U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from ____________ to ____________
Commission File Number 0-14819
RENT-A-WRECK OF AMERICA, INC.
---------------------------------------------------------------------
(Exact name of small business issuer as
specified in its Charter)
Delaware 95-3926056
- --------------------------------- -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11460 Cronridge Drive, Suite 120, Owings Mills, MD 21117
- -------------------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number: (410) 581-5755
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 4,088,792 shares as of July
28, 1998.
Transitional Small Business Disclosure Format (Check One):
Yes [ ] No [X]
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
FORM 10-QSB - JUNE 30, 1998
INDEX
Part I. Financial Information Page
- ------------------------------- ----
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 31, 1998 and
June 30, 1998 (Unaudited) 2-3
Consolidated Statements of Earnings for
the Three Months ended
June 30, 1997 and 1998 (Unaudited) 4
Consolidated Statements of Cash Flows for
the Three Months ended June 30, 1997 and
1998 (Unaudited) 5
Notes to Consolidated Financial Statements
(Unaudited) 6-8
Item 2. Management's Discussion and Analysis or
Plan of Operations 8-10
Part II. Other Information
- ---------------------------
Item 1. Legal proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security
Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
<PAGE>
Part I - Financial Information
Item 1 - Financial Statements
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
ASSETS
March 31, June 30,
1998 1998
----------- ----------
(Unaudited)
CURRENT ASSETS:
Cash and Cash Equivalents............................. $1,215,615 $ 898,768
Restricted Cash....................................... 394,021 748,970
Accounts Receivable, net of allowance
for doubtful accounts of $682,631 and $726,722 at
March 31, 1998 and June 30, 1998, respectively:
Continuing License Fees and
Advertising Fees................................. 302,367 328,527
Current Portion of Notes Receivable................ 342,765 385,664
Current Portion of Direct Financing
Leases........................................... 37,653 22,578
Insurance Premiums Receivable...................... 560,219 48,432
Other.............................................. 176,166 163,742
Prepaid Expenses....................................... 133,856 138,609
----------- ----------
TOTAL CURRENT ASSETS............................... 3,162,662 2,735,290
----------- ----------
PROPERTY AND EQUIPMENT:
Furniture............................................ 71,655 76,638
Computer Hardware and Software....................... 314,657 327,628
Machinery and Equipment.............................. 101,868 102,311
Leasehold Improvements............................... 37,896 37,896
Vehicles............................................. 23,347 60,722
----------- ----------
549,423 605,195
Less: Accumulated Depreciation and
Amortization.................................. (265,476) (294,499)
----------- -----------
NET PROPERTY AND EQUIPMENT............................. 283,947 310,696
----------- ----------
OTHER ASSETS:
Trademarks and other Intangible Assets, net of
accumulated amortization of $105,951 and $110,946 at
March 31, 1998 and June 30, 1998, respectively..... 203,129 200,138
Long-term Portion of Notes and Direct Financing Lease
Receivables, net of allowance of $0
at March 31, 1998 and June 30, 1998, respectively.. 14,374 12,178
----------- ----------
217,503 212,316
----------- ----------
TOTAL ASSETS....................................... $3,664,112 $3,258,302
=========== ==========
The accompanying notes are an integral part of this financial statement.
2
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
March 31, June 30,
1998 1997
---------- -----------
(Unaudited)
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses................ $ 873,690 $ 521,040
Dividends Payable.................................... 27,320 27,320
Insurance Premiums Payable........................... 488,397 465,141
Insurance Fees, Claims, and Loss Reserves............ 244,815 188,411
Other................................................ 1,506 1,506
----------- ----------
TOTAL CURRENT LIABILITIES.......................... 1,635,728 1,203,418
----------- ----------
TOTAL LIABILITIES.................................. 1,635,728 1,203,418
----------- ----------
COMMITMENTS AND CONTINGENCIES - -
SHAREHOLDERS' EQUITY:
Convertible Cumulative Series A Preferred Stock,
$.01 par value; authorized 10,000,000 shares;
issued and outstanding 1,366,000 shares at March
31, 1998 and at June 30, 1998 (aggregate liquidation
preference $1,151,300 at March 31, 1998 and at June
30, 1998).......................................... 13,660 13,660
Common Stock, $.01 par value; authorized
25,000,000 shares; issued and
outstanding 4,189,692 shares at March 31, 1998 and
4,128,792 shares at June 30, 1998.................. 41,896 41,288
Additional Paid-In Capital........................... 2,900,382 2,832,448
Accumulated Deficit.................................. (927,554) (832,512)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY......................... 2,028,384 2,054,884
----------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY........................................... $3,664,112 $3,258,302
=========== ==========
The accompanying notes are an integral part of this financial statement.
3
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended June 30,
---------------------------
1997 1998
---------- ----------
REVENUES:
Initial License Fees............................. $ 270,500 $ 312,000
Advertising Fees................................. 176,845 191,455
Continuing License Fees.......................... 548,725 582,578
Insurance Premiums............................... 87,567 162,043
Vehicle Rental Operations........................ 2,728 3,475
Direct Financing Leases to Franchisees........... 375 -
Other............................................ 40,591 34,058
----------- ----------
1,127,331 1,285,609
----------- ----------
EXPENSES:
Salaries, Consulting Fees and
Employee Benefits.............................. 195,215 204,187
Advertising and Promotion........................ 221,064 233,794
Insurance Underwriting Expenses.................. 61,098 137,060
Sales and Marketing.............................. 221,312 221,207
General and Administrative....................... 231,055 245,456
Depreciation and Amortization.................... 30,544 34,019
----------- ----------
960,288 1,075,723
----------- ----------
OPERATING INCOME............................. 167,043 209,886
INTEREST INCOME, NET............................... 18,091 16,120
----------- ----------
INCOME BEFORE INCOME TAX EXPENSE............. 185,134 226,006
----------- ----------
INCOME TAX EXPENSE................................. 52,500 59,342
----------- ----------
NET INCOME................................... $ 132,634 $ 166,664
DIVIDENDS ON CONVERTIBLE CUMULATIVE
PREFERRED STOCK.................................. 28,645 27,320
----------- ----------
NET INCOME AFTER DIVIDENDS ON
CONVERTIBLE CUMULATIVE PREFERRED STOCK........... $ 103,989 $ 139,344
----------- ----------
EARNINGS PER COMMON SHARE
Basic $ .02 $ .03
----------- ----------
Weighted average common shares..................... 4,244,499 4,162,888
=========== ==========
Diluted $ .02 $ .03
----------- ----------
Weighted average common shares
plus options and warrants......................... 6,390,030 5,631,968
=========== ==========
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended June 30,
---------------------------
1997 1998
---------- ---------
<S> <C> <C>
Increase (decrease) in cash and cash
equivalents
Cash flows from operating activities:
Net income .............................................. $ 132,634 $ 166,664
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization........................ 30,544 34,019
Provision for doubtful accounts...................... 53,127 44,091
Changes in assets and liabilities:
Accounts and notes receivable........................ (95,936) 428,332
Prepaid expenses..................................... (82,230) (4,753)
Accounts payable and accrued
expenses........................................... (103,550) (352,650)
Insurance fees, claims, and
loss reserves...................................... 43,544 (56,404)
---------- ----------
Net cash (used in) provided by operating activities.. (21,867) 259,299
---------- ---------
Cash flows from investing activities:
(Increase) decrease in restricted cash................... 13,914 (354,949)
Acquisition of property and equipment.................... (28,347) (55,771)
Additions to trademarks and other........................ (1,066) (2,005)
---------- ----------
Net cash used in investing activities................ (15,499) (412,725)
---------- ----------
Cash flow from financing activities:
Increase (decrease) in insurance premiums payable........ 140,255 (23,256)
Issuance of common stock................................. 12,500 16,000
Repayments of long-term debt............................. (2,021) -
Retirement of common stock............................... - (84,543)
Preferred dividends paid................................. (69,909) (71,622)
---------- ----------
Net cash provided by (used in) financing activities.. 80,825 (163,421)
---------- ----------
Net increase (decrease) in cash and cash
equivalents....................................... 43,459 (316,847)
Cash and cash equivalents at beginning of period........... 858,427 1,215,615
---------- ----------
Cash and cash equivalents at end of period................. $ 901,886 $ 898,768
========== ==========
Supplemental disclosure of cash flow information:
Interest paid............................................ $ 1,480 -
Taxes paid............................................... $ 43,986 $ 307,100
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE>
RENT-A-WRECK OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements presented herein include the
accounts of Rent-A-Wreck of America, Inc. ("RAWA, Inc.") and its wholly owned
subsidiaries, Rent-A-Wreck Operations, Inc. ("RAW OPS"), Rent-A-Wreck One Way,
Inc. ("RAW One Way"), Consolidated American Rental Insurance Company, LTD ("CAR
Insurance") and Bundy American Corporation ("Bundy"), and Bundy's subsidiaries,
Rent-A-Wreck Leasing, Inc. ("RAW Leasing"), URM Corporation ("URM") and Central
Life and Casualty Company, Limited ("CLC").
All of the above entities are collectively referred to as the "Company"
unless the context provides or requires otherwise. All material intercompany
balances and transactions have been eliminated.
The consolidated balance sheet as of June 30, 1998, the consolidated
statements of earnings and cash flows for the three-month periods ended June 30,
1997 and 1998 have been prepared by the Company without audit. In the opinion of
management, all adjustments which are necessary to present a fair statement of
the results of operations for the interim periods have been made, and all such
adjustments are of a normal recurring nature. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's March 31, 1998 audited
financial statements. The results of operations for the interim periods are not
necessarily indicative of the results for a full year.
2. PREFERRED STOCK
As of March 31, 1998, preferred dividend arrearages were $221,511. The
Company paid $44,302 of these arrearages during the quarter ended June 30, 1998.
For the quarter ended June 30, 1998, the Company declared dividends totaling
$27,320 which are expected to be paid during the second quarter of the Company's
fiscal year. As of June 30, 1998, preferred dividend arrearages were $177,209.
6
<PAGE>
3. EARNINGS PER SHARE
A reconciliation of the numerators and denominators utilized in the
computation of basic and diluted earnings per share for the three-month periods
ended June 30, 1997 and 1998 is as follows:
1997 1998
-------- ------
BASIC EPS COMPUTATION
Numerator:
Net income applicable to
common shares $ 103,989 $ 139,344
Denominator:
Weighted average common
shares 4,244,499 4,162,888
---------- ----------
Basic EPS $ .02 $ .03
========== ==========
DILUTED EPS COMPUTATION
Numerator:
Net income applicable to
common shares $ 103,989 $ 139,344
Dividends on convertible
preferred stock 28,645 27,320
---------- ----------
132,634 166,664
---------- ----------
Denominator
Weighted average common
shares 4,244,499 4,162,888
Convertible preferred
stock 1,432,250 1,366,000
Weighted average options
and warrants 713,281 103,080
---------- ----------
6,390,030 5,631,968
---------- ----------
Diluted EPS $ .02 $ .03
========== ==========
7
<PAGE>
4. LITIGATION
The Company is party to legal proceedings incidental to its business
from time to time. Certain claims, suits and complaints arise in the ordinary
course of business and may be filed against the Company. Based on facts now
known to the Company, management believes all such matters are adequately
provided for, covered by insurance or, if not so covered or provided for, are
without merit, or involve such amounts that would not materially adversely
affect the consolidated results of operations or financial position of the
Company.
Item 2.Management's Discussion and Analysis or
- ----------------------------------------------
Plan of Operations
------------------
RESULTS OF OPERATIONS-THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO JUNE 30, 1997
Revenue from franchising operations which includes initial license
fees, continuing license fees, advertising fees and direct financing leases
increased by $89,588 (9%). Initial license fees increased by $41,500 (15%) due
to the addition of new franchises. Continuing license fees increased by $33,853
(6%) and advertising fees increased by $14,610 (8%). These increases resulted
primarily from the fleet growth at existing franchises and the Company's
dedication of additional resources to the collection effort. Revenues from
insurance premiums increased by $74,476 (85%) due to higher participation by the
Company's franchisees in the CAR Insurance program that started in March 1997,
partially offset by a $13,292 (100%) reduction in the physical damage insurance
program ("CLC") due to its termination and replacement by CAR Insurance.
Total operating expenses increased by $115,435 (12%) in this period
compared to the same period in the prior year. Salary expense increased by
$8,972 (4%) primarily as a result of hiring additional employees in order to
manage the growth of the Company. Advertising and promotion expenses increased
by $12,730 (6%), which resulted primarily from an increase in national
advertising expense to promote the Company. Insurance underwriting expenses
increased by $75,962 (124%) due to an increase in paid losses and loss reserves
for future claims in connection with higher participation of the Company's
franchisees. General and administrative expenses increased by $14,401 (6%),
which resulted primarily from additional expenses related to legal and
accounting fees.
Depreciation and amortization expense increased by $3,475 (11%) in this
period compared to the same period in the prior year. This increase was
primarily due to the additional investment in computer software and hardware.
8
<PAGE>
Net interest income decreased $1,971 (11%). This decrease was primarily
due to interest paid to A.I.Credit Corporation ("AICCO") on the funds which CAR
Insurance Company borrowed from AICCO to meet the capital requirements of the
Bermuda Government in conjunction with the reinsurance program.
The Company realized operating income of $209,886, before taxes and
interest, for the three-month period ended June 30, 1998 compared to operating
income of $167,043 for the same period in the prior year, reflecting an increase
of $42,843 (26%). This increase resulted primarily from the increase in initial
license fees and continuing license fees due to the addition of new franchises
and the Company's collection efforts.
Income tax expense for the three-month period ended June 30, 1998
increased by $6,842 (13%) compared to the three-month period ended June 30, 1997
due to higher pre-tax earnings.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had working capital of $1,531,872
compared to $1,526,934 at March 31, 1998. This increase of $4,938 resulted
primarily from the net profit earned during the three-month period ended June
30, 1998.
The Company has finalized a $1,000,000 letter of credit with The Chase
Manhattan Bank ("Chase") in connection with the Company's new CAR Insurance
subsidiary. This letter of credit is part of the reinsurance agreement with
American International Group ("AIG") to secure payment of claims. Funds drawn
against the letter of credit bear interest at 3% plus Chase's prime commercial
lending rate (which prime rate was 8.5% on June 30, 1998). For the quarter ended
June 30, 1998, AIG has not drawn any funds from the letter of credit. This
letter of credit is secured by all of the Company's assets.
The Company was committed under capital lease agreements for various
equipment, and it rents its office facilities under the terms of an operating
lease. The capital lease obligations were $36,646 and $0 at June 30, 1997 and
June 30, 1998, respectively. The Company has utilized its working capital to pay
for these obligations.
Furniture, equipment and leasehold improvements increased by $18,397
(3%) from March 31, 1998 to June 30, 1998. This increase occurred primarily due
to additional investment in computer software and hardware. Vehicles increased
by $37,375 (160%) from March 31, 1998 to June 30, 1998 due to the purchase of a
vehicle for the Company.
Cash provided by operations was $259,299, resulting primarily from net
income before depreciation plus the decrease in accounts and notes receivable,
offset by the increase in the Company's prepaid expenses, decrease in accounts
payable and accrued expenses, and insurance fees, claims and loss reserves.
Accounts and notes receivable decreased primarily from funds received from AIG
in connection with the reinsurance program.
9
<PAGE>
Prepaid expenses increased primarily due to the purchase of additional
promotional items. Accounts payable and accrued expenses decreased primarily
from income taxes paid for the year ended March 31, 1998. Cash used in investing
activities of $412,725 related primarily to the acquisition of computer
software, hardware, a Company vehicle and annual costs associated with renewing
trademarks. Cash used in financing activities during the same period was
$163,421, resulting from a decrease in insurance premiums payable and the
payment of preferred dividends and buyback of common stock offset by the
issuance of common stock in connection with warrants which were exercised.
On April 23, 1998, the Company approved the repurchase of up to an
additional 500,000 shares of the Company's outstanding common or preferred
stock. For the quarter ended June 30, 1998, the Company bought back and retired
80,900 shares of its common stock.
The Company believes it has sufficient working capital to support its
business plan through fiscal 1999.
IMPACT OF INFLATION
Inflation has had no material impact on the operations and financial
condition of the Company.
The statements regarding anticipated future performance of the Company
contained in this report are forward-looking statements which are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements involve risks and uncertainties that
could cause the Company's actual results to differ materially from the
forward-looking statements. Factors which could cause or contribute to such
differences include, but are not limited to, the Company's limited experience in
the reinsurance business and the potential for negative claims experience, the
effects of government regulation of the Company's franchise and insurance
programs including maintaining properly registered franchise documents and
making any required alterations in the Company's franchise program to comply
with changes in the laws, competitive pressures from other motor vehicle rental
companies which have greater marketing and financial resources than the Company,
protection of the Company's trademarks, and the dependence on the Company's
relationships with its franchisees. These risks and uncertainties are more fully
described under the caption, "Item 6 - Management's Discussion and Analysis of
Financial Condition and Results of Operations - Important Factors" in the
Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 1998.
All forward-looking statements should be considered in light of these risks and
uncertainties.
10
<PAGE>
Selected Financial Data
-----------------------
Set forth below are selected financial data with respect to the
consolidated statements of earnings of the Company and its subsidiaries for the
fiscal quarters ended June 30, 1997 and 1998 and with respect to the balance
sheets thereof at June 30 in each of those years.
The selected financial data have been derived from the Company's
unaudited consolidated financial statements and should be read in conjunction
with the financial statements and related notes thereto and other financial
information appearing elsewhere herein.
Quarters ended June 30,
---------------------------------
1997 1998
---------------------------------
(in thousands except per share
amounts and number of franchises)
(Unaudited)
Franchisees' Results
Franchisees' revenue (1) $9,145 $9,710
Number of franchises 468 568
Results of Operations
Total revenue $1,127 $1,286
Total expense 960 1,076
Income before income
taxes 185 226
Net income 133 167
Earnings per common share
Basic $ .02 $ .03
Weighted average common
shares 4,244 4,163
Diluted $ .02 $ .03
Weighted average common
shares plus options and
warrants 6,390 5,632
Balance Sheet Data
Working capital $1,261 $1,532
Total assets $2,748 $3,258
Long-term obligations $ 28 $ --
Shareholders' Equity $1,831 $2,055
(1) The franchisees' revenue data have been derived from unaudited
reports provided by franchisees in paying license fees.
11
<PAGE>
Part II. Other Information
ITEM 1. LEGAL PROCEEDINGS
- ------- -----------------
The Company is party to legal proceedings incidental to its business
from time to time. Certain claims, suits and complaints arise in the ordinary
course of business and may be filed against the Company. Based on facts now
known to the Company, management believes all such matters are adequately
provided for, covered by insurance or, if not so covered or provided for, are
without merit, or involve such amounts that would not materially adversely
affect the consolidated results of operations or financial position of the
Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
- ------- -----------------------------------------
On June 30, 1998, the Company issued 20,000 shares of its common stock
in connection with the exercise of warrants. See also Item 5 below.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ------- -------------------------------
The information disclosed in footnote 2 to the financial statements
provided in Part I Item 1 of this Report on Form 10-QSB is incorporated herein
by this reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
On April 23, 1998, approximately 96% of the outstanding shares of
Series A Preferred Stock consented to the corporation's authorization of the
repurchase of up to 500,000 shares of the Company's Common Stock or its Series A
Preferred Stock.
ITEM 5. OTHER INFORMATION
- ------- -----------------
During the quarter ended June 30, 1998, the Company bought back and
retired 80,900 shares of its common stock, reducing total outstanding common
shares from 4,189,692 to 4,128,792.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) See Exhibit Index following the Signatures page, which is
incorporated herein by reference.
12
<PAGE>
(b) No reports on Form 8-K were filed during the quarter for
which this report is filed.
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Rent-A-Wreck of America, Inc.
-----------------------------
(Registrant)
By: Date:
/s/Mitra Ghahramanlou August 11, 1998
- ----------------------- -------------------
Mitra Ghahramanlou
Chief Accounting Officer
/s/Kenneth L. Blum, Sr. August 11, 1998
- ----------------------- -------------------
Kenneth L. Blum, Sr.
CEO and Chairman of
the Board
13
<PAGE>
EXHIBIT INDEX
TO
RENT-A-WRECK of AMERICA, INC.
FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 1998
EXHIBIT NO. DESCRIPTION
- ----------- -----------
27.1 Financial Data Schedule Filed herewith.
27.2 Financial Data Schedule Filed herewith.
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS IN RENT-A-WRECK OF AMERICA, INC.'S FORM 10-QSB FOR THE QUARTERLY
PERIOD ENDED JUNE 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FORM 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,647,738
<SECURITIES> 0
<RECEIVABLES> 1,524,101
<ALLOWANCES> 726,722
<INVENTORY> 0
<CURRENT-ASSETS> 2,735,290
<PP&E> 605,195
<DEPRECIATION> 294,499
<TOTAL-ASSETS> 3,258,302
<CURRENT-LIABILITIES> 1,203,418
<BONDS> 0
13,660
0
<COMMON> 41,288
<OTHER-SE> 1,999,936
<TOTAL-LIABILITY-AND-EQUITY> 3,258,302
<SALES> 0
<TOTAL-REVENUES> 1,285,609
<CGS> 0
<TOTAL-COSTS> 592,061
<OTHER-EXPENSES> 434,707
<LOSS-PROVISION> 48,955
<INTEREST-EXPENSE> 5,166
<INCOME-PRETAX> 226,006
<INCOME-TAX> 59,342
<INCOME-CONTINUING> 166,664
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 166,664
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS IN RENT-A-WRECK OF AMERICA, INC.'S FORM 10-QSB FOR THE QUARTERLY
PERIOD ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FORM 10-QSB.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 1,107,123
<SECURITIES> 0
<RECEIVABLES> 1,698,949
<ALLOWANCES> 832,162
<INVENTORY> 0
<CURRENT-ASSETS> 2,150,589
<PP&E> 547,521
<DEPRECIATION> 201,950
<TOTAL-ASSETS> 2,747,534
<CURRENT-LIABILITIES> 889,116
<BONDS> 0
14,322
0
<COMMON> 42,516
<OTHER-SE> 1,773,853
<TOTAL-LIABILITY-AND-EQUITY> 2,747,534
<SALES> 0
<TOTAL-REVENUES> 1,127,331
<CGS> 0
<TOTAL-COSTS> 503,474
<OTHER-EXPENSES> 404,691
<LOSS-PROVISION> 52,123
<INTEREST-EXPENSE> 1,492
<INCOME-PRETAX> 185,134
<INCOME-TAX> 52,500
<INCOME-CONTINUING> 132,634
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,634
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
