easyhome's revenue growth and operating profit margin in the third quarter were the highest of our North American peer group.
Donald K. Johnson, Chairman of the Board, easyhome

easyhome (EH.TO), Canada's largest rent to own company, reported revenue increased $4.5 million to $30.2 million for the third quarter ending September 30, 2006, up 17.6% from $25.7 million for the same quarter last year. Net income increased $0.3 million to $2.7 million, an improvement of 14.7%.

easyhome also reported same store revenue growth of 8.1% building on 8.8% for the third quarter and 4.1% in the second quarter 2006.

Commenting on the results, David Ingram, President and CEO said, "The record revenues were our highest comparable increase since the second quarter of 2005. This was driven by our best ever third quarter for growth in customers and the resulting improvement to the potential monthly lease revenue. All our major product categories experienced unit growth in the quarter with the exception of electronics which turned positive in September, as expected, due to the impact of lower pricing and high demand for flat panel technology."

Mr. Ingram added, "I am particularly pleased that we were able to achieve an operating margin of approximately 15% which has been an internal goal for our business model. In the third quarter, easyhome continued to execute its new store expansion program, opening 9 new stores, and adding 2 financial services kiosks. A total of 18 stores have opened in 2006 and the Company expects to complete the year with a total of 28 new stores, bringing the total store count at the end of 2006 to 190 stores. In addition to this, there currently are 5 Leon's kiosks, 3 financial services kiosks and one license store, which will not change by yearend."

Concluding, Mr. Ingram stated, "The business continues to improve and our key metrics, by which we measure ourselves against our US competitors, reflect that improvement. We are now well positioned to benefit from the key Holiday Season, as demand for the latest electronics will increase units on lease and will likely increase the average transaction value. We are, therefore, optimistic for continued momentum in our fourth quarter."

Donald K. Johnson, Chairman of the Board, commented, "We are pleased to report that easyhome's revenue growth and operating profit margin in the third quarter were the highest of our North American peer group."

In 2000 the Company adopted its current amortization policy for leased assets. It was at that time, and continues to be, the most conservative such policy among the Company's North American peers. In the third quarter, Management reviewed the continuing suitability of the policy in view of past experience and current circumstances. It was concluded that, under certain conditions, the current policy fully amortizes leased assets prematurely while useful life remains. Therefore, the following changes to the Company's leased asset amortization policy were made prospectively on October 1, 2006.

1. Leased assets that have not been on lease for 90 consecutive days after arrival in the store will be amortized straight-line over 36 months rather than 18 months. Then, when the asset does go on lease, amortization will revert to the units of activity basis rather than remaining on the straight-line basis as previously done.

2. Amortization of computers will commence at the earlier of the date of first lease or 90 days after arrival in the store. Computers were previously amortized commencing on date of arrival in the store.

Commenting on these changes, David Ingram noted, "These changes will better reflect the useful life of the assets in our lease portfolio. They will also encourage better commercial decisions in our stores about weekly leasing rates and disposal prices resulting in modest revenue increases."

It is estimated that the changes will reduce annual amortization expense by some $2 million to $2.5 million and enable the Company to commence claiming capital cost allowance for tax purposes in excess of amortization for accounting purposes. Consequently, the future tax asset will be gradually reduced through income with a corresponding reduction in cash taxes payable.

The Board of Directors have approved a dividend payment of $0.06 per share payable on January 4, 2007 to the holders of common shares of record as at the close of business on November 30, 2006.

easyhome Ltd., operates 186 stores in Canada.