Reconditioned Systems, Inc. News
Release
444 West Fairmont
Tempe, Arizona 85282 Contact: Investor Relations
(480) 968-1772 (Telephone)
(480) 894-1907 (Fax)
“RSI reports Third Quarter
2006 results”
Tempe, Arizona, February 3,
2006
Dear Fellow Shareholders:
I am pleased to report that Reconditioned Systems, Inc. (“RSI”) was profitable again this quarter. We are just slightly ahead of our budget for sales and profits year to date, and I expect that we will meet our forecast for this year of flat sales with a slight increase in profits over last year.
We are just beginning to see small price increases (or more correctly smaller discounts) and hope that this will lead to better margins. OEM lead times are increasing which should also help our business. We are moving our Tempe facility this year; we are optimistic that we will experience little or no disruption to our sales or manufacturing, however, any such change is always a distraction. Our new facility should make us more efficient and give us additional capacity for the future.
For the three months ended December 31 2005, RSI made $213 thousand on sales of $5 million. This compares to a profit of $159 thousand on sales of $5 million for the quarter ending December 31, 2004. The better performance continues to validate the cost cutting of the last two years, including becoming a non-reporting company. More and more small companies are following our lead due to the high cost of remaining a public company. We need to improve our margins and become more profitable. Your Board of Directors will be focusing on this for the future. This is problematic however, given the difficulty in maintaining profitable, domestic, non-technical manufacturing.
The economy has been remarkably strong so far this year, however, energy-driven inflation should trend higher for 2006, and interest rates should also rise. This could be a problem for the economy and we remain cautious for this next year.
/S/ Scott W. Ryan
Scott W. Ryan
Chairman of the Board
Reconditioned Systems, Inc.
February 3, 2006
Page -2-
|
Summary Statement of Operations |
||||
|
|
For The Three Months Ended |
For the Nine Months Ended |
||
|
|
December 31, 2005(Unaudited) |
December 31, 2004(Unaudited) |
December 31,
2005 (Unaudited) |
December 31,
2004 (Unaudited) |
|
Sales |
$5,048,208 |
$4,970,623
|
$15,248,315 |
$14,561,309 |
|
Net income before provision for income taxes |
$361,990 |
$282,270 |
$1,040,194 |
$607,922 |
|
Net income * |
$212,815 |
$159,118 |
$608,914 |
$435,922 |
|
Basic earnings per share |
$0.17 |
$0.13 |
$0.48 |
$0.35 |
|
Basic weighted average number of common shares
outstanding |
1,246,961 |
1,189,398 |
1,267,089 |
1,237,294 |
|
Diluted earnings per common and equivalent share |
$0.17 |
$0.13 |
$0.48 |
$0.34 |
|
Diluted weighted average number of common and
equivalent shares outstanding |
1,246,961 |
1,189,398 |
1,267,089 |
1,275,882 |
* Net of estimated income tax expense/benefit.
|
Summary Balance Sheet as
of |
|||||
|
|
December 31,
2005 (Unaudited) |
December 31,
2004 (Unaudited) |
|
December 31,
2005 (Unaudited) |
December 31,
2004 (Unaudited) |
|
Assets |
|
|
Liabilities
and Equity |
|
|
|
Cash |
$1,625,762 |
$1,019,095 |
Accounts payable |
$1,005,488 |
$976,935 |
|
Accounts receivable |
1,700,655 |
1,756,940 |
Customer deposits |
341,547 |
428,044 |
|
Inventory |
1,852,339 |
1,923,547 |
Other current liabilities |
1,001,327 |
654,175 |
|
Property & equipment |
765,898 |
649,246 |
Stockholders’ equity |
4,076,581 |
3,814,454 |
|
Other assets |
480,289 |
524,780 |
|
|
|
|
Total |
$6,424,943 |
$5,873,608 |
Total |
$6,424,943 |
$5,873,608 |
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.