|
UPDATE
12-18-02 9:00am
'ALL Managers' Conference call at 10:00am
stand by for updates...
Rent Way Sells 295 Stores to
Rent a Center
For 2 years, the RTO universe has held it's
collective breathe and hoped for a turnaround at Rent Way.
Sources tell RTO Online that a "significant announcement" will
be made shortly regarding the company.
Rent Way's Regional Managers have
been summoned to a meeting in Florida on Wednesday, one day prior to the company's year end earnings
release and conference call scheduled for 4:30 PM (EST) on
Thursday, December 19. (Listen
In) RTO Online has been unable to confirm the announcement
to be made, but the timing is seen as significant.
Regardless of any pending announcement, investors are speculating
that Thursday's earnings release will reveal good news.
Buyers outnumber
sellers and at 1:41pm EST
RWY stock was up over 16% on heavy
volume.
UPDATE: Profits were taken late in the day and RWY closed
up 11.47%.
Recent Events
On August 7th,
Rent Way revised Q4 estimates downward. Margins were
expected to be between 5% and 7%, versus an earlier estimate of
10% to 15%. Revenue projections were also lowered significantly.
Earlier revenue projections were $145 million to $150 million.
Revised revenue projections $138 million to $141 million.
Also on August 7th, CEO William Morgenstern promised
investors a rare, 'mid-quarter' conference call in September.
The purpose of that call was to expand on Rent Way's plans for a
return to profitability and give further guidance for 2003. The
call was postponed and has never been rescheduled.
On August 22nd, Rent Way was
downgraded from 'Outperform' to 'Neutral' by SunTrust Robinson Humphrey.
On September 24th,
Rent Way announced that it had retained
investment giant Salomon Smith Barney, a Citigroup company, as a
financial advisor to "guide Rent-Way through its efforts to
refinance current debt". Rent Way's high interest debt (as high
as 16%) is putting extreme pressure on margin and is seen by
insiders as the highest priority for company executives.
On October 8th,
Rent Way stock struggled to avoid an all time low as the
stock dipped to $2.61 per share on 5 times average volume.
On October 10th,
Rent Way pronounced the quarter ending September 30th "In line
with expectations". No details on performance were
disclosed. VP/CFO William McDonnell stated..."Details related to
our year-end conference call will be announced in advance of the
release of year-end results sometime in November". November came
and went with no release.
Whatever problems Rent Way has experienced, accounting or
otherwise, company executives have done an outstanding job of
keeping store level personnel insulated, and focused on 'rent
and collect'. Morale remains high among employees. As one
insider put it "No matter what happens here [Erie], you've got
1000 plus stores out there doing a great job every day".
Keep checking back for updates as they happen...
|
