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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 27, 1998
HOME CHOICE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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<CAPTION>
DELAWARE 0-21689 35-1480655
<S> <C> <C>
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification Number)
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714 E. KIMBROUGH STREET
MESQUITE, TEXAS 75149
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (972) 288-9327
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events
On October 27, 1998, Home Choice Holdings, Inc. (the "Company") issued
a press release regarding its financial results for the third quarter and nine
months ended September 30, 1998.
Item 7. Exhibits.
Exhibit No.
99.1 Press release dated October 27, 1998
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: October 30, 1998
HOME CHOICE HOLDINGS, INC.
By: /s/ John T. Egeland
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John T. Egeland
Chief Financial Officer
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EXHIBIT INDEX
99.1 Press release dated October 27, 1998
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[ HOME CHOICE LEASE OR OWN LETTERHEAD]
Contact: John T. Egeland
Chief Financial Officer
972-882-3126
HOME CHOICE HOLDINGS, INC.
ANNOUNCES THIRD QUARTER AND NINE MONTHS RESULTS
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REVENUES INCREASE 10% FOR THE QUARTER
MESQUITE, Texas (October 27, 1998) - Home Choice Holdings, Inc. (Nasdaq/NM:
HMCH) today announced results for the third quarter and nine months ended
September 30, 1998.
Revenues increased 10% to $65.0 million for the third quarter of 1998 from
%59.3 million for the third quarter of 1997. Same store revenues increased 2%
to $49.7 million from $48.5 million for the same quarter last year. Net income
for the third quarter of 1998 was $757,000 (including pre-tax business
combination costs and name change expenses totaling $418,000), or $0.04 per
diluted share, compared with a net loss of $133,000, or $0.01 per diluted
share, for the same quarter last year. For the quarter ending September 30,
1998, corporate expenses decreased 8% to $4.9 million compared with the quarter
ended September 30, 1997. Further, compared with the quarter ended June 30,
1998, corporate expenses decreased 39%, or $3.2 million.
For the nine months, revenues increased 16% to $196.0 million from $169.4
million for the same period in 1997. Same store revenues increased 5% to $153.4
million for the nine months ended September 30, 1998, from $146.5 million for
the same period last year. Net loss for the nine months ended September 30,
1998, was $9.3 million (including pre-tax business combination costs and name
change expenses totaling $12.2 million), or $0.55 per diluted share, compared
with net income of $1.0 million, or $0.07 per diluted share, for the comparable
period last year.
George D. Johnson, Jr., chairman of Home Choice, said, "We have completed
all activities related to the merger of RTO and Alrenco, including a
restructuring of our corporate office, and the growth in revenues and reduced
corporate expenses reflect a fully integrated organization. The restructuring
that we effected in June generated a substantial reduction in corporate
expenses.
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HMCH Reports Third Quarter Results
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October 27, 1998
"We're pleased with the improved performance of our stores and the
efficiencies that have been generated through the actions we have taken. Our
focus remains on driving revenues, improving operating profit at the store
level, and preparing for a smooth transition into the Rent Way organization.
Combining Rent Way's experienced management team and operational processes with
Home Choice's attractive store base should provide a significant opportunity to
enhance shareholder value."
On September 2, 1998, it was announced that Home Choice and Rent Way, Inc.
(NYSE:RWY) signed a definitive agreement to merge and form the second largest
rental purchase company in the U.S. with more than 860 stores in 32 states. As
previously reported, under the terms of the agreement, Home Choice stockholders
will receive .588 shares of Rent Way's common stock for each Home Choice share.
The exchange ratio is fixed and is not subject to adjustment.
Home Choice Holdings, Inc. now operates 459 rental-purchase stores in 26
states in the U.S. primarily under the name Home Choice Lease or Own. The
Company offers high quality, brand name consumer merchandise under flexible,
renewable rental-purchase agreements, also known as rent-to-own agreements.
Products offered include consumer electronics, appliances, furniture, jewelry
and home furnishing accessories.
This release contains forward-looking statements which involve certain
risks and uncertainties. The actual results of Home Choice Holdings, Inc. may
differ significantly from the results and expectations discussed in the
forward-looking statements. Factors that might cause such a difference include,
but are not limited to, general economic and business conditions, changes in
the competitive environment within the rental-purchase industry, the ability of
Home Choice and Rent-Way to merge operations, the ability to integrate and
manage acquired businesses, and new rental-purchase stores.
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HMCH Reports Third Quarter Results
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October 27, 1998
HOME CHOICE HOLDINGS, INC.
Financial Highlights
(Unaudited)
(In thousands except per share data)
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THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
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1998 1997 1998 1997
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<S> <C> <C> <C> <C>
REVENUE
Rentals and fees.................................... $62,802 $57,467 $188,131 $164,160
Cash sales and other................................ 2,158 1,808 7,903 5,267
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Total revenues............................ 64,960 59,275 196,034 169,427
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OPERATING EXPENSES
Direct store expenses:
Depreciation and disposition of rental
merchandise.................................... 20,452 17,110 60,025 48,059
Other............................................. 35,647 33,624 107,543 91,734
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56,099 50,734 167,568 139,793
Corporate expenses.................................. 4,871 5,300 18,580 16,086
Cost of business combinations....................... 25 362 11,140 864
Name change expenses 393 -- 1,027 --
Amortization of intangibles......................... 1,523 2,451 5,120 8,108
Key executives signing bonuses...................... -- 400 -- 400
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Total operating expenses.................. 62,911 59,247 203,435 165,251
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Operating income (loss)................... 2,049 28 (7,401) 4,176
Other income (expense):
Interest expense.................................. (1,224) (596) (3,532) (1,602)
Interest income................................... 16 (66) 179 194
Other non-operating income (expense), net......... 32 124 (343) (6)
Gain (loss) on sale of stores..................... 287 950 (174) 950
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Income (loss) before income taxes................... 1,160 440 (11,271) 3,712
Income tax expense (benefit)........................ 403 573 (1,998) 2,688
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Net income (loss)................................. $ 757 $ (133) $ (9,273) $ 1,024
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Pro forma information:
Pro forma income (loss)........................... $ 1,024
Pro forma income tax benefit...................... (214)
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Pro forma net income (loss)....................... $ 1,238
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Pro forma net income and net loss per share:
Basic............................................. $ 0.04 $ (0.01) $ (0.55) $ 0.07
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Diluted........................................... $ 0.04 $ (0.01) $ (0.55) $ 0.07
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Weighted average shares outstanding:
Basic............................................. 16,985 16,945 16,976 16,939
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Diluted........................................... 17,226 17,490 17,381
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