STAMFORD, Conn. -- Aggressive cost-cutting measures along with effective technology deployment have helped Warrantech Corp. reduce its net loss in its fiscal fourth quarter ended March 31 to $537,634, compared to a net loss of $3.5 million in the same three-month period a year ago.
Gross revenues for the fiscal fourth quarter were $22.3 million, a 45 percent drop from the $40.3 million recorded in the same three months in 1999. The net decrease in deferred revenues for the quarter was $11.4 million, compared with a net increase of $8 million last year. Net revenues for the quarter were $33.7 million, virtually flat compared to the $32.3 million racked up in the same period in 1999.
Service, selling general and administrative expenses for the fourth quarter were $12.3 million, 14 percent lower than the $14.4 million recorded in the same period last year. Warrantech said the decrease reflects an array of new operational efficiency measures.
"Since a mandated accounting change, we have demonstrated a strong trend in narrowing our losses quarter-to-quarter over the past year," said Joel San Antonio, chairman and CEO. "This has gone from $3.4 million in our first quarter ended June 30, 1999, $2.6 million in our second quarter ended Sept. 30, 1999, $1.7 million for our third quarter ended Dec. 31, 1999, to our fourth-quarter loss of $537,634.
"Our marketing efforts are very focused and continue to produce results," San Antonio said. "New, innovative niche and branded market products are being well received across all three segments of our business. It is our expectation that the continued roll-out of branded products, coupled with our tight focus on cost-management should improve results and lead to profitability in the short-term."
For its fiscal year, Warrantech -- which administers and markets service contracts and after-market warranties on major appliances and consumer electronics, among other products -- reported gross revenues of $101.2 million, a 32 percent decrease from the $148.9 million reported in fiscal 1999. The company attributed this decline to the loss of a major customer.
The net decrease in deferred revenues for the fiscal year reached $13.5 million, compared to a net increase of $30.6 million the previous year. The company said the decrease is directly attributable to prior-period deferred revenues being recognized in the current year.
Net revenues for the 12 months were $114.6 million, a 3 percent decrease from the $118.2 million last year, while the net loss for the 12 months was $8.2 million, compared to $7.6 million for the comparable 12 months last year.
SG&A expenses for the year decreased 11 percent to $49.2 million, compared to $55.5 million in 1999. The decrease is primarily related to a reduction in the number of employees and payroll-related costs, according to the company.