================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  -------------

                                    FORM 10-Q

                                  -------------



           (Mark One)

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

                  For the quarterly period ended March 31, 2000

                                       OR

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

                                 --------------

                         Commission File Number 0-22026

                                 RENT-WAY, INC.
             (Exact name of registrant as specified in its charter)

                                  -------------

        Pennsylvania                                    25-1407782
        ------------                                    ----------
(State or other jurisdiction               (I.R.S. Employer Identification No.)
        of incorporation)

                   One RentWay Place, Erie, Pennsylvania 16505
                   -------------------------------------------
                    (Address of principal executive offices)

                                 (814) 455-5378
                                 --------------
                         (Registrant's telephone number)


        Indicate by check mark whether the  registrant (1) has filed all reports
required 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
   ----------------            ---------------


        Indicate  the  number  of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date.

                  Class                       Outstanding as of April 25, 2000
              ------------                    --------------------------------
              Common Stock                               23,662,650



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<PAGE>

<TABLE>
<CAPTION>


                                 RENT-WAY, INC.



                                                                                                                  Page
                                                                                                                  ----
Part I            Financial Information

                  Item 1.  Condensed Consolidated Financial Statements

                           Condensed Consolidated Balance Sheets as of March 31, 2000 (unaudited)
<S>                                  <C> <C>                                                                        <C>
                           and September 30, 1999                                                                   3

                           Condensed Consolidated Statements of Operations, Three and Six Months
                           Ended March 31, 2000 and 1999 (unaudited)                                                4

                           Condensed Consolidated Statements of Cash Flows, Six Months Ended
                           March 31, 2000 and 1999(unaudited)                                                       5

                           Notes to Condensed Consolidated Financial Statements (unaudited)                         6

                  Item 2.  Management's Discussion and Analysis
                           of Financial Condition and Results of Operations                                        12

                  Item 3.  Quantitative and Qualitative Disclosures About Market Risk                              19

Part II           Other Information

                  Item 1.  Material Developments in Connection With Legal Proceedings                              20

                  Item 2.  Changes in Securities and Use of Proceeds                                               20

                  Item 4.  Submission of Matters to Vote of Security Holders                                       20

                  Item 6.  Exhibits and Reports on Form 8-K                                                        21

                  Signatures                                                                                       22


</TABLE>

<PAGE>


<TABLE>
<CAPTION>



                                                         RENT-WAY, INC.

                                             CONDENSED CONSOLIDATED BALANCE SHEETS
                                                  (all dollars in thousands)



                                                                                        March 31,              September 30,
                                                                                          2000                     1999
                                                                                      -------------            -------------
                                                                                       (unaudited)


ASSETS

<S>                                                                                 <C>                     <C>
Cash                                                                                $         6,587         $         8,646
Prepaid expenses                                                                             15,565                   9,610
Rental merchandise, net                                                                     260,300                 202,145
Property and equipment, net                                                                  55,622                  50,578
Goodwill, net                                                                               308,012                 305,900
Deferred financing costs, net                                                                 2,756                   3,688
Non-compete and prepaid consulting fees, net                                                  4,393                   5,494
Other assets                                                                                 19,548                  11,333
                                                                                    ---------------         ---------------
        Total assets                                                                $       672,783         $       597,394
                                                                                    ===============         ===============


LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
Accounts payable                                                                    $        11,648         $         8,417
Other liabilities                                                                            14,034                  15,861
Income tax payable                                                                           11,985                   2,316
Deferred income taxes                                                                         4,397                   5,218
Debt                                                                                        312,125                 288,130
                                                                                    ---------------         ---------------
        Total liabilities                                                                   354,189                 319,942

Contingencies (see note 9)                                                                        -                       -


Shareholders' equity:
Preferred stock, without par value; 1,000 shares authorized;
     no shares issued and outstanding                                                             -                       -
Common stock, without par value; 50,000 shares
     authorized; 23,653 and 21,976 shares issued and
     outstanding, respectively                                                              276,841                 256,755
Retained earnings                                                                            41,753                  20,697
                                                                                    ---------------         ---------------
        Total shareholders' equity                                                          318,594                 277,452
                                                                                    ---------------         ---------------
        Total liabilities and shareholders' equity                                  $       672,783         $       597,394
                                                                                    ===============         ===============











                                The accompanying notes are an integral part of these financial statements.

</TABLE>

<PAGE>

<TABLE>
<CAPTION>



                                                       RENT-WAY, INC.

                                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (all dollars in thousands, except per share data)


                                                             For the three months ended              For the six months ended
                                                                      March 31,                             March 31,
                                                               2000               1999                2000                1999
                                                               ----               ----                ----                ----
                                                                     (unaudited)                             (unaudited)


Revenues:
<S>                                                          <C>               <C>                 <C>                 <C>
Rental revenue                                               $   127,019       $   109,237         $  247,001          $   216,467
Other revenue                                                     21,868            16,513             42,797               33,243
                                                             -----------       -----------         ----------          -----------
       Total revenues                                            148,887           125,750            289,798              249,710

Costs and operating expenses:
Depreciation and amortization:
    Rental merchandise                                            36,317            32,140             67,476               63,464
    Property and equipment                                         3,876             2,240              7,587                4,425
    Amortization of goodwill and other intangibles                 3,278             2,454              6,537                4,949
Salaries and wages                                                35,148            32,157             71,305               65,485
Advertising                                                        5,882             6,190             11,491               13,977
Occupancy                                                         10,980             8,133             21,289               16,280
Name change expense                                                   --                --                 --                   86
Business combination costs                                            --               432                 --               16,800
Other operating expenses                                          28,179            25,651             56,322               54,978
                                                             -----------       -----------         ----------          -----------
        Total costs and operating expenses                       123,660           109,397            242,007              240,444
                                                             -----------       -----------         ----------          -----------
        Operating income                                          25,227            16,353             47,791                9,266
Other income (expense):
Interest expense                                                  (7,146)           (4,172)           (12,974)              (7,785)
Equity in loss of subsidiary                                        (197)               --               (197)                  --
Interest income                                                       70                 3                 84                   29
Other income (expense), net                                          (52)              (29)              (198)                (220)
                                                             -----------       -----------         ----------          -----------
       Income before income taxes and extraordinary item          17,902            12,155             34,506                1,290
Income tax expense                                                 6,976             5,040             13,450                3,705
                                                             -----------       -----------         ----------          -----------
        Income (loss) before extraordinary item                   10,926             7,115             21,056               (2,415)
Extraordinary item, net of tax benefit                                --                --                 --                 (519)
                                                             -----------       -----------         ----------          -----------
Net income (loss)                                            $    10,926       $     7,115         $   21,056          $    (2,934)
                                                             ===========       ===========         ==========          ===========


Earnings  (loss) per common  share (Note 2):
Basic  earnings  (loss) per common share:
     Income (loss) before extraordinary item                 $      0.48       $      0.34         $     0.94          $     (0.11)
                                                             ===========       ===========         ==========          ===========
     Net income (loss)                                       $      0.48       $      0.34         $     0.94          $     (0.14)
                                                             ===========       ===========         ==========          ===========
Diluted earnings (loss) per common share:
     Income (loss) before extraordinary item                 $      0.46       $      0.32         $     0.90          $     (0.11)
                                                             ===========       ===========         ==========          ===========
     Net income (loss)                                       $      0.46       $      0.32         $     0.90          $     (0.14)
                                                             ===========       ===========         ==========          ===========

Weighted average common shares outstanding:
     Basic                                                        22,673            21,125             22,326               21,166
                                                             ===========       ===========         ==========          ===========

     Diluted                                                      23,920            23,142             23,834               21,166
                                                             ===========       ===========         ==========          ===========


                               The accompanying notes are an integral part of these financial statements.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                       RENT-WAY, INC.

                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (all dollars in thousands)

                                                                                            For the six months ended
                                                                                                    March 31,
                                                                                          2000                    1999
                                                                                       ----------              ----------
                                                                                       (unaudited)             (unaudited)

Operating activities:

<S>                                                                                 <C>                       <C>
Net income (loss)                                                                   $      21,056            $       (2,934)
Adjustments to reconcile net income (loss)
 to net cash used in operating activities:
    Depreciation and amortization                                                          81,817                    73,045
    Equity in loss of subsidiary                                                              197                        --
    Deferred income taxes                                                                    (821)                      512
    Extraordinary item                                                                         --                       519
    Changes in assets and liabilities:
    Prepaid expenses                                                                       (5,955)                   (2,351)
    Rental merchandise                                                                   (124,931)                  (89,851)
    Non-compete and prepaid consulting fees                                                 1,101                     1,349
    Income tax receivable                                                                      --                     1,529
    Other assets                                                                              757                     2,741
    Accounts payable                                                                       (3,307)                    1,011
    Income taxes payable                                                                    9,669                     3,573
    Other liabilities                                                                      (2,269)                      677
                                                                                    -------------            --------------
        Net cash used in operating activities                                             (22,686)                  (10,180)


Investing activities:
    Purchase of businesses, net of cash acquired                                          (16,159)                     (589)
    Purchases of property and equipment                                                   (12,631)                  (10,383)
    Loans to related parties                                                               (1,917)                       --
                                                                                    -------------            --------------
        Net cash used in investing activities                                             (30,707)                  (10,972)

Financing activities:
    Proceeds from borrowings                                                              103,000                   267,142
    Payments on borrowings including early extinguishment                                 (59,005)                 (248,919)
    Book overdraft                                                                          6,538                        --
    Deferred finance costs                                                                     --                    (1,334)
    Proceeds from common stock issuance                                                       801                     1,702
                                                                                    -------------            --------------
       Net cash provided by financing activities                                           51,334                    18,591
                                                                                    -------------            --------------
       Decrease in cash                                                                    (2,059)                   (2,561)

Cash at beginning of period                                                                 8,646                     5,326
                                                                                    -------------            --------------
Cash at end of period                                                               $       6,587            $        2,765
                                                                                    =============            ==============

Supplemental disclosure of noncash financing activity:
   Common stock issed to extinguish debt                                            $      20,000            $           --
                                                                                    =============            ==============




                             The accompanying notes are an integral part of these financial statements.

</TABLE>
<PAGE>



                                 RENT-WAY, INC.

         Notes to Unaudited Condensed Consolidated Financial Statements
                (all dollars in thousands, except per share data)

1.    Basis of Presentation:

    Rent-Way,  Inc. (the  "Company" or  "Rent-Way")  is a corporation  organized
under the laws of the Commonwealth of Pennsylvania. The Company operates a chain
of  rental-purchase  stores that rent durable  household  products  such as home
entertainment equipment, furniture, major appliances and jewelry to consumers on
a weekly or monthly basis. The  accompanying  unaudited  condensed  consolidated
financial  statements have been prepared in accordance with the  instructions to
Form 10-Q, and therefore, do not include all information and notes necessary for
a fair presentation of financial position,  results of operations and cash flows
in conformity with generally accepted accounting  principles.  In the opinion of
management,  all  adjustments  (which,  except as discussed  herein,  consist of
normal recurring  adjustments),  which are necessary for a fair statement of the
financial  position,  results of  operations  and cash flows of the Company have
been made. The results of operations for the interim periods are not necessarily
indicative  of the results for the full year.  Certain  amounts in the March 31,
1999,  financial  statements have been  reclassified to conform to the March 31,
2000, presentation.

    The condensed  consolidated financial statements include the accounts of the
Company  and  its  wholly-owned   subsidiaries.   All  significant  intercompany
transactions and balances have been eliminated.

    The Company has no items of other comprehensive income.

    In 1999, the Company adopted  Statement of Financial  Accounting  Standards,
("SFAS")  No. 131,  "Disclosures  about  Segments of an  Enterprise  and Related
Information".  This statement  requires that public business  enterprises report
certain  information about their products and services,  the geographic areas in
which they operate,  and their major customers.  During fiscal 1999, the Company
determined  it had only one  segment  and the  adoption  of SFAS No.  131 had no
impact on the  consolidated  financial  statements  and the  related  disclosure
information. The acquisition of dPi Teleconnect LLC (see Note 4) resulted in the
recognition of a separate operating segment (see Note 5).

    These  financial  statements  and  the  notes  thereto  should  be  read  in
conjunction  with the Company's  audited  financial  statements  included in its
Annual Report on Form 10-K for the fiscal year ended September 30, 1999.

    In June 1998,  the FASB  issued  SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging Activities"  effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. This Statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other  contracts,   (collectively   referred  to  as
derivatives)  and for hedging  activities.  It requires that an entity recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position and measure those  instruments  at fair value.  In June 1999,  the FASB
issued   SFAS   No.   137,   "Accounting   for   Derivative    Instruments   and
Hedging-Activities-Deferral  of the Effective Date of SFAS No. 133-an  Amendment
of FASB  Statement  133."  This  Statement  delays the  effective  date for this
standard  until  fiscal  years  beginning  after June 15,  2000.  The Company is
currently evaluating the provisions of this Statement.

    The Accounting  Standards  Executive  Committee  Statement of Position 98-5,
"Accounting for the Costs of Start-up Activities" ("SOP 98-5"),  issued in April
1998 and  effective  for fiscal  years  beginning  after  December 15, 1998 with
earlier application permitted, provides guidance on financial reporting of start
up costs and  organization  costs. The Company adopted this statement on October
1,  1999,  resulting  in  no  significant  effect  on  the  Company's  financial
statements.

    In December  1999,  the  Securities  and  Exchange  Commission  issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial  Statements." The
Company is in the process of  determining  the impact this adoption will have on
its consolidated financial statements.


<PAGE>


                                 RENT-WAY, INC.

   Notes to Unaudited Condensed Consolidated Financial Statements - continued
               (all dollars in thousands, except per share data)

2.   Earnings (loss) per Common Share:

    Basic  earnings  (loss) per common  share is computed  using  income  (loss)
  available to common  shareholders  divided by the weighted  average  number of
  common  shares  outstanding.  Diluted  earnings  (loss)  per  common  share is
  computed  using income (loss)  available to common  shareholders  adjusted for
  anticipated  interest  savings,  net of related  taxes,  on  conversion of the
  Company's convertible  subordinated debentures and the weighted average number
  of shares  outstanding  is  adjusted  for the  potential  impact  of  options,
  warrants and the  convertible  subordinated  debentures  where the effects are
  dilutive. Because operating results were a loss for the six month period ended
  March 31, 1999, basic and diluted loss per common share were the same.

    The  following  table  discloses  the   reconciliation   of  numerators  and
  denominators  of the  basic and  diluted  earnings  (loss)  per  common  share
  computation:

<TABLE>
<CAPTION>

                                                                       For the three months          For the six months
                                                                               ended                        ended
                                                                             March 31,                    March 31,
                                                                            (unaudited)                  (unaudited)
                                                                   --------------------------  ---------------------------
             COMPUTATION OF EARNINGS (LOSS) PER SHARE:                 2000           1999          2000          1999
             -----------------------------------------             ------------   -----------  ------------  -------------

             BASIC
<S>                                                                <C>            <C>           <C>           <C>
             Earnings (loss) applicable to common shares........    $    10,926    $      7,115  $    21,056   $     (2,934)
                                                                    ===========    ============  ===========   ============
             Weighted average number of common shares
               outstanding during the period....................         22,673          21,125       22,326         21,166
                                                                    ===========    ============  ===========   ============

             Basic earnings (loss) per common share:
               Earnings (loss) before extraordinary item.........   $      0.48    $       0.34  $      0.94   $      (0.11)
                                                                    ===========    ============  ===========   ============
               Net income (loss).................................   $      0.48    $       0.34  $      0.94   $      (0.14)
                                                                    ===========    ============  ===========   ============


             DILUTED
             Earnings (loss) applicable to common shares.........   $    10,926    $      7,115  $    21,056   $     (2,934)
             Interest on 7% convertible debentures (net of tax)..            70             210          280             --
                                                                    -----------    ------------  -----------   ------------
             Earnings (loss) applicable for diluted earnings per
             share...............................................   $    10,996    $      7,325  $    21,336   $     (2,934)
                                                                    ===========    ============  ===========   ============
             Weighted average number of common shares
               outstanding during the period used in basic
               calculation.......................................        22,673          21,125       22,326         21,166
             Shares issuable upon exercise of stock options,
               warrants and escrowed shares......................           360             521          315             --
             Shares issued on conversion of 7% convertible
               debentures........................................           887           1,496        1,193             --
                                                                    -----------    ------------  -----------   ------------
             Weighted average number of shares used in
               calculation  of diluted earnings (loss) per share.        23,920          23,142       23,834         21,166
                                                                    ===========    ============  ===========   ============

             Earnings (loss) per common share:
               Earnings (loss) before extraordinary item.........   $      0.46    $       0.32  $      0.90   $      (0.11)
                                                                    ===========    ============  ===========   ============
               Net income (loss).................................   $      0.46    $       0.32  $      0.90   $      (0.14)
                                                                    ===========    ============  ===========   ============
</TABLE>


3.  Mergers and Acquisitions:

    On March 22, 2000, the Company purchased a portion of the rental merchandise
and rental  contracts  of ABC  Television  and  Appliance  Rental,  Inc.,  doing
business as Prime Time Rentals  ("Prime Time"),  a thirty-store  rental-purchase
chain.  The Company  purchased  the assets of ten stores  located in Alabama and
Tennessee  with  annual  revenues  of  approximately   $3,800  in  exchange  for
consideration of $3,000 in cash. Pursuant to the terms of the acquisition,  $400
of the purchase  price was placed in escrow,  subject to the terms of the escrow
agreement to satisfy  sellers'  representations  and warranties and any purchase
price  adjustments.  The acquisition was accounted for using the purchase method
of accounting.  Prime Time's assets were recorded at their estimated fair values
at the date of the  acquisition.  The  excess  of the fair  value of net  assets
acquired,  ("goodwill")  of  $2,341  is  being  amortized  over  20  years  on a
straight-line  basis.  The total  cost of net  assets  acquired  was  $3,000 and
consisted of assets of $3,101 less acquisition costs of $101. Assets acquired at
estimated fair value,  other than goodwill,  include rental  merchandise of $700
and a  non-compete  agreement of $60. The Condensed  Consolidated  Statements of
Operations for the three and six months ended March 31, 2000 include the results
of operations of Prime Time since the date of the acquisition.


<PAGE>


                                 RENT-WAY, INC.

   Notes to Unaudited Condensed Consolidated Financial Statements - continued
               (all dollars in thousands, except per share data)

3.  Mergers and Acquisitions (continued):

     On September 23, 1999, the Company  acquired all of the outstanding  shares
of RentaVision,  Inc.  ("RentaVision"),  a  rental-purchase  chain located in 16
states with annual revenues of approximately  $75,000. The consideration paid in
exchange for all the outstanding shares of RentaVision was $73,874 consisting of
$68,774 in cash and 278,801  shares of the  Company's  common stock  (restricted
shares).  Pursuant to the terms of the  purchase  agreement,  181,201  shares of
common stock  equivalent  to $4,000 of the  purchase  price was placed in escrow
subject to the terms and conditions of the escrow  agreement to secure  seller's
representations  and warranties and any purchase price adjustments.  As of March
31, 2000,  the Company had not released any funds from the escrow account due to
final  settlement of the purchase price. The acquisition was accounted for using
the purchase method of accounting.  RentaVision's  assets and  liabilities  were
recorded at their fair values as of the date of the  acquisition.  The excess of
the  acquisition  cost over the estimated fair value of the net assets  acquired
("goodwill")  of $90,144 is being  amortized  on a  straight-line  basis over 30
years.  The total cost of the net assets  acquired was $73,874 and  consisted of
assets of $106,134 less liabilities  assumed of $25,610 and acquisition costs of
$6,650.  Assets acquired (at fair value) other than goodwill consisted primarily
of rental  merchandise  of $12,267,  non-compete  agreement of $1,000,  customer
contracts of $1,200, cash of $725, and other assets of $798. Liabilities assumed
(at fair value) consisted  primarily of debt of $21,527,  accrued liabilities of
$3,125, and trade accounts payable of $958. The Condensed Consolidated Statement
of  Operations  for the three and six months  ended March 31, 2000  includes the
results of operations of RentaVision for the entire period.

    On June 30,  1999,  the  Company  acquired  all the  outstanding  shares  of
America's Rent-To-Own Center, Inc.,  ("America's  Rent-To-Own").  At the time of
the acquisition,  America's  Rent-To-Own  operated a chain of 21 rental-purchase
stores located in Arkansas,  Kansas, Missouri, and Oklahoma with annual revenues
of  approximately  $8,000.  The  consideration  paid  in  exchange  for  all the
outstanding shares of America's  Rent-To-Own  consisted of 231,140 shares of the
Company's  common  stock  (restricted  shares).  Pursuant  to the  terms  of the
purchase  agreement  approximately $800 or 32,454 shares of the Company's common
stock were placed in escrow  subject to the terms and  conditions  of the escrow
agreement to secure  seller's  representations  and  warranties and any purchase
price adjustments.  As of March 31, 2000, the Company had not released any funds
from the escrow  account due to final  settlement  of the  purchase  price.  The
acquisition was accounted for using the purchase method of accounting. America's
Rent-To-Own assets and liabilities were recorded at their fair value at the date
of the  acquisition.  The excess of the acquisition  cost over the fair value of
net assets  acquired,  ("goodwill")  of $4,847 is being  amortized on a straight
line basis over 30 years.  The total cost of the net assets  acquired was $4,838
and  consisted  of assets of  $7,273  less  liabilities  assumed  of $2,149  and
acquisition costs of $286. Assets acquired,  other than goodwill (at fair value)
consisted of rental  merchandise  of $1,269,  receivables  of $632,  prepaid and
other assets of $65, a deferred tax asset of $400,  and a non-compete  agreement
of $60. Liabilities assumed (at fair value) consisted of debt of $1,295, accrued
liabilities of $474 and trade  accounts  payables of $380. The Company is in the
process of finalizing the purchase price allocation.  The Condensed Consolidated
Statement  of  Operations  for the three and six  months  ended  March 31,  2000
includes  the results of  operations  of  America's  Rent-To-Own  for the entire
period.

4.  dPi Teleconnect L.L.C. Acquisition:

    On January 4, 2000, the Company  acquired a 49% interest in dPi  Teleconnect
L.L.C.  ("DPI").  DPI, a privately  held  Delaware  limited  liability  company,
provides  prepaid local phone service on a month by month basis. In exchange for
its 49% interest,  the Company paid  consideration of $6,400 in cash. As part of
the purchase  agreement  with DPI, the Company  retains an option to purchase an
additional 21% interest, which it will exercise pending receipt of various state
and regulatory  approvals.  The  consideration  for the  additional  interest is
$1,100 in cash. As of March 31, 2000,  the Company had advanced this  additional
consideration  to the  principals of DPI in the form of a  non-interest  bearing
note. In addition to the option to increase its ownership interest,  the Company
has  agreed to fund  working  capital  requirements  for DPI over the next three
years,  for a maximum  amount of $3,000 at the higher of the prime rate plus 200
basis  points or the rate at which the  Company is able to borrow  funds.  As of
March 31, 2000, the Company paid the first  installation  of working  capital to
DPI in the amount of $1,000.  The DPI  acquisition  has been accounted for using
the equity method in accordance with APB No. 18. When the Company  exercises its
option to acquire the additional 21%, the financial statements will be presented
on a consolidated  basis.  The excess of the acquisition cost over the estimated
fair value of net assets acquired ("goodwill") of $6,750 is being amortized on a
straight-line  basis over 15 years.  The total cost of net liabilities  acquired
was $149 with  acquisition  costs of $201.  The  purchase  price  allocation  is
subject to refinement  upon  finalization  of the review of fair value of assets
acquired.

<PAGE>


                                 RENT-WAY, INC.

   Notes to Unaudited Condensed Consolidated Financial Statements - continued
               (all dollars in thousands, except per share data)


5.  Segment Information:

    Rent-Way, Inc. is a national rental-purchase chain, which provides a variety
of services to its  customers  including  rental of  house-hold  items and local
telephone  service on a week by week or month by month  basis.  The  Company has
determined  that  its  reportable  segments  are  those  that  are  based on the
Company's  method of internal  reporting,  which  disaggregates  its business by
product category.  The Company's  reportable segments are: household rentals and
prepaid  telephone  service.  Its  household  rental  segment  rents  name brand
merchandise such as furniture,  appliances,  electronics and computers on a week
by week or month by month basis. Its prepaid  telephone service segment provides
a local dial tone on a month by month basis.

    The financial  results of the Company's  segments follow the same accounting
policies as described in "Summary of Significant  Accounting Policies" (see Note
1). The information  presented below does not include the results of the prepaid
telephone service segment prior to January 4, 2000 (see Note 4).

<TABLE>
<CAPTION>

                                                                 Rental         Phone          Total
               For the three months ended March 31, 2000         Segment        Segment        Segments
               -----------------------------------------         -------        -------        --------

<S>                                                             <C>            <C>            <C>
          Total revenue.................................        $ 148,887      $   3,592      $  152,479
                                                                =========      =========      ==========
          Operating income (loss).......................        $  25,227      $    (395)     $   24,832
                                                                =========      =========      ==========
          Net income (loss).............................        $  11,123      $    (403)     $   10,720
                                                                =========      =========      ==========

               For the six months ended March 31, 2000
               ---------------------------------------

          Total revenue.................................        $ 289,798      $   3,592      $  293,390
                                                                =========      =========      ==========
          Operating income (loss).......................        $  47,791      $    (395)     $   47,396
                                                                =========      =========      ==========
          Net income (loss).............................        $  21,253      $    (403)     $   20,850
                                                                =========      =========      ==========
             Total Assets...............................        $ 672,980      $   1,261      $  674,241
                                                                =========      =========      ==========

</TABLE>


The  following  is a  reconciliation  of segment  information  to the  Company's
Condensed Consolidated totals:


<TABLE>
<CAPTION>



                                                            Period Ended March 31, 2000
                                                            ---------------------------
                                                          Three months         Six months
                                                          ============         ==========

          Total revenue:
<S>                                                       <C>                  <C>
               Total segments...........................  $    152,479         $   293,390
               Elimination of non-consolidated revenue..        (3,592)             (3,592)
                                                          ------------         -----------
               As reported..............................  $    148,887         $   289,798
                                                          ============         ===========

          Net income:
               Total segments...........................  $     10,720         $    20,850
               Equity in loss of subsidiary.............          (197)               (197)
               Elimination of non-consolidated loss.....           403                 403
                                                          ------------         -----------
               As reported..............................  $     10,926         $    21,056
                                                          ============         ===========

          Total assets at March 31, 2000:
               Total segments...........................                       $   674,241
               Equity in loss of subsidiary.............                              (197)
               Elimination of non-consolidated assets...                            (1,261)
                                                                               -----------
               As reported..............................                       $   672,783
                                                                               ===========

</TABLE>



<PAGE>

                                RENT-WAY, INC.

   Notes to Unaudited Condensed Consolidated Financial Statements - continued
                (all dollars in thousands, except per share data)


6.  Debt:

     On March 29, 2000, the Company made the required $3,750  principal  payment
on its Term Notes A and the required $250 principal payment on its Term Notes B.

    As of March 31, 2000, the Company's debt under both the euro-rate option and
base-rate option plans were as follows:


<TABLE>
<CAPTION>





                         Borrowing option plan                            Amount                   Rate         Expiration Date
                         ---------------------                            ------                   ----         ---------------

<S>                                                                <C>                             <C>             <C>   <C>
             Euro-rate tranche..................................   $        117,500                8.78%           06/30/00
             Euro-rate tranche..................................             99,500                9.78%           06/30/00
             Euro-rate tranche..................................             60,000                8.78%           06/30/00
             Base-rate..........................................             35,000               10.00%           09/30/04
                                                                   ----------------
                                                                   $        312,000
                                                                   ================


</TABLE>



    At March 31, 2000, the Company had $95,000 principal amount of the revolving
credit facility  outstanding  under the Facility and $1,700 in letters of credit
outstanding.  At March 31, 2000 there was $3,300 of unused  revolving  notes and
letters of credit available under the Facility.

    By notice to the holders thereof dated December 10, 1999, the Company called
for a  mandatory  redemption  of its $20  million  7%  Convertible  Subordinated
Debentures  due 2007.  The  Company  had the right to redeem the  debentures  on
February  5,  2000,  at a price of 103%.  On  February  6,  2000,  $20,000 of 7%
Subordinated Convertible Debentures converted into 1,495 shares of the Company's
common  stock.  The  debentures  were  convertible  into shares of common stock,
without par value,  at a  conversion  price of $13.37 per share at the option of
the shareholders at any time on notice therefrom. Unamortized deferred financing
costs in the  amount of $715 were  charged  to  equity  in  connection  with the
conversion.

7.  Derivative Financial Instruments:

    The fair value of the interest rate swap agreements based on settlement cost
as estimated by independent dealers as of March 31, 2000 is as follows:


<TABLE>
<CAPTION>


                                                                             Notional         Fair
                                                                              Amount          Value
                                                                            ----------       --------

<S>                                                                          <C>              <C>
        Interest rate swap, National City Bank........................       $  30,000        $    929
        Interest rate swap, Bank of America...........................       $  20,000        $    217
        Interest rate swap, Manufacturers' and Traders Trust Company..       $  10,000        $    302
        Interest rate swap, Harris Bank...............................       $  20,000        $  1,303
        Interest rate swap, SunTrust Bank.............................       $  10,000        $    646
        Interest rate swap, LaSalle Bank..............................       $  10,000        $    649
        Interest rate swap, Bank of America...........................       $  10,000        $    640
        Interest rate swap, Harris Bank...............................       $  10,000        $    641
        Interest rate swap, PNC Bank..................................       $   5,000        $     34


</TABLE>

8.  Related Party Transactions:

    As of March 31, 2000,  the Company had full recourse notes  receivable  (the
"Notes") of $1,255 from various officers and directors of the Company. The Notes
were  approved  by the Board of  Directors  for the  purpose of  certain  option
exercises.  The Notes  are  reflected  as a  reduction  to  common  stock in the
Company's condensed consolidated balance sheets.

    The Company acts as an agent for DPI, in regard to revenue  collection.  The
Company  collects the revenue from the DPI  customer,  retains a commission  and
remits the balance to DPI. For the three- and six-month periods ending March 31,
2000, the Company's commission was $180 and $297 respectively.


<PAGE>

                                RENT-WAY, INC.

   Notes to Unaudited Condensed Consolidated Financial Statements - continued
                (all dollars in thousands, except per share data)

9.  Contingencies:

    The  Company  is  subject to legal  proceedings  and claims in the  ordinary
course of its business that have not been finally adjudicated.  Certain of these
cases have resulted in contingent liabilities ranging from $1,800 to $4,600. The
majority of such claims are, in the opinion of management,  covered by insurance
policies  and  therefore  should  not have a  material  effect on the  financial
position,  results of  operations  or cash  flows of the  Company.  The  Company
intends to vigorously  defend itself  against the claims.  The Company  believes
that it has sufficient  insurance coverage for any damages that might be awarded
and that the final  disposition  of the action will not have a material  adverse
effect on the  financial  position,  results of  operations or cash flows of the
Company.

    Additional  claims  exist in the range of $280 to $370 for which  management
believes  it has  meritorious  defenses  but  for  which  the  likelihood  of an
unfavorable outcome is currently not determinable. In management's opinion, each
of these claims will either be indemnified by the previous shareholders of prior
acquisitions  or covered by  insurance  policies and  therefore  will not have a
material effect on the financial  position,  results of operations or cash flows
of the Company.

10.  Income Taxes:

     The  fiscal  1999   effective  tax  rate  has  been  adjusted  for  certain
non-deductible  business  combination  costs  which  have been  expensed  in the
quarter ended  December 31, 1998. As a result,  the impact on the effective rate
for the year has been entirely  reflected in the quarter ended December 31, 1998
and without these charges would have been approximately 41.5%.



<PAGE>




                                 RENT-WAY, INC.

ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (all dollars in thousands)

Overview

    Rent-Way is the second largest operator in the rental purchase industry with
1,093 stores  located in 41 states.  The Company  offers quality brand name home
entertainment equipment,  furniture,  appliances, and jewelry to customers under
full-service  rental-purchase  agreements  that generally  allow the customer to
obtain  ownership of the  merchandise at the conclusion of an agreed upon rental
period.

    On June 30, 1999, the Company acquired America's  Rent-To-Own  Center,  Inc.
("America's  Rent-To-Own").  The transaction  value was approximately $7 million
and was paid for with a combination of 231,140 shares of Rent-Way's common stock
and the assumption of certain  liabilities.  America's  Rent-To-Own  operated 21
rental-purchase  stores in  Arkansas,  Kansas,  Missouri,  and  Oklahoma and had
annual revenues of approximately $8 million.

    On September 23, 1999,  the Company  acquired all the stock of  RentaVision,
Inc.  ("RentaVision")  for  a  purchase  price  of  approximately  $74  million.
RentaVision  operated a chain of 250 rental-purchase  stores in 16 states, 50 of
which have been opened during the past year.  RentaVision had annual revenues of
approximately $75 million.

    The Company completed the management  information systems integration of all
stores acquired in the America's  Rent-To-Own  acquisition by July 31, 1999, all
stores  acquired in the  RentaVision  acquisition  by November 11, 1999, and all
stores  acquired in the Prime Time  acquisition  by April 12, 2000. In addition,
the Company consolidated all back office functions such as accounting,  payroll,
and human  resources.  The  Company  closed  and  merged 47  stores  located  in
overlapping  markets.  The Company  also  closed  RentaVision's  five  warehouse
locations.  The Company  uses a  direct-ship  policy  from their  vendors to the
stores. This policy has minimized the amount of rental merchandise not on rent.

    On January 4, 2000, the Company  acquired a 49% interest in dPi Teleconnect,
L.L.C.  ("DPI"), a privately-held  provider of prepaid local phone service.  The
Company has the option to acquire an  additional  21%  interest  upon receipt of
regulatory  approvals.  In fiscal 1999, the Company began to act as an agent for
DPI.  The  Company  successfully  tested this  service in 70 of its stores.  The
Company received the benefit of additional  traffic in these stores, as well as,
a 10%  commission  from the sale of the service.  DPI is  currently  licensed to
offer  prepaid local phone service in 21 states and is working to expand to over
40 states by the end of 2000.

    On February 6, 2000,  $20,000 in  subordinated  convertible  debentures were
converted at a  conversion  price of $13.37 per share into  1,495,986  shares of
common  stock,  with  no par  value.  The  Company  had  previously  called  the
debentures for redemption on February 5, 2000, at a price of 103%.

    On March 22,  2000,  the  Company  acquired  a portion  of the assets of ABC
television   and  Appliance   Rental  Inc.   ("Prime   Time"),   a  thirty-store
rental-purchase chain. The Company purchased the assets of ten stores located in
Alabama and Tennessee  with  estimated  annual revenue of $3,800 in exchange for
consideration of $3,000 in cash.

    Management continues to actively seek acquisition  candidates with financial
and geographic profiles consistent with the Company's growth objectives.






<PAGE>

Results of Operations

    The following  table sets forth,  for the periods  indicated,  certain items
from the Company's  unaudited Condensed  Consolidated  Statements of Operations,
expressed as a percentage of revenues.

<TABLE>
<CAPTION>


                                                              Three Months                         Six Months
                                                             Ended March 31                      Ended March 31
                                                         ----------------------------------------------------------
                                                         2000             1999               2000              1999
                                                         ----------------------------------------------------------
       Revenues:

<S>                                                       <C>            <C>                 <C>              <C>
         Rental revenue..............................     85.3%          88.0%               85.2%            86.7%
         Other revenue...............................     14.7           12.0                14.8             13.3
                                                         -----          -----               -----            -----
             Total revenues..........................    100.0          100.0               100.0            100.0

       Costs and operating expenses:
         Depreciation and amortization:
         Rental merchandise..........................     24.4           25.6                23.3             25.4
         Property and equipment......................      2.6            1.8                 2.6              1.8
         Amortization of goodwill....................      2.2            2.0                 2.3              2.0
                                                         -----          -----               -----            -----
              Total depreciation and amortization....     29.2           29.4                28.2             29.2
       Salaries and wages............................     23.6           25.6                24.6             26.2
       Advertising...................................      4.0            4.9                 4.0              5.6
       Occupancy.....................................      7.4            6.5                 7.3              6.5
       Name change expense...........................       --             --                  --              0.1
       Business combination costs....................       --            0.2                  --              6.7
       Other operating expenses......................     18.9           20.4                19.4             22.0
                                                         -----          -----               -----            -----
         Total costs and operating expenses..........     83.1           87.0                83.5             96.3
                                                         -----          -----               -----            -----
         Operating income............................     16.9           13.0                16.5              3.7
       Interest expense..............................     (4.8)          (3.3)               (4.5)            (3.1)
       Equity in loss of subsidiary..................     (0.1)            --                (0.1)              --
       Interest income...............................      0.1             --                 0.1               --
       Other income..................................     (0.1)            --                (0.1)            (0.1)
                                                         -----          -----               -----            -----
        Income before income taxes and
        extraordinary item...........................     12.0            9.7                11.9              0.5
       Income tax expense (benefit)..................      4.7            4.0                 4.6             (1.5)
                                                         -----          -----               -----            -----
         Income (loss) before extraordinary item.....      7.3            5.7                 7.3             (1.0)
       Extraordinary item............................       --             --                  --             (0.2)%
                                                         -----          -----               -----            -----
       Net income (loss).............................      7.3%           5.7%                7.3%            (1.2)%
                                                         =====          =====               =====            =====

</TABLE>


Comparison of Three Months Ended March 31, 2000 and 1999

         Total revenues.  Total revenues  increased  $23.1 million,  or 18.4% to
$148.9 million from $125.8 million. The increase is attributable to the addition
of the stores  acquired  and opened in fiscal 1999 and 2000 and  increased  same
store revenues. The stores acquired in the RentaVision and America's Rent-To-Own
acquisitions  accounted  for $21.4  million  and $2.2  million of the  increase,
respectively.  Stores opened in fiscal 1999 and 2000  accounted for $1.9 million
of the increase.  The Company experienced a 2.7% increase in same store revenues
compared to the same period last year.  Increase in same store  revenues for the
Rent-Way  stores and Home Choice  stores were 5.1% and 0.6%,  respectively.  The
increase  in  same  store  revenues  was  primarily  due to 0.9%  increase  as a
percentage of total revenues in jewelry rentals, a 0.2% increase as a percentage
of total revenues in prepaid  dialtone  service sales,  and a 0.7% increase as a
percentage of total revenues in merchandise sales offset by a 0.5% decrease as a
percentage  of total  revenues in  appliance  rentals  and a 0.2%  decrease as a
percentage of total revenues in pager  rentals.  The Company  expects  increased
same store  revenues  for the rest of the fiscal  2000 due to,  among many other
factors,  the addition of new products and services.  During the last quarter of
fiscal 1999,  the Company  added  personal  computers to its product  line.  The
Company will also act as an agent to provide  prepaid phone service through DPI.
The DPI service is  currently  offered in over 200 stores.  Management  believes
that opportunities  exist to provide additional  non-traditional  merchandise to
its customers.

         Depreciation and amortization.  Depreciation  expense related to rental
merchandise  decreased  1.2% as a  percentage  of total  revenues  to 24.4% from
25.6%. This decrease is primarily due to increases in weekly rental rates, lower
purchase  costs of rental  merchandise  due to  increased  volume,  and improved
realization of potential collectible rent. In addition,  depreciation expense as
a  percentage  of total  revenues  has shown  solid  improvement  in the  stores
acquired in the Home Choice  merger.  Acquired  merchandise  with high remaining
values  has  worked  its way out of the  Company's  system  and the  stores  are
replacing  poorly priced and termed  agreements  with new agreements  priced and
termed in accordance with Rent-Way operating procedures.

         Depreciation  expense  related to property and  equipment  increased to
2.6% as a percentage of total  revenues from 1.8%.  This increase is principally
due to the  depreciation  expense  related  to new store  signage  and  remodels
associated with the Home Choice stores, new computers and equipment installed in
the RentaVision  stores, and the computer and software costs associated with the
Company's implementation of the PeopleSoft software package in January 1999.

         Amortization  of goodwill  increased to 2.2% as a  percentage  of total
revenues  from  2.0%.  This  increase  is due to the  addition  of the  goodwill
associated with the RentaVision and America's Rent-To-Own acquisitions.

         Salaries  and wages.  Salaries  and wages  increased by $3.0 million to
$35.1 million from $32.1  million,  but decreased  2.0% as a percentage of total
revenues  to 23.6% from  25.6%.  This 2.0%  decrease  as a  percentage  of total
revenues  is due to the  Company's  ability  to spread  corporate  and  regional
managers'  payroll over an increased  store revenue  base.  The decrease is also
attributable  to the Company  bringing Home Choice  payroll and store  personnel
levels within the Company's standards. As a result of these factors, the Company
expects  a further  decline  in  salaries  and  wages as a  percentage  of total
revenues during the remainder of fiscal 2000.

         Advertising.  Advertising  expense  decreased to $5.9 million from $6.2
million and decreased to 4.0% as a percentage of total revenues from 4.9%.  This
decrease is due to the Company's ability to focus advertising efforts in cluster
markets.  It  is  also  due  to  the  Company's  participation  in  co-operative
advertising  programs with its vendors. As part of these co-operative  programs,
the  Company  is able to  recoup a portion  of its  advertising  costs  from its
vendors in the form of rebates for advertising their products in Rent-Way ads.

         Occupancy.  Occupancy  expense  increased  to $11.0  million  from $8.1
million,  or 0.9% as a  percentage  of total  revenues  to 7.4% from 6.5%.  This
increase  is  primarily  due to the  addition  of the  RentaVision  stores.  The
RentaVision  stores have lower  revenue  averages to charge  fixed  rental costs
against. The Company expects occupancy expense as a percentage of total revenues
to decrease as the RentaVision per store revenue averages increase. Fifty of the
250 stores acquired were opened in the past twelve months.

         Business  combination  costs. In conjunction  with the Company's merger
with Home Choice Holdings, Inc. (the "Merger") on December 10, 1998, the Company
incurred $0.4 million in costs in the quarter ended March 31, 1999.

         Other operating  expenses.  Other operating expenses increased to $28.2
million  from $25.7  million but  decreased  to 18.9% as a  percentage  of total
revenues from 20.4%.  This decrease is the result of the efficiencies  gained by
the Company  from its ability to spread  certain  fixed costs over an  increased
store revenue base.  These  decreased fixed costs include  liability  insurance,
legal and professional fees, state and local taxes, and office supplies.

         Operating income. Operating income increased to 16.9% of total revenues
from 13.0% of total  revenues due to the factors  discussed  above.  The Company
anticipates its operating  income to remain at or increase above 16.9% in fiscal
2000 as a result of its  continued  ability to leverage  costs over an increased
store revenue base.

         Interest  expense.  Interest  expense  increased to 4.8% from 3.3% as a
percentage of total  revenues.  This increase is mainly due to the $68.8 million
in funds  drawn on the  Company's  senior  credit  facility  to  consummate  the
RentaVision   acquisition.   In  addition,  the  Company  has  purchased  rental
merchandise at a higher rate in an effort to supplement  the  merchandise in the
RentaVision stores with newer merchandise and a broader product selection.

         Equity in earnings of  subsidiary.  In  conjunction  with the Company's
purchase  of a 49%  ownership  interest  in dPi, a charge of $197  reflects  the
unconsolidated loss for the period. The Company currently uses the equity method
to  account  for this  acquisition.  Once the  Company  exercises  the option to
acquire the additional 21%, the consolidation method of accounting will be used.

         Income  tax  expense.  Income  tax  expense  increased  to  4.7%  as  a
percentage of total revenues from 4.0% of total  revenues.  The increase was due
to an  increase  in pretax  book  income and  operating  income.  The  Company's
effective tax rate is 39.0%

     Net income.  Net income  increased to 7.3% of total  revenues  from 5.7% of
total revenues due to the factors discussed above.


<PAGE>



Comparison of Six Months Ended March 31, 2000 and 1999

         Total revenues.  Total revenues  increased  $40.1 million,  or 16.1% to
$289.8 million from $249.7 million. The increase is attributable to the addition
of the stores  acquired  and opened in fiscal 1999 and 2000 and  increased  same
store revenues. The stores acquired in the RentaVision and America's Rent-To-Own
acquisitions  accounted  for $41.4  million  and $4.1  million of the  increase,
respectively.  Stores opened in fiscal 1999 and 2000  accounted for $3.2 million
of the increase.  The Company experienced a 2.2% increase in same store revenues
compared  to the same  period  last  year.  Increase  (decrease)  in same  store
revenues  for the  Rent-Way  stores and Home Choice  stores were 4.8% and (0.4)%
respectively.  The  increase  in same  store  revenues  was  primarily  due to a
1.1%increase as a percentage of total revenues in electronics  revenues,  a 0.9%
increase as a percentage of total revenues in merchandise sales offset by a 0.6%
decrease  as a  percentage  of total  revenues in  furniture  rentals and a 0.2%
decrease as a percentage of total revenues in pager rentals. The Company expects
increased same store revenues for the rest of the fiscal 2000 due to, among many
other  factors,  the  addition of new  products  and  services.  During the last
quarter of fiscal  1999,  the Company  added  personal  computers to its product
line.  The dPi  service  is  currently  offered in over 200  stores.  Management
believes  that  opportunities   exist  to  provide  additional   non-traditional
merchandise to its customers.

         Depreciation and amortization.  Depreciation  expense related to rental
merchandise  decreased  2.1% as a  percentage  of total  revenues  to 23.3% from
25.4%. This decrease is primarily due to increases in weekly rental rates, lower
purchase  costs of rental  merchandise  due to  increased  volume,  and improved
realization of potential collectible rent. In addition,  depreciation expense as
a  percentage  of total  revenues  has shown  solid  improvement  in the  stores
acquired in the Home Choice  merger.  Acquired  merchandise  with high remaining
values  has  worked  its way out of the  Company's  system  and the  stores  are
replacing  poorly priced and termed  agreements  with new agreements  priced and
termed in accordance with Rent-Way operating procedures.

         Depreciation  expense  related to property and  equipment  increased to
2.6% as a percentage of total  revenues from 1.8%.  This increase is principally
due to the  depreciation  expense  related  to new store  signage  and  remodels
associated with the Home Choice stores, new computers and equipment installed in
the RentaVision  stores, and the computer and software costs associated with the
Company's implementation of the PeopleSoft software package in January 1999.

         Amortization  of goodwill  increased to 2.3% as a  percentage  of total
revenues  from  2.0%.  This  increase  is due to the  addition  of the  goodwill
associated with the RentaVision and America's Rent-To-Own acquisitions.

         Salaries  and wages.  Salaries  and wages  increased by $5.8 million to
$71.3 million from $65.5  million,  but decreased  1.6% as a percentage of total
revenues  to 24.6% from  26.2%.  This 1.6%  decrease  as a  percentage  of total
revenues  is due to the  Company's  ability  to spread  corporate  and  regional
managers'  payroll over an increased  store revenue  base.  The decrease is also
attributable  to the Company  bringing Home Choice  payroll and store  personnel
levels within the Company's standards. As a result of these factors, the Company
expects  a further  decline  in  salaries  and  wages as a  percentage  of total
revenues during the remainder of fiscal 2000.

         Advertising.  Advertising expense decreased to $11.5 million from $14.0
million and decreased to 4.0% as a percentage of total revenues from 5.6%.  This
decrease is due to the Company's ability to focus advertising efforts in cluster
markets.  It  is  also  due  to  the  Company's  participation  in  co-operative
advertising  programs with its vendors. As part of these co-operative  programs,
the  Company  is able to  recoup a portion  of its  advertising  costs  from its
vendors in the form of rebates for advertising their products in Rent-Way ads.

         Occupancy.  Occupancy  expense  increased  to $21.3  million from $16.3
million,  or 0.8% as a  percentage  of total  revenues  to 7.3% from 6.5%.  This
increase  is  primarily  due to the  addition  of the  RentaVision  stores.  The
RentaVision  stores have lower  revenue  averages to charge  fixed  rental costs
against. The Company expects occupancy expense as a percentage of total revenues
to decrease as the RentaVision per store revenue averages increase. Fifty of the
250 stores acquired were opened in the past twelve months.

           Name change expense.  Name change expense decreased to zero from $0.1
million. In 1997, HomeChoice launched a program to change the name of all of its
stores from the various trade names  acquired to  "HomeChoice  Lease or Own." In
connection  with this program,  Home Choice  incurred  nonrecurring  costs which
included  the  write-off  of the net  carrying  values of old signs and  branded
supplies and the expensing of new vehicle decals. The Company currently operates
under both the RentWay and HomeChoice trade names.

         Business  combination  costs. In conjunction  with the Company's merger
with Home Choice Holdings, Inc. on December 10, 1998, the Company incurred $16.8
million in costs in the six months  ended March 31, 1999.  These costs  included
investment banker fees of $6.5 million,  proxy preparation,  printing, and other
professional fees of $1.3 million,  employee severance and stay-put arrangements
of $4.5 million, due diligence and other costs of $0.9 million, costs related to
closing or disposing of duplicate corporate  headquarters,  equipment and stores
in  overlapping  markets of $2.1 million,  and the  write-off of prepaid  assets
which could not be used of $1.5 million.

         Other operating  expenses.  Other operating expenses increased to $56.3
million  from $55.0  million but  decreased  to 19.4% as a  percentage  of total
revenues  from 22.1%.  This  decrease is due in part to a decrease in  inventory
write-offs. In connection with the Merger, the Company identified a large number
of rental merchandise items, which failed to meet the accepted quality standards
of the company's operating procedures.  Accordingly,  the Company experienced an
excessive  amount of  inventory  deletions  during the three month  period ended
December  31,  1998.  The amount of these  excessive  inventory  write-offs  was
approximately $1.1 million. This decrease is also the result of the efficiencies
gained by the  Company  from its ability to spread  certain  fixed costs over an
increased  store revenue base.  These  decreased  fixed costs include  liability
insurance,  legal and  professional  fees,  state and local  taxes,  and  office
supplies.

         Operating income. Operating income increased to 16.5% of total revenues
from 3.7% of total  revenues  due to the factors  discussed  above.  The Company
anticipates its operating  income to remain at or increase above 16.9% in fiscal
2000 as a result of its  continued  ability to leverage  costs over an increased
store revenue base.

         Interest  expense.  Interest  expense  increased to 4.5% from 3.1% as a
percentage of total  revenues.  This increase is mainly due to the $68.8 million
in funds  drawn on the  Company's  senior  credit  facility  to  consummate  the
RentaVision   acquisition.   In  addition,  the  Company  has  purchased  rental
merchandise at a higher rate in an effort to supplement  the  merchandise in the
RentaVision stores with newer merchandise and a broader product selection.

         Equity in earnings of  subsidiary.  In  conjunction  with the Company's
purchase  of a 49%  ownership  interest  in dPi, a charge of $197  reflects  the
unconsolidated loss for the period. The Company currently uses the equity method
to  account  for this  acquisition.  Once the  Company  exercises  the option to
acquire the additional 21%, the consolidation method of accounting will be used.

         Income  tax  expense.  Income  tax  expense  increased  to  4.6%  as  a
percentage of total revenues from 1.5% of total  revenues.  The increase was due
to an increase in pretax income and operating  income.  The Company's  effective
tax rate is 39.0%

     Net income.  Net income increased to 7.3% of total revenues from a net loss
of 1.2% of total revenues due to the factors discussed above.

Liquidity and Capital Resources

    The Company's  capital  requirements  relate primarily to acquisitions,  new
store  openings,  and purchasing  additional  rental  merchandise  and replacing
rental  merchandise  that has been sold or is no longer  suitable for rent.  The
Company   intends  to  increase  the  number  of  stores  it  operates   through
acquisitions and new store openings. Such acquisitions will vary in size and the
Company will consider large  acquisitions that could be material to the Company.
To provide any  additional  funds  necessary  for the  continued  pursuit of its
growth strategies,  the Company may incur, from  time-to-time,  additional short
and long-term bank or other institutional  indebtedness and may issue, in public
or private transactions,  its equity and debt securities,  depending upon market
and other conditions.  There can be no assurance that such additional  financing
will be available on terms acceptable to the Company.

    Net cash used in operating activities increased to $22.7 million for the six
month period ended March 31, 2000,  from $10.2  million for the six month period
ended March 31,  1999.  This  increase  is  principally  due to a $24.0  million
increase  in net income and a $6.1  million  increase  in income  taxes  payable
offset by a $35.1 million  increase in rental  merchandise  purchases and a $3.6
million increase in prepaid expenses.

    Net cash used in  investing  activities  increased  $19.8  million  to $30.7
million in the six month period ended March 31, 2000,  compared to $11.0 million
in the six month period ended March 31, 1999.  The increase in cash used for the
purchase of business was  primarily due to the Prime Time  acquisition  for $3.1
and the purchase of DPI for $6.6.  Capital  expenditures in the six month period
ended March 31,  2000,  included  the  purchase  of new store  signage and store
remodeling  costs and the purchase of  computers  and  equipment  for the stores
acquired from RentaVision.

    The Company  has begun to  construct  a 30,000  square foot  addition to its
current  corporate  headquarters  facility.  The Company  estimates  the cost at
approximately  $3.5  million.  The  Company  plans  to fund  this  project  with
borrowings  on its senior  credit  facility.  As of March 31, 2000,  the Company
incurred $0.7 million in costs related to this project.


    Net cash provided by financing  activities increased to $51.3 million in the
six month  period  ended  March 31,  2000,  from $18.6  million in the six month
period  ended  March  31,  1999.  Cash  flows  from  financing  activities  have
historically represented the Company's financing of its long term growth.

    On September 23, 1999, the Company  amended its existing  collaterized  term
loan and  revolving  credit  facility  with a syndicate  of banks led by Bank of
Montreal and National City Bank (the "Amended  Facility").  The Amended Facility
provides for loans and letters of credit up to $325.0 million.  Borrowings under
the Amended Facility bear interest at the Company's option either at a base rate
or a LIBOR based rate. The Amended Facility requires the Company to meet certain
financial  covenants and ratios  including  maximum  leverage,  minimum interest
coverage,  minimum  tangible  net  worth,  fixed  charge  coverage,  and  rental
merchandise  usage ratios.  As of March 31, 2000,  the Company was in compliance
with all  covenants  contained  in the Amended  Facility.  As of April 17, 2000,
$312.0 million in borrowings is outstanding under the Amended Facility.

    On January 10,  2000,  the Company  acquired a 49%  interest in DPI for $6.4
million in cash.  The Company has agreed to acquire an  additional  21% interest
upon receipt of regulatory approvals.  The Company has also committed to provide
DPI $3.0 million in funds to meet working capital requirements as needed.

    Management believes that sufficient  resources will be available to meet the
Company's  short-term  cash  requirements.  The  Company  believes  that  it can
adequately fund its short-term cash needs through  borrowings  under the Amended
Facility and cash  generated  from  operations.  Cash  requirements  for periods
beyond the next twelve months depend on the Company's profitability, its ability
to manage working capital requirements, and its rate of growth.

    The  Company   recognizes  that  its  plans  to  continue  to  grow  through
acquisitions,  new store openings and new product  development will require more
cash than is currently available under its existing senior credit facility. As a
result,  the  Company  has  begun to take  steps to secure  an  increase  to its
existing facility. The Company expects to have additional financing available to
support its plans for continued growth.

Seasonality and Inflation

    Management  believes that operating  results may be subject to  seasonality.
The first  quarter  typically  has a greater  percentage  of rentals  because of
traditional  holiday  shopping  patterns.  Management  plans for these  seasonal
variances  and takes  particular  advantage  of the first  quarter  with product
promotions,  marketing campaigns,  and employee incentives.  Because many of the
Company's expenses do not fluctuate with seasonal revenue changes,  such revenue
changes may cause fluctuations in the Company's quarterly earnings.

    During the six months ended March 31, 2000, the cost of rental  merchandise,
store lease rental expense and salaries and wages have increased modestly. These
increases  have  not  had a  significant  effect  on the  Company's  results  of
operations  because the Company  has been able to charge  commensurately  higher
rental  for  its  merchandise.  This  trend  is  expected  to  continue  in  the
foreseeable future.

Recent Accounting Pronouncements

    In June 1998,  the FASB  issued  SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging Activities"  effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. This Statement  establishes  accounting and
reporting  standards for derivative  instruments,  including certain  derivative
instruments   embedded  in  other  contracts,   (collectively   referred  to  as
derivatives)  and for hedging  activities.  It requires that an entity recognize
all  derivatives  as either assets or  liabilities in the statement of financial
position and measure those  instruments  at fair value.  In June 1999,  the FASB
issued   SFAS   No.   137,   "Accounting   for   Derivative    Instruments   and
Hedging-Activities-Deferral  of the Effective Date of SFAS No. 133-an  Amendment
of FASB  Statement  133."  This  Statement  delays the  effective  date for this
standard  until  fiscal  years  beginning  after June 15,  2000.  The Company is
currently evaluating the provisions of this Statement.

    The Accounting  Standards  Executive  Committee  Statement of Position 98-5,
"Accounting for the Costs of Start-up Activities" ("SOP 98-5"),  issued in April
1998 and  effective  for fiscal  years  beginning  after  December 15, 1998 with
earlier application permitted, provides guidance on financial reporting of start
up costs and organization  costs.  The Company adopted this statement  effective
October 1, 1999,  resulting in no significant effect on the Company's  financial
statements.

    In December  1999,  the  Securities  and  Exchange  Commission  issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial  Statements." The
Company is in the process of  determining  the impact this adoption will have on
its consolidated financial statements.


Year 2000 Issues

    As of the date  hereof,  the Company  has not  experienced  any  significant
business disruptions as a result of Year 2000 issues.  However, Year 2000 issues
may arise that are not  apparent  currently.  The  Company  utilizes  management
information  systems and software  technology  that may be affected by Year 2000
issues  throughout  its  operations.  During  fiscal 1998,  the Company began to
implement  plans to ensure  those  systems  continue  to meet its  internal  and
external  requirements.  All  the  Company's  remote  locations  operate  on  an
internally  developed point of sale system. This system utilizes a peer to peer,
Windows 95 local area network.  Communications  between remote locations and the
corporate  office are handled via e-mail through the internet.  After completion
of testing,  the Company  has  determined  that its point of sale system is Year
2000  compliant.  As a result of the  Company's  growth,  a decision was made to
upgrade  information  systems at the  corporate  office.  The  installation  and
implementation  of  a  Year  2000  compliant  PeopleSoft  software  package  was
completed in January 1999. This package  encompasses  all accounting  functions,
payroll,  human resources and benefit  administration  requirements.  The system
operates  in an n-tier  environment  on a Windows NT  platform.  The cost of all
hardware,  software,  training and implementation  costs were approximately $1.5
million,  the majority of which was incurred in fiscal 1998.  In addition to the
PeopleSoft  package,  the  Company  has  implemented  a Year 2000  compliant  J.
Driscoll Package for cash management. This package operates on the same platform
as the PeopleSoft package.

      The Company developed questionnaires and contacted key suppliers regarding
their  Year 2000  compliance  to  determine  any impact on its  operations.  The
Company will continue to monitor its  suppliers on this matter.  The Company has
reviewed  and  continues  to review its  non-information  technology  systems to
determine  the extent of any changes  that may be necessary  and  believes  that
there will be minimal changes required for compliance.

    The Company does not foresee significant risks associated with its Year 2000
compliance at this time.  As the  Company's  plan was and remains to address its
significant  Year  2000  issues  prior to  being  affected  by them,  it has not
developed a comprehensive  contingency plan.  However, if the Company identifies
significant  risks  related  to Year  2000  issues,  the  Company  will  develop
contingency plans as deemed necessary at that time.

Cautionary Statement

    This  Report  on Form 10-Q and the  foregoing  Management's  Discussion  and
Analysis of  Financial  Condition  and Results of  Operations  contains  various
"forward looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended.  Forward-looking  statements represent the Company's expectations or
beliefs concerning future events. Any  forward-looking  statements made by or on
behalf of the Company are subject to uncertainties  and other factors that could
cause  actual  results  to  differ   materially  from  such  statements.   These
uncertainties and other factors include, but are not limited to, (i) the ability
of the Company to acquire additional  rental-purchase stores on favorable terms,
(ii) the  ability of the  Company to improve the  performance  of such  acquired
stores and to integrate  such  acquired  stores into the  Company's  operations,
(iii) the ability of the Company to improve the  performance  of the Home Choice
stores  and other  stores  acquired  in fiscal  1999 and fiscal  2000,  (iv) the
Company's  ability to open new stores in  favorable  locations  and on favorable
terms and to cause such  stores to become  profitable  in a timely  manner or at
all,  and (v) the  impact of state and  federal  laws  regulating  or  otherwise
affecting the rental-purchase transaction.

    Undue reliance should not be placed on any  forward-looking  statements made
by or on behalf of the  Company  as such  statements  speak  only as of the date
made.  The Company  undertakes no  obligation  to publicly  update or revise any
forward-looking  statement,   whether  as  a  result  of  new  information,  the
occurrence of future events or otherwise.



<PAGE>



ITEM 3. Quantitative and Qualitative Disclosures About Market Risk

    The  Company's  major  market  risk  exposure is  primarily  due to possible
fluctuations in interest rates.  The Company's policy is to manage interest rate
risk by  utilizing  interest  rate swap  agreements  to convert a portion of the
floating  interest rate debt to fixed interest rates. The Company does not enter
into derivative financial instruments for trading or speculative  purposes.  The
interest rate swap agreements are entered into with major financial institutions
thereby minimizing the risk of credit loss.

    The  following  table  presents   information  about  the  Company's  market
sensitive  financial  instruments.  The  table  illustrates  the  principle  and
notional amounts,  as well as the date of maturity,  actual and weighted average
pay and receive rates for all  significant  financial and  derivative  financial
instruments in effect as of March 31, 2000:

<TABLE>
<CAPTION>



              Expected Maturity Dates
                (dollars in millions):                          1999     2000     2001      2002      2003      2004    Thereafter
              ------------------------                          ----     ----     ----      ----      ----      ----    ----------

              Debt:
<S>                                                                                                            <C>
                Revolving credit facility, Base rate option...                                                   $35.0
                --Actual floating rate........................                                                   10.00%
                Revolving credit facility, Euro-rate option...                                                   $60.0
                --Actual floating rate........................                                                   8.684%
                Term Loan A Euro-rate option..................            $7.5     $20.0     $25.0     $30.0     $35.0
                --Actual floating rate........................            8.684%   8.780%    8.780%    8.780%    8.780%
                Term Loan B Euro-rate option..................            $0.5     $1.0      $1.0      $1.0      $1.0       $95.0
                --Actual floating rate........................            9.780%   9.780%    9.780%    9.780%    9.780%     9.780%
                Convertible Subordinated Debentures...........
                --Actual fixed interest rate..................
              Interest rate swap agreements:
                National City Bank, notional amount...........                                         $30.0
                --Actual fixed interest rate pay rate.........                                         5.965%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                Bank of America, notional amount..............                                         $20.0
                --Actual fixed interest rate pay rate.........                                         5.760%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                Manufacturers and Traders Trust, notional
                amount........................................                                         $10.0
                --Actual fixed interest rate pay rate.........                                         5.925%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                Harris Bank, notional amount..................                                         $20.0
                --Actual fixed interest rate pay rate.........                                         5.090%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                SunTrust Bank, notional amount................                                         $10.0
                --Actual fixed interest rate pay rate.........                                         5.105%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                LaSalle Bank, notional amount.................                                         $10.0
                --Actual fixed interest rate pay rate.........                                         5.095%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                Bank of America, notional amount..............                                         $10.0
                --Actual fixed interest rate pay rate.........                                         5.120%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                Harris Bank, notional amount..................                                         $10.0
                --Actual fixed interest rate pay rate.........                                         5.120%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                         6.280%
                PNC Bank, notional amount.....................                                                   $5.0
                --Actual fixed interest rate pay rate.........                                                   6.740%
                --Actual variable interest rate receive rate,
                  (based on 3 month LIBOR)....................                                                   6.280%
               Letters of credit:
                Letter of credit, Base rate option............  $650
                --Actual floating rate........................  N/A
                Letter of credit, Base rate option............  $300
                --Actual floating rate........................  N/A
                Letter of credit, Base rate option............            $450
                --Actual floating rate........................            N/A
                Letter of credit, Base rate option............            $300
                --Actual floating rate........................            N/A



</TABLE>



                                 RENT-WAY, INC.

                            PART II OTHER INFORMATION

       ITEM 1.  Material Developments in Connection with Legal Proceedings

     On December  20,1999,  an action seeking $100 million in wrongful death and
punitive  damages was brought  against the  Company.  The action  arose out of a
collision on November 20,1999,  between a Company delivery truck and a passenger
vehicle.  The parties have reached a settlement  in the amount of $4.0  million,
which has been  confirmed by letter  agreement.  Final terms of a formal written
settlement  document are presently being negotiated.  The Company has sufficient
insurance  coverage for the settlement of this claim,  and the final  settlement
will not have a material  adverse  effect on the financial  position,  result of
operations or cash flows of the Company.

       ITEM 2.    Changes in Securities and Use of Proceeds

     On February  6, 2000,  the Company  issued  1,495,000  shares of its common
stock to the holders of the Company's 7% Subordinated Convertible Debentures due
2007 on voluntary  conversion  thereof in a transaction exempt from registration
under section 4(2) of the Securities Act of 1933, as amended.

       ITEM 4.    Submission of Matters to Vote of Security Holders

     The Annual Meeting of Shareholders of the Company was held on March 8, 2000
at the Bel Aire Hotel, located at 2800 West Eighth Street, Erie, Pennsylvania at
10:00 a.m. All proposals as described in the  Company's  Proxy  Statement  dated
January 31, 2000 were approved. Below are details of the matters voted on at the
meeting:

       Election of Directors

     Elections  were held for three (3) Class II  directors  to serve  until the
2003 Annual Meeting of Shareholders. The results of the votes are as follows:


<TABLE>
<CAPTION>


                                                                 Votes                        Broker
                                                                 -----                        ------
       Name                            Class      Votes For      Against      Abstentions     Non-Votes
       ----                            -----      ---------      -------      -----------     ---------



<S>                                               <C>            <C>              <C>         <C>
       William Lerner                   II        17,039,576     573,214           0          4,395,401
       Marc Joseffer                    II        17,039,586     573,204           0          4,395,401
       Jacqueline Woods                 II        17,202,652     410,138           0          4,395,401

</TABLE>


     The  following  directors'  terms of office  continued  after the  meeting:
William E Morgenstern, Gerald A. Ryan, Robert Fagenson, and Vincent Carrino.





<PAGE>





                                 RENT-WAY, INC.


ITEM 6.  Exhibits and Reports on Form 8-K


a.  Exhibits

    The Exhibits filed as part of this report are listed below.

         Exhibit No.                    Description
         -----------                    -----------
             27                         Financial data schedule

b.  Reports on Form 8-K

     (1) On January 19,  2000,  the Company  filed a Current  Report on Form 8-K
announcing  the  promotion of Jeffrey A. Conway to the office of  President  and
Chief  Operating  Officer and announcing the appointment of William A. McDonnell
as Chief Financial Officer.

     (2) On January 19,  2000,  the Company  filed a Current  Report on Form 8-K
announcing its investment in DPI Teleconnect,  LLC, a privately-held provider of
prepaid local phone service.

     (3) On February 15, 2000,  the Company  filed a Current  Report on Form 8-K
announcing its goal to open 400 new stores over the next three to four years.

     (4) On February 29, 2000,  the Company  filed a Current  Report on Form 8-K
announcing  its goal to strengthen  and augment its computer  sales  training by
providing  all store and  regional  managers  with a  state-of-the-art  personal
computer for home use at the nominal cost of $3.00 per pay check.

     (5) On April 11,  2000,  the  Company  filed a  Current  Report on Form 8-K
announcing  that dPi  Teleconnect  has agreed in principal to terms with Western
Union  which will  provide  access to all 30,000  Western  Union  locations  for
payments from dPi Teleconnect customers for pre-paid local phone service.

     (6) On April 25,  2000,  the  Company  filed a  Current  Report on Form 8-K
announcing  that an agreement in principal has been reached with  Gateway,  Inc.
The agreement allows the Company to be the exclusive rental-purchase supplier of
Gateway computers and technologies.  Also as part of the agreement, Gateway will
invest $7.0 million in the Company.



<PAGE>





                                   SIGNATURES


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

                                             RENT-WAY, INC.
                                             By



           April 27, 2000                   /s/ William A. McDonnell
       ----------------------        ---------------------------------------
               Date                             William A. McDonnell
                                    Vice President and Chief Financial Officer




           April 27, 2000                  /s/ Matthew J. Marini
       ----------------------       ---------------------------------------
               Date                            Matthew J. Marini
                              Corporate Controller and Chief Accounting Officer