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, Tuesday, May 1, 2018. Your speakers today are Mr. Mitch Fadel, Chief Executive Officer of Rent-A-Center; Ms. Maureen Short, Interim Chief Financial Officer; and Mr. Daniel O'Rourke, Vice President of Finance, Investor Relations and Treasury. I would now like to turn the conference over to Mr. O'Rourke. Please go ahead, sir. [01T5N9-M Daniel O'Rourke]: Thank you, Regina. Good morning, everyone, and thank you for joining us. Our earnings release was distributed after market closed yesterday, which outlines our operational and financial results for the first quarter of 2018. All related materials are available on our website at investor.rentacenter.com. As a reminder, some of the statements provided on this call are forward-looking statements, which are subject to many factors that could cause actual results to differ materially from our expectations. Rent-A-Center undertakes no obligation to publicly update or revise any forward-looking statements. These factors are described in our earnings release issued yesterday as well as in the company's SEC filings. I'd now like to turn the call over to Mitch.

Thank you, Daniel, and good morning, everyone. Thank you for joining us. Over the past few months, the company has been diligently executing on our strategic initiatives and I am pleased to say considerable progress has been made. As I mentioned on our last call, our strategy is built around aggressively addressing a number of controllable items to drive near-term profitability and cash flow. Our value proposition enhancements are also part of our strategy to increase demand and achieve sustainable revenue improvement of both the Core stores and the AcceptanceNOW business. And the first quarter results, demonstrate the progress that's been made on both the top line and bottom line. In the first quarter, we generated positive same-store sales across all operating segments. And achieving positive same-store sales in the quarter is a key milestone for the company and an important step toward building sustainable profitability in the segment. It was the first time since the second quarter of 2015 that the Core was positive; again, a real milestone event. This was primarily driven by our strong portfolio performance, and the Core same-store sales improved sequentially throughout the quarter growing to plus 1.6% in the Core in March. As many of you know, the portfolio is made up of our customer agreement count multiplied by the average ticket. The rental agreement portfolio in the Core business same-stores ended the first quarter about $3.3 million ahead of last year. In our business, the portfolio balance is a leading indicator of future performance. In a portfolio business like ours, the $3.3 million we're ahead at the end of March, at the end of first quarter, rolls forward each month through the rest of the year, assuming we hold on to that variance. So for the remaining nine months of the year, it'd…

Thanks, Mitch. Good morning, everyone. I'll cover our first quarter financial results in more detail and provide an overview of our balance sheet. All of the financial information I speak to will be excluding special items. During the first quarter of 2018 consolidated total revenues were $698 million, down 5.9% versus the same period of last year primarily due to store closures. Same-store sales for the consolidated business were a positive 0.8%; adjusted EBITDA was $25.1 million in the quarter; and EBITDA margin was 3.6%, up 490 basis points sequentially. Net diluted loss per share excluding special items was $0.08. The special item charges taken in the quarter were $17.5 million, which included approximately $10 million in one-time expenses related to our cost savings initiatives driven largely by severance costs. In our Core segment, total revenues in the first quarter were down 1.8% primarily driven by store closures. Same-store sales in the Core segment were positive 0.3% driven by better collections from lower promotional activity and a higher portfolio balance due to an increase in the average ticket. This is the fifth consecutive quarter of sequential same-store sales improvement and a 390 basis point improvement versus the fourth quarter. Gross profit margin was 69.8%, an increase of 100 basis points over last year, primarily due to the intercompany book value adjustment on returned AcceptanceNOW products. As we mentioned during our last earnings call, this intercompany adjustment results in the Core no longer being negatively impacted by the excess inventory cost of AcceptanceNOW product purchased at retail instead of wholesale rate, and will not impact the consolidated financials. Store labor expense in the Core was down $2.4 million driven by lower store count. Other store expenses were down $7.2 million, driven by a lower store count and timing related to advertising…

Our first question will come from the line of Budd Bugatch with Raymond James. Please go ahead. Beryl Bugatch - Raymond James & Associates, Inc.: Good morning, Mitch. Good morning, Maureen. Good morning, Daniel.

Good morning. Beryl Bugatch - Raymond James & Associates, Inc.: I guess, I'll just cut to the cost savings and try to pen what might have been effective in quarter one. You said it wasn't material, my guess was somewhere around $3 million of the adjust – of the projected cost savings, or maybe you can help give us that number.

That's probably not far off, but I don't have that exact number in front of me. It's probably closer to $2 million to $3 million in that range. Since the overhead savings happened in March, in I guess early to mid-March, there wasn't a lot of savings that occurred, but that's probably a good estimate. Beryl Bugatch - Raymond James & Associates, Inc.: So that would – I'm sorry. Go ahead.

That's very little, and that's why I made the comment that our – even though we're raising our numbers, not much of an impact in the first quarter. That's why our spread is a little different than the analyst spreads out there, because we're raising our numbers, yet we missed the first quarter consensus estimates. But... Beryl Bugatch - Raymond James & Associates, Inc.: Guilty as charged.

Obviously, our spread is a little different, so... Beryl Bugatch - Raymond James & Associates, Inc.: Well, I understand, but that would imply something close to $20 million a quarter for each of the next three quarters, may be with the second quarter being a little bit light, because you're still implementing some actions?

That's right. That's right. Beryl Bugatch - Raymond James & Associates, Inc.: Okay. And then are there any other actions that you can talk about that are contemplated. I realize that's sensitive, if you've got people involved in those actions, but should we expect more actions or more significant actions in the next couple quarters?

I don't think in the next couple quarters we will, Budd. We're certainly focused on the things – there are more things on the list. We picked the things we could get done this year and we're executing on them, running a little ahead of plan. There are other things on the list that's probably not things that'll impact this year, be more of an impact on next year. Beryl Bugatch - Raymond James & Associates, Inc.: Okay. And you said I think $170 million of free cash and you've already had $85 million of that. Does that mean that debt goes down by another $85 million by the end of the year or is that the right way to look at it or is it more?

Well, the revolver is fully paid off. Beryl Bugatch - Raymond James & Associates, Inc.: Understood.

And so, the $170 million that we generate in free cash flow will be enough to sustain the operation, to implement our cost savings initiatives. And we'll use what we can to pay off debt. But with the revolver already paid off, there's not a lot more that we plan to pay off when it comes to debt throughout the year. We're working on our refinancing plan. And once we have the outcome of the strategic alternatives review process, we'll move forward with that. Beryl Bugatch - Raymond James & Associates, Inc.: Okay. Just a couple of other quick ones from me. You talked about 150 stores I think in the Core being closed this year. How do we look at that versus what's been franchised, what's been merged. Help us out to what kind of maybe an ending Core number is, or maybe how that flows through the year?

Well, the 150 is separate from the 31 that we sold to an existing franchisee in the first quarter. And you might recall, Budd, last quarter we estimated more like 175. And as we've gone through store by store and businesses improving, that number is actually a little lower at 150 versus what we said last quarter due to the business getting a little better. And as we analyze which stores to close, we're down to 150. They're pretty well spread over the year with a bit of front load. If you look in our current press release, there were 62 merged within the first quarter, but the locations at the end of the year are down. Well, yes, I'm just looking at the press release. So about 60 merged in the first quarter, so it's about another 90 to go. And that would leave us about 2,200 stores right at the end of the year. Beryl Bugatch - Raymond James & Associates, Inc.: Got you. Okay. And just lastly from me, if you could kind of give us what the comp base is for ANOW. That's an area where it's been really challenging to kind of get – for us at least to get the revenues right. So how do we think about that?

The store count included in the same-store sales number for AcceptanceNOW is still a fairly small number compared to the total. And those stores, as you know, have trended a little bit more favorable than the overall average, they are newer locations so that still applies this quarter. Beryl Bugatch - Raymond James & Associates, Inc.: Okay. Thank you very much. I'll cede the floor and let others have questions. Thank you.

Thanks, Budd.

Thanks, Budd.

Your next question will come from the line of Kyle Joseph with Jefferies. Please go ahead.

Good morning, guys, and thanks for taking my questions.

Good morning, Kyle.

Hey, Kyle.

Just want to make sure we're apples-to-apples on the free cash flow guidance, just given how off the analysts were this quarter; apologies for that. Anyway, in terms of the free cash flow guidance, would that include sales proceeds from the franchising and would severance be in there as well?

Yes, included in the $170 million – at least $170 million would be the proceeds from the sale to the franchise – or the sale of the franchise, re-franchised stores, as well as any severance incurred for the cost savings initiatives.

Okay. That's helpful. Thank you. And then just going over to AcceptanceNOW, I know Budd touched on it, but looks like credit improved there. How much of that is being driven by just lapping the Conn's and HHGregg closures, how much is the new pricing you're rolling out there, can you just give us some color on what's going on there?

Sure, Kyle. Yeah. I don't think much of it is lapping Conn's and HHGregg, not in the first quarter at least, because we got out of HHGregg towards the end of last year and Conn's sort of the end of the first quarter. So we're in those stores. We hadn't exited them for most of the first quarter of last year. And when we look at ourselves sequentially, the numbers in the first quarter have gone down every month from a collections and a loss standpoint. So I think there's just a lot of improvement, probably primarily split between execution and the value proposition changes. Shorter terms will make a very big impact in the way that business operates. And I think we're already seeing some of that.

And then on the closure of the AcceptanceNOW collections facilities, do you anticipate any sort of impact on credit performance there, or do you think the stores can make up for that completely?

I think that, if anything, it will get better. The stores will do...

Okay.

...a the better job. The stores will do a better job collecting them what we're doing in the collection center. So if there's any impact, it will be on the positive side. Besides, the cost savings obviously has a huge impact. But if there's any operational impact, I believe it will be positive based on the stores. So the stores are pretty good at collecting.

Great. Thanks very much for answering my questions.

Thanks, Kyle.

Thanks, Kyle.

Your next question comes from the line of Brad Thomas with KeyBanc Capital Markets. Please go ahead.

Hey, good morning, everybody, and thank you for taking my question. Let's see here, I wanted to zoom into ANOW first, if I could. Obviously we've known about the loss of HHGregg and Conn's here for a number of quarters. The first quarter revenues in ANOW did come in worse than what I had been looking for and probably others. I guess, was there anything unusual about 1Q in terms of the early payouts and is this run rate kind of down mid-teens where revenues in ANOW would be tracking for 2Q at this point?

I think, no, there's nothing unusual about the ownership levels. It's normal. They're higher certainly in the first quarter because of income tax refunds. So that was normal. I think, the – I don't have the spread in front of me, but I think with the first quarter of last year being the last quarter we were in those stores that the deficit against Conn's and HHGregg would subside as the year goes on.

Got you. Do you think 1Q would be sort of the worst quarter, or I mean, I guess, just to try to get our models aligned better with how you guys are looking at the business. Do you think revenues in ANOW decline at a lesser rate in 2Q or could things continue to get worse in 2Q as we keep lapping some of these tough comparisons?

No. I think, absolutely the former what you said, the first quarter being the last – first quarter of 2017 being the last quarter we were Conn's and HHGregg for the majority of it, the first quarter of this year lapping against that certainly appears and with pretty good certainty from my standpoint that that's the worse number we'll see.

Got you. And then just to wrap up the line of conversation on this. When does this really roll off? I mean, when you look at the leases that you have that were originated in Conn's and HHGregg, is there a particular quarter we should be looking to for where these really are immaterial in terms of the headwind you're up against?

Yeah. It seems right now, we've got small amount left only about 10%, but the headwinds is the key point as you mentioned compared to last year. In the second quarter, it was still a lot of revenue in those two stores. As I said, we'll improve upon the minus 16%. But the second quarter still had a significant number; third quarter not so much, and by the fourth quarter, it really was pretty de minimis. So I think there's two more quarters – it declines the next two quarters, but there's really two more quarters, the second and third quarter there will be an impact, just not as big as the first.

Perfect. And then, Mitch, I was hoping you could just talk a little bit more about some of the management and operational changes that you've made in terms of how ANOW works relative to the Core. You know, we've been hearing that there's been more of an integration that's gone on. Where does that stand here today and what gives you the confidence that that will be favorable both in terms of the cost that you're pulling out as well as making sure that the operations are still where you want them to be?

Well, the – couple of significant things in AcceptanceNOW, from a management standpoint, a lot of the savings there was in the district manager level without having the collection centers to manage, the district managers over AcceptanceNOW and they're still just over AcceptanceNOW stores, they can manage more stores because the collections is off their plate, and they're just managing sales now. And the kiosk still do phone calls for the guest but they're primarily managing sales now, and with the Core taking on the collections, those district managers can manage more stores, because their job got – well, I don't know if it's easier, but their job changed. So, they're managing more stores and that's where a lot of the savings was from a management standpoint, but there's still a whole team of district managers solely focused on AcceptanceNOW. So with that collections going over to the Core side, we could expand their span of control a bit and leverage a little more. And as I said earlier, I think it's all positive because the district managers can focus primarily on sales now and people of course to get those sales and the Core taking over the collections activity, the running and picking up of the product is certainly something more up the alley of the Core stores anyhow. So I think it's all positive from that standpoint.

Great, great. And if I could just squeeze one more in here on the Core, obviously, you have done a nice job here of improving same-store sales in the Core. We've had a second quarter in a row here where the gross margin in the Core has been up year-over-year. I guess could you talk a little bit more here about the trajectory that you're seeing in the business, Mitch, it would look like the way your lease portfolio is evolving that the comps – it sounds like are even better here as we've moved into April and should be better in 2Q than in 1Q and that the margins would stay strong as the way you're seeing it. Am I connecting the dots right here, Mitch?

I think, you are. I think, as you look at the sequential comps continuing to grow and as I mentioned where we were at the end of March with the portfolio being bigger than last year, there's also less free time being used which directly impacts the comps, and as I mentioned, April just continues that sequential improvement. And this is without some other things like the pricing changes that we made in the first quarter. As you folks know, I brought back, Ann Davids, our former CMO, and we're still working on the marketing programs and so forth. We're just starting to even advertise some of the enhancements we've made, so there's more good stuff coming from a traffic standpoint, when you think about the changes we made to the value proposition and actually now advertising them, and obviously always focusing on improving the execution. But to your original point, Brad, yes, sequentially it just continues to look better.

Great, well, clearly a lot going on there. Thank you for answering all my questions, Mitch.

Thanks Brad.

Your next question comes from the line of John Baugh with Stifel. Please go ahead. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Thank you. Good morning. Let's start, you know, with the comment about initial payment program changing, I think, within ANOW, could you tell me, Mitch, what that change is, what's going on?

The initial payment, something we started to test at the end of the quarter is on lowering the initial payment to align our customers, their first payment on their pay date versus paying a month. And I think, it helps us in a couple of ways, it increases in demand because the initial payment is lower, but it also gives the customer on their next payday, when their first monthly payment comes due versus us – the date of shopping if they pay a month that day, it might not be the best due-date going forward, you know, 30 days from now. So we got a lower initial payment just to get them to their first payday, their next payday. And then they can start making their monthly payments. So it increases demand, helps with the collections, because it gets the consumer on their right date. And it's honestly pretty much the way all of our competition in that space does it. So in a lot of ways, we're just catching up to the competition and with that low initial payment. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Great. Thank you for that. And on the ANOW collection centers being closed, I guess two questions. One, I have assumed it'd be more product that is not rerouted through Core stores is just liquidated in some other fashion, and I am curious assuming there was some revenue benefit and maybe margin benefit in the future from re-renting some of those items, so I appreciate that the costs go away, but I am curious what if any offset that is there? And then on the collection side of that decision, you mentioned the stores collect better. Are you putting more resources in the Core stores to collect on ANOW?

Really, to your first question or point, there's no negative effect because all the product was going back to the Core stores anyhow. I think the company in the past has tested some clearance centers and so forth, but those have been closed last year. So this product was all going back to the Core, it goes a little more directly now without the collection center. The Core has more control over picking it up and putting it in which store that the district manager and the Core business needs them. So it improves where the product goes and there's no negative offset to it. As far as the labor in the stores, in a few markets, we have to add a little bit of labor, but the returns are so low in AcceptanceNOW and continue to go down as we shorten the terms on the value proposition, driving a lot more ownership and the returns are so low, most stores don't need any more labor. There's a few markets where we have to add some labor and that's when I talk about savings of around $25 million a year, a little over $25 million a year, that was net of a little bit of labor we had to add in certain markets before. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Good. You mentioned you sold 31 stores to refranchised. Can you disclose what you got for those stores? Were they good stores, average stores, bad stores, multiple of rent or any color on and how that impacted your P&L sort of going forward? I understand there's cash coming in, but just curious.

Yeah, John. So the proceeds from the sale of stores in the quarter as we disclosed in the press release was $9.5 million. As far as how the stores performed versus the average stores, they were in the third quartile, the way that we look at it is from a profitability standpoint, we put them in different buckets and so these were not just underperforming stores that we wanted to get rid of. These are good stores and every franchise deal is going to be different. We partner with the franchisee to identify markets to franchise. That's our strategy going forward. It's not just as some have asked about just a way to unload underperforming stores. We truly believe that franchising is the right strategy for the company going forward and believe that that's the way that we can continue the brand and continue growing stores and utilize the proceeds to help improve the balance sheet.

And Maureen has said, those stores being in the third quartile of our store, the royalty payments on those stores relative to the EBITDA they're making are – I don't have the exact numbers in front of me, but they are close enough where there is not an EBITDA impact going forward certainly not materially, but they impact going forward, John. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And would it be fair to say though that the price was less than half of annualized revenue, or any kind of guide on what the sale of the franchisee was on a revenue basis?

I'd probably just leave it at the numbers that are in the press release that it's a roughly $9.5 million transaction. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And then there was a mention of change or timing by advertising, could you explain that, and what sort of the plan is maybe for 2018 versus 2017 on the ad spend?

Sure. So depending on when the activities take place in which quarter, that's when we expect to expense the advertising. And so, when we talk about timing differences, it's primarily the year-over-year impact of when the activities occurred. As far as advertising year-over-year, it's about the same as what we had done last year. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: So that's a quarter one comment or that's your plan for the year 2018 versus 2017?

Full year is fairly similar to last year. As far as the Q1 impact, if you look year-over-year, there was a timing difference which benefited the quarter this year. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And then couple of last quickies, where are we, Mitch, with sort of the virtual decisioning in ANOW?

Good question. It continues to be a critical piece of what we need to do. There's a lot going on there. We're looking at all of our options to solve that. There are a lot of options on how we can solve that by going out and in-licensing and so forth, and we're continuing to work on that. Hope to have something done in the next 30 days on that. It is a critical piece going forward, right? There's awful lot of white space out there in the AcceptanceNOW space, and that's going to be our growth vehicle, and we've got some options that we're just trying to finalize over the next 30 days. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And the last one quickly, any change or update in timing of the completion of the strategic review process? I'm sorry I missed it, if you commented on that. And there was some disclosures around bidders versus interested parties and a little nuance there. Any color, anything you can add? Thank you.

No. I'd just let the press release speak for itself. We still anticipate, as press release says, reaching a determination in the second quarter. John Allen Baugh - Stifel, Nicolaus & Co., Inc.: Okay. Thank you. Good luck.

Thanks, John.

Thank you.

Your next question comes from the line of Carla Casella with JPMorgan. Please go ahead.

Hi. A couple of follow-ups. Did you give the Core stores skip/stolen rate?

Yes, we did. 3.1%, Carla, same as last year in the first quarter.

Okay, great. And then working capital, you talked a lot about the improvements in working capital. And I'm just wondering how much of that improvement is coming from inventory reduction and supply chain, or if any of it's coming from the payable side of the business and change in vendor terms?

Carla, within the working capital numbers, the majority of the change is coming from right-sizing the inventory. We talked about the $40 million to $45 million we expect to realize in 2018. There is $25 million in one-time benefit from right-sizing the Core inventory, $15 million coming from the one-time benefit of eliminating third-party distribution centers, and $6 million in benefits from lower product costs of moving to the direct-to-store model.

Okay, great. And then, on the CapEx side, where do you see it for this year and then what is the maintenance level of CapEx?

Yeah. The CapEx that we expect this year is, just as we mentioned, last quarter, around $45 million, I think, we said $45 million to $50 million in CapEx – sorry, $40 million to $50 million for the full year. That is made up of store reimaging expenses related to IT costs. So a similar breakout to the past, but we're focused more on reducing CapEx this year to those lower levels. A lot of the decrease is coming from lower technology spend.

Okay, great. And then just one last, on the franchise, the reporting for the franchise is the revenue and gross profit and SG&A. It looks a little – the percentages, the rates of gross profit and SG&A are a little bit strange compared to prior reporting. Is that all just because of the refranchising and/or did we change something in that business on the profitability side?

There was an accounting change that required us to treat the advertising royalties a little bit different than in the past. So you'll see now on the income statement that the amount that we collect from franchisees related to advertising, now hits as a revenue item on the income statement, as well the a cost item. So there is a net of zero, but now that is reflected here on the franchise income statement versus it being just on the balance sheet previously. This is related to the revenue recognition change that the company adopted in the first quarter of this year.

Okay, great. So you don't have to restate last year for that, it'll just show through each quarter this year?

That's correct.

Okay. Awesome. Thank you.

Thanks, Carla.

Thanks, Carla.

Your next question comes from the line of Anthony Chukumba with Loop Capital Markets. Please go ahead.

Good morning, and thanks for taking my question. So I just had a question on supply chain, in terms of reverting back to the direct-to-store supply chain. I guess, if you could just give us a little bit of a history here in terms of why you went with a third-party distribution center network, and why you are now, I guess, aside from the working capital change, why you decided to revert back?

Well, I think, as we analyzed this, what our cost of goods are running through there. A lot of when you have third-party distribution centers is related to volume of how much is running through there, because you get a fixed cost, a third-party fixed cost. And as the volume has changed over the last couple of years with store closings and so forth, when you add in the cost of redelivering the product from the DCs, you ended up with a higher cost, than if we just go buy it direct and go back to what we were doing. So the numbers change over time as far as deflation in electronics and so forth, so the numbers are always moving. And as we looked at the current volume level, as I said, in the fixed cost – as the different volume numbers the fixed cost certainly changes, and everything about our analysis is by going direct to store augmenting with our National Product Service centers as we not only get the product to the stores for less money overall, there's a savings there but then obviously not have it sitting in the DCs from a working capital standpoint.

Okay. And is there any, I guess, incremental labor associated with that change? And also is there any executional risk in terms of making that change?

No. The labor is already there in the National Product Service centers. In fact, one of the things we've talked about in the supply chain is also by rerouting using some more efficient routing methodology in the service centers that it's actually a $7 million savings there as well. So not only is there not an extra cost to doing it, but by optimizing our routes in the service centers, we're actually lowering our cost there as well. So it's a win-win from a lot of ways, Anthony.

Got it. Okay. Thank you so much.

Thanks.

Your next question comes from the line of Vincent Caintic from Stephens. Please go ahead.

Hey. Thanks. Good morning. Thanks for taking my questions. First on the cost savings. So I appreciate you laying out the significant initiatives to improve expenses and very quickly, if you could talk about how these corporate overhead and supply chain redundancies, how these can be cut while keeping the revenues and the overall operations of the business unchanged and I guess should we be expecting any revenue generations as you go through with more of the initiatives?

Well, the revenue is improving as we cut over, and I don't think that's necessarily related to cutting the overhead, but it's certainly not impacting us in a negative way from a revenue standpoint. I think the way the stores operate versus with the way the corporate office operates are two different things and just felt like there's an extra overhead here that we can do without. Sometimes when you have more – the more overhead you have, but at the corporate office, the more projects you have going, you're actually impacting the stores in a negative way by giving them more and more projects every month because we're churning out so much work in a corporate office. So I think it actually can help us with less distraction by having less projects going on here at the corporate office. Maureen just mentioned when Carla asked a question about the CapEx, there's a lot less projects, technology projects going on and less projects, less distraction, less overhead. It probably helps the stores, if anything doesn't hurt them, so.

Okay, great. And secondly on the pricing actions and the value proposition, if you could talk about the actions on the price inelastic changes in more detail, I know just from checking on the website occasionally, we've seen some of the elastic changes like the six months same as cash, I'm just kind of wondering how the pricing actions will take place with the inelastic products, and any impacts to revenue and earnings that we should see over the course of 2018?

Yeah. So I think, as you know, Vince, we got more competitive on the electronic side, because that's where there's a lot of price sensitivity between computers and televisions and making up where margin lies on the furniture side and so far, and it's been now five or six weeks, we've seen no negative impact on the "inelastic products", the furniture side, we haven't seen any less demand there at all, in fact, as I've said our demand continues to improve.

Okay. Great. And the last one I have and this might be trivial and it was actually touched on a little bit earlier, but I've gotten about a dozen investor questions on this, so I thought I'd ask. So in the past press releases and the strategic review session, you had a discussion about multiple bidders and this quarter the phrase was changed instead to parties instead of bidders. Just wondering if there's any reason for that if people are reading too much into that? Thanks.

Well, I don't want to comment any more than what's in the press release, it does sound like from what you're just saying with all those queries that people are definitely reading too much into it. But I'll leave it at that.

Okay. Great. Thanks very much, Mitch. Appreciate it.

Thanks, Vincent.

Our next question will come from the line of John Rowan with Janney. Please go ahead.

Good morning, everyone.

Good morning.

Good morning, John.

Just a couple of kind of housekeeping questions. Overall, one, did debt cost a little bit higher than I was expecting, are we assuming that you're still paying a commitment fee on the revolving facility and that'll continue going forward even with the zero balance?

Yeah, we do have a fee that we pay on the undrawn balance which is consistent with what it has been in previous quarters.

Okay. And then obviously there was a loss per share this quarter, if we were to assume that you guys have a gain at some point for earnings. What would the diluted share count be? I mean how many shares would we have to add back into that count?

It's about 53 million in diluted shares.

Okay. And then what's the plan with the cash, obviously you're out of your revolving credit facility, you'll continue to generate free cash flow. I know you said you will build cash, but what are the functions on the notes that you guys can trigger to refinance sort of the important dates, prepayment penalties, just give me an idea of how else you can go about reducing debt through the notes?

Well, John, since we expect a strategic alternative review process to be completed within the second quarter, I think the way we think about it rather than building cash since we're not able to pay down the bonds in the existing credit facility, we would make the change and refinance the credit facility. And if we're able to meet the plan and have excess cash, then we would take a look at the capital structure. But as of right now, we're generating over $170 million of free cash flow and we'll see how the strategic review process, the outcome of that and then we'll refinance going forward. And we'll look at our overall capital structure, and provide more details at that time.

Yes, John. The way I think about it is that now the revolver is paid off, the excess cash is just going to help us with the refinancing.

Right.

Okay. All right. Thank you.

Thanks, John.

Thanks.

Our next question is a follow up from the line of Brad Thomas with KeyBanc Capital Markets. Please go ahead.

Hey, guys, thanks for letting me get back in. I wanted to just ask a high-level question kind of about how to think about the year in terms of the puts and takes. Obviously, we're starting with about $71 million of EBITDA from last year, because clearly if you have two-thirds of these cost cuts hitting this year, $60 million tailwind, we can see some of the puts and takes on the trajectory at ANOW and the Core. And clearly a lot of things going right for you. But I just wanted to make sure we're not missing anything in terms of headwinds that you're up against. Obviously, we hear a lot of retailers talk about things like labor prices and transportation prices, I mean, as you guys think of the year, what should we be contemplating in terms of potential headwinds with higher gasoline prices and higher labor prices, for example?

There's a little bit of a headwind on our delivery cost with the way we're forecasting the fuel prices, but it's really not all that material with us having small trucks in the cities and so forth as compared to semis and things like that. So it's pretty immaterial and the labor side isn't impacting us at this point. We've always paid higher than minimum wages in those kind of things. And we have a range depending on the potential employees experience and so forth, so we pay within a range and the more experience they have and so forth, the more they would make anyhow. So that's not changing for us. So I don't – from a headwind standpoint, Brad, the only one I can think of is the small amount of fuel, Maureen...

Right.

...and fuel cost is the only one. As we revised our internal financials, that's about the only one that we've talked about, one I know that's going in the wrong direction, I was thinking it's not a game changer.

Great. And then again, it clearly feels like things are moving in the right direction from a top line perspective, I guess, circling back to these cost cuts, we've seen cuts under executives when you were not with the company, where there were some missteps after those cuts or initiatives. And I guess the question would be what are you monitoring most closely to make sure that these cuts don't impact the business?

Well, we look at our metrics daily. Actually, I get reports throughout the day, but delivery impact in the stores, collection impact, revenue collection, and so forth. So we monitor our store metrics and our Acceptance NOW metrics at least on a daily basis and a lot of the VPs are looking – can pull up their numbers every couple hours and see how the stores are trending for the day and especially if there's an event going on, we have some big sales contests going on or something like that. So just it's the everyday metrics of running and collecting and so far, so good, Brad.

Great. Thanks again for letting me get back in the queue here.

Thanks, Brad.

Thanks, Brad.

At this time, I'll turn the conference back over to Mr. Fadel for any further remarks.

Thank you, Regina, and thank you everyone for joining us. I appreciate your time, I appreciate your support. Glad to update you on our turnaround program here and look forward to updating you again next quarter as we see things is only continuing to get better. So we appreciate your time and wish you a great day.

Ladies and gentlemen, this concludes today's conference. Thank you all for joining and you may now disconnect.