Bestway, Inc. Announces Fiscal 2005 Second Quarter Results; Same
Store Revenues Up 4.1% DALLAS, March 29 /PRNewswire-FirstCall/ --
Bestway, Inc. (OTC Pink Sheets: BSTW), today released financial
results for its second quarter ended January 31, 2005. For the
three months ended January 31, 2005, revenue increased 4.5% to
$9,994,453, compared to $9,564,193 for the second quarter of last
year. Same store revenues (revenues earned in stores operated for
the entirety of both periods) increased 4.1% in the quarter. During
the second quarter of 2005, the Company opened one new store
location. Net earnings decreased to a loss of $8,557, or $(.01) per
share on a diluted basis, compared to income of $159,208, or $.09
per share on a diluted basis a year ago. The Company's quarterly
decline in net earnings resulted primarily from transitioning to a
more aggressive value-pricing model offering customers the lowest
total cost of ownership implemented during the fiscal fourth
quarter of 2004, as well as operating losses of $39,022 from one
new store location. As a result of the Company's value-pricing
model, depreciation of rental merchandise increased $311,673, or
16.7%. It is anticipated that continued revenue increases, combined
with future cost savings in key areas will result in continued
improvement in our profitability over time. For the six months
ended January 31, 2005 revenue increased 4.3% to $19,424,993,
compared to $18,623,221 for the six months ended January 31, 2004.
Same store revenues increased 3.8% in the six months. Net earnings
for the six month period ended January 31, 2005 decreased to a loss
of $141,086, or $(.08) per share on a diluted basis, compared to
income of $223,713, or $.12 per share on a diluted basis a year
ago. "Our value-pricing model continues to perform very well,"
commented David A. Kraemer, President and Chief Executive Officer.
"Growth in agreements and customers has been well within our
expectations and we're seeing continued strong results in revenue
growth. While our earnings were affected with higher depreciation,
we feel this is short term and anticipate future cost savings in
key areas, combined with continued revenue increases will result in
improved bottom lines." On November 19, 2004, the Company filed its
Schedule 13E-3 and preliminary proxy statement in connection with
the upcoming annual meeting of the stockholders of the Company. At
such meeting, the stockholders of the Company will vote upon, among
other things, an amendment to the Company's Amended and Restated
Certificate of Incorporation, which, if approved, would result in a
1-for-100 reverse stock split, such that stockholders owning less
than 100 shares of Common Stock will have such shares cancelled and
converted into the right to receive payment of cash, at a rate of
$13.00 per each pre-split share of Common Stock, immediately
followed by a 100-for-1 forward stock split. The Company is
currently awaiting completion of the SEC review of its Schedule
13E-3 and proxy statement before proceeding with the
reverse/forward stock split. All stockholders will receive a
definitive proxy statement once the SEC has completed its review
process. Bestway, Inc. owns and operates a total of seventy
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. Undue 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, 2005
2004 Cash and cash equivalents $700,789 $692,476 Prepaid expenses
and other assets 247,054 243,619 Rental merchandise, net 14,380,860
13,946,095 Property and equipment, net 2,099,950 2,235,985 Total
assets 19,624,173 19,375,622 Accounts payable 1,430,158 606,009
Debt 8,324,609 8,433,907 Total liabilities 11,017,260 10,657,088
Stockholders' Equity 8,606,913 8,718,534 BESTWAY, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months
Ended Six Months Ended January 31, January 31, 2005 2004 2005 2004
Revenues: Rental and fee income $9,474,675 $9,107,900 $18,528,630
$17,836,089 Sales of merchandise 519,778 456,293 896,363 787,132
9,994,453 9,564,193 19,424,993 18,623,221 Cost and operating
expenses: Depreciation and amortization: Rental merchandise
2,174,321 1,862,648 4,218,811 3,621,819 Other 258,687 308,540
530,673 636,981 Cost of merchandise sold 343,257 333,997 607,430
588,874 Salaries and wages 2,925,223 2,772,879 5,781,583 5,414,204
Advertising 497,043 454,715 982,293 918,604 Occupancy 643,014
632,683 1,311,171 1,250,953 Other operating expenses 3,029,272
2,792,969 5,894,385 5,532,408 Interest expense 130,405 136,396
257,606 289,210 Loss on sale of property and equipment 6,923 14,225
67,126 11,653 10,008,145 9,309,052 19,651,078 18,264,706 Income
(loss) before income taxes (13,692) 255,141 (226,085) 358,515
Income tax (benefit) expense (5,135) 95,933 (84,999) 134,802 Net
income (loss) $(8,557) $159,208 $(141,086) $223,713 Basic net
income (loss) per share $(0.01) $0.09 $(0.08) $0.13 Diluted net
income (loss) per share $(0.01) $0.09 $(0.08) $0.12 Weighted
average common shares outstanding 1,687,405 1,681,089 1,685,639
1,679,880 Diluted weighted average common shares outstanding
1,687,405 1,825,787 1,685,639 1,831,179 DATASOURCE: Bestway, Inc.
CONTACT: Beth A. Durrett, Chief Financial Officer, , or David A.
Kraemer, President and Chief Executive Officer, , both of Bestway,
Inc., +1-214-630-6655
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