Rent-A-Wreck of America Announces Third Quarter and Nine Months Results
OWINGS MILLS, Md.--Feb. 16, 2001--Rent-A-Wreck of America, Inc. announced results for the third quarter and nine-month period ended December 31, 2000.For the three-month period ended December 31, 2000, the Company reported an increase in operating cash flow (EBITDA) of 33% over the prior corresponding period. Net income was $175,541, or $.03 per common share (Diluted), an increase of approximately 13% over net income of $155,495 in the same period last year.
Net revenues for the three months ended December 31, 2000 increased 11% from $1,355,376 to $1,505,155. The increase was mainly due to an 8% increase in continuing license fees and a 29% increase in premiums revenue in connection with the Company's reinsurance segment. Net income applicable to common shares increased by 15% to $153,441, or $.03 per common share (Basic).
As previously described, net income for the nine months ended December 31, 2000, was negatively impacted by a one-time compensation expense of $1,234,560 during the quarter ended September 30 caused by the Company's repurchase of options to buy 957,721 common shares.
If the repurchase of options had not impacted the Company's earnings for the nine months ended December 31, 2000 (in which case it also would have produced no partially offsetting reduction in income tax expense), operating income would have been $1,443,890 in the nine months ended December 31, 2000 instead of operating income of $209,330, which would have been an increase versus the comparable period in 1999 of $288,318 (25%).
Excluding the option repurchase, net income would have been $982,819 instead of $332,771, basic earnings per share would have been $.25 instead of $.07, and diluted earnings per share would have been $.18 instead of $.03.
Three Months Nine Months
Ended Dec. 31, Ended Dec. 31,
1999 2000 1999 2000
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(in thousands except per share
and number of franchises)
(Unaudited)
Franchisees' Results
(Unaudited)
Franchisees' Revenue (1) $11,709 $12,612 $38,528 $43,019
Number of Franchised
locations 667 677 667 677
Company's Results of
Operations
Total Revenue $ 1,355 $ 1,505 $ 4,701 $ 5,340
Operating expenses 1,163 1,240 3,545 5,130
Income before income
taxes $ 212 $ 286 $ 1,214 $ 298
Net income 155 176 821 333
Earnings per common share
Basic $ .04 $ .03 $ .20 $ .07
Weighted average common
shares 3,784 4,486 3,889 3,961
Diluted $ .03 $ .03 $ .14 $ .06
Weighted average common
shares plus convertible
preferred stock, options
and warrants 5,962 5,593 5,987 5,473
EBITDA (2) 254 337 1,334 1,688
(1) The franchisees' revenue data have been derived from unaudited
reports provided by franchisees for use in calculating license
fees.
(2) "EBITDA" is earnings before interest expense, depreciation,
amortization, taxes and repurchase of options. EBITDA should not
be interpreted as a measure of operating results, cash flow
provided by operating activities, a measure of liquidity, or as an
alternative to any generally accepted accounting principle measure
of performance. The Company is reporting EBITDA because it is a
widely used financial measure of the potential capacity of a
company to incur and service debt. Rent-A-Wreck's reported EBITDA
may not be comparable to similarly titled measures used by other
companies.