontinued Operations | 23,393 | (103,198) | ||
Earnings (Loss) from Discontinued Operations, Net of Income Tax | 9,380 | (328,307) | ||
Cash Flows: | ||||
Cash Provided by Operating Activities - Discontinued Operations | 142,582 | 222,604 | ||
Cash Used in Investing Activities - Discontinued Operations | $ 7,019 | $ 28,703 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) - Four - USD ($) $ in Thousands | Jun. 25, 2021 | Jun. 30, 2021 |
Business Acquisition [Line Items] | ||
Percentage of voting interests acquired | 100.00% | |
Purchase price | $ 23,465 | |
Cash acquired from acquisition | $ 500 | |
Acquisition-related costs | $ 600 |
Acquisition - Identifiable Asse
Acquisition - Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 25, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed | |||
Goodwill | $ 306,627 | $ 288,801 | |
Four | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 23,465 | ||
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed | |||
Cash and Cash Equivalents | 530 | ||
Loans Receivable | 1,030 | ||
Property, Plant and Equipment | 210 | ||
Other Intangibles | 5,173 | ||
Prepaid Expenses and Other Assets | 48 | ||
Total Identifiable Assets Acquired | 6,991 | ||
Accounts Payable and Accrued Expenses | (77) | ||
Deferred Income Tax Liability | (1,275) | ||
Total Liabilities Assumed | (1,352) | ||
Goodwill | 17,826 | ||
Net Assets Acquired | $ 23,465 |
Acquisition - Intangibles Acqui
Acquisition - Intangibles Acquired (Details) - Four $ in Thousands | Jun. 25, 2021USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, Fair Value | $ 5,173 |
Weighted Average Life (in years) | 4 years 8 months 12 days |
Acquired technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, Fair Value | $ 4,000 |
Weighted Average Life (in years) | 5 years |
Tradename | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, Fair Value | $ 587 |
Weighted Average Life (in years) | 5 years |
Merchant relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, Fair Value | $ 586 |
Weighted Average Life (in years) | 2 years |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair value on a recurring basis - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Liability | 2,095 | 1,740 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred Compensation Liability | $ 0 | $ 0 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value for Loan Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans Receivable, Net | $ 0 | $ 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans Receivable, Net | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans Receivable, Net | $ 149,815 | $ 119,895 |
Loans Receivable - Components o
Loans Receivable - Components of Loans Receivable, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||||||
Loans Receivable, Gross | $ 161,031 | $ 131,422 | ||||
Unamortized Fees | (12,825) | (10,147) | ||||
Loans Receivable, Amortized Cost | 148,206 | 121,275 | ||||
Allowance for Loan Losses | (45,151) | $ (44,656) | (42,127) | $ (30,693) | $ (31,594) | $ (14,911) |
Loans Receivable, Net of Allowances and Unamortized Fees | $ 103,055 | $ 79,148 |
Loans Receivable - Credit Quali
Loans Receivable - Credit Quality (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2021 | $ 75,606 | |
2020 | 48,319 | |
2019 | 13,614 | |
2018 | 5,106 | |
2017 | 2,977 | |
Prior | 2,584 | |
Loans Receivable, Amortized Cost | 148,206 | $ 121,275 |
600 or Less | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2021 | 5,920 | |
2020 | 3,904 | |
2019 | 1,099 | |
2018 | 330 | |
2017 | 53 | |
Prior | 42 | |
Loans Receivable, Amortized Cost | 11,348 | |
Between 600 and 700 | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2021 | 58,507 | |
2020 | 38,784 | |
2019 | 11,377 | |
2018 | 4,117 | |
2017 | 2,515 | |
Prior | 2,028 | |
Loans Receivable, Amortized Cost | 117,328 | |
700 or Greater | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2021 | 10,149 | |
2020 | 5,631 | |
2019 | 1,138 | |
2018 | 659 | |
2017 | 409 | |
Prior | 514 | |
Loans Receivable, Amortized Cost | 18,500 | |
No score identified | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2021 | 1,030 | |
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
Prior | 0 | |
Loans Receivable, Amortized Cost | $ 1,030 |
Loans Receivable - Aging of the
Loans Receivable - Aging of the Loans Receivable Balance (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 9.60% | 11.40% |
Current loans receivable | 90.40% | 88.60% |
Balance of Credit Card Loans on Nonaccrual Status | $ 1,965 | $ 1,962 |
30-59 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 5.00% | 5.70% |
60-89 days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 2.20% | 2.60% |
90 or more days past due | ||
Financing Receivable, Past Due [Line Items] | ||
Past due loans receivable | 2.40% | 3.10% |
Balance of Loans Receivable 90 or More Days Past Due and Still Accruing Interest and Fees | $ 0 | $ 0 |
Loans Receivable - Components_2
Loans Receivable - Components of the Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Components of the Allowance For Loan Losses: | ||||||||
Beginning Balance | $ 44,656 | $ 31,594 | $ 42,127 | $ 14,911 | ||||
Provision for Loan Losses | 4,388 | 3,428 | 10,856 | 16,150 | ||||
Charge-offs | (4,766) | (5,132) | (9,649) | (11,333) | ||||
Recoveries | 873 | 803 | 1,817 | 1,502 | ||||
Ending Balance | 45,151 | 30,693 | 45,151 | 30,693 | ||||
Increase (decrease) to stockholders' equity attributable to parent | 1,063,335 | 1,521,199 | 1,063,335 | 1,521,199 | $ 1,036,956 | $ 986,136 | $ 1,446,614 | $ 1,737,259 |
Retained Earnings | ||||||||
Components of the Allowance For Loan Losses: | ||||||||
Increase (decrease) to stockholders' equity attributable to parent | $ 1,384,703 | $ 1,805,869 | 1,384,703 | 1,805,869 | $ 1,315,866 | $ 1,236,378 | $ 1,740,193 | 2,029,613 |
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Components of the Allowance For Loan Losses: | ||||||||
Beginning Balance | $ 0 | $ 9,463 | ||||||
Increase (decrease) to stockholders' equity attributable to parent | (6,715) | |||||||
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||||||
Components of the Allowance For Loan Losses: | ||||||||
Increase (decrease) to stockholders' equity attributable to parent | $ (6,715) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Other Commitments [Line Items] | ||
Loss contingency accrual | $ 0.1 | $ 0.1 |
Unused credit card lines | ||
Other Commitments [Line Items] | ||
Remaining credit available | 393.4 | $ 287.3 |
Minimum | ||
Other Commitments [Line Items] | ||
Range of possible loss not accrued | 0 | |
Maximum | ||
Other Commitments [Line Items] | ||
Range of possible loss not accrued | $ 0.2 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segments - Revenue by Source an
Segments - Revenue by Source and Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 659,971 | $ 599,164 | $ 1,380,972 | $ 1,267,605 |
Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 646,048 | 589,749 | 1,354,030 | 1,248,283 |
Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 13,923 | 9,415 | 26,942 | 19,322 |
Lease Revenues and Fees | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 646,048 | 589,749 | 1,354,030 | 1,248,283 |
Lease Revenues and Fees | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 646,048 | 589,749 | 1,354,030 | 1,248,283 |
Lease Revenues and Fees | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Interest and Fees on Loans Receivable | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 13,923 | 9,415 | 26,942 | 19,322 |
Interest and Fees on Loans Receivable | Progressive Leasing | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Interest and Fees on Loans Receivable | Vive | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 13,923 | $ 9,415 | $ 26,942 | $ 19,322 |
Segments - Information on Segme
Segments - Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||||
Total Earnings Before Income Taxes | $ 91,874 | $ 59,764 | $ 197,470 | $ 109,589 | |
Total Assets | 1,425,920 | 1,425,920 | $ 1,317,404 | ||
Operating Segments | Progressive Leasing | |||||
Segment Reporting Information [Line Items] | |||||
Total Earnings Before Income Taxes | 87,521 | 63,113 | 191,693 | 125,820 | |
Total Assets | 1,268,275 | 1,268,275 | 1,209,650 | ||
Operating Segments | Vive | |||||
Segment Reporting Information [Line Items] | |||||
Total Earnings Before Income Taxes | 4,353 | 1,626 | 5,777 | (5,526) | |
Total Assets | 132,828 | 132,828 | 107,754 | ||
Unallocated Corporate Expenses | |||||
Segment Reporting Information [Line Items] | |||||
Total Earnings Before Income Taxes | 0 | $ (4,975) | 0 | $ (10,705) | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Total Assets | $ 24,817 | $ 24,817 | $ 0 |