Financial Projections

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APRO along with RTO public companies, independent research and equity research firms set a statistical framework to provide a financial projection for the growth of the RTO industry in the U.S. for the next several years.

Here are some of the findings:

The average revenue growth for the RTO industry up to 2008 was from $100 – $200 million per year. Since 2008, revenue growth has been $400 – $600 million per year. The economy and credit collapse being the most significant factors in the recent growth. Wall Street analysts and economics indicate those same macro economic factors exist today and will remain for the next several years.

Several other socio-economic factors also exist that show enormous growth for the RTO industry. Especially those companies who can best capitalize on the dynamic trends in the retail marketplace and consumer perceptions regarding the rent-to-own industry and other underbanked options.

According to the U.S. Census Bureau, more than 50 million Americans fit the RTO demographic. The industry is currently serving 4 million customers. Since 1997, APRO has conducted RTO Customer Satisfaction Surveys and Potential Customer surveys to gauge both the current climate of customer satisfaction and to gauge the potential customer that fits the RTO demographic but does not RTO.

The following are some statistics regarding the current climate for future market penetration for additional RTO customers.

The lack of distinction across income levels, home ownership and marital status may be reflective of the economic climate which is impacting lower and middle household incomes.*

Younger participants were more interested in renting-to-own than older, particularly ages 18-24 (37% interest vs. 17% interest among 45-54 year olds.)*

Hispanics in particular tended to be positive, more hesitant to express negatives and concerns about rent-to-own. They were quick to rationalize and approve of others use of rent to own stores.*

Reasons for more positive image of rent-to-own included: the current economy/hard times (25%), better product quality/selection (25%), publicity/advertising (18%), increased usage/growing (14%), and staff is nicer/helpful (19%).*

The impact of the current economy is evident, as this was the first year of interviewing where mentions were made of the economy impacting perceptions of rent-to-own (regardless of their interest rating in renting-to-own).*

Millennials from higher income groups are increasing their use of rent-to-own stores – 15 percent of respondents making less than $25,000 and 17 percent of those who earn $50,000-$74,999 reported using rent-to-own stores.** That is an increase of 14% of general income levels for current RTO customers surveyed in 2009.***

*Trenholm Potential Customer Research Survey 2010 and 2011 Focus Group Observations.

**Think Finance Survey of Underbanked Millennials

*** America’s Research Group survey of current RTO customers.

Those RTO companies that can effectively communicate all of the benefits of RTO especially in this economy will have a greater advantage of increasing their customer base.