QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I. R. S. Employer Identification No.) | ||||||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Large Accelerated Filer | ☐ | ☒ | |||||||||||||||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||||||||||||||||||||
Emerging Growth Company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Title of Each Class | Shares Outstanding as of October 20, 2023 | |||||||
Common Stock, $0.50 Par Value |
Item 3. Defaults Upon Senior Securities | |||||
Item 4. Mine Safety Disclosures | |||||
Item 5. Other Information | |||||
(Unaudited) | |||||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
(In Thousands, Except Share Data) | |||||||||||
ASSETS: | |||||||||||
Cash and Cash Equivalents | $ | $ | |||||||||
Accounts Receivable (net of allowances of $ | |||||||||||
Lease Merchandise (net of accumulated depreciation and allowances of $ | |||||||||||
Merchandise Inventories, Net | |||||||||||
Property, Plant and Equipment, Net | |||||||||||
Operating Lease Right-of-Use Assets | |||||||||||
Goodwill | |||||||||||
Other Intangibles, Net | |||||||||||
Income Tax Receivable | |||||||||||
Prepaid Expenses and Other Assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES & SHAREHOLDERS’ EQUITY: | |||||||||||
Accounts Payable and Accrued Expenses | $ | $ | |||||||||
Deferred Tax Liabilities | |||||||||||
Customer Deposits and Advance Payments | |||||||||||
Operating Lease Liabilities | |||||||||||
Debt | |||||||||||
Total Liabilities | |||||||||||
Commitments and Contingencies (Note 6) | |||||||||||
SHAREHOLDERS' EQUITY: | |||||||||||
Common Stock, Par Value $ | |||||||||||
Additional Paid-in Capital | |||||||||||
Retained Earnings | |||||||||||
Accumulated Other Comprehensive Income (Loss) | ( | ||||||||||
Less: Treasury Shares at Cost | |||||||||||
( | ( | ||||||||||
Total Shareholders’ Equity | |||||||||||
Total Liabilities & Shareholders’ Equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||
(In Thousands, Except Per Share Data) | ||||||||||||||||||||
REVENUES: | ||||||||||||||||||||
Lease Revenues and Fees | $ | $ | $ | $ | ||||||||||||||||
Retail Sales | ||||||||||||||||||||
Non-Retail Sales | ||||||||||||||||||||
Franchise Royalties and Other Revenues | ||||||||||||||||||||
COSTS OF REVENUES: | ||||||||||||||||||||
Depreciation of Lease Merchandise and Other Lease Revenue Costs | ||||||||||||||||||||
Retail Cost of Sales | ||||||||||||||||||||
Non-Retail Cost of Sales | ||||||||||||||||||||
GROSS PROFIT | ||||||||||||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Personnel Costs | ||||||||||||||||||||
Other Operating Expenses, Net | ||||||||||||||||||||
Provision for Lease Merchandise Write-Offs | ||||||||||||||||||||
Restructuring Expenses, Net | ||||||||||||||||||||
Impairment of Goodwill | ||||||||||||||||||||
Separation Costs | ||||||||||||||||||||
Acquisition-Related Costs | ||||||||||||||||||||
OPERATING (LOSS) PROFIT | ( | ( | ||||||||||||||||||
Interest Expense | ( | ( | ( | ( | ||||||||||||||||
Other Non-Operating (Expense) Income, Net | ( | ( | ( | |||||||||||||||||
(LOSS) EARNINGS BEFORE INCOME TAXES | ( | ( | ( | |||||||||||||||||
INCOME TAX BENEFIT | ( | ( | ( | ( | ||||||||||||||||
NET (LOSS) EARNINGS | $ | ( | $ | ( | $ | $ | ||||||||||||||
(LOSS) EARNINGS PER SHARE | $ | ( | $ | ( | $ | $ | ||||||||||||||
(LOSS) EARNINGS PER SHARE ASSUMING DILUTION | $ | ( | $ | ( | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Net (Loss) Earnings | $ | ( | $ | ( | $ | $ | |||||||||||||||||
Other Comprehensive Income (Loss): | |||||||||||||||||||||||
Unrealized Gain (Loss) on Derivative Instruments, net of Tax1 | ( | ||||||||||||||||||||||
Foreign Currency Translation Adjustment, net of Tax1 | ( | ( | ( | ||||||||||||||||||||
Total Other Comprehensive Income (Loss) | ( | ( | |||||||||||||||||||||
Comprehensive Income (Loss) | $ | ( | $ | ( | $ | $ | ( |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In Thousands) | |||||||||||
OPERATING ACTIVITIES: | |||||||||||
Net Earnings | $ | $ | |||||||||
Adjustments to Reconcile Net Earnings to Cash Provided by Operating Activities: | |||||||||||
Depreciation of Lease Merchandise | |||||||||||
Other Depreciation and Amortization | |||||||||||
Provision for Lease Merchandise Write-Offs | |||||||||||
Non-Cash Inventory Fair Value Adjustment | |||||||||||
Accounts Receivable Provision | |||||||||||
Stock-Based Compensation | |||||||||||
Deferred Income Taxes | ( | ( | |||||||||
Impairment of Goodwill and Other Assets | |||||||||||
Non-Cash Lease Expense | |||||||||||
Other Changes, Net | ( | ( | |||||||||
Changes in Operating Assets and Liabilities: | |||||||||||
Lease Merchandise | ( | ( | |||||||||
Merchandise Inventories | ( | ||||||||||
Accounts Receivable | ( | ( | |||||||||
Prepaid Expenses and Other Assets | ( | ( | |||||||||
Income Tax Receivable | ( | ( | |||||||||
Operating Lease Right-of-Use Assets and Liabilities | ( | ( | |||||||||
Accounts Payable and Accrued Expenses | ( | ( | |||||||||
Customer Deposits and Advance Payments | ( | ( | |||||||||
Cash Provided by Operating Activities | |||||||||||
INVESTING ACTIVITIES: | |||||||||||
Purchases of Property, Plant, and Equipment | ( | ( | |||||||||
Proceeds from Dispositions of Property, Plant, and Equipment | |||||||||||
Acquisition of BrandsMart U.S.A., Net of Cash Acquired | ( | ||||||||||
Acquisition of Businesses and Customer Agreements, Net of Cash Acquired | ( | ||||||||||
Proceeds from Other Investing-Related Activities | |||||||||||
Cash Used in Investing Activities | ( | ( | |||||||||
FINANCING ACTIVITIES: | |||||||||||
Repayments on Swing Line Loans, Net | ( | ( | |||||||||
Proceeds from Revolver and Term Loan | |||||||||||
Repayments on Revolver and Term Loan | ( | ( | |||||||||
Proceeds on Inventory Loan Program, Net | ( | ||||||||||
Dividends Paid | ( | ( | |||||||||
Acquisition of Treasury Stock | ( | ( | |||||||||
Issuance of Stock Under Stock Option Plans | |||||||||||
Shares Withheld for Tax Payments | ( | ( | |||||||||
Debt Issuance Costs | ( | ||||||||||
Cash (Used in) Provided by Financing Activities | ( | ||||||||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | ( | ( | |||||||||
Increase in Cash and Cash Equivalents | |||||||||||
Cash and Cash Equivalents at Beginning of Period | |||||||||||
Cash and Cash Equivalents at End of Period | $ | $ |
Stores as of September 30 (Unaudited) | 2023 | 2022 | |||||||||
Company-operated Aaron's Stores1 | |||||||||||
GenNext (included in Company-Operated) | |||||||||||
Franchisee-operated Aaron's Stores | |||||||||||
BrandsMart U.S.A. Stores2 | |||||||||||
Systemwide Stores |
Company-operated Aaron's Store Types as of September 30, 2023 (Unaudited) | GenNext | Legacy | Total | ||||||||
Store | |||||||||||
Hub | |||||||||||
Showroom | |||||||||||
Total |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(Shares In Thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Weighted Average Shares Outstanding | |||||||||||||||||||||||
Dilutive Effect of Share-Based Awards1 | |||||||||||||||||||||||
Weighted Average Shares Outstanding Assuming Dilution |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Advertising Costs, Gross | $ | $ | $ | $ | |||||||||||||||||||
Less: Cooperative Advertising Considerations | ( | ( | ( | ( | |||||||||||||||||||
Advertising Costs, Net | $ | $ | $ | $ |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Customers | $ | $ | |||||||||
Corporate | |||||||||||
Franchisee | |||||||||||
$ | $ |
Nine Months Ended September 30, | |||||||||||
(In Thousands) | 2023 | 2022 | |||||||||
Beginning Balance | $ | $ | |||||||||
Accounts Written Off, net of Recoveries | ( | ( | |||||||||
Accounts Receivable Provision | |||||||||||
Ending Balance | $ | $ |
Nine Months Ended September 30, | |||||||||||
(In Thousands) | 2023 | 2022 | |||||||||
Bad Debt Expense (Reversal) | $ | $ | ( | ||||||||
Provision for Returns and Uncollectible Renewal Payments | |||||||||||
Accounts Receivable Provision | $ | $ |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Merchandise on Lease, net of Accumulated Depreciation and Allowances | $ | $ | |||||||||
Merchandise Not on Lease, net of Accumulated Depreciation and Allowances1 | |||||||||||
Lease Merchandise, net of Accumulated Depreciation and Allowances | $ | $ |
Nine Months Ended September 30, | |||||||||||
(In Thousands) | 2023 | 2022 | |||||||||
Beginning Balance | $ | $ | |||||||||
Merchandise Written off, net of Recoveries | ( | ( | |||||||||
Provision for Write-offs | |||||||||||
Ending Balance | $ | $ |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Merchandise Inventories, gross | $ | $ | |||||||||
Reserve for Merchandise Inventories | ( | ( | |||||||||
Merchandise Inventories, net | $ | $ |
Nine Months Ended | |||||
(In Thousands) | September 30, 2023 | ||||
Beginning Balance | $ | ||||
Merchandise Written off | ( | ||||
Provision for Write-offs | |||||
Ending Balance1 | $ |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Prepaid Expenses | $ | $ | |||||||||
Insurance Related Assets | |||||||||||
Company-Owned Life Insurance | |||||||||||
Assets Held for Sale | |||||||||||
Deferred Tax Assets | |||||||||||
Other Assets1 | |||||||||||
$ | $ |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Accounts Payable | $ | $ | |||||||||
Estimated Claims Liability Costs | |||||||||||
Accrued Salaries and Benefits | |||||||||||
Accrued Real Estate and Sales Taxes | |||||||||||
Other Accrued Expenses and Liabilities | |||||||||||
$ | $ |
(In Thousands) | Aaron's Business | BrandsMart | BrandsMart Leasing | Total | ||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ||||||||||
Acquisitions | ||||||||||||||
Acquisition Accounting Adjustments | ||||||||||||||
Impairment Loss | ||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | $ |
Treasury Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Per Share) | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022 | ( | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Cash Dividends, $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of Shares under Equity Plans | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Net Earnings | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Unrealized (Loss) on Derivative Instruments, net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2023 | ( | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Cash Dividends, $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of Shares under Equity Plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Acquisition of Treasury Stock | ( | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net Earnings | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Unrealized Gain on Derivative Instruments, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2023 | ( | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Cash Dividends, $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of Shares under Equity Plans | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Acquisition of Treasury Stock | ( | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net Loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Unrealized Gain on Derivative Instruments, net of tax | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment, net of tax | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2023 | ( | $ | ( | $ | $ | $ | $ | $ |
Treasury Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
(In Thousands, Except Per Share) | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | ( | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Cash Dividends, $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of Shares Under Equity Plans | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Acquisition of Treasury Stock | ( | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net Earnings | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Unrealized Gain on Fuel Hedge Derivative Instrument | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | ( | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Cash Dividends, $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of Shares Under Equity Plans | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Acquisition of Treasury Stock | ( | ( | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Net Loss | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Unrealized Gain on Fuel Hedge Derivative Instrument | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | ( | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||
Cash Dividends, $ | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of Shares Under Equity Plans | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Acquisition of Treasury Stock | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net Loss | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Unrealized (Loss) on Fuel Hedge Derivative Instrument | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Foreign Currency Translation Adjustment | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2022 | ( | $ | ( | $ | $ | $ | $ | ( | $ |
Nine Months Ended September 30, 2023 | |||||||||||
(In Thousands) | Derivative Instruments | Foreign Currency | Total | ||||||||
Balance at December 31, 2022 | $ | ( | $ | ( | $ | ( | |||||
Other Comprehensive Income, net of Tax | |||||||||||
Balance at September 30, 2023 | $ | $ | ( | $ |
Nine Months Ended September 30, 2022 | |||||||||||
(In Thousands) | Derivative Instruments | Foreign Currency | Total | ||||||||
Balance at December 31, 2021 | $ | $ | ( | $ | ( | ||||||
Other Comprehensive Income (Loss), net of Tax | ( | ( | |||||||||
Balance at September 30, 2022 | $ | $ | ( | $ | ( |
(In Thousands) | Preliminary Amounts Recognized as of Acquisition Date1 | 2023 Measurement Period Adjustments2 | Final Amounts Recognized as of Acquisition Date | ||||||||
Cash Consideration to BrandsMart U.S.A. | $ | $ | $ | ||||||||
Acquired Cash | |||||||||||
Estimated Excess Working Capital, net of Cash | |||||||||||
Non-Cash Off-Market Lease Agreement3 | |||||||||||
Aggregate Consideration Transferred | |||||||||||
Total Purchase Consideration, Net of Cash Acquired | |||||||||||
Estimated Fair Value of Identifiable Assets Acquired and Liabilities Assumed | |||||||||||
Accounts Receivable | |||||||||||
Merchandise Inventories | |||||||||||
Property, Plant and Equipment | ( | ||||||||||
Operating Lease Right-of-Use Assets | |||||||||||
Other Intangibles4 | |||||||||||
Prepaid Expenses and Other Assets5 | ( | ||||||||||
Total Identifiable Assets Acquired | ( | ||||||||||
Accounts Payable and Accrued Expenses | ( | ||||||||||
Customer Deposits and Advance Payments | |||||||||||
Operating Lease Liabilities | |||||||||||
Debt | |||||||||||
Total Liabilities Assumed | ( | ||||||||||
Net Assets Acquired | ( | ||||||||||
Goodwill6 | |||||||||||
Total Estimated Fair Value of Net Assets Acquired | $ | $ | $ |
Fair Value (In Thousands) | Weighted Average Life (In Years) | ||||||||||
Trade Names | $ | ||||||||||
Non-Compete Agreements | |||||||||||
Customer List | |||||||||||
Total Acquired Intangible Assets | $ |
(Unaudited) | Three Months Ended September 30, 2022 | |||||||
(In Thousands) | As Reported | Pro Forma Combined Results | ||||||
Revenues | $ | $ | ||||||
(Loss) Earnings Before Income Taxes | ( | ( | ||||||
Net (Loss) | ( | ( |
(Unaudited) | Nine Months Ended September 30, 2022 | |||||||
(In Thousands) | As Reported | Pro Forma Combined Results | ||||||
Revenues | $ | $ | ||||||
(Loss) Earnings Before Income Taxes | ( | |||||||
Net Earnings |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
Deferred Compensation Liability | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Interest Rate Swap Asset | $ | $ | $ | $ | $ | $ |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
Assets Held for Sale | $ | $ | $ | $ | $ | $ |
(In Thousands) | September 30, 2023 | December 31, 2022 | |||||||||
Revolving Facility | $ | $ | |||||||||
Term Loan, Due in Installments through April 20271 | |||||||||||
Total Debt | |||||||||||
Less: Current Maturities | |||||||||||
Long-Term Debt | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||
Lease Revenues and Fees | $ | $ | $ | $ | |||||||||||||
Retail Sales | |||||||||||||||||
Non-Retail Sales | |||||||||||||||||
Franchise Royalties and Fees | |||||||||||||||||
Other | |||||||||||||||||
Total Revenues1 | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Right-of-Use Asset Impairment | $ | $ | $ | $ | |||||||||||||||||||
Operating Lease Charges1 | |||||||||||||||||||||||
Fixed Asset Impairment | |||||||||||||||||||||||
Severance | |||||||||||||||||||||||
Other Expenses2 | |||||||||||||||||||||||
Total Restructuring Expenses, Net | $ | $ | $ | $ |
(In Thousands) | Severance | Operating Lease Charges1,2 | Professional Advisory Fees | ||||||||
Balance at January 1, 2023 | $ | $ | $ | ||||||||
Restructuring Charges | |||||||||||
Payments | ( | ( | ( | ||||||||
Balance at September 30, 2023 | $ | $ | $ |
Three Months Ended September 30, 2023 | ||||||||||||||
(In Thousands) | Aaron's Business | BrandsMart | Elimination of Intersegment Revenues | Total | ||||||||||
Lease Revenues and Fees | $ | $ | $ | $ | ||||||||||
Retail Sales | ( | |||||||||||||
Non-Retail Sales | ||||||||||||||
Franchise Royalties and Fees | ||||||||||||||
Other | ||||||||||||||
Total Revenues | $ | $ | $ | ( | $ |
Three Months Ended September 30, 2023 | |||||||||||||||||
(In Thousands) | Aaron's Business | BrandsMart | Unallocated Corporate1 | Elimination | Total | ||||||||||||
Gross Profit | $ | $ | $ | $ | ( | $ | |||||||||||
Earnings (Loss) Before Income Taxes | ( | ( | ( | ( | |||||||||||||
Depreciation and Amortization2 | |||||||||||||||||
Capital Expenditures |
Three Months Ended September 30, 2022 | ||||||||||||||
(In Thousands) | Aaron's Business | BrandsMart | Elimination of Intersegment Revenues | Total | ||||||||||
Lease Revenues and Fees | $ | $ | $ | $ | ||||||||||
Retail Sales | ( | |||||||||||||
Non-Retail Sales | ||||||||||||||
Franchise Royalties and Fees | ||||||||||||||
Other | ||||||||||||||
Total Revenues | $ | $ | $ | ( | $ |
Three Months Ended September 30, 2022 | |||||||||||||||||
(In Thousands) | Aaron's Business | BrandsMart | Unallocated Corporate1 | Elimination | Total | ||||||||||||
Gross Profit | $ | $ | $ | $ | ( | $ | |||||||||||
Earnings (Loss) Before Income Taxes | ( | ( | ( | ||||||||||||||
Depreciation and Amortization2 | |||||||||||||||||
Capital Expenditures |
Nine Months Ended September 30, 2023 | ||||||||||||||
(In Thousands) | Aaron's Business | BrandsMart | Elimination of Intersegment Revenues | Total | ||||||||||
Lease Revenues and Fees | $ | $ | $ | $ | ||||||||||
Retail Sales | ( | |||||||||||||
Non-Retail Sales | ||||||||||||||
Franchise Royalties and Fees | ||||||||||||||
Other | ||||||||||||||
Total Revenues | $ | $ | $ | ( | $ |
Nine Months Ended September 30, 2023 | |||||||||||||||||
(In Thousands) | Aaron's Business1 | BrandsMart | Unallocated Corporate2 | Elimination | Total | ||||||||||||
Gross Profit | $ | $ | $ | $ | ( | $ | |||||||||||
Earnings (Loss) Before Income Taxes | ( | ( | ( | ||||||||||||||
Depreciation and Amortization3 | |||||||||||||||||
Capital Expenditures |
Nine Months Ended September 30, 2022 | ||||||||||||||
(In Thousands) | Aaron's Business | BrandsMart | Elimination of Intersegment Revenues | Total | ||||||||||
Lease Revenues and Fees | $ | $ | $ | $ | ||||||||||
Retail Sales | ( | |||||||||||||
Non-Retail Sales | ||||||||||||||
Franchise Royalties and Fees | ||||||||||||||
Other | ||||||||||||||
Total Revenues | $ | $ | $ | ( | $ |
Nine Months Ended September 30, 2022 | |||||||||||||||||
(In Thousands) | Aaron's Business | BrandsMart1 | Unallocated Corporate2 | Elimination | Total | ||||||||||||
Gross Profit | $ | $ | $ | $ | ( | $ | |||||||||||
Earnings (Loss) Before Income Taxes | ( | ( | ( | ( | |||||||||||||
Depreciation and Amortization3 | |||||||||||||||||
Capital Expenditures |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
REVENUES: | |||||||||||||||||||||||
Lease Revenues and Fees | $ | 340,805 | $ | 372,127 | $ | (31,322) | (8.4) | % | |||||||||||||||
Retail Sales | 155,682 | 188,734 | (33,052) | (17.5) | |||||||||||||||||||
Non-Retail Sales | 23,573 | 26,542 | (2,969) | (11.2) | |||||||||||||||||||
Franchise Royalties and Other Revenues | 5,618 | 5,981 | (363) | (6.1) | |||||||||||||||||||
525,678 | 593,384 | (67,706) | (11.4) | ||||||||||||||||||||
COSTS OF REVENUES | |||||||||||||||||||||||
Depreciation of Lease Merchandise and Other Lease Revenue Costs | 113,970 | 125,711 | (11,741) | (9.3) | |||||||||||||||||||
Retail Cost of Sales | 119,732 | 146,292 | (26,560) | (18.2) | |||||||||||||||||||
Non-Retail Cost of Sales | 20,068 | 23,634 | (3,566) | (15.1) | |||||||||||||||||||
253,770 | 295,637 | (41,867) | (14.2) | ||||||||||||||||||||
GROSS PROFIT | 271,908 | 297,747 | (25,839) | (8.7) | |||||||||||||||||||
Gross Profit % | 51.7% | 50.2% | |||||||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||
Personnel Costs | 125,907 | 134,001 | (8,094) | (6.0) | |||||||||||||||||||
Other Operating Expenses, Net | 125,361 | 123,040 | 2,321 | 1.9 | |||||||||||||||||||
Provision for Lease Merchandise Write-Offs | 20,730 | 28,022 | (7,292) | (26.0) | |||||||||||||||||||
Restructuring Expenses, Net | 2,696 | 14,930 | (12,234) | (81.9) | |||||||||||||||||||
Impairment of Goodwill | — | 12,933 | (12,933) | (100.0) | |||||||||||||||||||
Separation Costs | 34 | 220 | (186) | (84.5) | |||||||||||||||||||
Acquisition-Related Costs | 693 | 1,659 | (966) | (58.2) | |||||||||||||||||||
275,421 | 314,805 | (39,384) | (12.5) | ||||||||||||||||||||
OPERATING (LOSS) PROFIT | (3,513) | (17,058) | 13,545 | 79.4 | |||||||||||||||||||
Interest Expense | (3,456) | (3,151) | (305) | (9.7) | |||||||||||||||||||
Other Non-Operating Expense, Net | (288) | (344) | 56 | 16.3 | |||||||||||||||||||
(LOSS) EARNINGS BEFORE INCOME TAXES | (7,257) | (20,553) | 13,296 | 64.7 | |||||||||||||||||||
INCOME TAX BENEFIT | (3,120) | (4,937) | (1,817) | (36.8) | |||||||||||||||||||
NET (LOSS) EARNINGS | $ | (4,137) | $ | (15,616) | $ | 11,479 | 73.5 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Occupancy Costs | $ | 57,811 | $ | 57,461 | $ | 350 | 0.6 | % | |||||||||||||||
Shipping and Handling | 15,621 | 16,930 | (1,309) | (7.7) | |||||||||||||||||||
Advertising Costs | 7,301 | 7,798 | (497) | (6.4) | |||||||||||||||||||
Intangible Amortization | 2,588 | 2,957 | (369) | (12.5) | |||||||||||||||||||
Professional Services | 3,493 | 3,288 | 205 | 6.2 | |||||||||||||||||||
Bank and Credit Card Related Fees | 8,811 | 7,932 | 879 | 11.1 | |||||||||||||||||||
Gains on Dispositions of Store-Related Assets, net | (772) | (3,438) | 2,666 | 77.5 | |||||||||||||||||||
Other Miscellaneous Expenses, net | 30,508 | 30,112 | 396 | 1.3 | |||||||||||||||||||
Other Operating Expenses, net | $ | 125,361 | $ | 123,040 | $ | 2,321 | 1.9 | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Lease Revenues and Fees | $ | 340,805 | $ | 372,127 | $ | (31,322) | (8.4) | % | |||||||||||||||
Retail Sales | 6,208 | 8,264 | (2,056) | (24.9) | |||||||||||||||||||
Non-Retail Sales | 23,573 | 26,542 | (2,969) | (11.2) | |||||||||||||||||||
Franchise Royalties and Fees | 5,444 | 5,803 | (359) | (6.2) | |||||||||||||||||||
Other | 174 | 178 | (4) | (2.2) | |||||||||||||||||||
Total Revenues - Aaron's Business | $ | 376,204 | $ | 412,914 | $ | (36,710) | (8.9) | % |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Gross Profit | $ | 237,257 | $ | 257,066 | $ | (19,809) | (7.7) | % | |||||||||||||||
Earnings Before Income Taxes | 17,510 | 23,493 | (5,983) | (25.5) |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Retail Sales | $ | 152,392 | $ | 183,341 | $ | (30,949) | (16.9) | % | |||||||||||||||
Gross Profit | 34,923 | 41,040 | (6,117) | (14.9) | |||||||||||||||||||
(Loss) Earnings Before Income Taxes | (2,415) | 2,955 | (5,370) | (181.7) |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
REVENUES | |||||||||||||||||||||||
Lease Revenues and Fees | $ | 1,068,351 | $ | 1,167,958 | $ | (99,607) | (8.5) | % | |||||||||||||||
Retail Sales | 454,274 | 392,189 | 62,085 | 15.8 | |||||||||||||||||||
Non-Retail Sales | 70,308 | 81,411 | (11,103) | (13.6) | |||||||||||||||||||
Franchise Royalties and Other Revenues | 17,478 | 18,292 | (814) | (4.5) | |||||||||||||||||||
1,610,411 | 1,659,850 | (49,439) | (3.0) | ||||||||||||||||||||
COSTS OF REVENUES | |||||||||||||||||||||||
Depreciation of Lease Merchandise and Other Lease Revenue Costs | 356,511 | 390,147 | (33,636) | (8.6) | |||||||||||||||||||
Retail Cost of Sales | 344,545 | 320,635 | 23,910 | 7.5 | |||||||||||||||||||
Non-Retail Cost of Sales | 59,481 | 73,227 | (13,746) | (18.8) | |||||||||||||||||||
760,537 | 784,009 | (23,472) | (3.0) | ||||||||||||||||||||
GROSS PROFIT | 849,874 | 875,841 | (25,967) | (3.0) | |||||||||||||||||||
Gross Profit % | 52.8% | 52.8% | |||||||||||||||||||||
OPERATING EXPENSES | |||||||||||||||||||||||
Personnel Costs | 382,297 | 385,368 | (3,071) | (0.8) | |||||||||||||||||||
Other Operating Expenses, Net | 371,176 | 363,786 | 7,390 | 2.0 | |||||||||||||||||||
Provision for Lease Merchandise Write-Offs | 59,891 | 72,092 | (12,201) | (16.9) | |||||||||||||||||||
Restructuring Expenses, Net | 12,820 | 23,847 | (11,027) | (46.2) | |||||||||||||||||||
Impairment of Goodwill | — | 12,933 | (12,933) | (100.0) | |||||||||||||||||||
Separation Costs | 163 | 990 | (827) | (83.5) | |||||||||||||||||||
Acquisition-Related Costs | 3,087 | 13,156 | (10,069) | (76.5) | |||||||||||||||||||
829,434 | 872,172 | (42,738) | (4.9) | ||||||||||||||||||||
OPERATING PROFIT | 20,440 | 3,669 | 16,771 | nmf | |||||||||||||||||||
Interest Expense | (11,724) | (5,964) | (5,760) | (96.6) | |||||||||||||||||||
Other Non-Operating Income (Expense), Net | 921 | (2,827) | 3,748 | 132.6 | |||||||||||||||||||
EARNINGS (LOSS) BEFORE INCOME TAXES | 9,637 | (5,122) | 14,759 | nmf | |||||||||||||||||||
INCOME TAX BENEFIT | (5,541) | (5,696) | (155) | (2.7) | |||||||||||||||||||
NET EARNINGS | $ | 15,178 | $ | 574 | $ | 14,914 | nmf |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Occupancy Costs | $ | 169,868 | $ | 159,946 | $ | 9,922 | 6.2 | % | |||||||||||||||
Shipping and Handling | 48,238 | 52,900 | (4,662) | (8.8) | |||||||||||||||||||
Advertising Costs | 26,868 | 31,143 | (4,275) | (13.7) | |||||||||||||||||||
Intangible Amortization | 7,829 | 6,599 | 1,230 | 18.6 | |||||||||||||||||||
Professional Services | 11,076 | 12,132 | (1,056) | (8.7) | |||||||||||||||||||
Bank and Credit Card Related Fees | 24,848 | 22,029 | 2,819 | 12.8 | |||||||||||||||||||
Gains on Dispositions of Store-Related Assets, net | (3,007) | (10,605) | 7,598 | 71.6 | |||||||||||||||||||
Other Miscellaneous Expenses, net | 85,456 | 89,642 | (4,186) | (4.7) | |||||||||||||||||||
Other Operating Expenses, net | $ | 371,176 | $ | 363,786 | $ | 7,390 | 2.0 | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Lease Revenues and Fees | $ | 1,068,351 | $ | 1,167,958 | $ | (99,607) | (8.5) | % | |||||||||||||||
Retail Sales | 21,141 | 31,580 | (10,439) | (33.1) | |||||||||||||||||||
Non-Retail Sales | 70,308 | 81,411 | (11,103) | (13.6) | |||||||||||||||||||
Franchise Royalties and Fees | 16,930 | 17,713 | (783) | (4.4) | |||||||||||||||||||
Other | 548 | 579 | (31) | (5.4) | |||||||||||||||||||
Total Revenues - Aaron's Business | $ | 1,177,278 | $ | 1,299,241 | $ | (121,963) | (9.4) | % |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Gross Profit | $ | 744,802 | $ | 812,624 | $ | (67,822) | (8.3) | % | |||||||||||||||
Earnings Before Income Taxes | 84,209 | 105,174 | (20,965) | (19.9) |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(In Thousands) | 2023 | 2022 | $ | % | |||||||||||||||||||
Retail Sales | $ | 440,326 | $ | 364,783 | $ | 75,543 | 20.7 | % | |||||||||||||||
Gross Profit | 105,627 | 63,915 | 41,712 | 65.3 | |||||||||||||||||||
(Loss) Before Income Taxes | (2,220) | (12,964) | 10,744 | 82.9 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs 1 | ||||||||||
July 1, 2023 through July 31, 2023 | — | — | — | $ | 132,709,435 | |||||||||
August 1, 2023 through August 31, 2023 | 76,588 | 11.99 | 76,588 | 131,790,987 | ||||||||||
September 1, 2023 through September 30, 2023 | 463,131 | 10.27 | 463,131 | 127,033,496 | ||||||||||
Total | 539,719 | 539,719 |
Name and Title | Action | Applicable | Duration of Trading Arrangements | Rule 10b5-1 Trading Arrangement? (Y/N)* | Aggregate Number of Securities Subject to Trading Arrangement | ||||||||||||
November 2, 2023 - October 31, 2024 | Y | ||||||||||||||||
November 2, 2023 - July 31, 2024 | Y |
EXHIBIT NO. | DESCRIPTION OF EXHIBIT | |||||||
31.1* | ||||||||
31.2* | ||||||||
32.1* | ||||||||
32.2* | ||||||||
101.INS | XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | The cover page from this Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL (included in Exhibit 101) | |||||||
*Filed herewith. |
THE AARON’S COMPANY, INC. | |||||||||||
(Registrant) | |||||||||||
Date: | October 23, 2023 | By: | /s/ C. Kelly Wall | ||||||||
C. Kelly Wall | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
Date: | October 23, 2023 | By: | /s/ Douglass L. Noe | ||||||||
Douglass L. Noe | |||||||||||
Vice President, Corporate Controller | |||||||||||
(Principal Accounting Officer) |
I, Douglas A. Lindsay, certify that: | |||||||||||||||||
1. | I have reviewed this quarterly report on Form 10-Q of The Aaron's Company, Inc.; | ||||||||||||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||||||||||||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||||||||||||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||||||||||||||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||||||||||||||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||||||||||||||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||||||||||||||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | ||||||||||||||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | ||||||||||||||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | ||||||||||||||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | October 23, 2023 | /s/ Douglas A. Lindsay | ||||||
Douglas A. Lindsay | ||||||||
Chief Executive Officer and Director | ||||||||
(Principal Executive Officer) | ||||||||
I, C. Kelly Wall, certify that: | |||||||||||||||||
1. | I have reviewed this quarterly report on Form 10-Q of The Aaron's Company, Inc.; | ||||||||||||||||
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | ||||||||||||||||
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | ||||||||||||||||
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: | ||||||||||||||||
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||||||||||||||||
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||||||||||||||||
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||||||||||||||||
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and | ||||||||||||||||
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): | ||||||||||||||||
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and | ||||||||||||||||
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | October 23, 2023 | /s/ C. Kelly Wall | ||||||
C. Kelly Wall | ||||||||
Chief Financial Officer (Principal Financial Officer) | ||||||||
Date: | October 23, 2023 | /s/ Douglas A. Lindsay | |||||||||
Douglas A. Lindsay | |||||||||||
Chief Executive Officer and Director | |||||||||||
(Principle Executive Officer) | |||||||||||
Date: | October 23, 2023 | /s/ C. Kelly Wall | |||||||||
C. Kelly Wall | |||||||||||
Chief Financial Officer (Principal Financial Officer) | |||||||||||
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 8,022 | $ 8,895 |
Lease Merchandise, accumulated depreciation and allowances | $ 420,599 | $ 431,092 |
Common stock, par value (in dollars per share) | $ 0.50 | $ 0.50 |
Common stock, shares authorized (in shares) | 112,500,000 | 112,500,000 |
Common stock, shares issued (in shares) | 36,622,558 | 36,100,011 |
Treasury shares (in shares) | 6,293,271 | 5,480,353 |
Condensed Consolidated Statements of Earnings (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
REVENUES: | ||||
Revenues | $ 525,678 | $ 593,384 | $ 1,610,411 | $ 1,659,850 |
COSTS OF REVENUES: | ||||
Total cost of revenue | 253,770 | 295,637 | 760,537 | 784,009 |
GROSS PROFIT | 271,908 | 297,747 | 849,874 | 875,841 |
OPERATING EXPENSES: | ||||
Personnel Costs | 125,907 | 134,001 | 382,297 | 385,368 |
Other Operating Expenses, Net | 125,361 | 123,040 | 371,176 | 363,786 |
Provision for Lease Merchandise Write-Offs | 20,730 | 28,022 | 59,891 | 72,092 |
Restructuring Expenses, Net | 2,696 | 14,930 | 12,820 | 23,847 |
Impairment of Goodwill | 0 | 12,933 | 0 | 12,933 |
Separation Costs | 34 | 220 | 163 | 990 |
Acquisition-Related Costs | 693 | 1,700 | 3,087 | 13,156 |
Operating expenses, total | 275,421 | 314,805 | 829,434 | 872,172 |
OPERATING (LOSS) PROFIT | (3,513) | (17,058) | 20,440 | 3,669 |
Interest Expense | (3,456) | (3,151) | (11,724) | (5,964) |
Other Non-Operating (Expense) Income, Net | (288) | (344) | 921 | (2,827) |
(LOSS) EARNINGS BEFORE INCOME TAXES | (7,257) | (20,553) | 9,637 | (5,122) |
INCOME TAX BENEFIT | (3,120) | (4,937) | (5,541) | (5,696) |
NET (LOSS) EARNINGS | $ (4,137) | $ (15,616) | $ 15,178 | $ 574 |
(LOSSES) EARNINGS PER SHARE (in dollars per share) | $ (0.13) | $ (0.51) | $ 0.49 | $ 0.02 |
(LOSSES) EARNINGS PER SHARE (in dollars per share) | $ (0.13) | $ (0.51) | $ 0.49 | $ 0.02 |
Lease Revenues and Fees | ||||
REVENUES: | ||||
Revenues | $ 340,805 | $ 372,127 | $ 1,068,351 | $ 1,167,958 |
COSTS OF REVENUES: | ||||
Costs of goods and services sold | 113,970 | 125,711 | 356,511 | 390,147 |
Retail Sales | ||||
REVENUES: | ||||
Revenues | 155,682 | 188,734 | 454,274 | 392,189 |
COSTS OF REVENUES: | ||||
Costs of goods and services sold | 119,732 | 146,292 | 344,545 | 320,635 |
Non-Retail Sales | ||||
REVENUES: | ||||
Revenues | 23,573 | 26,542 | 70,308 | 81,411 |
COSTS OF REVENUES: | ||||
Costs of goods and services sold | 20,068 | 23,634 | 59,481 | 73,227 |
Franchise Royalties and Other Revenues | ||||
REVENUES: | ||||
Revenues | $ 5,618 | $ 5,981 | $ 17,478 | $ 18,292 |
Condensed Consolidated Statements Of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net (Loss) Earnings | $ (4,137) | $ (15,616) | $ 15,178 | $ 574 | ||
Other Comprehensive Income (Loss): | ||||||
Unrealized Gain (Loss) on Derivative Instruments, net of Tax | [1] | 889 | (235) | 1,584 | 4 | |
Foreign Currency Translation Adjustment, net of tax | [1] | (165) | (611) | 339 | (719) | |
Total Other Comprehensive Income (Loss) | 724 | (846) | 1,923 | (715) | ||
Comprehensive Income (Loss) | $ (3,413) | $ (16,462) | $ 17,101 | $ (141) | ||
|
Condensed Consolidated Statements Of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Unrealized Gain on Derivative Instruments, Tax Expense | $ 0.3 | $ 0.5 |
Foreign Currency Translation Adjustment, Tax Benefit | $ (0.1) | $ (0.3) |
Business and Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business and Summary of Significant Accounting Policies | BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES For a discussion of trends that we believe have affected our business during the periods covered by these financial statements, see Part I, Item 2. "Management’s Discussion and Analysis of Financial Condition and Results of Operations", including the "Highlights," "Consolidated Results of Operations" and "Liquidity and Capital Resources", below, and Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K, filed with the United States Securities and Exchange Commission on March 1, 2023 (the "2022 Annual Report"). Description of Business The Aaron's Company, Inc. (the "Company") is a leading, technology-enabled, omni-channel provider of lease-to-own ("LTO") and retail purchase solutions of furniture, electronics, appliances, and other home goods across its brands: Aaron's, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven Furniture Industries ("Woodhaven"). Unless the context otherwise requires or we specifically indicate otherwise, references to "we," "us," "our," and the "Company," refer to The Aaron's Company, Inc., which holds, directly or indirectly, the Pre-Spin Aaron’s Business (as defined in "Item 1. Business - Description of 2020 Spin-off Transaction" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.) and all other subsidiaries of the Company, which are wholly owned, as well as other lines of business described above. As of September 30, 2023, the Company's operating and reportable segments are the Aaron's Business and BrandsMart, each as described below. Effective as of April 1, 2022 and in connection with the acquisition of BrandsMart U.S.A., the Company changed its composition of reportable segments to align the reportable segments with the current organizational structure and the operating results that the chief operating decision maker regularly reviews to analyze performance and allocate resources, which includes separate segments for the Aaron's Business and BrandsMart, along with an Unallocated Corporate category for remaining unallocated costs. The Aaron's Business segment is comprised of (i) Aaron's branded Company-operated and franchise-operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); (iii) Woodhaven; and (iv) BrandsMart Leasing (collectively, the "Aaron’s Business"). The operations of BrandsMart U.S.A. (excluding BrandsMart Leasing) comprise the BrandsMart segment (collectively, "BrandsMart"). BrandsMart U.S.A. Acquisition On April 1, 2022, the Company completed the previously announced transaction to acquire a 100% ownership of Interbond Corporation of America, doing business as BrandsMart U.S.A. The Company paid total consideration of approximately $230 million in cash under the terms of the agreement and additional amounts for working capital adjustments and transaction related fees. Refer to Note 2 to these condensed consolidated financial statements for additional information regarding the BrandsMart U.S.A. acquisition. Management believes that the BrandsMart U.S.A. acquisition will strengthen the Company's ability to deliver on its mission of enhancing people’s lives by providing easy access to high quality furniture, appliances, electronics, and other home goods through affordable lease-to-own and retail purchase options. Management also believes that value creation opportunities include leveraging the Company's lease-to-own expertise to provide BrandsMart U.S.A.'s customers enhanced payment options and offering a wider selection of products to millions of Aaron's customers, as well as generating procurement savings and other cost synergies. Aaron's Business Segment Since its founding in 1955, Aaron's has been committed to serving the overlooked and underserved customer with a dedication to inclusion and improving the communities in which it operates. Through a portfolio of approximately 1,250 stores and its aarons.com e-commerce platform, Aaron's, together with its franchisees, provide consumers with LTO and retail purchase solutions for the products they need and want, with a focus on providing its customers with unparalleled customer service, high approval rates, lease plan flexibility, and an attractive value proposition, including competitive monthly payments and total cost of ownership, as compared to other LTO providers. Woodhaven manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. Launched in 2022, BrandsMart Leasing offers LTO purchase solutions to customers of BrandsMart U.S.A. BrandsMart Segment Founded in 1977, BrandsMart U.S.A. is one of the leading appliance and consumer electronics retailers in the southeast United States and one of the largest appliance retailers in the country with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. The operations of BrandsMart U.S.A. (other than BrandsMart Leasing) comprise the BrandsMart segment. The following table presents store count by ownership type:
1 The typical layout for a Company-operated Aaron's store is a combination of showroom, customer service and warehouse space, averaging approximately 9,500 square feet. Certain Company-operated Aaron's stores consist solely of a showroom. 2 BrandsMart U.S.A. stores average approximately 100,000 square feet and have been included in this table subsequent to the acquisition date of April 1, 2022. Basis of Presentation The financial statements as of and for the three and nine months ended September 30, 2023 and comparable prior year periods are condensed consolidated financial statements of the Company and its subsidiaries, each of which is wholly-owned, and is based on the financial position and results of operations of the Company. Intercompany balances and transactions between consolidated entities have been eliminated. These condensed consolidated financial statements reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of the Company's condensed consolidated financial statements in conformity with 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 extent to which inflationary and other economic pressures will impact the Company's business will depend on future developments. These developments are uncertain and cannot be precisely predicted at this time. In many cases, management's estimates and assumptions are dependent on estimates of such future developments and may change in the future. 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 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 2022 Annual Report. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of operating results that may be achieved for any other interim period or for the full year. Accounting Policies and Estimates See Note 1 to the consolidated and combined financial statements in the 2022 Annual Report for an expanded discussion of accounting policies and estimates. (Loss) Earnings Per Share Earnings per share is computed by dividing net earnings 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"), performance share units ("PSUs") and other awards issuable under the Company's 2020 Equity and Incentive Plan or employee stock purchase plan ("ESPP"), (collectively, "share-based awards"), as determined under the treasury stock method, unless the inclusion of such awards would have been anti-dilutive. The following table shows the calculation of weighted-average shares outstanding assuming dilution:
1 There was no dilutive effect of share-based awards for the three months ended September 30, 2023 and September 30, 2022, due to the net loss incurred in both periods. Approximately 1.2 million weighted-average share based awards were excluded from the computation of earnings per share assuming dilution during the nine months ended September 30, 2023, and 0.8 million during the nine months ended September 30, 2022, respectively, as the awards would have been anti-dilutive for the periods presented. Revenue Recognition The Company provides lease and retail merchandise, consisting of appliances, electronics, furniture, and other home goods to its customers for lease under certain terms agreed to by the customer and through retail sales. The Company's Aaron's stores, aarons.com e-commerce platform, and BrandsMart Leasing components of the Aaron's Business segment offer leases with flexible ownership plans that can be generally renewed weekly, bi-weekly, semi-monthly, or monthly up to 12, 18 or 24 months. The Aaron's Business segment also earns revenue from the sale of merchandise to customers and Aaron's franchisees, and earns ongoing revenue from Aaron's franchisees in the form of royalties and through advertising efforts that benefit the franchisees. The Company's BrandsMart U.S.A. stores and related brandsmartusa.com e-commerce platform offer the sale of merchandise directly to its customers via retail sales. See Note 5 to these condensed consolidated financial statements for further information regarding the Company's revenue recognition policies and disclosures. Advertising The Company expenses advertising costs as incurred. Advertising production costs are initially recognized as a prepaid advertising asset and are expensed when an advertisement appears for the first time. The prepaid advertising asset was $7.3 million and $4.6 million at September 30, 2023 and December 31, 2022, respectively, and is reported within prepaid expenses and other assets on the condensed consolidated balance sheets. Total advertising costs are classified within other operating expenses, net in the condensed consolidated statements of earnings. These advertising costs are presented net of cooperative advertising considerations received from vendors, which represents reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products, and are recorded as a reduction of advertising costs. The following table shows total advertising costs, net of cooperative advertising consideration:
Accounts Receivable Accounts receivable consist of receivables due from customers on lease agreements, corporate receivables incurred during the normal course of business (primarily for vendor consideration and third-party warranty providers), and franchisee obligations. Accounts receivable, net of allowances, consist of the following:
The Company maintains an accounts receivable allowance for the Aaron's Business customer lease agreements, under which its policy is to record a provision for returns and uncollectible contractually due renewal payments based on historical payments experience, which is recognized as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends. The Company writes off customer lease receivables for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off customer lease receivables for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate future losses related to certain franchisees that are deemed to have a higher risk of non-payment and record an allowance for these estimated losses. The estimated allowance on franchisee accounts receivable includes consideration of the financial position of each franchisee and qualitative consideration of potential losses associated with uncertainties impacting the franchisee's ability to satisfy their obligations. Uncertainties include inflationary and other economic pressures in the current macroeconomic environment. Accordingly, actual accounts receivable write-offs could differ from the allowance. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in other operating expenses, net within the condensed consolidated statements of earnings. The allowance related to corporate receivables is not significant as of September 30, 2023 and December 31, 2022. The following table shows the components of the accounts receivable allowance:
The following table shows the components of the accounts receivable provision, which includes amounts recognized for bad debt expense and the provision for returns and uncollected payments:
Lease Merchandise The Company’s lease merchandise is recorded at the lower of depreciated cost, including overhead costs from our distribution centers, or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company begins depreciating furniture and appliances at the earlier of the lease date or 24 months and one day from its purchase, while all other lease merchandise begins depreciating at the earlier of when the merchandise is leased to the customer or 12 months and one day from its purchase. Lease merchandise fully depreciates over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon early payout. The following is a summary of lease merchandise, net of accumulated depreciation and allowances:
1 Includes Woodhaven raw materials, finished goods and work-in-process inventory that has been classified within lease merchandise in the condensed consolidated balance sheets of $9.8 million and $12.9 million as of September 30, 2023 and December 31, 2022, respectively. The Aaron's store-based operations' policies require weekly merchandise counts at its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. Monthly cycle counting procedures are performed at both the Aaron's distribution centers and Woodhaven manufacturing facilities. Physical inventories are also taken at the manufacturing facilities annually. The Company also monitors merchandise levels and mix by division, store, and distribution center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off and is included as a component of the provision for lease merchandise write-offs in the accompanying condensed consolidated statements of earnings. The Company records a provision for write-offs using the allowance method, which is included within lease merchandise, net within the condensed consolidated balance sheets. 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 primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as seasonality and the impacts of uncertainty surrounding inflationary and other economic pressures in the current macroeconomic environment and the normalization of business trends associated with the effects of the COVID-19 pandemic on our customers. Therefore, actual lease merchandise write-offs could differ from the allowance. The provision for write-offs is included in provision for lease merchandise write-offs in the accompanying condensed consolidated statements of earnings. The Company writes off lease merchandise on lease agreements for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off lease merchandise on lease agreements for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The following table shows the components of the allowance for lease merchandise write-offs:
Merchandise Inventories The Company’s merchandise inventories are stated at the lower of weighted average cost or net realizable value and consist entirely of merchandise held for sale by the BrandsMart segment. In-bound freight-related costs from vendors, net of allowances and vendor rebates, are included as part of the net cost of merchandise inventories. Costs associated with storing and transporting merchandise inventories to our retail stores are expensed as incurred and included within retail cost of sales in the condensed consolidated statements of earnings. The Company periodically evaluates aged and distressed inventory and establishes an inventory markdown which represents the excess of the carrying value over the amount the Company expects to realize from the ultimate sale of the inventory. Markdowns establish a new cost basis for the inventory and are recorded within retail cost of sales within the condensed consolidated statement of earnings. The write-offs of merchandise inventories associated with the Company's cycle and physical inventory count processes are also included within retail cost of sales in the condensed consolidated statement of earnings. The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost. This reserve is based on management’s current knowledge with respect to inventory levels, sales trends, and historical experience selling or disposing of aged or obsolete inventory. The following is a summary of merchandise inventories, net of allowances:
The following table shows the components of the reserve for merchandise inventories:
1 There were no significant markdown provisions recorded during the three and nine months ended September 30, 2022. Prepaid Expenses and Other Assets Prepaid expenses and other assets consist of the following:
1 Amounts as of September 30, 2023 and December 31, 2022 included restricted cash of $1.6 million held as collateral for BrandsMart U.S.A.'s workers' compensation and general liability insurance policies. Sale-Leaseback Transactions During the nine months ended September 30, 2022, the Company entered into four sale and leaseback transactions related to seven Company-owned Aaron's store properties for a total sales price of $12.9 million, all of which was received during the nine months ended September 30, 2022. Such proceeds are presented within proceeds from dispositions of property, plant and equipment in the condensed consolidated statements of cash flows. The Company recognized gains of $2.8 million and $8.5 million associated with these transactions during the three and nine months ended September 30, 2022, respectively, which was classified within other operating expenses, net in the condensed consolidated statements of earnings. Derivative Instruments In March 2023, the Company entered into a non-speculative interest rate swap agreement for an aggregate notional amount of $100.0 million with an effective date of April 28, 2023 and a termination date of March 31, 2027. The purpose of this hedge is to limit the Company's exposure of its variable interest rate debt by effectively converting it to fixed interest rate debt. Under the terms of the agreement, the Company will receive a floating interest rate based on 1-month Chicago Mercantile Exchange ("CME") Term Secured Overnight Financing Rate ("SOFR") and pay a fixed interest rate of 3.87% on the notional amount. The Company has accounted for the interest rate swap as a cash flow hedge instrument in accordance with ASC 815, Derivatives and Hedging. Accordingly, the effective portion of the gains and losses associated with the changes in the fair value of the cash flow hedge instrument are recognized as a component of accumulated other comprehensive income in the Company's condensed consolidated balance sheets. Such amounts are reclassified into earnings in the same period during which the cash flow hedging instrument affects earnings. As of September 30, 2023, the facts and circumstances of the hedged relationship remain consistent with the initial effectiveness assessment and the hedging instrument remains an effective accounting hedge. The fair value of the hedge as of September 30, 2023 was an asset of $2.1 million, and has been recorded within prepaid expenses and other assets in the Company's condensed consolidated balance sheets. During the nine months ended September 30, 2023, the Company reclassified $0.6 million of net gains from accumulated other comprehensive income to interest expense. See Note 3 to these condensed consolidated financial statements for further information regarding the fair value determination of the Company's interest rate swap agreement. Derivative instruments in place during the prior year were not significant. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following:
Estimated Claims Liability Costs Estimated claims liability costs are accrued primarily for workers compensation and vehicle liability, as well as general liability and group health insurance benefits provided to team members. These liabilities are recorded within estimated claims liability costs within accounts payable and accrued expenses in the condensed consolidated balance sheets. Estimates for these claims liabilities are made based on actual reported but unpaid claims and actuarial analysis of the projected claims run off for both reported and incurred but not reported claims. This analysis is based upon an assessment of the likely outcome or historical experience and considers a variety of factors, including the actuarial loss forecasts, company-specific development factors, general industry loss development factors and third-party claim administrator loss estimates of individual claims. The Company makes periodic prepayments to its insurance carriers to cover the projected claims run off for both reported and incurred but not reported claims, considering its retention or stop loss limits. In addition, we have prefunding balances on deposit and other insurance receivables with the insurance carriers which are recorded within prepaid expenses and other assets in our condensed consolidated balance sheets. 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. All acquisition-related goodwill balances are allocated amongst the Company's reporting units based on the nature of the acquired operations that originally created the goodwill. During the fourth quarter of 2022, in connection with its annual impairment testing, management evaluated the various components of the operating segments further described above and in Note 8 to these condensed consolidated financial statements and identified three reporting units, Aaron's Business, BrandsMart, and BrandsMart Leasing, each as described below. The Aaron's Business reporting unit is comprised of (i) Aaron's branded Company-operated and franchise operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); and (iii) Woodhaven (collectively, the "Aaron’s Business reporting unit"). The Aaron's Business reporting unit is a component of the Aaron's Business operating segment. The operations of BrandsMart Leasing comprise the BrandsMart Leasing reporting unit (collectively, the "BrandsMart Leasing reporting unit"), and is a component of the Aaron's Business operating segment. Management considered the aggregation of the BrandsMart Leasing reporting unit and Aaron's Business reporting unit as a single reporting unit and determined that these components were economically dissimilar and also reviewed separately by the segment managers of the Aaron's Business operating segment, and therefore should not be aggregated. The operations of BrandsMart, comprise the BrandsMart reporting unit (collectively, the "BrandsMart reporting unit") and is also the sole component of the BrandsMart operating segment. The acquisition of BrandsMart U.S.A. in the second quarter of 2022 resulted in the recognition of approximately $55.8 million of goodwill, inclusive of measurement period adjustments further described in Note 2 to these condensed consolidated financial statements. Of this amount, $29.2 million was assigned to the BrandsMart reporting unit and $26.5 million was assigned to the BrandsMart Leasing reporting unit. The following table provides information related to the carrying amount of goodwill by operating segment.
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 interim impairment may have occurred. An interim goodwill impairment test is required if the Company believes it is more likely than not that the carrying amount of its reporting unit exceeds the reporting unit's fair value. The Company determined that there were no events that occurred or circumstances that changed during the nine months ended September 30, 2023 that would more likely than not reduce the fair value of its reporting units below their carrying amount. The Company may be required to recognize material impairments to the BrandsMart or BrandsMart Leasing goodwill balances in the future if: (i) the Company fails to successfully execute on one or more elements of the BrandsMart strategic plan; (ii) actual results are unfavorable to the Company's estimates and assumptions used to calculate fair value; (iii) the BrandsMart or BrandsMart Leasing carrying values increase without an associated increase in the fair value; and/or (iv) BrandsMart or BrandsMart Leasing is materially impacted by further deterioration of macroeconomic conditions, including inflation and other economic pressures, including rising interest rates. Acquisition-Related Costs Acquisition-related costs of $0.7 million and $3.1 million were incurred during the three and nine months ended September 30, 2023, and Acquisition-related costs of $1.7 million and $13.2 million were incurred during the three and nine months ended September 30, 2022. These primarily represent internal control readiness third-party consulting, banking and legal expenses and retention bonuses associated with the acquisition of BrandsMart U.S.A. completed April 1, 2022. Related Party Transactions with the Sellers of BrandsMart U.S.A. Effective as of the BrandsMart U.S.A. acquisition date, the Company entered into lease agreements for six store locations retained by the sellers of BrandsMart U.S.A., including Michael Perlman, who was employed by the Company for a short period following the acquisition. While Mr. Perlman is no longer employed by the Company as of December 31, 2022, the Company intends to continue its treatment of the lease agreements as potential related party transactions under the Company’s Related Party Transactions Policy until December 2023. The agreements include initial terms of ten years, with options to renew each location for up to 20 years thereafter. The Company recorded these leases within operating lease right-of-use assets and operating lease liabilities in the Company's condensed consolidated balance sheets. The six operating leases are considered to be above market. The value of the off-market element of the lease agreements was included as a component of the consideration transferred to the sellers of BrandsMart U.S.A. and was recognized as a reduction to the operating lease right-of-use-asset. The total amounts paid to the sellers of BrandsMart U.S.A. during the three and nine months ended September 30, 2023 related to real estate activities, including rental payments, maintenance and taxes, were approximately $3.2 million and $9.7 million, respectively. Stockholders' Equity Changes in stockholders' equity for the three and nine months ended September 30, 2023 and 2022 are as follows:
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 fair values of the Company's assets and liabilities as of September 30, 2023 and December 31, 2022 are further described in Note 3 to these condensed consolidated financial statements. Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) ("AOCI") by component for the nine months ended September 30, 2023 and September 30, 2022 are summarized below:
Recent Accounting Pronouncements There were no new accounting standards that had a material impact on the Company’s condensed consolidated financial statements during the nine months ended September 30, 2023, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of September 30, 2023 that the Company expects to have a material impact on its condensed consolidated financial statements.
|
Acquisitions |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | ACQUISITIONS BrandsMart U.S.A. Acquisition On April 1, 2022, the Company completed the previously announced acquisition of all of the issued and outstanding shares of capital stock of BrandsMart U.S.A. Founded in 1977, BrandsMart U.S.A. is one of the leading appliance and consumer electronics retailers in the southeastern United States and one of the largest appliance retailers in the country, with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. The Company paid total consideration of approximately $230 million in cash under the terms of the agreement and additional amounts for working capital adjustments and transaction related fees. Consideration transferred also included the off-market value associated with certain operating leases entered into in conjunction with the transaction, which is further described in the table below. Management believes that the BrandsMart U.S.A. acquisition will strengthen the Company's ability to deliver on its mission of enhancing people’s lives by providing easy access to high quality furniture, appliances, electronics, and other home goods through affordable lease-to-own and retail purchase options. Management also believes that value creation opportunities include leveraging the Company's lease-to-own expertise to provide BrandsMart U.S.A.'s customers enhanced payment options and offering a wider selection of products to millions of Aaron's customers, as well as generating procurement savings and other cost synergies. The BrandsMart U.S.A. acquisition has been accounted for as a business combination, and the BrandsMart results of operations are included in the Company's results of operations from the April 1, 2022 acquisition date. BrandsMart contributed revenues of $152.4 million and $440.3 million and loss before income taxes of $2.4 million and $2.2 million during the three and nine months ended September 30, 2023. In the prior year period, BrandsMart contributed revenues of $183.3 million and earnings before income taxes of $3.0 million during the three months ended September 30, 2022, as well as revenues of $364.8 million and loss before income taxes of $13.0 million from the April 1, 2022 acquisition date, through the period end date of September 30, 2022. The BrandsMart loss for the period covering April 1, 2022 through September 30, 2022 includes a one-time, non-cash charge for a fair value adjustment of $23.1 million made to the acquired merchandise inventories, which was included within "Retail Cost of Sales" in the condensed consolidated statements of earnings. Acquisition Accounting The consideration transferred and the estimated fair values of the assets acquired and liabilities assumed in the BrandsMart U.S.A. acquisition as of the April 1, 2022 acquisition date are as follows:
1 As previously reported in the notes to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 2 The measurement period adjustments recorded in 2023 primarily relate to opening balance sheet adjustments to certain asset and liability balances further illustrated in the table above. 3 Effective as of the acquisition date, the Company entered into lease agreements for six store locations retained by the sellers of BrandsMart U.S.A. The agreement includes initial terms of ten years, with options to renew each location for up to 20 years thereafter. The annual rent is considered to be above market. The value of the off-market element of the lease agreements has been included in consideration transferred and as a reduction to the operating lease right-of-use-asset. 4 Identifiable intangible assets are further disaggregated in the table set forth below. 5 Includes restricted cash of $2.5 million at the acquisition date that was held as collateral for BrandsMart U.S.A.'s workers' compensation and general liability insurance policies. 6 The purchase price exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, all of which is expected to be deductible for tax purposes. Goodwill is comprised of synergies created from the expected future benefits to the Company, including those related to the expansion of BrandsMart stores into new markets, expanded product assortment, procurement synergies, the projected growth of the BrandsMart Leasing business, and certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. See Note 1 to these condensed consolidated financial statements for further discussion of the identification of the Company's reporting units and the allocation of goodwill and Note 8 for the discussion of operating segments associated with the BrandsMart U.S.A. acquisition. Intangible assets attributable to the BrandsMart U.S.A. acquisition are comprised of the following:
The Company incurred $0.7 million and $3.1 million, and $1.7 million and $13.2 million of transaction costs during the three and nine months ended September 30, 2023, and September 30, 2022, respectively, in connection with the acquisition of BrandsMart U.S.A. These costs were included within "Acquisition-Related Costs" in the condensed consolidated statements of earnings. Acquisition-Related Costs that will affect the Company's income statement throughout the remainder of 2023 are not expected to be material. Pro Forma Financial Information The following table presents unaudited consolidated pro forma information as if the acquisition of BrandsMart U.S.A. had occurred on January 1, 2021, compared to actual, historical results.
The unaudited pro forma combined financial information does not reflect the costs of any integration activities or dis-synergies, or benefits that may result from future costs savings due to revenue synergies, procurement savings or operational efficiencies expected to result from the BrandsMart U.S.A. acquisition. Accordingly, the unaudited pro forma financial information above is not intended to represent or be indicative of the consolidated results of operations of the Company that would have been reported had the BrandsMart U.S.A. acquisition been completed as of the dates presented, and should not be construed as representative of the future consolidated results of operations or financial condition of the combined entity. The unaudited pro forma combined financial information for the three and nine months ended September 30, 2022 includes adjustments to, among other things, record depreciation expense, amortization expense and income taxes based upon the fair value allocation of the purchase price to BrandsMart U.S.A.'s tangible and intangible assets acquired and liabilities assumed as though the acquisition had occurred on January 1, 2021. Interest expense on the additional debt incurred by the Company to fund the acquisition and personnel costs incurred related to the acquisition are also included in the unaudited pro forma combined information as if the BrandsMart U.S.A. acquisition had occurred on January 1, 2021 for the pro forma three and nine months ended September 30, 2022.
|
Fair Value Measurement |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | FAIR VALUE MEASUREMENT Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The fair value of the Company's current financial assets and liabilities, such as cash and cash equivalents, accounts receivable and accounts payable, approximate their carrying values due to their short-term nature. The Company's outstanding debt borrowings as of September 30, 2023 and December 31, 2022 were subject to a variable interest rate. Therefore, the fair value of these borrowings also approximates its carrying value. Debt borrowings are measured within Level 2 of the fair value hierarchy. The Company also measures certain non-financial assets at fair value on a nonrecurring basis, such as goodwill, intangible assets, operating lease right-of-use assets, property, plant, and equipment and assets held for sale, in connection with periodic evaluations for potential impairment. The following table summarizes financial liabilities measured at fair value on a recurring basis:
The Company maintains The Aaron's Company, 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 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, which is recorded in accounts payable and accrued expenses in the condensed consolidated balance sheets. In March 2023, the Company entered into an interest rate swap agreement for an aggregate notional amount of $100.0 million which is further described in Note 1 to these condensed consolidated financial statements. The fair value of the interest rate swap agreement is derived by using widely accepted valuation techniques and reflects the contractual terms of the interest rate swap including the period to maturity and uses observable market-based inputs, including interest rate curves. The fair value associated with the interest rate swap is recorded within prepaid expenses and other assets (when the resulting fair value is an asset) or accounts payable and accrued expenses (when the resulting fair value is a liability) within the Company's condensed consolidated balance sheets. Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The following table summarizes non-financial assets measured at fair value on a nonrecurring basis:
Assets classified as held for sale are recorded at the lower of carrying value or fair value less estimated costs to sell, and any adjustment is recorded in other operating expenses, net or restructuring expenses, net (if the asset is a part of the Company's restructuring programs as described in Note 7 to these condensed consolidated financial statements) in the condensed consolidated statements of earnings. The highest and best use of the primary components of assets held for sale are as real estate land parcels for development or real estate properties for use or lease; however, the Company has chosen not to develop or use these properties, and plans to sell the properties to third parties as quickly as practicable. On April 1, 2022, the Company completed the previously announced acquisition of all of the issued and outstanding shares of capital stock of BrandsMart U.S.A. For the fair value measurements performed related to the net assets acquired, including acquired intangible assets, the Company utilized multiple Level 3 inputs and assumptions, such as estimates about costs of capital, future projected performance and cash flows. See Note 2 to these condensed consolidated financial statements for further details regarding the acquired assets.
|
Indebtedness |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness | INDEBTEDNESS The following is a summary of the Company's debt, net of unamortized debt issuance costs as applicable:
1 Includes unamortized debt issuance costs of $0.6 million and $0.7 million as of September 30, 2023 and December 31, 2022. The Company has included $2.4 million and $2.9 million of debt issuance costs as of September 30, 2023 and December 31, 2022, respectively, related to the new and previous revolving credit facility, within prepaid expenses and other assets in the condensed consolidated balance sheets. Revolving Credit Facility and Term Loan To finance the BrandsMart U.S.A. acquisition, on April 1, 2022 the Company entered into a new unsecured credit facility (the "Credit Facility") which replaced its previous $250 million unsecured credit facility dated as of November 9, 2020 (as amended, the "Previous Credit Facility"). The Previous Credit Facility is further described in Note 8 to the consolidated and combined financial statements of the 2022 Annual Report. The Credit Facility provides for a $175 million term loan (the "Term Loan") and a $375 million revolving credit facility (the "Revolving Facility"), which includes (i) a $35 million sublimit for the issuance of letters of credit on customary terms, and (ii) a $35 million sublimit for swing line loans on customary terms. The Company pays a commitment fee on unused balances related to the revolving facility, which ranges from 0.20% to 0.30% as determined by the Company's ratio of total net debt to EBITDA (as defined by the agreement). On April 1, 2022, the Company borrowed $175 million under the Term Loan and $117 million under the Revolving Facility to finance the purchase price for the BrandsMart U.S.A. acquisition and other customary acquisition and financing-related closing costs and adjustments. The Company expects that future additional borrowings under 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. As of September 30, 2023, $171.7 million and $16.4 million remained outstanding under the Term Loan and Revolving Facility, respectively, compared to $173.9 million and $69.3 million outstanding at December 31, 2022. Amounts outstanding under the letters of credit, which reduce availability under the Revolving Facility, were $19.0 million and $17.2 million as of September 30, 2023 and December 31, 2022, respectively. Borrowings under the Revolving Facility and the Term Loan bear interest at a rate per annum equal to, at the option of the Company, (i) the forward-looking term rate based on SOFR plus an applicable margin ranging between 1.50% and 2.25%, based on the Company's Total Net Debt to EBITDA Ratio, or (ii) the base rate (as defined in the Credit Facility) plus an applicable margin, which is 1.00% lower than the applicable margin for SOFR loans. The loans and commitments under the Revolving Facility mature or terminate on April 1, 2027. The Term Loan amortizes in quarterly installments, commencing on December 31, 2022, in an aggregate annual amount equal to (i) 2.50% of the original principal amount of the Term Loan during the first and second years after the closing date, (ii) 5.00% of the original principal amount of the Term Loan during the third, fourth and fifth years after the closing date, with the remaining principal balance of the Term Loan to be due and payable in full on April 1, 2027. Franchise Loan Facility Amendment On April 1, 2022, the Company also entered into a new $12.5 million unsecured franchise loan facility (the "Franchise Loan Facility"), which replaced its previous $15.0 million amended and restated unsecured franchise loan facility dated as of November 10, 2021. The Franchise Loan Facility operates as a guarantee by the Company of certain debt obligations of certain Aaron's franchisees (the "Borrower") under a franchise loan program. In the event these franchisees are unable to meet their debt service payments or otherwise experience an event of default, the Company would be unconditionally liable for the outstanding balance of the franchisees’ debt obligations under the Franchise Loan Facility, which would be due in full within 90 days of such event of default. Borrowings under the Franchise Loan Facility bear interest at a rate per annum equal to SOFR plus an applicable margin ranging between 1.50% and 2.25%, based on the Company's Total Net Debt to EBITDA Ratio (as defined in the Franchise Loan Facility). The Franchise Loan Facility is available for a period of 364 days commencing on April 1, 2022, and permits the Borrower to request extensions for additional 364-day periods. On February 10, 2023, the Company amended its Franchise Loan Facility to extend the maturity date from March 31, 2023 to March 30, 2024. Subsequently on February 23, 2023, the Company amended its Franchise Loan Facility to reduce the total commitment amount from $12.5 million to $10.0 million. Financial Covenants The Credit Facility and the Franchise Loan Facility contain customary financial covenants including (a) a maximum Total Net Debt to EBITDA Ratio of 2.75 to 1.00 and (b) a minimum Fixed Charge Coverage Ratio of 1.75 to 1.00. If the Company fails to comply with these covenants, the Company will be in default under these agreements, and all borrowings outstanding could become due immediately. Under the Credit Facility and Franchise Loan Facility, the Company may pay cash dividends in any year so long as, after giving pro forma effect to the dividend payment, the Company maintains compliance with its financial covenants and no event of default has occurred or would result from the payment. The Company is in compliance with all covenants under the Credit Facility at September 30, 2023.
|
Revenue Recognition |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | REVENUE RECOGNITION The following table disaggregates revenue by source:
1 Includes revenues (which are primarily lease revenues and fees) from Canadian operations of $4.3 million and $13.0 million during the three and nine months ended September 30, 2023, respectively, compared to $4.6 million and $14.2 million, respectively, in the same periods of the prior year. Lease Revenues and Fees The Aaron's Business segment, which includes BrandsMart Leasing, provides lease merchandise, consisting of furniture, appliances, electronics, computers, and other home goods to their customers for lease under certain terms agreed to by the customer. The Aaron's Business segment offers leases with flexible ownership plans that can be generally renewed weekly, bi-weekly, semi-monthly, or monthly up to 12, 18 or 24 months and does not require deposits upon inception of customer agreements. The customer has the right to acquire ownership either through an early purchase option or through payment of all required lease payments through the end of the ownership plan. Aaron's also offers customers the option to obtain a membership in the Aaron’s Club program. The benefits to customers of the Aaron's Club program are separated into three general categories: (a) lease protection benefits; (b) health & wellness discounts; and (c) dining, shopping and consumer savings. Lease agreements offered by the Aaron's Business segment (including the Aaron's Club program memberships) and BrandsMart Leasing, are cancellable at any time by either party without penalty, and as such, these offerings are renewable period to period arrangements. Lease revenues related to the leasing of merchandise and Aaron's Club membership fees are recognized as revenue in the month they are earned. Payments received prior to the month earned are recorded as deferred lease revenue, and this amount is included in customer deposits and advance payments in the accompanying condensed consolidated balance sheets. Lease payments due but not received prior to month end are recorded as accounts receivable in the accompanying condensed consolidated balance sheets. Lease revenues are recorded net of a provision for returns and uncollectible renewal payments. All of Aaron's customer lease agreements, including BrandsMart Leasing, are considered operating leases. The Company maintains ownership of the lease merchandise until all payment obligations are satisfied under lease agreements. Initial direct costs related to customer agreements are expensed as incurred and have been classified as other operating expenses, net in the condensed consolidated statements of earnings. The statement of earnings effects of expensing the initial direct costs as incurred are not materially different from amortizing initial direct costs over the lease ownership plan. Substantially all lease revenues and fees were within the scope of ASC 842, Leases, during the three and nine months ended September 30, 2023 and 2022. Included in lease revenues and fees above, the Company had $6.1 million and $18.6 million of other revenue during the three and nine months ended September 30, 2023, respectively, compared to $6.9 million and $20.9 million, respectively, in the same periods of the prior year, within the scope of ASC 606, Revenue from Contracts with Customers, which is included in lease revenues and fees above. Lease revenues and fees are recorded within lease revenues and fees in the accompanying condensed consolidated statements of earnings. Retail Sales All retail sales revenue is within the scope of ASC 606, Revenue from Contracts with Customers, during the three and nine months ended September 30, 2023 and 2022. Aaron's Business Revenues from the retail sale of lease merchandise to individual consumers are recognized at the point of sale and are recorded within retail sales in the accompanying condensed consolidated statements of earnings. Generally, the transfer of control occurs near or at the point of sale for retail sales. Aaron's Business retail sales are not subject to a returns policy. BrandsMart Revenues from the retail sale of merchandise inventories are recorded within retail sales in the accompanying condensed consolidated statement of earnings and are recognized at a point in time that the Company has satisfied its performance obligation and transferred control of the product to the respective customer. Revenues associated with retail sales transactions for which control has not transferred are deferred and are recorded within customer deposits and advance payments within the accompanying consolidated balance sheets. Retail sales at the BrandsMart segment, both in store and online, are subject to the segment's 30-day return policy. Accordingly, an allowance, based on historical returns experience, for sales returns is recorded as a component of retail sales in the period in which the related sales are recorded as well as an asset for the returned merchandise. The return asset and allowance for sales returns as of September 30, 2023 was $2.3 million and $3.1 million, respectively, compared to $3.0 million and $4.0 million as of December 31, 2022, respectively. The return asset and allowance for sales returns was recorded within prepaid and other assets and accounts payable and accrued expenses within the accompanying consolidated balance sheets, respectively. Additional protection plans can be purchased by BrandsMart U.S.A. customers that provides extended warranty coverage on their product purchases, with payment being due for this protection at the point of sale. A third-party underwriter assumes the risk associated with the coverage and is primarily responsible for fulfillment. The Company is an agent to the contract and records the fixed commissions within retail sales in the accompanying condensed consolidated statements of earnings on a net basis. Non-Retail Sales Revenues for the non-retail sale of merchandise to Aaron's franchisees are recognized when control transfers to the franchisee, which is upon delivery of the merchandise and are recorded within non-retail sales in the accompanying condensed consolidated statements of earnings. All non-retail sales revenue is within the scope of ASC 606, Revenue from Contracts with Customers, during the three and nine months ended September 30, 2023 and 2022. Franchise Royalties and Fees We have existing agreements with our current Aaron's franchisees to govern the operations of franchised stores. Our standard agreement is for a term of ten years, with one ten-year renewal option. Franchisees are obligated to remit to us royalty payments of 6% of the weekly cash revenue payments received, which is recognized as the fees become due. The Company guarantees certain debt obligations of some of the franchisees and receives guarantee fees based on the outstanding debt obligations of such franchisees. Refer to Note 6 to these condensed consolidated financial statements for additional discussion of the franchise-related guarantee obligation. The Company also charges fees for advertising efforts that benefit the franchisees, which are recognized at the time the advertising takes place. Substantially all franchise royalties and fee revenue is within the scope of ASC 606, Revenue from Contracts with Customers. Of the franchise royalties and fees, $4.3 million and $13.5 million during the three and nine months ended September 30, 2023, respectively (three and nine months ended September 30, 2022: $4.6 million and $14.1 million, respectively), is related to franchise royalty income that is recognized as the fees become due. The remaining revenue is primarily related to advertising fees charged to franchisees. Franchise royalties and fees are recorded within franchise royalties and other revenues in the accompanying condensed consolidated statements of earnings.
|
Commitments and Contingencies |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Guarantees The Company has guaranteed certain debt obligations of some of its Aaron's franchisees under a franchise loan program (the "Franchise Loan Facility") as described in further detail in Note 4 to these condensed consolidated financial statements. The Company has recourse rights to franchisee assets securing the debt obligations, which consist primarily of lease merchandise and fixed assets. Since the inception of the franchise loan program in 1994, the Company's losses associated with the program have been insignificant. However, the Company could incur losses that could be significant in a future period due to potential adverse trends in the liquidity and/or financial performance of Aaron's franchisees resulting in an event of default or impending defaults by franchisees. The Company entered into a new Franchise Loan Facility agreement on April 1, 2022, which reduced the total commitment under the Franchise Loan Facility from $15.0 million to $12.5 million and extended the commitment termination date to March 31, 2023. On February 10, 2023, the Company amended its Franchise Loan Facility to extend the maturity date from March 31, 2023 to March 30, 2024. Subsequently on February 23, 2023, the Company amended its Franchise Loan Facility to reduce the total commitment amount from $12.5 million to $10.0 million. At September 30, 2023, the maximum amount that the Company would be obligated to repay in the event franchisees defaulted was $4.8 million. The Company is subject to financial covenants under the Franchise Loan Facility as detailed in Note 4 to these condensed consolidated financial statements. At September 30, 2023, the Company was in compliance with all covenants under the Franchise Loan Facility agreement. The Company records a liability related to estimated future losses from repaying the franchisees' outstanding debt obligations upon any possible future events of default. This liability is included in accounts payable and accrued expenses in the condensed consolidated balance sheets and was $1.0 million and $1.3 million at September 30, 2023 and December 31, 2022, respectively. The balances at September 30, 2023 and December 31, 2022 included qualitative consideration of potential losses associated with uncertainties impacting the operations and liquidity of our franchisees. Uncertainties include inflationary and other economic pressures in the current macroeconomic environment. Legal Proceedings From time to time, the Company is party to various legal and regulatory proceedings arising in the ordinary course of business, certain of which have been described below. 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 due to the inherent uncertainty in litigation, regulatory and similar adversarial proceedings, and 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 had accrued $0.4 million and $2.7 million at September 30, 2023 and December 31, 2022, respectively, for pending legal and regulatory matters for which it believes losses are probable and is management’s best estimate of its exposure to loss. The Company records these 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 $0.5 million. At September 30, 2023, 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 between zero and $0.5 million. 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. Other Contingencies Management regularly assesses the Company's insurance deductibles, monitors 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.
|
Restructuring |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | RESTRUCTURING As management continues to execute on its long-term strategic plan, additional benefits and charges are expected to result from our restructuring programs. The extent of any future charges related to our restructuring programs are not currently estimable and depend on various factors including the timing and scope of future cost optimization initiatives. Operational Efficiency and Optimization Restructuring Program During the third quarter of 2022, the Company initiated the Operational Efficiency and Optimization Restructuring Program intended to strengthen operational efficiencies and reduce the Company’s overall costs. Management believes that this restructuring program will help the Company sharpen its operational focus, optimize its cost profile, allocate capital resources towards long-term strategic objectives, and generate incremental value for shareholders through investments in technological capabilities, and fulfillment center logistics competencies. Since initiation, the program has resulted in the closure or consolidation of 32 Company-operated Aaron's stores. This program also includes the Hub and Showroom model to optimize labor and other operating expenses in markets, store labor realignments, rationalization of the Company's supply chain, the centralization and restructuring of store support center, operations, and multi-unit store oversight functions, as well as other real estate and third party spend costs reductions. Total net restructuring expenses under the Operational Efficiency and Optimization Restructuring Program related to the initiatives described above were $0.5 million and $4.9 million during the three and nine months ended September 30, 2023, and were recorded within the Unallocated Corporate category for segment reporting. For the three months ended September 30, 2023, these expenses were comprised mainly of professional advisory fees and variable operating lease charges on previously closed stores. For the nine months ended September 30, 2023, such expenses were comprised mainly of professional advisory fees and severance charges related to the Company's January 2023 headcount reduction of its store support center and Aaron's Business store oversight functions, in addition to variable operating lease charges on previously closed stores. Since inception of the Operational Efficiency and Optimization Restructuring Program, the Company has incurred charges of $16.5 million under the plan. These cumulative charges are primarily comprised of operating lease right-of-use asset and fixed impairment charges, continuing variable occupancy costs incurred related to closed stores, professional advisory fees, and severance related to reductions in its store support center and Aaron's Business store oversight functions. Real Estate Repositioning and Optimization Restructuring Program During the first quarter of 2020, the Company initiated a real estate repositioning and optimization restructuring program. This program includes a strategic plan to remodel, reposition, and consolidate our Company-operated Aaron's store footprint over the next to four years. We believe that such strategic actions will allow Aaron's to continue to successfully serve our markets while continuing to utilize our growing aarons.com platform. Management expects that this strategy, along with our increased use of technology, will enable us to reduce store count while retaining a significant portion of our existing customer relationships as well as attract new customers. Since initiation, the program has resulted in the closure, consolidation, or relocation of 243 Company-operated Aaron's stores during 2020, 2021, 2022 and the first nine months of 2023. This program also resulted in the closure of one administrative store support building, a further rationalization of our store support center staff, which included a reduction in employee headcount in those areas to more closely align with current business conditions. As of September 30, 2023, we have identified approximately 20 remaining Aaron's stores for closure, consolidation, or relocation that have not yet been closed and vacated, which are expected to close over the course of the next twelve months. Total net restructuring expenses under the real estate repositioning and optimization restructuring program were $2.2 million and $7.9 million during the three and nine months ended September 30, 2023. Restructuring expenses were recorded within the Unallocated Corporate category of segment reporting and were comprised mainly of continuing variable occupancy costs incurred related to closed stores and operating lease right-of-use asset and fixed asset impairment charges related to the vacancy or planned vacancy of stores identified for closure. Since inception of the real estate repositioning and optimization program, the Company has incurred charges of $69.5 million under the program. These cumulative charges are primarily comprised of operating lease right-of-use asset and fixed impairment charges, losses recognized related to contractual lease obligations, and severance related to reductions in store support center and field support staff headcount. The following table summarizes restructuring charges for the three and nine months ended September 30, 2023 and 2022, respectively, under the Company's restructuring programs:
1 Includes an accrual of $2.0 million for deferred maintenance on previously restructured properties. 2 Includes professional advisory fees of $1.7 million for the nine months ended September 30, 2023. The following table summarizes changes in the accrued expense balance related to the restructuring programs for the nine months ended September 30, 2023:
1 Operating lease charge liabilities outstanding at January 1, 2023 represent expenses related to a real estate-related settlement which remained payable at December 31, 2022 and was subsequently paid during the first quarter of 2023. 2 Operating lease charges payable at September 30, 2023 relate to accrued maintenance charges at various properties vacated in conjunction with the restructuring programs discussed herein. These liabilities are included within accounts payable and accrued expenses in the condensed consolidated balance sheets. All other operating lease charges incurred during the nine months ended September 30, 2023 were expensed as incurred.
|
Segments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | SEGMENTS Segment Reporting For all periods prior to April 1, 2022, the Company only had one operating and reportable segment. Effective as of April 1, 2022 and in connection with the acquisition of BrandsMart U.S.A., the Company updated its reportable segments to align the reportable segments with the current organizational structure and the operating results that the chief operating decision maker regularly reviews to analyze performance and allocate resources, which includes two operating and reportable segments: Aaron's Business and BrandsMart, along with an Unallocated Corporate category for remaining unallocated costs. The Aaron's Business segment includes the operations of the Pre-Spin Aaron's business (as described in the 2022 Annual Report), which continued after the separation to provide consumers with LTO and retail purchase solutions through the Company's Aaron's stores in the United States and Canada and the aarons.com e-commerce platform. This operating segment also supports franchisees of its Aaron's stores. In addition, the Aaron's Business segment includes the operations of BrandsMart Leasing, which offers a lease-to-own solution to customers of BrandsMart U.S.A., and Woodhaven, which manufactures and supplies a significant portion of the upholstered furniture leased and sold in Company-operated and franchised Aaron's stores. The BrandsMart segment includes the operations of BrandsMart U.S.A. (other than BrandsMart Leasing), which is one of the leading appliance and consumer electronics retailers in the southeastern United States and one of the largest appliance retailers in the country with 11 stores in Florida and Georgia and a growing e-commerce presence on brandsmartusa.com. The results of BrandsMart have been included in the Company's consolidated results from the April 1, 2022 acquisition date. Measurement of Segment Profit or Loss and Segment Assets The Company evaluates segment performance based primarily on revenues and earnings (loss) from operations before unallocated corporate costs, which are evaluated on a consolidated basis and not allocated to the Company's business segments. Intersegment sales between BrandsMart and the Aaron's Business pertaining to BrandsMart Leasing, are recognized at retail prices. Since the intersegment profit affects cost of goods sold, depreciation and lease merchandise valuation, they are adjusted when intersegment profit is eliminated in consolidation. The Company determines earnings (loss) before income taxes for all reportable segments in accordance with U.S. GAAP. Unallocated Corporate costs are presented separately and generally include unallocated costs associated with the following: equity-based compensation, interest income and expense, information security, executive compensation, legal and compliance, corporate governance, accounting and finance, human resources and other corporate functions. The Unallocated Corporate category also includes acquisition-related costs, restructuring charges and separation costs for which the individual operating segments are not being evaluated. The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segment assets are not presented.
1 The loss before income taxes for the Unallocated Corporate category during the three months ended September 30, 2023 was impacted by restructuring charges of $2.7 million, and BrandsMart U.S.A. acquisition-related costs of $0.7 million. 2 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
1 The loss before income taxes for the Unallocated Corporate category during the three months ended September 30, 2022 was impacted by a goodwill impairment charge of $12.9 million to fully write-off the goodwill balance of the Aaron's Business reporting unit, restructuring charges of $14.9 million, BrandsMart U.S.A. acquisition-related costs of $1.7 million and separation-related costs of $0.2 million. 2 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
1 The earnings before income taxes for the Aaron's Business during the nine months ended September 30, 2023 includes a $3.8 million receipt from the settlement of a class action lawsuit related to alleged anti-competitive conduct by several manufacturers of cathode ray tubes. 2 The loss before income taxes for the Unallocated Corporate category during the nine months ended September 30, 2023 was impacted by restructuring charges of $12.8 million, BrandsMart U.S.A. acquisition-related costs of $3.1 million, and separation-related costs of $0.2 million. 3 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
1 Loss before income taxes for the BrandsMart segment during the nine months ended September 30, 2022 was impacted by a one-time, non-cash charge for a fair value adjustment to the acquired merchandise inventories of $23.1 million. 2 Loss before income taxes for the Unallocated Corporate category during the nine months ended September 30, 2022 was impacted by restructuring charges of $23.8 million, BrandsMart U.S.A. acquisition-related costs of $13.2 million, a goodwill impairment charge of $12.9 million to fully write-off the goodwill balance of the Aaron's Business reporting unit and separation-related costs of $1.0 million. 3 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
|
Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Pay vs Performance Disclosure | ||||||||
Net Earnings (Loss), As Reported | $ (4,137) | $ 6,517 | $ 12,798 | $ (15,616) | $ (5,342) | $ 21,532 | $ 15,178 | $ 574 |
Insider Trading Arrangements |
3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023
shares
|
Sep. 30, 2023
shares
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Material Terms of Trading Arrangement | Securities Trading Plans of Directors and Officers During the three months ended September 30, 2023, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement," except as set forth below:
* Denotes whether the trading plan is intended, when adopted, to satisfy the affirmative defense of Rule 10b5-1(c).
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Rule 10b5-1 Arrangement Adopted | false | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Terminated | false | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Rule 10b5-1 Arrangement Terminated | false | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Douglas Lindsay [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Douglas Lindsay | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title | Chief Executive Officer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Adopted | true | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption Date | August 4, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrangement Duration | 364 days | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Available | 112,566 | 112,566 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stephen Olsen [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading Arrangements, by Individual | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Stephen Olsen | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title | President | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rule 10b5-1 Arrangement Adopted | true | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adoption Date | August 4, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Arrangement Duration | 272 days | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Available | 25,000 | 25,000 |
Business and Summary of Significant Accounting Policies (Policies) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business | Description of Business The Aaron's Company, Inc. (the "Company") is a leading, technology-enabled, omni-channel provider of lease-to-own ("LTO") and retail purchase solutions of furniture, electronics, appliances, and other home goods across its brands: Aaron's, BrandsMart U.S.A., BrandsMart Leasing, and Woodhaven Furniture Industries ("Woodhaven"). Unless the context otherwise requires or we specifically indicate otherwise, references to "we," "us," "our," and the "Company," refer to The Aaron's Company, Inc., which holds, directly or indirectly, the Pre-Spin Aaron’s Business (as defined in "Item 1. Business - Description of 2020 Spin-off Transaction" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.) and all other subsidiaries of the Company, which are wholly owned, as well as other lines of business described above. As of September 30, 2023, the Company's operating and reportable segments are the Aaron's Business and BrandsMart, each as described below. Effective as of April 1, 2022 and in connection with the acquisition of BrandsMart U.S.A., the Company changed its composition of reportable segments to align the reportable segments with the current organizational structure and the operating results that the chief operating decision maker regularly reviews to analyze performance and allocate resources, which includes separate segments for the Aaron's Business and BrandsMart, along with an Unallocated Corporate category for remaining unallocated costs. The Aaron's Business segment is comprised of (i) Aaron's branded Company-operated and franchise-operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); (iii) Woodhaven; and (iv) BrandsMart Leasing (collectively, the "Aaron’s Business"). The operations of BrandsMart U.S.A. (excluding BrandsMart Leasing) comprise the BrandsMart segment (collectively, "BrandsMart").
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The financial statements as of and for the three and nine months ended September 30, 2023 and comparable prior year periods are condensed consolidated financial statements of the Company and its subsidiaries, each of which is wholly-owned, and is based on the financial position and results of operations of the Company. Intercompany balances and transactions between consolidated entities have been eliminated. These condensed consolidated financial statements reflect the historical results of operations, financial position and cash flows of the Company in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). The preparation of the Company's condensed consolidated financial statements in conformity with 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 extent to which inflationary and other economic pressures will impact the Company's business will depend on future developments. These developments are uncertain and cannot be precisely predicted at this time. In many cases, management's estimates and assumptions are dependent on estimates of such future developments and may change in the future. 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 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 2022 Annual Report. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of operating results that may be achieved for any other interim period or for the full year.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies and Estimates | Accounting Policies and EstimatesSee Note 1 to the consolidated and combined financial statements in the 2022 Annual Report for an expanded discussion of accounting policies and estimates. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Loss) Earnings Per Share | Loss) Earnings Per ShareEarnings per share is computed by dividing net earnings 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"), performance share units ("PSUs") and other awards issuable under the Company's 2020 Equity and Incentive Plan or employee stock purchase plan ("ESPP"), (collectively, "share-based awards"), as determined under the treasury stock method, unless the inclusion of such awards would have been anti-dilutive. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition The Company provides lease and retail merchandise, consisting of appliances, electronics, furniture, and other home goods to its customers for lease under certain terms agreed to by the customer and through retail sales. The Company's Aaron's stores, aarons.com e-commerce platform, and BrandsMart Leasing components of the Aaron's Business segment offer leases with flexible ownership plans that can be generally renewed weekly, bi-weekly, semi-monthly, or monthly up to 12, 18 or 24 months. The Aaron's Business segment also earns revenue from the sale of merchandise to customers and Aaron's franchisees, and earns ongoing revenue from Aaron's franchisees in the form of royalties and through advertising efforts that benefit the franchisees. The Company's BrandsMart U.S.A. stores and related brandsmartusa.com e-commerce platform offer the sale of merchandise directly to its customers via retail sales. See Note 5 to these condensed consolidated financial statements for further information regarding the Company's revenue recognition policies and disclosures.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising | AdvertisingThe Company expenses advertising costs as incurred. Advertising production costs are initially recognized as a prepaid advertising asset and are expensed when an advertisement appears for the first time.Total advertising costs are classified within other operating expenses, net in the condensed consolidated statements of earnings. These advertising costs are presented net of cooperative advertising considerations received from vendors, which represents reimbursement of specific, identifiable and incremental costs incurred in selling those vendors’ products, and are recorded as a reduction of advertising costs. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable | Accounts Receivable Accounts receivable consist of receivables due from customers on lease agreements, corporate receivables incurred during the normal course of business (primarily for vendor consideration and third-party warranty providers), and franchisee obligations. The Company maintains an accounts receivable allowance for the Aaron's Business customer lease agreements, under which its policy is to record a provision for returns and uncollectible contractually due renewal payments based on historical payments experience, which is recognized as a reduction of lease revenues and fees within the condensed consolidated statements of earnings. Other qualitative factors are considered in estimating the allowance, such as current and forecasted business trends. The Company writes off customer lease receivables for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off customer lease receivables for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly. The Company also maintains an allowance for outstanding franchisee accounts receivable. The Company's policy is to estimate future losses related to certain franchisees that are deemed to have a higher risk of non-payment and record an allowance for these estimated losses. The estimated allowance on franchisee accounts receivable includes consideration of the financial position of each franchisee and qualitative consideration of potential losses associated with uncertainties impacting the franchisee's ability to satisfy their obligations. Uncertainties include inflationary and other economic pressures in the current macroeconomic environment. Accordingly, actual accounts receivable write-offs could differ from the allowance. The provision for uncollectible franchisee accounts receivable is recorded as bad debt expense in other operating expenses, net within the condensed consolidated statements of earnings. The allowance related to corporate receivables is not significant as of September 30, 2023 and December 31, 2022.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Merchandise | Lease Merchandise The Company’s lease merchandise is recorded at the lower of depreciated cost, including overhead costs from our distribution centers, or net realizable value. The cost of merchandise manufactured by our Woodhaven operations is recorded at cost and includes overhead from production facilities, shipping costs and warehousing costs. The Company begins depreciating furniture and appliances at the earlier of the lease date or 24 months and one day from its purchase, while all other lease merchandise begins depreciating at the earlier of when the merchandise is leased to the customer or 12 months and one day from its purchase. Lease merchandise fully depreciates over the lease agreement period when on lease, generally 12 to 24 months, and generally 36 months when not on lease. Depreciation is accelerated upon early payout. The Aaron's store-based operations' policies require weekly merchandise counts at its store-based operations, which include write-offs for unsalable, damaged, or missing merchandise inventories. Monthly cycle counting procedures are performed at both the Aaron's distribution centers and Woodhaven manufacturing facilities. Physical inventories are also taken at the manufacturing facilities annually. The Company also monitors merchandise levels and mix by division, store, and distribution center, as well as the average age of merchandise on hand. If obsolete merchandise cannot be returned to vendors, its carrying amount is adjusted to its net realizable value or written off. Generally, all merchandise not on lease is available for lease or sale. On a monthly basis, all damaged, lost or unsalable merchandise identified is written off and is included as a component of the provision for lease merchandise write-offs in the accompanying condensed consolidated statements of earnings. The Company records a provision for write-offs using the allowance method, which is included within lease merchandise, net within the condensed consolidated balance sheets. 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 primarily on historical write-off experience. Other qualitative factors are considered in estimating the allowance, such as seasonality and the impacts of uncertainty surrounding inflationary and other economic pressures in the current macroeconomic environment and the normalization of business trends associated with the effects of the COVID-19 pandemic on our customers. Therefore, actual lease merchandise write-offs could differ from the allowance. The provision for write-offs is included in provision for lease merchandise write-offs in the accompanying condensed consolidated statements of earnings. The Company writes off lease merchandise on lease agreements for its Aaron's Business operations that are 60 days or more past due on pre-determined dates twice monthly. The Company writes off lease merchandise on lease agreements for its BrandsMart Leasing operations that are 90 days or more past due on pre-determined dates twice monthly.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Merchandise Inventories | Merchandise Inventories The Company’s merchandise inventories are stated at the lower of weighted average cost or net realizable value and consist entirely of merchandise held for sale by the BrandsMart segment. In-bound freight-related costs from vendors, net of allowances and vendor rebates, are included as part of the net cost of merchandise inventories. Costs associated with storing and transporting merchandise inventories to our retail stores are expensed as incurred and included within retail cost of sales in the condensed consolidated statements of earnings. The Company periodically evaluates aged and distressed inventory and establishes an inventory markdown which represents the excess of the carrying value over the amount the Company expects to realize from the ultimate sale of the inventory. Markdowns establish a new cost basis for the inventory and are recorded within retail cost of sales within the condensed consolidated statement of earnings. The write-offs of merchandise inventories associated with the Company's cycle and physical inventory count processes are also included within retail cost of sales in the condensed consolidated statement of earnings. The Company records an inventory reserve for the anticipated loss associated with selling inventories below cost. This reserve is based on management’s current knowledge with respect to inventory levels, sales trends, and historical experience selling or disposing of aged or obsolete inventory.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments In March 2023, the Company entered into a non-speculative interest rate swap agreement for an aggregate notional amount of $100.0 million with an effective date of April 28, 2023 and a termination date of March 31, 2027. The purpose of this hedge is to limit the Company's exposure of its variable interest rate debt by effectively converting it to fixed interest rate debt. Under the terms of the agreement, the Company will receive a floating interest rate based on 1-month Chicago Mercantile Exchange ("CME") Term Secured Overnight Financing Rate ("SOFR") and pay a fixed interest rate of 3.87% on the notional amount. The Company has accounted for the interest rate swap as a cash flow hedge instrument in accordance with ASC 815, Derivatives and Hedging. Accordingly, the effective portion of the gains and losses associated with the changes in the fair value of the cash flow hedge instrument are recognized as a component of accumulated other comprehensive income in the Company's condensed consolidated balance sheets. Such amounts are reclassified into earnings in the same period during which the cash flow hedging instrument affects earnings. As of September 30, 2023, the facts and circumstances of the hedged relationship remain consistent with the initial effectiveness assessment and the hedging instrument remains an effective accounting hedge. The fair value of the hedge as of September 30, 2023 was an asset of $2.1 million, and has been recorded within prepaid expenses and other assets in the Company's condensed consolidated balance sheets. During the nine months ended September 30, 2023, the Company reclassified $0.6 million of net gains from accumulated other comprehensive income to interest expense. See Note 3 to these condensed consolidated financial statements for further information regarding the fair value determination of the Company's interest rate swap agreement. Derivative instruments in place during the prior year were not significant.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Claims Liability Costs | Estimated Claims Liability Costs Estimated claims liability costs are accrued primarily for workers compensation and vehicle liability, as well as general liability and group health insurance benefits provided to team members. These liabilities are recorded within estimated claims liability costs within accounts payable and accrued expenses in the condensed consolidated balance sheets. Estimates for these claims liabilities are made based on actual reported but unpaid claims and actuarial analysis of the projected claims run off for both reported and incurred but not reported claims. This analysis is based upon an assessment of the likely outcome or historical experience and considers a variety of factors, including the actuarial loss forecasts, company-specific development factors, general industry loss development factors and third-party claim administrator loss estimates of individual claims. The Company makes periodic prepayments to its insurance carriers to cover the projected claims run off for both reported and incurred but not reported claims, considering its retention or stop loss limits. In addition, we have prefunding balances on deposit and other insurance receivables with the insurance carriers which are recorded within prepaid expenses and other assets in our condensed consolidated balance sheets.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | 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. All acquisition-related goodwill balances are allocated amongst the Company's reporting units based on the nature of the acquired operations that originally created the goodwill. During the fourth quarter of 2022, in connection with its annual impairment testing, management evaluated the various components of the operating segments further described above and in Note 8 to these condensed consolidated financial statements and identified three reporting units, Aaron's Business, BrandsMart, and BrandsMart Leasing, each as described below. The Aaron's Business reporting unit is comprised of (i) Aaron's branded Company-operated and franchise operated stores; (ii) aarons.com e-commerce platform ("aarons.com"); and (iii) Woodhaven (collectively, the "Aaron’s Business reporting unit"). The Aaron's Business reporting unit is a component of the Aaron's Business operating segment. The operations of BrandsMart Leasing comprise the BrandsMart Leasing reporting unit (collectively, the "BrandsMart Leasing reporting unit"), and is a component of the Aaron's Business operating segment. Management considered the aggregation of the BrandsMart Leasing reporting unit and Aaron's Business reporting unit as a single reporting unit and determined that these components were economically dissimilar and also reviewed separately by the segment managers of the Aaron's Business operating segment, and therefore should not be aggregated. The operations of BrandsMart, comprise the BrandsMart reporting unit (collectively, the "BrandsMart reporting unit") and is also the sole component of the BrandsMart operating segment. The acquisition of BrandsMart U.S.A. in the second quarter of 2022 resulted in the recognition of approximately $55.8 million of goodwill, inclusive of measurement period adjustments further described in Note 2 to these condensed consolidated financial statements. Of this amount, $29.2 million was assigned to the BrandsMart reporting unit and $26.5 million was assigned to the BrandsMart Leasing reporting unit. The following table provides information related to the carrying amount of goodwill by operating segment.
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 interim impairment may have occurred. An interim goodwill impairment test is required if the Company believes it is more likely than not that the carrying amount of its reporting unit exceeds the reporting unit's fair value. The Company determined that there were no events that occurred or circumstances that changed during the nine months ended September 30, 2023 that would more likely than not reduce the fair value of its reporting units below their carrying amount. The Company may be required to recognize material impairments to the BrandsMart or BrandsMart Leasing goodwill balances in the future if: (i) the Company fails to successfully execute on one or more elements of the BrandsMart strategic plan; (ii) actual results are unfavorable to the Company's estimates and assumptions used to calculate fair value; (iii) the BrandsMart or BrandsMart Leasing carrying values increase without an associated increase in the fair value; and/or (iv) BrandsMart or BrandsMart Leasing is materially impacted by further deterioration of macroeconomic conditions, including inflation and other economic pressures, including rising interest rates.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition-Related Costs | Acquisition-Related CostsAcquisition-related costs of $0.7 million and $3.1 million were incurred during the three and nine months ended September 30, 2023, and Acquisition-related costs of $1.7 million and $13.2 million were incurred during the three and nine months ended September 30, 2022. These primarily represent internal control readiness third-party consulting, banking and legal expenses and retention bonuses associated with the acquisition of BrandsMart U.S.A. completed April 1, 2022. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 fair values of the Company's assets and liabilities as of September 30, 2023 and December 31, 2022 are further described in Note 3 to these condensed consolidated financial statements.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements There were no new accounting standards that had a material impact on the Company’s condensed consolidated financial statements during the nine months ended September 30, 2023, and there were no other new accounting standards or pronouncements that were issued but not yet effective as of September 30, 2023 that the Company expects to have a material impact on its condensed consolidated financial statements.
|
Business and Summary of Significant Accounting Policies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Company Operated Store Activity | The following table presents store count by ownership type:
1 The typical layout for a Company-operated Aaron's store is a combination of showroom, customer service and warehouse space, averaging approximately 9,500 square feet. Certain Company-operated Aaron's stores consist solely of a showroom. 2 BrandsMart U.S.A. stores average approximately 100,000 square feet and have been included in this table subsequent to the acquisition date of April 1, 2022.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Dilutive Stock Awards | The following table shows the calculation of weighted-average shares outstanding assuming dilution:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Advertising Cost |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Receivable Net of Allowances | Accounts receivable, net of allowances, consist of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Doubtful Accounts | The following table shows the components of the accounts receivable allowance:
The following table shows the components of the accounts receivable provision, which includes amounts recognized for bad debt expense and the provision for returns and uncollected payments:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease Merchandise | The following is a summary of lease merchandise, net of accumulated depreciation and allowances:
1 Includes Woodhaven raw materials, finished goods and work-in-process inventory that has been classified within lease merchandise in the condensed consolidated balance sheets of $9.8 million and $12.9 million as of September 30, 2023 and December 31, 2022, respectively.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Lease Merchandise | The following table shows the components of the allowance for lease merchandise write-offs:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Merchandise Inventories | The following is a summary of merchandise inventories, net of allowances:
The following table shows the components of the reserve for merchandise inventories:
1 There were no significant markdown provisions recorded during the three and nine months ended September 30, 2022.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following:
1 Amounts as of September 30, 2023 and December 31, 2022 included restricted cash of $1.6 million held as collateral for BrandsMart U.S.A.'s workers' compensation and general liability insurance policies.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table provides information related to the carrying amount of goodwill by operating segment.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | Changes in stockholders' equity for the three and nine months ended September 30, 2023 and 2022 are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) ("AOCI") by component for the nine months ended September 30, 2023 and September 30, 2022 are summarized below:
|
Acquisitions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The consideration transferred and the estimated fair values of the assets acquired and liabilities assumed in the BrandsMart U.S.A. acquisition as of the April 1, 2022 acquisition date are as follows:
1 As previously reported in the notes to the consolidated and combined financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 2 The measurement period adjustments recorded in 2023 primarily relate to opening balance sheet adjustments to certain asset and liability balances further illustrated in the table above. 3 Effective as of the acquisition date, the Company entered into lease agreements for six store locations retained by the sellers of BrandsMart U.S.A. The agreement includes initial terms of ten years, with options to renew each location for up to 20 years thereafter. The annual rent is considered to be above market. The value of the off-market element of the lease agreements has been included in consideration transferred and as a reduction to the operating lease right-of-use-asset. 4 Identifiable intangible assets are further disaggregated in the table set forth below. 5 Includes restricted cash of $2.5 million at the acquisition date that was held as collateral for BrandsMart U.S.A.'s workers' compensation and general liability insurance policies. 6 The purchase price exceeded the fair value of the net assets acquired, which resulted in the recognition of goodwill, all of which is expected to be deductible for tax purposes. Goodwill is comprised of synergies created from the expected future benefits to the Company, including those related to the expansion of BrandsMart stores into new markets, expanded product assortment, procurement synergies, the projected growth of the BrandsMart Leasing business, and certain other intangible assets that do not qualify for separate recognition, such as an assembled workforce. See Note 1 to these condensed consolidated financial statements for further discussion of the identification of the Company's reporting units and the allocation of goodwill and Note 8 for the discussion of operating segments associated with the BrandsMart U.S.A. acquisition.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Intangible assets attributable to the BrandsMart U.S.A. acquisition are comprised of the following:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The following table presents unaudited consolidated pro forma information as if the acquisition of BrandsMart U.S.A. had occurred on January 1, 2021, compared to actual, historical results.
|
Fair Value Measurement (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets Measured at Fair Value on Nonrecurring Basis | The following table summarizes non-financial assets measured at fair value on a nonrecurring basis:
|
Indebtedness (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Company's Credit Facilities | The following is a summary of the Company's debt, net of unamortized debt issuance costs as applicable:
1 Includes unamortized debt issuance costs of $0.6 million and $0.7 million as of September 30, 2023 and December 31, 2022. The Company has included $2.4 million and $2.9 million of debt issuance costs as of September 30, 2023 and December 31, 2022, respectively, related to the new and previous revolving credit facility, within prepaid expenses and other assets in the condensed consolidated balance sheets.
|
Revenue Recognition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table disaggregates revenue by source:
|
Restructuring (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Costs | The following table summarizes restructuring charges for the three and nine months ended September 30, 2023 and 2022, respectively, under the Company's restructuring programs:
1 Includes an accrual of $2.0 million for deferred maintenance on previously restructured properties. 2 Includes professional advisory fees of $1.7 million for the nine months ended September 30, 2023.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve | The following table summarizes changes in the accrued expense balance related to the restructuring programs for the nine months ended September 30, 2023:
1 Operating lease charge liabilities outstanding at January 1, 2023 represent expenses related to a real estate-related settlement which remained payable at December 31, 2022 and was subsequently paid during the first quarter of 2023. 2 Operating lease charges payable at September 30, 2023 relate to accrued maintenance charges at various properties vacated in conjunction with the restructuring programs discussed herein. These liabilities are included within accounts payable and accrued expenses in the condensed consolidated balance sheets. All other operating lease charges incurred during the nine months ended September 30, 2023 were expensed as incurred.
|
Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information on Segments and Reconciliation to Earnings Before Income Taxes from Continuing Operations | The Company does not evaluate performance or allocate resources based on segment asset data, and therefore total segment assets are not presented.
1 The loss before income taxes for the Unallocated Corporate category during the three months ended September 30, 2023 was impacted by restructuring charges of $2.7 million, and BrandsMart U.S.A. acquisition-related costs of $0.7 million. 2 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
1 The loss before income taxes for the Unallocated Corporate category during the three months ended September 30, 2022 was impacted by a goodwill impairment charge of $12.9 million to fully write-off the goodwill balance of the Aaron's Business reporting unit, restructuring charges of $14.9 million, BrandsMart U.S.A. acquisition-related costs of $1.7 million and separation-related costs of $0.2 million. 2 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
1 The earnings before income taxes for the Aaron's Business during the nine months ended September 30, 2023 includes a $3.8 million receipt from the settlement of a class action lawsuit related to alleged anti-competitive conduct by several manufacturers of cathode ray tubes. 2 The loss before income taxes for the Unallocated Corporate category during the nine months ended September 30, 2023 was impacted by restructuring charges of $12.8 million, BrandsMart U.S.A. acquisition-related costs of $3.1 million, and separation-related costs of $0.2 million. 3 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
1 Loss before income taxes for the BrandsMart segment during the nine months ended September 30, 2022 was impacted by a one-time, non-cash charge for a fair value adjustment to the acquired merchandise inventories of $23.1 million. 2 Loss before income taxes for the Unallocated Corporate category during the nine months ended September 30, 2022 was impacted by restructuring charges of $23.8 million, BrandsMart U.S.A. acquisition-related costs of $13.2 million, a goodwill impairment charge of $12.9 million to fully write-off the goodwill balance of the Aaron's Business reporting unit and separation-related costs of $1.0 million. 3 Excludes depreciation of lease merchandise, which is not included in the chief operating decision maker's measure of depreciation and amortization.
|
Business and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
store
|
Apr. 01, 2022
USD ($)
|
Sep. 30, 2022
store
|
---|---|---|---|
Significant Accounting Policies [Line Items] | |||
Approximate number of stores | 1,250 | ||
Number of retail stores | 1,262 | 1,278 | |
Common stock conversion ratio | 0.5 | ||
BrandsMart | |||
Significant Accounting Policies [Line Items] | |||
Percentage of interests acquired | 100.00% | ||
Cash Consideration to BrandsMart U.S.A. | $ | $ 230,000 | $ 230,000 |
Business and Summary of Significant Accounting Policies - (Loss) Earnings Per Share (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounting Policies [Abstract] | ||||
Weighted Average Shares Outstanding (in shares) | 30,880 | 30,875 | 30,889 | 30,921 |
Dilutive Effect of Share-Based Awards (in shares) | 0 | 0 | 342 | 452 |
Weighted Average Shares Outstanding Assuming Dilution (in shares) | 30,880 | 30,875 | 31,231 | 31,373 |
Business and Summary of Significant Accounting Policies - (Loss) Earnings Per Share Narrative (Details) - shares shares in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounting Policies [Abstract] | ||
Anti-dilutive securities excluded from the computation of earnings per share assuming dilution (in shares) | 1.2 | 0.8 |
Business and Summary of Significant Accounting Policies - Revenue Recognition (Details) - Sales And Lease Ownership |
Sep. 30, 2023 |
---|---|
Agreement One | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Lease agreement period | 12 months |
Agreement Two | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Lease agreement period | 18 months |
Agreement Three | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Lease agreement period | 24 months |
Business and Summary of Significant Accounting Policies - Advertising Expense (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounting Policies [Abstract] | ||
Prepaid advertising asset | $ 7.3 | $ 4.6 |
Business and Summary of Significant Accounting Policies - Schedule of Advertising Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounting Policies [Abstract] | ||||
Advertising Costs, Gross | $ 15,269 | $ 16,092 | $ 50,951 | $ 55,794 |
Less: Cooperative Advertising Considerations | (8,074) | (8,294) | (24,189) | (24,651) |
Advertising Costs, Net | $ 7,195 | $ 7,798 | $ 26,762 | $ 31,143 |
Business and Summary of Significant Accounting Policies - Accounts Receivable Net of Allowances (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 23,678 | $ 38,191 |
Threshold period past due for write-off of lease receivable | 60 days | |
Customers | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 4,110 | 9,721 |
Customer Lease Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Threshold period past due for write-off of lease receivable | 90 days | |
Corporate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 13,252 | 20,597 |
Franchisee | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable, net of allowances | $ 6,316 | $ 7,873 |
Business and Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning Balance | $ 8,895 | $ 7,163 |
Accounts Written Off, net of Recoveries | (29,151) | (28,020) |
Accounts Receivable Provision | 28,278 | 29,331 |
Ending Balance | $ 8,022 | $ 8,474 |
Business and Summary of Significant Accounting Policies - Components of the Accounts Receivable Provision (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accounting Policies [Abstract] | ||
Bad Debt Expense (Reversal) | $ 25 | $ (263) |
Provision for Returns and Uncollectible Renewal Payments | 28,253 | 29,594 |
Accounts Receivable Provision | $ 28,278 | $ 29,331 |
Business and Summary of Significant Accounting Policies - Allowance for Lease Merchandise Write-offs (Details) - Lease Merchandise - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Components of the allowance of leases merchandise write-offs: | ||
Beginning Balance | $ 13,894 | $ 12,339 |
Merchandise Written off, net of Recoveries | (61,215) | (70,247) |
Provision for Write-offs | 59,891 | 72,092 |
Ending Balance | $ 12,570 | $ 14,184 |
Business and Summary of Significant Accounting Policies - Retail Related Inventory, Merchandise (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounting Policies [Abstract] | ||
Merchandise Inventories, gross | $ 100,448 | $ 96,945 |
Reserve for Merchandise Inventories | (1,041) | (981) |
Merchandise Inventories, Net | $ 99,407 | $ 95,964 |
Business and Summary of Significant Accounting Policies - Retail Related Inventory, Components of the Reserve for Merchandise Inventories (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Retail Related Inventory, Merchandise [Roll Forward] | |
Beginning Balance | $ 981 |
Merchandise Written off | (350) |
Provision for Write-offs | 410 |
Ending Balance | $ 1,041 |
Business and Summary of Significant Accounting Policies - Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Apr. 01, 2022 |
---|---|---|---|
Restructuring Cost and Reserve [Line Items] | |||
Prepaid Expenses | $ 22,798 | $ 20,218 | |
Insurance Related Assets | 27,707 | 25,103 | |
Company-Owned Life Insurance | 14,257 | 13,443 | |
Assets Held for Sale | 1,113 | 1,857 | |
Deferred Tax Assets | 24,615 | 16,277 | |
Other Assets | 22,130 | 19,538 | |
Prepaid expenses and other assets | 112,620 | 96,436 | |
BrandsMart | |||
Restructuring Cost and Reserve [Line Items] | |||
Restricted cash | $ 1,600 | $ 1,600 | $ 2,500 |
Business and Summary of Significant Accounting Policies - Sale-Leaseback Transactions (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2022
USD ($)
store
|
Sep. 30, 2022
USD ($)
sale-leasebackTransaction
store
|
Sep. 30, 2023
store
|
|
Lessee, Lease, Description [Line Items] | |||
Number of retail stores | 1,278 | 1,278 | 1,262 |
Sales leaseback transaction, sale price | $ | $ 12.9 | $ 12.9 | |
Sale and leaseback transactions | Other operating expense | |||
Lessee, Lease, Description [Line Items] | |||
Gain related to the sale and leaseback transaction | $ | $ 2.8 | $ 8.5 | |
BrandsMart | |||
Lessee, Lease, Description [Line Items] | |||
Sale leaseback, number of properties | sale-leasebackTransaction | 4 | ||
Number of retail stores | 6 | ||
BrandsMart | Sale and leaseback transactions | |||
Lessee, Lease, Description [Line Items] | |||
Number of retail stores | 7 | 7 |
Business and Summary of Significant Accounting Policies - Derivative Instruments (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Mar. 31, 2023 |
|
Debt Instrument [Line Items] | ||
Derivative fixed interest rate | 3.87% | |
Interest Rate Swap | ||
Debt Instrument [Line Items] | ||
Notional amount | $ 100.0 | |
Net gains AOCI to interest expense | $ 0.6 | |
Interest Rate Swap | Designated as Hedging Instrument | ||
Debt Instrument [Line Items] | ||
Derivative asset | $ 2.1 |
Business and Summary of Significant Accounting Policies - Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounting Policies [Abstract] | ||
Accounts Payable | $ 107,106 | $ 106,966 |
Estimated Claims Liability Costs | 60,895 | 58,549 |
Accrued Salaries and Benefits | 28,355 | 33,932 |
Accrued Real Estate and Sales Taxes | 23,331 | 24,030 |
Other Accrued Expenses and Liabilities | 33,713 | 40,566 |
Accounts Payable and Accrued Liabilities | $ 253,400 | $ 264,043 |
Business and Summary of Significant Accounting Policies - Goodwill Narrative (Details) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2022
USD ($)
reportingUnit
|
Sep. 30, 2023
USD ($)
|
Jun. 30, 2022
USD ($)
|
Apr. 01, 2022
USD ($)
|
|
Goodwill [Line Items] | ||||
Number of reporting units | reportingUnit | 3 | |||
Goodwill | $ 54,710 | $ 55,750 | ||
BrandsMart | ||||
Goodwill [Line Items] | ||||
Goodwill | 55,750 | $ 55,800 | $ 54,710 | |
BrandsMart | BrandsMart Leasing | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 26,517 | $ 26,517 | 26,500 | |
BrandsMart | BrandsMart | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 29,200 |
Business and Summary of Significant Accounting Policies - Acquisition Related Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Acquisition-related costs | $ 693 | $ 1,700 | $ 3,087 | $ 13,156 |
BrandsMart | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Acquisition-related costs | $ 700 | $ 1,659 | $ 3,100 | $ 13,200 |
Business and Summary of Significant Accounting Policies - Related Party Transactions (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023
USD ($)
store
|
Sep. 30, 2022
USD ($)
store
|
Sep. 30, 2023
USD ($)
store
|
Sep. 30, 2022
USD ($)
store
|
|
Related Party Transaction [Line Items] | ||||
Number of retail stores | 1,262 | 1,278 | 1,262 | 1,278 |
Real estate activities | $ | $ 275,421 | $ 314,805 | $ 829,434 | $ 872,172 |
Real estate activities, including rental payments, maintenance and taxes | ||||
Related Party Transaction [Line Items] | ||||
Real estate activities | $ | $ 3,200 | $ 9,700 | ||
BrandsMart | ||||
Related Party Transaction [Line Items] | ||||
Number of retail stores | 6 | 6 | ||
Initial operating lease term | 10 years | 10 years | ||
Renewal term | 20 years | 20 years | ||
Number of operating leases | 6 |
Business and Summary of Significant Accounting Policies - Statements of Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Treasury Stock Beginning Balance (in shares) | (5,480,353) | (5,480,353) | ||||||||||||
Beginning Balance | $ 710,580 | $ 703,903 | $ 695,402 | $ 720,513 | $ 730,908 | $ 718,166 | $ 695,402 | $ 718,166 | ||||||
Cash Dividends | (3,934) | (3,874) | (3,966) | (3,471) | (3,541) | (3,584) | ||||||||
Stock-Based Compensation | 3,100 | 2,913 | 2,874 | 3,163 | 3,224 | 3,611 | ||||||||
Issuance of Shares under Equity Plans | 21 | 60 | (2,539) | (23) | 860 | (3,489) | ||||||||
Acquisition of Treasury Stock | (5,676) | (804) | 0 | (5,335) | (5,720) | |||||||||
Net (Loss) Earnings | (4,137) | 6,517 | 12,798 | (15,616) | (5,342) | 21,532 | 15,178 | 574 | ||||||
Unrealized Gain (Loss) on Derivative Instruments, net of tax | 889 | [1] | 1,685 | (990) | (235) | [1] | 85 | 154 | 1,584 | [1] | 4 | [1] | ||
Foreign Currency Translation Adjustment, net of tax | $ (165) | [1] | 180 | 324 | (611) | [1] | (346) | 238 | $ 339 | [1] | (719) | [1] | ||
Treasury Stock Ending Balance (in shares) | (6,293,271) | (6,293,271) | ||||||||||||
Ending Balance | $ 700,678 | $ 710,580 | $ 703,903 | $ 703,720 | $ 720,513 | $ 730,908 | $ 700,678 | $ 703,720 | ||||||
Other Derivative Instruments | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Unrealized Gain (Loss) on Derivative Instruments, net of tax | $ 889 | |||||||||||||
Treasury Stock | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Treasury Stock Beginning Balance (in shares) | (5,753,000) | (5,687,000) | (5,480,000) | (5,260,000) | (5,005,000) | (4,580,000) | (5,480,000) | (4,580,000) | ||||||
Beginning Balance | $ (142,096) | $ (141,292) | $ (138,753) | $ (136,400) | $ (131,065) | $ (121,804) | $ (138,753) | $ (121,804) | ||||||
Issuance of Shares under Equity Plans (in shares) | (207,000) | (1,000) | 0 | (163,000) | ||||||||||
Issuance of Shares under Equity Plans | $ (2,539) | $ (22) | $ 0 | $ (3,541) | ||||||||||
Acquisition of Treasury Stock (in shares) | (540,000) | (66,000) | 0 | (255,000) | (262,000) | |||||||||
Acquisition of Treasury Stock | $ (5,676) | $ (804) | $ 0 | $ (5,335) | $ (5,720) | |||||||||
Treasury Stock Ending Balance (in shares) | (6,293,000) | (5,753,000) | (5,687,000) | (5,261,000) | (5,260,000) | (5,005,000) | (6,293,000) | (5,261,000) | ||||||
Ending Balance | $ (147,772) | $ (142,096) | $ (141,292) | $ (136,422) | $ (136,400) | $ (131,065) | $ (147,772) | $ (136,422) | ||||||
Common Stock | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Beginning Balance | $ 18,310 | $ 18,298 | $ 18,050 | $ 18,019 | $ 17,984 | $ 17,779 | $ 18,050 | $ 17,779 | ||||||
Beginning Balance (in shares) | 36,620,000 | 36,596,000 | 36,100,000 | 36,037,000 | 35,969,000 | 35,559,000 | 36,100,000 | 35,559,000 | ||||||
Issuance of Shares under Equity Plans (in shares) | 3,000 | 24,000 | 496,000 | 5,000 | 68,000 | 410,000 | ||||||||
Issuance of Shares under Equity Plans | $ 1 | $ 12 | $ 248 | $ 2 | $ 35 | $ 205 | ||||||||
Ending Balance | $ 18,311 | $ 18,310 | $ 18,298 | $ 18,021 | $ 18,019 | $ 17,984 | $ 18,311 | $ 18,021 | ||||||
Ending Balance (in shares) | 36,623,000 | 36,620,000 | 36,596,000 | 36,042,000 | 36,037,000 | 35,969,000 | 36,623,000 | 36,042,000 | ||||||
Additional Paid-in Capital | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Beginning Balance | $ 744,015 | $ 741,054 | $ 738,428 | $ 731,891 | $ 727,842 | $ 724,384 | $ 738,428 | $ 724,384 | ||||||
Stock-Based Compensation | 3,100 | 2,913 | 2,874 | 3,163 | 3,224 | 3,611 | ||||||||
Issuance of Shares under Equity Plans | 20 | 48 | (248) | (3) | 825 | (153) | ||||||||
Ending Balance | 747,135 | 744,015 | 741,054 | 735,051 | 731,891 | 727,842 | 747,135 | 735,051 | ||||||
Retained Earnings | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Beginning Balance | 90,548 | 87,905 | 79,073 | 107,611 | 116,494 | 98,546 | 79,073 | 98,546 | ||||||
Cash Dividends | (3,934) | (3,874) | (3,966) | (3,471) | (3,541) | (3,584) | ||||||||
Net (Loss) Earnings | (4,137) | 6,517 | 12,798 | (15,616) | (5,342) | 21,532 | ||||||||
Ending Balance | $ 82,477 | $ 90,548 | $ 87,905 | $ 88,524 | $ 107,611 | $ 116,494 | 82,477 | 88,524 | ||||||
Dividends, per share (in dollars per share) | $ 0.125 | $ 0.125 | $ 0.125 | $ 0.11 | $ 0.11 | $ 0.11 | ||||||||
Accumulated Other Comprehensive (Loss) Income | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Beginning Balance | $ (197) | $ (2,062) | $ (1,396) | $ (608) | $ (347) | $ (739) | (1,396) | (739) | ||||||
Unrealized Gain (Loss) on Derivative Instruments, net of tax | 1,685 | (990) | (235) | 85 | 154 | |||||||||
Foreign Currency Translation Adjustment, net of tax | (165) | 180 | 324 | (611) | (346) | 238 | ||||||||
Ending Balance | 527 | $ (197) | $ (2,062) | $ (1,454) | $ (608) | $ (347) | $ 527 | $ (1,454) | ||||||
Accumulated Other Comprehensive (Loss) Income | Other Derivative Instruments | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Unrealized Gain (Loss) on Derivative Instruments, net of tax | $ 889 | |||||||||||||
|
Business and Summary of Significant Accounting Policies - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | $ (1,396) | $ (739) |
Other Comprehensive Income (Loss), net of Tax | 1,923 | (715) |
Ending Balance | 527 | (1,454) |
Derivative Instruments | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (17) | 0 |
Other Comprehensive Income (Loss), net of Tax | 1,584 | 4 |
Ending Balance | 1,567 | 4 |
Foreign Currency | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | (1,379) | (739) |
Other Comprehensive Income (Loss), net of Tax | 339 | (719) |
Ending Balance | $ (1,040) | $ (1,458) |
Acquisitions - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2023
USD ($)
store
|
Apr. 01, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
store
|
Sep. 30, 2022
USD ($)
store
|
Sep. 30, 2023
USD ($)
store
|
Sep. 30, 2022
USD ($)
store
|
|
Business Acquisition [Line Items] | ||||||
Number of retail stores | store | 1,262 | 1,262 | 1,278 | 1,262 | 1,278 | |
Acquisition-related costs | $ 693 | $ 1,700 | $ 3,087 | $ 13,156 | ||
BrandsMart | ||||||
Business Acquisition [Line Items] | ||||||
Cash consideration to BrandsMart U.S.A. | $ 230,000 | $ 230,000 | ||||
Revenue contributed by acquiree | 152,400 | 183,300 | 440,300 | 364,800 | ||
Net earnings (losses) contributed by acquiree | (2,400) | 3,000 | (2,200) | (13,000) | ||
Acquisition-related costs | $ 700 | $ 1,659 | $ 3,100 | 13,200 | ||
BrandsMart | Operating Segments | ||||||
Business Acquisition [Line Items] | ||||||
Merchandise written off | $ 23,100 |
Acquisitions - Intangible Assets Acquired (Details) - BrandsMart $ in Thousands |
Apr. 01, 2022
USD ($)
|
---|---|
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, fair value | $ 122,950 |
Trade Names | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, fair value | $ 108,000 |
Weighted Average Life (in years) | 20 years |
Non-Compete Agreements | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, fair value | $ 250 |
Weighted Average Life (in years) | 3 years |
Customer List | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, fair value | $ 14,700 |
Weighted Average Life (in years) | 4 years |
Fair Value Measurement - Narrative (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Interest Rate Swap | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Notional amount | $ 100.0 |
Fair Value Measurement - Assets Measured At Fair Value on Nonrecurring Basis (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 1,113 | $ 1,857 |
Level 1 | Fair Value, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | 0 | 0 |
Level 2 | Fair Value, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | 1,113 | 1,857 |
Level 3 | Fair Value, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Held for Sale | $ 0 | $ 0 |
Indebtedness - Summary of Company's Credit Facilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Less: Current Maturities | $ 21,819 | $ 23,450 |
Long-Term Debt | 165,638 | 218,963 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt | 187,457 | 242,413 |
Revolving Facility | Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt | 16,350 | 69,250 |
Revolving Facility | Credit Facility | Fixed-Rate Long-Term Debt | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs deferred | 600 | 700 |
Revolving Facility | Credit Facility | Prepaid Expenses and Other Assets | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance costs deferred | 2,400 | 2,900 |
Term Loan | Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt | $ 171,107 | $ 173,163 |
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 525,678 | $ 593,384 | $ 1,610,411 | $ 1,659,850 |
Lease Revenues and Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 340,805 | 372,127 | 1,068,351 | 1,167,958 |
Lease Revenues and Fees | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,300 | 4,600 | 13,000 | 14,200 |
Retail Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 155,682 | 188,734 | 454,274 | 392,189 |
Non-Retail Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,573 | 26,542 | 70,308 | 81,411 |
Franchise Royalties and Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,444 | 5,803 | 16,930 | 17,713 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 174 | $ 178 | $ 548 | $ 579 |
Commitments and Contingencies (Details) - USD ($) |
Sep. 30, 2023 |
Feb. 23, 2023 |
Dec. 31, 2022 |
Apr. 01, 2022 |
Mar. 31, 2022 |
---|---|---|---|---|---|
Other Commitments [Line Items] | |||||
Portion that company might be obligated to repay in the event franchisees defaulted | $ 4,800,000 | ||||
Fair value of franchisee-related borrowings | 1,000,000 | $ 1,300,000 | |||
Loss contingency accrual | 400,000 | $ 2,700,000 | |||
Minimum | |||||
Other Commitments [Line Items] | |||||
Range of possible loss not accrued | 0 | ||||
Estimate of possible loss | 0 | ||||
Maximum | |||||
Other Commitments [Line Items] | |||||
Range of possible loss not accrued | 500,000 | ||||
Estimate of possible loss | $ 500,000 | ||||
Revolving Facility | Franchise Loan Facility | Credit Facility | |||||
Other Commitments [Line Items] | |||||
Franchise loan facility | $ 10,000,000 | $ 12,500,000 | $ 15,000,000 |
Restructuring - Summary of Accruals of Restructuring Programs (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Severance | |
Restructuring Reserve [Roll Forward] | |
Balance at January 1, 2023 | $ 695 |
Restructuring Charges | 1,900 |
Payments | (2,428) |
Balance at September 30, 2023 | 167 |
Operating Lease Charges | |
Restructuring Reserve [Roll Forward] | |
Balance at January 1, 2023 | 2,200 |
Restructuring Charges | 2,016 |
Payments | (2,200) |
Balance at September 30, 2023 | 2,016 |
Professional Advisory Fees | |
Restructuring Reserve [Roll Forward] | |
Balance at January 1, 2023 | 1,032 |
Restructuring Charges | 1,716 |
Payments | (2,748) |
Balance at September 30, 2023 | $ 0 |
Segments - Narrative (Details) |
3 Months Ended | 18 Months Ended | |
---|---|---|---|
Sep. 30, 2022
segment
store
|
Mar. 31, 2022
segment
|
Sep. 30, 2023
segment
store
|
|
Business Acquisition [Line Items] | |||
Number of operating segments | 1 | 2 | |
Number of reportable segments | 1 | 2 | |
Number of retail stores | store | 1,278 | 1,262 |
:XC+A=Z2'X"!;4$0Q"M6&QN5%RP
M'/049H<69H?B7F7?D$L.#8GAU4P3X7%U\0K30RMEBEZOZ-,L?4_N4@4^-LZ6
MSG=!O,OJOS?2_R!KLZN3K5H[4]-'1\_:$-,>[5[TK6<3;V&"*&Y=AA&/_2SW
M=Q.RA1$%%RAOR%-X'+?P."YN4?* @R*Z(MM$?>+[
M7VAA4*#YECR1YC_:%[)M!RVW4O&T (,&: W^ 0$A1*)1!3_1@B!(V(9:XQNX1:/#>A^1?^P1F.]*?5W*75 !
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M5V:)@7A+%S[BYGWKW_;G_=JE#P H+0_'_1,&0P:!33.0 &9BT P%;LM9S]Z
M"/Z6I8A/1-H2Q*WZ43%@AP3652B@+!!% E@3V*_ %AG%9VY@
MV;<;Q*>]M$.3D"[I,/V^8LZ)$^WJ9V!A*7,[Y^'%@>I?<'G:2,OVM&=D >>S._:\X\MS.C
M?S@;!Q.26Z/1))C!5/[ GQAMSQL\%%$8!=,!>*LP].4T:DNG9P \&5P&PVB*
MWV;#8 J:,,3,,'.YDPV%/ BT4PNP![DV+2FQ'%R?24;.SHOO%PE8Q$5.9VJ2
M#)ZK\$P?&=3N9$4K)-@A/I\0@,3EOIAYZ3 *H891?^:N/,D^J8=1ZWD-"N/K
MW*43E_]P<6U=$:1S*K5%: ?)>'PTQEBH=:Q.K8V+VD&O@[-\YM0\
M&?L1<45BIV[G'[5G4X_0ZD+$TE!MM\$_:0!PY*B4]^RCM:@]%RS,M@2JP\5<
MHW+1%5 1*"N,NJL;RJ/C,9E\Z_DXHB'=!'=G_X1^93)=QP8="1M+-=M< OE=(-.'UM@(;Q3N%
MAV=B/!E$B\&4GN:C:#B:XVD8#6:+:#P=\O-P-H\NIPN<+F6:B5N9X>!P.HUF
MBY$8+A;1?#P1D^DD<G8GP)(HM+\4'GYYT#HW$TG4.:632=C,1\$(T'"[$8
M1I/A4+PS,H\W*4FH]S(KT[:(TV@RF>#O8C 6PUET.1Z(X3R:#\?B8[F!!8;@
M.IPOQ'2"?_-+\:,N9=:H2CI,1Q 66_!T.8[&BPGK-1L.F#L_3R^CQ124Q?L\
MSJJD\9059[M-&F^$-$H4)@72IME>9&Q0TS;H"M(^]QDAV^UJU"Y,7(+#QNA,?NB<[RKIPCHWS#9Q,K
M7L%5DA;@,
D;3R-)IJT8$F!:G
[TDO_C5?F*J$E_Q[GQ[L,:/]QU#DO#!;F:A7!P@-H\I;=?#ZQQ^B2?CS
M,T*,6B%&SU'_IHV>W;V?M_GY/[]<7E_>7'[Z>"W>E-"(^2#+2GP97 _F@YY>
M/N5BOBUU)B*V2AR(:JU(GUN9/X@$_S-5J93OXH!;7=0F>X"2\Z+.$SR0'K%B
M*626T3]:KHVI:0'L@7QA*OS0^4J8M02CM"B16UW)3" ,DJ]TXS&K[W *?$_H
M7$2SL[-@SQ(-6KEJ#LV0NN@4N=UF6H)#/C^!;NN-*@7GB[+(=6*0="JI,U4:
MHDY[#=A<*VDJ5>;B2ZY)[NM*5N"6A?!.D>5*F=8@@9_;#CM&VD>@S^L;RN8":
MJ!G&Y+R01[.L5GD,U5S"KQE2FD