"It is clearly not a coincidence that our two best quarters ever came shortly after we moved to our new national brand"
David Ingram, CEO easyome

easyhome, (EH.TO) formerly RTO Enterprises, Canada's largest rent to own, held it's first ever web cast conference call yesterday to discuss the company's recent record performance. This was the first widely publicized glimpse of the company that has come to dominate rent to own in all 10 Canadian provinces. CEO David Ingram (who's who) and CFO Bill Johnson had plenty to brag about.

easyhomes overriding priority in 2003 was re-branding. RTO Enterprises operated under 6 different brands; Easyhome, Rentown, Rent to Own, North American TV, First Choice Rental Purchase, and Louer. In January 2003, the company announced that RTO Enterprises would change it's name to easyhome and all 130+ stores would follow suit. In the words of CEO Ingram, the re-branding and re-engineering of RTO Enterprises was a "Precondition of sustained profitable growth." That transition is complete and company officials attribute much of easyhome's recent success, including a 9.3% revenue increase in the 4th quarter, to that focused team effort. Ingram stated "It is clearly not a coincidence that our two best quarters ever came shortly after we moved to our new national brand."

CFO Bill Johnson stated that 40% of the revenue increase was from "new customers." He added, "easyhome's disciplined approach to operations and continued optimization efforts have translated into higher margins."

Same store sales have increased for 8 consecutive quarters and were 7.7% in the 4th quarter of 03, trailing only Aaron Rents in the same store sales race (same store sales for the quarter ending December 31st, 2003; Aarons +10.6% (excluding sight and sound), Rent Way +6.6%, and Rent a Center +0.2%).

easyhome will open 12 new stores in 2004. The planned openings are evenly spaced throughout the year but will likely be accelerated based on the companies recent results under the newly re-engineered brand.

Over the past 3 years, the company has reduced it's funded debt from $25 million to $3.7 million. CFO Bill Johnson stated "We are in our strongest financial position ever."

easyhome's inventory utilization target is 80%. Target idle inventory is 165 pieces (Rent a Center's target is 160 - 165).

Inventory losses (charge-offs) were down from 3.1% of revenue in 2002 to 2.5% in 2003.

According to numbers release during the webcast, easyhome's average customer paid $122.25 per month in 2003 compare to $115.58 in 2002.

David Ingram closed the webcast with a statement on his philosophy for growth. "We look forward to 2004, a year of growth. Carefully planned profitable growth. Not growth for the sake of growing; We will grow our customer base, our average collected customer payment, and we will grow our store count as we resume our expansion program."

A replay of easyhome's webcast is available from My RTO Portfolio.