Reconditioned Systems, Inc. News Release
444 West Fairmont
Tempe, Arizona 85282 Contact: Investor Relations
(480) 968-1772 (Telephone)
(480) 894-1907 (Fax)
“RSI reports Second Quarter
2006 results”
Tempe, Arizona, November 11,
2005
Dear Fellow Shareholders:
I am pleased to report that Reconditioned Systems, Inc. (“RSI”) had another profitable quarter. However, the environment for our industry continues to be very competitive, especially with the OEMs. We are starting to see their lead times increase slightly, which usually indicates that price increases, or more accurately discount reductions, should follow. This usually is a good environment for us; we can compete on price and delivery times.
For the three months that ended September 30, 2005, RSI made a pre-tax profit of $136 thousand on sales of $4.3 million. This compares to a pre-tax profit of $294 thousand on sales of $5.2 million for the quarter ending September 30, 2004. We are proud of our results, which confirm the correctness of our cost cutting measures of the last several years, including becoming a non-reporting company.
We still believe that high energy prices will have a significant negative impact on consumer spending and the economy. The last time energy prices had this kind of increase, it led to a recession and a prolonged period of “stagflation”. It is because of this outlook that we have been conservative in our budget and our planning. Although our sales have been strong, we continue to project flat sales with a slight increase in earnings. For the first six months of our fiscal year we are slightly ahead of our budget for sales and earnings.
We paid the first common stock dividend in the history of the company on August 31, 2005. We hope to pay future annual dividends depending on our performance and what our cash needs are.
/s/ Scott W. Ryan
Scott W. Ryan
Chairman of the Board
Reconditioned Systems, Inc.
November 11, 2005
Page -2-
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Summary Statement of Operations |
||||
|
|
For The Three Months Ended |
For the Six Months Ended |
||
|
|
September 30, 2005(Unaudited) |
September 30, 2004(Unaudited) |
September 30,
2005 (Unaudited) |
September 30,
2004 (Unaudited) |
|
Sales |
$4,304,455
|
$5,180,860 |
$10,200,103 |
$9,590,686 |
|
Net income before provision for income taxes |
$135,978 |
$294,123 |
$678,190 |
$325,652 |
|
Net income |
$77,973 |
$253,005 |
$396,085 |
$276,804 |
|
Basic earnings
per share |
$0.06 |
$0.22 |
$0.31 |
$0.22 |
|
Basic weighted average number of common shares
outstanding |
1,279,779 |
1,155,331 |
1,277,154 |
1,261,243 |
|
Diluted earnings
per common and equivalent share |
$0.06 |
$0.20 |
$0.31 |
$0.21 |
|
Diluted weighted average number of common and
equivalent shares outstanding |
1,279,779 |
1,271,094 |
1,277,154 |
1,319,124 |
|
Summary Balance Sheet as
of |
|||||
|
|
September 30,
2005 (Unaudited) |
September 30,
2004 (Unaudited) |
|
September 30,
2005 (Unaudited) |
September 30,
2004 (Unaudited) |
|
Assets |
|
|
Liabilities
and Equity |
|
|
|
Cash |
$1,533,587 |
$685,310 |
Accounts payable |
$767,812 |
$900,709 |
|
Accounts receivable |
1,485,636 |
2,057,164 |
Customer deposits |
566,978 |
397,426 |
|
Inventory |
1,967,046 |
1,612,630 |
Other current liabilities |
868,015 |
612,856 |
|
Property & equipment |
798,133 |
655,259 |
Stockholders’ equity |
3,965,993 |
3,455,678 |
|
Other assets |
384,396 |
356,306 |
|
|
|
|
Total |
$6,168,798 |
$5,366,669 |
Total |
$6,168,798 |
$5,366,669 |
Note: The
Company’s quarterly press releases are available on our website www.resy.net under Inventor Relations. Any shareholder who would like to sell
shares back to the Company should contact the Investor Relations Department at
800-280-5000.