Rent-Way slashes loss
By Furniture Today Staff -- Furniture Today, February 16, 2003
Erie, Pa. — Rent-to-own operator Rent-Way reported a smaller net loss on a 1.6% dip in revenues in its first quarter ended Dec. 31.
"We're making great strides in positioning our company for sustained, profitable growth," said Bill Morgenstern, chairman and chief executive officer.
Rent-Way lost $5.4 million in the quarter, compared with a $64.2 million loss in the same quarter a year earlier, when an accounting rule change required a $41.5 million charge. Operating income of $6.4 million in the latest quarter was up from $3 million a year ago.
Revenues of $146.5 million in the quarter were down slightly because of a 1.5% dip in same-store volume and a reduction in stores.
Morgenstern said the company has improved operational efficiency and expense control. The recent sale of 295 low-performing stores to competitor Rent-A-Center will allow Rent-Way to focus on its best locations, the remaining 759 stores in 33 states, he said.
The $100.4 million deal will provide the company with immediate net proceeds of $65 million and $10 million later, which will be used to pay down debt. As of Dec. 31, debt of $285 million was down $54 million from a year earlier.
| Rent-Way | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| Quarter ended 12/31 | 2002 | 2001 | Change |
| (a) Includes non-rental revenues of $27.3 million in the 2002 quarter and $28.3 million in the 2001 quarter. (b) Revenues minus depreciation and amortization of rental merchandise and property and equipment, cost of prepaid phone service, salaries and wages, advertising, occupancy and other operating expenses. (c) Includes a $150,000 net loss from discontinued operations. (d) Includes a $90,000 net gain from discontinued operations and a $41.5 million extraordinary charge, the cumulative effect of an accounting principle change. | |||
| Revenues(a) | $146,468,000 | $148,793,000 | (1.6%) |
| Operating income(b) | 6,367,000 | 3,030,000 | 110.1% |
| Net income | (c)(5,360,000) | (d)(64,222,000) | — |
| Earnings per share | (0.21) | (2.62) | — |
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