Rent-A-Wreck Purchases and Retires 400,000 Shares -- 10.1% -- of its Common Stock
23 November 1999
Rent-A-Wreck Purchases and Retires 400,000 Shares -- 10.1% -- of its Common Stock
OWINGS MILLS, Md.--Nov. 23, 1999--On Nov. 23, 1999, Rent-A-Wreck of America, Inc. purchased and retired 400,000 shares of it outstanding common stock for $790,000.The shares were purchased in a private transaction. The transaction reduces the Company's outstanding common shares to 3,553,217.
After repurchasing and retiring a total of 640,975 common and convertible preferred shares and warrants in its fiscal year ended March 31, 1999, Rent-A-Wreck did not buy any additional shares between March 5 and November 22 while the common stock rose in value (based on last reported trade) during that time from $1.25 to $2.00.
Although the Company had not previously paid more than $1.25 per share for common stock and $1.60 per share for Convertible Cumulative Series A Preferred Stock, Kenneth L. Blum, Jr., President, stated that the Company's continued growth in earnings, its substantial cash position and absence of debt, and the size of the block being offered caused the Board of Directors to increase the per share price it was willing to pay.
Mr. Blum stated that the Board has not authorized any further share repurchases at this time. Despite this, he indicated that future earnings growth, the Company's financial circumstances, and/or the price and quantity at which stock might become available in the future could cause this situation to change.
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.