TUCSON, Ariz., Nov. 22, 2002 (PRIMEZONE) -- Renegade Venture (NEV.) Corporation (OTCBB:RDVN) recently filed its third-quarter report, covering the second quarter of operations following the May 2002 acquisition of its operating subsidiary, Hamilton Aerospace Technologies, Inc. Renegade Chairman and CEO Ian Herman took the opportunity to discuss Renegade's financial results to date and expected results for the remainder of the year, and to discuss anticipated revenues for 2003 and 2004.
Mr. Herman stated that, "Hamilton is at this point our operational entity. As our 10-QSB just filed for the Sept. 30 quarter clearly reflects, Hamilton continued its strong performance during the third quarter, with slight dip in August activity. Revenue for the quarter was approximately $1.4 million, and total revenues for the partial year through Sept. 30 were almost $3 mil. The third quarter increased our loss for the year to $2.3 mil., compared to a $1.3 mil. loss at June 30. But we are quite pleased with our progress, since the third-quarter loss was significantly smaller than the loss through June 30. But our losses are deceptive and don't present an accurate picture of our operating results," Mr. Herman continued. "For one thing, $1.3 mil. of our $2.3 mil. loss through Sept. 30th was a one-time event solely attributable to the grant of stock and stock options, not to operations. Ironically, many of those stock options since have been cancelled."
"Another $350,000 of those losses is attributable solely to parent company activities," Mr. Herman noted, "such as audit costs and other charges that Hamilton would not incur on its own if it were privately held. Third, our cost of sales is high while revenues are being ramped up partly because certain costs are fixed for Hamilton, irrespective of revenue. A good example is liability insurance, which we must carry at the high level of $100 mil., at the insistence of certain large customers, and this expense would not increase if we quadrupled our business overnight. The bottom line is that our actual loss on operations through Sept. 30 was only $700,000 on approximately $3 mil. in revenue. Considering that we launched this business in the trough of the worst aviation recession since the Great Depression, with the aftershocks of September 11th still being felt, we are not at all unpleased with our results."
"The really exciting news," Mr. Herman noted, "is that October was Hamilton's first profitable month. It was a small profit, but based on work being done and in progress, together with expected contracts and other revenues, we expect that Hamilton will show a profit of approx. $200,000 for the fourth quarter on quarterly revenues of $3 mil., reducing our annual loss to $2.15 mil. To recap, at Dec. 31st year end, we expect to show a loss on Hamilton standalone operations of $500,000 on $6 mil. in total revenues, and this does not include any results of the predecessor company, Hamilton Aviation. We are continuing to trim holding company expenses, and look to a profitable year in 2003."
Mr. Herman continued, "We are frequently asked about projections for the next couple of years. Our results will depend on our funding level. Renegade is looking for $1.5 mil. in additional capital. Assuming that amount can be raised, we expect to do $30 mil. in revenues in the first 12 months thereafter, with an estimated profit of $3 mil., and $36 mil. in the second 12 months thereafter, with an estimated profit of $5 mil., or a total of $66 mil., with $8 mil. in earnings for the first two years following funding. The additional operations we are ramping up, such as the Complete Controls business we are in the process of buying from General Motors Acceptance Corporation and an expansion of Hamilton's business, can be launched or expanded strongly with more funding. Without additional capital, on the other hand, the results will not be nearly as strong. While these numbers seem like a big jump, they really aren't," Herman emphasized, "because Hamilton's predecessor company did $26.5 million in 2001 and $29 mil. in 2000, so we know the business is there. We just need to be able to ramp up and bring on more employees to handle the additional business."
Herman also pointed out that, "We are pleased that we are doing everything we've promised shareholders, and more. We are growing, we are continuing to land strong new customers, such as UPS, DHL Worldwide Express and Boeing, and we are keeping some key customers of our predecessor company. Our strategic alliance with World Jet Corp., a leading aviation parts company, is working just as planned, and our parts sales are growing faster than anticipated." Herman added, "We will have more contracts to announce very soon."
About Hamilton Aerospace Technologies
Hamilton Aerospace provides maintenance, engineering and modifications for large passenger jet aircraft. Customers include scheduled and charter airlines, aviation leasing companies and government entities. The Federal Aviation Administration (FAA) on May 6, 2002, awarded Hamilton Aerospace its own Part 145 Air Agency Certificate, which allows it to perform such services. Hamilton Aerospace operates from leased facilities comprising about 22 acres located at the Tucson International Airport. These facilities include hangars, workshops and other buildings. Hamilton's customers include UPS (NYSE:UPS), DHL Worldwide Express, a Boeing Company (NYSE:BA) joint venture, Pegasus Aviation and Falcon Air Express, among others.
Renegade Venture's website can be found at www.renegadeventurecorp.com, and Hamilton's website can be found at www.hamaerotech.com.
Except for the historical information presented herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995, or by the Securities and Exchange Commission in its rules, regulations, and releases. These forward- looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks include the economic health of the airline industry and concomitant demand for Hamilton's services, competitive pricing pressures for Hamilton's services, and the availability of financing to complete management's plans and objectives. In addition, other risks are detailed in Renegade's current report on Form 8-K filed on May 9, 2002. These forward-looking statements speak only as of the date hereof. Renegade disclaims any intent or obligation to update these forward-looking statements.
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