Easyhome revenue rises 9.2% in third quarter
MISSISSAUGA, Ontario
By Michael J. Knell -- Furniture Today, November 16, 2009
— Easyhome, this country's largest furniture and appliance leasing merchant, saw a healthy uptick in revenue in the third quarter, although restructuring charges took a bite out of net earnings.
Revenue was C$42.5 million — up 9.2% from the same period last year — with most of the gains coming from the company's Insta-rent business and Easyfinancial, its payday loan division. Same-store sales growth for the period was 1.8%.
Net income was C$20,000 or zero cents per share, compared with C$1.5 million or 14 cents per share for the comparable 2008 period. But the company said that excluding restructuring charges of C$1.2 million or 14 cents per share, earnings were 8 cents per share.
“In the third quarter, we began to scale back our infrastructure, which had been constructed to meet higher consumer demand, to better reflect the realities of the market,” Easyhome President and CEO David Ingram said in a conference call.
“A number of spending cuts initiated in the third quarter decreased costs, but the majority of these reductions are not expected to flow through to the bottom line until the fourth quarter of this year.”
The reorganization will include the closing of the company's administrative office in Edmonton, Alberta, as well as the realignment of senior management responsibilities and changes in store staff structures.
Restructuring charges in the quarter amounted to C$1.2 million.
Ingram said Easyhome's performance is likely to improve in the fourth quarter.
The company also reported that its franchising business met its targets for the quarter. Easyhome is expected to have a total of 22 stores in operation by the end of fiscal 2009.
It also expects to operate 30 Easyfinancial kiosks across Canada by the end of the year.
Ingram said that next year, Easyhome intends to open between eight and 10 corporate stores, 25 to 30 franchise stores, and 25 to 30 Easyfinancial kiosks. It projects revenue growth of 5% to 7%.
At Sept. 30, Easyhome operated 237 stores, including 208 Canadian corporate stores, 13 U.S. corporate stores, 10 U.S. franchise stores, five Canadian franchise stores and one licensed Canadian store.
Easyhome (a)
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.
| Quarter ended 9/30 | 2009 | 2008 | Change |
| (a) In Canadian dollars. |
|||
| Revenues | C$42,455,000 | C$38,862,000 | 9.2% |
| Operating income | 16,866,000 | 17,713,000 | (4.8%) |
| Net income | 20,000 | 1,499,000 | (98.7%) |
| Earnings per share | 0.00 | 0.14 | (100.0%) |
| 9 months ended 9/30 | 2009 | 2008 | Change |
| Revenues | C$129,784,000 | C$118,441,000 | 9.6% |
| Operating income | 56,652,000 | 55,953,000 | 1.2% |
| Net income | 4,338,000 | 7,201,000 | (39.8%) |
| Earnings per share | 0.41 | 0.68 | (39.7%) |
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