Rent-A-Wreck Announces Earnings for Its Fiscal Year Ended March 31, 2000
30 June 2000
Rent-A-Wreck Announces Earnings for Its Fiscal Year Ended March 31, 2000
OWINGS MILLS, Md. - Rent-A-Wreck of America, Inc. announced earnings for its fourth quarter and fiscal year ended March 31, 2000.The Company reported an increase in operating cash flow (EBITDA) of 46%. Due to a one-time expense of $625,000 for the repurchase of 500,000 options incurred in the fourth quarter, operating income in fiscal 2000 declined 3% to $1,002,387 from $1,037,647 in the prior year. Net income for the 2000 fiscal year was $820,629 compared to $857,975 in 1999. Net income applicable to common shares was $731,129, or $.19 per common share (Basic) and $.14 per common share (Diluted). Excluding the expense associated with the repurchase of options, net income would have been $1,204,379 instead of $820,629, basic earnings per share would have been $.29 instead of $.19, and diluted earnings per share would have been $.20 instead of $.14.
"This has been yet another year for strong growth in operating cash flow, much of which was utilized to enhance future earnings per share by buying back shares and options pursuant to the Company's stock buyback program which has been in effect since 1995. The increase in continuing license fees indicates the growth in our fleet and we are encouraged with future prospects in many areas including PRICELE$$ and our initial foray into the wheelchair accessible vehicle marketplace", says Company President, Kenneth L. Blum, Jr.
CONDENSED CONSOLIDATED FINANCIAL STATEMENT ATTACHED
Year ended March 31,
1999 2000
-----------------------
(in thousands except per share
and number of franchises)
Franchisees' Results (Unaudited)
Franchisees' Revenue (1) $45,358 $51,707
Number of Franchises 652 675
(outstanding at year-end)
Company's Results of Operations
Total Revenue $ 5,601 $ 6,282
Operating expenses 4,564 5,279
Income before income
taxes $ 1,113 $ 1,101
Net income 858 821
Earnings per common share
Basic $ .18 $ .19
Weighted average common
shares 4,086 3,808
Diluted $ .15 $ .14
Weighted average common
shares plus convertible
preferred stock, options
and warrants 5,611 5,902
EBITDA (2) $ 1,313 $ 1,922
(1) The franchisees' revenue data have been derived from unaudited
license fee reports provided by franchisees.
(2) "EBITDA" is earnings before interest expense, depreciation,
amortization, taxes and repurchase of options. EDITDA should not
be interpreted as a measure of operating results, cash flow
provided by operating activities, a measure of liquidity, or as an
alternative to any generally accepted accounting principle measure
of performance. The Company is reporting EBITDA because it is a
widely used financial measure of the potential capacity of a
company to incur and service debt. Rent-A-Wreck's reported EBITDA
may not be comparable to similarly titled measures used by other
companies.
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, 2000. All forward-looking statements should be considered in light of these risks and uncertainties.