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Rent-A-Center, Inc. Reports Fourth Quarter and Year End 2001 Results
MONDAY, FEBRUARY 11, 2002 4:41 PM
- PRNewswire
PLANO, Texas, Feb 11, 2002 /PRNewswire-FirstCall via COMTEX/ -- Rent-A-Center, Inc. (RCII) (the
"Company") today announced revenues and net earnings for the quarter and year ended December
31, 2001.
Total revenues for the quarter ended December 31, 2001 were $479.0 million as compared to $411.9
million for the same quarter of the prior year, an increase of 16.3%. Net earnings rose to $26.0
million in the fourth quarter of 2001 from $23.6 million during the fourth quarter of 2000, an increase of
10.2%. Diluted earnings per share for the quarter ended December 31, 2001 totaled $0.70 as
compared to $0.67 for the same quarter of the prior year, representing a 4.5% increase. The
Company's quarterly growth in revenues and net earnings was primarily driven by strong growth in
same store revenues and the initial success of the Company's efforts to control expenses and
improve store operating margins. Same store revenues (revenues earned in stores operated for the
entirety of both periods) during the fourth quarter of 2001 increased 9.7% above the comparable
quarter of 2000.
"We are very pleased with our results during the fourth quarter, especially given where we began in
early October," commented Mark E. Speese, the Company's Chairman and Chief Executive Officer.
"We were able to make significant improvements relatively quickly which are evidenced by our
improved operating results in the fourth quarter allowing us to report earnings per share on the high
side of our revised guidance range." Speese added, "Our demand continues to be strong, and we
believe our ability to capitalize on this demand while controlling costs will lead to margin
enhancement in the coming year."
Excluding the one-time gain in 2000 and the one-time charge in 2001 as discussed below, net
earnings for the twelve months ended December 31, 2001 were $97.5 million compared with $91.2
million for the twelve months ended December 31, 2000, representing an increase of 6.9%. Diluted
earnings per share, excluding the one-time charge in 2001, rose to $2.63 for the twelve months
ended December 31, 2001 compared with earnings of $2.62 per diluted share for the twelve months
ended December 31, 2000, when excluding the one- time gain. Total revenues for the twelve months
ended December 31, 2001 increased to $1.809 billion from $1.602 billion in 2000, representing an
increase of 12.9%. Same store revenues for the twelve-month period ended December 31, 2001
increased 8.0%.
During 2000, the Company received a reimbursement of $22.4 million from the settlement fund
related to three class action lawsuits in the State of New Jersey which it settled in December 1998.
Accordingly, the Company recorded a one-time gain during the second quarter of 2000 of $22.4
million to reflect this settlement. The after-tax effect of the reimbursement in the results for the twelve
months ended December 31, 2000 increases the Company's net earnings per diluted share by $0.34.
During the third quarter of 2001, the Company recorded a one-time, non- recurring pre-tax charge of
$16.0 million as a result of the agreement in principal for the settlement of Margaret Bunch, et al v.
Rent-A-Center, Inc., a lawsuit pending in federal court in Kansas City, Missouri, asserting various
claims of gender discrimination and other gender based claims on behalf of a nationwide class. The
settlement is subject to court approval. The after-tax effect of the charge in the results for the twelve
months ended December 31, 2001 decreases the Company's net earnings per diluted share by
$0.24.
In the fourth quarter of 2001, the Company opened 15 new locations and acquired an additional four
stores. The Company has opened four new stores during the first quarter of 2002 and intends to open
60 to 80 new stores during 2002, as well as pursue opportunistic acquisitions. The Company
believes this growth can be funded with internally generated cash flow. During the year ended
December 31, 2001, the Company generated $175.7 million in cash flow from operations. This
enabled the Company to reduce total debt outstanding by $38.1 million, fund the growth of an
additional 123 stores and repurchase $25 million in common stock outstanding. The Company ended
the year with approximately $108 million of cash on hand.
"We have experienced strong cash flow all year long, but particularly in the fourth quarter of 2001,
whereby we generated $58.9 million in operating cash flow," stated Speese. "The renewed profit
focus and expense control initiatives we have implemented over the last few months give us further
comfort in our guidance," continued Speese, "and as we continue to realize the benefit of these
initiatives, we believe it could lead to further upside on earnings."
Rent-A-Center will host a conference call to discuss the fourth quarter financial results and other
business updates on Tuesday morning, February 12, 2002, at 10:45 a.m. EST. For a live webcast of
the call, visit
www.rentacenter.com/CompanyInfo/CompanyInfo.html . The webcast will be
archived for a period of two weeks.