"Although we were disappointed in the bottom-line results of our seasonally slow third quarter, we are pleased that our clearance initiative positioned us well for the fourth quarter, our busiest quarter of the year"
Wayland J. Russell
Chairman and CEO

Rainbow Rentals (RBOW) today reported financial results for its third quarter and nine months ended September 30, 2003.

Revenue for the quarter was $25.4 million, up 4.5 percent from $24.3 million for the comparable period of 2002. Revenue at comparable stores (opened on or before July 1, 2002) was up 1.1 percent. The increase in comparable store revenue was primarily the result of growth in stores opened in 2002, offset by lower seasonal rentals of air conditioners, the discontinued rental of accessory items and promotional offers that lowered initial rental rates. (View Rainbow's Current Ads Here: Ad 1, Ad 2)

Net income for the quarter was $217,000, or $0.04 per share, compared to net income of $335,000, or $0.06 per share, in the third quarter of 2002. The results were adversely affected by costs associated with six new stores opened during the year (including two stores opened during the quarter), increased expenses at comparable stores and higher general and administrative expenses, which offset an increase in comparable store revenues and continued improvements in gross rental margins.

"Although we were disappointed in the bottom-line results of our seasonally slow third quarter, we are pleased that our clearance initiative positioned us well for the fourth quarter, our busiest quarter of the year," said Wayland J. Russell, chairman and chief executive officer. "New products in our stores now represent a larger portion of our inventory, which should make us more competitive in the fourth quarter. We also continued to benefit from better purchasing.

"We are making several administrative changes to reduce expenses and improve customer response. Customer service responsibilities have been shifted from the home office to the regional managers. Additionally, we anticipate utilizing outside contractors, as needed, for new stores and remodeling in lieu of maintaining our own construction department."

For the nine months ended September 30, 2003, revenue was $77.0 million, up 3.8 percent from the $74.1 million for the comparable period of 2002. Revenue at comparable stores (opened on or before January 1, 2002) was down 0.8 percent. Net income for the nine months was $926,000 or $0.16 per share, compared to net income of $1.3 million, or $0.23, per share for the comparable period in 2002.