BSTW Bestway (MM)

Bestway, Inc. Reports Results for Fiscal 2004 Second Quarter and Six Months; Same Store Sales Increase 7.5%; Net Earnings Increase 273.6% DALLAS, March 11 /PRNewswire-FirstCall/ -- Bestway, Inc. , today reported financial results for its fiscal second quarter and six-months ended January 31, 2004. Revenue for the quarter was $9,564,193, a $669,933 increase from $8,894,260 for the comparable period in the prior year. We achieved this 7.5% year-over-year revenue increase from same stores. Of the increase in revenue from same stores, rental and fee income increased $868,207, or 10.2%. The increase in rental and fee income is directly attributable to the success of our efforts on improving store operations through increasing our customer base and increasing the average price per unit on rent by upgrading our rental merchandise. Sales of merchandise decreased $198,274, or 50.6%, as the Company discontinued and liquidated lower-margin product offerings in December 2002. Net earnings for the quarter increased to $159,208, or $.09 per share on a diluted basis, compared to net earnings of $42,619, or $.02 per diluted share, for the comparable period in the prior year. The year-over-year increase in net earnings is primarily the result of eliminating lower-cost, lower-margin merchandise from our product mix, focusing on higher revenue-generating merchandise, driving top line revenues through training and developing our people and implementing a more aggressive and targeted marketing campaign. For the six months ended January 31, 2004 revenue was $18,623,221, a $1,455,999 increase from $17,167,222 for the comparable period in the prior year. We achieved this 8.5% year-over-year revenue increase from same stores. Net earnings for the six month period ended January 31, 2004 was $223,713, or $.12 per share on a diluted basis, compared to net loss of $194,072, or $.12 per diluted share for the comparable period last year. "We continue to be pleased with our initiatives in training and development. The pay offs we've seen are tighter inventory controls, a reduction in delinquent accounts, increased customer counts, as well as a reduction in employee turnover," said David A. Kraemer, President and Chief Executive Officer. "As we look forward to the remainder of the year, we expect same store revenues to continue to be strong and remain confident in the fundamentals of our business." Bestway, Inc. owns and operates a total of sixty-nine rent-to-own stores located in the southeastern United States. These stores generally offer high quality brand name merchandise such as home entertainment equipment, appliances, furniture and computers under flexible rental purchase agreements that generally allow the customer to obtain ownership of the merchandise at the conclusion of an agreed upon rental period. This press release and the guidance above contain various "forward-looking statements" that involve risks and uncertainties. Forward-looking statements represent the Company's expectations or beliefs concerning future events. Any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors include, but are not limited to, (i) the ability of the Company to open or acquire additional rental-purchase stores on favorable terms, (ii) the ability of the Company to improve the performance of such acquired stores and to integrate such opened or acquired stores into the Company's operations, (iii) the impact of state and federal laws regulating or otherwise affecting rental- purchase transactions, (iv) the impact of general economic conditions in the United States and (v) the impact of terrorist activity, threats of terrorist activity and responses thereto on the economy in general and the rental- purchase industry in particular. Undo reliance should not be placed on any forward-looking statements made by or on behalf of the Company as such statements speak only as of the date made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, the occurrence of future events or otherwise. BESTWAY, INC. SELECTED BALANCE SHEET DATA (Unaudited) January 31, July 31, 2004 2003 Cashand cash equivalents $ 823,058 $ 305,869 Prepaid expenses and other assets 208,630 234,908 Rental merchandise, net 13,755,615 13,858,064 Property and equipment, net 2,406,290 2,732,798 Total assets 19,643,353 20,002,168 Accounts payable 1,073,947 751,328 Debt 8,742,797 9,451,299 Total liabilities 11,078,250 11,683,375 Stockholders' Equity 8,565,103 8,318,793 BESTWAY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended January 31, January 31, 2004 2003 2004 2003 Revenues: Rental and fee income $9,370,876 $8,502,669 $18,265,815 $16,496,860 Sales of merchandise 193,317 391,591 357,406 670,362 9,564,193 8,894,260 18,623,221 17,167,222 Cost and operating expenses: Depreciation and amortization: Rental merchandise 1,862,648 1,728,322 3,621,819 3,348,869 Other 308,540 379,407 636,981 751,944 Cost of merchandise sold 180,512 427,584 336,871 779,824 Salaries and wages 2,772,879 2,662,915 5,414,204 5,107,388 Advertising 454,715 427,932 918,604 812,923 Occupancy 632,683 593,122 1,250,953 1,182,182 Other operating expenses 2,946,454 2,499,317 5,784,411 5,153,395 Interest expense 136,396 175,103 289,210 350,268 Loss (gain) on sale of property and equipment 14,225 (9,347) 11,653 (8,561) 9,309,052 8,884,355 18,264,706 17,478,232 Income (loss) before income taxes 255,141 9,905 358,515 (311,010) Income tax expense (benefit) 95,933 (32,714) 134,802 (116,938) Net income (loss) $ 159,208 $ 42,619 $ 223,713 $ (194,072) Basic net income (loss) per share $ 0.09 $ 0.03 $ 0.13 $ (0.12) Diluted net income (loss) per share $ 0.09 $ 0.02 $ 0.12 $ (0.12) Weighted average common shares outstanding 1,681,089 1,671,705 1,679,880 1,662,139 Diluted weighted average common shares outstanding 1,825,787 1,752,091 1,831,179 1,662,139 DATASOURCE: Bestway, Inc. CONTACT: Beth A. Durrett, Chief Financial Officer, or , or David A. Kraemer, President and Chief Executive Officer, or , both of Bestway, Inc., +1-214-630-6655

Copyright