AAN - Earnings call transcript Q4 2017

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Operator

Good morning. Welcome to the Aaron's, Inc. Fourth Quarter and Year Ended 2017 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. Participating this morning are John Robinson, Aaron's, Inc. Woodley, Sales Progressive Steve and Inc. Ryan President Douglas Michaels, CEO; Aaron's of Lease and CEO Leasing; of Lindsay, Aaron's, President Ownership; and and CFO Strategic of President Operations.

of to Wall, would Treasury. introduce I Relations and like Vice Now, President Finance, Investor Kelly

You may proceed.

Kelly Wall

morning, including and to Welcome on the the and release Form Aaron’s X-K good to released today. QX our which for XXXX available quarter with there the results, be Thank Relations were call results, as and All discuss website, everyone. webcast you, this conference fourth archived Investor related are fiscal replay material, for company’s well. earnings investor.aarons.com will

Before investors historical about the Except remind discussed for I’ll information, statement. are results the these Safe statements. today discussed, Harbor matters forward-looking are

uncertainties, and certain description which from XXXX our December results to risks several and could differ. differ the XX-K ended SEC result statement. involve a may they predicted for filings such, those of Please actual cause materially XX, actual risks subsequent Aaron’s that to in forward-looking see year cause the As for

update Forward-looking and today initiatives and release the to statement any in for business forward-looking undertake forward-looking such projected on results the to in listed business including matters strategy include place periods, regarding for discussed emphasis obligation statements Aaron’s may Progressive’s future transformation our Listeners Aaron’s Aaron’s our statements. expectations published that earnings disclaimer are press those other today. be undue not we cautioned statements, no the and

which measures included call our with I adjusted referring now earnings and with reconciliation in items, may the CEO, EPS, performance including the EBITDA, earnings detailed adjusted other are also certain of turn the non-GAAP Robinson. comparability companies. During Aaron’s release. measures, call, been will These to have non-GAAP John will over non-GAAP our tables to affect certain financial be non-GAAP we which net for

John Robinson

significant of our year significant improvement you EBITDA, Aaron's non-GAAP strong outstanding exceptional at all margin of from in an and Aaron's. our a the by Aaron's thank congratulate the diluted would completed to teams for fourth In us across the our today. associates business. Douglas delivered Kelly, EPS, Lindsay growth record of Thanks, a Progressive Woodley full achievement for with XXXX, led results. quarter for and profit and diluted joining year. The We had EPS like Progressive business Ryan these at and businesses I for revenues, outstanding finish

business. continuing made XXXX In we will innovation. important support addition we as Progressive market strengthened leader a by excellent our in position that to these financial the believe results, investments its growth of strategic drive long-term to

We find are have to continue partners, more associates customers to high very merchandise ways together to before. talented fortunate who quality to retail and than ever provide access to

In margin, we're talent technology, and to invest and we EBITDA to revenues. despite aggressively we to Given expansion which market to investments. Progressive's the a leading our in and unserved In margin to improvement invest contributed significant ticket the average benefits growth opportunity, continue we maintain these XXXX, saw of lease and declining in Aaron's market business, continue in reap meaningful position. beginning business competitive rate the

addition, business In the going about forward. are leading optimistic increasingly positive, expectations of which gives many us our indicators

and of XXXX. business revenue execution As many metrics. the to high of proud the a of portfolio reminder, nature these for in I'm level teams due the tremendously of growth dedication, lags their

and to Among our across of pilot and more of operating in continue position. continued additional efficiency from technology, can The benefit by our customers year the we Steve and reform opportunity and increasing We sales debt our believe business, XXth the growth revenue XXXX. dividend allowing build to in encouraged support continue tax a building making million December believe to while with will we that At a from to is of drive accelerate we're improving we're to partners. drive to by other and Aaron's moving and And our of federal compliance. repurchasing retail And capital overall and use invest same to revenue partner to as support businesses XXXX, we're in making investments speed but position. capitalized. strong further our be of increasing and we’re these and we we're ease our momentum. additional forward The scale at history is decisioning number returning the model. consecutive our omni-channel enhancements accelerate business programs the retail both for we In Progressive, our improve competitive positive detail in believe second seeing associates, we on conservatively Looking areas the to the our has earnings with clear market traction dollars, more growth. pleased long-term in that the us We're forward for into to implications shares the we're we're profit for platform XXXX are and our stock. scaled initiatives results remaining the we initial the our that by million potential will Aaron's capture shareholders have time nearly for for investments continues goal operating investments, outline strategy our capital X $XXX of significant, half organization. reduced passed our

and this in to added increasing first technology. forward, to to our and continues organization talent We business. be significant Going of value the the invest XXXX long-term continue in priority people we’ll

on As opportunistic prior that and remain and acquisitions we can support innovation capital to stated growth. regarding us conservative allow other calls structure a will investments that strongly we believe have

when $XXX return million share intend to that. to shareholders we evidence Finally of new appropriate are today excess authorization through dividends and cash repurchases. repurchase The announced market is conditions

it to Ryan Now over turn Progressive. discuss I'll

Ryan Woodley

quarter growth in Thank XXXX and last revenue year same strongest off fourth the you, EBITDA John. in Progressive increase our an quarter a year. excellent capped XX% over the with delivering

trends are ago active the per being about and Progressive to as business from seeing as of with The successfully The our door completed growth XX% well We’re versus third That’s dynamics revenues supporting rose experienced how pleased doors that period. we’re across XX%. is Invoice in acceleration active doors a gains increased encouraging. the team Total lease the XX,XXX executing. approximately number balanced quarter. the regional in the a on boarded. as quarter new We excited doors sharp increased XX% national accounts. these with are year

compared quarter. combination a improved percent approval The in despite prudent. significant modestly, business. rose making million we the amounts increase, was the realized with revenues expenses a of quarter a Our bad increase year, average in lease operating of taking to in approval a debt ticket SG&A expense as in versus fourth to as product X.X% in revenues the year and were of declined driven slightly the X.X% we’re of investments quarter, year by $XX steps $XX mix ago. XX.X% prior revenues million EBITDA versus ago, Write-offs leverage were rate the XX.X%

within to revenue historically goal profitability. look for we As parameters growth XXXX, maximize outlined our the is and have we to EBITDA

proven the a strong we growth as year our XXXX. in large pursuit Our assumes support has we effective, the for people expect saw is what evidenced in this to systems strategy this believe we unserved of investment by XXXX and market. and growth Today, significant continued plan in

to we enabling these margin in of us further to In us to will investments operating believe future as this allow expansion continue strong we growth, efficiency. rate years, generate drive addition

and of dollars We of to to the decisioning debt data Additionally continue XXXX have for and XXXX of to driving investments ongoing Advanced additional XX% we expected XX% our range more be but as to enhance data of and XX%. annual our allowing result by pools. provide progressive, will portfolio. finished to good our decisioning, predictive with range range and annual higher of our life XX% optimized across visibility margin improvement is the annual our to processes to write-offs metrics in bad of expect X%. revenue. we've lease our the months continuing relatively within Likewise, previously that a X% within scale, mix believe lease to enabled seven remain into retail the of invoice profit aided of of the for a science while short shift us in This access increased still us remain partners decisioning a expense to capital XX.X% increase, provided though application within expect and we performance continued average algorithms, EBITDA more are further

better position profitability. strong rising turn business to comments robust in several growth our results contribute further from and Dent-A-Med among Douglas key objectives beyond. to seeing achieved as optimistic we're business future operational growth These the that optimization, a over the continued believe well across to quarter the addition XXXX others I'll many also as and factors the application we business. In for Aaron's pipeline. solid expectations on and to for now it for delivered the opportunity

Douglas Lindsay

business Thanks Ryan. in The EBITDA quarter an with revenues, and adjusted fourth EBITDA strong margin. a dollars lease had increase adjusted Aaron's

the for the solid We transformation business initiatives increasingly expectations optimistic. have momentum our in and are

of the portfolio that our a a impact Improvements up level three benefited ticket Same-store increased is quarter the average a trends to at continued we’ve were Lease in XX mix results. an third franchisees during XXXX holiday all X.X% and We collections closed and margin in product fourth consolidated Our We over was the size, revenues as retention At solid quarter pricing slight lease stores average its end, season as closures. favorable the well performing emerged performance. sales in lease customer acquisition quarter. store Black contributed the initiatives. size our quarter. and overall. positive Friday had in strong declined The rates recent of from more great XXXX ticket slightly and improvement in or delivered the additional a highest offset years.

portfolio. we trends store leading on consecutive lease improving to as The four and per of drive expect value we’re believe portfolio important was Adjusted quarters, to now lower leases higher basis points initiatives return. churning year-ago by primarily is focused lease that Our driven them The a indicator improved we XXX quality customer improving with the an X.X%. margin replacing profitability. is which gain quarter versus for for improved delivery EBITDA have out leases our a

and Merchandise due benefited reduced costs close/merge Overall, and we adoption better enter X.X% platform. our favorable payment pay the optimism XXXX. leading our In made of to in to start are the addition, business as a of indicators execution were from off half our XXXX with two-year ago as continue quarter, of the strategy. the number compared is we streamline continued and write-offs building a as X.X% recurring our year we operational to we in second in the operating quarter investments

business, the in While we on efficiency continue encouraged number focus to by to generate a initiatives growth. we’re revenue more driving of

make in experience, Aaron’s. improve we’re process product of strategy. omni-channel the site The of our easier products faster our our site, replatforming increase example, lease selection customer and For it component e-commerce at a should key and to new

We things, continue a among the decisioning to see and conversion and on growth driving we’re healthy is aarons.com, channel. profit better in traffic doing at site job other which

also to and rapid we labor enable our our decisioning further us times to model. out transaction process, expect which We’re rolling onboarding lease in stores, further optimize the decrease streamline

investments to pay Our merchandising are starting in off.

that team the in that are by to drive in not Merchandising designed experience have initiatives inventory cost the in their Chief a top new to and to There opportunity we XXXX launched believe serve. transformation start reduce with are the number we markets Olsen more initiatives testing a customer drive more of early significant line improve pleased assortment, future. strategies value team growth, led our more value and stages, We're in expect other be of diverse potential deliver about that Officer, to to I beyond. excited serve. optimization could relevant the number a and Our which we product Steve

you the for As we on to financials. continue look on turn Steve an invest it progress. we to initiatives, to our now these forward in update over updating I'll

Steve Michaels

in and $X.XXX and on basis for versus basis in in earnings non-GAAP quarter was Tax basis to XXXX billion, the with XXXX Jobs for a Revenues non-GAAP in signed were fourth net favorable and Tax XX the the diluted ago. quarter the was $X.XX for and year Diluted earnings earnings a XX, December XXXX non-GAAP were were $XX.X the fourth $X.XX $X.XX quarter dilution up quarter $X.XX months million EPS $XXX.X generated a year. and of in the months increase for Douglas. At of $XXX.X million XXXX. to for $XXX XXXX. XX.X% for year same driven year. of was $X.XX. and $XX of for a the was of $XXX.X the that December the was period cash period were compared share EBITDA the a and million $XXX non-GAAP quarter million to impact million months is XX $XX of in per basis X.X% million months the company XX year million ago. this fourth earnings Cuts $XXX.X were quarter same up a of compared respectively million compared months Non-GAAP for adjusted period XX XXXX. EPS cash in XX Act were company ago. the Act. $XXX.X Earnings was XX to million end fourth the $X.XX were for hand last the in XX for to $X.XX of over from compared dilution revenues, Net XXXX, And non-GAAP of period for year year. $X.XX which per exclude XXXX and at Earnings on were XX the and the quarter prior XXXX. million versus for by months favorably Adjusted Earnings EPS XXXX $XXX.X XX.X%. last $XX.X had fourth $XX.X the Thanks XX fourth in $XX.X for progressive by The in million the on the fourth activities in versus million in million same operating EPS on into for the Net $XXX.X million compared the Net months earnings the million EBITDA impacted $XXX.X XXXX. for for we're Cash of months XXXX. basis of assuming the a Adjusted XXXX quarter million was XX, XXXX. through months diluted December on share the a same fourth law XXXX the the the assuming on ended Net year

credit net XX.X%, at year, by million, and had outstanding on reduced the $XXX balance our debt-to-EBTIDA debt total our of a debt December, end one million we of facility. capitalization we no of the During times total to and ratio revolving $XXX

Tax has the benefited recently John earlier, stated company As our from passed Reform Act.

the are lease was under by The federal in purchases acquired of tax September expensing XXXX. eligible an the tax overpayment depreciation reduction federal for expense XXXX the after to The our merchandise new addition accelerated immediate after tax In in XXXX September liability. statutory assets law. rate, resulted merchandise our generated purchases for purposes XX, XX, applicable to

$XXX our XXXX. receive rate deferred offset expect slightly million was million the approximately and first tax refund the by recorded benefit by new of $XX for filed have lower to at of other QX liability, We driven approximately tax in credits. of $XXX per half XXXX revaluation XXXX or a the million provisional loss of share $X.XX The the in tax tax

we $XX.X XXX,XXX repurchased fourth of of in stock year, the million. XXXX quarter the shares common million. X,XXX,XXX shares were $XX.X for During for repurchased

to currently morning, program customer company following diluted in we of share authorization diluted $X.XX. range million range to per earnings the ago. basis, common XXX X.X% has revenues share adjusted the XXXX, up billion in our share repurchase December XX, board at EBITDA $X.XX Non-GAAP account As with per X,XXX,XXX million, year the billion, year $XXX $X.XX a of GAAP of earnings the $XXX repurchase XXXX; $X.XX up expects $X.XX to our in of replaced a share consolidated above guidance of expenditures million to On $X.XX Consolidated million. fiscal range program. to for EPS announced repurchases any new The of not $XX to authorized existing million capital the achieve $XX to stock. million from does and assume this repurchase a the under newly $XXX X,XXX,XXX to approximately increased to

sheet, balance the we be $XX in in of all XXXX million of the the will debt of scheduled first for amortization As year. which half have paid

not providing for annual a years. cash three since tax of have give and While practice next the guidance impact over the to multi-year of giving we sense Act you multi-year the estimates projections Tax we wanted visibility, provided a our

benefit said, tax in lower million million we by primary merchandise. cash the expensing have tax of range to expensing. previous we estimate cash versus the driver federal of we statutory point, timing rate, will $XXX tax a As us a law lease $XXX the total driven temporary the is immediate timing differences three-year of immediate benefit from our but for this At of

range is rate to on tax over With the move Our XX estimated Tax John to Act were we it passed, expected range I’ll rate to that, the XXXX XXXX the XX.X%. for a And tax of to not before XX% expecting XX.X%. been back in turn be of in Q&A. previously to we

John Robinson

with continued the very progress the performance in Steve. you, to delivered Thank business the financial pleased momentum Aaron's we're of making transform record further We're proud and XXXX. the team and Progressive's

and make have appreciate organization, a to the Q&A. to operator and and strategy value our want by turn proposition that we the that, our We it Aaron's sheet best success. I to We associates, partners With do thanking value franchisees increase will the your talent for for the call your the customers. retail to deliver the such believe all commitment to all I'll of a efforts of a in balance you close company. strong great well-defined long-term

Operator

go question of first Please will Baugh The Instructions] ahead. [Operator John Stifel. come from

John Baugh

strong a on quarter. fourth Congrats

other you largest your Douglas, franchisee talked core And just leading And margin are are to might well? will you curious I'm acquisition I way, of sense margin up less of are that? there about Thank improvement metrics as as I’m is you. whether indicating and indicators, influenced it you like like positive. that I’m think, curious quite there bad trends one comps sounds it the then, any you separate Douglas, as what of them how with looking deliveries traffic? the that start into. to is then, are was if of trending. know heard at us if you or ticket traffic Let's and delved could a I outside I the looks be favorable? give to numbers wondering and But

Douglas Lindsay

our the really but we're meeting separately as integrated acquisition as excited well we’re profit are going integration taken Dave is fact that disclosing the which additional fully organization some for quarter, SCI, and Dave within it’s far as not and So and of the of has that expectations a about. Edwards matter responsibility team on

So, full fully into guidance. and also and that track that on built year is was QX our

our up really there average strategy and in are then the indicators, positive to and are doing job, our strategy, metrics what talking good we're Steve our a leading the mentioned we're in size, ticket also I and Those is into deliveries. I we as And carrying indicators, are combination trade profitability as his improvement higher of and mix over a which the team business. the about ticket everything So the when about our driving know putting terms Olsen, great you leading merchandising and and both margin are average portfolio. size. talk mentioned of is trends

of in improvement exactly trends well. I and trends traffic we're say In the so deliveries of sort our traffic terms with seeing would traffic, as

John Baugh

slightly the those guess comments if debt heard decisioning. the I over bad the wondering you within ranges I Progressive. and higher, you mix and I'm but to and mentioned a trending aggressive that on terms that? of provision? more offs Jumping are could your ranges way write guess about different in on of is, are all doing a Thank to comment, basis I performance invoices that the like-for-like you. and of ask both is what question charge-offs a driver the of Ryan,

Ryan Woodley

Thanks, John.

competitive know the of but of to it specific they’re a and prefer testing doing reasons, that's relates You as not an evaluating constantly excellent range strategies we’re we job we’re and to decisioning, the discuss work. Obviously, risk strategies, these for deploying team strategies.

moderating earlier the to a performance areas sense and about It’s better give pools range for performance about of the we are pools in how performing. people us talk forecasting curve lease when we life systems. of and better talk getting and We’re one in indicators those investing constantly of a

to there they’re team contributing We more have a our decisions. and insight better larger make leveraging data and and to ability that’s

end this on so. over XX% debt bit of as at for we’re and and years, by range little money the feel leaving last of a hovered couple know table the we referenced range to we’ve mentioned, on more You you of lower bad we doing that XX% the

decisioning is to with goal decisioning strategy our capture opportunity what that ongoing to it the more that’s Our strategies. relates as and of is really

John Baugh

invoices a So, the bad you expect debt. metrics maybe know that Is you charge-offs tell you on slightly we like-for-like should fair better to a know higher that return assessment? have But, and/or capital. that’s

Ryan Woodley

think you yeah, about If assessment. that’s it, fair a

think those you also provided the of spoke returns, to for for the can about. the to keep help debt that XX% but drive of if drive to or in range profit, optimize our slightly further ability achieve to dollars write-offs, while EBITDA XX% drive bad that about we’ve optimization thinking that we revenue margin and us about If absolute the yield we return guidance more also may and of models decisioning ways solving move but our achieve provided it target us may to we’re we we leverage ranges which higher bad for debt write-offs the identified still we’re per our higher returns that expense is portfolio through on that and lease

John Robinson

EBITDA target range this opportunity. market One this large XX% that John XX% I'd is to aggressively you while that kind really Robinson. trying margin to to add and doing ultimately of is Ryan said know thing, to John we’re get what unserved of And a pursuing

the there. XX% the a a of So and rate retailers we're we with fact businesses an plus pipeline, have the from current that growing perspective that unserved of business size you when building market coupled large the opportunities is of in well with out grew think if and it's today. really with in we still lot And growth the OpEx have ahead QX that

not in ready to after our short for now. to term big it build go and continue So, this ahead cost product innovate definitely better term in reduce a long right not - to We believe for that the decision to maximization market to profit be is serve the future. it's strategy right to our retailers to we're

And the we lean feel is are term so we when perspective if it’s not your to make you're think to to an margin, long you're know we could, there that right given don't trying do the right EBITDA necessarily this to we think a out we business long-term now doing that right from decision it's maximize short year, wanted market. OpEx we in just term decision. like But where you the

John Baugh

cumulative you better And benefit. I actually in curious in on sense the tax you over charge three I'm the of the a would pay be didn't much how I it in for might what guys three color if - code, if years, and cash any know you’d taxes years? think guess roughly and next thank were of stayed would next have taxes you you if the cash the but pay you'll all rewriting

Steve Michaels

Steve. John this is

being takes are much. puts don't be we some don't state in income. We only a credits as change and taxes paying But to about certainly will and in that able that federal well. XXXX apply There XXXX, talks code any credits. and XX% state obviously expect provision tax And all to NOLs federal is be with of paying the which cash taxable there in taxes

federal range $XX state million taxes get you know should So we further out start somewhere on some The in you are the $XX year. to per taxes. spectrum it cash paying the cash million of and

Operator

from The question be Please go SunTrust. will next Bill of Chappell ahead.

Bill Chappell

there's way on and or to how standpoint execution if question look versus trying positive an the way a just at of terms how from good a that? there's out if was holiday stores quarter a Aaron's to in to break understand season overall much first even Just the

Douglas Lindsay

So season. we had a holiday strong

offered I've that highlighted think merchandising were I really discussed. promotions that sort up of our was by We the aspirational. that products in more strategies

is was where also a driving so first up payment. a a margin higher trade lot with ticket that end was attract benefit. we really it strategy this driving there price low of higher out and real a And we product think a It we product and volume put that and and

also You strategy, in dollars got had benefit contribute a helped which in where the and closed/merged the revenue margin quarter terms our overall in were effectively of know per the we we we to also store of more portfolio. annualizing that

Bill Chappell

trying you’ll kind is of comps flatten on where just business the guidance get and assume of that expectation and tie to the declines in fourth I And your will would to an quarter, have that the you until out or the business it toughest in fourth quarter.

this things and better than you was that tough year accelerating don’t fourth quarter So, help really expected? throughout see really are a understand what - It’s the comp. me

Douglas Lindsay

the lot a of of is this business. mean portfolio nature I the

seeing We is indicators in our of the portfolio and lessening that portfolio deals of the in we our the every an manage we that add day which going a we’re decline portfolio we the about improving, have portfolio. When deliveries are out improving talk a leading and trend. deals churn into

higher deals fewer the We’re of out seeing into higher and ticket or portfolio out we’re portfolio. agreements value going the churning

say in Another is the retaining customers portfolio. we’re more way that to

comp the next last fourth the to themselves continue quarter which and over deals lower of we or is value and over think third happened value churning begin in what’s year out will with replacing year. deals, it higher So, we’re

Bill Chappell

one months? side. seeing Progressive past months And three Are iterations fairly or on various past, is go from the through it from difference same the me, then change the they in you either competing the their as any stores normal over the are last they just or how four over competitive landscape, fairly or Rent-A-Center especially the to on any

John Robinson

And the the competitive Aaron's. and continues know been lot that now the Progressive the say that good a side virtual on as and robust be way difference seen wonder from a way of the changed there's that there on and obviously really both remain for I business, competitor market well. honestly years environment that would business competitors of sides competitive are it and in been continues the in I that of in terms stores and to both we’ve Progressive and side and Rent of we you any the stores have against haven't and hasn't

change real there. So, no

Operator

The next KeyBanc from go Please Thomas of Brad Capital question will Markets. come ahead.

Brad Thomas

to the on Progressive side. wanted I up follow

that rates you correctly? provide declined you I you maybe I right, tracking? product think we that of of nuance approval rates if how know Ryan, should if you maybe heard that around I how relationship First, think about that approval types you about the affecting, could And partners your any color and tenure said think different or heard any or the you know slightly, categories more that's you it,

Ryan Woodley

probably think is spot there. on I your intuition

You know approval rate the factors. several that by is things is influenced one of

If will channels. you the know of application about as think obviously in doors drive you mix on rate approval a that well as portfolio mix the approval rate changes of

example a a online rate you it you you might rate example, As for compared as in relates might or mobile approval would as expect to prepaid retailer, as store. might expect a in bedding lower doors, channel approval an expect, lower than by to you a retailer

increase, to so, continue a well. be factor that online apps And as will as

and year-over-year, for influence period the that are roughly all control rate strategies. you decisioning to same-store I'd flat will, on approval a outside specific basis if say those you trends of from it's If but period factors those factors

Brad Thomas

do think for about think the as Ryan, here, how your your and quarters expectations approval you rates… we ahead

Ryan Woodley

that I It's influenced mind know - in to is it's sort You be in influenced but to amount mix you, to the one going wouldn't strategies approval approval by and that’s be in it’s about things. shift have elements going of decisioning along expect decisioning don’t number we the by - what it's for XXXX titrating those know with and our we're strategies. one the I of keep other thinking a you of when I rate be -

John Robinson

job are these testing and constantly an to on the question. mentioned We’ve to team that that, to it's made. continue is But, these change and and as changes earlier they're - And there're Brad, or add get their Ryan working on thing a incremental to I'd is this, continue very evolution big are strategies evolve.

make that that changes always but understand, we guess changes, emphasize were we small changes months. the the validated is duration are and there tests their leads and And XX then total sure make watch I that with are is months short, about that piece to Progressive very seven remember there life we it's go. because are average try results. other to We that so as months this I and about the were would seven and in is incremental we small of So, there pool then,

a performance. We quickly then, have very of inside it can a fast affect something when have change is of we a the so visibility And year to we into even lot feedback, changing can performance.

adapt this. So, move and agilely, about remember that's quickly we can to and pretty and important

So, kind that of on changes. but we're an tweaking basis, constantly ongoing small

Brad Thomas

Yeah, Signet you Progressive. wins continue XXXX. of account and side up account think just the two will for And we big door to obviously in ramp had things that in Kansas as and about

terms guidance open expecting already in new for your in? XXXX, for assumed ramp that that at versus what’s As you think Progressive the doors of we you're to are doors about revenue in

John Robinson

think the for Those XXXX are until overall the mature continuing pipeline hit that on obviously folks we and well are doors what think opportunities we level know continue that the to doors we aren't added opportunities invoice today. we portfolio convert the going to contributing you in on and to but revenue those at perform of very XXXX, well few I to then - expect there to excited for obviously to the in might those pipeline quite to new the expect nail well the door did region us to impact growth. also So boarded. progress that forecast as see produce that the XXXX for And of head and In you as those and in are as you that sit imagine into XXXX. excited as - we factors about regional And XXXX us. the about are ramp contribute see that in see we the mature the on the a

Brad Thomas

just that your be XXXX. you've paid flow follow-up here might then even $XXX to cash free the and for year? What I you'll one try million underlying what if ultimate your like it was taxes for flow sounds could know you'd the you code like $XX to ask Steve, you think your maybe bridge this on cash the sounds get hoping flow. new If the more free XXXX I I've cash right that saved And from from look cash range free flow business. here back on from do got maybe million like it XXXX total somewhere in got million might the $XXX and

Steve Michaels

cash mean expect alluded then get we've refund. the you tax don’t you we’ll - I as pay we and to, to Brad. know

stores, is material, so, see maintenance more little slight And in - a a is the do but in CapEx guidance. as you there we CapEx not as increase the bit from

in say would free the cash be it flow ballpark on I side. So, million will of the $XXX

Operator

Jefferies. be will Joseph of from Kyle ahead. question next Please The go

Kyle Joseph

You guys Can tax on commentary your any any talked on about impact impacts customers? business. potential on give you the your reform

John Robinson

think positive You to also it - extent increase pay help. should and and should we bit, a and will take out which know help, we are the for think it is be overall, jobs probably their there created this should the it

no getting the change change tax terms say our what seen general And in would that of haven't but just bill, I us. business, we seen obviously generally, of really early any worse, we we So certainly into but it's change, seeing haven’t a that's noticeable to of to-date, benefit, terms haven't forecast our a but in not in factored we're necessarily. net in any

Kyle Joseph

result delayed there? give the delayed related year, they know last also impact year, if were taxes, any a thoughts reform there heard as this tax refund to I’ve of commentary I going been were can any and And on any you to there's but or season, the be tax they

Steve Michaels

last centers our that XX. and call we this refund minus year our has year, we've last that plus Progressive anyways. at two it'll or the Aaron's as thinking within hitting be at days not three yet, And of February observed days around it not stores we're And It started year both the in to refund saw well. started

not we've has that started yet it So observed.

Kyle Joseph

it. Got

Steve Michaels

think And But Kyle, does we our we that impact starts, normally the it expectation think is to continue. about the that it our will expectation same business whenever it so.

Kyle Joseph

to commented to Mike, availability environment can specifically your I you on of the but you've recently? you comment seen customers then just credit that the competitive know more broadly own, rent to on And more

Steve Michaels

that change we've observed recently. don't know a there I

us could I know if certainly mean to a you recently. we for some a from their credit but perspective, rise could help ahead extent that You perhaps that haven't could be demand and tailwind look that it and rates tightens noticed potentially

Operator

from Laura Roe will go Equity question Please next ahead. The Research. of come Champine

Laura Champine

and you comment thoughts you shift Could your on given the to those my how available on M&A the increased environment reform? tax with cash

John Robinson

I'll cash, in kind our tax of kind broader and allocation of terms it our take strategy. excess reform capital

Our continue Progressive first on side. to the businesses our priority is really in invest to

we discussed. You know opportunities we've growth got a lot of

testing because we party a concepts great continue lot doing side, so we’ve I better the scaling them. analytics, seeking feel think to we’re at to of much before our where got of and and first that businesses, to On build Aaron was out efficient and the invest job those both about more so

M&A, opportunistic going out to of we’re and continue looking. there terms we’re In be to

technology opportunities We customers enable not have us may product that have a from us our to team better. that’s out more a so help perspective serve there looking serve or customers, can to and a that we that may or for

of and that’s find that there’re kind something back and doing, some us out extent will of maintain future. We future, kind allows to may be be at the so the to to in might of that’s do what return so, capital that flexibility and us this and to expect cash And want attractive, to that feel continue times we opportunistic area opportunistic time, a don’t it’s then, they’re franchisees beyond to kind but about. where going structure, good planned one-and-a-half there been shareholders. would kind now disciplined in would. us about we gives have be of we’re debt-to-EBITDA, that we are important. we we one and like important conservative right we’re anything be continue are We that, it that to an targeting going but to And a to we’re opportunities It the I

shares businesses. million let years years, several the in next our and XX buy sheet really back is all invest expect to and conservative maintaining we’ve a the dividends believe and announcement while this know and history I So, of had that over we’ve that. continue straight bought $XXX to raised We’ve the balance to investors stock back we to so continue

Laura Champine

you doubt the along John, your in made? to open those indicate to color core on and investing incremental guidance stores. on think more some projects? those you, your as significant specific can give CapEx are us Where investments just seem business, does you lines I growth do that’s If

Steven Michaels

got to CapEx hardware continuing or and some and - obviously and so you in the and it’s stores we're remodeled I both we we capital on mean, need is technology but repainted the and up a increase year, good last they and slightly, out there invest there's and increase, use huge to to dash stores think maintenance - splash fleet from across that's we’ve CapEx systems of the not a of do be we’re up will, of of but if obviously fleet sides have - business. in a

increases So that's really where the coming from. are

Operator

will The come Loop next go Capital. Chukumba from Please of question Anthony ahead.

Anthony Chukumba

first my is So question. question a clarification

like my and as doors is sequential because in quarter active notes that progressive XX,XXX from XX% Is last you approximately press So to release, year-over-year looking XX% XX,XXX. was your that well. were the that active it I a was progressive looks up say then at doors

So I little I guess, was just by a that. confused

up for if you clear that me? could so And

John Robinson

confusion stat and quarter. year-over-year a may release part our partly sequential not count door the count active stat, we annually, referred to gave of year-over-year at admittedly the stat the we a an for an causing That's I think there then on but which quarter the active was be and the confusion as in in door the some times

Anthony Chukumba

SCI, any business, about we Aaron's you integrated, you saw to improvement or think the question know something question about the it's talked first back know the last first talked about, you my meeting I sharing the second to in fourth a expectations. announced due it’s which was talked you that’s that have Aaron's best fully track, acquisition from Do that little practices of acquisition. business quarter you SCI, in was you the when you’ve the that my when on then And bit announced

Douglas Lindsay

discern really to early too from really any it's that. know lift You

the we’re fourth acquisition said of late quarter time the And was brought of within quarter the target transaction, you SEI integration third us. for down and taking the benefits that in on is a in hope quarter, really SEI there, to but we talent roles I fourth early really As organization, know some broader see XXXX.

John Robinson

on into right if the that the went and remember of was to hurricanes, was Anthony, it of so a you time about and difficult time of focused by attention board when a acquisition on the we of hit these recovering that kind so of pretty kind these September-October came hurricanes. kind the integration lot be because from

the applaud just the a And delivered it fact time was that team the operationally the storms in it so was the tough across our are fall despite was system tough because Texas, difficult so in southeast, for during it the disruptive time. they results a I

we as has So Douglas team them of done we talked our integrated. his there getting job gets now future, a you the know team more integrated in great and hope - to with is about

I think that's forward. going opportunity

Operator

question come ahead. of Sidoti. next The Hollenden Instructions] [Operator will from Brian Please go

Brian Hollenden

color provide some you DAMI. more Can on

has Your the since you and still your expect is the that met XXXX guidance do for acquisition? EBITDA. in an improvement segment negative in expectations When segment for it

Ryan Woodley

and years will. now positioned better It’s growth our that there ideas in our in we've the is job when a and back built the happy the we with infrastructure mind it ago to it business strategic business. had performing in progress built we're great has, DAMI, team year was expectations obviously two ago doing objectives line out XXXX the with it’s than we future that or fulfilling the of in team, the acquired It support a the

So we're where with at. it's happy

John Robinson

the show year a was a to add projects - me of XXXX up that infrastructure - the that necessarily future the position is this position Ryan, Let a P&L, in and that excellent lot the better get of number in big that accomplishing don't of this future. milestones positively and his business did for don't but year terms of team platform for job the kind an Ray to and of

thought as strategic feel line what said, a Ryan So we it’s - with about good forward. and it in going we performed it from a standpoint

Brian Hollenden

quarter the invoice if volume active Sorry, to compared in invoice on active but XXXX based door volume with per increased this revenue missed I new guidance. door growth? growth much XX% How of is

John Robinson

pretty which invoice Unfortunately, per about I that and driving the early I pretty mature don't little have of doors, we're up. now, that seeing to accounts onboarding of active the are excited but say that of about number XXXX would into need results, in new modeled excited me. that how in and of they of it's strong increase shaping into obviously pressure benefits bit because a life front we're the there productivity door the is numbers is large

Operator

for John time, Robinson conclude his question-and-answer the to would we at gentlemen And ladies remarks. like to and will I this closing hand session. conference back the

John Robinson

you. we earnings your updating Thank we and first in call. our forward look Aaron's, on Thank you, appreciate and interest to quarter results our you next on

Operator

and gentlemen, the Thank conference attending today's presentation. concluded. Ladies has you for

disconnect You your may now lines.

PROG (PRG) 15 Feb 182017 Q4 Earnings call transcript