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Rent-A-Center Q1 Profit Rises

Rent-A-Center Inc. (RCII) reported that its first-quarter net earnings rose to $49.3 million or $0.88 per share from $7.3 million or $0.13 per share last year.

The company generated $48.9 million in operating profit in the first quarter of 2020 compared to $17.3 million in the first quarter of 2019. As a result of our debt refinancing in August 2019, net interest expense decreased by $4.2 million in the first quarter of 2020 versus the prior year.

Special items in the first quarter of $1.7 million were primarily related to cost savings initiatives, store closures, COVID-19 related impacts, and the write-off of IT software assets. The impacts were offset by tax benefits of approximately $13.2 million, primarily related to the carry back of income tax net operating losses available as a result of the Coronavirus Aid, Relief, and Economic Security Act.

The Company's Non-GAAP first quarter 2020 earnings per share were $0.67 compared to $0.59 in the first quarter of 2019, an increase of 14.6 percent.

Total revenues increased in the first quarter of 2020 to $701.9 million, or by 0.8 percent compared to the same period in 2019, driven by the addition of the Merchants Preferred virtual solution and an increase in same store sales revenue of 1.7 percent in the Rent-A-Center Business, partially offset by the refranchising of approximately 60 Rent-A-Center locations in the preceding twelve months.

Excluding effects on revenues resulting from the refranchising efforts, consolidated revenues increased 1.9 percent in the first quarter of 2020 compared to the first quarter of 2019.

The Rent-A-Center Board of Directors declared a cash dividend of $0.29 per share for the second quarter of 2020, which will be paid on June 1, 2020 to stockholders of record at the close of business on May 18, 2020.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.58 per share and revenues of $702.82 million for the quarter. Analysts' estimates typically exclude special items.

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