Bestway, Inc. Reports Second Quarter 2003 Results; Same Store Revenues Up 15.1%

Furniture World Magazine

Bestway, Inc. (NASDAQ:BSTW) announced revenues and net earnings for the quarter ended January 31, 2003. Revenue for the second quarter ended January 31, 2003 increased to $8,894,260 compared to $8,493,850 for the comparable period in 2002. Growth in same store revenues drove this 4.7% increase, which was offset by decreased revenues from the consolidation or sale of fourteen store locations in 2002. Same store revenues (revenues earned in stores operated for the entirety of both periods) during the second quarter of 2003 increased 15.1% above the comparable quarter of 2002. Net income and diluted earnings per share for the second quarter were $42,619 or $.02 per share, respectively, compared to a net loss of $73,723 or $.04 per share a year ago. Proforma net loss for the second quarter of 2002 was reduced to $10,636 or $.01 per share to reflect the required adoption of Statement of Financial Accounting Standards No. 142, under which the Company discontinued amortization of goodwill. Revenue for the six-month period ended January 31, 2003 increased to $17,167,222 compared to $16,944,355 for the comparable period in 2002. Growth in same store revenues drove this 1.3% increase, which was offset by decreased revenues from the consolidation or sale of fourteen store locations in 2002. Same store revenues during the six-month period of 2003 increased 12.7% above the comparable period in 2002. Net loss and diluted earnings per share for the six-month period were $194,072 or $.12 per share, respectively, compared to a net loss of $265,605 or $.16 per share a year ago. Proforma net loss for the six-month period of 2002 was reduced to $139,430 or $.08 per share to reflect the required adoption of Statement of Financial Accounting Standards No. 142, under which the Company discontinued amortization of goodwill. The Company's improvement in operations for both the three and six-month periods occurred as a result of the increase in revenues coupled with the realization of our margin enhancement initiatives and the reduction of intangible amortization expense, offset by our investments in human resources and advertising. By adjusting our merchandise mix through the elimination of lower margin product lines and focusing on higher revenue merchandise, we increased our average income per rental agreement and our gross margins. Our increased investment in store personnel and advertising resulted in an increase in both customers and agreements on rent. "I can not say enough about the job everyone here at Team Bestway is doing," commented David Kraemer, the Company's President and Chief Executive Officer. "We committed ourselves 7 months ago to make '03 a year of growth, and I'm pleased to say we are seeing the rewards of good planning and execution as evidenced by an impressive 12.7% improvement in same store sales for the six-month period as well as returning the company to profitability for the quarter. In addition to our improvement in all financial measures," Kraemer continued, "we also have significantly strengthened our field personnel at all levels including the appointment of two new Regional Vice Presidents. Based on the quality of our team, our commitment to continuous improvement in processes and execution and the overall opportunity in the rent-to-own industry, I could not be more excited about our future." 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.