Press Release: Mego Financial Corp.
January 15, 2001
LAS VEGAS, NV -- Mego Financial Corp. (Nasdaq: MEGO) announced Jan. 12 improved results for the first quarter of
fiscal 2001 ended November 30, 2000.
For the three months ended November 30, 2000, Mego Financial reported total revenues of $25,880,000, up from $20,697,000
in the same period of fiscal 2000. Income before income taxes for the 2001 first quarter ended November 30, 2000
improved substantially, to $1,786,000, compared to income before income taxes of $655,000 in the first quarter
of fiscal 2000.
For the fiscal 2001 first quarter ended November 30, 2000, Mego Financial reported net income applicable to common
stock of $1,923,000 (inclusive of a income tax benefit of $137,000), or $0.55 per common share based on 3,500,557
common shares and common share equivalents outstanding. For the fiscal 2000 first quarter ended November 30, 1999,
Mego Financial reported net income applicable to common stock of $655,000, or net income of $0.19 per common share
based on 3,500,557 common shares and common share equivalents outstanding.
Management Comments on Fiscal 2001 First Quarter Results
Commenting on the Company's results, Jerome J. Cohen, President of Mego Financial, said, ``We are extremely pleased
with the overall performance of the Company during the first quarter of fiscal 2001 as we achieved the seventh
consecutive quarter of profitability since our turnaround began in early 1999. Mego Financial started the new fiscal
year with strong improvements in timeshare interest sales, total revenues and net income, indicating the continuing
progress of strategic marketing programs and enhanced sales initiatives.
``We are especially pleased with the continued strong performance in timeshare sales, where the Company achieved
17% growth versus the prior year. Our established off-site offices, located in West Covina, California; Denver,
Colorado; and Dallas, Texas posted strong gains this quarter while our new off-site office in Houston, Texas processed
approximately $1.8 million in sales. Based on the initial success of our Houston office, which opened in March
2000, we continue to believe this location will contribute meaningfully to revenues in fiscal 2001 and generate
the same level of sales as our Dallas office over the long-term.''
Mr. Cohen added, ``As Mego Financial enters a new fiscal year, we are targeting a 12% to 15% increase in 'same
store sales' in fiscal 2001. To accomplish this 'same store sales' goal we expanded the hours and days of operation
at some of our offices with the intent of improving sales efficiencies. Additionally, Mego Financial continues
to explore new external opportunities to drive our expansion. We are optimistic that fiscal 2001 will be another
year of solid achievement and very positive about the impact of our long-term growth strategies on the financial
prospects of the Company.''
Finally, management noted that the Company's website, Ramadavacationsuites.com
, which was launched in early 2000 continue to produce more and more prospects, while servicing existing owners
more quickly and conveniently. Enhancements are being made to the site on an ongoing basis.
Mego Financial is a premier developer and operator of timeshare properties and a provider of consumer financing
to purchasers of timeshare interests and land parcels through its wholly owned subsidiary, Preferred Equities Corporation,
established in 1970. Mego Financial is headquartered in Las Vegas, Nevada and has properties it operates under
the banner of Ramada Vacation Suites in Nevada, New Jersey, Colorado, Florida, Hawaii and Louisiana. Mego Financial
also owns Central Nevada Utilities, serving a large portion of the fast-growing Palrump Valley, near Las Vegas.
To receive Mego Financial's latest news and other corporate documents via FAX-no cost-please dial 1-800-PRO-INFO.
Use Mego Financial's ticker symbol, MEGO.
Or view our pages on FRB's website www.frbinc.com
This press release contains ``forward-looking statements'' within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors
which may cause actual results, performance or achievements of Mego Financial to be materially different from any
future results, performance or achievements express or implied by such forward-looking statements. Factors that
might cause such a difference, include, but are not limited to those discussed in the Management's Discussion and
Analysis of Financial Condition and Results of Operations in Mego Financial's Annual Report on Form 10-K for the
year ended August 31, 2000, filed by Mego Financial Corp. with the Securities and Exchange Commission.
Mego Financial Corp. and Subsidiaries
Condensed Consolidated Income Statements
(Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
Three Months Ended
November 30,
2000 1999
REVENUES
Timeshare interest sales, net $14,018 $11,991
Land sales, net 4,742 4,019
Gain on sale of notes receivable 292 -
Gain on sale of investments and
other assets 1,608 -
Interest income 3,209 2,871
Financial income 479 272
Incidental operations 490 624
Other 1,042 920
Total revenues 25,880 20,697
COSTS AND EXPENSES
Direct cost of:
Timeshare interest sales 3,157 2,378
Land sales 769 556
Interest expense 3,044 2,866
Marketing and sales 11,464 9,274
General and administrative 4,914 3,878
Incidental operations 354 600
Depreciation 392 490
Total costs and expenses 24,094 20,042
INCOME BEFORE INCOME TAXES 1,786 655
INCOME TAXES (BENEFIT) (137) -
NET INCOME APPLICABLE TO COMMON
STOCK $1,923 $655
INCOME PER COMMON SHARE
Basic:
Net income applicable to common
stock $0.55 $0.19
Weighted-average number of common
shares and common share
equivalents outstanding 3,500,557 3,500,557
Diluted:
Net income applicable to common
stock $0.55 $0.19
Weighted-average number of common
shares and common share
equivalents outstanding
3,500,557 3,500,557
Mego Financial Corp. and Subsidiaries
Condensed Consolidated Balance Sheets
(Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
November 30, August 31,
2000 2000
ASSETS
Cash and cash equivalents $337 $1,069
Restricted cash 1,066 1,255
Notes receivable, net of allowance
for cancellations and discounts of
$13,262 at
November 30, 2000 and $13,234 at
August 31, 2000 84,090 83,156
Interest only receivables, at fair
value 2,812 2,701
Timeshare interests held for sale 20,992 23,307
Land and improvements inventory 3,593 4,113
Other investments 4,487 4,492
Property and equipment, net of
accumulated depreciation of
$15,807 at November 30,
2000 and $17,632 at August 31,
2000 16,988 23,167
Deferred selling costs 5,238 5,231
Prepaid debt expenses 2,103 2,060
Other assets 18,082 18,041
TOTAL ASSETS $159,788 $168,592
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Notes and contracts payable $97,903 $109,131
Accounts payable and accrued
liabilities 20,478 19,544
Reserve for notes receivable sold
with recourse 4,265 4,033
Deposits 3,029 2,841
Accrued income taxes 2,595 2,975
Total liabilities before
subordinated debt 128,270 138,524
Subordinated debt 4,286 4,286
Stockholders' equity:
Preferred stock, $.01 par value
(authorized- - - -
5,000,000 shares, non
outstanding) - -
Common stock, $.01 par value
(authorized- - - -
50,000,000 shares;
3,500,557 shares
issued and outstanding at
November 30, 2000 and August 31,
2000) 35 35
Additional paid-in capital 13,068 13,068
Retained earnings 14,602 12,679
Accumulated other comprehensive
loss (473) -
Total stockholders' equity 27,232 25,782
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $159,788 $168,592
SOURCE: Mego Financial Corp.