BSTW Bestway (MM)

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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