Rent-A-Center, Inc. today announced revenues and net earnings for the quarter ended September 30, 2002.

The Company, the nation's largest rent-to-own operator, had net earnings for the quarter ended September 30, 2002 of $41.4 million, or $1.14 per diluted share. After adjusting reported results for the third quarter of 2001 to exclude the effects of goodwill amortization and a non-recurring charge of $16.0 million relating to the settlement of its class action gender discrimination lawsuits, net earnings and diluted earnings per common share increased $16.1 million and $0.47, respectively. On a comparable basis, this represents an increase in diluted earnings per common share of 70.1%. Total revenues for the quarter ended September 30, 2002 increased to $494.6 million as compared to $447.1 million for the same quarter of the prior year. Incremental revenues generated in new and acquired stores, as well as growth in same store revenues primarily drove this 10.6% increase. Same store revenues (revenues earned in stores operated for the entirety of both periods) during the third quarter of 2002 increased 6.9% above the comparable quarter of 2001. The Company's quarterly growth in net earnings resulted primarily from better than expected same store sales and the benefits from the Company's ongoing strict cost control programs.


Net earnings for the nine months ended September 30, 2002 were $127.0 million, or $3.48 per diluted share. When excluding the non-recurring charge in 2001 referred to above, this represents an increase of 77.6% over the net earnings of $71.5 million, or $1.93 per diluted share for the same period in the prior year. Total revenues for the nine months ended September 30, 2002 increased to $1.488 billion from $1.330 billion in 2001, representing an increase of 11.9%. Same store revenues for the nine-month period ending September 30, 2002 increased 6.6%.


"We are pleased to announce another quarter of outstanding results for our company," commented Mark E. Speese, the Company's Chairman and Chief Executive Officer. "Our achievements over the course of the past twelve months have been extraordinary," continued Mr. Speese, "particularly in light of the continued weakness of the economy as a whole and the retail sector in particular."


During the third quarter of 2002, the Company opened 17 new store locations and acquired 23 stores as well as accounts from 25 additional locations. Through the nine month period ending September 30, 2002, the Company has opened 39 new stores, acquired a total of 64 others as well as accounts from 84 additional locations while consolidating 19 stores into existing locations and selling three. To date through the fourth quarter, the Company has opened seven new store locations, acquired 10 stores and accounts from nine additional locations while consolidating one store into an existing location and selling one. "Since we began opening new stores in October of 2000 we have opened 153 new stores," stated Mitchell E. Fadel, the Company's President. "I am pleased to announce that these stores are tracking ahead of our new store model at this point in their life cycle." Mr. Fadel added, "Since new stores have been one of the drivers in our growth initiatives, these results validate our program, which speaks to the continued growth opportunity."


The Company's cash flow from operations was $92.8 million for the third quarter of 2002 and $265.7 million for the nine months ended September 30, 2002. The Company reduced its outstanding indebtedness by $169.3 million for the nine-month period ending September 30, 2002, including $41.3 million during the third quarter of 2002. Since September 30, 2002, the Company has reduced its outstanding indebtedness by an additional $12.0 million. In addition, for all of 2002, the Company has repurchased in excess of $60 million of its common stock, $25.8 million of which was under its open market repurchase program of $50 million. Such stock repurchases and debt reductions for 2002 were effected after funding the cost of the new stores and acquisitions mentioned above.


"Our strong recurring cash flow continues to benefit us in terms of managing the day to day business demands as well as allow us to think and act strategically in managing our capital structure for the benefit of all of our stakeholders," Speese commented. "We continue to believe that the growth potential of this company and the industry as a whole is significant," Speese continued "and we have positioned ourselves well for the fourth quarter of 2002 whereby we expect diluted earnings per share to be between $1.23 to $1.26. As we look to 2003, we expect earnings of $5.30 to $5.45 per diluted share."