Rent-A-Center earnings jump
By Furniture Today Staff -- Furniture Today, February 16, 2003
Plano, Texas — Cost controls and same-store sales gains lifted Rent-A-Center to sharp earnings increases for the fourth quarter and year, the company said.
Mark Speese, chairman and chief executive officer of the rent-to-own giant, said management was "able to deliver on our expectations and in many cases exceed them."
Net earnings of $45.2 million in the fourth quarter were up sharply from $379,000 in the year-earlier quarter, when the company took a $36 million one-time charge to settle a gender discrimination lawsuit and another charge for goodwill amortization. Excluding nonrecurring charges in both quarters, earnings per share jumped 40.5%.
In addition to controlling costs and adding stores and rental contracts, Rent-A-Center said it has been leveraging marketing expenses as revenue has grown. It also has been adding higher-priced goods to its inventory, mainly new electronics products such as high-definition televisions and laptop computers.
In the fourth quarter, same-store revenues were up 4.7%, with 4.5% attributable to the higher prices, said Mitch Fadel, president and chief operating officer. Total revenues of $522.2 million in the period were up 9% from a year earlier.
For the year, the company reported a profit of $162 million, after preferred dividends, on revenues of $2.01 billion. Revenues rose 11.1% over 2001, bolstered by a same-store gain of 6%.
Reported profits in 2002 were more than triple those of 2001. On a comparable basis excluding one-time charges, the company said earnings were up 43.1%.
| Rent-A-Center | |||
|---|---|---|---|
| Earnings per share are fully diluted. | |||
| Quarter ended 12/31 | 2002 | 2001 | Change |
| (a) Includes non-rental revenues of $49.7 million in the 2002 quarter, $41.5 million in the 2001 quarter, $181.5 million in the 2002 year and $157.7 million in the 2001 year. (b) Revenues minus direct store expenses, franchise operation expenses and general and administrative expenses. (c) After preferred dividends of $1,000 in the 2002 quarter and $10.2 million in the 2002 year. (d) After preferred dividends of $3.3 million in the 2001 quarter and $15.4 million in the 2001 year; includes pretax charges for class-action litigation settlement expense of $36 million in the 2001 quarter and $52 million in the 2001 year. (e) Based on average shares outstanding of 36 million in the 2002 periods and 37 million in the 2001 periods. |
|||
| Revenues(a) | $522,213,000 | $478,993,000 | 9.0% |
| Operating income(b) | 91,672,000 | 66,881,000 | 37.1% |
| Net income | (c)45,217,000 | (d)379,000 | 11,830.6% |
| Earnings per share(e) | 1.26 | 0.10 | 1,160.0% |
| Year ended 12/31 | 2002 | 2001 | Change |
| Revenues(a) | $2,010,044,000 | $1,808,528,000 | 11.1% |
| Operating income(b) | 355,494,000 | 266,780,000 | 33.3% |
| Net income | (c)161,961,000 | (d)50,809,000 | 218.8% |
| Earnings per share(e) | 4.74 | 1.79 | 164.8% |
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