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Warrantech Fiscal Q2 Earnings, Revenue Drop

11/13/2001 09:28:00 AM Eastern

Euless, Texas - Although service contract and after-market warranty marketer Warrantech extended its consecutive string of profitable quarters to six, the company reported net income for the second fiscal quarter of $548,247, down from $692,383 in the year-ago three months. The earnings decrease was due in part to the loss of net earned administrative fees from the loss of the Staples account, Warrantech said.

The company recorded a net earned administrative fee for the second quarter ending Sept. 30 of $9.3 million, down from $12.8 million in the same quarter in 2000. The net earned administrative fee for the Consumer Products segment decreased to $3.7 million in the second quarter, down from $7.5 million a year earlier. This change resulted primarily from the loss of the Staples account that was partially offset by increased volume from new and existing customers.

Consumer products reported a pre-tax loss of $1.3 million in the second quarter, compared with a $534,047 profit in the second quarter of 2000, due to the loss of the Staples account.

For the six months, Warrantech recorded net income of $679,470, compared with net income of $932,983 in the year-ago six months. The net earned administrative fee for the six months was $18.5 million, down from $25.3 million in the same six months in 2000.