Wednesday, February 27, 2002
The Canfield company spent more on advertising and payroll to boost the number of units on rent.
CANFIELD -- Rainbow Rentals said higher operating costs and lower rental rates led to a loss of $169,000 in the fourth quarter.
As rental rates were declining, the company was spending more on advertising and payroll.
Wayland Russell, company chairman and chief executive, said, however, that he is encouraged because of a 9 percent increase in the number of units on rent in the quarter. He attributed the increase in part to the higher spending on advertising and employee compensation programs.
"Although these strategies affected our performance in the short term, we are pleased that they enabled us to generate higher units on rent compared to a year ago. This higher volume of units, although at lower rental rates, should form the basis for higher revenues in 2002," he said.
Already this quarter, Rainbow has raised prices and reduced supply costs, he said.
The numbers: The loss in the fourth quarter, which was announced this morning, amounted to 3 cents a share, compared with earnings of 14 cents, or $829,000, in the same quarter of 2000.
Revenue for last quarter was $24 million, compared with $23.5 million in the same quarter of 2000. At stores open before Oct. 1, 2000, revenues rose nearly 1 percent.
For all of 2001, earnings were $1.2 million, or 20 cents a share, compared with $4.1 million, or 69 cents a share, in 2000.
Revenue for 2001 was $94.6 million, compared with revenue of $91.9 million in 2000. Revenue at stores open before Jan. 1, 2000 were down 4.3 percent.
Canfield-based Rainbow Rentals operates 113 rental-purchase stores in 11 states.