We were particularly pleased with the speed at which the average new store achieved profitability in month 5 compared to our model based on historical run rates of 10-12 months
David Ingram, President and CEO

easyhome (EH.TO) Canada's largest rent to own company, today announced record quarterly revenue for the fourth quarter ended December 31, 2004 and record annual revenue and net income.

easyhome increased revenue for the fourth quarter to $23.9 million, the sixth consecutive quarterly record for the Company and an increase of 17% from $20.4 million a year ago. Same store revenue growth (revenue from stores open for the comparable periods) was 9.9% for the quarter, up from 7.7% for the comparable period last year. The record revenues were driven by an increase in the rental agreement portfolio. An increased customer base accounted for 89% of this portfolio growth.

For the quarter income before taxes increased to $2.7 million from $2 million, an increase of 37.7%. To increase future customer growth, during the quarter, the National TV advertising campaign introduced in 2004 increased advertising costs by $0.5 million over last year and 10 additional stores increased salaries and benefits expense by $0.3 million.

Net income for the quarter was $1.7 million compared with $1.3 million in the fourth quarter of last year after adjusting for the impact of the reduced fourth quarter tax provision.

Revenue for the year ended December 31, 2004 was $88.5 million, up 13.3% from $78.1 million last year. Same store revenue growth was 9.4% for the year ended December 31, 2004 compared to 5.9% last year. The Company has achieved 39 consecutive months of year-over-year revenue growth.

Operating income for the year ended December 31, 2004 was $10.4 million compared with $7.4 million last year, an increase of 40.3%. Income before income taxes increased to $10.1 million from $5.7 million, an increase of 77.7%. Net income increased to $8.8 million from $4 million and diluted earnings per share were $1.30 for the year ended December 31, 2004 compared with $0.75 last year.

During the third quarter of 2004, a future tax asset valuation reserve in the amount of $2.3 million was reversed through income tax expense as Management is of the view that the magnitude, timing and sustainability of future taxable income is sufficient to support the value of the future tax assets. Before the reversal of the future tax asset valuation reserve, net income for the year was $6.5 million and diluted earnings per share were $0.96.

Commenting on the results, David Ingram, President and CEO said, " I am delighted to report that easyhome executed on all its key objectives for 2004. We committed to opening 12 new stores and surpassed that with 14 locations opened in the year. We were particularly pleased with the speed at which the average new store achieved profitability in month 5 compared to our model based on historical run rates of 10-12 months. We also targeted greater than 5% same store revenue growth and achieved 9.4% with evidence of an improving trend. Lastly, we concluded that a continued disciplined approach to our finances would drive forward our profitability and increase shareholder return. As a result, income before income taxes increased to $10.1 million from $5.7 million and the company's share price increased to $19.00 as at December 31, 2004 from $8.75 as at December 31, 2003."

Mr. Ingram concluded, "While we invested more in marketing costs for the Holiday Season we are very pleased to report that net customers and units on rent achieved record quarterly growth in 2004 resulting in 12 month increases of 16.3% and 24.3% respectively. We now have a monthly rental revenue portfolio to start 2005 that is $887,000 higher than January 2004. Our plan remains consistent with the previously announced strategy to grow our store base by a minimum of 15% per year through 2007."

Donald K. Johnson, Chairman of the Board, commented, "On behalf of the Board of Directors, I would like to compliment the senior management team for their vision in creating the company's strategic growth plan and their disciplined execution of the plan. The settlement of the class-action lawsuit announced on March 4, 2005 is certainly in the best interests of the Company and all stakeholders. Management can now devote all of its time to executing the Company's growth strategy. I would also like to thank each of our directors for their continued contribution to the Company's success."

The Board of Directors approved a 3 for 2 stock split which is subject to shareholder and regulatory approval. The shareholders will be asked to approve the stock split at the Annual and Special meeting of shareholders to be held on May 10, 2005.

The Board of Directors also approved a dividend payment of $0.06 per share on April 4, 2005 on a pre-split basis to the holders of common shares of record as at the close of business on March 18, 2005. This increases the quarterly dividend payment by 50%, from $0.04 per share to $0.06 per share.

easyhome Ltd., with 142 locations, is Canada's largest merchandise rental company and the fourth largest in North America.