Bestway, Inc. Announces Fiscal 2005 First Quarter Results; Same
Store Revenues Up 3.5% DALLAS, March 28 /PRNewswire-FirstCall/ --
Bestway, Inc. (OTC Pink Sheets: BSTW), today released financial
results for its first quarter ended October 31, 2004. For the three
months ended October 31, 2004, revenue increased 4.1% to
$9,430,540, compared to $9,059,027 for the first quarter of last
year. Same store revenues (revenues earned in stores operated for
the entirety of both periods) increased 3.5% in the quarter. Net
earnings decreased to a loss of $132,536, or $(.08) per share on a
diluted basis, compared to income of $64,505, or $.04 per share on
a diluted basis, a year ago. The Company's quarterly decline in net
earnings resulted primarily from the decision to move to a more
aggressive value-pricing model during the fiscal fourth quarter of
2004. The Company's value-pricing model is an investment necessary
to increase customer traffic. It is anticipated that future cost
savings in key areas, combined with revenue increases will result
in improved profits over time. In addition, the Company incurred
expense of $60,202 for the relocation of two stores. "I'm pleased
to report strong internal enthusiasm for our new value-priced
programs that have been well received by our customers with early
results exceeding expectations," commented David A. Kraemer,
President and Chief Executive Officer. "While offering our
customers an aggressive pricing model, we've been able to have a
positive impact on reducing returns and collection efforts to focus
on growing revenues and customers. Transitioning to our model
affected earnings with higher depreciation expense. We are
committed to improving our customers experience with rent-to-own by
offering them the lowest total cost of ownership and we understand
that lower margins requires us to operate at a more optimum level
with strict cost controls. While we continue to seek cost take
outs, it must be understood short term earnings may be erratic." 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 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) October 31, July 31, 2004
2004 Cash and cash equivalents $792,249 $692,476 Prepaid expenses
and other assets 251,685 243,619 Rental merchandise, net 13,604,377
13,946,095 Property and equipment, net 2,089,511 2,235,985 Total
assets 19,001,339 19,375,622 Accounts payable 1,167,685 606,009
Debt 7,679,310 8,433,907 Total liabilities 10,404,091 10,657,088
Stockholders' Equity 8,597,248 8,718,534 BESTWAY, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three Months
Ended October 31, 2004 2003 Revenues: Rental and fee income
$9,053,956 $8,728,188 Sales of merchandise 376,584 330,839
9,430,540 9,059,027 Cost and operating expenses: Depreciation and
amortization: Rental merchandise 2,044,490 1,759,171 Other 271,987
328,441 Cost of merchandise sold 264,173 254,877 Salaries and wages
2,856,362 2,641,325 Advertising 485,250 463,889 Occupancy 668,159
618,270 Other operating expenses 2,865,118 2,739,438 Interest
expense 127,202 152,814 Loss (gain) on sale of property and
equipment 60,202 (2,572) 9,642,943 8,955,653 Income (loss) before
income taxes (212,403) 103,374 Income tax (benefit) expense
(79,867) 38,869 Net income (loss) $(132,536) $64,505 Basic and
diluted net income (loss) per share $(0.08) $0.04 Weighted average
common shares outstanding 1,683,872 1,678,672 Diluted weighted
average common shares outstanding 1,683,872 1,835,559 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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