Easyhome 4Q revenue up 15.6% to C$27.6M
By Michael J. Knell -- Furniture Today, March 27, 2006
Edmonton, Alberta — Major rent-to-own vendor Easyhome reported revenues rose 15.6% to C$27.6 million in the fourth quarter, which its CEO attributed to aggressive store openings and a generally underserved Canadian market.
"There remains under-capacity for the industry in Canada," said President and CEO David Ingram in a conference call with analysts.
Fourth-quarter net income remained virtually flat at C$1.75 million, or 17 Canadian cents per share.
Ingram said earnings were hurt by severance costs of 5 cents per share related to the departure of Executive Vice President and Chief Financial Officer Bill Johnson, and by losses at stores open less than a year.
In the fourth quarter, Easyhome opened seven stores, its first franchise operation and three kiosks in three Leon's Furniture stores.
For the year, the company had revenues of C$103.1 million, up 16.6% from C$88.5 million in 2004. Net income, however, fell 35.1% to C$5.7 million, or 55 Canadian cents per share, from C$8.8 million, or 87 cents per share, in 2004.
A non-recurring charge that shrunk earnings was the settlement of a class action lawsuit at a total cost of C$3.1 million.
Ingram told analysts the company executed all its key objectives for 2005.
"We successfully opened 28 new locations, doubling the 14 opened in 2004," he said. "Total revenues improved ... building on the growth of 13.3% recorded for 2004. We had targeted same-store revenue growth of 7% to 9% and finished with 7.5%, giving Easyhome 51 consecutive months of comparable growth."
Units on lease were up 21% at the end of 2005 over 2004, he said.
Ingram noted that yearly earnings per share, after adjustments for the 2005 class-action settlement and a tax credit in 2004, improved from 64 to 73 Canadian cents in 2005 over 2004.
"Despite the drag from new store losses (C$1.2 million in 2005) the company continues to expand both revenues and earnings, which have led to initiating a dividend payment and our second increase since May 2004," said Ingram.
| Easyhome (a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 12/31 | 2005 | 2004 | Change |
| (a) In Canadian dollars. (b) Includes non-rental revenue of $4.7 million in the 2005 quarter, $3.8 million in the 2004 quarter, $17.1 million in the 2005 year and $14 million in the 2004 year. (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 $3.1 million pretax expense for a class action settlement. | |||
| Revenues (b) | $27,639,000 | $23,914,000 | 15.6% |
| Operating income (c) | 8,458,000 | 7,336,000 | 15.3% |
| Net income | 1,748,000 | 1,728,000 | 1.2% |
| Earnings per share | 0.17 | 0.17 | 0.0% |
| Year ended 12/31 | 2005 | 2004 | Change |
| Revenues (b) | $103,112,000 | $88,450,000 | 16.6% |
| Operating income (c) | 33,843,000 | 28,079,000 | 20.5% |
| Net income (d) | 5,678,000 | 8,752,000 | (35.1%) |
| Earnings per share | 0.55 | 0.87 | (36.8%) |
