Consumer loans drive Easyhome earnings
Michael Knell -- Furniture Today, October 28, 2011
MISSISSAUGA, Ontario - Its expanding short-term consumer loan business drove all of Easyhome's sales and earnings growth in both the second quarter and first half of the year, Canada's largest furniture and appliance leasing merchant reported.
Revenue for the three months ending June 30 was C$46.3 million, up 8% over the C$42.9 million for the second quarter of 2010.
Net income increased 36% to $2.7 million, compared with $2 million for the comparable period. On a per share basis, earnings were 23 Canadian cents, compared with 19 cents. The company noted that when adjusted for the restructuring charges and bad debt expenses resulting from last year's employee fraud, earnings were C$2.5 million or 23 cents per share a year ago.
Same-store sales growth was 6.4%, compared with 1.3% for the second quarter of 2010.
Easyhome said revenues from its core business - leasing furniture, appliances and electronics - were C$40.3 million, essentially unchanged from the same period of last year. Also unchanged was revenue from its franchise operations, which totaled C$300,000. However, its Easyfinancial consumer loans business saw its revenue jump from C$2.3 million to C$5.6 million as its total loans receivable portfolio doubled from C$17.3 million to C$35.3 million.
Excluding Easyfinancial, Easyhome's same-store sales growth drops to negative 1% for the second quarter and negative 0.8% for the first half of 2011.
"Our results for the second quarter maintain the trend of revenue and earnings growth. The continuing investment to improve both our internal processes and infrastructure are providing a platform for positive sustainable growth," David Ingram, Easyhome president and CEO, said in a statement.
"These enhancements, coupled with the increased capital secured through our recent bank refinancing and the December 2010 equity offering, will support the growth of all business units, in particular Easyfinancial Services," Ingram added.
For the first half of 2011, Easyhome revenues were C$92.5 million, up 7.7% from the C$85.9 million rung up for the opening six months of 2010. Net income, adjusted for unusual items, was C$5.1 million, up from C$4.8 million. Diluted earnings per share, excluding unusual items, fell to 43 cents from 46 cents a year ago.
As of June 30, Easyhome operated 258 stores including 217 corporate stores, 15 of which are located in the U.S. (mostly in New York state).
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