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easyhome Ltd. Reports Results for the Fourth Quarter and Year Ended December 31, 2013

Record Revenues and Net Income Achieved in Q4 and Fiscal 2013 Full Year Adjusted Net Income Increased 35%

MISSISSAUGA, ONTARIO -- (Marketwired) -- 03/05/14 -- easyhome Ltd. (TSX:EH) ("easyhome" or the "Company"), the Canadian leader in providing goods and financial services to the cash and credit constrained consumer, today announced its results for the fourth quarter and full year ended December 31, 2013.

Revenue for the fourth quarter of 2013 increased to $57.8 million, an increase of 11.8% from $51.7 million in the fourth quarter of 2012. The growth was driven primarily by the expansion of easyfinancial and the related growth of its consumer loans receivable portfolio. Revenue for easyfinancial increased by 65% for the fourth quarter of 2013 compared to the fourth quarter of 2012. Operating income for the quarter was $7.5 million, up $1.7 million or 30% compared to the fourth quarter of 2012. Net income for the quarter was $4.3 million, an increase of 15% compared with $3.8 million reported in the fourth quarter of 2012. Excluding the impact of restructuring and other non-recurring items in the fourth quarter of 2012, operating income and net income increased 51% and 50%, respectively. Diluted earnings per share for the quarter, adjusting for restructuring and other items in 2012, increased by 38% to $0.33 compared to $0.24 for the fourth quarter of 2012.

"We are delighted to report continued strong growth in revenue, operating income and net income in the fourth quarter," said David Ingram, easyhome's President and Chief Executive Officer. "Same store sales growth in the quarter was 66% for easyfinancial and 6.8% for easyhome Leasing. As a result, our adjusted operating income increased by 51%."

During the fourth quarter of 2013, the consumer loans receivable portfolio experienced a record level of growth, increasing by $17.9 million compared with growth of $11.1 million in the fourth quarter of 2012. The gross consumer loans receivable as at December 31, 2013 was $110.7 million compared with $70.7 million as at December 31, 2012.

Other highlights for the fourth quarter of 2013 include:

easyfinancial Services

--  Operating margin of 34.1% for the fourth quarter of 2013 was up from
    27.3% reported for the same period in 2012. Strong growth in the quarter
    coupled with improvements in consumer loan losses positively impacted
--  During the quarter, easyfinancial opened 10 new stand-alone locations.
    The Company plans to continue to open new locations and increase its
    marketing investment to support growth.

easyhome Leasing

--  Same store revenue growth excluding easyfinancial Services of 6.8%,
    driven mainly by the migration of the lease portfolio of closed stores
    to nearby locations and improved retail execution. 
--  The operating margin of the leasing business for the fourth quarter of
    2013 was 16.4%, up from 15.6% reported in the fourth quarter of 2012.

Fiscal 2013 Results

For the full year, easyhome recorded revenues of $218.8 million, up 9.6% compared with $199.7 million in fiscal 2012. Operating income for the year was $25.0 million compared with $17.7 million in fiscal 2012, an increase of 41%. Excluding the restructuring and other charges in 2012, adjusting operating earnings increased of 44% over fiscal 2012. Both operating income and adjusted operating earnings for 2013 compared to 2012 were negatively impacted by a $1.8 million increase in stock based incentive compensation plan expenses, driven by the 92% year over year increase in the Company's share price.

Net income for 2013 was $14.2 million compared to adjusted net income (adjusted for unusual items) of $10.5 million for 2012. Earnings per share increased from $0.92 to $1.15 cents. On a per share basis and excluding unusual items in 2012, earnings per share increased from $0.87 to $1.15, an increase of 32.2%.

"My thanks go out to our entire team who work tirelessly to satisfy the needs of countless cash and credit constrained consumers in Canada who are in need of goods and financial services but who have been neglected by mainstream financial services," said David Ingram. "This was our twelfth consecutive year of growing revenues and producing positive net income."

In addition to the strong financial performance during 2013, the Company also made significant progress on its strategic initiatives.

--  The balance sheet was strengthened to support future growth by
    increasing the Company's debt facilities and completing a $20.0 million
    common share equity offering. 
--  E-commerce transactional websites were launched for both business units,
    allowing the Company to reach customers who wish to transact
--  easyfinancial further prepared for its 3-year growth plan by
    implementing a new, industry leading credit underwriting model and
    opening a Shared Service Centre to provide operational support to the
    retail branches in areas such as collections, customer retention and
    customer care. 
--  easyhome Leasing completed the integration of the 15 merchandise leasing
    stores acquired at the end of 2012.


Looking ahead, easyhome's strategic focus remains unchanged. The Company will focus on evolving its delivery channels to better meet the needs of its customers, expanding the size and scope of easyfinancial and executing with efficiency and effectiveness.

The Company included targets for 2014 in its previous press release announcing its results for the third quarter of 2013. Based on the strong results achieved in the fourth quarter of 2013, the Company has revised its targets for 2014 as follows:

--  Open 30 - 35 new easyfinancial locations with virtually all of these
    being stand-alone locations (unchanged). 
--  easyfinancial gross consumer loans receivable portfolio growing to $160
    - $170 million (increased from $145 - $155 million). 
--  easyfinancial margins of 28 - 32% (increased from 27 - 29%) will
    continue to be below the long-term expected margin of 35% due to the
    impact of increased marketing expenditures and the drag associated with
    new store openings, both of which are to accelerate growth and promote
    brand awareness.. 
--  easyhome Leasing expects to open two new Be-A-Contender franchise stores
    that are consolidated for financial reporting purposes and three new
    franchise stores (unchanged). 
--  Based on these assumptions, the Company is targeting total revenue
    growth of 10 - 12% (unchanged).

The achievement of these targets by the Company, however, is predicated on a number of factors, including the pace of expansion of easyfinancial.

The Board of Directors has approved a quarterly dividend payment of $0.085 per share payable on April 11, 2014 to the holders of common shares of record as at the close of business on March 28, 2014.

About easyhome

As at March 5, 2014, easyhome Ltd. operated 236 easyhome leasing stores (including 9 consolidated franchise locations and 55 other franchise locations) and 127 easyfinancial locations.

easyhome Ltd. is the Canadian leader in providing goods and financial services to the cash and credit constrained consumer. easyhome Ltd. serves its customers through two key operating divisions, easyhome Leasing and easyfinancial. easyhome Leasing is Canada's largest merchandise leasing Company, offering top quality, brand-name household furnishings, appliances and home electronic products to consumers under weekly or monthly leasing agreements through both corporate and franchise stores. easyfinancial is a leading provider of consumer loans as an alternative to traditional banks and payday lenders. easyhome Ltd. is listed on the TSX under the symbol 'EH'. For more information, visit

The above analysis refers to certain financial measures, including same store revenue growth and gross consumer loans receivable which are not determined in accordance with International Financial Reporting Standards ("IFRS"). These measures do not have standardized meanings and may not be comparable to similar measures presented by other companies. These measures are defined in our Management's Discussion and Analysis for the period which is available on SEDAR or on the Company's website at or can be determined by reference to our financial statements. We discuss these measures as we believe that they facilitate the understanding of the results of our operations and financial position.

Forward-Looking Statements

This news release includes forward-looking statements about easyhome Ltd., including its business operations, strategy and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as 'expects', 'anticipates', 'intends', 'plans', 'believes' or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenue, earnings or growth rates), ongoing business strategies or prospects about future events is also a forward-looking statement. Forward- looking statements are based on certain factors and assumptions, including expected growth, results of operations and business prospects and are inherently subject to, among other things, risks, uncertainties and assumptions about our operations, economic factors and the industry generally. They are not guarantees of future performance, and actual events and results could differ materially from those expressed or implied by forward-looking statements made by us, due to, but not limited to important factors such as our ability to enter into new lease and/or financing agreements, collect on existing lease and/or financing agreements, open new locations on favourable terms, secure new franchised locations, purchase products which appeal to our customers at a competitive rate, cope with changes in legislation, react to uncertainties related to regulatory actions, raise capital under favourable terms, manage the impact of litigation (including shareholder litigation), control costs at all levels of the organization and maintain and enhance our system of internal controls. We caution that the foregoing list is not exhaustive. The reader is cautioned to consider these and other factors carefully and not place undue reliance on forward-looking statements, which may not be appropriate for other purposes. We are under no obligation (and expressly disclaim any such obligation) to update or alter the forward-looking statements whether as a result of new information, future events or otherwise, unless otherwise required by law.

easyhome Ltd.                                                               
CONSOLIDATED STATEMENTS OF INCOME                                           
(expressed in thousands of Canadian dollars except earnings per share)      
                            Three months ended            Years ended       
                         December 31, December 31, December 31, December 31,
                                 2013         2012         2013         2012
Lease revenue                 37,788       39,124      153,347      156,049 
Interest income               11,175        7,168       37,581       24,701 
Other                          8,833        5,402       27,886       18,923 
                              57,796       51,694      218,814      199,673 
EXPENSES BEFORE                                                             
 DEPRECIATION AND                                                           
Salaries and benefits         17,159       16,478       66,127       63,885 
Stock based compensation       1,349        1,039        3,803        2,035 
Advertising and                                                             
 promotion                     1,841        1,899        7,379        7,757 
Bad debts                      4,449        3,019       14,800        9,779 
Occupancy                      6,674        6,465       26,232       25,832 
Distribution and travel        1,803        1,765        6,988        7,300 
Other                          3,433        2,933       14,808       12,988 
Restructuring and other                                                     
 items                             -         (814)           -         (378)
                              36,708       32,784      140,137      129,198 
DEPRECIATION AND                                                            
Depreciation of lease                                                       
 assets                       12,158       12,334       48,078       48,379 
Depreciation of property                                                    
 and equipment                 1,075        1,041        4,389        4,019 
Amortization of                                                             
 intangible assets               384          273        1,309          621 
Impairment, net                  (38)        (528)         (64)        (253)
                              13,579       13,120       53,712       52,766 
Total operating expenses      50,287       45,904      193,849      181,964 
Operating income               7,509        5,790       24,965       17,709 
Finance costs                  1,414        1,215        5,638        2,643 
Income before income                                                        
 taxes                         6,095        4,575       19,327       15,066 
Income tax expense                                                          
 Current                         935         (536)       4,554        5,309 
 Deferred                        824        1,345          591       (1,300)
                               1,759          809        5,145        4,009 
Net income                     4,336        3,766       14,182       11,057 
Basic earnings per share        0.34         0.32         1.16         0.92 
Diluted earnings per                                                        
 share                          0.33         0.31         1.15         0.92 
easyhome Ltd.                                                               
(expressed in thousands of Canadian dollars)                                
                                                        As at          As at
                                                 December 31,   December 31,
                                                         2013           2012
Cash                                                    2,329         4,631 
Amounts receivable                                      7,206         5,536 
Prepaid expenses                                        1,699           964 
Consumer loans receivable                             103,936        66,584 
Lease assets                                           68,453        68,075 
Property and equipment                                 15,793        13,729 
Deferred tax assets                                     3,997         4,232 
Intangible assets                                       9,524         6,213 
Goodwill                                               19,963        19,963 
TOTAL ASSETS                                          232,900       189,927 
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Bank revolving credit facility                         23,496        21,281 
Accounts payable and accrued liabilities               24,301        33,155 
Income taxes payable                                    3,929         4,216 
Dividends payable                                       1,130         1,012 
Deferred lease inducements                              2,749         2,462 
Unearned revenue                                        3,763         3,922 
Provisions                                                 21           536 
Term loan                                              37,878        18,330 
TOTAL LIABILITIES                                      97,267        84,914 
Shareholders' equity                                                        
Share capital                                          79,923        60,885 
Contributed surplus                                     4,169         3,035 
Accumulated other comprehensive income (loss)             307          (137)
Retained earnings                                      51,234        41,230 
TOTAL SHAREHOLDERS' EQUITY                            135,633       105,013 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            232,900       189,927 

easyhome Ltd.
David Ingram
President & Chief Executive Officer
(905) 272-2788

easyhome Ltd.
Steve Goertz
Senior Vice President and Chief Financial Officer
(905) 272-2788
(905) 272-9886 (FAX)

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