Easyhome sales up 16.4%, but profit dips
By Furniture Today Staff -- Furniture Today, December 4, 2005
Edmonton, Alberta — Easyhome said a 15% year-to-date increase in its furniture department's units-on-rent helped produce 48 straight months of revenue growth for Canada's largest rent-to-own merchant.
In the third quarter, revenues jumped 16.4% to C$25.7 million from C$22 million in last year's comparable quarter. Net income, however, was down 43.2% to C$2.3 million from C$4.1 million last year.
Same-store sales grew 8.8% in the latest quarter and the number of active customers hit an all-time high, Easyhome said.
The net earnings decline was attributed in part to a tax-related gain that inflated the 2004 quarter's earnings. Without the gain, the earlier quarter's earnings would have been C$1.8 million or 18 cents per share.
Easyhome also reported a C$500,000 credit in the latest quarter related to a class-action lawsuit that alleged Easyhome's interest rates were unlawfully high. The settlement provided qualified renters with coupons valued at about C$55 each tto be redeemed before Dec. 31.
President and CEO David Ingram told analysts during a conference call the company anticipates that not all coupons will be redeemed, which led to the credit. For the nine months ended Sept. 30, the company still reported a C$3.1 million expense for the settlement.
Increased energy prices and certain tax asset valuations also dragged down earnings.
In the nine months, revenues were C$75.5 million, up 16.9% from the comparable 2004 period. Net earnings fell 44% to C$3.9 million from C$7 million. Same-store sales in the nine months rose 8.5%.
"The growth in revenue is entirely attributed to an increase in the company's customer base," Ingram said.
In the latest quarter, Easyhome opened six stores, and three more at the beginning of October, to give it 161 units coast-to-coast. Ingram said five more stores will open before the end of the year, and the trial program with Leon's Furniture will be expanded from one to five stores in November.
Easyhome said it will unveil a new store concept in the fourth quarter.
| Easyhome(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 9/30 | 2005 | 2004 | Change |
| (a) In Canadian dollars. (b) Includes non-rental revenues of C$4.2 million in the 2005 quarter, C$3.6 million in the 2004 quarter, C$12.4 million in the 2005 nine months and C$10.2 million in the 2004 nine months. (c) Revenues minus salaries and benefits, selling, general and administrative expenses, occupancy costs, automotive and travel expenses and amortization of rental assets. (d) Includes a C$500,000 pretax recovery from a class action settlement in the 2005 quarter and a C$3.1 million pretax charge in the 2005 nine months for a class action settlement. |
|||
| Revenues (b) | C$25,656,000 | C$22,036,000 | 16.4% |
| Operating income (c) | 3,679,000 | 3,320,000 | 10.8% |
| Net income | (d)2,337,000 | 4,116,000 | (43.2%) |
| Earnings per share | 0.23 | 0.41 | (43.9%) |
| 9 months ended 9/30 | 2005 | 2004 | Change |
| Revenues (b) | C$75,473,000 | C$64,536,000 | 16.9% |
| Operating income (c) | 10,691,000 | 8,778,000 | 21.8% |
| Net income | (d)3,930,000 | 7,024,000 | (44.0%) |
| Earnings per share | 0.38 | 0.70 | (45.7%) |
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Easyhome sales up 16.4%, but profit dips
Dec 5, 2005
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