<PAGE>   1
                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

           (Mark One)

           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended SEPTEMBER 30, 1997

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                         Commission File Number 33-81370

                               CENTRAL RENTS, INC.
             (Exact name of registrant as specified in its charter)


               Delaware                                 95-4476294
     -------------------------------                 ----------------
     (State or other jurisdiction of                 (I.R.S. Employer
     incorporation or organization)                  Identification No.)

                            5480 East Ferguson Drive
                           Commerce, California 90022
                    ----------------------------------------
                    (Address of principal executive offices)


                                 (213) 720-8700
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether Registrant (1) has filed all reports to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.             YES   X   NO 
                                 ------   ------

Number of shares outstanding as of November 13, 1997: 617,045








<PAGE>   2

                               CENTRAL RENTS, INC.

                                    FORM 10-Q

                                      INDEX


<TABLE>
<CAPTION>
                                                                                                                         Page No.
---------------------------------------------------------------------------------------------------------------------------------
<S>          <C>                                                                                                        <C> 

PART I.                                            FINANCIAL INFORMATION

Item 1.       Condensed Financial Statements:

              Condensed Balance Sheets at September 30, 1997 and December 31, 1996 ........................................  1

              Condensed Statements of Operations for the Three and Nine Months Ended September 30, 1997 and 1996...........  2

              Condensed Statements of Cash Flows for the Nine Months Ended September 30, 1997 and 1996 ....................  3

              Notes to Condensed Financial Statements  ....................................................................  4

Item 2.       Management's Discussion and Analysis of Financial Condition and Results of Operations  ......................  6


PART II.                                            OTHER INFORMATION

Item 5.       Other Information  ..........................................................................................  9

Item 6.       Exhibits and Reports on Form 8-K ............................................................................  9

Signatures    ............................................................................................................. 10
</TABLE>










<PAGE>   3

PART I.           FINANCIAL INFORMATION

ITEM 1.           CONDENSED FINANCIAL STATEMENTS

                               CENTRAL RENTS, INC.

                            CONDENSED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                           September 30,       December 31,
                                                                                1997               1996
                                                                              --------           --------
<S>                                                                          <C>                <C>     
                                     ASSETS
Cash and cash equivalents                                                     $ 10,075           $ 12,808
Receivables and prepaid expenses                                                 2,312              2,348
Due from related parties                                                           271                 --
Income tax receivable - related party                                              872              1,871
Rental merchandise, net                                                         31,918             34,381
Property and equipment, net                                                      3,910              2,527
Deferred financing costs, net                                                    1,670              1,957
Non-compete agreement, net                                                          --              1,275
Excess of cost over net assets acquired, net                                     6,674              6,861
Deferred income taxes, net                                                       9,246              8,156
Other assets                                                                       133                279
                                                                              --------           --------
        Total assets                                                          $ 67,081           $ 72,463
                                                                              ========           ========

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Accounts payable                                                              $  1,028           $  5,332
Accrued expenses                                                                 6,785              5,682
Due to related parties                                                              --                237
Accrued interest                                                                 2,253                322
Long-term notes                                                                 58,300             58,094
                                                                              --------           --------
        Total liabilities                                                       68,366             69,667
Commitments and contingencies
Stockholders' equity (deficit):
        Preferred stock, $0.01 par value,
           100 shares authorized; no shares issued                                  --                 --
        Common stock, $0.01 par value, 2,000,000 shares authorized;
           617,045 and 551,045 shares issued and outstanding in 1997
           and 1996, respectively                                                    6                  6
        Additional paid-in capital                                              22,944             22,944
        Retained deficit                                                       (24,235)           (20,154)
                                                                              --------           --------
           Total stockholders' equity (deficit)                                 (1,285)             2,796
                                                                              --------           --------
        Total liabilities and stockholders' equity (deficit)                  $ 67,081           $ 72,463
                                                                              ========           ========
</TABLE>




                  See notes to condensed financial statements.





                                       1


<PAGE>   4

                               CENTRAL RENTS, INC.

                       CONDENSED STATEMENTS OF OPERATIONS
                       (THOUSANDS, EXCEPT PER SHARE DATA)



<TABLE>
<CAPTION>
                                                  Three Months Ended           Nine Months Ended
                                                      September 30,               September 30,
                                                ----------------------      ----------------------
                                                  1997          1996          1997          1996
                                                --------      --------      --------      --------
<S>                                            <C>           <C>           <C>           <C>     
Revenues                                        $ 25,409      $ 26,468      $ 78,539      $ 82,635
                                                --------      --------      --------      --------

Costs and expenses:
        Selling, general and administrative       16,206        15,084        47,202        45,910
        Cost of merchandise sold                     791           936         2,756         2,915
        Depreciation and amortization -
           Rental merchandise                      7,723         7,773        23,172        24,503
           Property and equipment                    451           374         1,227         1,176
                                                --------      --------      --------      --------
                                                  25,171        24,167        74,357        74,504
                                                --------      --------      --------      --------

Income before interest, taxes and
amortization of intangibles                          238         2,301         4,182         8,131

Amortization of intangibles                           68           883         1,479         4,380
                                                --------      --------      --------      --------

Income from operations                               170         1,418         2,703         3,751
Interest expense, net                              1,945         1,882         5,868         5,697
                                                --------      --------      --------      --------
Loss before income taxes                          (1,775)         (464)       (3,165)       (1,946)
Income tax benefit                                   584           144         1,084           639
                                                --------      --------      --------      --------
Net loss                                         $(1,191)     $   (320)     $ (2,081)     $ (1,307)
                                                ========      ========      ========      ========

Per share data:

Net loss per common share                       $  (1.93)     $   (.58)     $  (3.45)     $  (2.37)
                                                ========      ========      ========      ========

Weighted average common shares outstanding           617           551           603           551
                                                ========      ========      ========      ========
</TABLE>










                  See notes to condensed financial statements.




                                       2

<PAGE>   5

                               CENTRAL RENTS, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                            Nine Months Ended
                                                                                               September 30,
                                                                                         ----------------------
                                                                                           1997          1996
                                                                                         --------      --------
<S>                                                                                     <C>           <C>      
Cash flows from operating activities:
        Net loss                                                                         $ (2,081)     $ (1,307)
        Adjustments to reconcile net loss to net cash provided by
           operating activities:
               Depreciation of rental merchandise                                          23,172        24,503
               Depreciation and amortization of property and equipment                      1,227         1,176
               Amortization of intangibles                                                  1,479         4,380
               Amortization of debt discount                                                  206           206
               Amortization of deferred financing costs                                       287           248
               Increase in deferred income taxes                                           (1,090)         (132)
        Changes in operating assets and liabilities:
               Decrease (increase) in receivables, prepaid expenses and other assets          165          (120)
               Increase in rental merchandise, net of $3,394 retirements 
                 in 1997 and $2,841 in 1996                                               (20,709)      (21,320)
               Decrease in income tax receivable - related party                              999           186
               Decrease in accounts payable                                                (4,304)       (6,096)
               Increase in due from related parties                                          (271)           --
               Decrease in due to related parties                                            (237)         (528)
               Increase in accrued expenses                                                 1,103         2,583
               Increase in accrued interest                                                 1,931         1,931
                                                                                         --------      --------
               Net cash provided by operating activities                                    1,877         5,710
                                                                                         --------      --------
Cash flows from investing activities:
        Purchase of property and equipment                                                 (2,610)         (832)
                                                                                         --------      --------
               Net cash used by investing activities                                       (2,610)         (832)
                                                                                         --------      --------
Cash flows from financing activities:
        Dividends paid                                                                     (2,000)           --
                                                                                         --------      --------
               Net cash used in financing activities                                       (2,000)           --
                                                                                         --------      --------

Net decrease in cash and cash equivalents                                                  (2,733)        4,878
Cash and cash equivalents, beginning of period                                             12,808        14,552
                                                                                         --------      --------
Cash and cash equivalents, end of period                                                 $ 10,075      $ 19,430
                                                                                         ========      ========

Cash paid during the period for:
Interest                                                                                 $  3,925      $  3,934
Income taxes                                                                                   85           460
</TABLE>






                  See notes to condensed financial statements.



                                       3


<PAGE>   6

                               CENTRAL RENTS, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS

A.     Basis of Presentation

       The accompanying condensed financial statements of Central Rents, Inc.
(the "Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of only normal recurring adjustments) considered
necessary for a fair presentation of the Company's financial condition and
operating results for the interim periods presented have been included.
Operating results for the quarter are not necessarily indicative of the results
that may be expected for the year. These interim financial statements should be
read in conjunction with the Form 10-K for the year ended December 31, 1996,
including the financial statements and notes contained therein, filed with the
Securities and Exchange Commission.

       On March 17, 1994, the Company was incorporated in Delaware. The Company
is a wholly owned subsidiary of Central Rents Holding, Inc. which is a wholly
owned subsidiary of Banner Holdings, Inc. ("Banner"). On June 3, 1994, the
Company acquired all of the outstanding stock of RTO Enterprises, Inc., ("RTO")
and WBC Holdings, Inc. ("WBC") for a purchase price of approximately $60,000,000
in cash (the "Acquisition"), in a transaction accounted for as a purchase. On
April 28, 1995, RTO and WBC were merged into the Company pursuant to a statutory
merger effected in accordance with the provisions of the Delaware General
Corporation Laws.

       Certain reclassifications have been made to previously reported amounts
to conform with the current quarter financial presentation.

B.     Earnings Per Common Share

       Earnings per common share have been computed on the basis of the weighted
average number of common shares outstanding. There were no common stock
equivalents for the periods presented.

       The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" (SFAS 128), Statement of
Financial Accounting Standards No. 129, "Disclosure of Information About Capital
Structure" (SFAS 129), Statement of Financial Accounting Standards No. 130
"Reporting Comprehensive Income" (SFAS 130) and Statement of Financial
Accounting Standards No. 131 "Disclosures about Segments of Enterprise and
Related Information" (SFAS 131) in fiscal year 1997. The Company will be
required to adopt SFAS 128 and 129 in fiscal year 1997 and SFAS 130 and 131 in
fiscal year 1998. The Company does not expect that the adoption of SFAS 128 and
SFAS 129 will have a material effect on its financial position or its results of
operations for the year ended December 31, 1997.

C.     Amortization of Intangibles

       In connection with the Acquisition, one of the sellers entered into a
non-compete agreement with the Company. The non-compete agreement was amortized
over a period of 3 years. Amortization of the non-compete agreement was 50% in
year one, 35% in year two and 15% in year three. The agreement was fully
amortized at June 30, 1997.

       The excess of cost over net assets acquired, which relates primarily to
the Acquisition of RTO and WBC and other stores in 1995, is currently being
amortized on a straight-line basis over a period of 30 years. The purchase
allocation may change upon the resolution of certain issues with the seller. The
Company periodically reviews the excess of cost over net assets acquired to
assess recoverability. Impairment would be recognized in operating results if a
permanent diminution in value were to occur, pursuant to Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of."








                                       4

<PAGE>   7

D.     Long-term Notes and Revolving Line of Credit

       The Company funded the purchase price for the Acquisition from the
proceeds of an offering of units (the "Offering"), consisting of $60,000,000
principal of 12 7/8% Senior Notes due 2003 (the "Notes") and Warrants (the
"Warrants") to purchase 60,000 shares of common stock of the Company, at an
exercise price of $0.01 per share. The Offering was made in reliance upon
exemptions from the registration requirements of the Securities Act of 1933, as
amended and applicable state securities laws. Additional Warrants to purchase
6,000 shares of common stock of the Company, at an exercise price of $0.01 per
share, were issued to Jefferies & Company, Inc., the initial purchaser of the
Notes. Of the total proceeds, $57,389,000 was allocated to Notes and $2,200,000
was allocated to the issuance of Warrants. On or before February 28, 1997, all
Warrant holders exercised their option to convert the Warrants into the
Company's common stock.

       The Notes bear interest at the rate of 12 7/8% per annum payable
semi-annually on June 15 and December 15. On or after June 15, 1999, the Notes
will be redeemable at the option of the Company, in whole or in part, at the
redemption prices as defined, plus accrued and unpaid interest to the date of
redemption.

       On May 10, 1997, the Company canceled a revolving line of credit
agreement with Wells Fargo Bank (the "Line of Credit") which was entered into on
May 9, 1995. The Line of Credit was subject to an annual commitment fee payable
to the bank on a quarterly basis of 0.5% of the unused borrowings.

E.     Related Party Transactions

       The Company has entered into an Administrative Services Agreement (the
"Administrative Services Agreement") with Banner pursuant to which Banner or one
of the other Banner subsidiaries, other than the Company, may provide
purchasing, advertising, accounting, insurance, health and other benefits, real
estate, management information systems, and other services to the Company. The
Company is required to reimburse Banner for its allocable share of direct and
overhead costs determined on the basis of the Company's percentage utilization,
if any, of the applicable services contemplated by the Administrative Services
Agreement. The Administrative Services Agreement can be automatically extended
for successive one-year terms through June 3, 2004 unless the Company gives at
least 30 days prior notice at the end of the then current term that the
Administrative Services Agreement will terminate. As long as Banner or any other
Banner subsidiary beneficially owns more than 50% of the voting stock of the
Company, the Administrative Services Agreement shall not be terminable by Banner
or any other Banner subsidiary as a result of any breach of the Administrative
Services Agreement by the Company. During the nine months ended September 30,
1997, the Company purchased $501,000 of merchandise from Banner's Central
Electric, a wholly owned subsidiary of Banner, in connection with the
Administrative Services Agreement. The Company has not incurred any material
common costs during the nine months ended September 30, 1997 or 1996 in
connection with the Administrative Services Agreement.

       The Company and G.M. Cypres & Co., a related party of the Company through
common ownership, entered into an agreement (the "Consulting Agreement")
pursuant to which G.M. Cypres & Co. or its designee provides consulting,
investment banking or similar services to the Company in consideration for the
payment of certain fees and expenses, including an annual management fee (the
"Management Fee"). Under the terms of the indenture entered into by the Company
in connection with the issuance of the Notes, the fees and expenses payable
under the Consulting Agreement must be reasonable and customary, and the
Management Fee shall not exceed $375,000 per year. Management Fees under the
terms of the Consulting Agreement totaled $281,250 for the nine months ended
September 30, 1997 and 1996.

       Effective January 1, 1995, the Company entered into a triple net lease
agreement with BCE Properties II, Inc., a related party of the Company through
common ownership, for office space at the Company's corporate headquarters. The
lease provides, among other things, for monthly rent of $10,000 through December
31, 2005. Rent expense for the nine months ended September 30, 1997 and 1996
totaled $90,000.

F.     Dividends

       On January 7, 1997 the Company declared a cash dividend of $3.24 per
share on its common stock which was paid on March 5, 1997.














                                       5
<PAGE>   8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

       Certain matters discussed in this report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 and as such may involve risks and uncertainties. These forward-looking
statements relate to, among other things, expectations of the business
environment in which the Company operates, projections of future performance,
and perceived opportunities in the market. The Company's actual results,
performance, or achievements may differ significantly from the results,
performance, or achievements expressed or implied in such forward-looking
statements.

       This discussion and analysis highlights the results of operations of the
Company during the three and nine months ended September 30, 1997 and 1996.

       The revenue, store operating profit, field and corporate general and
administrative expenses, income before interest, taxes and amortization of
intangibles, net loss and number of stores of the Company were as follows for
the three and nine months ended September 30, 1997 and 1996 ($ in millions):


<TABLE>
<CAPTION>
                                              Three Months Ended                     Nine Months Ended
                                                September 30,                          September 30,
                                           1997                1996              1997               1996
                                    ----------------   ----------------   ----------------   ---------------- 
<S>                                <C>        <C>     <C>        <C>     <C>        <C>     <C>        <C>   
Revenues ........................   $  25.4    100.0%  $  26.5    100.0%  $  78.5    100.0%  $  82.6    100.0%

Store operating profit ..........       3.2     12.6       4.9     18.5      12.1     15.4      16.2     19.6

Field and corporate general and
    administrative expenses .....       3.0     11.8       2.6      9.8       7.9     10.1       8.1      9.8

Income before interest, taxes and
    amortization of intangibles .       0.2      0.8       2.3      8.7       4.2      5.4       8.1      9.8

Net loss ........................      (1.2)    (4.7)     (0.3)    (1.1)     (2.1)    (2.7)     (1.3)    (1.6)

Number of stores (at end of period)         172                166                172                166
</TABLE>


THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH THE RESULTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996.

       Revenues. Total revenues decreased $1.1 million or 4.2% to $25.4 million
for the three months ended September 30, 1997 from $26.5 million for the three
months in 1996. The decrease in revenues is primarily the result of fewer units
on rent combined with lower average revenue per unit. In addition, consolidation
within the rental-purchase industry over the last several years, especially in
the eastern and central states, has significantly increased the competitive
climate in those states and contributed to the general deterioration in the
number of units on rent. In the third quarter, a promotion was begun which
slowed the decline in units on rent but resulted in a lower average revenue per
unit.

       Store Operating Profit. Store operating profit decreased $1.7 million or
34.7% to $3.2 million for the three months ended September 30, 1997 from $4.9
million for the three months in 1996. The decrease in store operating profit was
primarily the result of a decrease in gross profit of approximately $0.8 million
as a result of lower revenues in the three months ended September 30, 1997 as
compared to 1996. Total store operating expenses as a percentage of revenue
increased to 56.7% of revenues in the three months ended September 30, 1997 from
50.9% for the three months in 1996. The increase in store operating expenses as
a percentage of revenue was largely due to an increase in store advertising,
occupancy costs, vehicle costs, and other expenses. Store operating profit as a
percentage of revenue decreased to 12.6% of revenues for the three months ended
September 30, 1997 from 18.5% for the same period in 1996. Operating expenses
related to stores which opened during 1997 were $0.5 million, partially offset
by revenue of $0.2 million, resulting in a net negative impact on total store
operating profit of approximately $0.3 million. New stores incur operating
losses prior to and just after opening, and generally continue to sustain 
losses for up to one year before turning a profit.








                                       6

<PAGE>   9


       Comparable Stores. Comparable store revenues decreased $0.9 million or
3.5%, to $24.7 million for the three months ended September 30, 1997 from $25.6
million for the three months in 1996. The decrease in comparable store revenues
was primarily the result of lower average revenue per unit for the three months
ended September 30, 1997 as compared to the same period in 1996. Comparable
store operating profit decreased $1.5 million or 30.6%, to $3.4 million for the
three months ended September 30, 1997 from $4.9 million for the same period in
1996. The decrease in comparable store operating profit was primarily the result
of a decrease in same store gross profit as a result of lower average revenue in
1997 and an increase in store operating expenses. Store operating expenses
increased primarily due to higher occupancy costs related to relocations and
expansions, new vehicles leased to replace an aging fleet, and increased
advertising expenses.

       Field and Corporate General and Administrative Expenses. Field and
corporate general and administrative expenses increased by $0.4 million or
15.4%, to $3.0 million for the three months ended September 30, 1997 from $2.6
million for the three months in 1996. Field and corporate general and
administrative expenses for the three months ended September 30, 1997 as a
percentage of revenue increased to 11.8% from 9.8% for the same period in 1996.
The increase in expenses is primarily due to approximately $0.4 million of 
severance and other one-time charges.

       Income Before Interest, Taxes and Amortization of Intangibles. Income
before interest, taxes and amortization of intangibles decreased $2.1 million or
91.3%, to $0.2 million for the three months ended September 30, 1997 from $2.3
million for the three months in 1996. The decrease in income before interest,
taxes and amortization of intangibles is primarily the result of the decrease in
store operating profit for the three months ended September 30, 1997 as compared
to the same period in 1996. Income before interest, taxes and amortization of
intangibles as a percentage of revenue decreased to 0.8% for the three months
ended September 30, 1997 from 8.7% for the same period in 1996.

       Net loss. Net loss increased $0.9 million or 300% to $1.2 million for the
three months ended September 30, 1997 from $0.3 million for the three months in
1996. Net loss as a percentage of revenue increased to 4.7% for the three months
ended September 30, 1997 from 1.1% for the three months in 1996.



NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH THE RESULTS OF OPERATIONS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1996.

       Revenues. Total revenues decreased $4.1 million or 5.0%, to $78.5 million
for the nine months ended September 30, 1997 from $82.6 million for the nine
months in 1996. The decrease in revenues is primarily the result of a decrease
in units on rent partially offset by an increase in the average revenue per
unit. Management believes the decline in the portfolio of units on rent is a
result of the continued weakness in the consumer electronics and appliances
marketplace coupled with increased competition, primarily in its operations in
the eastern and central states. In addition, consolidation within the
rental-purchase industry over the last several years, especially in the eastern
and central states, has significantly increased the competitive climate in those
states and contributed to the general deterioration in the number of units on
rent and resultant revenue declines.

       Store Operating Profit. Store operating profit decreased $4.1 million or
25.3%, to $12.1 million for the nine months ended September 30, 1997 from $16.2
million for the nine months in 1996. The decrease in store operating profit was
primarily the result of a decrease in gross profit of approximately $3.0 million
as a result of lower revenues in the nine months ended September 30, 1997 as
compared to 1996 with an increase of $1.1 million in store operating expenses.
Total store operating expenses as a percentage of revenue increased to 53.8% of
revenues in the nine months ended September 30, 1997 from 49.8% for the nine
months in 1996. The increase in store operating expenses was largely due to an
increase in advertising, occupancy costs, vehicle costs, and other expenses.
Store operating profit as a percentage of revenue decreased to 15.4% of revenues
for the nine months ended September 30, 1997 from 19.6% for the same period in
1996. Operating expenses related to stores which opened during 1997 were $0.9
million, partially offset by revenue of $0.2 million, resulting in a net
negative impact on store operating profit of approximately $0.7 million. New
stores incur operating losses prior to and just after opening, and generally 
continue to sustain losses for up to one year before turning a profit.

       Comparable Stores. Comparable store revenues decreased $3.4 million or
4.2%, to $76.7 million for the nine months ended September 30, 1997 from $80.1
million for the nine months in 1996. The decrease in comparable store revenues
was primarily the result of a decrease in units on rent, partially offset by an
increase in the average revenue per unit, for the nine months ended September
30, 1997 as compared to the same period in 1996. Comparable store operating
profit decreased $3.5 million or 21.7%, to $12.6 million for the nine months
ended September 30, 1997 from $16.1 million for the same









                                       7

<PAGE>   10

period in 1996. The decrease in comparable store operating profit was primarily
the result of a decrease in same store gross profit in 1997 with an increase in
store operating expenses as previously discussed.

       Field and Corporate General and Administrative Expenses. Field and
corporate general and administrative expenses decreased by $0.2 million or 2.5%,
to $7.9 million for the nine months ended September 30, 1997 from $8.1 million
for the nine months in 1996. Field and corporate general and administrative
expenses for the nine months ended September 30, 1997 as a percentage of revenue
increased to 10.1% from 9.8% for the same period in 1996. Savings is due to
lower headcount offset by approximately $0.4 million of severance and other 
one-time charges.

       Income Before Interest, Taxes and Amortization of Intangibles. Income
before interest, taxes and amortization of intangibles decreased $3.9 million or
48.1%, to $4.2 million for the nine months ended September 30, 1997 from $8.1
million for the nine months in 1996. The decrease in income before interest,
taxes and amortization of intangibles is primarily the result of the decrease in
store operating profit for the nine months ended September 30, 1997 as compared
to the same period in 1996. Income before interest, taxes and amortization of
intangibles as a percentage of revenue decreased to 5.4% for the nine months
ended September 30, 1997 from 9.8% for the same period in 1996.

       Net loss. Net loss increased $0.8 million or 61.5% to $2.1 million for
the nine months ended September 30, 1997 from $1.3 million for the nine months
in 1996. Net loss as a percentage of revenue increased from 1.6% to 2.7%.

LIQUIDITY AND CAPITAL RESOURCES

       The Company's primary capital expenditures are purchases of rental
merchandise throughout the year to replace rental merchandise which has been
rented, sold or charged-off. Total purchases of rental merchandise were $24.1
million during the nine months ended September 30, 1997. The Company's other
capital expenditures consist of purchases of property, fixtures and office
equipment, including store improvements and store expansion. Total combined
capital expenditures on these items for the nine months ended September 30, 1997
totaled $2.6 million primarily due to new stores, emphasis on remodeling
existing stores and computer upgrades.

       The Company's long-term notes (the "Notes") of $60,000,000 were issued in
connection with the acquisition of RTO and WBC in June 1995 and bear interest at
the rate of 12 7/8% per annum payable semi-annually on June 15 and December 15.
On or after June 15, 1999 the Notes will be redeemable at the option of the
Company, in whole or in part, at the redemption prices as defined, plus accrued
and unpaid interest to the date of redemption.

       On May 10, 1997 the Company canceled a revolving line of credit with
Wells Fargo Bank (the "Line of Credit") entered into May 9, 1995. The Line of
Credit bore interest at prime plus 1% and was subject to an annual commitment
fee payable to the bank on a quarterly basis of 0.5% of the unused borrowings.

       On January 7, 1997 the Company declared a cash dividend on its common
stock to be paid to the holders of record of the Company's common stock as of
February 28, 1997 payable on March 5, 1997. On or before February 28, 1997, all
Warrant holders exercised their option to convert the Warrants into the
Company's common stock.

       On March 5, 1997, the Company paid a total cash dividend of $2.0 million
to the holders of its common stock.

       The Company's primary sources of liquidity are expected to be its cash
flow from operations and short-term investments currently available. The Company
has continued to consolidate stores that operated in overlapping geographic
markets and sold certain other stores that were not located within the Company's
targeted geographic markets. The Company has opened six new stores in the three
months ended September 30, 1997 for a total of ten new stores opened
year-to-date. One additional store is expected to be opened by year-end. The
Company does not have any mandatory debt amortization requirements until the
year 2003.









                                       8
<PAGE>   11

PART II.   OTHER INFORMATION

ITEM 5.    OTHER INFORMATION

Derek S. Stamper resigned his position as President of the Company effective
September 26, 1997. No immediate replacement is planned. Instead, the Company
has established an Office of the President, consisting of Gary M. Cypres,
Chairman of the Board and Chief Executive Officer, A. Keith Wall, Vice President
and Chief Financial Officer, Jonathan D. Martin, Administrative Director of
Legal Affairs, and Stephen E. Pearson, Vice President of Operations.



ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K

   (a)         Exhibits

   3.1         Amended and Restated Certificate of Incorporation of Central
               Rents, Inc.*
   4.2         Purchase Agreement dated June 3, 1994*
   4.3         Registration Rights Agreement dated June 3, 1994*
   4.4         Indenture dated June 3, 1994*
   4.5         Form of Series A Note (Included in Exhibit 4.3)*
   4.6         Form of Series B Note (Included in Exhibit 4.3)*
   4.7         Warrant Agreement dated June 3, 1994*
   10.8        Tax Sharing Agreement*
   10.9        Administrative Services Agreement*
   10.10       Consulting Agreement*
   10.11       Central Rents, Inc. Vehicle Lease Agreement**
   10.12       Central Rents, Inc. 1994 Stock Option Plan**
   10.13       Credit Agreement by and between Central Rents, Inc. as Borrower
               and Wells Fargo Bank National Association, as Bank, dated May 9,
               1995***
   10.7        First Amendment to Credit Agreement by and between Central Rents,
               Inc. as borrower and Wells Fargo Bank National Association as
               Bank, dated November 4, 1996****
   27          Financial Data Schedule

   (b)         Reports
               No reports on Form 8-K were required to be filed by the Company
               during the three months ended September 30, 1997.



--------------------
*      Incorporated by reference from the Company's Registration Statement on
       Form S-1 (No. 33-81370)
**     Incorporated by reference from the Company's Form 10-K for the fiscal
       year ended December 31, 1994
***    Incorporated by reference from the Company's Form 10-Q for the quarterly
       period ended March 31, 1995
****   Incorporated by reference from the Company's From 10-Q for the quarterly
       period ended September 30, 1996










                                       9
<PAGE>   12

                                   SIGNATURES

       Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                                   CENTRAL RENTS, INC.


November 13, 1997                                  /s/ GARY M. CYPRES
                                                   ---------------------------
                                                   Gary M. Cypres
                                                   Chairman




November 13, 1997                                  /s/ A. KEITH WALL
                                                   ---------------------------
                                                   A. Keith Wall
                                                   Vice President
                                                   Chief Financial Officer
















                                       10

<PAGE>   13

INDEX TO EXHIBITS


Exhibit
Number                            Description

  3.1      Amended and Restated Certificate of Incorporation of Central Rents,
           Inc.*
  4.2      Purchase Agreement dated June 3, 1994*
  4.3      Registration Rights Agreement dated June 3, 1994*
  4.4      Indenture dated June 3, 1994*
  4.5      Form of Series A Note (Included in Exhibit 4.3)*
  4.6      Form of Series B Note (Included in Exhibit 4.3)*
  4.7      Warrant Agreement dated June 3, 1994*
  10.8     Tax Sharing Agreement*
  10.9     Administrative Services Agreement*
  10.10    Consulting Agreement*
  10.11    Central Rents, Inc. Vehicle Lease Agreement**
  10.12    Central Rents, Inc. 1994 Stock Option Plan**
  10.13    Credit Agreement by and between Central Rents, Inc. as Borrower and
           Wells Fargo Bank National Association, as Bank, dated May 9, 1995***
  10.7     First Amendment to Credit Agreement by and between Central Rents,
           Inc. as Borrower and Wells Fargo Bank National Association as Bank,
           dated November 4, 1996****
  27       Financial data schedule


----------------------
*      Incorporated by reference from the Company's Registration Statement on
       Form S-1 (No. 33-81370)
**     Incorporated by reference from the Company's Form 10-K for the fiscal
       year ended December 31, 1994
***    Incorporated by reference from the Company's Form 10-Q for the quarterly
       period ended March 31, 1995.
****   Incorporated by reference from the Company's Form 10-Q for the quarterly
       period ended September 30, 1996.