FT. LAUDERDALE, Fla., Aug. 22, 2002 (PRIMEZONE) -- Carcorp USA Inc. ("CUSA") (OTCBB:CUSA) said today that it anticipates strong operating results for the last six months of 2002, with gross revenues growing by 34% in the last six months over the last six months of 2001, with EBITDA increasing by 27% over the same reporting period in 2001. Net profits should increase by 28% from the first six months of 2001.
Several major banks have withdrawn from the auto financing industry due to the manual review of applications they required. This has created the opportunity for Carcorp to expand the loans on its books, while simultaneously upgrading the creditworthiness of the client mix. The Company also has a fully automated lease financing system that is FDIC approved, which will ultimately improve service time to consumers. The company currently, and in the foreseeable future, has more demand for its financing products than it has available financing.
The Board of Directors of Carcorp USA has authorized management to pursue an increase of existing or new credit lines that will result in the Company having available warehouse lines of credit of at least $40 million from its existing $20 million facility and to offer a total of $5 million of equity to institutional investors, who have been identified by the Company's investment bankers. Such increased capitalization should allow the Company to more than double its present gross revenues of approximately $8 million per year, and double its EBITDA from its current annualized EBITDA of approximately $4.4 million.
CEO and Chairman Michael DeMeo stated: "We are anticipating the acquisition of new credit lines and equity over the remainder of 2002, which is the major reason that I decided to have the Company enter the public marketplace. These new facilities will allow us to expand our market position to service the auto financing needs of consumers who are no longer serviced by the major banks."
Robert Minson, CFO, added: "We can do as much quality business as we can get the financing to do. The supply/demand imbalance is definitely tipped in our favor. We anticipate operating results to substantially surpass those of the first six months of 2002."
Carcorp USA operates its automotive leasing model in a vertically integrated manner, servicing the medium grade or "Near Prime" credit client. This model allows Carcorp to monitor the initial leasing, processing and collections, with a lower rate of delinquencies than the industry average, as well as timely recoveries.
"The Carcorp system includes re-marketing capabilities," stated DeMeo. "In the event of a recovery, we are able to refurbish and re-lease the vehicle within ten to fifteen days, versus taking the car to wholesale auction, as most lenders do, where substantial money is lost. We turn the asset quickly, and maximize the profit with another down payment of fifteen to twenty percent in the retail consumer market."
Carcorp has an historic loan loss of less than one percent, which is well below the industry standards of three to five percent.
Forward-Looking Statements
Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release, the Company will appropriately inform the public.
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