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RTO has stronger 4th quarter

By Furniture Today Staff -- Furniture Today, March 31, 2002

Edmonton, Alberta — With a stronger fourth quarter, Canadian rent-to-own powerhouse RTO Enterprises managed to turn an operating profit for 2001 and substantially slash net losses.

Revenue in the fourth quarter ended Dec. 31 was C$17.7 million, up 8.4% from the C$16.3 million in the prior year's quarter. Net income moved from a loss of C$2.6 million in 2000 to a profit of $389,000 in 2001.

For the year, total revenue was C$67.8 million, up marginally from C$67.4 million in 2000. Same-store sales increased 1.5%. Income before taxes was C$1 million compared to a loss before taxes of C$9.1 million the previous year.

Net income improved from a loss of C$6.4 million in 2000 to a loss of C$1.9 million in 2001.

The 2001 loss includes a future income tax charge of C$2.6 million taken in the second quarter to reflect tax rate and asset valuation changes.

David Ingram, president and chief executive officer, attributed the improved fourth quarter to strong growth in same-store revenue, improved collection practices, better product utilization and improved store operating margins.

"We are very pleased with ... the impact our marketing and merchandising programs made in growing the customer and agreement base," he said.

RTO plans to add seven stores this year, Ingram said.

RTO Enterprises(a)
Quarter ended 12/31	2001	2000	Change
Revenues(b)	C$17,720,000	C$16,343,000	8.4%
Operating income (c)	1,511,000	(72,000)	—
Net income	389,000	(d)(2,568,000)	—
Earnings per share	0.01	(0.12)	—
Year ended 12/31	2001	2000	Change
Revenues(b)	C$67,759,000	C$67,368,000	0.6%
Operating income(c)	5,431,000	851,000	538.2%
Net income	(1,870,000)	(d)(6,405,000)	—
Earnings per share	(0.04)	(0.29)	—
(a) In Canadian dollars. (b) Includes non-rental revenues of C$2.7 million in the 2001 quarter, C$2.5 million in the 2000 quarter, C$10.3 million in the 2001 year and C$10 million in the 2000 year. (c) Revenues minus salaries and benefits, selling, general and administrative expenses, rent, automotive and travel expenses and amortization of rental assets. (d) Includes pretax restructuring charges of C$1.2 million in the 2000 quarter and C$4.5 million in the 2000 year. The 2000 year also includes a C$2.7 million income tax benefit.

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