UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report:
(Date of earliest event reported)

January 31, 2011

RENT-A-CENTER, INC.

(Exact name of registrant as specified in charter)

Delaware (State or other jurisdiction of incorporation or organization)		0-25370 (Commission File Number)		45-0491516 (IRS Employer Identification No.)

5501 Headquarters Drive
Plano, Texas 75024
(Address of principal executive offices and zip code)

(972) 801-1100
(Registrant’s telephone
number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

 

 

Item 2.02		Results of Operations and Financial Condition.

     Attached hereto as Exhibit 99.1 is the Registrant’s press release reflecting earnings information for the quarter and fiscal year ended December 31, 2010.

     The press release contains information regarding EBITDA (earnings before interest, taxes, depreciation and amortization), which is a non-GAAP financial measure as defined in Item 10(e) of Regulation S-K. The press release also contains a reconciliation of EBITDA to the Registrant’s reported earnings before income taxes. Management of the Registrant believes that presentation of EBITDA is useful to investors, as among other things, this information impacts certain financial covenants under the Registrant’s senior credit facilities and the indenture governing its 6 ⅝% senior unsecured notes due November 2020. While management believes this non-GAAP financial measure is useful in evaluating the Registrant, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Further, the non-GAAP financial measure may differ from similar measures presented by other companies.

     Pursuant to General Instruction B.2. of Form 8-K, all of the information contained in this Form 8-K and the accompanying exhibit shall be deemed to be “furnished” and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and, therefore, shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended.

Item 9.01		Financial Statements and Exhibits.

(d)

Exhibits

     Exhibit 99.1 Press Release, dated January 31, 2011.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBIT INDEX

Exhibit No.		Description
99.1		Press release, dated January 31, 2011

Exhibit 99.1

For Immediate Release:

RENT-A-CENTER, INC. REPORTS
FOURTH QUARTER AND YEAR END 2010 RESULTS

Raises 2011 Revenue and EPS Guidance

Repurchased 1.4 Million Shares of Common Stock in the 4^th Quarter

Diluted Earnings per Share of $0.49 in the 4^th Quarter, Including Charges of $0.22 per Diluted Share Related to Refinancing and the Financial Services Business

Plano, Texas, January 31, 2011 — Rent-A-Center, Inc. (the “Company”) (NASDAQ/NGS: RCII), the nation’s largest rent-to-own operator, today announced revenues and earnings for the quarter and year ended December 31, 2010.

Fourth Quarter 2010 Results

Total revenues for the quarter ended December 31, 2010, were $677.1 million, an increase of $4.2 million from total revenues of $672.9 million for the same period in the prior year. This increase in revenues was primarily due to a $5.5 million increase in rentals and fees revenue driven by the RAC Acceptance business. Same store sales for the quarter ended December 31, 2010, excluding financial services revenue, were flat.

Net earnings and net earnings per diluted share for the three months ended December 31, 2010 were $31.9 million and $0.49, respectively, as compared to $43.7 million and $0.66, respectively, for the same period in the prior year.

Net earnings and net earnings per diluted share for the three months ended December 31, 2010 were impacted by the following significant items, as discussed below:

•

An $18.9 million pre-tax impairment charge, or approximately $0.19 per share, related to the discontinuation of the financial services business; and

•

A $3.1 million pre-tax financing expense, or approximately $0.03 per share, related to the repayment of $200.0 million of term loans under the Company’s senior secured credit facilities.

Collectively, these items reduced net earnings per diluted share by approximately $0.22 in the fourth quarter of 2010.

When excluding the items above, adjusted net earnings per diluted share for the three months ended December 31, 2010 were $0.71, as compared to net earnings per diluted share for the three months ended December 31, 2009 of $0.66, an increase of 7.6%.

“We had excellent results in the fourth quarter,” said Mark E. Speese, the Company’s Chairman and Chief Executive Officer. “In our core rent-to-own business, customer demand remained strong with our best gain in customer agreements in years and improvement in our margins with our continued focus on expense control,” Speese stated. “As to our growth initiatives, we accelerated the expansion of our RAC Acceptance business with the acquisition of 158 kiosk locations from The Rental Store and have more than doubled our expected 2011 kiosk openings. We also successfully entered the Mexico market with the opening of five stores during the fourth quarter. In addition to these growth initiatives, we anticipate expanding in Canada, testing other retail concepts and investing in technology in an effort to continue to improve the top line and drive additional efficiencies,” Speese concluded.

Year End December 31, 2010 Results

Total revenues for the twelve months ended December 31, 2010, were $2.732 billion, a decrease of $20.0 million from total revenues of $2.752 billion for the same period in the prior year. This decrease in revenues was attributable to the November 2009 divestiture of dPi Teleconnect, LLC, the Company’s subsidiary engaged in the prepaid telecommunications and energy business, which had contributed approximately $50.5 million in merchandise sales for the twelve months ended December 31, 2009. Same store sales for the twelve months ended December 31, 2010, excluding financial services revenue, decreased 0.4%.

Net earnings and net earnings per diluted share for the twelve months ended December 31, 2010 were $171.6 million and $2.60, respectively, as compared to $167.9 million and $2.52, respectively, for the same period in the prior year.

Net earnings and net earnings per diluted share for the twelve months ended December 31, 2010 were impacted by the following significant items, as discussed below:

•

An $18.9 million pre-tax impairment charge, or approximately $0.18 per share, related to the discontinuation of the financial services business; and

•

A $3.1 million pre-tax financing expense, or approximately $0.03 per share, related to the repayment of $200.0 million of term loans under the Company’s senior secured credit facilities.

Collectively, these items reduced net earnings per diluted share by approximately $0.21 for the twelve months ended December 31, 2010.

Net earnings and net earnings per diluted share for the twelve months ended December 31, 2009 included $4.9 million in pre-tax litigation credits, or approximately $0.04 per share, related to the Hilda Perez matter as discussed below.

When excluding the items above, adjusted net earnings per diluted share for the twelve months ended December 31, 2010 were $2.81, as compared to adjusted net earnings per diluted share for the twelve months ended December 31, 2009 of $2.48, an increase of 13.3%.

“As a result of our strong operating results, we generated positive cash flow from operations of approximately $216.5 million for the twelve month period through December 31, 2010, while ending the quarter with approximately $70.7 million of cash on hand,” commented Robert D. Davis, the Company’s Executive Vice President and Chief Financial Officer. “This significant cash flow enabled us to return value to our stockholders with our first ever dividend of $0.06 per share in the third quarter and our second dividend of $0.06 per share in the fourth quarter, as well as repurchase 3.6 million shares of our common stock,” Davis stated. “In addition, we enhanced our capital structure and extended our debt repayment schedules with the offering of $300 million of senior unsecured notes due 2020. We used $200 million of the net proceeds from the offering to repay term loans under the Company’s existing senior secured credit facility and the remaining net proceeds will continue to be used to repurchase shares of the Company’s common stock,” Davis concluded.

During the twelve month period ended December 31, 2010, the Company repurchased 3,585,495 shares of its common stock for approximately $84.6 million in cash under its common stock repurchase program. In the fourth quarter, the Company repurchased 1,403,993 shares of its common stock for approximately $38.7 million in cash. To date, the Company has repurchased a total of 23,470,345 shares and has utilized approximately $551.2 million of the $800.0 million authorized by its Board of Directors since the inception of the plan.

2010 Significant Items

Financial Services Charge. On October 25, 2010, the Company announced that, in connection with the analysis of available growth initiatives, the Company was exploring strategic alternatives with respect to the financial services business, including the possible sale or divestiture of such business. As of December 31, 2010, the Company has sold a majority of the customer accounts at approximately 214 financial services store locations, and closed six financial services store locations in Montana as a result of state law changes enacted in the November general election. Since December 31, 2010, the Company has sold a majority of the customer accounts at approximately 66 financial services store locations.

During the fourth quarter of 2010, the Company recorded a pre-tax impairment charge of approximately $18.9 million related to the discontinuation of the financial services business. The charge with respect to discontinuing the operations of all 331 store locations relate primarily to fixed asset disposals, loan write-downs, and other miscellaneous items. This impairment charge reduced diluted earnings per share in the fourth quarter of 2010 by approximately $0.19 and for the twelve month period ended December 31, 2010 by approximately $0.18.

Senior Credit Facility Financing Expense. During the fourth quarter of 2010, the Company recorded a pre-tax expense of approximately $3.1 million to write off the unamortized financing costs related to the repayment of $200.0 million of term loans under the Company’s existing senior secured credit facilities. This financing expense reduced diluted earnings per share in both the fourth quarter of 2010 and for the twelve month period ended December 31, 2010 by approximately $0.03.

2009 Significant Item

Hilda Perez Matter. In connection with the court approved settlement of the Hilda Perez v. Rent-A-Center, Inc. matter in New Jersey, the Company previously recorded a pre-tax credit in the amount of $3.0 million in the first quarter of 2009 and a pre-tax credit in the amount of $1.9 million in the second quarter of 2009 to account for cash payments to the Company representing undistributed monies in the settlement fund to which the Company is entitled pursuant to the terms of the settlement, as well as a refund of costs to administer the settlement previously paid by the Company which were not expended during the administration of the settlement. Through the twelve month period ended December 31, 2009, the total pre-tax credit of approximately $4.9 million increased net earnings per diluted share by approximately $0.04.

- - -

Rent-A-Center, Inc. will host a conference call to discuss the fourth quarter results, guidance and other operational matters on Tuesday morning, February 1, 2011, at 10:45 a.m. EDT. For a live webcast of the call, visit http://investor.rentacenter.com. Certain financial and other statistical information that will be discussed during the conference call will also be provided on the same website.

Rent-A-Center, Inc., headquartered in Plano, Texas, currently operates approximately 3,000 company-owned stores nationwide and in Canada, Mexico and Puerto Rico. The stores generally offer high-quality, durable goods such as major consumer electronics, appliances, computers and furniture and accessories under flexible rental purchase agreements that generally allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. ColorTyme, Inc., a wholly owned subsidiary of the Company, is a national franchiser of approximately 210 rent-to-own stores operating under the trade name of “ColorTyme.”

The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. These statements do not include the potential impact of any repurchases of common stock the Company may make, future dividends, changes in outstanding indebtedness, or the potential impact of acquisitions or dispositions that may be completed after January 31, 2011.

FIRST QUARTER 2011 GUIDANCE:

Revenues

•		The Company expects total revenues to be in the range of $745 million to $765 million.
•		Store rental and fee revenues are expected to be between $615 million and $627 million.
•		Total store revenues are expected to be in the range of $736 million to $756 million.
•		Same store sales are expected to be in the range of 1.5% to 2.5%.
•		The Company expects to open approximately 10 domestic rent-to-own store locations.
•		The Company expects to add approximately 100 domestic RAC Acceptance kiosks.
•		The Company expects to open approximately 5 rent-to-own locations in Mexico.

Expenses

•		The Company expects cost of rental and fees to be between 22.7% and 23.1% of store rental and fee revenue and cost of merchandise sold to be between 69.5% and 74.5% of store merchandise sales.
•		Store salaries and other expenses are expected to be in the range of 53.0% to 54.5% of total store revenue.
•		General and administrative expenses are expected to be approximately 4.5% of total revenue.
•		Net interest expense is expected to be approximately $10 million and depreciation of property assets is expected to be approximately $16 million.
•		The effective tax rate is expected to be in the range of 37.5% to 38.0% of pre-tax income.
•		Diluted earnings per share are estimated to be in the range of $0.82 to $0.88.
•		Diluted shares outstanding are estimated to be between 64.0 million and 65.0 million.

FISCAL 2011 GUIDANCE:

Revenues

•		The Company expects total revenues to be in the range of $2.868 billion and $2.928 billion.
•		Store rental and fee revenues are expected to be between $2.477 billion and $2.527 billion.
•		Total store revenues are expected to be in the range of $2.835 billion and $2.895 billion.
•		Same store sales are expected to be in the range of 1.5% to 2.5%.
•		The Company expects to add approximately 25 domestic rent-to-own store locations.
•		The Company expects to add 275 to 325 domestic RAC Acceptance kiosks.
•		The Company expects to open 40 to 75 rent-to-own locations in Mexico.
•		The Company expects to open 10 to 20 rent-to-own locations in Canada.

Expenses

•		The Company expects cost of rental and fees to be between 22.8% and 23.4% of store rental and fee revenue and cost of merchandise sold to be between 74.5% and 78.5% of store merchandise sales.
•		Store salaries and other expenses are expected to be in the range of 55.5% to 57.0% of total store revenue.
•		General and administrative expenses are expected to be approximately 4.5% of total revenue.
•		Net interest expense is expected to be approximately $33 million and depreciation of property assets is expected to be in the range of $61 million to $66 million.
•		The effective tax rate is expected to be in the range of 37.5% to 38.0% of pre-tax income.
•		Diluted earnings per share are estimated to be in the range of $2.90 to $3.10.
•		Diluted shares outstanding are estimated to be between 64.0 million and 65.0 million.

Store Activity

		Domestic												International
						RAC				Get It Now/
		RTO				Acceptance				Home Choice				Canada				Mexico
Twelve Months Ended December 31, 2010
Stores at beginning of period			2,950				82				39				18				—
New store openings			26				160				3				—				5
Acquired stores remaining open			3				158				—				—				—
Closed stores
Merged with existing stores			26				1				—				—				—
Sold or closed with no surviving store			10				15				—				—				—
Stores at end of period			2,943				384				42				18				5
Acquired stores closed and accounts merged with existing stores			14				—				—				—				—

		Domestic												International
						RAC				Get It Now/
		RTO				Acceptance				Home Choice				Canada				Mexico
Three Months Ended December 31, 2010
Stores at beginning of period			2,942				153				41				18				—
New store openings			8				75				1				—				5
Acquired stores remaining open			1				158				—				—				—
Closed stores
Merged with existing stores			8				1				—				—				—
Sold or closed with no surviving store			—				1				—				—				—
Stores at end of period			2,943				384				42				18				5
Acquired stores closed and accounts merged with existing stores			1				—				—				—				—

This press release and the guidance above contain forward-looking statements that involve risks and uncertainties. Such forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “could,” “estimate,” “should,” “anticipate,” or “believe,” or the negative thereof or variations thereon or similar terminology. Although the Company believes that the expectations reflected in such forward-looking statements will prove to be correct, the Company can give no assurance that such expectations will prove to have been correct. The actual future performance of the Company could differ materially from such statements. Factors that could cause or contribute to such differences include, but are not limited to: uncertainties regarding the ability to open new rent-to-own stores; the Company’s ability to acquire additional rent-to-own stores or customer accounts on favorable terms; the Company’s ability to control costs and increase profitability; the Company’s ability to identify and successfully enter new lines of business offering products and services that appeal to its customer demographic; the Company’s ability to enhance the performance of acquired stores; the Company’s ability to retain the revenue associated with acquired customer accounts; the Company’s ability to identify and successfully market products and services that appeal to its customer demographic; the Company’s ability to enter into new and collect on its rental purchase agreements; the passage of legislation adversely affecting the rent-to-own or financial services industries; the Company’s failure to comply with statutes or regulations governing the rent-to-own or financial services industries; interest rates; increases in the unemployment rate; economic pressures, such as high fuel and utility costs, affecting the disposable income available to the Company’s targeted consumers; changes in the Company’s stock price and the number of shares of common stock that it may or may not repurchase; future dividends; changes in estimates relating to self-insurance liabilities and income tax and litigation reserves; changes in the Company’s effective tax rate; the Company’s ability to maintain an effective system of internal controls; changes in the number of share-based compensation grants, methods used to value future share-based payments and changes in estimated forfeiture rates with respect to share-based compensation; the resolution of material litigation; our ability to successfully manage the strategic alternatives process with respect to our financial services business and the results therefrom; and the other risks detailed from time to time in the Company’s SEC reports, including but not limited to, its annual report on Form 10-K for the year ended December 31, 2009, and its quarterly reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010 and September 30, 2010. 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 is not obligated to publicly release any revisions to these forward-looking statements to reflect the events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

Contact for Rent-A-Center, Inc.:

David E. Carpenter
Vice President of Investor Relations
(972) 801-1214
david.carpenter@rentacenter.com

Rent-A-Center, Inc. and Subsidiaries

STATEMENT OF EARNINGS HIGHLIGHTS

		Three Months Ended December 31,
		2010				2010				2009
		Before				After
		Significant Items				Significant Items
		(Non-GAAP				(GAAP				(GAAP
(In thousands of dollars, except per share data)		Earnings)				Earnings)				Earnings)
Total Revenue		$	677,090			$	677,090			$	672,913
Operating Profit			81,781				62,842	(1)			74,582
Net Earnings			45,620				31,854	(1)(2)			43,694
Diluted Earnings per Common Share		$	0.71			$	0.49	(1)(2)		$	0.66
Adjusted EBITDA		$	98,173			$	98,173			$	90,598
Reconciliation to Adjusted EBITDA:
Earnings Before Income Taxes		$	73,482			$	51,443			$	70,082
Add back:
Impairment Charge			—				18,939				—
Finance Charges from Refinancing			—				3,100				—
Interest Expense, net			8,299				8,299				4,500
Depreciation of Property Assets			16,258				16,258				15,601
Amortization and Write-down of Intangibles			134				134				415
Adjusted EBITDA		$	98,173			$	98,173			$	90,598

		Twelve Months Ended December 31,
		2010				2010				2009				2009
		Before				After				Before				After
		Significant Items				Significant Items				Significant Items				Significant Items
		(Non-GAAP				(GAAP				(Non-GAAP				(GAAP
(In thousands of dollars, except per share data)		Earnings)				Earnings)				Earnings)				Earnings)
Total Revenue		$	2,731,632			$	2,731,632			$	2,751,956			$	2,751,956
Operating Profit			322,708				303,769	(1)			291,455				296,324	(3)
Net Earnings			185,408				171,642	(1)(2)			164,823				167,855	(3)
Diluted Earnings per Common Share		$	2.81			$	2.60	(1)(2)		$	2.48			$	2.52	(3)
Adjusted EBITDA		$	389,372			$	389,372			$	360,086			$	360,086
Reconciliation to Adjusted EBITDA:
Earnings Before Income Taxes		$	296,796			$	274,757			$	265,501			$	270,370
Add back:
Litigation Expense (Credit)			—				—				—				(4,869	)
Impairment Charge			—				18,939				—				—
Finance Charges from Refinancing			—				3,100				—				—
Interest Expense, net			25,912				25,912				25,954				25,954
Depreciation of Property Assets			63,410				63,410				65,788				65,788
Amortization and Write-down of Intangibles			3,254				3,254				2,843				2,843
Adjusted EBITDA		$	389,372			$	389,372			$	360,086			$	360,086

SELECTED BALANCE SHEET HIGHLIGHTS

		December 31,
Selected Balance Sheet Data: (in Thousands of Dollars)		2010				2009
Cash and Cash Equivalents		$	70,727			$	101,803
Receivables, net			53,890				63,439
Prepaid Expenses and Other Assets			170,713				50,680
Rental Merchandise, net
On Rent			655,248				589,066
Held for Rent			181,606				160,932
Total Assets		$	2,688,331			$	2,443,997
Senior Debt		$	401,114			$	711,158
Senior Notes			300,000				—
Total Liabilities			1,334,532				1,196,483
Stockholders’ Equity		$	1,353,799			$	1,247,514

Rent-A-Center, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

		Three Months Ended December 31,
		2010				2009
(In thousands of dollars, except per share data)		Unaudited
Store Revenue
Rentals and Fees		$	589,106			$	583,650
Merchandise Sales			43,549				49,805
Installment Sales			18,594				15,336
Other			16,270				15,783
			667,519				664,574
Franchise Revenue
Franchise Merchandise Sales			8,420				7,193
Royalty Income and Fees			1,151				1,146
Total Revenue			677,090				672,913
Operating Expenses
Direct Store Expenses
Cost of Rentals and Fees			131,777				131,740
Cost of Merchandise Sold			34,912				37,729
Cost of Installment Sales			7,367				5,486
Salaries and Other Expenses			381,504				380,083
Franchise Cost of Merchandise Sold			8,040				6,833
			563,600				561,871
General and Administrative Expenses			31,575				36,045
Amortization and Write-down of Intangibles			134				415
Impairment Charge			18,939				—
Total Operating Expenses			614,248				598,331
Operating Profit			62,842				74,582
Finance Charges from Refinancing			3,100				—
Interest Expense			8,547				4,648
Interest Income			(248	)			(148	)
Earnings before Income Taxes			51,443				70,082
Income Tax Expense			19,589				26,388
NET EARNINGS		$	31,854			$	43,694
BASIC WEIGHTED AVERAGE SHARES			63,678				65,844
BASIC EARNINGS PER COMMON SHARE		$	0.50			$	0.66
DILUTED WEIGHTED AVERAGE SHARES			64,575				66,433
DILUTED EARNINGS PER COMMON SHARE		$	0.49			$	0.66

Rent-A-Center, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF EARNINGS

		Twelve Months Ended December 31,
		2010				2009
(In thousands of dollars, except per share data)		Unaudited
Store Revenue
Rentals and Fees		$	2,335,496			$	2,346,849
Merchandise Sales			220,329				261,631
Installment Sales			63,833				53,035
Other			76,542				57,601
			2,696,200				2,719,116
Franchise Revenue
Franchise Merchandise Sales			30,575				28,065
Royalty Income and Fees			4,857				4,775
Total Revenue			2,731,632				2,751,956
Operating Expenses
Direct Store Expenses
Cost of Rentals and Fees			519,282				530,018
Cost of Merchandise Sold			164,133				188,433
Cost of Installment Sales			23,303				18,687
Salaries and Other Expenses			1,543,391				1,556,074
Franchise Cost of Merchandise Sold			29,242				26,820
			2,279,351				2,320,032
General and Administrative Expenses			126,319				137,626
Amortization and Write-down of Intangibles			3,254				2,843
Litigation Expense (Credit)			—				(4,869	)
Impairment Charge			18,939				—
Total Operating Expenses			2,427,863				2,455,632
Operating Profit			303,769				296,324
Finance Charges from Refinancing			3,100				—
Interest Expense			26,766				26,791
Interest Income			(854	)			(837	)
Earnings before Income Taxes			274,757				270,370
Income Tax Expense			103,115				102,515
NET EARNINGS		$	171,642			$	167,855
BASIC WEIGHTED AVERAGE SHARES			65,104				65,986
BASIC EARNINGS PER COMMON SHARE		$	2.64			$	2.54
DILUTED WEIGHTED AVERAGE SHARES			65,903				66,567
DILUTED EARNINGS PER COMMON SHARE		$	2.60			$	2.52