Bestway (NASDAQ:BSTW)
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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