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RentACenter Inc. Reports Operating Results (10-Q)

July 27, 2012 | About:
10qk

10qk

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RentACenter Inc. (RCII) filed Quarterly Report for the period ended 2012-06-30.

Rent-a-center Inc has a market cap of $1.97 billion; its shares were traded at around $36.57 with a P/E ratio of 11 and P/S ratio of 0.7. The dividend yield of Rent-a-center Inc stocks is 1.9%. Rent-a-center Inc had an annual average earning growth of 1.7% over the past 10 years.

Highlight of Business Operations:

Operating Profit. Operating profit increased by $5.9 million, or 8.0%, to $79.0 million for the three months ended June 30, 2012, as compared to $73.2 million in 2011. Operating profit as a percentage of total revenue remained at 10.5% for the three months ended June 30, 2012 and 2011. Operating profit in 2012 was favorably impacted by increased gross profit as discussed above. Operating profit in 2012 also increased compared to 2011 due to the $4.9 million restructuring charge in the second quarter of 2011 for post-acquisition lease terminations related to the acquisition of The Rental Store, which was reported in the RAC Acceptance segment. These increases were partially offset by an increase in expenses associated with our continued expansion of the RAC Acceptance and International segments.

Net Earnings and Earnings per Share. Net earnings increased by $4.3 million, or 10.8%, to $44.2 million for the three months ended June 30, 2012, as compared to $39.9 million in 2011. This increase was primarily attributable to an increase in operating profit and a decrease in interest expense, partially offset by an increase in income tax expense in 2012 as compared to 2011. Diluted earnings per share for the three months ended June 30, 2012, were $0.74 compared to $0.63 in 2011. The increase was due primarily to the increase in net income and was also favorably impacted by a decrease in average diluted shares outstanding.

Salaries and Other Expenses. Salaries and other expenses increased by $50.5 million, or 6.4%, to $842.8 million for the six months ended June 30, 2012, as compared to $792.3 million in 2011. This increase was primarily attributable to increased expenses associated with the expansion of our RAC Acceptance and International segments. Charge offs in our Core U.S. rental stores due to customer stolen merchandise, expressed as a percentage of revenues, were approximately 2.2% for the six months ended June 30, 2012, as compared to 2.3% in 2011. Salaries and other expenses expressed as a percentage of total store revenue decreased to 53.9% for the six months ended June 30, 2012, from 55.7% in 2011 due to an increase in store revenue while continuing to manage store-related expenses.

Operating Profit. Operating profit increased by $17.5 million, or 11.4%, to $171.1 million for the six months ended June 30, 2012, as compared to $153.6 million in 2011. Operating profit as a percentage of total revenue increased slightly to 10.8% for the six months ended June 30, 2012, from 10.7% for 2011. Operating profit in 2012 was favorably impacted by increased gross profit as discussed above. Operating profit in 2012 also increased compared to 2011 due to the $7.3 million impairment charge related to the discontinuation of our financial services business and the $2.8 million litigation charge in the first quarter of 2011, both of which were reported in the Core U.S. segment, and the $4.9 million restructuring charge in the second quarter of 2011 for post-acquisition lease terminations related to the acquisition of The Rental Store, which was reported in the RAC Acceptance segment. These increases were partially offset by an increase in expenses associated with our continued expansion of the RAC Acceptance and International segments.

Net Earnings and Earnings per Share. Net earnings increased by $12.0 million, or 14.3%, to $96.1 million for the six months ended June 30, 2012, as compared to $84.1 million in 2011. This increase was primarily attributable to an increase in operating profit and a decrease in interest expense, partially offset by an increase in income tax expense in 2012 as compared to 2011. Diluted earnings per share for the six months ended June 30, 2012, were $1.61 compared to $1.32 in 2011. The increase was due primarily to the increase in net income and was also favorably impacted by a decrease in average diluted shares outstanding.

Read the The complete Report

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