Rent-A-Center Inc.

Good morning and thank you for holding. Welcome to Rent-A-Center's first quarter earnings conference call. As a reminder, this conference is being recorded Thursday, May 6th, 2021. Your speakers today are Mr. Mitch Fidel, Chief Executive Officer of Rent-A-Center, Maureen Short, Chief Financial Officer, Jason Hogue, Executive Vice President of Asima, Anthony Blasquez, Executive Vice President of Rent Center Business, and Daniel O'Rourke, Senior Vice President of Finance and Real Estate. I would now like to turn the call over to Mr. O'Rourke. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining us. Our earnings release was distributed after market closed yesterday, and it outlines our operational and financial results for the first quarter of 2021. All related materials, including a link to the live webcast, are available on our website at investor.renacenter.com. As a reminder, some of these statements provided on this call are forward-looking statements, which are subject to many factors that could cause actual results to differ materially and adversely from our expectations. These factors are described in our earnings release issued yesterday, as well as in the company's SEC filings. Rena Center undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. This call will also include references to non-GAAP financial measures. Please refer to our first quarter earnings release, which can be found on our website, for a description of the non-GAAP financial measures and a reconciliation to the most comparable GAAP financial measures. I'd now like to turn the call over to Mitch.

Thank you, Daniel, and good morning, everyone. Thank you for joining us. We will be providing a voiceover to the presentation shown on the webcast that can be found on our website at investor.rentoncenter.com. We delivered the most successful quarter in our history in the first quarter. Same-store sales, invoice volume, and portfolio performance were driven by strong demand tied to an improving economy, and we're pleased with the momentum across the businesses. The ASEMA integration is right on schedule. The teams are optimizing the business for scale as we increase our digital presence, turn on new functionality, and continue to grow the portfolio. Our ASEMA segment, which combines our previous preferred lease segment with the acquired ASEMA business, drove strong merchandise sales and invoice volume in the quarter. On a standalone basis, the ASEMA business we acquired in February had adjusted EBITDA margins of 17.5% in the first quarter. The path we're on is truly exciting, and we feel great about our strategy to capture more of the retail partner opportunity. As we move ahead with ASEMA, the Rent-A-Center business is also making important progress to continue to accelerate profitable growth. And the first quarter is a testament to that. Demand was broad-based and driven by our value proposition, e-commerce, and the digital investments we've put into motion. Total revenues were up 47.7% driven by the ASEMA acquisition and a 15% year-over-year revenue increase in our Rent-A-Center business. Adjusted EBITDA margin was 13%, up approximately 370 basis points, supported by top-line improvements and efficiency gains. The retail partner business had a great quarter, with a SEMA invoice volume up approximately 28% on a pro forma basis, driving over 30% pro forma revenue growth. The Rent-A-Center business generated outstanding results, with a 23.4% increase in same-store sales. That's the 13th consecutive quarter of positive comparables. and it's a nice lift in the two-year stack trend. Our digital strategy continues to drive growth. E-commerce and mobile are in the early innings, and we think there's a long runway for each. Now, turning to slide four, as we've discussed, we're operating two leading LTO platforms with broad reach and compelling avenues to increase revenue and earnings. ASEMA has immediately transformed our retail partner business to a higher growth, higher profit, and best-in-class virtual platform. ASEMA is doing so many things for us. It's improving our ability to compete for high-value national retail accounts and enhancing our underwriting with a high-performing decision engine that supports more verticals. The team is bringing extensive data and digital expertise, and we now have a superior back-end infrastructure. The agreement with MasterCard announced recently is just one component of our strategy to create better access to more products for cash and credit-constrained consumers. We'll have much more to report as the year progresses. From a financial perspective, ASEMA tilts our consolidated revenues to a majority fintech business with an extremely attractive growth runway. We're on track with our target for 30% accretion for non-GAAP EPS in 2021, and we believe some of our long-term targets may be conservative given the progress we're making. I can't discuss the record first quarter without addressing the powerful traction we're seeing with digital across the business. Our scale allows us to serve customers at multiple touch points as Lease to Own captures new product verticals and a younger generation of customers who want the flexibility offered by Lease to Own. We're adding multiple capabilities to meet the customer where they want to shop, and it's paying off and accelerating growth and profitability. We see it in Omnichannel in our Rent-A-Center business, which is driving more efficient and faster growth in both stores and online. And we expect it to play out in numerous ways as a theme and improve performance for retail partners and favorably impact customer acquisition costs. There's little question that stimulus and reopenings combine to catalyze strong performance, and our portfolios reflect that and ended the quarter in great shape, both in size and in quality. And while that should underpin strong performance in 2021, our updated guidance incorporates a return to a more normalized environment in the second half. The good news is that the work we're doing to improve digital and grow a SEMA represents sustainable improvements that should benefit in future periods. And it supports our confidence in our 2023 goal for $6 billion in consolidated revenues with a mid-teens consolidated adjusted EBITDA margin. And that equates to a very enviable growth in profitability for any sector, and we believe it's a very attractive story. Before I turn the call over to Jason, I'd like to thank our coworkers, our retail partners, our franchisees, and our suppliers for their dedication to serving customers. We've put together a best-in-class set of assets to support LeaseZone, and we look forward to working with you to grow the business further. Jason?