Under the proposed settlement, Rent a Center would pay $37.5 million in cash, to be distributed to the class of customers from February 1999 through October 2004, and issue vouchers to qualified class members for two weeks free rent on a new rental agreement for merchandise of their choice.

Rent-A-Center, Inc. (RCII) today reported total revenues for the quarter ended September 30, 2004 of $569.6 million, a $19.8 million increase from the same period in the prior year. This increase was primarily driven by incremental revenues from new and acquired stores, offset by a decrease in same store sales of 5.5%.

"While we have seen an increase in total revenues, our net earnings have been negatively affected by the weakness in our same store sales, which we believe reflects, among other things, higher fuel and energy costs that disproportionately constrains demand among our customer base," commented Mark E. Speese, the Company's Chairman and Chief Executive Officer.

Rent A Center also announced a prospective settlement with the plaintiffs to resolve the class action suit pending in state court in San Diego, California. These matters challenge certain of the Company's business practices in California.

In a statement issued in December, 2003, Rent A Center said "We believe the claims in the plaintiffs' complaint are unfounded and that we have meritorious defenses to the allegations made." (See Story)

Under the terms of the proposed settlement, Rent a Center anticipates it will pay an aggregate of $37.5 million in cash, to be distributed to an agreed-upon class of Company customers from February 1999 through October 2004, as well as the plaintiffs' attorneys fees and costs to administer the settlement, in amounts to be determined. In addition, Rent a Center anticipates issuing vouchers to qualified class members for two weeks free rent on a new rental agreement for merchandise of their choice. Under the terms of the prospective settlement, the Company would be entitled to any undistributed monies in the settlement fund up to an aggregate of $8.0 million, with any additional undistributed funds distributed to non-profit organizations to be determined. In connection with the prospective settlement, Rent a Center is not admitting liability for its past business practices in California. To account for the aforementioned costs, as well as Rent a Center's attorneys' fees, the Company recorded a pre-tax charge of $47.0 million in the third quarter of 2004.

These and other charges, reduced diluted earnings per share in the third quarter of 2004 by $0.40, $0.37 for the litigation charge and $0.03 for the refinancing charge, from $0.47 per diluted earnings per share to the reported diluted earnings per share of $0.07

The terms of the prospective settlement are subject to the parties entering into a definitive settlement agreement and obtaining court approval. While Rent a Center believes that the terms of this prospective settlement are fair, there can be no assurance that the settlement, if completed, will be approved by the court in its present form.

FOURTH QUARTER 2004 GUIDANCE:

Revenues

-- The Company expects total revenues to be in the range of $583 million to $588 million..

-- Store rental and fee revenues are expected to be between $527 million and $532 million.

-- Total store revenues are expected to be in the range of $570 million to $575 million.

-- Same store sales are expected to be in the (2.5%) to (3.5%) range.

-- The Company expects to open 25-30 new store locations.

Expenses

-- The Company expects cost of rental and fees to be between 21.3% and 21.7% of store rental and fee revenue and cost of goods merchandise sales to be between 73% and 78% of store merchandise sales.

-- Store salaries and other expenses are expected to be in the range of 56.5% and 58.0% of total store revenue.

-- General and administrative expenses are expected to be between 3.3% and 3.5% of total revenue.

-- Net interest expense is expected to be approximately $9.0 million and amortization is expected to be approximately $2.5 million.

-- The effective tax rate is expected to be approximately 38.0% of pre-tax income.

-- Diluted earnings per share are estimated to be in the range of $0.55 to $0.57.

-- Diluted shares outstanding are estimated to be between 78.0 million and 79.0 million shares.

FISCAL 2005 GUIDANCE:

Revenues

-- The Company expects total revenues to be in the range of $2.40 billion and $2.43 billion.

-- Store rental and fee revenues are expected to be between $2.157 billion and $2.182 billion.

-- Total store revenues are expected to be in the range of $2.359 billion and $2.384 billion.

-- Same store sales are expected to be in the flat to (2.0%) range.

-- The Company expects to open approximately 100 new store locations.

Expenses

-- The Company expects cost of rental and fees to be between 21.2% and 21.6% of store rental and fee revenue and cost of goods merchandise sales to be between 70% and 75% of store merchandise sales.

-- Store salaries and other expenses are expected to be in the range of 56.0% and 57.5% of total store revenue.

-- General and administrative expenses are expected to be between 3.3% and 3.5% of total revenue.

-- Net interest expense is expected to be between $35.0 million and $40.0 million and amortization of intangibles is expected to be approximately $7.0 million.

-- The effective tax rate is expected to be approximately 38.0% of pre-tax income.

-- Diluted earnings per share are estimated to be in the range of $2.30 to $2.40.

-- Diluted shares outstanding are estimated to be between 79.0 million and 80.0 million shares.