RTO hikes sales, profits
By Furniture Today Staff -- Furniture Today, March 9, 2003
Edmonton, Alberta — RTO Enterprises, Canada's only national rent-to-own home furnishings merchant, reported improvements in sales and profits in the fourth quarter and year.
In the quarter, revenue increased 6.7% to C$18.9 million. Same-store sales advanced 3.2% while net income more than doubled to C$851,000 from C$389,000 in the 2001 quarter.
For the year, revenue was C$72.4 million, an increase of 6.9% over the previous year. Same-store sales were up 5% while net income jumped from a loss of C$1.9 million in 2001 to earnings of C$2.6 million.
David Ingram, president and chief executive officer, said, "We were rewarded by the diligent work conducted by our marketing team, who introduced more effective targeting techniques to attract new customers during the fall. This resulted in sequential growth of 7% in customer gain over the third quarter, a 10% increase in ending agreements on rent, leading to our monthly rental revenue portfolio increasing $383,000, which is 21% higher than the comparable period in 2001."
RTO opened four stores in the fourth quarter and now operates a total of 136 stores across the country, an increase of six over the previous year. A few weeks ago, RTO announced it would convert all stores to its new Easyhome banner by mid-year.
"In the past 2 years, our funded debt has been reduced by 30% and our monthly rental revenue portfolio has increased 16%," Ingram said. "This, coupled with our Easyhome brand transition due for completion by June, gives us continued optimism for 2003."
Chairman Donald Johnson said the company will focus on improving profitability as it implements the rebranding strategy.
| RTO Enterprises(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/31 | 2002 | 2001 | Change |
| (a) In Canadian dollars. (b) Includes non-rental revenues of C$3 million in the 2002 quarter, C$2.7 million in the 2001 quarter, C$10.8 million in the 2002 year and C$10.3 million in the 2001 year. (c) Revenues minus salaries and benefits, selling, general and administrative expenses, rent, automotive and travel and amortization of rental assets. | |||
| Revenues (b) | C$18,914,000 | C$17,720,000 | 6.7% |
| Operating income (c) | 1,942,000 | 1,512,000 | 28.4% |
| Net income | 851,000 | 389,000 | 118.8% |
| Earnings per share | 0.18 | 0.09 | 100.0% |
| Year ended 12/31 | 2002 | 2001 | Change |
| Revenues (b) | C$72,437,000 | C$67,759,000 | 6.9% |
| Operating income (c) | 6,929,000 | 5,432,000 | 27.6% |
| Net income | 2,618,000 | (1,870,000) | — |
| Earnings per share | 0.54 | (0.45) | — |
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