Rent-Way Reports Fiscal 2004 Second Quarter Financial Results

Rent-Way Reports Fiscal 2004 Second Quarter Financial Results
Comp Revenues Increase 6.9%; Operating Income Doubles 


ERIE, Pa., April 29  /PRNewswire-FirstCall/ -- Rent-Way, Inc.  today reported
financial results for its fiscal 2004 second quarter ended March 31, 2004.

The Company reported consolidated revenues of $135.0 million versus $130.2
million in the same quarter last year.  Revenues from the company's core rental
business (which excludes the company's dPi Teleconnect unit) were $128.2
million versus $120.3 million in the same quarter last year.  Same store
revenues increased 6.9% versus last year's quarter.  Consolidated operating
income in the quarter was $15.2 million, up from $7.5 million in the same
period last year.  Consolidated net income allocable to common shareholders was
$6.3 million, or $0.22 per diluted share versus a net loss of $27.9 million
last year, or $(1.09) per diluted share.  The comparability of consolidated net
income allocable to common shareholders in the 2004 fiscal second quarter with
the same quarter in fiscal 2003 is affected by several significant charges in
the 2003 quarter totaling approximately $29.6 million, including a $14.0
million charge on settlement of our prior securities class action litigation
and a $13.4 million loss from discontinued operations.

"I am very pleased with our performance in the quarter," stated William
Morgenstern, Rent-Way's Chairman and CEO. "Since our June 2003 refinancing, we
have had three consecutive full quarters of period over period increases in
revenues and operating income and positive store comps.  We will continue to
make investments in marketing, in our employees and in our stores in order to
ensure strong top-line performance during the remainder of fiscal 2004 and
beyond."

William McDonnell, Vice President and Chief Financial Officer stated, "For the
quarter, we again exceeded our guidance on revenue and operating income.
Shareholders should note, however, that due to the seasonality of our
rent-to-own business our fiscal second quarter is traditionally the quarter in
which we report our strongest numbers.  We expect performance in accordance
with our prior guidance in our fiscal 2004 third and fourth quarters."

The company reported EBITDA for the quarter of $19.1 million versus $13.1
million in the same quarter last year.  EBITDA as defined by the Company is
operating income plus depreciation of property and equipment and amortization
of intangibles.  The company believes EBITDA provides investors useful
information regarding its ability to service its debt and generate cash for
other purposes, including for capital expenditures and working capital.  The
company reported net cash provided by operations for the quarter of $22.0
million versus net cash used in operations of $(4.3) million in the same
quarter last year.  A reconciliation of EBITDA to net cash provided by (used
in) operations is presented in the chart of supplemental information attached
to this release.

About Rent-Way

Rent-Way is one of the nation's largest operators of rental-purchase stores. 
Rent-Way rents quality name brand merchandise such as home entertainment
equipment, computers, furniture and appliances from 753 stores in 33 states.

Safe-Harbor Statements

This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.  These statements contain the
words "projects," "anticipates," "believes," "expects," "intends," "will,"
"may" and similar words and expressions.  Each such statement is subject to
uncertainties, risks and other factors that could cause actual results or
performance to differ materially from the results or performance expressed in
or implied by such statements.  The forward-looking statements in this news
release that contain projections of the company's expected financial
performance and other projections regarding future performance are inherently
subject to change given the nature of projections and the company's actual
performance may be better or worse than projected.  Uncertainties, risks and
other factors that may cause actual results or performance to differ materially
from any results or performance expressed or implied by forward-looking
statements in this news release include:  (1) the company's ability to control
its operating expenses and to realize operating efficiencies, (2) the company's
ability to develop, implement and maintain adequate and reliable internal
accounting systems and controls, (3) the company's ability to retain existing
senior management and to attract additional management employees, (4) general
economic, business and demographic conditions, including demand for the
company's products and services, (5) general conditions relating to the
rental-purchase industry, including the impact of state and federal laws
regulating or otherwise affecting the rental-purchase transaction, (6)
competition in the rental-purchase industry, including competition with
traditional retailers, (7) the company's ability to service its high level of
outstanding debt, and (8) the company's ability to open new stores and cause
those new stores to operate profitably.  A discussion of other risk factors
that may cause actual results to differ from the results expressed in or
implied by these forward-looking statements can be found in the company's
filings with the SEC. The company disclaims any duty to provide updates to the
forward-looking statements made in this news release.

                               RENT-WAY, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (all dollars in thousands except per share data)

                                             For the three months ended
                                                     March 31,
                                               2004              2003
                                           (unaudited)       (unaudited)
  Revenues:
     Rental revenue                      $111,126   82.3%  $104,489   80.2%
     Prepaid phone service revenue          6,884    5.1%     9,931    7.6%
     Other revenue                         17,035   12.6%    15,819   12.1%

  Total Revenue                           135,045  100.0%   130,239  100.0%

  Costs and operating expenses:
     Depreciation and amortization:
        Rental merchandise                 37,131   27.5%    33,320   25.6%
        Property and equipment              3,741    2.8%     5,153    4.0%
        Amortization of intangibles           110    0.1%       474    0.4%
     Cost of prepaid phone service          4,952    3.7%     6,012    4.6%
     Salaries and wages                    33,598   24.9%    32,562   25.0%
     Advertising, net                       4,272    3.2%     4,721    3.6%
     Occupancy                              8,495    6.3%     8,445    6.5%
     Restructuring costs                      -      0.0%     2,215    1.7%
     Other operating expenses              27,505   20.4%    29,815   22.9%
           Total costs and operating
            expenses                      119,804   88.7%   122,717   94.2%

           Operating income                15,241   11.3%     7,522    5.8%

  Other income (expense):
  Settlement of class action lawsuit          -      0.0%   (14,000) -10.7%
  Interest expense                         (7,662)  -5.7%    (8,511)  -6.5%
  Interest income                              14    0.0%        43    0.0%
  Amortization and write-off of deferred
   financing costs                           (264)  -0.2%      (738)  -0.6%
  Other income (expense), net               1,229    0.9%     1,795    1.4%
        Income (loss) before income
         taxes                              8,558    6.3%   (13,889) -10.7%

  Income tax expense                        1,395    1.0%       672    0.5%

  Income (loss) before discontinued
   operations                               7,163    5.3%   (14,561) -11.2%

  Loss from discontinued operations          (437)  -0.3%   (13,357) -10.3%

  Net income (loss)                        $6,726    5.0%  $(27,918) -21.4%

  Dividend and accretion of preferred
   stock                                     (403)  -0.3%       -      0.0%

  Net income (loss) allocable to common
   shareholders                            $6,323    4.7%  $(27,918) -21.4%

  Earnings (loss) per common share:
      Basic earnings (loss) per common
       share
          Income (loss) before
           discontinued operations          $0.27            $(0.57)
          Net income (loss) allocable to
           common shareholders              $0.24            $(1.09)

      Diluted earnings (loss) per common
       share
          Income (loss) before
           discontinued operations          $0.24            $(0.57)
          Net income (loss) allocable to
           common shareholders              $0.22            $(1.09)

  Weighted average common shares
   outstanding:
      Basic                                26,172            25,686
      Diluted                              30,026            25,686


                               RENT-WAY, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (all dollars in thousands except per share data)

                                              For the six months ended
                                                     March 31,
                                               2004              2003
                                           (unaudited)       (unaudited)

  Revenues:
     Rental revenue                      $213,554   82.6%  $201,277   80.5%
     Prepaid phone service revenue         13,074    5.1%    19,192    7.7%
     Other revenue                         32,026   12.4%    29,608   11.8%

  Total Revenue                           258,654  100.0%   250,077  100.0%

  Costs and operating expenses:
     Depreciation and amortization:
        Rental merchandise                 70,003   27.1%    62,013   24.8%
        Property and equipment              7,723    3.0%    10,809    4.3%
        Amortization of intangibles           224    0.1%       952    0.4%
     Cost of prepaid phone service          8,931    3.5%    11,739    4.7%
     Salaries and wages                    67,240   26.0%    66,306   26.5%
     Advertising, net                      10,401    4.0%    13,481    5.4%
     Occupancy                             17,196    6.6%    16,105    6.4%
     Restructuring costs                       48    0.0%     2,215    0.9%
     Other operating expenses              53,128   20.5%    54,440   21.8%
           Total costs and operating
            expenses                      234,894   90.8%   238,060   95.2%

           Operating income                23,760    9.2%    12,017    4.8%

  Other income (expense):
  Settlement of class action lawsuit          -      0.0%   (14,000)  -5.6%
  Interest expense                        (15,521)  -6.0%   (17,209)  -6.9%
  Interest income                             784    0.3%        54    0.0%
  Amortization and write-off of deferred
   financing costs                           (522)  -0.2%    (1,136)  -0.5%
  Other income (expense), net              (3,093)  -1.2%     3,282    1.3%
        Income (loss) before income
         taxes                              5,408    2.1%   (16,992)  -6.8%

  Income tax expense                        2,790    1.1%     2,102    0.8%

  Income (loss) before discontinued
   operations                               2,618    1.0%   (19,094)  -7.6%

  Loss from discontinued operations        (1,710)  -0.7%   (14,184)  -5.7%

  Net income (loss)                          $908    0.4%  $(33,278) -13.3%

  Dividend and accretion of preferred
   stock                                     (798)  -0.3%       -      0.0%

  Net income (loss) allocable to common
   shareholders                              $110    0.0%  $(33,278) -13.3%

  Earnings (loss) per common share:
      Basic earnings (loss) per common
       share
          Income (loss) before
           discontinued operations          $0.10            $(0.74)
          Net income (loss) allocable to
           common shareholders              $0.00            $(1.30)

      Diluted earnings (loss) per common
       share
          Income (loss) before
           discontinued operations          $0.10            $(0.74)
          Net income (loss) allocable to
           common shareholders              $0.00            $(1.30)

  Weighted average common shares
   outstanding:
      Basic                                26,125            25,686
      Diluted                              26,602            25,686


                               RENT-WAY, INC.
                         SELECTED BALANCE SHEET DATA
                         (all dollars in thousands)

                                        March 31, 2004   September 30, 2003

  Cash and cash equivalents                     $4,815               $3,303
  Prepaid expenses                              11,273                8,144
  Rental merchandise, net                      178,508              171,982
  Total Assets                                 443,693              457,859

  Accounts payable                              19,440               30,244
  Debt                                         226,753              214,592
  Total Liabilities                            312,869              335,079
  Shareholders' Equity                         107,571              106,789


  Calculation of EBITDA and Reconciliation of Net Cash Provided by
  (Used in) Operations to EBITDA
  For the Three Months Ended March 31, 2004 and 2003
  (all dollars in thousands)

                                                    Three Months Ended
                                                03/31/04          03/31/03

  Calculation of EBITDA

  Operating income                               $15,241            $7,522
  Depreciation - property and equipment            3,741             5,153
  Amortization of intangibles                        110               474

  EBITDA                                         $19,092           $13,149


  Reconciliation of Net Cash Provided by (Used in) Operations to EBITDA

                                                    Three Months Ended
                                                03/31/04          03/31/03

  Net cash provided by (used in)
   operating activities                          $21,986           $(4,254)
  Depreciation and amortization                  (41,368)          (39,448)
  Depreciation - property and equipment            3,741             5,153
  Amortization of intangibles                        110               474
  Settlement of class action lawsuit                 -              14,000
  Interest expense                                 7,662             8,511
  Interest income                                    (14)              (43)
  Amortization and write off of
   deferred financing costs                          264               738
  Other income (expense)                          (1,229)           (1,795)
  Income taxes                                     1,395               672
  Deferred income taxes                           (1,395)           (1,547)
  Market adjustment for interest rate
   swap derivative                                   605             1,375
  Market adjustment for preferred stock
   conversion option derivative                        1               -
  Write-off of property and equipment                (48)           (1,391)
  Gain on sale of assets                             -                 389
  Changes in assets and liabilities:
     Prepaid expenses                              6,369             2,234
     Rental merchandise                           16,755            38,076
     Rental merchandise deposits and
      credits due from vendors                      (328)             (105)
     Income tax receivable                        (4,223)              193
     Other assets                                   (219)           13,821
     Accounts payable                             18,022            (2,998)
     Other liabilities                            (9,432)          (25,954)
  Cash used in discontinued operations               438             5,048
  EBITDA                                         $19,092           $13,149


DATASOURCE: Rent-Way, Inc.



CONTACT:  Bill Morgenstern, Chairman & CEO of Rent-Way, Inc.,

[phone]



Web site:  http://www.rentway.com/ 

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