Warrantech's 1st Quarter Net Drops By 45%

Staff On Sep 3 2001 - 6:00am

Net income at service contract and extended warranty provider Warrantech dropped about 45 percent to $131,223 in the fiscal first quarter, compared with $240,600 in the same three months last year.

The company did say, however, that this was its seventh consecutive quarter of profitability.

Due primarily to the loss of the Staples account, which was partially offset by increased volume from existing customers, Warrantech reported about a 42 percent decrease in net earned administrative fee for its Consumer Products segment in the first quarter. This dipped to $4.6 million, down from $7.9 million in the year-ago three months.

The Consumer Products segment registered a pretax loss of $1.2 million in the first quarter, compared with a $1.2 million profit in the first quarter of 2001. This, too, was due primarily to the loss of the Staples business.

The company reported a $9.2 million overall net earned administrative fee for the first quarter ended June 30, compared with $12.5 million in the same quarter last year.

The company also reported a loss from overall operations for the first quarter, reaching $72,366, compared with a profit of $861,909 in the year-ago three months.

Overall selling, general and administrative costs for the first quarter, however, were reduced to $7.9 million, down from $10.1 million in the same period in 2000.

"Throughout the quarter, we have been signing agreements domestically on an aggressive basis," said Joel San Antonio, chairman/CEO, "making up for some of the loss from the Staples account."

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