10-Q 1 d85173e10-q.txt FORM 10-Q FOR QUARTER ENDED JANUARY 31, 2001 1 BESTWAY, INC. FORM 10-Q -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 0-8568 BESTWAY, INC. -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 81-0332743 ------------------------------- ------------------- (State of other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7800 Stemmons Freeway, Suite 320 75247 ---------------------------------------- ------------------- (Address of principal executive offices) (Zip Code) (214) 630-6655 -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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: The number of shares of Common Stock, $.01 par value, outstanding as of January 31, 2001, was 1,695,272. 2 BESTWAY, INC. FORM 10-Q -------------------------------------------------------------------------------- QUARTERLY REPORT TO THE SECURITIES AND EXCHANGE COMMISSION FOR THE QUARTER ENDED January 31, 2001
PART I - FINANCIAL INFORMATION PAGE NOS. --------- ITEM 1. Condensed Consolidated Unaudited Financial Statements 3-7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-12 PART II - OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K, Signatures 13
3 BESTWAY, INC. FORM 10-Q CONDENSED CONSOLIDATED BALANCE SHEETS --------------------------------------------------------------------------------
(UNAUDITED) JANUARY 31, JULY 31, 2001 2000 ------------ ------------ ASSETS Cash $ 669,128 $ 979,042 Prepaid expenses 298,385 176,833 Federal income taxes receivable 332,949 -- Deferred income taxes 649,842 473,739 Other assets 62,428 117,901 Rental merchandise, at cost 26,180,584 25,025,924 less accumulated depreciation 9,464,706 8,771,578 ------------ ------------ 16,715,878 16,254,346 ------------ ------------ Property and equipment, at cost 10,364,422 9,334,006 less accumulated depreciation 4,511,493 4,147,614 ------------ ------------ 5,852,929 5,186,392 ------------ ------------ Non-competes, net of amortization 302,188 378,273 Goodwill, net of amortization 1,924,842 2,051,017 ------------ ------------ Total assets $ 26,808,569 $ 25,617,543 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable $ 1,003,737 $ 1,453,892 Accrued interest - related parties 19,333 20,667 Income taxes payable -- 135,796 Other accrued liabilities 1,505,028 1,537,732 Notes payable-related parties 3,000,000 3,000,000 Notes payable-other 12,488,494 10,294,945 Commitments and contingencies Stockholders' equity: Preferred stock, $10.00 par value, 1,000,000 authorized, none issued -- -- Common stock, $.01 par value, 5,000,000 authorized, 1,756,917 issued at January 31, 2001 and July 31, 2000 17,569 17,569 Paid-in capital 16,124,578 16,124,578 Less treasury stock, at cost, 61,645 at January 31, 2001 and 55,945 at July 31, 2000 (381,426) (353,301) Accumulated deficit (6,968,744) (6,614,335) ------------ ------------ Total stockholders' equity 8,791,977 9,174,511 ------------ ------------ Total liabilities and stockholders' equity $ 26,808,569 $ 25,617,543 ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 3 4 BESTWAY, INC. FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF INCOME --------------------------------------------------------------------------------
(UNAUDITED) THREE MONTHS ENDED SIX MONTHS ENDED ------------------------------ ------------------------------ JANUARY 31, JANUARY 31, 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Revenues: Rental income $ 9,102,101 $ 8,529,370 $ 17,865,622 $ 16,276,196 Sales of merchandise 74,161 106,648 236,142 184,387 ------------ ------------ ------------ ------------ 9,176,262 8,636,018 18,101,764 16,460,583 ------------ ------------ ------------ ------------ Cost and operating expenses: Depreciation and amortization: Rental merchandise 2,012,569 1,891,185 3,977,053 3,600,379 Other 495,758 399,692 976,776 758,615 Cost of merchandise sold 65,905 104,011 253,346 182,451 Salaries and wages 2,777,669 2,439,567 5,436,998 4,669,585 Advertising 467,543 484,510 897,180 890,921 Occupancy 670,376 566,825 1,298,333 1,097,916 Other operating expenses 2,599,215 2,315,396 5,137,306 4,556,659 Interest expense 368,696 283,074 669,391 514,353 (Gain) loss on sale of property and equipment 7,975 (7,361) (14,107) (16,949) Gain on sale of assets -- (320) -- (320) ------------ ------------ ------------ ------------ 9,465,706 8,476,579 18,632,276 16,253,610 ------------ ------------ ------------ ------------ Income (loss) from operations before income tax provision (289,444) 159,439 (530,512) 206,973 ------------ ------------ ------------ ------------ Income tax expense (benefit) (93,383) 83,762 (176,103) 108,510 ------------ ------------ ------------ ------------ Net income (loss) $ (196,061) $ 75,677 $ (354,409) $ 98,463 ------------ ------------ ------------ ------------ Basic and diluted net income (loss) per share $ (.12) $ .04 $ (.21) $ .06 ============ ============ ============ ============ Weighted average common shares outstanding 1,695,605 1,728,114 1,696,472 1,736,299 ============ ============ ============ ============ Diluted weighted average common shares outstanding 1,695,605 1,745,012 1,696,472 1,756,513 ============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements. 4 5 BESTWAY, INC. FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY -------------------------------------------------------------------------------- For the six months ended January 31, 2001
COMMON STOCK TREASURY STOCK --------------------------- PAID-IN ---------------------------- ACCUMULATED SHARES AMOUNT CAPITAL SHARES AMOUNT DEFICIT ----------- ----------- ----------- ----------- ----------- ----------- Balance at July 31, 2000 1,756,917 $ 17,569 $16,124,578 (55,945) $ (353,301) $(6,614,335) Treasury stock purchases -- -- -- (5,700) (28,125) -- Net loss for the six months ended January 31, 2001 -- -- -- -- -- (354,409) ----------- ----------- ----------- ----------- ----------- ----------- Balance at January 31, 2001 1,756,917 $ 17,569 $16,124,578 (61,645) $ (381,426) $(6,968,744) =========== =========== =========== =========== =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 5 6 BESTWAY, INC. FORM 10-Q CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS --------------------------------------------------------------------------------
(UNAUDITED) SIX MONTHS ENDED ---------------------------- JANUARY 31, JANUARY 31, 2001 2000 ----------- ----------- Cash flows from operating activities: Net income (loss) $ (354,409) $ 98,463 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 4,953,829 4,358,994 Net book value of rental units retired 1,579,517 1,074,544 Gain on sale of property and equipment (14,107) (16,949) Deferred income taxes (176,103) 91,763 Gain on sale of assets -- (320) Changes in operating assets and liabilities other than cash: Prepaid expenses (121,552) (301,081) Federal income taxes receivable (332,949) -- Other assets 55,473 (19,716) Accounts payable (291,398) (305,998) Income taxes payable (135,796) (39,353) Other accrued liabilities (34,038) (141,821) ----------- ----------- Total adjustments (860,260) (807,969) ----------- ----------- Net cash flows from operating activities 5,128,467 4,798,526 ----------- ----------- Cash flows from investing activities: Purchase of rental units and equipment (6,173,846) (7,818,255) Additions to property and equipment (1,488,934) (1,286,908) Proceeds from sale of property and equipment 58,975 20,871 Asset purchase net of cash acquired -- (92,578) Proceeds from sale of assets -- 105,873 ----------- ----------- Net cash flows used in investing activities (7,603,805) (9,070,997) ----------- ----------- Cash flows from financing activities: Bank overdraft -- 149,109 Proceeds from notes payable 3,700,000 4,212,999 Repayment of notes payable (1,506,451) (5,898) Treasury stock purchase (28,125) (131,536) ----------- ----------- Net cash flows provided by financing activities 2,165,424 4,224,674 ----------- ----------- Cash at beginning of period 979,042 812,179 ----------- ----------- Cash at end of period $ 669,128 $ 764,382 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 6 7 BESTWAY, INC. FORM 10-Q NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 1. REFERENCE TO PREVIOUS DISCLOSURES The condensed consolidated financial statements included herein have been prepared by the Company without audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Management believes that the disclosures are adequate to make the information presented not misleading and that all adjustments deemed necessary for a fair statement of the results for the interim period have been reflected. It is suggested that these unaudited consolidated financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's 2000 Form 10-K, particularly with regard to disclosure relating to significant accounting policies. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles. 2. EARNINGS PER COMMON SHARE Basic net income per common share is based on the weighted average common shares outstanding during the period. Diluted net income per share includes common stock equivalents, consisting of stock options, which are dilutive to net income per share. For the three and six months ended January 31, 2001 and 2000, 228,565 and 77,960 shares of common stock options were excluded from the calculation of diluted income per share because their effect would be antidilutive. 3. COMMON STOCK During the six months ending January 31, 2001, the Company repurchased 5,700 shares of its common stock in the open market at a cost of $28,125 (1,500 shares repurchased for $7,125 and 4,200 shares repurchased for $21,000). 4. RENTAL MERCHANDISE Rental merchandise rented to customers, or available for rent, is recorded at cost, net of accumulated depreciation. Merchandise rented to customers is depreciated on the income-forecast basis over the term of the rental agreement ranging from 12 to 24 months. Under the income-forecast basis, merchandise held for rent is not depreciated. Rental merchandise which is damaged and inoperable, deemed obsolete, or not returned by the customer after becoming delinquent on payments, is written-off as such impairment is incurred. For the six months ended January 31, 2001 and 2000, $818,783 and $741,374, respectively, of such impairments were incurred and are included in other operating expenses in the accompanying condensed consolidated statements of income. 7 8 BESTWAY, INC. FORM 10-Q NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS -------------------------------------------------------------------------------- 5. NEW ACCOUNTING STANDARD Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" was effective for the Company during the first quarter of fiscal year 2001. This statement had no impact on the Company's consolidated financial statements, as the Company does not currently hold derivative instruments or engage in hedging activities. 6. SUBSEQUENT EVENTS On February 20, 2001, the Company entered into an asset purchase agreement with Rent-A-Center, Inc. to sell all the assets of one store location in South Carolina. The Company received $122,374 in cash for all the assets involved in the daily operation of the store including all rental inventory being rented by customers. Idle inventory was transferred to the Company's existing store locations. 8 9 BESTWAY, INC. FORM 10-Q ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Report on Form 10-Q contains various "forward looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements represent the Company's expectations or beliefs concerning future events. Any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors include, but are not limited to, (i) the ability of the Company to acquire additional rental-purchase stores on favorable terms, (ii) the ability of the Company to improve the performance of such acquired stores and to integrate such acquired stores into the Company's operations, and (iii) the impact of state and federal laws regulating or otherwise affecting the rental-purchase transaction. Undo reliance should not be placed on any forward-looking statements made by or on behalf of the Company as such statements speak only as of the date made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, the occurrence of future events or otherwise. RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain items from the Company's unaudited Consolidated Statements of Operations, expressed as a percentage of revenues:
THREE MONTHS ENDED SIX MONTHS ENDED ------------------- ------------------- JANUARY 31, JANUARY 31, 2001 2000 2001 2000 ------ ------ ------ ------ Revenues: Rental income 99.2% 98.8% 98.7% 98.9% Sales of merchandise 0.8 1.2 1.3 1.1 ------ ------ ------ ------ Total revenues 100.0 100.0 100.0 100.0 ------ ------ ------ ------ Cost and operating expenses: Depreciation and amortization: Rental merchandise 21.9 21.9 22.0 21.9 Other 5.4 4.6 5.4 4.6 Cost of merchandise sold 0.7 1.2 1.4 1.1 Salaries and wages 30.3 28.2 30.0 28.4 Advertising 5.1 5.6 5.0 5.4 Occupancy 7.3 6.6 7.2 6.6 Other operating expenses 28.3 26.8 28.4 27.7 Interest expense 4.0 3.3 3.7 3.1 (Gain) loss on sale of property and equipment 0.1 -- (0.2) (0.1) Gain on sale of assets -- -- -- -- ------ ------ ------ ------ Total cost and operating expenses 103.1 98.2 102.9 98.7 ------ ------ ------ ------ Income (loss) from operations before income tax provision (3.1) 1.8 (2.9) 1.3 ------ ------ ------ ------ Income tax expense (benefit) (1.0) 0.9 (0.9) 0.7 ------ ------ ------ ------ Net income (loss) (2.1)% 0.9% (2.0)% 0.6% ====== ====== ====== ======
9 10 BESTWAY, INC. FORM 10-Q ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CON'T. COMPARISON OF THREE MONTHS ENDED JANUARY 31, 2001 AND 2000 For the three months ended January 31, 2001 compared to the three months ended January 31, 2000, total revenue increased $540,244, or 6.3% to $9,176,262 from $8,636,018. The increase in total revenue was primarily attributable to the inclusion of twelve new store openings in fiscal year 2000 and the inclusion of seven new store openings in fiscal year 2001 offset by decreased revenues in same stores, selling four store locations and merging one location in fiscal year 2000. Revenue from the twelve new store openings in fiscal year 2000 accounted for $757,657, or 140.2% of the increase. Revenue from the seven new store openings in fiscal year 2001 accounted for $428,484, or 79.3% of the increase. The increase in revenue from new stores is primarily a result of an increase in customers and the inclusion of a full quarter's results for stores opened in 2000. Revenue from same stores decreased $247,585, or 3.2% and accounted for a decrease of 45.8% in total revenue. The decline was primarily attributable to a decrease in the number of items on rent and a decrease in customers. Revenue decreased $398,312 or 73.7%, due to selling four locations and merging one location in fiscal year 2000, respectively. Total costs and operating expenses increased $989,127 or 11.7%, to $9,465,706 from $8,476,579 and increased 4.9% as a percentage of total revenues to 103.1% from 98.2%. The Company experienced net losses in the quarter ending January 31, 2001. These losses are primarily the result of expenses associated with the twelve stores opened in fiscal year 2000 and seven store openings in fiscal year 2001, respectively, and a lack of revenue growth in same stores after the Company's administrative and management organization had been developed to accommodate an anticipated growth in revenue. The Company has implemented a program to reduce operating expenses at the store and corporate level to increase profitability. Depreciation of rental merchandise increased $121,384, or 6.4%, to $2,012,569 from $1,891,185 and remained consistent as a percentage of revenue at 21.9%. Other depreciation and amortization increased $96,066, or 24.0% to $495,758 from $399,692 and as a percentage of total revenue increased .8% to 5.4% from 4.6%. Salaries and wages increased $338,102, or 13.9% to $2,777,669 from $2,439,567 and as a percentage of total store revenue increased 2.1% to 30.3% from 28.2%. Additional personnel for the new stores increased salaries and wages by $252,625, or 74.7% of the total increase due to additional personnel for the seven new internal new stores opened in fiscal year 2001, and three stores opened in the fourth quarter of fiscal year 2000, respectively. Occupancy expense increased $103,551, or 18.3% to $670,376 from $566,825 and as a percentage of total revenue increased .7% to 7.3% from 6.6% primarily due to the seven new store openings in the fiscal year 2001 and twelve new store openings in fiscal year 2000, respectively. Other operating expenses increased $283,819, or 12.3% to $2,599,215 from $2,315,396 and as a percentage of total revenues increased 1.5% to 28.3% from 26.8%. The increase was primarily attributable to the seven new stores opened in fiscal year 2001, the twelve new stores opened in fiscal year 2000 and increased write-offs of rental merchandise. Interest expense increased $85,622, or 30.2% to $368,696 from $283,074 and as a percentage of total revenue increased .7% to 4.0% from 3.3%. The increase in interest expense is primarily attributable to the indebtedness related to the internal new store locations in fiscal year 2001 and fiscal year 2000, respectively. For the three months ending January 31, 2001 compared to the three months ending January 31, 2000, income from operations before income tax provision decreased $448,883, or 281.5% to a loss 10 11 BESTWAY, INC. FORM 10-Q of $289,444 compared to a profit of $159,439. Income from operations before income tax provision as a percentage of total revenues decreased 4.9% to a negative 3.1% from 1.8%. The Company experienced operating losses of $145,069 from the seven new stores opened in fiscal year 2001. The new stores operated at a lower average revenue per store as compared to the Company's existing stores and, therefore, had higher salaries and wages, advertising and occupancy expenses as a percentage of revenues. COMPARISON OF SIX MONTHS ENDED JANUARY 31, 2001 AND 2000 For the six months ended January 31, 2001 compared to the six months ended January 31, 2000, total revenue increased $1,641,181, or 10.0% to $18,101,764 from $16,460,583. The increase in total revenue was primarily attributable to the inclusion of twelve new store openings in fiscal year 2000, the inclusion of seven new store openings in fiscal year 2001, slightly improved same store revenues offset by decreased revenue due to selling four store locations and merging one location in fiscal year 2000. Revenue from the twelve new store openings in fiscal year 2000 accounted for $1,905,931, or 116.1% of the increase. Revenue from the seven new store openings in fiscal year 2001 accounted for $550,226, or 33.5% of the increase. The increase in revenue from new stores is primarily a result of an increase in customers and the inclusion of a full quarter's results for stores opened in 2000. Revenue from same stores increased $22,295, or .1% and accounted for 1.4% of the increase. Same store revenues represent those revenues earned in stores that were operated by the Company for the entire six months ending January 31, 2001 and 2000. Revenue decreased $837,271, or 51.0%, due to selling four locations and merging one location in fiscal year 2000, respectively. Total costs and operating expenses increased $2,378,666, or 14.6% to $18,632,276 from $16,253,610 and increased 4.2% as a percentage of total revenues to 102.9% from 98.7%. The Company experienced net losses in the six months ending January 31, 2001. The losses are primarily the result of expenses associated with the twelve stores opened in fiscal year 2000 and seven store openings in the six months ending January 31, 2001, respectively, and a lack of revenue growth in same stores after the Company's administrative and management organization had been developed to accommodate an anticipated growth in revenue. The Company has implemented a program to reduce operating expenses at the store and corporate level to increase profitability. Depreciation of rental merchandise increased $376,674, or 10.5%, to $3,977,053 from $3,600,379 and as a percentage of total revenue increased .1% to 22.0% from 21.9%. Other depreciation and amortization increased $218,161, or 28.8% to $976,776 from $758,615 and as a percentage of total revenue increased .8% to 5.4% from 4.6%. Salaries and wages increased $767,413, or 16.4% to $5,436,998 from $4,669,585 and as a percentage of total store revenue increased 1.6% to 30.0% from 28.4%. Additional personnel for the new stores increased salaries and wages by $548,687, or 71.4% of the total increase due to additional personnel for the seven and twelve new internal new stores opened in fiscal year 2001 and fiscal year 2000, respectively. Occupancy expense increased by $200,417, or 18.3% to $1,298,333 from $1,097,916 and as a percentage of total revenue increased .6% to 7.2% from 6.6% primarily due to the seven new store openings in fiscal year 2001 and twelve new store openings in fiscal year 2000, respectively. Other operating expenses increased $580,647, or 12.7% to $5,137,306 from $4,556,659 and as a percentage of total revenues increased .7% to 28.4% from 27.7%. The increase was primarily attributable to the seven new stores opened in fiscal year 2001, the twelve new stores opened in fiscal year 2000, increased write-offs of rental merchandise and increased insurance costs. Interest expense increased $155,038, or 30.1% to $669,391 from 11 12 BESTWAY, INC. FORM 10-Q $514,353. The increase in interest expense is primarily attributable to the indebtedness related to the internal store locations in fiscal year 2001 and fiscal year 2000, respectively. For the six months ending January 31, 2001 compared to the six months ending January 31, 2000, income from operations before income tax provision decreased $737,485, or 356.3% to a loss of $530,512 compared to a profit of $206,973. Income from operations before income tax provision as a percentage of total revenues decreased 4.2% to a negative 2.9% from 1.3%. The Company experienced operating losses of $349,708 from the seven new stores opened in fiscal year 2001. The new stores operated at a lower average revenue per store as compared to the Company's existing stores and, therefore, had higher salaries and wages, advertising and occupancy expenses as a percentage of revenues. FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES For the six months ending January 31, 2001, the Company's net cash flows from operating activities was $5,128,467 as compared to $4,798,526 for the six months ending January 30, 2000. The increase was primarily due to increased cash flow from the stores opened in fiscal year 2000 and increased outflow for working capital requirements. For the six months ending January 31, 2001, the Company's net cash flows used in investing activities was $7,603,805 as compared to $9,070,997 for the six months ending January 31, 2000. The Company's investing activities reflects a $1,644,409 decrease in the purchase of rental units and equipment. For the six months ending January 31, 2001, the Company's net cash flows provided by financing activities was $2,165,424 as compared to $4,224,674 for the six months ending January 31, 2000. The decrease in financing activities principally reflects decreased borrowings on the Company's debt. With the Company having available credit of approximately $2,129,000 under the $17,500,000 Revolving Credit Loan Agreement, management believes the Company has adequate resources to meet its future cash obligations. INFLATION Although the Company cannot precisely determine the effects of inflation on its business, it is management's belief that the effects on revenues and operating results have not been significant. NEW ACCOUNTING STANDARD Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" was effective for the Company during the first quarter of fiscal year 2001. This statement had no impact on the Company's consolidated financial statements as the Company does not currently hold derivative instruments or engage in hedging activities. 12 13 BESTWAY, INC. FORM 10-Q PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K, SIGNATURES (a) Exhibits required by Item 601 of Regulation S-K (b) Report on Form 8-k The Company did not file any reports on Form 8-k during the quarter ended January 31, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BESTWAY, INC. March 16, 2001 /s/ Beth A. Durrett ------------------- Beth A. Durrett Chief Financial Officer (Principal Financial Officer and duly authorized to sign on behalf of the Registrant) 13