New Store Opening Program On Track ERIE, Pa., Aug. 4
/PRNewswire-FirstCall/ -- Rent-Way, Inc. (NYSE:RWY) today reported
financial results for the three and nine months ended June 30,
2005. For the third quarter, the Company reported revenues of
$128.3 million versus $124.9 million in the same quarter last year.
Revenues from the Company's core rental business (which excludes
the Company's dPi Teleconnect unit) were $124.2 million versus
$118.5 million in the same quarter last year, an increase of 4.8%.
Same store rental business revenues increased 2.6% versus last
year's quarter. Operating income in the quarter was $12.3 million,
compared to $12.3 million in the same period last year. Excluding
operating losses of $2.6 million related to the new store opening
program, operating income would have been $14.9 million, or a 21
percent increase over the prior year. Reported operating income
benefited from retrospective insurance adjustments of $1.9 million
in this quarter and $1.8 million in last year's quarter. As a
result of the increase in the Company's stock price in the quarter,
the Company recorded a $5.0 million FAS 133 charge related to the
conversion feature of the Company's preferred stock versus income
of $0.2 million in the same quarter last year. Giving effect to
this charge results in the Company incurring a net loss of $1.2
million in the quarter, compared to net income of $4.9 million in
the third quarter last year. Net loss allocable to common
shareholders was $1.8 million or $(0.07) per diluted share versus
net income allocable to common shareholders of $4.4 million last
year or $0.16 per diluted share. Without the FAS 133 charge, net
income and net income allocable to common shareholders in the
quarter would have been $3.8 million and $3.2 million,
respectively. "The fundamentals of our business are sound and our
plan to invest in growing the Rent-Way brand by 40 - 50 stores per
year for the next several years is working," stated Bill Short,
Rent-Way's President. "We opened 9 new stores in the quarter and we
expect to open 10 more by the end of September, which would mean 42
new stores opened in fiscal 2005. We're pleased with the top line
revenue performance of these new stores. Our cash flow is strong,
our team is solid and I remain very optimistic about 2006 and
beyond," concluded Mr. Short. William McDonnell, Rent-Way's Vice
President and CFO, stated, "For the quarter, our core stores
revenue and operating income, were $121.4 million and $13.2
million, respectively, and our core stores with new stores revenue
and operating income, were $124.2 million and $10.6 million,
respectively. Higher payoffs and a slight fall off in deliveries
during the quarter reduced our agreements on rent more than we had
anticipated. Nonetheless, we met our guidance for core store
revenue and operating income. Looking forward, our results for the
full fiscal year will be in line with our guidance, however we
expect revenue and operating income will be slightly below guidance
for the fourth quarter," concluded Mr. McDonnell. The Company ended
the quarter with $32.0 million outstanding on its bank revolver.
The Company reported EBITDA for the quarter of $16.2 million versus
$16.2 million in the same quarter last year. EBITDA as defined by
the Company is operating income plus depreciation of property and
equipment and amortization of intangibles. The Company believes
EBITDA provides investors useful information regarding its ability
to service its debt and generate cash for other purposes, including
for capital expenditures and working capital. The Company reported
net cash used in operations for the quarter of $8.4 million versus
cash provided by operations of $3.6 million in the same quarter
last year. Reconciliations of the non-GAAP measures mentioned above
to the nearest comparable GAAP measures are presented in the chart
of supplemental information attached to this release. About
Rent-Way Rent-Way is one of the nation's largest operators of
rental-purchase stores. Rent-Way rents quality name brand
merchandise such as home entertainment equipment, computers,
furniture and appliances from 786 stores in 34 states. Safe-Harbor
Statements This news release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements contain the words "projects,"
"anticipates," "believes," "expects," "intends," "will," "may" and
similar words and expressions. Each such statement is subject to
uncertainties, risks and other factors that could cause actual
results or performance to differ materially from the results or
performance expressed in or implied by such statements. The
forward-looking statements in this news release that contain
projections of the company's expected financial performance and
other projections regarding future performance are inherently
subject to change given the nature of projections and the company's
actual performance may be better or worse than projected.
Uncertainties, risks and other factors that may cause actual
results or performance to differ materially from any results or
performance expressed or implied by forward- looking statements in
this news release include: (1) the company's ability to control its
operating expenses and to realize operating efficiencies, (2) the
company's ability to develop, implement and maintain adequate and
reliable internal accounting systems and controls, (3) the
company's ability to retain existing senior management and to
attract additional management employees, (4) general economic and
business conditions, including demand for the company's products
and services, (5) general conditions relating to the
rental-purchase industry, including the impact of state and federal
laws regulating or otherwise affecting the rental-purchase
transaction, (6) competition in the rental-purchase industry,
including competition with traditional retailers, (7) the company's
ability to make principal and interest payments on its high level
of outstanding debt, and (8) the company's ability to open new
stores and cause those new stores to operate profitably. A
discussion of other risk factors that may cause actual results to
differ from the results expressed in or implied by these
forward-looking statements can be found in the company's filings
with the SEC. The company disclaims any duty to provide updates to
the forward-looking statements made in this news release. RENT-WAY,
INC. SELECTED BALANCE SHEET DATA (all dollars in thousands) June
30, 2005 September 30, 2004 (unaudited) (unaudited) Restated Cash
and cash equivalents $3,887 $3,412 Prepaid expenses 9,774 8,496
Rental merchandise, net 197,967 173,929 Total Assets 463,723
431,128 Accounts payable 17,309 26,187 Debt 234,211 203,934 Total
Liabilities 323,054 302,101 Shareholders' Equity 113,908 109,237
RENT-WAY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (all dollars
in thousands except per share data) For the three months ended June
30, 2005 2004 (unaudited) (unaudited) Restated Revenues: Rental
revenue $108,455 84.5% $103,211 82.6% Prepaid phone service revenue
4,313 3.4% 6,602 5.3% Other revenues 15,529 12.1% 15,069 12.1%
Total Revenues 128,297 100.0% 124,882 100.0% Costs and operating
expenses: Depreciation and amortization: Rental merchandise 31,949
24.9% 31,429 25.2% Property and equipment 3,732 2.9% 3,836 3.1%
Amortization of intangibles 195 0.2% 86 0.1% Cost of prepaid phone
service 2,684 2.1% 4,075 3.3% Salaries and wages 35,580 27.7%
33,192 26.6% Advertising, net 5,438 4.2% 4,986 4.0% Occupancy 9,526
7.4% 8,560 6.9% Restructuring costs - 0.0% - 0.0% Other operating
expenses 26,886 21.0% 26,392 21.1% Total costs and operating
expenses 115,990 90.4% 112,556 90.1% Operating income 12,307 9.6%
12,326 9.9% Other income (expense): Interest expense (7,304) -5.7%
(7,398) -5.9% Interest income 9 0.0% 9 0.0% Amortization of
deferred financing costs (289) -0.2% (227) -0.2% Other income
(expense), net (4,362) -3.4% 1,600 1.3% Income before income taxes
and discontinued operations 361 0.3% 6,310 5.1% Income tax expense
1,395 1.1% 1,395 1.1% Income (loss) before discontinued operations
(1,034) -0.8% 4,915 3.9% Loss from discontinued operations (181)
-0.1% (12) 0.0% Net income (loss) $(1,215) -0.9% $4,903 3.9%
Preferred stock dividend and accretion of preferred stock (549)
-0.4% (487) -0.4% Net income (loss) allocable to common
shareholders $(1,764) -1.4% $4,416 3.5% Earnings (loss) per common
share: Basic earnings (loss) per common share Income before
discontinued operations $(0.04) $0.19 Net income (loss) allocable
to common shareholders $(0.07) $0.17 Diluted earnings (loss) per
common share Income before discontinued operations $(0.04) $0.16
Net income (loss) allocable to common shareholders $(0.07) $0.16
Weighted average common shares outstanding: Basic 26,250 26,216
Diluted 26,250 30,125 RENT-WAY, INC. CONSOLIDATED STATEMENTS OF
OPERATIONS (all dollars in thousands except per share data) For the
nine months ended June 30, 2005 2004 (unaudited) (unaudited)
Restated Restated Revenues: Rental revenue $328,596 84.1% $316,514
82.6% Prepaid phone service revenue 13,617 3.5% 19,676 5.1% Other
revenues 48,579 12.4% 47,198 12.3% Total Revenues 390,792 100.0%
383,388 100.0% Costs and operating expenses: Depreciation and
amortization: Rental merchandise 100,471 25.7% 101,349 26.4%
Property and equipment 12,145 3.1% 12,240 3.2% Amortization of
intangibles 251 0.1% 310 0.1% Cost of prepaid phone service 8,460
2.2% 13,007 3.4% Salaries and wages 105,164 26.9% 100,552 26.2%
Advertising, net 15,524 4.0% 15,387 4.0% Occupancy 27,874 7.1%
25,426 6.6% Restructuring costs - 0.0% 48 0.0% Other operating
expenses 83,133 21.3% 79,511 20.7% Total costs and operating
expenses 353,022 90.3% 347,830 90.7% Operating income 37,770 9.7%
35,558 9.3% Other income (expense): Interest expense (21,662) -5.5%
(22,919) -6.0% Interest income 22 0.0% 792 0.2% Amortization and
write-off of deferred financing costs (854) -0.2% (748) -0.2% Other
income (expense), net (4,601) -1.2% (1,493) -0.4% Income before
income taxes and discontinued operations 10,675 2.7% 11,190 2.9%
Income tax expense 4,185 1.1% 4,185 1.1% Income (loss) before
discontinued operations 6,490 1.7% 7,005 1.8% Loss from
discontinued operations (361) -0.1% (1,722) -0.4% Net income (loss)
$6,129 1.6% $5,283 1.4% Preferred stock dividend and accretion of
preferred stock (1,619) -0.4% (1,286) -0.3% Net income (loss)
allocable to common shareholders $4,510 1.2% $3,997 1.0% Earnings
(loss) per common share: Basic earnings (loss) per common share
Income before discontinued operations $0.24 $0.27 Net income (loss)
allocable to common shareholders $0.17 $0.15 Diluted earnings
(loss) per common share Income before discontinued operations $0.24
$0.26 Net income (loss) allocable to common shareholders $0.17
$0.15 Weighted average common shares outstanding: Basic 26,246
26,155 Diluted 26,778 26,700 Calculation of EBITDA and
Reconciliation of Net Cash (Used in) Provided by Operations to
EBITDA For the Three Months Ended June 30, 2005 and 2004 (all
dollars in thousands) Three Months Ended 06/30/05 06/30/04
(unaudited) (unaudited) Restated Calculation of EBITDA Operating
income $12,307 $12,326 Depreciation - property and equipment 3,732
3,836 Amortization of intangibles 195 86 EBITDA $16,234 $16,248
Reconciliation of Net Cash (Used in) Provided by Operations to
EBITDA Three Months Ended 06/30/05 06/30/04 (unaudited) (unaudited)
Restated Net cash (used in) provided by operating activities
$(8,370) $3,611 Net cash used in discontinued operations 181 12
Adjustments to reconcile net income (loss) to net cash (used in)
provided by operating activities (42,609) (35,878) Changes in
assets and liabilities 49,583 37,158 Depreciation - property and
equipment 3,732 3,836 Amortization of intangibles 195 86 Interest
expense 7,304 7,398 Interest income (9) (9) Amortization of
deferred financing costs 289 227 Other (income) expense 4,362
(1,600) Income taxes 1,395 1,395 Loss from discontinued operations
181 12 EBITDA $16,234 $16,248 RENT-WAY, INC. RECONCILIATION OF CORE
STORES REVENUES AND OPERATING INCOME For the Three Months Ended
June 30, 2005 (all dollars in thousands) Operating Revenues Income
Rent-Way, Inc., as reported $128,297 $12,307 New store revenues and
operating loss (2,793) 2,587 Rent-Way, Inc. revenues and operating
income excluding New Stores $125,504 $14,894 DPI revenues and
operating loss (4,313) 160 DPI commissions 166 (30) Core stores
revenues and operating income $121,357 $15,024 Retrospective
insurance adjustments - 1,852 Core stores revenues and operating
income excluding annual insurance adjustments $121,357 $13,172
RECONCILIATION OF CORE STORES WITH NEW STORES REVENUES AND
OPERATING INCOME For the Three Months Ended June 30, 2005 (all
dollars in thousands) Operating Revenues Income Rent-Way, Inc., as
reported $128,297 $12,307 DPI revenues and operating loss (4,313)
160 DPI commissions 166 (30) Core stores with new stores revenues
and operating income $124,150 $12,437 Retrospective insurance
adjustments - 1,852 Core stores with new stores revenues and
operating income excluding annual insurance adjustments $124,150
$10,585 RENT-WAY, INC. RECONCILIATION OF NET INCOME AND NET INCOME
ALLOCABLE TO COMMON SHAREHOLDERS EXCLUDING FAS 133 CHARGE For the
Three Months Ended June 30, 2005 (all dollars in thousands) Net
Income (Loss) Allocable to Net Common Income (Loss) Shareholders
Rent-Way, Inc., as reported $(1,215) $(1,764) FAS 133 charge
related to the conversion feature of preferred stock (4,969)
(4,969) Net income and net income allocable to common shareholders
excluding FAS 133 charge $3,754 $3,205 DATASOURCE: Rent-Way, Inc.
CONTACT: Bill McDonnell, CFO of Rent-Way, +1-814-455-5378 Web site:
http://www.rentway.com/
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