Rent-to-own News - easyhome reports improved 2010 Q4 results

easyhome, Canada s largest merchandise rental company, today announced its results for the fourth quarter and full year ended December 31, 2010.

"easyhome delivered improved revenues and earnings in 2010," said David Ingram, easyhome's President and Chief Executive Officer. "Normalized earnings for the year were 92 cents compared with 63 cents in 2009. The increase in earnings reflects our commitment to extracting efficiencies from all aspects of our operations, and the growth of our easyfinancial Services business. All business segments are also beginning to benefit from renewed consumer confidence."

"The growth of easyfinancial Services was slowed in the fourth quarter by the fraud we discovered in October. Rather than expanding the business, we applied ourselves to reviewing our processes, strengthening our team and enhancing our internal controls. We are encouraged by the growth prospects of our easyfinancial Services business unit."

Fourth Quarter Results

For the three months ended December 31, 2010, easyhome increased revenues 8.3% to $46.9 million from $43.3 million for the same period last year. Strong revenue growth of $2.9 million from easyfinancial Services and $0.5 million from easyhome s U.S. operations complemented the modest revenue growth in the Company s Canadian leasing operations. Same-store revenue growth, which includes revenue growth from easyfinancial Services, was 10.9%, up from -1.7% in the fourth quarter of 2009.

Mr. Ingram continued, "all of easyhome s business units are showing year-over-year improvements. Our potential monthly lease revenue, a key measure of the size of our lease portfolio, increased by $0.6 million during the fourth quarter of 2010 and our consumer loan portfolio increased by $3.4 million over the same period. Both of these increases will lead to improved revenues in the upcoming quarters."

Operating income for the quarter was $0.3 million compared with $1.6 million for the fourth quarter of 2009. Operating income for the fourth quarter of 2010, however, was negatively impacted by the costs associated with the forensic investigation of the fraud previously discovered at easyfinancial Services. Excluding non-recurring charges associated with the fraud investigation for 2010 and restructuring and other charges for 2009, operating income was $2.7 million compared with $2.5 million for the same period last year, an increase of 9.5%.

The Company recorded net income of $0.5 million for the quarter compared with net income of $0.9 million in the fourth quarter of 2009. On a per share basis, earnings were $0.04 compared with $0.09. Excluding non-recurring charges associated with the fraud investigation for 2010 and the restructuring and other charges for 2009, net income was $2.2 million and earnings per share were $0.20 compared with net income of $1.5 million and earnings per share of $0.14 in the fourth quarter of 2009, an increase of 43%.

Fiscal 2010 Results

For the full year, easyhome generated revenues of $180.8 million, an increase of 4.3% compared with $173.4 million at the end of fiscal 2009. Canadian leasing contributed $158.6 million to total revenues, down slightly from $161.5 million for the same period last year. U.S. leasing revenues increased to $9.3 million from $7.7 million at the end of 2009. easyfinancial Services generated revenues of $12.9 million compared with $4.1 million in fiscal 2009.

Operating income for the year was $10.4 million compared with $9.4 million for the same period last year. Adjusted to exclude non-recurring charges associated with the fraud investigation, restructuring and other charges, operating income was $14.4 million compared with $11.9 million, an increase of 20.9%. Reported net income was $6.9 million, or $0.65 per share, compared with $5.1 million, or $0.48 per share a year earlier.