ALRENCO REPORTS RECORD EARNINGS; 1996 EARNINGS UP 189%.

NEW ALBANY, Ind.--(BUSINESS WIRE)--Feb. 10, 1997--Alrenco, Inc. (Nasdaq/NM: RNCO), the sixth largest operator of rental-purchase stores in the U.S., today reported results for the fourth quarter and year ended December 31, 1996.

For the year ended December 31, 1996, revenues increased 70% to a record $63.9 million from $37.6 million for 1995. Net earnings for the year increased 189% to a record $3.7 million from $1.3 million for 1995. Earnings per share rose 88% to $0.77 for the year on 4.8 million weighted average shares outstanding compared with $0.41 per share on 3.1 million weighted average shares outstanding for 1995.

For the fourth quarter, revenues increased 74% to $19.7 million from $11.3 million for the fourth quarter of 1995. Net earnings for the quarter increased 85% to $914,000 from $495,000 for the year-earlier period. Earnings per share were $0.15 on 6.1 million weighted average shares outstanding compared with $0.16 on 3.1 million weighted average shares outstanding in the prior-year period. The increase in weighted average shares outstanding for both periods results from Alrenco's initial public offering of 1.8 million shares of common stock on January 23, 1996, and a secondary offering in September 1996 in which 1.5 million shares were issued.

Commenting on the results, Michael D. Walts, chairman and president, said, "Our record performance for 1996 is a result of the 71 stores we acquired as well as strong internal growth in our existing stores. We're especially pleased with the increase in operating profit as a percent of total revenues, which improved to 10.5% for 1996 from 7.8% for 1995. We believe our experienced managers and the information management system we have in every store are keys to our efficient operations. We're pleased that the actions we took in some expansion markets are showing positive results, despite having an impact on fourth quarter operating expenses.

"With the recently announced acquisition of Fastway, a 28-store chain based in Arkansas, we've exceeded our expansion goal for 1997. For the remainder of the year, we will continue to seek quality acquisitions on a selected basis and focus on the integration of the stores we've acquired to date and maintain the strong performance of our existing stores."

Alrenco, headquartered in New Albany, Indiana, operates 158 rental-purchase stores in 18 states, primarily in the Midwest and Southern U.S., offering high quality, brand-name consumer merchandise under flexible rental-purchase agreements, also known as rent-to-own agreements. -0-

                         ALRENCO, INC.
                      Financial Highlights
              (In thousands, except per share data)

                        Three Months Ended      For the Years Ended
                           December 31,            December 31,
                         1996        1995        1996        1995
REVENUE
Rentals and fees     $19,249,218 $11,070,506 $62,536,490 $36,850,796
Sales                    370,874     189,414   1,199,375     658,246
Other                     64,139      20,507     119,943      66,597
 Total revenues       19,684,231  11,280,427  63,855,808  37,575,639

OPERATING EXPENSES
Direct store expenses
 Depreciation
  of rental
  merchandise          4,352,200   2,518,380  13,964,028   9,099,579
 Cost of sales           302,558     120,838     835,667     366,072
 Salaries and other
  expenses            11,402,543   6,171,619  35,640,094  20,557,528
                      ----------  ----------  ----------  ----------
                      16,057,301   8,810,837  50,439,789  30,023,179

General and
 administrative
 expenses              1,685,711   1,357,316   5,588,925   4,338,583
Amortization of
 intangibles             527,334     118,623   1,140,675     284,901
  Total operating
   expenses           18,270,346  10,286,776  57,169,389  34,646,663

  Operating profit     1,413,885     993,651   6,686,419   2,928,976

Gain on sale of
 investments                   -     (99,930)          -     (99,930)
Interest income         (127,569)       (188)   (133,688)       (730)
Interest expense          37,050     333,960     652,255     894,733
                         (90,519)    233,842     518,567     794,073

Earnings before
 income taxes          1,504,404     759,809   6,167,852   2,134,903

Income tax expense       590,700     264,634   2,504,474     868,311

 NET EARNINGS        $   913,704 $   495,175 $ 3,663,378 $ 1,266,592

Weighted average
 shares outstanding    6,061,492   3,105,000   4,786,736   3,105,000

Earnings per common
 share               $      0.15 $      0.16 $      0.77 $      0.41

CONTACT: Alrenco Inc., New Albany

Theodore H. Wilson, 812/949-3370