Rainbow Rentals Reports Financial Results for First Quarter

Apr 25, 2001, 01:00 ET from Rainbow Rentals

    CANFIELD, Ohio, April 25 /PRNewswire/ -- Rainbow Rentals, Inc.
 (Nasdaq: RBOW) today reported its financial results for the first quarter
 ended March 31, 2001.
     Net income for the first quarter was $531,000, or $0.09 per share on a
 diluted basis, in line with management guidance provided in February.  In the
 first quarter of 2000, Rainbow earned $1,342,000, or $0.23 per share.  Revenue
 for the quarter was $24,290,000, up 8.1 percent from $22,462,000 in the
 comparable quarter of 2000, offsetting a decline of 2.5 percent in revenue at
 comparable stores (those opened or acquired before January 1, 2001).
     "We are very pleased that the initiatives we've undertaken to rebuild our
 units on rent have begun to show favorable results," said Wayland J. Russell,
 chairman and chief executive officer. "In line with the guidance we provided
 in February, our first-quarter results were affected by the greater-than-
 expected decline we sustained last summer in our units on rent, and by the
 costs of initiatives aimed at rebuilding them. These initiatives included the
 expansion of our regional management team and an increase in advertising
 spending.
     "These strategies are working.  Although we typically lose units during
 our first quarter, we actually gained units during the first quarter of 2001,
 even without the effect of a tuck-in acquisition in March. Our overall
 collection performance is markedly improved, the staffing shortage that
 affected us last summer is behind us, and our expanded advertising schedule
 began in March.
     "However, our preliminary results for early April indicate a significant
 loss of units, prompting us to reevaluate our expectations for the second
 quarter and subsequent quarters of 2001. At this time, we expect second-
 quarter net income of 9 to 11 cents per share, representing an improvement
 from our first quarter of 2001 but still far below where we believe Rainbow
 should be.  We are also revisiting our advertising strategy and are committed
 to making whatever adjustments are necessary to improve our performance."
     In March, Rainbow purchased the inventory and approximately 700 accounts
 of two Rental Depot stores in Knoxville and Alcoa, Tenn., and tucked them into
 existing Rainbow stores.  Rainbow paid $274,000 in cash to acquire the assets
 from C&J Development Corp.
     Rainbow Rentals, Inc. offers brand-name, full-featured appliances,
 electronics, computers and furniture at 112 rental-purchase stores in 11
 states -- Connecticut, Massachusetts, Michigan, New York, North Carolina,
 Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee and Virginia.
 Rainbow also accepts product orders by phone and at its website, located at
 www.rainbowrentals.com . Established in 1986, Rainbow is headquartered in
 Canfield, Ohio, and employs more than 950 associates. The company completed
 its initial public offering in 1998 and was listed on Forbes magazine's 2000
 and 1999 lists of Best 200 Small Companies.
     Forward-looking statements in this release are made pursuant to the safe
 harbor provisions of the Private Securities Litigation Reform Act of 1995.
 Such forward-looking statements are subject to certain risks and uncertainties
 that could cause actual results to differ materially from those projected.
 Readers are cautioned not to place undue reliance on these forward-looking
 statements. For further information, please refer to the company's filings
 with the Securities and Exchange Commission.
 
 
                               RAINBOW RENTALS, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (Dollars in thousands, except per share amounts)
 
                                                          (unaudited)
                                                   For the three months ended
                                                            March 31,
                                                      2001              2000
     Revenues
       Rental revenue                               $22,466           $20,761
       Fees                                             686               671
       Merchandise sales                              1,138             1,030
              Total revenues                         24,290            22,462
 
     Operating expenses
       Merchandise costs                              8,388             7,507
       Store expenses
          Salaries and related                        5,710             5,135
          Occupancy                                   2,092             1,618
          Advertising                                 1,524             1,046
          Other expenses                              3,344             2,861
              Total store expenses                   12,670            10,660
 
              Total merchandise costs and
               store expenses                        21,058            18,167
 
       General and administrative expenses            1,855             1,618
       Amortization of goodwill and
        noncompete agreements                           175               132
              Total operating expenses               23,088            19,917
 
              Operating income                        1,202             2,545
 
     Interest expense                                   226               198
     Other expense, net                                  85                73
              Income before income taxes                891             2,274
 
     Income taxes                                       360               932
 
              Net income                               $531            $1,342
 
     Earnings per common share:
       Basic and diluted earnings per
        share                                         $0.09             $0.23
 
     Weighted average common shares
      outstanding:
       Basic                                      5,925,735         5,925,735
 
       Diluted                                    5,935,968         5,925,735
 
                       MAKE YOUR OPINION COUNT -  Click Here
                  http://tbutton.prnewswire.com/prn/11690X21266942
 
 

SOURCE Rainbow Rentals
    CANFIELD, Ohio, April 25 /PRNewswire/ -- Rainbow Rentals, Inc.
 (Nasdaq: RBOW) today reported its financial results for the first quarter
 ended March 31, 2001.
     Net income for the first quarter was $531,000, or $0.09 per share on a
 diluted basis, in line with management guidance provided in February.  In the
 first quarter of 2000, Rainbow earned $1,342,000, or $0.23 per share.  Revenue
 for the quarter was $24,290,000, up 8.1 percent from $22,462,000 in the
 comparable quarter of 2000, offsetting a decline of 2.5 percent in revenue at
 comparable stores (those opened or acquired before January 1, 2001).
     "We are very pleased that the initiatives we've undertaken to rebuild our
 units on rent have begun to show favorable results," said Wayland J. Russell,
 chairman and chief executive officer. "In line with the guidance we provided
 in February, our first-quarter results were affected by the greater-than-
 expected decline we sustained last summer in our units on rent, and by the
 costs of initiatives aimed at rebuilding them. These initiatives included the
 expansion of our regional management team and an increase in advertising
 spending.
     "These strategies are working.  Although we typically lose units during
 our first quarter, we actually gained units during the first quarter of 2001,
 even without the effect of a tuck-in acquisition in March. Our overall
 collection performance is markedly improved, the staffing shortage that
 affected us last summer is behind us, and our expanded advertising schedule
 began in March.
     "However, our preliminary results for early April indicate a significant
 loss of units, prompting us to reevaluate our expectations for the second
 quarter and subsequent quarters of 2001. At this time, we expect second-
 quarter net income of 9 to 11 cents per share, representing an improvement
 from our first quarter of 2001 but still far below where we believe Rainbow
 should be.  We are also revisiting our advertising strategy and are committed
 to making whatever adjustments are necessary to improve our performance."
     In March, Rainbow purchased the inventory and approximately 700 accounts
 of two Rental Depot stores in Knoxville and Alcoa, Tenn., and tucked them into
 existing Rainbow stores.  Rainbow paid $274,000 in cash to acquire the assets
 from C&J Development Corp.
     Rainbow Rentals, Inc. offers brand-name, full-featured appliances,
 electronics, computers and furniture at 112 rental-purchase stores in 11
 states -- Connecticut, Massachusetts, Michigan, New York, North Carolina,
 Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee and Virginia.
 Rainbow also accepts product orders by phone and at its website, located at
 www.rainbowrentals.com . Established in 1986, Rainbow is headquartered in
 Canfield, Ohio, and employs more than 950 associates. The company completed
 its initial public offering in 1998 and was listed on Forbes magazine's 2000
 and 1999 lists of Best 200 Small Companies.
     Forward-looking statements in this release are made pursuant to the safe
 harbor provisions of the Private Securities Litigation Reform Act of 1995.
 Such forward-looking statements are subject to certain risks and uncertainties
 that could cause actual results to differ materially from those projected.
 Readers are cautioned not to place undue reliance on these forward-looking
 statements. For further information, please refer to the company's filings
 with the Securities and Exchange Commission.
 
 
                               RAINBOW RENTALS, INC.
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                 (Dollars in thousands, except per share amounts)
 
                                                          (unaudited)
                                                   For the three months ended
                                                            March 31,
                                                      2001              2000
     Revenues
       Rental revenue                               $22,466           $20,761
       Fees                                             686               671
       Merchandise sales                              1,138             1,030
              Total revenues                         24,290            22,462
 
     Operating expenses
       Merchandise costs                              8,388             7,507
       Store expenses
          Salaries and related                        5,710             5,135
          Occupancy                                   2,092             1,618
          Advertising                                 1,524             1,046
          Other expenses                              3,344             2,861
              Total store expenses                   12,670            10,660
 
              Total merchandise costs and
               store expenses                        21,058            18,167
 
       General and administrative expenses            1,855             1,618
       Amortization of goodwill and
        noncompete agreements                           175               132
              Total operating expenses               23,088            19,917
 
              Operating income                        1,202             2,545
 
     Interest expense                                   226               198
     Other expense, net                                  85                73
              Income before income taxes                891             2,274
 
     Income taxes                                       360               932
 
              Net income                               $531            $1,342
 
     Earnings per common share:
       Basic and diluted earnings per
        share                                         $0.09             $0.23
 
     Weighted average common shares
      outstanding:
       Basic                                      5,925,735         5,925,735
 
       Diluted                                    5,935,968         5,925,735
 
                       MAKE YOUR OPINION COUNT -  Click Here
                  http://tbutton.prnewswire.com/prn/11690X21266942
 
 SOURCE  Rainbow Rentals