Rent-A-Wreck of America Announces First Quarter Results

    OWINGS MILLS, Md.--Aug. 15, 2001--Rent-A-Wreck of America, Inc. announced earnings for its first fiscal quarter ended June 30, 2001.
    The Company reported an increase in net revenues of 18% from $1,729,677 to $2,047,885, which was mainly due to a 37% increase in initial license fees and a 36% increase in premiums in connection with the reinsurance program. Operating income increased by 41%, from $440,277 to $621,963 for the three months ended June 30, 2001. This increase resulted primarily from an increase in insurance underwriting profitability. Net income was $398,953, or $.07 per common share (Diluted), an increase of approximately 36% over net income of $292,732 in the same period last year.

	   CONDENSED CONSOLIDATED FINANCIAL STATEMENT ATTACHED

                            Three Months ended June 30,  
                                   2000        2001         
                          --------------------------------
                          (in thousands except per share
                          amounts and number of franchises)
                                   (Unaudited)
Franchisees' Results

Franchisees' revenue (1)          $13,590   $14,659
Number of franchised locations        663       677

Results of Operations

Total revenue                     $ 1,730   $ 2,048
Total expense                       1,298     1,426
Income before income
  taxes                               476       650
Net income                            293       399
Earnings per common share

 Basic                            $   .08   $   .09
 Weighted average common
  shares                            3,568     4,385

 Diluted                          $   .05   $   .07
 Weighted average common
  shares plus convertible
   preferred stock, and options
    and warrants                    5,421     5,490


EBITDA (2)                            511       702

    (1) The franchisees' revenue data have been derived from unaudited
    reports provided by franchisees in paying 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 business to incur and service debt.
    Rent-A-Wreck's reported EBITDA may not be comparable to
    similarly titled measures used by other companies.