9 Months and Q3 Results Announced by Rent-A-Wreck of America Inc.
11 February 1999
Record Nine Months and Third Quarter Results Announced by Rent-A-Wreck of America Inc.
OWINGS MILLS, Md.--Feb, 10, 1999--Rent-A-Wreck of America Inc., announced its third quarter results.For the nine months ended Dec. 31, 1998, net revenues were $4,296,303, an increase of 21% over revenues of $3,542,012 in the same period last year. For the three months ended Dec. 31, 1998, net revenues rose 19% to $1,344,430 from the $1,132,223 in the same period last year.
Pre-tax income for the quarter was up 53% to $249,431 over the $162,594 in the same period in 1997. Nine-month pre-tax income was up by 54% to $979,745 compared with $634,316 in the same period a year ago. After including income tax expense, net income was up by 54% for the nine-month period from $439,947 to $677,521, and for the three-month period net income was up 53% from $115,328 to $176,009.
For the nine months, net income applicable to common shares increased by 67% to $595,561, or $.15 per common share (basic) and 54% to $677,521, or $.12 per common share (diluted). For the quarter, net income applicable to common shares increased by 70% to $148,689, or $.04 per common share (basic) and 53% to $176,009 ($.03 per common share, diluted).
"Rent-A-Wreck continues to be the number one choice of franchisee prospects when selecting an auto rental franchise," said Company President, Kenneth L. Blum, Jr. "Sales this year have exceeded any other year in the Company's storied history.
"For the last quarter of this year, Rent-A-Wreck will begin using its new toll-free vanity number, 1-US RENT A WRECK - (877/368-2973). It will soon be introduced in the Company's national ad campaigns.
"Consolidated American Rental Insurance Co., Ltd. has continued to experience insurance loss ratios as expected. Management is optimistic that the trend will continue as the program is gradually expanded," concluded Blum.
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 on 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 Nine Months
Ended Ended
Dec. 31, Dec. 31,
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) $ 8,575 $10,797 $30,457 $33,698
Number of franchises 485 623 485 623
Results of Operations
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Total revenue $ 1,132 $ 1,344 $ 3,542 $ 4,296
Costs and expenses and
Other 983 1,115 2,954 3,369
Income before income taxes 163 249 634 980
Net income 115 176 440 678
Earnings per share:
Basic $ .02 $ .04 $ .08 $ .15
Weighted average
common shares 4,292 4,079 4,276 4,107
Diluted $ .02 $ .03 $ .07 $ .12
Weighted average
common shares 5,919 5,569 5,903 5,597
(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.