Bestway, Inc. Announces Fiscal 2004 Third Quarter Results Same
Store Revenues Increase 2.1%; Seven Consecutive Quarters of
Increased Same Store Revenues DALLAS, June 9 /PRNewswire-FirstCall/
-- Bestway, Inc. (NASDAQ:BSTW), today reported financial results
for its fiscal third quarter and nine months ended April 30, 2004.
For the third quarter of fiscal 2004, revenue increased 2.5% to
$9,447,879, compared with revenue of $9,213,864 for the same period
last year. Same store revenues (revenues earned in stores operated
for the entirety of both periods) increased 2.1% in the quarter.
Net earnings in the third quarter decreased to $88,010, or $.05 per
fully diluted share, compared with $147,106, or $.08 per fully
diluted share, for the third quarter last year. The Company's
quarterly decline in net earnings resulted primarily from costs
associated with an overall increase in salaries and wages and other
operating expenses. We feel strongly that the investments we are
making in our people will allow us to drive growth and
profitability in the future. For the nine months ended April 30,
2004, revenue increased 6.4% to $28,071,100, compared with revenue
of $26,381,085 for the same period last year. Same store revenues
increased 6.1% for the year-to-date period. Net earnings for the
nine month period increased to $311,723, or $.17 per fully diluted
share, compared to net loss of $46,967, or $.03 per fully diluted
share, last year. "Although I am not happy with a 2.1% same store
revenue growth for the quarter, we did have a 4.0% growth in rental
and fee revenue for the same period," commented David A. Kraemer,
President and Chief Executive Officer. "It should also be noted
that our strategic efforts of increasing our customer base,
focusing on higher revenue-generating merchandise, implementing
targeted marketing campaigns and focusing on developing our people
has resulted in a 13.9% same store growth in revenue compared to
two years ago. I feel strongly that we are capable of further
accelerating same store revenue growth. Using the foundation we
built with the strategic initiatives outlined above, we began
implementation of several additional changes in our business model
with excellent results," Kraemer continued, "these changes were
brought about by our market and customer research over the past
several months. We are encouraged by the acceptance of these
changes to date and look forward to completing implementation of
the programs over the next several months." 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. 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) April 30, July 31, 2004
2003 Cash and cash equivalents $ 269,150 $ 305,869 Prepaid expenses
and other assets 210,819 234,908 Rental merchandise, net 14,710,512
13,858,064 Property and equipment, net 2,423,464 2,732,798 Total
assets 19,934,152 20,002,168 Accounts payable 1,234,755 751,328
Debt 8,538,402 9,451,299 Total liabilities 11,272,884 11,683,375
Stockholders' Equity 8,661,268 8,318,793 BESTWAY, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months
Ended Nine Months Ended April 30, April 30, 2004 2003 2004 2003
Revenues: Rental and fee income $ 9,220,420 $ 8,864,582 $27,486,235
$25,361,440 Sales of merchandise 227,459 349,282 584,865 1,019,645
9,447,879 9,213,864 28,071,100 26,381,085 Cost and operating
expenses: Depreciation and amortization: Rental merchandise
1,822,500 1,743,587 5,444,319 5,092,456 Other 297,030 375,044
934,011 1,126,988 Cost of merchandise sold 197,387 339,328 534,258
1,119,152 Salaries and wages 2,791,719 2,581,090 8,205,923
7,688,478 Advertising 427,364 465,942 1,345,968 1,278,865 Occupancy
635,834 606,458 1,886,787 1,788,640 Other operating expenses
2,991,515 2,696,548 8,775,926 7,849,943 Interest expense 128,404
168,648 417,614 518,916 Loss (gain) on sale of property and
equipment 15,085 1,475 26,738 (7,086) 9,306,838 8,978,120
27,571,544 26,456,352 Income (loss) before income taxes 141,041
235,744 499,556 (75,267) Income tax expense (benefit) 53,031 88,638
187,833 (28,300) Net income (loss) $ 88,010 $ 147,106 $ 311,723 $
(46,967) Basic net income (loss) per share $ 0.05 $ 0.09 $ 0.19 $
(0.03) Diluted net income (loss) per share $ 0.05 $ 0.08 $ 0.17 $
(0.03) Weighted average common shares outstanding 1,682,122
1,677,572 1,680,628 1,667,283 Diluted weighted average common
shares outstanding 1,817,171 1,813,456 1,826,630 1,667,283
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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