The agreement grants Bud Gates exclusive rights to franchise the easyhome concept anywhere in the United States, outside the border states.
David Ingram, CEO, easyhome

easyhome (EH.TO), Canada's largest rent to own/leasing company, is expanding into the United States.

easyhome CEO David Ingram said a key element of the company's long-term growth will be easyhome's entry into the United States in 2007. He commented, "The time is ripe for us to launch in the U.S. We plan to open two or three corporate stores in states that border Canada in 2007, an initiative that will be complemented by a Franchise Agreement we have concluded with an entity controlled by Bud Gates. Mr. Gates is a former Chairman & CEO of the largest US based rent-to-own business. In addition Mr. Gates has successfully owned franchise operations in the rent-to-own and food industries. This agreement grants him exclusive rights to franchise the easyhome concept anywhere in the United States, outside the border states. We have already launched licensing in Canada, and we are comfortable with it. This strategy will permit us to expand much more rapidly than if we were to grow the American business on our own, and it minimizes our financial risk while presenting us with a huge potential upside."

The Company established the following targets for fiscal 2007. Total revenue growth of approximately 15%-18%, same store revenue growth of approximately 5%-7%, and new store openings of approximately 21-24.

Donald K. Johnson, Chairman of the Board commented that "easyhome is a very different Company today than it was five years ago. We have an excellent platform in place to grow our Canadian store base by approximately 15% per annum for the next few years. While the financial services proposition is still being tested, the results to date are promising. We are particularly excited about our entry in to the U.S. market through a balanced growth strategy. This franchise agreement limits the financial risk to our Company and our shareholders, and would not be a material distraction to our senior management team who are focused on executing our Canadian growth strategy. We have a high level of confidence in our master franchisee, Bud Gates, given his extensive knowledge to the U.S. rent-to-own industry and his experience in the franchise sector."

easyhome Ltd. currently operates 191 stores.

RTO Online wll be covering easyhome's 2007 National Conference this week. Please check www.rtoonline.com for interviews with company officials, photo galleries and podcasts.

easyhome also announced results for the quarter ending December 31, 2006.

Fourth quarter highlights are:

- Revenue increased $4.2 million to $31.9 million from $27.6 million for the same quarter last year, an improvement of 15.3%.

- Same store revenue growth of 5.7% building on 6.9% for the fourth quarter of 2005, and 8.1% in the third quarter 2006.

- Potential monthly lease revenue increased to $9,523,000 from $8,258,000 at the end of 2005, an improvement of 15.3%.

- 21 consecutive quarters of comparable revenue growth.

- $0.8 million of losses from stores open less than 12 months (2005 - $0.4 million).

- Operating income improved $1.2 million to $4.2 million from $3.0 million in 2005, an increase of 39.3%.

- Net income increased $0.8 million to $2.5 million, an improvement of 45.5%.

- Diluted earnings per share of $0.24 up 41.2% from reported diluted earnings per share in 2005 of $0.17

- Opened 10 new stores

Full Year highlights are:

- Revenue increased $16.5 million or 16.0% from $103.1 million in 2005 to $119.6 million in 2006.

- Same store revenue growth of 5.4%.

- Opened 28 new stores and 3 financial services kiosks.

- Net income was $9.0 million in 2006 versus $5.7 million in 2005. Net income in 2006 was adversely impacted by a $0.4 million future income tax expense related to reductions in future federal income tax rates. Adjusted net income for 2006 of $9.4 million is up $1.8 million or 23.7% from 2005's net income, adjusted for the after tax class action settlement provision of $1.9 million.

- Fully diluted earnings per share of $0.86 in 2006 versus $0.55 in 2005. Diluted earnings per share in 2006 adjusted for the future tax rate changes was $0.90, up $0.16 or 21.6% from 2005's diluted earnings per share adjusted for the class action settlement provision.

David Ingram expressed his delight with the results. "We have rounded out the year with another stellar performance. This is our 21st consecutive quarter of growth, and with the addition of 28 new stores during the year--another record for the Company--we now have 191 stores across the country. In addition, we have three financial kiosks that have performed well and will be the foundation of what we expect to be a very promising new line of business."