Rentcash Announces Second Quarter and Six Month results; declares dividend on continued positive performance



    EDMONTON, Feb. 6 /CNW/ - Rentcash Inc. ("Rentcash" or the "Company")
(RCS:TSX) today announced second quarter and six month results for the period
ended December 31, 2007.

    
    Second Quarter Highlights (table of results at end of release)

    -   Net income was $2.5 million, compared to $1.4 million for the same
        quarter last year.

    -   Diluted earnings per share increased to $0.12 compared to $0.07 for
        the same quarter last year.

    -   Store operating income for the brokerage division was $9.8 million,
        compared to $8.8 million for the same quarter last year.

    -   Brokerage division same store sales were $91,600 compared to $87,300
        for the same quarter last year.

    -   Same store sales in the rental division were $83,800 compared to
        $76,600 for the same quarter last year.

    -   Consolidated revenue was $37.8 million, compared to $36.9 million for
        the same quarter last year.

    -   Retention payments decreased to $5.3 million, from $6.0 million for
        the same quarter last year.

    -   Non-recurring costs of $473,000 related to the spin-off of the rental
        division. Excluding these costs diluted earnings per share would have
        been $0.14.

    -   Dividend declared for the quarter of 2.5 cents per common share.

    Year-To-Date Highlights (6 months)

    -   Net income was $5.6 million, compared to $3.8 million for the same
        period last year.

    -   Diluted earnings per share increased to $0.27 compared to $0.19 for
        the same period last year.

    -   Store operating income for the brokerage division was $19.1 million
        compared to $18.0 million for the same period last year.

    -   Consolidated revenue was $75.5 million, compared to $74.5 for the
        same period last year.

    -   Retention payments to third party lenders decreased to $11.1 million,
        compared to $12.2 million for the same period last year.
    

    Mr. Gordon Reykdal, Chairman and CEO commented, "I'm pleased to report
continued strong performance in the second quarter of fiscal 2008. Revenues
are growing, retention payments have been reduced and net income is up.
Subsequent to a year long corporate-wide restructuring program, this quarter
marks the third consecutive quarter of revenue growth in the brokerage
division along with continued year-over-year improvements to the division's
same store sales and store operating income. Continued positive trending in
store operating performance, increased revenue from non-brokerage related
services and lower retention payments indicate that ongoing management
initiatives to grow revenues and control expenses are working."
    He further commented, "The rental division remains well-positioned for
the previously announced spin-off to existing shareholders, anticipated to
occur in the third quarter of this fiscal year. Same store sales and store
operating income have improved relative to the same period last year; net
losses continue to be reduced."
    He added, "Management has in recent periods concentrated on the
continuous training and development of store associates, with positive overall
results. We intend to further strengthen our hands-on strategy. Beginning in
the third quarter I will conduct a country-wide tour to meet personally with
all store managers to discuss the company's strategic priorities and the
effective pursuit of our goals and objectives."
    Mr. Reykdal further added, "The Company maintains strong cash and working
capital positions and is fully able to initiate expansion initiatives as
market conditions and opportunities arise, inclusive of dividends paid. The
Company's cash holdings are fully liquid, held in current accounts with major
Canadian banks. We are pleased to declare a third consecutive dividend of
2.5 cents per share for the second quarter of 2008."
    The cash dividend of $0.025 per common share will be payable on March 5,
2008 to shareholders of record on February 19, 2008.
    Mr. Reykdal further commented, "The Company was extremely pleased with
its continued involvement in the regulatory processes ongoing in both Manitoba
and Nova Scotia. Even with the anticipated increased costs associated with
these processes, the Company believes regulation will benefit the industry as
a whole."

    Rental Division Spin-off

    Shareholder approval for divestiture of the rental division to existing
shareholders was granted at the 2007 Annual General Meeting held on
November 28, 2007. The Company continues to move forward with the spin-off,
which will be subject to the receipt of applicable regulatory approvals. It is
anticipated that all requisite approvals will be obtained and the spin-off
completed during the third quarter of fiscal 2008. The Company has also
applied to Canada Revenue Agency (CRA) for a tax ruling in respect of the
transaction. Management believes that divesting of the rental division will
provide better clarity for both business models and have a positive long term
impact on shareholder value.
    During the quarter the Company incurred non-recurring costs of $472,600
related to the spin-off of its rental division. The Company anticipates that
additional costs will be incurred in the future until the spin-off's expected
completion at the end of the third quarter.

    
    Summary Financial Information

    -------------------------------------------------------------------------
    (thousands of dollars,
     except for per share
     amounts and store figures)   Three Months Ended        Six Months Ended
    -------------------------------------------------------------------------
                               31-Dec-07   31-Dec-06   31-Dec-07   31-Dec-06
                              -----------------------------------------------
    Brokerage Operations
     No. of stores                   367         344         367         344

      Broker fees                 27,079      25,368      54,317      52,436
      Other fees                   5,512       5,405      10,455       9,715
                              -----------------------------------------------
                                  32,591      30,773      64,772      62,152
      Expenses                    18,289      16,540      36,038      32,876
      Retention payments           5,290       6,000      11,082      12,210
      Other amortization           1,196         882       2,251       1,743
      Income before taxes          7,815       7,352      15,402      15,323
      Expense Add Back
       for EBITA                   1,196         882       2,251       1,743
      EBITA(*)(*)                  9,011       8,233      17,653      17,067
      Net income                   4,757       4,262       9,669       9,305
      Diluted earnings
       per share                    0.23        0.21        0.46        0.45
    -------------------------------------------------------------------------
    Rental Operations
     No. of stores                    60          88          60          88

      Revenue                      5,147       6,076      10,539      12,381
      Expenses                     3,362       4,297       6,892       8,641
      Rental asset amortization    2,094       2,573       4,248       5,205
      Other amortization             137         151         281         316
      Income before spin-off
       costs                        (446)       (945)       (883)     (1,781)
      Spin-off costs                 473           -         473           -
      Income before taxes           (919)       (945)     (1,356)     (1,781)
      EBITA(*)(*)                   (309)       (794)       (602)     (1,465)
      Net income                    (559)       (548)       (851)     (1,082)
      Diluted earnings per
       share                       (0.03)      (0.02)      (0.04)      (0.05)
    -------------------------------------------------------------------------
    Corporate
      Revenue                         83           5         140          17
      Expenses                     2,644       3,672       4,942       6,659
      Other amortization             177         343         390         577
      Income before taxes         (2,738)     (4,009)     (5,191)     (7,219)
      EBITA(*)(*)                 (2,462)     (3,344)     (4,607)     (5,991)
      Net income                  (1,667)     (2,324)     (3,259)     (4,384)
      Diluted earnings per
       share                       (0.08)      (0.11)      (0.16)      (0.21)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (*)Certain comparative tax figures have been reclassified to conform to
    the presentation adopted for the current period.
    (*)(*)EBITA - earnings before spin-off costs, interest, income taxes,
    stock-based compensation, amortization of capital and intangible assets.
    EBITDA is not a recognized measure under Canadian GAAP and does not have
    any standardized meaning prescribed by Canadian GAAP. Therefore, this
    measure may not be comparable to similar measures presented by other
    issuers.
    

    This press release should be read in conjunction with the unaudited
interim consolidated financial statements of Rentcash for the three month and
six month period ended December 31, 2007.

    About Rentcash

    Rentcash is the only payday advance broker in Canada publicly traded on
the Toronto Stock Exchange (TSX:RCS). Rentcash operates 427 stores across
Canada under three banners: The Cash Store, Instaloans and Insta-rent.
    The Cash Store and Instaloans act as brokers to facilitate payday advance
services to income-earning consumers and provide two private-label debit
cards, The Cash Store Cash Card(TM) and InstaWorld Debit Card, and a prepaid
credit card, the Freedom Mastercard, to those who may not be able to obtain
them from traditional banks.
    Insta-rent rents brand-name furniture, appliances, electronics and
computers, with or without an option to purchase. Insta-rent operates
primarily in The Brick and United Furniture Warehouse locations, which are
part of The Brick Group, one of Canada's largest volume retailers of household
furniture, mattresses, appliances and home electronics.
    Rentcash employs more than 1,800 associates and is headquartered in
Edmonton, Alberta.

    Cautionary Statement Regarding Forward-looking Information

    This press release contains "forward-looking information" within the
meaning of applicable Canadian and United States securities legislation.
Forward-looking information includes, but is not limited to, information with
respect to our objectives, strategies, operations and financial results, as
well as the company's plan to sell or spin-off its rental division. Generally,
this forward-looking information can be identified by the use of
forward-looking terminology such as "plans", "expects", or "does not expect",
"is expected", "budget", "scheduled", "estimates", "forecasts", "intends",
"anticipates", or "does not anticipate", or "believes" or variations of such
words and phrases or state that certain actions, events or results "may",
"could", "would", "might", or "will be taken", "occur", or "be achieved".
Forward-looking information is subject to known and unknown risks,
uncertainties and other factors that may cause the actual results, level of
activity, performance or achievements of the company, to be materially
different from those expressed or implied by such forward-looking information,
including, but not limited to, changes in economic and political conditions,
legislative or regulatory developments, technological developments,
third-party arrangements, competition, litigation, risks associated with the
spin-off of the rental division and a favorable CRA ruling including, but not
limited to, market conditions, the availability of alternative transactions,
shareholder, legal, regulatory and court approvals and third party consents
and other factors described in the company's Annual Information Form dated
September 26, 2007 under the heading "Risk Factors". Although the Company has
attempted to identify important factors that could cause actual results to
differ materially from those contained in forward-looking information, there
may be other factors that cause results not to be as anticipated, estimated or
intended. There can be no assurance that such information will prove to be
accurate, as actual results and future events could differ materially from
those anticipated in such information. Accordingly, readers should not place
undue reliance on forward-looking information. The Company does not undertake
to update any forward-looking information, except in accordance with
applicable securities laws.
    All published financial statements can be obtained from SEDAR at
www.sedar.com and the company's web site at www.rentcash.ca.

    %SEDAR: 00017423E




For further information:

For further information: Gordon J. Reykdal, Chairman and Chief Executive
Officer, (780) 408-5118 or Michael J.L. Thompson, Vice President Investor
Relations & Government Affairs, (780) 408-5595, Cell: (613) 371-4093

Organization Profile

The Cash Store Financial Services Inc.

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