Rent-A-Wreck of America Announces Third Quarter and Nine Months Results
OWINGS MILLS, Md.--Feb. 15, 2002--Rent-A-Wreck of America, Inc. announced results for the third quarter and nine-month period ended December 31, 2001.
Three Months Nine Months
Ended Dec. 31, Ended Dec. 31,
2000 2001 2000 2001
-------------------------------------
(in thousands except per share and
number of franchises)
(Unaudited)
Franchisees' Results
(Unaudited)
Franchisees' Revenue (1) $12,612 $13,733 $43,019 $46,307
Number of Franchised
locations 677 659 677 659
Company's Results of
Operations
Total Revenue $ 1,505 $ 1,724 $ 5,340 $ 5,852
Operating expenses 1,240 1,561 5,130 4,562
Income before income
taxes $ 286 $ 195 $ 298 $ 1,418
Net income 176 119 333 871
Earnings per common share
Basic $ .03 $ .02 $ .07 $ .19
Weighted average common
shares 4,486 4,268 3,961 4,337
Diluted $ .03 $ .02 $ .06 $ .16
Weighted average common
shares plus convertible
preferred stock, options
and warrants 5,593 5,375 5,473 5,442
EBITDA (2) 337 270 1,688 1,616
(1) The franchisees' revenue data has 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 company to incur and service debt.
Rent-A-Wreck's reported EBITDA may not be comparable to
similarly titled measures used by other companies.
Revenues increased by 14.6% for the quarter and 9.6% for the nine months due primarily to operations of two pilot Company-owned Priceless locations in the Baltimore area. As was expected during the startup phase, expenses increased by more than revenues, contributing to a decline in EBITDA of 19.9% for the quarter and 4.3% for the nine months. If utilization rates warrant continued fleet growth, the Company intends to continue expanding these two locations.
While some franchisees reported declines in their business as a result of the falloff in travel after September 11, because Rent-A-Wreck's business is predominantly neighborhood rentals rather than air traffic dependent, Company-wide results held up better than those of many other auto rental market participants.
Shareholders' equity grew by 18.1% during the nine months, and the Company took advantage of weakness in its stock price by continuing its stock repurchase program, buying and retiring an additional 155,200 shares during the nine-month period.