Rent-A-Wreck Reports Financial Results for Its First Quarter Ended June 30, 2002; Rent-A-Wreck Intends to Deregister Its Common Stock and Terminate Its Quotation On Nasdaq

    OWINGS MILLS, Md.--Aug. 20, 2002--Rent-A-Wreck of America, Inc. (RAWA) reported its results for its first quarter ended June 30, 2002.
    Sales were $1,708,537, a decrease of approximately 17% from $2,047,885 for the three months ended June 30, 2001. Net income for its fiscal 2002 first quarter decreased to $51,002 from $398,953, a decrease of approximately 87% versus the quarter ended June 30, 2001.
    Earnings per share on a fully diluted basis were $.01 for the June 30, 2002 quarter down from $.07 for the comparable three months in fiscal 2001.
    Ken Blum, Jr. noted "our industry has been hard hit by decreased air travel and the Company's collection of royalties from franchisees have fallen off considerably compared to last year." In addition, part of the decrease in profitability for this quarter arose from increased costs associated with the Company's pilot Priceless franchise location."
    On August 12, 2002, the Board of Directors authorized management to terminate the Company's registration under the Securities Exchange Act of 1934. The Company will accomplish this by making a filing with the Securities and Exchange Commission, which filing is expected to be made on August 30, 2002.
    The effect of the filing will be to deregister the common stock of the Company under the 1934 Act, delist the Company's common stock on the Nasdaq Small Cap market, and immediately terminate the obligation of the Company to file periodic and annual reports with the SEC.
    Notwithstanding the increased liability to officers under recent legislation, the Company's Chief Executive Officer has elected to certify the correctness of the Company's 10-QSB for the quarter ended June 30, 2002, so as to cut off head-on any potential claim that the Company is not fully forthcoming in its financial reporting.
    Furthermore, so as to provide adequate notice to shareholders of the potential diminution of liquidity for their shares which may occur when Nasdaq delists the stock automatically upon the filing of Form 15 with the SEC, the Board has instructed counsel not to file this form before Friday, August 30.
    The Company reached this decision after extensive discussions with respect to the advantages and disadvantages of deregistering. Ken Blum, Jr. added "the Company believed that deregistration will benefit the Company by decreasing certain expenses and free up management and Company personnel to remain more focused on operating the Company rather than satisfying the increasingly burdensome securities law reporting requirements."
    "Despite small trading volume and virtually no following on Wall Street, the Company has persevered by maintaining its Nasdaq listing for 17 years in the hope that the widespread recognition of the Company's brand coupled with consistently strong financial performance, at least from fiscal 1994 through fiscal 2001, would lead to the development of a deeper and more active market for its shares. This clearly never came to pass. Reluctantly, therefore, the Company has concluded that shareholders will, in the long run, be better served by lower expenditures for SEC compliance than by maintenance of what has, at best, been a desultory public market for its shares."