<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
--------------- ---------------
COMMISSION FILE NUMBER 000-22026
Rent-Way, Inc.
401(k) Retirement Savings Plan
(Title of Plan)
Rent-Way, Inc.
(Name of Issuer of securities held pursuant to the Plan)
One Rent-Way Place Erie, Pennsylvania 16505
(Address of Plan and of principal executive office of Issuer)
<PAGE> 2
RENT-WAY, INC.
401(k) RETIREMENT SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS
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<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits at December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for Benefits for the
year ended December 31, 1999 3
Notes to Financial Statements 4 - 8
Supplemental Schedules:
Schedule of Assets Held for Investment Purposes at End of Year 9
Schedule of Reportable Transactions 10
</TABLE>
<PAGE> 3
REPORT OF INDEPENDENT ACCOUNTANTS
To the Employee Benefits Committee,
Participants and Administrator of
Rent-Way, Inc. 401(k) Retirement Savings Plan
In our opinion, the accompanying statement of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Rent-Way, Inc. 401(k) Retirement Savings Plan (the "Plan") at December
31, 1999 and 1998, and the changes in net assets available for benefits for the
year ended December 31, 1999 in conformity with accounting principles generally
accepted in the United States. These financial statements are the responsibility
of the Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment Purposes and Reportable Transactions as of and for the year ended
December 31, 1999, are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
June 20, 2000
<PAGE> 4
RENT-WAY, INC.
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AT DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Investments:
Investments, at fair value (Note 3) $11,038,082 $7,231,798
Cash equivalents 399,760 287,234
Employer contributions receivable 58,639 63,791
Participant contributions receivable 151,106 159,469
Participant notes receivable 347,512 236,247
----------- ----------
Total assets 11,995,099 7,978,539
----------- ----------
Net assets available for benefits $11,995,099 $7,978,539
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 2 -
<PAGE> 5
RENT-WAY, INC.
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999
<S> <C>
Net appreciation in fair market value of assets (Note 3) $ 1,631,855
Dividends 585,452
-----------
2,217,307
Contributions:
Participant 2,407,117
Employer 466,318
-----------
2,873,435
-----------
Total additions 5,090,742
Deductions:
Withdrawals 1,074,182
-----------
Total deductions 1,074,182
-----------
Net increase 4,016,560
Beginning net assets 7,978,539
-----------
Ending net assets $11,995,099
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
- 3 -
<PAGE> 6
RENT-WAY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
1. DESCRIPTION OF PLAN
The following description of the Rent-Way, Inc. 401(k) Retirement Savings
Plan ("the Plan") provides only general information. Participants should
refer to the Plan agreement for a more complete description of the Plan's
provisions.
GENERAL
The Plan is a defined contribution plan covering all employees of
Rent-Way, Inc. (the "Company") who are age eighteen or older. It is
subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA).
CONTRIBUTIONS
Each year, participants may contribute up to fifteen percent of pre-tax
annual compensation, as defined in the Plan. Participants may also
contribute amounts representing distributions from other qualified
defined benefit or contribution plans. The Company makes a matching
contribution equal to a specified percentage of the participant's
contribution (up to a maximum of six percent of a participant's total
compensation). Additional amounts may be contributed at the Company's
discretion. All employer contributions are invested in the Company's
common stock, with the exception that, to avoid the retention of idle
funds, such contributions may be invested in cash equivalent securities
for periods generally not exceeding thirty days.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of (a) the Company's contributions and, (b)
Plan earnings. Allocations are based on participant earnings, as defined
in the Plan agreement. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's vested account.
VESTING
Participants are immediately vested in their contributions plus actual
earnings thereon. The Company's matching contributions plus actual
earnings thereon vest based on years of continuous service, as defined in
the Plan agreement. A participant's employer contributions vest in twenty
percent increments per year and are fully vested after five years of
credited service.
CASH EQUIVALENTS
Cash equivalents consist of short-term highly liquid investments, with a
three-month or less maturity which are readily convertible into cash.
INVESTMENT OPTIONS
Upon enrollment in the Plan, a participant may direct employee
contributions in five percent increments in any of the following
investment options:
o Putnam Money Market Fund - Putnam Money Market Fund seeks as high a
rate of current income as Putnam Investment Management, Inc.
believes is consistent with preservation of capital and maintenance
of liquidity. It is designed for investors seeking current income
with stability of principal.
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<PAGE> 7
RENT-WAY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
o The George Putnam Fund of Boston - The George Putnam Fund of Boston
seeks to provide a balanced investment composed of a
well-diversified portfolio of stocks and bonds, which will produce
both capital growth and current income.
o Putnam Convertible Income-Growth Trust Fund - Putnam Convertible
Income-Growth Trust seeks, with equal emphasis, current income and
capital appreciation. Its secondary objective is conservation of
capital. A particular security selected for the fund's portfolio
need not reflect all aspects of the fund's investment objectives.
o The Putnam Fund for Growth and Income - The Putnam Fund for Growth
and Income seeks capital growth and current income. The fund is
designed for investors seeking a diversified portfolio offering the
opportunity for capital growth while also providing current income.
o Putnam New Opportunities Fund - Putnam New Opportunities Fund seeks
long-term capital appreciation. Current income is only an incidental
consideration.
o Putnam Voyager II Fund - Putnam Voyager II Fund seeks long-term
growth of capital. The fund is designed for investors willing to
assume above-average risk in return for above-average capital growth
potential.
o Putnam International Growth Fund - Putnam International Growth Fund
seeks capital appreciation. The fund is designed for investors
seeking capital appreciation primarily through a diversified
portfolio of equity securities of companies located in a country
other than the United States.
o Putnam High Yield Trust Fund - Putnam High Yield Trust is registered
under the Investment company Act of 1940, as amended, as a
diversified, open-end management investment company. The fund seeks
high current income by investing primarily in high-yielding,
lower-rated fixed-income securities constituting a portfolio that
Putnam Investment Management, Inc. believes does not involve undue
risk to income or principal.
o Rent-Way Stock Fund - Rent-Way Stock Fund is comprised exclusively
of Common Shares, without par value of the Company ("Common
Shares"). Each participant electing to purchase Common Shares
through the Stock Fund is permitted to vote such Common Shares in
the same manner as any other shareholder and is furnished proxy
materials to such effect. If a participant does not vote their
proxy, the trustee votes the proxy for the participant's Common
Shares. Common Share purchases under the account are generally
purchased on the open market for cash. The price of Common Shares
purchased on the open market is priced for each participant's
account at an average purchase price of all shares purchased, plus
brokerage fees, taxes, commissions and expenses incident to the
purchase. No more than 50% of a participant's contributions may be
invested in the Rent-Way Stock Fund.
-5-
<PAGE> 8
RENT-WAY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum equal to the lesser of $50,000 or 50 percent of their vested
account balance. Loan transactions are treated as a transfer to (from)
the investment fund from (to) the Loan Fund. Loan terms shall not exceed
5 years except in the case of a loan for the purpose of acquiring any
house, apartment, condominium, or in certain circumstances a mobile home.
The loans are collateralized by the balance in the participant's account
and bear interest at a rate of one percent above prime. Principal and
interest are paid at least quarterly.
PAYMENT OF BENEFITS
On termination of service due to death, disability or retirement, a
participant or beneficiary receives a lump-sum amount equal to the value
of the participant's vested interest in his or her accounts. For
termination of service due to other reasons, a participant may receive
the value of the vested interest in his or her account as a lump-sum
distribution.
FORFEITED ACCOUNTS
At December 31, 1999 and 1998, forfeited nonvested accounts totaled
$25,500 and $179,646, respectively. These accounts will be used to fund
administrative expenses and to reduce future employer contributions. In
1999, employer contributions were reduced by $216,509 from forfeited
accounts.
PLAN TERMINATION
Although the Company has not expressed any intent to do so, the Company
has the right under the Plan to discontinue its contributions at any time
and to terminate the Plan subject to the provisions of ERISA. In the
event the Plan is terminated, participants will become fully vested in
all contributions and related earnings in their accounts.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual basis
of accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of additions and
deductions during the reporting period. Actual results could differ from
those estimates.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks and mutual funds. Investment securities are exposed to various
risks, such as interest rate, market and credit. Due to the level of risk
associated with certain investment securities, it is at least reasonably
possible that changes in risks in the near term could materially affect
participants' account balances and the
-6-
<PAGE> 9
RENT-WAY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
amounts reported in the Statement of Net Assets Available for Benefits
and the Statement of Changes in Net Assets Available for Benefits.
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. Shares of registered
investment companies are valued at quoted market prices which represent
the net asset value of shares held by the Plan at year-end. The Company
stock is valued at the last sales price of the last business day of the
year. Participant notes receivable are valued at cost which approximates
fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded
on the ex-dividend date.
The Plan presents in the statement of changes in net assets available for
plan benefits, the net appreciation (depreciation) in the fair value of
its investments which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
PAYMENT OF BENEFITS
Benefits are recorded when paid.
3. INVESTMENTS
The following presents investments that represent five percent or more of
the Plan's net assets.
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
<S> <C> <C>
The George Putnam Fund of Boston $ 621,229 $ 610,167
The Putnam Fund for Growth and Income 918,125 641,386
Putnam Voyager II Fund 4,067,733 2,274,821
Putnam New Opportunities Fund 1,780,056 731,940
Putnam International Growth Fund 819,888 --
* Rent-Way Stock Fund 2,453,841 2,369,864
</TABLE>
* Participant and nonparticipant-directed
-7-
<PAGE> 10
RENT-WAY, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
--------------------------------------------------------------------------------
During 1999, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by $1,631,855 as follows:
<TABLE>
<S> <C>
Mutual funds $2,276,310
Common stock (644,455)
----------
Total appreciation $1,631,855
==========
</TABLE>
During 1999 the Company made $688,221 of non-participant-directed
contributions into the Rent-Way Stock Fund.
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
There were no differences between net assets available for benefits at
December 31, 1999 and 1998 or between changes in net assets available for
benefits for the year ended December 31, 1999 per the financial
statements and the respective Form 5500's. In addition, investments at
fair value per the financial statements and Form 5500 agree in total.
5. TAX STATUS
The Internal Revenue Service has determined and informed the Employer by
a letter dated January 27, 1999, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code ("IRC").
6. SUBSEQUENT EVENT
On January 1, 2000, the Second Amendment to the Plan, dated December 14,
1999, became effective. Pursuant to this amendment, HomeChoice 401(k) and
Profit Sharing Plan (the "HomeChoice Plan") was merged into the Plan.
Effective January 1, 2000, any employee who was or would have been an
eligible employee under the HomeChoice Plan as in effect on December 31,
1999 is an eligible employee under the Plan.
-8-
<PAGE> 11
RENT-WAY, INC.
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT
IDENTITY OF ISSUE, INCLUDING MATURITY DATE,
BORROWER, LESSOR OR RATE OF INTEREST, COLLATERAL, CURRENT
SIMILAR PARTY PAR, OR MATURITY VALUE COST VALUE
<S> <C> <C> <C> <C>
Putnam Investments Putnam Money Market Fund $ 399,760 $ 399,760
The George Putnam Fund of Boston 703,045 621,229
Putnam Convertible Income-Growth Trust Fund 273,837 260,286
The Putnam Fund for Growth and Income 1,004,899 918,125
Putnam New Opportunities Fund 1,129,875 1,780,056
Putnam Voyager II Fund 2,257,893 4,067,733
Putnam International Growth Fund 532,187 819,888
Putnam High Yield Trust Fund 127,647 116,924
* Loan Fund N/A 347,512
* Rent-Way Stock Fund 2,332,766 2,453,841
</TABLE>
These investment options are interests in registered investment companies
therefore the securities do not have maturity dates, rates of interest,
collateral, par or maturity values.
The Rent-Way Stock Fund includes sponsoring company common stock
therefore maturity dates, rates of interest, collateral, par or maturity
values are not applicable.
* Party-in-interest
-9-
<PAGE> 12
RENT-WAY, INC.
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
PURCHASE SELLING LEASE
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET PRICE PRICE RENTAL
<S> <C> <C> <C> <C>
Individual Purchase Transactions
--------------------------------
None
Series of Purchase/Sale Transactions
------------------------------------
Putnam Investments The Putnam Fund for Growth and Income $ 450,285 N/A N/A
Putnam Voyager II Fund 504,828 N/A N/A
Putnam Voyager II Fund N/A 507,101 N/A
Putnam New Opportunities Fund 562,214 N/A N/A
Rent-Way Stock Fund 1,529,842 N/A N/A
Rent-Way Stock Fund N/A $1,283,357 N/A
</TABLE>
<TABLE>
<CAPTION>
(a) (b) (f) (g) (h) (i)
CURRENT
EXPENSE VALUE OF
INCURRED ASSET ON
WITH COST OF TRANSACTION NET GAIN
IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSET TRANSACTIONS ASSET DATE OR (LOSS)
<S> <C> <C> <C> <C> <C>
Individual Purchase Transactions
--------------------------------
None
Series of Purchase/Sale Transactions
------------------------------------
Putnam Investments The Putnam Fund for Growth and Income $ -- $ 450,285 $ 450,285 $ --
Putnam Voyager II Fund -- 504,828 504,828 --
Putnam Voyager II Fund -- 291,229 507,101 215,872
Putnam New Opportunities Fund -- 562,214 562,214 --
Rent-Way Stock Fund -- 1,529,842 1,529,842 --
Rent-Way Stock Fund -- 1,195,093 1,283,714 88,264
</TABLE>
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<PAGE> 13
RENT-WAY INC. 401(k) RETIREMENT SAVINGS PLAN
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees have duly caused this annual report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: June 28, 2000 RENT-WAY, INC. 401(k) RETIREMENT
SAVINGS PLAN
By: /s/ Jeffrey A. Conway
-------------------------------
Jeffrey A. Conway, Trustee
<PAGE> 14
INDEX TO EXHIBITS
Exhibit No. Name
----------- ----
23 Consent of PricewaterhouseCoopers LLP
