MISSISSAUGA, Ontario (14 August 2012) - Its short-term consumer loans operations continued to drive Easyhome Ltd's performance in the second quarter, prompting Canada's largest furniture, mattress and major appliance leasing merchant to restructure its core business.

For the three months ended June 30, 2012, Easyhome reported revenue of $48.9 million, a 5.7% increase from the $46.3 million for the same period a year ago. Net income decreased to $2.0 million or 17 cents per share for the second quarter of 2012, compared with net income of $2.7 million or 23 cents per share for the second quarter of 2011.

Easyhome said net income was negatively impacted by higher interest and income tax expenses as well as charges related to its restructuring effort.

Corporate same store sales growth totalled 6.4%. On a segmented basis, Easyfinancial revenues increased 56% year-over-year to $8.8, as its loans receivable portfolio grew from $35.3 million to $55.8 million. Meanwhile, the company's leasing operations recorded revenues of $39.7 million, down from $40.3 million for the same period last year.

Franchise operations also recorded revenue improvements, from $300,000 in the second quarter of 2011 to $400,000 this year.

During the second quarter, Easyhome closed 13 underperforming locations and transferred their active lease portfolios to nearby stores. Changes were also made to the leadership of the leasing operation, including the elimination of seven senior positions.

"We had a mixed performance for the quarter," David Ingram, Easyhome president and chief executive officer, said in a note to shareholders. "Our Easyfinancial services business continued to deliver strong growth and strong results and our corporate expenditures for the second quarter of 2012 were reduced from the comparable period in the prior year. Our leasing business, however, reported lower revenues and lower earnings. The negative performance of this, our largest business unit, necessitated a restructuring of its network and operations which was completed in the second quarter of 2012."

For the six months that also ended June 30, 2012, Easyhome recorded revenues of $98.7 million, up 6.7% compared with $92.5 million for the first half of 2011.

Net income, adjusted for unusual items, was $5.0 million compared with $5.1 million for the same period last year. On a per share basis and excluding unusual items, diluted earnings per share was 42 cents compared with 43 cents a year ago.

Easyhome also announced it is negotiating with lenders to increase its borrowing limit from the current $40 million to $65 million. The company believes this new financing, together with the its improving cash flow from operations, will help Easyhome achieve its growth targets for the next 12 to 18 months.

As of June 30, 2012, Easyhome operated a total of 249 stores - including 204 corporately owned stores plus a network of 45 franchise locations - in both Canada and the United States, down from 261 units as of December 31, 2011.