Record Six Months and Q2 Results Announced by Rent-A-Wreck
2 November 1998
Record Six Months and Second Quarter Results Announced by Rent-A-Wreck of America
OWINGS MILLS, Md.--Nov. 2, 1998--Rent-A-Wreck of America Inc., reported record net income for its six and three month periods ended Sept. 30, 1998.For the six months, net income was $501,512, an increase of approximately 54% over net income of $324,619 in the same period last year. Net revenues increased 22% from $2,409,789 to $2,951,873.
The increase was mainly due to a 71% increase in initial license fees, a 5% increase in continuing license fees and a 54% increase in premiums in connection with the new reinsurance program.
The number of franchises increased by approximately 25% to 588. Net income applicable to common shares increased by 67% to $446,872, or $.11 per common share (Basic), while net income increased by 54% to $501,512, or $.09 per common share (Diluted).
In the second quarter, net income increased 74% from $191,984 to $334,848. This increase occurred for the same reasons indicated above. Net income applicable to common shares increased by 87% to $307,528, or $.08 per common share (Basic), while net income increased by 74% to $334,848 ($.06 per common share, Diluted).
The statements regarding anticipated future performance of the company contained in this press release are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements involve risks and uncertainties that could cause the company's actual results to differ materially from the forward-looking statements.
Factors which could cause or contribute to such differences include, but are not limited to, the company's limited experience in the reinsurance business and the potential for negative claims experience in the company's new reinsurance program, the effects of government regulation of the company's franchise and reinsurance programs including maintaining properly registered franchise documents and making any required alterations in the company's franchise program to comply with changes in the laws, competitive pressures from other motor vehicle rental companies which have greater marketing and financial resources than the company, protection of the company's trademarks, and the dependence on the company's relationships with its franchisees.
These risks and uncertainties are more fully described under the caption, "Item 6 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Important Factors" in the company's Annual Report of Form 10-KSB for the fiscal year ended March 31, 1998. All forward-looking statements should be considered in light of these risks and uncertainties.
CONDENSED CONSOLIDATED FINANCIAL STATEMENT ATTACHED
Three Months Six Months
Ended Ended
Sept. 30, Sept. 30,
1997 1998 1997 1998
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(in thousands except per share
and number of franchises)
(Unaudited)
Franchisees' Results (Unaudited)
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Franchisees' revenue(1) $12,555 $13,191 $21,700 $22,901
Number of franchises 469 588 469 588
Results of Operations
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Total revenue $ 1,282 $ 1,666 $ 2,410 $ 2,952
Costs and expenses and
Other 1,010 1,178 1,971 2,254
Income before income taxes 287 504 472 730
Net income 192 335 325 502
Earnings per share
Basic $ .04 $ .08 $ .06 $ .11
Weighted average
common shares 4,292 4,098 4,292 4,098
Diluted $ .03 $ .06 $ .05 $ .09
Weighted average
common shares 6,124 5,505 6,124 5,505
(1) the franchisees' revenue data have been derived from
unaudited reports provided by franchisees submitted when paying
license fees and advertising fees to the company.