As a result of those difficult conditions, we began the fiscal year with fewer agreements on rent, which resulted in our first quarter of negative same store revenues in more than two years.
William Short, President, Rent-Way

Rent-Way Inc. (RWY) today reported financial results for its fiscal 2006 first quarter ended December 31, 2005.

For the quarter, the company reported revenues from the company's core rental business (which excludes the company's dPi Teleconnect unit) were $124.0 million versus $121.9 million in the same quarter last year, an increase of 1.7%. Same store rental business revenues decreased 2.4% versus last year's quarter. Operating income in the quarter was $7.4 million, down from $11.2 million in the same period last year. Net income was $0.6 million versus net income of $1.0 million in the first quarter last year. Net income allocable to common stockholders was $0.03 million compared with $0.5 million in the 2005 first quarter. Net income was positively impacted by a $1.7 million adjustment in the 2006 quarter and negatively impacted by a $2.2 million adjustment in the 2005 quarter related to the conversion feature of the company's preferred stock. The positive adjustment in the 2006 quarter is reversed in the calculation of net income per diluted share, resulting in a net loss per share of $(0.04) compared with net income per diluted share of $0.02 in last year's quarter.

"We experienced strong growth in potential weekly rental revenue in the fiscal 2006 first quarter, which we believe signals a recovery from the difficult business conditions we faced last summer and early fall," stated William Short, Rent-Way's President. "As a result of those difficult conditions, we began the fiscal year with fewer agreements on rent, which resulted in our first quarter of negative same store revenues in more than two years. Our team has worked hard to regain the momentum we lost and we believe our strong performance in the first quarter bodes well for our business the rest of the year. We are forecasting 2006 full year rental business revenues in the range of $515 - $525 million, operating income in the range of $44 - $48 million, and EBITDA in the range of $58 - $62 million. We expect our same store revenues to turn positive in the second quarter, and remain positive for the balance of the fiscal year," concluded Mr. Short.

During the quarter the Company opened five new stores, and acquired the rental agreements of another fourteen, which were merged into existing RentWay locations.

Rent-Way operates 791 stores in 34 states.