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Rent-A-Center's 3Q revenues up slightly

Janice Chamberlain -- Furniture Today, October 30, 2005

Plano, Texas — Rent-to-own major Rent-A-Center reported revenues of $573.5 million in the third quarter, up slightly from revenues of $569.6 million in the comparable 2004 period. Net earnings more than doubled to $11.3 million from $5.6 million in the year-earlier quarter.

Excluding special charges,, RAC had earnings of $26 million in the latest quarter, compared with $37.6 million in the same period in 2004.

For the nine months, RAC revenues inched up 1.6% to $1.8 billion from $1.7 billion in the first nine months of 2004. Net profits slipped 7.6% to $100.7 million from $109 million. Excluding special charges and credits, net earnings in the 2005 nine months were $108.3 million versus $141 million in the year-ago period.

Same-store sales slipped 0.4% in the latest quarter and 0.8% in the nine months.

"This quarter, as well as the past year and a half, have been challenging for our customer and for our company due, we believe, to the macroeconomic environment and, more specifically, the higher energy prices," said Chairman and CEO Mark Speese.

"Our strategic objectives will continue to be to enhance store operations, open new stores, pursue opportunistic acquisitions in rent-to-own and other businesses ... and enhance stockholder value by repurchasing additional shares of our common stock, while maintaining a solid balance sheet," he said.

During the third quarter, RAC opened 17 new stores, acquired two stores, consolidated 114 stores into existing locations, sold two stores and closed eight. In the fourth quarter, the company intends to open between 20 and 25 new stores.

RAC currently operates 2,763 company-owned stores nationwide, in Canada and Puerto Rico. ColorTyme, a wholly owned subsidiary, is a national franchiser of 288 RTO stores, 276 of which operate under the name ColorTyme and the remaining 12 as Rent-A-Center.

Rent-A-Center
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
Quarter ended 9/30	2005	2004	Change
(a) Includes non-rental revenues of $57.1 million in the 2005 quarter, $53 million in the 2004 quarter, $194.2 million in the 2005 nine months and $186.5 million in the 2004 nine months. (b) Revenues minus direct store expenses, franchise operation expenses and general and administrative expenses. (c) Includes a $13 million pretax restructuring charge in both periods. The 2005 nine months also includes an $8 million reversal of a class action litigation settlement. (d) Includes a $47 million pretax charge in both periods for a class action litigation settlement. The 2004 nine months also includes a $4.2 million pretax charge from recapitalization. (e) Based on average shares outstanding of 73.7 million in the 2005 quarter, 79.9 million in the 2004 quarter, 75.3 million in the 2005 nine months and 81.6 million in the 2004 nine months.
Revenues (a)	$573,507,000	$569,607,000	0.7%
Operating income (b)	49,934,000	74,100,000	(32.6%)
Net income	(c)11,277,000	(d)5,573,000	102.4%
Earnings per share (e)	0.15	0.07	114.3%
9 months ended 9/30	2005	2004	Change
Revenues (a)	$1,755,894,000	$1,727,972,000	1.6%
Operating income (b)	205,366,000	262,628,000	(21.8%)
Net income	(c)100,688,000	(d)108,976,000	(7.6%)
Earnings per share (e)	1.34	1.34	0.0%

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RAC 3Q revenues rise 3.6%

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