...we understand that lower margins requires us to operate at a more optimum level with strict cost controls. While we continue to seek cost take outs, it must be understood short term earnings may be erratic
David A. Kraemer, President and Chief Executive Officer

Bestway, Inc. (BSTW), released financial results for its first quarter ended October 31, 2004.

For the three months ended October 31, 2004, revenue increased 4.1% to $9,430,540, compared to $9,059,027 for the first quarter of last year. Same store revenues (revenues earned in stores operated for the entirety of both periods) increased 3.5% in the quarter. Net earnings decreased to a loss of $132,536, or $(.08) per share on a diluted basis, compared to income of $64,505, or $.04 per share on a diluted basis, a year ago. The Company's quarterly decline in net earnings resulted primarily from the decision to move to a more aggressive value-pricing model during the fiscal fourth quarter of 2004. The Company's value-pricing model is an investment necessary to increase customer traffic. It is anticipated that future cost savings in key areas, combined with revenue increases will result in improved profits over time. In addition, the Company incurred expense of $60,202 for the relocation of two stores.

"I'm pleased to report strong internal enthusiasm for our new value-priced programs that have been well received by our customers with early results exceeding expectations," commented David A. Kraemer, President and Chief Executive Officer. "While offering our customers an aggressive pricing model, we've been able to have a positive impact on reducing returns and collection efforts to focus on growing revenues and customers. Transitioning to our model affected earnings with higher depreciation expense. We are committed to improving our customers experience with rent-to-own by offering them the lowest total cost of ownership and we understand that lower margins requires us to operate at a more optimum level with strict cost controls. While we continue to seek cost take outs, it must be understood short term earnings may be erratic."

On November 19, 2004, the Company filed its Schedule 13E-3 and preliminary proxy statement in connection with the upcoming annual meeting of the stockholders of the Company. At such meeting, the stockholders of the Company will vote upon, among other things, an amendment to the Company's Amended and Restated Certificate of Incorporation, which, if approved, would result in a 1-for-100 reverse stock split, such that stockholders owning less than 100 shares of Common Stock will have such shares cancelled and converted into the right to receive payment of cash, at a rate of $13.00 per each pre-split share of Common Stock, immediately followed by a 100-for-1 forward stock split. The Company is currently awaiting completion of the SEC review of its Schedule 13E-3 and proxy statement before proceeding with the reverse/forward stock split. All stockholders will receive a definitive proxy statement once the SEC has completed its review process.