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

                                  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 DECEMBER 31, 1999

                                       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 of incorporation) (I.R.S. Employer Identification
                                                                           No.)
                   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
-------------------------------------------------------------------------------
                                  Common Stock


                       Outstanding as of January 19, 2000
-------------------------------------------------------------------------------

                                   22,011,564

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



<PAGE>



                                 RENT-WAY, INC.


<TABLE>
<CAPTION>




                                                                                                           Page
                          PART I--FINANCIAL INFORMATION

             Item 1. Condensed Consolidated Financial Statements:
<S>                                                                       <C> <C>                <C> <C>    <C>
             Item 1. Condensed Consolidated Financial Statements:
                  Condensed Consolidated Balance Sheets as of December 31, 1999 and September 30, 1999....    3
                  Condensed Consolidated Statements of Operations, Three Months Ended December 31, 1999
                  and 1998................................................................................    4
                  Condensed Consolidated Statements of Cash Flows, Three Months Ended December 31, 1999
                  and 1998................................................................................    5
                  Notes to Condensed Consolidated Financial Statements....................................    6

             Item 2. Management's Discussion and Analysis of Financial Condition and Results of
                    Operations............................................................................    9

             Item 3. Quantitative and Qualitative Disclosures About Market Risk...........................   14


             PART II-OTHER INFORMATION


             Item 1. Material Developments in Connection with Legal Proceedings...........................   15

             Item 5. Other Information....................................................................   15

             Item 6. Exhibits and Reports on Form 8-K.....................................................   15

             Signatures...................................................................................   16
</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                 RENT-WAY, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (all dollars in thousands, except share data)


                                                                                  December 31,     September 30,
                                                                                      1999             1999
                                                                                 -------------    --------------
                                                                                   (unaudited)

                        Assets
<S>                                                                              <C>              <C>
                        Cash.................................................... $       3,752    $       8,646
                        Prepaid expenses........................................        12,878            9,610
                        Rental merchandise, net.................................       232,133          202,145
                        Property and equipment, net.............................        52,432           50,578
                        Goodwill, net...........................................       307,710          305,900
                        Deferred financing costs, net...........................         3,579            3,688
                        Non-compete and prepaid consulting fees, net............         4,784            5,494
                        Other assets............................................         9,799           11,333
                                                                                 -------------    -------------
                             Total assets....................................... $     627,067    $     597,394
                                                                                 =============    =============


                        Liabilities and Shareholders' Equity
                        Liabilities:
                        Accounts payable........................................ $      13,668    $       8,417
                        Other liabilities.......................................        16,612           15,861
                        Income taxes payable....................................         7,723            2,316
                        Deferred income taxes...................................         4,269            5,218
                        Debt....................................................       297,128          288,130
                                                                                 -------------    -------------
                             Total liabilities..................................       339,400          319,942

                        Contingencies (see Note 6)..............................            --               --


                        Shareholders' equity:
                        Preferred stock, without par value; 1,000,000 shares
                        authorized;
                          no shares issued and outstanding......................            --               --
                        Common stock, without par value; 50,000,000 shares
                          authorized; and 21,989,579 and 21,976,401 shares
                          issued and outstanding, respectively..................       256,842          256,755
                        Retained earnings.......................................        30,825           20,697
                                                                                 -------------    -------------
                             Total shareholders' equity.........................       287,667          277,452
                                                                                 -------------    -------------
                             Total liabilities and shareholders' equity......... $     627,067    $     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
                                                                                     December 31,
                                                                        ---------------------------------------
                                                                               1999                1998
                                                                               ----                ----
                                                                           (unaudited)         (unaudited)

                   Revenues:
<S>                                                                     <C>                 <C>
                   Rental revenue...................................... $     119,982       $     109,634
                   Other revenue.......................................        20,929              14,325
                                                                        -------------       -------------
                        Total revenues.................................       140,911             123,959

                   Costs and operating expenses:
                   Depreciation and amortization:
                     Rental merchandise................................        31,158              31,324
                     Property and equipment............................         3,711               2,185
                     Amortization of goodwill..........................         3,259               2,495
                   Salaries and wages..................................        36,157              33,328
                   Advertising.........................................         5,609               7,787
                   Occupancy...........................................        10,310               8,147
                   Name change expense.................................            --                  86
                   Business combination costs..........................            --              16,368
                   Other operating expenses............................        28,143              29,327
                                                                        -------------       -------------
                        Total costs and operating expenses.............       118,347             131,047
                                                                        -------------       -------------
                        Operating income (loss)........................        22,564              (7,088)

                   Other income (expense):
                   Interest expense....................................        (5,828)             (3,613)
                   Interest income.....................................            14                  26
                   Other income (expense), net.........................          (146)               (191)
                                                                        -------------       -------------
                          Income (loss) before income taxes and
                            extraordinary item.........................        16,604             (10,866)
                   Income tax expense (benefit)........................         6,476              (1,335)
                                                                        -------------       -------------
                          Income (loss) before extraordinary item......        10,128              (9,531)
                   Extraordinary item, net of tax benefit..............            --                (519)
                                                                        -------------       -------------
                   Net income (loss)................................... $      10,128       $     (10,050)
                                                                        =============       =============

                   Earnings (loss) per common share (see note 2):
                      Basic earnings(loss) per common share:
                          Income (loss) before extraordinary item...... $        0.46       $       (0.45)
                                                                        =============       =============
                          Net income (loss)............................ $        0.46       $       (0.48)
                                                                        =============       =============
                      Diluted earnings (loss) per common share:
                          Income (loss) before extraordinary item...... $        0.44       $       (0.45)
                                                                        =============       =============
                          Net income (loss)............................ $        0.44       $       (0.48)
                                                                        =============       =============
                      Weighted average common shares outstanding:
                          Basic........................................        21,982              21,088
                                                                        =============       =============
                          Diluted......................................        23,762              21,088
                                                                        =============       =============

   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 three months ended
                                                                                         December 31,
                                                                               --------------------------------
                                                                                     1999             1998
                                                                               ---------------  ---------------
                                                                                  (unaudited)      (unaudited)

                       Operating activities:
<S>                                                                            <C>              <C>
                       Net income (loss).....................................  $       10,128   $      (10,050)
                       Adjustments to reconcile net income (loss) to net
                       cash used in operating activities:
                         Depreciation and amortization.......................          38,319           36,111
                         Deferred income taxes...............................            (950)             588
                         Extraordinary item..................................              --              519
                       Changes in assets and liabilities:
                         Prepaid expenses....................................          (3,268)            (587)
                         Rental merchandise..................................         (61,146)         (52,345)
                         Prepaid consulting fees.............................             710              717
                         Income taxes receivable.............................              --             (654)

                         Other assets........................................           1,534            2,021
                         Accounts payable....................................          (4,444)         (10,265)
                         Income taxes payable................................           5,407               --
                         Other liabilities...................................             417            2,699
                                                                               --------------   --------------
                            Net cash used in operating activities............         (13,293)         (31,246)
                                                                               --------------   --------------

                       Investing activities:
                         Purchase of businesses, net of cash acquired........          (4,736)            (727)
                         Purchases of property and equipment.................          (5,565)          (3,275)
                                                                               ---------------  ---------------
                            Net cash used in investing activities............         (10,301)          (4,002)
                                                                               --------------   --------------

                       Financing activities:
                         Proceeds from borrowings............................          16,000          208,475
                         Payments on borrowings including early
                         extinguishment......................................          (7,002)        (179,916)
                         Book overdraft......................................           9,695            5,190
                         Deferred finance costs..............................             (80)          (1,187)
                         Proceeds from common stock issuance.................              87              571
                                                                               --------------   --------------
                            Net cash provided by financing activities........          18,700           33,133
                                                                               --------------   --------------
                            Decrease in cash.................................          (4,894)          (2,115)
                         Cash at beginning of period.........................           8,646            5,326
                                                                               --------------   --------------
                         Cash at end of period...............................  $        3,752   $        3,211
                                                                               ==============   ==============




   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,  and  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.

    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.

    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.

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
convertible  subordinated  debentures  where the effects are  dilutive.  Because
operating  results were a loss in the quarter ended December 31, 1998, 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 ended
                                                                             December 31,
                                                                             (unaudited)
                                                                  -----------------------------------
               COMPUTATION OF EARNINGS (LOSS) PER SHARE:                1999              1998
               -----------------------------------------                ----              ----

               BASIC
               Earnings (loss) applicable to common shares for
<S>                                                               <C>                <C>
               basic earnings per share.........................  $     10,128       $    (10,050)
                                                                  ============       ============
               Weighted average common shares outstanding.......        21,982             21,088
                                                                  ============       ============
               Earnings (loss) per common share:
                 Income (loss) before extraordinary item........  $       0.46       $      (0.45)
                                                                  ============       ============
                 Earnings (loss) applicable to common shares....  $       0.46       $      (0.48)
                                                                  ============       ============


               DILUTED
               Earnings (loss) applicable to common shares for
                 basic earnings per share.......................  $     10,128       $    (10,050)
                 Interest on 7% convertible debentures (net of
                 tax)...........................................           210                 --
                                                                  ------------       ------------
               Earnings (loss) applicable to common shares for
               diluted earnings per share.......................  $     10,338       $    (10,050)
                                                                  ============       ============
               Weighted average common shares used in
                 calculating basic earnings per share...........        21,982             21,088
               Add incremental shares representing:
               Shares issuable upon exercise of stock options,
               stock warrants, and escrowed shares..............           284                 --
               Shares issued on conversion of 7% convertible
               debentures.......................................         1,496                 --
                                                                 -------------       ------------
               Weighted average number of shares used in
               calculation of diluted earnings (loss) per share.        23,762             21,088
                                                                 =============       ============
               Earnings (loss) per common share:
                 Income (loss) before extraordinary item........  $       0.44       $      (0.45)
                                                                  ============       ============
                 Earnings (loss) applicable to common shares....  $       0.44       $      (0.48)
                                                                  ============       ============
</TABLE>
<PAGE>

                                 RENT-WAY, INC.

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



3.  Mergers and Acquisitions:

     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.   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 $88,917 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 $104,465 less liabilities
assumed of $25,721 and  acquisition  costs of $4,870.  Assets  acquired (at fair
value) other than goodwill consisted primarily of rental merchandise of $13,500,
non-compete agreement of $1,000, customer contracts of $1,200, cash of $725, and
other assets of $356. Liabilities assumed (at fair value) consisted primarily of
debt of $21,527,  accrued  liabilities of $2,684,  and trade accounts payable of
$1,510.  The  Consolidated  Statement of  Operations  for the three months ended
December 31, 1999  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 December 31,  1999,  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 $4,835 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  $7,261  less  liabilities  assumed  of $2,149  and
acquisition costs of $274. 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 Consolidated Statement
of Operations  for the three months ended December 31, 1999 includes the results
of operations of America's Rent-To-Own for the entire period.

4.       Debt:

    On November 17, 1999,  the Company  amended its existing  collaterized  term
loan and  revolving  credit  facility  with a syndicate of banks led by National
City Bank of Pennsylvania (the "Facility"). The amendment permits the Company to
repurchase  outstanding capital stock and to make an investment in and a loan to
DPI Teleconnect, L.L.C., a Delaware limited liability company (see Note 8).

     On December  31,  1999,  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 December 31, 1999, 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..............................  $ 121,250      8.68375%      03/29/00
                  Euro-rate tranche..............................     99,750      9.68375%      03/29/00
                  Euro-rate tranche..............................     40,000      8.68375%      03/29/00
                  Base-rate......................................     16,000      9.50000%      09/30/04
                                                                   ---------
                                                                   $ 277,000
                                                                   =========
</TABLE>

     At December  31,  1999,  the Company  had $56,000  principal  amount of the
revolving credit facility  outstanding  under the Facility and $1,700 in letters
of  credit  outstanding.  At  December  31,  1999  there was  $42,300  of unused
revolving notes and letters of credit available under the Facility.

<PAGE>

                                 RENT-WAY, INC.

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


4.  Debt (continued):

    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 redemption  date is February 5, 2000 and the redemption
price is 103% of the outstanding  principal  amount thereof.  The Debentures are
convertible  into  shares of Common  Stock at a price of $13.37 per share  until
redeemed.

5.  Derivative Financial Instruments:

    During the three month period ended December 31, 1999,  the Company  entered
into a new derivative  financial  instrument  with PNC Bank. The notional amount
outstanding,  maturity date, and the fixed pay and variable receive rate of this
interest rate swap agreement are as follows:


<TABLE>
<CAPTION>

                                                                                             Fixed       Variable
                                                                    Notional    Maturity      Pay        Receive
                                                                     Amount       Date        Rate         Rate
                                                                  -----------   --------     ------      --------
<S>                                                               <C>                <C>     <C>          <C>
          Interest rate swap, PNC Bank..........................  $   5,000     Sept 2004    6.740%       5.514%

</TABLE>

     The fair value of the interest  rate swap  agreements  based on  settlement
cost as estimated by independent dealers as of December 31, 1999 are as follows:

<TABLE>
<CAPTION>

                                                                             Notional         Fair
                                                                              Amount          Value
                                                                           ----------      -----------
<S>                                                                        <C>             <C>
          Interest rate swap, National City Bank.......................    $  30,000       $       755
          Interest rate swap, Bank of America..........................    $  20,000       $       165
          Interest rate swap, Manufacturers' and Traders Trust Company.    $  10,000       $       232
          Interest rate swap, Harris Bank..............................    $  20,000       $     1,225
          Interest rate swap, SunTrust Bank............................    $  10,000       $       594
          Interest rate swap, LaSalle Bank.............................    $  10,000       $       609
          Interest rate swap, Bank of America..........................    $  10,000       $       602
          Interest rate swap, Harris Bank..............................    $  10,000       $       602
          Interest rate swap, PNC Bank.................................    $   5,000       $         5

</TABLE>

6.  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 $1,400 to $3,100. 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.  In addition,  on
December  20,  1999,  an action was  brought  against the Company in the Circuit
Court of  Jefferson  County,  Mississippi,  asserting  claims  in the  amount of
$100,000 for wrongful deaths and punitive  damages arising out of a collision on
November 20, 1999, between a Company delivery truck and a passenger vehicle. 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 $300 to $450 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.

7.       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 in 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%.

8.       Subsequent Event:

     On  January  10,  2000,  the  Company   acquired  a  49%  interest  in  DPI
Teleconnect,  L.L.C.  ("DPI"), a privately-held  provider of prepaid local phone
service, for $5,500 in cash. The Company has the option to acquire an additional
21% interest upon receipt of regulatory approvals.  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.

<PAGE>

                                 RENT-WAY, INC.

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

Overview

    Rent-Way is the second largest operator in the rental purchase industry with
1,088 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  integration of all stores
acquired  in the  America's  Rent-To-Own  acquisition  by July 31,  1999 and all
stores  acquired  in the  RentaVision  acquisition  by  November  11,  1999.  In
addition, the Company consolidated all back office functions such as accounting,
payroll, and human resources. The Company closed and merged 33 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 10, 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.

    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
                                                                                     Ended
                                                                                  December 31
                                                                    -----------------------------------------
                                                                           1999                 1998
                                                                    -----------------------------------------
                      Revenues:
<S>                                                                           <C>                   <C>
                        Rental revenue.............................           85.1%                 86.5%
                        Other revenue..............................           14.9                  13.5
                                                                    --------------        --------------
                           Total revenues..........................          100.0                 100.0

                      Costs and operating expenses:
                      Depreciation and amortization:
                        Rental merchandise.........................           22.1                  25.3
                        Property and equipment.....................            2.6                   1.7
                        Amortization of goodwill...................            2.3                   2.0
                                                                    --------------         -------------
                           Total depreciation and amortization.....           27.0                  29.0
                      Salaries and wages...........................           25.7                  26.9
                      Advertising..................................            4.0                   6.3
                      Occupancy....................................            7.3                   6.5
                      Name change expense..........................             --                   0.1
                      Business combination costs...................             --                  13.2
                      Other operating expenses.....................           20.0                  23.7
                                                                    --------------         -------------
                           Total costs and operating expenses......           84.0                 105.7
                                                                    --------------         -------------
                           Operating income (loss).................           16.0                  (5.7)
                       Interest expense............................           (4.1)                 (2.9)
                       Other income................................           (0.1)                 (0.2)
                                                                    --------------         -------------
                           Income (loss) before income taxes and
                           extraordinary item......................           11.8                  (8.8)
                       Income tax expense (benefit)................            4.6                  (1.1)
                                                                    --------------         -------------
                           Income (loss) before extraordinary item.            7.2%                 (7.7)%
                                                                    ==============         =============
</TABLE>

Comparison of Three Months Ended December 31, 1999 and 1998

         Total revenues.  Total revenues  increased  $17.0 million,  or 13.7% to
$140.9 million from $123.9 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 $20.1  million  and $1.9  million of the  increase,
respectively.  Stores opened in fiscal 1999 and 2000  accounted for $1.3 million
of the increase.  The Company experienced a 1.9% 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 5.1% and (0.9)%,
respectively.  The increase in same store  revenues was  primarily due to a 1.4%
increase as a percentage of total revenues in appliance rentals, a 1.6% increase
as a percentage of total  revenues in electronics  revenues,  0.9% increase as a
percentage  of total  revenues  in jewelry  rentals,  and a 1.1%  increase  as a
percentage of total revenues in merchandise sales offset by a 1.1% 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 Compaq personal computers to its product line. In
addition,  the  Company  has begun to act as an agent to provide  prepaid  phone
service through DPI Teleconnect,  L.L.C.  This program is currently being rolled
out to 70  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  $0.1 million,  3.2% as a percentage of total revenues to
22.1% from 25.3%.  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 1.7%.  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 $2.9 million to
$36.2 million from $33.3  million,  but decreased  1.2% as a percentage of total
revenues  to 25.7% from  26.9%.  This 1.2%  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 $5.6 million from $7.8
million and decreased to 4.0% as a percentage of total revenues from 6.3%.  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 $10.3  million  from $8.1
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,  Home Choice  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. (the "Merger") on December 10, 1998, the Company
incurred  $16.4 million in costs in the quarter ended  December 31, 1998.  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 $4.1  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 decreased to $28.1
million  from $29.3  million and  decreased  to 20.0% as a  percentage  of total
revenues  from 23.7%.  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. The decrease in other operating expenses 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 16.0% of total revenues
from an operating  loss of 5.7% of total  revenues due to the factors  discussed
above.  Excluding  the $1.1 million in excessive  inventory  write-offs  and the
$16.4 million in business  combination  costs described above,  operating income
increased to 16.0% from 8.4%. The Company  anticipates  its operating  income to
remain at or increase  above  16.0% 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 4.1% from 2.9% 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.

         Income  tax  expense.  Income  tax  expense  increased  to  4.6%  as  a
percentage  of  total  revenues  from an  income  tax  benefit  of 1.1% of total
revenues.  The increase was due to a significant  increase in pretax book income
and operating income.

         Extraordinary  item. In the three month period ended December 31, 1998,
the Company  entered into a new syndicated  loan facility in connection with its
merger with Home Choice. As a result of this refinancing,  the Company wrote-off
the remainder of deferred  financing costs associated with its and Home Choice's
previous credit facilities. The amount of the remaining deferred financing costs
was $0.9 million, $0.5 million net of tax benefit.

     Net income.  Net income increased to 7.2% of total revenues from a net loss
of 8.1% 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  decreased  to $13.3  million for the
three month period ended  December  31, 1999,  from $31.2  million for the three
month period ended  December 31, 1998.  This  decrease is  principally  due to a
$20.2  million  increase  in net  income,  a $5.9  million  increase in accounts
payable,  and a $5.4 million  increase in income taxes payable  offset by a $8.8
million  increase in rental  merchandise  purchases,  a $2.7 million increase in
prepaid expenses, and a $2.3 million decrease in other liabilities.

    Net cash  used in  investing  activities  increased  $6.3  million  to $10.3
million in the three month  period ended  December  31,  1999,  compared to $4.0
million in the three month period ended December 31, 1998. Capital  expenditures
in the three month period ended  December 31, 1999  included  acquisition  costs
related to the  RentaVision  acquisition.  It also  included the purchase of new
store signage and store  remodeling costs associated with the stores obtained in
the Home Choice  merger and the  purchase of  computers  and  equipment  for the
stores acquired from RentaVision. Capital expenditures in the three month period
ended  December  31, 1998  included the computer  equipment  and software  costs
related  to  the  implementation  of  a  PeopleSoft  software  package  for  all
accounting,  payroll, human resources, and benefits administration  requirements
and a J. Driscoll package for cash management.

    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 December 31, 1999, the Company
incurred $0.4 million in costs related to this project.

    Net cash provided by financing  activities increased to $18.7 million in the
three month period ended December 31, 1999 from $33.1 million in the three month
period ended  December  31,  1998.  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 December 31, 1999, the Company was in compliance
with all covenants  contained in the Amended Facility.  As of December 31, 1999,
$277.0 million in borrowings is outstanding under the Amended  Facility.  Of the
$277.0  million  outstanding,  $56.0  million is related to a  revolving  credit
facility,  which is payable September 30, 2004 and $221.0 million is in the form
of term notes designated as Term Notes A (up to $125.0 million) and Term Notes B
(up to $100 million).

    On December 31, 1999, the Company made the required principal  repayments of
$3.8  million  on the  Term  Notes A and  $250,000  on the Term  Notes B.  These
repayments were funded with cash generated from operations. The Company believes
that it will  generate  sufficient  amounts of cash from  operations to make the
required quarterly principal repayments in the remainder of fiscal 2000.

    On January 10, 2000, the Company acquired a 49% interest in DPI Teleconnect,
L.L.C.,  a  privately-held  provider of prepaid  local phone  service,  for $5.5
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 cash requirements through at least the next twelve months. The Company
believes that it can adequately fund its cash needs for the  foreseeable  future
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.

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  three  months  ended  December  31,  1999,  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  is  currently  evaluating  the
provisions of this Statement.

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 yet 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,  (iv) the Company's  ability to
open new stores in favorable  locations and on favorite  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.


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 December 31, 1999:

<TABLE>
<CAPTION>


                             Expected Maturity Dates
                              (dollars in millions):         1999    2000    2001     2002     2003    2004      Thereafter
                      -------------------------------------- ----    ----    ----     ----     ----    ----      ----------
                      Debt:
                        Revolving credit facility, Base
<S>                                                                                                   <C>
                        rate option.........................                                          $16.0
                       --Actual floating rate...............                                          9.500%
                        Revolving credit facility,
                        Euro-rate option....................                                          $40.0
                       --Actual floating rate...............                                          8.684%
                        Term Loan A Euro-rate option........        $11.2   $20.0    $25.0    $30.0   $35.0
                       --Actual floating rate...............        8.684%  8.684%   8.684%   8.684%  8.684%
                        Term Loan B Euro-rate option........        $0.8    $1.0     $1.0     $1.0    $1.0        $95.0
                       --Actual floating rate...............        9.684%  9.684%   9.684%   9.684%  9.684%      9.684%
                        Convertible Subordinated Debentures.                                                      $20.0
                       --Actual fixed interest rate.........                                                        7.0%
                      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).............................                                  5.514%
                        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).............................                                  5.514%
                        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).............................                                  5.514%
                        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).............................                                  5.514%
                        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).............................                                  5.514%
                        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).............................                                  5.514%
                        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).............................                                  5.514%
                        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).............................                                  5.514%
                        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)............................                                           5.514%
                      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>

<PAGE>

PART II - OTHER INFORMATION


ITEM 1. Material Developments in Connection With Legal Proceedings

    On December 20, 1999, an action was brought  against  Rent-Way,  Inc. (among
other parties) in the Circuit Court of Jefferson County, Mississippi,  asserting
claims in the amount of $100  million for wrongful  deaths and punitive  damages
arising  out of a collision  on  November  20,  1999,  between a Rent-Way,  Inc.
delivery truck and a passenger  vehicle.  Rent-Way,  Inc.  intends to vigorously
defend itself against the claims. Rent-Way, Inc. 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 Rent-Way, Inc.

ITEM 5. Other Information

    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 redemption  date is February 5, 2000 and the redemption
price is 103% of the outstanding  principal  amount thereof.  The Debentures are
convertible  into  shares of Common  Stock at a price of $13.37 per share  until
redeemed.

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
                                   -----------  ------------------------------
                                      10.22     Notification to the holders of
                                                Rent-Way, Inc.'s 7% Convertible
                                                Debentures, due 2007, of the
                                                Company's intent to redeem the
                                                debentures in February 2000.

                                        27      Financial data schedule



b. Reports on Form 8-K

     (1) On October 12,  1999,  the Company  filed a Current  Report on Form 8-K
disclosing  the  completion  of the  RentaVision  acquisition  and attaching the
exhibits under Item 7.

     (2) On October 21, 1999,  the Company filed a Current Report on Form 8-K in
response to numerous inquiries  regarding the decline in the price of its common
stock.

     (3) On December 3, 1999,  the Company filed a Current  Report on Form 8-K/A
amending  the  Current  Report on Form 8-K filed on October 12, 1999 to file the
financial statements and pro forma financial information required under Item 7.

     (4) 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.

     (5) 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.


<PAGE>



                                   SIGNATURES

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


January 21, 2000
-------------------------------------
Date
/s/ Jeffrey A. Conway
-------------------------------------
Jeffrey A. Conway
President and Chief Operating Officer



January 21, 2000
------------------------------------
Date
/s/ Matthew J. Marini
-------------------------------------
Matthew J. Marini
Controller and Chief Accounting Officer









<PAGE>



                                 Exhibit 10.22

                                 RENT-WAY, INC.
                                One RentWay Place
                            Erie, Pennsylvania 16505



                                           December 10, 1999


Via First-Class Mail
--------------------

TO THE HOLDERS OF RENT-WAY, INC. $20,000,000
7% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2007 (CUSIP Numbers
76009UAA2 and 76009UAB0):

Ladies and Gentlemen:

         Reference  is made to that certain  Indenture,  dated as of February 4,
1997,  from  Rent-Way,  Inc.  ("Rent-Way")  to  Manufacturers  and Traders Trust
Company, as Trustee (the "Trustee") (the "Indenture"). All specially-capitalized
terms not  otherwise  defined in this  letter  have the same  meanings as in the
Indenture.

         Rent-Way hereby redeems the following Securities: 100% of the principal
amount of Rent-Way's  $20,000,000  7%  Convertible  Subordinated  Debentures due
2007. The Redemption  Date is February 7, 2000. The Redemption  Price is 103% of
the principal  amount plus accrued and unpaid  interest to the Redemption  Date.
The  Conversion  Price is $13.369.  The name and address of the Paying Agent and
the Conversion Agent is Manufacturers and Traders Trust Company,  One M&T Plaza,
7th Floor, Buffalo, New York 14203, Attention:
Russell Whitley.

         Securities  called for  redemption  may be converted at any time before
the close of business on the Redemption  Date and, if not converted prior to the
close of business on the Redemption  Date, the right of conversion will be lost.
Holders  who  wish to  convert  Securities  must  satisfy  the  requirements  of
Paragraph 7 thereof.

         Securities  called for  redemption  must be  surrendered  to the Paying
Agent to  collect  the  Redemption  Price.  Interest  on  Securities  called for
redemption ceases to accrue on and after the Redemption Date.

         No  representation  is made as to the  correctness  or  accuracy of the
CUSIP numbers set forth above.

         If you have any questions  concerning  this redemption  notice,  please
contact Russell Whitley at the Trustee, (716) 842-5602,  John Zak, legal counsel
to Rent-Way,  at (716) 848-1253 or Jeffrey A. Conway, Chief Financial Officer of
Rent-Way, at (814) 461-5223.