PR Newswire | Feb 25, 2021 07:03AM EST

02/25 06:00 CST

PROG Holdings Reports Fourth Quarter 2020 Results SALT LAKE CITY, Feb. 25, 2021

SALT LAKE CITY, Feb. 25, 2021 /PRNewswire/ --

* Revenues of $605.7 million, up 6.5% * Diluted EPS of $0.62; Non-GAAP Diluted EPS $0.95, up 46.2% * Earnings before taxes of $66.3 million; Adjusted EBITDA of $90.0 million, up 35.9% * Progressive Leasing earnings before taxes of $88.1 million; Adjusted EBITDA of $96.7 million, up 25.4% * Board of Directors authorizes new $300 million share repurchase program

PROG Holdings, Inc. (NYSE:PRG), a FinTech holding company operating Progressive Leasing, a leading provider of virtual in store, e-commerce and app-based point-of-sale lease-to-own solutions, and Vive Financial, an omni-channel provider of second-look revolving credit products, today announced fourth quarter 2020 results for the first time as a stand-alone public company.

"Our Progressive Leasing segment delivered record revenue, earnings before taxes, and adjusted EBITDA for the fourth quarter period, in spite of challenges posed by the pandemic", said Steve Michaels, PROG's Chief Executive Officer. "During our first quarter as a stand-alone FinTech company, the PROG team provided exceptional service to our customers and point-of-sale retail partners while also completing the spin-off of our former Aaron's Business segment. We continued to navigate challenging economic conditions, as changes in customer behavior, supply chain disruptions, and broader economic uncertainty negatively impacted gross merchandise volume (GMV) in the period. During 2021, we expect to achieve strong GMV growth by expanding our e-commerce business and driving increased sales for our existing and new point-of-sale retail partners."

Consolidated Results

For the fourth quarter of 2020, consolidated revenues were $605.7 million, an increase of 6.5% from the fourth quarter of 2019. The increase was primarily driven by continued strong customer payment performance across both the Progressive Leasing and Vive business segments, as well as elevated buyout activity in the period. These revenue drivers were partially offset by lower levels of GMV growth in the second and third quarters that had an unfavorable impact on fourth quarter revenue growth. Progressive Leasing's GMV for the fourth quarter of 2020 declined 3.4% compared to the prior year period, as strong growth in new national retailers and e-commerce was offset by the effects of pandemic-related challenges experienced by our point-of-sale retail partners.

The provision for lease merchandise write-offs was 4.5% of revenues in the fourth quarter of 2020 compared with 6.6% in the same period of 2019, below our annual target range of 6% to 8% of revenues. The lower write-offs resulted from lower delinquencies and customer payment performance exceeding prior year results.

The Company reported net earnings from continuing operations for the fourth quarter of 2020 of $42.3 million compared to a net loss from continuing operations of $138.1 million in the prior year period (which was burdened by one-time legal and regulatory expenses of $179.3 million). Net earnings in the fourth quarter of 2020 included $15.5 million of transaction expenses related to the spin-off of our former Aaron's Business segment, as well as $3.6 million of unallocated overhead costs that was previously allocated to that segment.

Adjusted EBITDA for the Company was $90.0 million for the fourth quarter of 2020, compared with $66.2 million for the same period in 2019, an increase of $23.8 million, or 35.9%. As a percentage of revenues, adjusted EBITDA was 14.9% in the fourth quarter of 2020 compared with 11.6% for the same period in 2019.

Diluted earnings per share from continuing operations for the fourth quarter of 2020 were $0.62 compared with diluted loss per share of $2.06 in the year ago period. The fourth quarter 2019 diluted loss per share was impacted by one-time legal and regulatory expenses of $179.3 million. On a non-GAAP basis, diluted earnings per share from continuing operations were $0.95 in the fourth quarter of 2020 compared with $0.65 for the same quarter in 2019, an increase of $0.30 or 46.2%.

Liquidity and Capital Allocation

The Company ended 2020 with a net debt position of $13 million and had $300 million of unused capacity on its $350 million revolving credit facility. In addition, the Company's Board of Directors has authorized a new $300 million share repurchase program and determined to discontinue paying dividends for the foreseeable future.

"The Board's decision to authorize a new repurchase program and discontinue the dividend, reflects our new positioning. With the spin-off behind us, our business is now high-growth and asset light. We have substantial capital to grow, through both re-investment in our business and potential opportunities to acquire innovative and scalable technologies or businesses. At the same time, we expect our strong cash flows will provide us the opportunity to return excess capital to shareholders through opportunistic buybacks," said Mr. Michaels.

The Company expects to repurchase shares under its new $300 million program from time to time, subject to its capital plan, market conditions and other factors. The timing and exact amount of repurchases under the new repurchase program will be determined by the Company's management. The Company is not obligated to acquire any particular number of shares and the new program may be suspended or discontinued at any time.

2021 Outlook

The Company is providing outlook for the first quarter of 2021, but will not be providing annual guidance at this time, as the economic uncertainty created by the pandemic, and uncertainty regarding the amount, nature and timing of any government stimulus, continues to impact our POS partners and our customers in a manner that limits its visibility into its full-year performance for 2021.

Q1 2021 Outlook

(In thousands, except per share amounts) Low High



PROG Holdings - Total Revenues $650,000$670,000

PROG Holdings - Net Earnings 55,000 58,000

PROG Holdings - Adjusted EBITDA^1 85,000 90,000

PROG Holdings - Diluted EPS 0.81 0.87

PROG Holdings - Diluted Non-GAAP EPS 0.89 0.95



Progressive Leasing - Total Revenues 638,000 657,000

Progressive Leasing - Earnings before taxes72,000 75,000

Progressive Leasing - Adjusted EBITDA^1 84,000 87,000



Vive - Total Revenues 12,000 13,000

Vive - Earnings before taxes 1,000 3,000

Vive - Adjusted EBITDA^1 1,000 3,000

^ The Q1 2021 Adjusted EBITDA outlook excludes stock-based compensation1 expense. See GAAP to Non-GAAP reconciliation below for further details.

Conference Call and Webcast

The Company will hold a conference call to discuss its quarterly results on Thursday, February 25, 2021 at 8:30 a.m. Eastern Time. The public is invited to listen to the conference call by webcast accessible through the Company's investor relations website, investor.progleasing.com. The webcast will be archived for playback at that same site.

About PROG Holdings, Inc.

Headquartered in Salt Lake City, Utah, PROG Holdings, Inc.'s (NYSE-PRG) is a financial technology holding company operating Progressive Leasing, a leading provider of virtual in store, e-commerce and app-based point-of-sale lease-to-own solutions, and Vive Financial, an omni-channel provider of second-look revolving credit products. The Company's mission is to provide simple and affordable payment options for credit challenged consumers. Progressive Leasing's fair and transparent lease-purchase option has helped millions of consumers and their families use and own the products they need through more than 25,000 point-of-sale partner locations and e-commerce websites in 45 states. Vive Financial provides second-look credit products that are originated through federally insured banks at over 3,000 point-of-sale partner locations and e-commerce websites.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release regarding our business that are not historical facts are "forward-looking statements" that involve risks and uncertainties which could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements generally can be identified by the use of forward-looking terminology, such as "expect", "believe", "outlook", "guidance", and similar terminology. These risks and uncertainties include factors such as (i) the impact of the COVID-19 pandemic and related measures taken by governmental or regulatory authorities to combat the pandemic, and whether additional government stimulus payments or supplemental unemployment benefits will be approved, and the nature, amount and timing of any such payments or benefits, including the impact of the pandemic and such measures on: (a) demand for the lease-to-own products offered by our Progressive Leasing segment, (b) Progressive Leasing's POS partners, (c) Progressive Leasing's customers, including their ability and willingness to satisfy their obligations under their lease agreements, (d) Progressive Leasing's point-of-sale partners being able to obtain the merchandise its customers need or desire, (e) our employees and labor needs, including our ability to adequately staff our operations, (f) our financial and operational performance, and (g) our liquidity; (ii) changes in the enforcement of existing laws and regulations and the adoption of new laws and regulations that may unfavorably impact our businesses; (iii) the effects on our business and reputation resulting from Progressives Leasing's announced settlement and related consent order with the FTC, including the risk of losing existing POS partners or being unable to establish new relationships with additional POS partners, and of any follow-on regulatory and/or civil litigation arising therefrom; (iv) other types of legal and regulatory proceedings and investigations, including those related to consumer protection, customer privacy, third party and employee fraud and information security; (v) increased competition from traditional and virtual lease-to-own competitors; (vi) increases in lease merchandise write-offs and the provision for returns and uncollectible renewal payments for Progressive Leasing, especially in light of the COVID-19 pandemic; (vii) the possibility that the operational, strategic and shareholder value creation opportunities expected from the spin-off of the Company's Aaron's Business segment may not be achieved in a timely manner, or at all; and (viii) the other risks and uncertainties discussed under "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, which will be filed with the Securities and Exchange Commission later today. Statements in this press release that are "forward-looking" include without limitation statements about (i) the strength of our businesses during the ongoing economic uncertainty caused by the COVID pandemic; (ii) our expectations for growth in Progressive Leasing's gross merchandise volume, expanding our business with e-commerce partners, and driving increased sales for existing and new POS partners; (iii) statements regarding our plans to repurchase shares under our newly authorized $300 million repurchase program and the manner in which, and frequency with which, we may do so, the consistency of our business model and ability to generate strong cash flows, and our ability to create meaningful shareholder value over the long term; and (iv) our outlook for our consolidated financial performance for the first quarter of 2021. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances after the date of this press release.

PROG Holdings, Inc. Consolidated Statements of Earnings (In thousands, except per share data)



(Unaudited) Twelve Months Ended Three Months Ended

December 31, December 31,

2020 2019 2020 2019

Revenues:

Lease Revenues and Fees $594,017$559,549 2,443,405 $2,128,133

Interest and Fees on Loans 11,635 9,103 41,190 35,046 Receivable

Total 605,652 568,652 2,484,595 2,163,179



Costs and Expenses:

Depreciation of Lease 401,037 379,038 1,690,922 1,445,027 Merchandise

Provision for Lease 26,889 36,668 131,332 153,516 Merchandise Write-offs

Operating Expenses 95,690 94,783 373,460 357,762

Legal and Regulatory Expense, net of insurance - 179,261 (835) 179,261 recoveries

Separation Related Charges 15,510 - 17,953 -

Total 539,126 689,750 2,212,832 2,135,566



Operating Profit (Loss) 66,526 (121,098) 271,763 27,613

Interest Expense (187) - (187) -

Earnings (Loss) Before Income Tax Expense from 66,339 (121,098) 271,576 27,613 Continuing Operations

Income Tax Expense 24,034 17,028 37,949 52,228

Net Earnings (Loss) from 42,305 (138,126) 233,627 (24,615) Continuing Operations

(Loss) Earnings from Discontinued Operations, (1,487) 31,069 (295,092) 56,087 Net

Net Earnings (Loss) $40,818 $(107,057)$(61,465)$31,472

Basic Earnings (Loss) per Share:

Continuing Operations $0.62 $(2.06) $3.47 $(0.37)

Discontinued Operations (0.02) 0.46 (4.39) 0.83

Total Basic Earnings (Loss)0.60 (1.60) (0.91) 0.47 per Share

Diluted Earnings (Loss) per Share:

Continuing Operations $0.62 $(2.06) $3.43 $(0.37)

Discontinued Operations (0.02) 0.46 (4.34) 0.83

Total Diluted Earnings 0.60 (1.60) (0.90) 0.47 (Loss) per Share

Weighted Average Shares 67,719 66,908 67,261 67,322 Outstanding

Weighted Average Shares Outstanding Assuming 68,537 66,908 68,022 67,322 Dilution

PROG Holdings, Inc. Consolidated Balance Sheets (In thousands, except per share data)



December 31, 2020December 31, 2019

ASSETS:

Cash and Cash Equivalents $36,645 $57,755

Accounts Receivable (net of allowances 61,254 67,080 of $56,364 in 2020 and $65,573 in 2019)

Lease Merchandise (net of accumulated depreciation and allowances of $409,307610,263 651,820 in 2020 and $428,288 in 2019)

Loans Receivable (net of allowances and unamortized fees of $52,274 in 2020 and79,148 75,253 $21,134 in 2019)

Property, Plant and Equipment, Net 26,705 30,365

Operating Lease Right-of-Use Assets 20,613 24,279

Goodwill 288,801 288,801

Other Intangibles, Net 154,421 176,562

Income Tax Receivable - 17,607

Prepaid Expenses and Other Assets 39,554 27,456

Assets of Discontinued Operations - 1,880,822

Total Assets $1,317,404 $3,297,800

LIABILITIES & SHAREHOLDERS' EQUITY:

Accounts Payable and Accrued Expenses $78,249 $58,622

Accrued Regulatory Expense - 175,000

Deferred Income Tax Liability 126,938 100,292

Customer Deposits and Advance Payments 46,565 44,222

Operating Lease Liabilities 29,516 33,904

Debt 50,000 -

Liabilities of Discontinued Operations - 1,148,501

Total Liabilities 331,268 1,560,541

SHAREHOLDERS' EQUITY:

Common Stock, Par Value $0.50 Per Share: Authorized: 225,000,000 Shares at December 31, 2020 and 2019; Shares 45,376 45,376 Issued: 90,752,123 at December 31, 2020 and 2019

Additional Paid-in Capital 318,263 290,229

Retained Earnings 1,236,378 2,029,613

Accumulated Other Comprehensive Loss - (19)



Less: Treasury Shares at Cost

Common Stock: 23,029,434 Shares at December 31, 2020 and 24,034,053 at (613,881) (627,940) December 31, 2019

Total Shareholders' Equity 986,136 1,737,259

Total Liabilities & Shareholders' $1,317,404 $3,297,800 Equity

PROG Holdings, Inc. Consolidated Statements of Cash Flows (In thousands)



Twelve Months Ended December 31,

(In Thousands) 2020 2019

OPERATING ACTIVITIES:

Net (Loss) Earnings $(61,465) $31,472

Adjustments to Reconcile Net (Loss) Earnings to Net Cash Provided by Operating Activities:

Depreciation of Lease Merchandise 2,163,443 1,972,358

Other Depreciation and Amortization 93,814 105,061

Accounts Receivable Provision 254,168 322,963

Provision for Credit Losses on Loans Receivable 34,038 21,667

Stock-Based Compensation 41,218 26,548

Deferred Income Taxes (141,407) 49,967

Impairment of Goodwill 446,893 -

Impairment of Assets 23,788 30,344

Non-Cash Lease Expense 92,277 114,934

Other Changes, Net 9,172 (9,886)

Changes in Operating Assets and Liabilities, Net of Effects of Acquisitions and Dispositions:

Additions to Lease Merchandise (2,351,064)(2,484,755)

Book Value of Lease Merchandise Sold or Disposed 317,763 401,960

Accounts Receivable (250,159) (331,636)

Prepaid Expenses and Other Assets 7,753 (25,860)

Income Tax Receivable 17,066 10,458

Operating Lease Right-of-Use Assets and (109,356) (124,384) Liabilities

Accounts Payable and Accrued Expenses 39,660 20,183

Accrued Litigation Expense (175,000) 175,000

Customer Deposits and Advance Payments 3,362 10,791

Cash Provided by Operating Activities 455,964 317,185

INVESTING ACTIVITIES:

Investments in Loans Receivable (112,596) (70,313)

Proceeds from Loans Receivable 69,358 53,170

Proceeds from Investments - 1,212

Outflows on Purchases of Property, Plant and (64,345) (92,963) Equipment

Proceeds from Disposition of Property, Plant, and 7,482 14,090 Equipment

Outflows on Acquisitions of Businesses and (14,793) (14,285) Customer Agreements. Net of Cash Acquired

Proceeds from Dispositions of Businesses and 359 2,813 Customer Agreements, Net of Cash Disposed

Cash Used in Investing Activities (114,535) (106,276)

FINANCING ACTIVITIES:

Borrowings (repayments) on Revolving Facility, Net50,000 (16,000)

Proceeds from Debt 5,625 -

Repayments on Debt (347,646) (68,531)

Acquisition of Treasury Stock - (69,255)

Dividends Paid (13,778) (9,437)

Issuance of Stock Under Stock Option Plans 12,362 7,749

Shares Withheld for Tax Payments (11,734) (13,038)

Debt Issuance Costs (3,233) (40)

Transfer of Cash to The Aaron's Company (54,150) -

Cash Used in Financing Activities (362,554) (168,552)

EFFECT OF EXCHANGE RATE CHANGES 15 120

(Decrease) Increase in Cash and Cash Equivalents (21,110) 42,477

Cash and Cash Equivalents at Beginning of Year 57,755 15,278

Cash and Cash Equivalents at End of Year $36,645 $57,755

PROG Holdings, Inc. Quarterly Revenues by Segment (In thousands)



Unaudited

Three Months Ended

December 31, 2020

Progressive LeasingVive Consolidated Total

Lease Revenues and Fees $594,017 $- $594,017

Interest and Fees on Loans - 11,635 11,635 Receivable

Total Revenues $594,017 $11,635$605,652

Unaudited

Three Months Ended

December 31, 2019

Progressive LeasingVive Consolidated Total

Lease Revenues and Fees $559,549 $- $559,549

Interest and Fees on Loans - 9,103 9,103 Receivable

Total Revenues $559,549 $9,103$568,652

PROG Holdings Inc. Twelve Month Revenues by Segment (In thousands)



Twelve Months Ended

December 31, 2020

Progressive Vive Consolidated Leasing Total

Lease Revenues and Fees $2,443,405 $- $2,443,405

Interest and Fees on Loans - 41,190 41,190 Receivable

Total Revenues $2,443,405 $41,190$2,484,595



Twelve Months Ended

December 31, 2019

Progressive Vive Consolidated Leasing Total

Lease Revenues and Fees $2,128,133 $- $2,128,133

Interest and Fees on Loans - 35,046 35,046 Receivable

Total Revenues $2,128,133 $35,046$2,163,179

Use of Non-GAAP Financial Information:

Non-GAAP net earnings from continuing operations, non-GAAP diluted earnings from continuing operations per share, EBITDA and adjusted EBITDA are supplemental measures of our performance that are not calculated in accordance with generally accepted accounting principles in the United States ("GAAP"). Non-GAAP net earnings from continuing operations and non-GAAP diluted earnings from continuing operations per share for 2020 exclude (i) intangible amortization expense; (ii) insurance reimbursements for certain legal costs associated with our FTC regulatory charge; (iii) stock-based compensation modification expense and other executive retirement charges resulting from our separation and distribution of Aaron's Business; (iv) income tax benefits from our revaluation of net operating loss carrybacks resulting from the CARES Act; (v) income tax expense for the recognition of a revaluation allowance on foreign tax credits resulting from our separation and distribution of Aaron's Business; and (vi) certain corporate restructuring charges. Non-GAAP net (loss) earnings from continuing operations and non-GAAP diluted earnings from continuing operations per share for 2019 exclude (i) intangible amortization expense, (ii) regulatory charge and legal expenses associated with our settlement of the FTC matter; and (iii) certain corporate restructuring charges. The amounts for these after-tax non-GAAP adjustments, which are tax effected using our statutory tax rate, can be found in the reconciliation of net earnings (loss) from continuing operations and earnings (loss) from continuing operations per share assuming dilution to non-GAAP net earnings from continuing operations and earnings from continuing operations per share assuming dilution table in this press release.

The EBITDA and adjusted EBITDA figures presented in this press release are calculated as the Company's earnings before interest expense, depreciation on property, plant and equipment, amortization of intangible assets and income taxes. Adjusted EBITDA also excludes the other adjustments described in the calculation of non-GAAP net earnings above. The amounts for these pre-tax non-GAAP adjustments can be found in the quarterly and twelve months segment EBITDA tables in this press release. Adjusted EBITDA for the Company's Q1 2021 outlook is calculated as projected earnings before interest expense, depreciation on property, plant and equipment, amortization of intangible assets and income taxes. Adjusted EBITDA for the Company's Q1 2021 outlook also excludes stock-based compensation expense.

Management believes that non-GAAP net earnings from continuing operations, non-GAAP diluted earnings from continuing operations per share, EBITDA and adjusted EBITDA provide relevant and useful information, and are widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and business unit performance.

EBITDA, adjusted EBITDA, non-GAAP net earnings from continuing operations and non-GAAP diluted earnings from continuing operations provide management and investors with an understanding of the results from the primary operations of our business by excluding the effects of certain items that generally arose from larger, one-time transactions that are not reflective of the ordinary earnings activity of our operations or transactions that have variability and volatility of the amount. Stock-based compensation expense for our Q1 2021 outlook has been excluded from projected adjusted EBITDA. We believe the exclusion of stock-based compensation expense provides for a better comparison of our operating results beginning in 2021 with our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types. This measure may be useful to an investor in evaluating the underlying operating performance of our business.

EBITDA and adjusted EBITDA also provide management and investors with an understanding of one aspect of earnings before the impact of investing and financing charges and income taxes. These measures may be useful to an investor in evaluating our operating performance because the measures:

* Are widely used by investors to measure a company's operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending upon accounting methods, book value of assets, capital structure and the method by which assets were acquired, among other factors. * Are a financial measurement that is used by rating agencies, lenders and other parties to evaluate our creditworthiness. * Are used by our management for various purposes, including as a measure of performance of our operating entities and as a basis for strategic planning and forecasting.

Non-GAAP financial measures, however, should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with GAAP, such as the Company's GAAP basis net earnings (loss) from continuing operations and diluted earnings (loss) from continuing operations per share and the GAAP revenues and earnings (loss) from continuing operations before income taxes of the Company's segments, which are also presented in the press release. Further, we caution investors that amounts presented in accordance with our definitions of non-GAAP net earnings from continuing operations, non-GAAP diluted earnings from continuing operations per share, EBITDA, and adjusted EBITDA may not be comparable to similar measures disclosed by other companies, because not all companies and analysts calculate these measures in the same manner.

PROG Holdings Inc. Reconciliation of Net Earnings and Earnings Per Share Assuming Dilution from Continuing Operations to Non-GAAP Net Earnings and Earnings Per Share Assuming Dilution from Continuing Operations (In thousands, except per share amounts)



(Unaudited)

Twelve Three Months Ended Months Ended

Mar 31, Jun 30, Sept 30, Dec 31, Dec 31,

2020

Net Earnings from $57,682$58,997$74,643$42,305$233,627Continuing Operations

Add: Intangible 5,566 5,566 5,565 5,444 22,141 Amortization Expense

Add: Separation Costs - - 2,443 2,293 4,736

Add: Separation Costs - Executive Stock - - - 13,217 13,217 Compensation Acceleration^ (1)

Add: Legal and Regulatory Expense, Net of Insurance - - (835) - (835) Recoveries

Add: Restructuring - 238 - - 238 Expense

Less: Tax impact of (1,447) (1,509) (1,865) (2,012) (6,833) adjustments ^(1)

Less: NOL Carryback (34,190)(1,350) - - (35,540) Revaluation

Add: Valuation Allowance - - - 4,034 4,034 on Foreign Tax Credits

Non-GAAP Net Earnings from$27,611$61,942$79,951$65,281$234,785Continuing Operations



Earnings from Continuing Operations Per Share $0.85 $0.87 $1.10 $0.62 $3.43 Assuming Dilution

Add: Intangible 0.08 0.08 0.08 0.08 0.33 Amortization Expense

Add: Separation Costs - - 0.04 0.03 0.07

Add: Separation Costs - Executive Stock - - - 0.19 0.19 Compensation Acceleration^ (1)

Add Legal and Regulatory Expense, Net of Insurance - - (0.01) - (0.01) Recoveries

Add: Restructuring Expense- - - - -

Less: Tax impact of (0.02) (0.02) (0.03) (0.03) (0.10) adjustments ^(1)

Less: NOL Carryback (0.50) (0.02) - - (0.52) Revaluation

Add: Valuation Allowance - - - 0.06 0.06 on Foreign Tax Credits

Non-GAAP Earnings from Continuing Operations Per $0.41 $0.92 $1.17 $0.95 $3.45 Share Assuming Dilution^ (2)



Weighted Average Shares Outstanding Assuming 67,864 67,523 68,155 68,537 68,022 Dilution



Adjustments are tax-effected using an assumed statutory tax rate of 26.0%,(1) except for the separation costs related to executive stock compensation acceleration which did not result in a current or deferred tax benefit.

(2) In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.

PROG Holdings Inc. Reconciliation of Net Earnings (Loss) and Earnings (Loss) Per Share Assuming Dilution from Continuing Operations to Non-GAAP Net Earnings and Earnings PerShare Assuming Dilution from Continuing Operations (In thousands, except per share amounts)



(Unaudited)

Twelve Three Months Ended Months Ended

Mar 31, Jun 30, Sept 30, Dec 31, Dec 31,

2019

Net Earnings (Loss) from Continuing $38,788$39,112$35,611$(138,126)$(24,615)Operations

Add: Intangible 5,566 5,566 5,565 5,566 22,263 Amortization Expense

Add: Separation Costs - - - - -

Add: Legal and - - - 4,261 4,261 Regulatory Expense

Add: FTC Legal - - - 175,000 175,000 Settlement^(1)

Add: Restructuring - 304 - - 304 Expense

Less: Tax impact of (1,447) (1,526) (1,447) (2,555) (6,975) adjustments ^(1)

Non-GAAP Net Earnings from Continuing $42,907$43,456$39,729$44,146 $170,238 Operations



Earnings (Loss) from Continuing Operations $0.56 $0.57 $0.52 $(2.06) (0.37) Per Share Assuming Dilution

Add: Intangible 0.08 0.08 0.08 0.08 0.32 Amortization Expense

Add: Separation Costs - - - - -

Add: Legal and - - - 0.06 0.06 Regulatory Expense

Add: FTC Legal - - - 2.56 2.55 Settlement ^(1)

Add: Restructuring - - - - - Expense

Less: Tax impact of (0.02) (0.02) (0.02) (0.04) (0.10) adjustments ^(1)



Non-GAAP Earnings from Continuing Operations $0.62 $0.63 $0.58 $0.65 $2.48 Per Share Assuming Dilution^(2)



Weighted Average Shares Outstanding 68,773 68,793 68,652 68,308 68,631 Assuming Dilution^(3)

Adjustments are tax-effected using an assumed statutory tax rate of 26.0%,(1) except for the FTC legal settlement which did not result in a current or deferred tax benefit.

(2) In some cases, the sum of individual EPS amounts may not equal total non-GAAP EPS calculations due to rounding.

For the three and twelve months ended December 31, 2019, the GAAP Weighted(3) Average Shares Outstanding Assuming Dilution was 66,908 and 67,322, respectively and the Non-GAAP Weighted Average Shares Outstanding Assuming Dilution was 68,308 and 68,631 respectively.

PROG Holdings Inc. Non-GAAP Financial Information Quarterly Segment EBITDA (In thousands)



Unaudited

Three Months Ended

December 31, 2020

Progressive UnallocatedConsolidated Leasing Vive Corporate Total Expenses

Net Earnings from Continuing $42,305 Operations

Income Taxes^1 24,034

Earnings (Loss) from Continuing Operations Before$88,134 $(3,307)$(18,488)$66,339 Income Taxes

Interest Expense 187 - - 187

Depreciation 2,356 192 - 2,548

Amortization 5,421 23 - 5,444

EBITDA $96,098 $(3,092)$(18,488)$74,518

Separation Costs 572 - 14,938 15,510

Adjusted EBITDA $96,670 $(3,092)$(3,550) $90,028



Unaudited

Three Months Ended

December 31, 2019

Progressive UnallocatedConsolidated Leasing Vive Corporate Total Expenses

Net Loss from Continuing $(138,126)Operations

Income Taxes^1 17,028

Earnings (Loss) from Continuing Operations Before$(109,858)$(1,594)$(9,646) $(121,098)Income Taxes

Depreciation 2,288 209 - 2,497

Amortization 5,421 145 - 5,566

EBITDA $(102,149)$(1,240)$(9,646) $(113,035)

Legal and Regulatory Expense, Net of Insurance 179,261 - - 179,261 Recoveries

Adjusted EBITDA $77,112 $(1,240)$(9,646) $66,226

(1) Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.

PROG Holdings Inc. Non-GAAP Financial Information Twelve Months Segment EBITDA (In thousands)



Twelve Months Ended

December 31, 2020

Progressive UnallocatedConsolidated Leasing Vive Corporate Total Expenses

Net Earnings from Continuing $233,627 Operations

Income Taxes^1 37,949

Earnings (Loss) Before $320,636 $(11,180)$(37,880)$271,576 Income Taxes

Interest Expense 187 - - 187

Depreciation 8,864 815 - 9,679

Amortization 21,683 458 - 22,141

EBITDA $351,370 $(9,907) $(37,880)$303,583

Legal and Regulatory Expense, Net of Insurance (835) - - (835) Recoveries

Separation Costs 2,337 - 15,616 17,953

Restructuring Expenses, Net - - 238 238

Adjusted EBITDA $352,872 $(9,907) $(22,026)$320,939





Twelve Months Ended

December 31, 2019

Progressive UnallocatedConsolidated Leasing Vive Corporate Total Expenses

Net Loss from Continuing $(24,615) Operations

Income Taxes^1 52,228

Earnings (Loss) Before $64,283 $(6,127) $(30,543)$27,613 Income Taxes

Depreciation 8,284 805 - 9,089

Amortization 21,683 580 - 22,263

EBITDA $94,250 $(4,742) $(30,543)$58,965

Legal and Regulatory Expense, Net of Insurance 179,261 - - 179,261 Recoveries

Restructuring Expenses, Net - - 304 304

Adjusted EBITDA $273,511 $(4,742) $(30,239)$238,530

(1) Taxes are calculated on a consolidated basis and are not identifiable by Company Segment.

Reconciliation of Q1 2021 Outlook for Adjusted EBITDA (In thousands)



Q1 2021 Ranges

Progressive Vive Consolidated Leasing Total

Estimated Net Earnings $55,000 - $58,000

Taxes^1 18,000 - 20,000

Projected Earnings Before $72,000 - $75,000$1,000 - $73,000 - Taxes $3,000 $78,000

Interest Expense 500 50 550

Depreciation 2,300 200 2,500

Amortization 5,400 - 5,400

Projected EBITDA 80,000 - 83,000 1,000 - 3,00081,000 - 86,000

Stock-based compensation 3,900 100 4,000

Projected Adjusted EBITDA $84,000 - $87,000$1,000 - $85,000 - $3,000 $90,000

(1) Taxes are calculated on a consolidated basis and are not identifiable by Company segments.

Reconciliation of Q1 2021 Outlook for Earnings Per Share Assuming Dilution to Non-GAAP Earnings Per Share Assuming Dilution



Q1 2021 Range

Low High

Projected Earnings Per Share Assuming Dilution $0.81$0.87

Add Projected Intangible Amortization Expense 0.08 0.08

Projected Non-GAAP Earnings Per Share Assuming Dilution$0.89$0.95

Contact: PROG Holdings, Inc.

John Baugh

Vice President, Investor Relations

385.351.1390

John.Baugh@progleasing.com

View original content: http://www.prnewswire.com/news-releases/prog-holdings-reports-fourth-quarter-2020-results-301235215.html

SOURCE PROG Holdings, Inc.