PHOENIX, Nov. 15, 2010 /PRNewswire-FirstCall/ -- NowAuto
Group, Inc. (Pink Sheets: NAUG; NWAU) today announced results for
its fiscal 2011 first quarter ended September 30, 2010. The Company reported revenue
of $1.1 million and a net loss of
$0.05 per diluted share versus
revenue of approximately $1.4 million
and a net loss of $0.5 per diluted
share in the prior year. During the quarter ended September 30, 2010 gross margin improved to 62.9%
due improved capture of vehicle costs.
In spite of general economic conditions and the significant
impact on auto purchasing, the cost of charge-offs and defaults
improved by 13% over the same quarter of the prior year as a result
of increased credit criteria, improved contract management and
system upgrades. Nevertheless, management has chosen to increase
the bad debt accrual as a hedge against future potential losses.
Net investment increased 5% year-over-year. Operating income,
defined as income before charge-offs and interest expense, improved
34% year-over-year.
"The present condition of the sub-prime and below sub-prime auto
market has continued to impact our industry and our company," said
CEO Scott Miller. "While we have
managed to increase gross margin our challenge has been, and will
continue to be on, maintaining accounts and collections. Our
challenge in the current environment is to aggressively work with
our customers to maintain active contracts. Tighter underwriting
criteria yielded positive results in the September 2010 quarter. Nevertheless, we expect a
difficult environment for the foreseeable future. Our commitment to
customers and shareholders alike remains; NowAuto will do whatever
it can to maintain productive contracts without placing imprudent
demands on our customers," Miller said.
"We continue to seek ways to operate with greater efficiency,"
said Chief Financial Officer Faith
Forbis. "Our goal is to broaden our customer base thru
better service and rewards."
"Beginning in our second fiscal quarter we will be rolling out
additional business lines, including wheel and rim financing and
title loan programs to compliment our core auto finance business,"
said Chief Operating Officer Tino
Valenzuela. "These new lines require minimal capital
investment and require virtually no additional overhead, so we
expect results of these new lines to immediately contribute to the
bottom line," Valenzuela said.
About NowAuto Group, Inc.
NowAuto Group, Inc. operates two buy-here-pay-here used vehicle
dealerships in Arizona. The
Company manages all of its installment finance contracts and
purchases installment finance contracts from a select number of
other independent used vehicle dealerships.
Note to Investors
This press release contains forward-looking information within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Act of 1934, and is subject to the
safe harbor created by those sections. The forward-looking
information is based upon current information and expectations
regarding NowAuto Group, Inc. These estimates and statements speak
only as of the date on which they are made, are not guarantees of
future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual
outcomes and results could materially differ from what is
expressed, implied or forecasted in such forward-looking
statements.
NowAuto Group, Inc. assumes no obligation to update the
information contained in this press release. NowAuto Group, Inc.'s
forward-looking statements in this press release and future results
may be materially impacted by any number of factors, any or all of
which could have a negative impact on sales, operating results,
financial and budgetary constraints. NowAuto Group, Inc.'s future
results may also be impacted by other risk factors listed from time
to time in its SEC filings, including, but not limited to, the
Company's Form-Qs and its Annual Report on Form 10-K. The
statements made herein are independent statements of NowAuto Group,
Inc. The inclusion, if any, of any third parties does not represent
an endorsement of any NowAuto Group, Inc. products or services by
any such third party.
For further information contact NowAuto Group, Inc. or visit the
Company's Web site at www.nowauto.com.
SOURCE NowAuto Group, Inc.