Rent-A-Wreck Announces Fifth Consecutive Record Year
7 July 1999
Rent-A-Wreck Announces Fifth Consecutive Record Year ... Fiscal 99 Operating Income Up 49%
OWINGS MILLS, Md.--July 6, 1999--Rent-A-Wreck of America, Inc. (NASDAQ SMALLCAP:RAWA) announced record earnings for its fourth quarter and fiscal year ended March 31, 1999.The Company reported fiscal 1999 operating income for the year up by 49% to $1,037,647 over operating income of $694,085 in the same period a year ago.
Net income for the 1999 fiscal year increased 57% from $547,904 to $857,975. The increase was mainly due to a 35% increase in initial license fees, a 13% increase in continuing license fees and a 28% increase in premiums in connection with the reinsurance program. The number of franchises increased by 13% to 629 as of March 31, 1999.
Net income applicable to common shares increased by 73% to $753,233, or $.18 per common share (Basic) and $.15 per common share (Diluted).
Rent-A-Wreck president Kenneth L. Blum, Jr. noted that the Company continues to grow rapidly in an industry that has seen many mergers and acquisitions in recent years.
"The franchise business in the auto rental industry has proven to be lucrative, and we believe there are many untapped opportunities. This record pace of growth has put us on the map. Rent-A-Wreck is part of the American lexicon, and with almost 1 billion gross impressions in the first quarter this year, our radio advertising campaign has created new marketing opportunities," noted Blum.
CONDENSED CONSOLIDATED FINANCIAL STATEMENT ATTACHED
Year ended March 31,
1998 1999
(in thousands except per share
and number of franchises)
Franchisees' Results (Unaudited)
Franchisees' Revenue (1) $40,018 $45,358
Number of Franchises 558 629
Company's Results of Operations
Total Revenue $ 4,677 $ 5,601
Costs and expenses and Other 3,983 4,564
Income before income taxes $ 756 1,113
Net income 548 858
Earnings per common share
Basic $ .10 $ .18
Weighted average common shares 4,267 4,086
Diluted $ .09 $ .15
Weighted average common shares plus
options and warrants 5,915 5,611
(1) The franchisees' revenue data have been derived from unaudited
license fee reports provided by franchisees.
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 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, "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, 1999. All forward-looking statements should be considered in light of these risks and uncertainties.