Mego Financial Corp. Reports Fiscal 2001 Second Quarter And Six Month Results

Company Achieves Revenues of $48.8 Million in First Six Months



Company Continues to Experience Strong Demand for its Ramada Vacation Suites

Timeshare Resorts



Financial Summary Table

(in 000's, except per share data)



Six Months Ended Three Months Ended

2/28/01 2/29/00 2/28/01 2/29/00

Total Revenues $ 48,793 $41,715 $22,913 $21,018

Income Before Income

Taxes 2,209 1,661 423 1,006

Income Taxes (Benefit) (137) --- -- ---

Net Income Applicable

to Common Stock 2,346 1,661 423 1,006

Net Income Per Common

Share (basic and

diluted) 0.67 0.47 0.12 0.29

Number of Common

Shares and

Common Share Equivalents

Outstanding

(basic and diluted) 3,500,557 3,500,557 3,500,557 3,500,557



Apr 16, 2001, 01:00 ET from Mego Financial Corp.

    LAS VEGAS, April 16 /PRNewswire/ -- Mego Financial Corp. (Nasdaq:   MEGO)
 announced today financial results for the second quarter and the first six
 months of fiscal 2001, ended February 28, 2001.
     Commenting on today's news, Jerome J. Cohen, President of Mego Financial,
 said, "We are pleased to report the eighth consecutive quarter of
 profitability for our Company since our turnaround efforts began in early
 1999.  Although we did not have any gain on sale of investments during the
 second quarter, for the six months the Company had a gain of $1.6 million.
 We continue to market our non-core assets and hope to be able to close an
 additional sale during fiscal 2001."
     Mr. Cohen continued, "Our timeshare properties, especially those in
 Florida, Colorado and Las Vegas, continue to be in high demand and are
 experiencing strong sales generated on-site, but more importantly, our ongoing
 off-site sales efforts are proving successful, albeit at somewhat higher
 costs."  Mr. Cohen reiterated his previous guidance of a 12% to 15% increase
 in 'same store sales' in fiscal 2001 via a combination of expanded hours of
 operation and improved sales efficiencies.
     Finally, Mr. Cohen noted Mego's strong position in the timeshare market as
 reflected in the Company's recently announced acquisition of 42 additional
 units at its Ramada Vacation Suites at Orlando resort, and its ability to
 secure $4.5 million of acquisition and construction financing along with the
 extension of its existing $30 million receivables line of credit covering the
 resort.  The 42 units, which should be available to purchasers by August of
 this year, could generate up to $31 million in additional revenues for the
 Company.  Mego Financial continues to seek other avenues of expansion of its
 business.
 
     First Half and Second Quarter Results
     For the six months ended February 28, 2001, Mego Financial reported a
 17% increase in total revenues, to $48,793,000, compared to $41,715,000 last
 year. The increase in revenues was primarily generated by a 14% increase in
 net timeshare and land sales and a $1.6 million gain on sale of non-core
 assets, both significantly higher than last year's period.
     Income before income taxes for the six months ended February 28, 2001 was
 $2,209,000.  This compares to income before income taxes of $1,661,000 in the
 same period of fiscal 2000, or a 33% gain.  Net income applicable to common
 stock was $2,346,000, or $0.67 per common share based on 3,500,557 common
 shares and common share equivalents outstanding for the six months ended
 February 28, 2001.  In the same period of fiscal 2000, Mego Financial reported
 net income applicable to common stock of $1,661,000, or $0.47 per common share
 based on 3,500,557 common shares and common share equivalents outstanding.
     For the three months ended February 28, 2001, Mego Financial reported
 total revenues of $22,913,000, up 9% from $21,018,000 in the same period of
 fiscal 2000.  The increase in revenues was primarily generated by an 11%
 increase in net timeshare and land sales at PEC.   Income before income taxes
 for the quarter ended February 28, 2001 was $423,000.  This compares to income
 before income taxes of $1,006,000 in the second quarter of fiscal 2000, which
 included a $678,000 gain on sale of non-core assets.
     The Company reported net income applicable to common stock of $423,000, or
 $0.12 per common share based on 3,500,557 common shares and common share
 equivalents outstanding for the quarter ended February 28, 2001.  In the same
 period of fiscal 2000, Mego Financial reported net income applicable to common
 stock of $1,006,000, or $0.29 per common share based on 3,500,557 common
 shares and common share equivalents outstanding.
 
     Mego Financial is a premier developer and operator of timeshare properties
 and a provider of consumer financing to purchasers of timeshare interests and
 land parcels through its wholly owned subsidiary, Preferred Equities
 Corporation, established in 1970.  Mego Financial is headquartered in Las
 Vegas, Nevada and has properties it operates under the banner of Ramada
 Vacation Suites in Nevada, New Jersey, Colorado, Florida and Hawaii.  Mego
 Financial also owns Central Nevada Utilities, serving a large portion of the
 fast-growing Pahrump Valley, near Las Vegas.
 
     To receive Mego Financial's latest news and other corporate documents via
 FAX -- no cost -- please dial 1-800-PRO-INFO.  Use Mego Financial's ticker
 symbol, MEGO.
     Or view our pages on FRB's website http://www.frbinc.com .
 
     This press release contains "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995.  Such
 forward-looking statements involve known and unknown risks, uncertainties or
 other factors which may cause actual results, performance or achievements of
 Mego Financial to be materially different from any future results, performance
 or achievements express or implied by such forward-looking statements.
 Factors that might cause such a difference, include, but are not limited to
 those discussed in the Management's Discussion and Analysis of Financial
 Condition and Results of Operations in Mego Financial's Annual Report on Form
 10-K for the year ended August 31, 2000, the Form 10Q for the period ended
 November 30, 2001, and subsequent documents filed by Mego Financial Corp. with
 the Securities and Exchange Commission.
 
 
                       MEGO FINANCIAL CORP. AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                 (thousands of dollars, except per share amounts)
                                    (unaudited)
 
                                                 February 28,        August 31,
     ASSETS                                          2001               2000
     Cash and cash equivalents                      $1,323             $1,069
     Restricted cash                                 3,123              1,255
     Notes receivable, net of allowance
      for cancellations and discounts of
      $13,839 at
      February 28, 2001 and $13,234 at
       August 31, 2000                              92,117             83,156
     Interest only receivables, at fair
      value                                          2,954              2,701
     Timeshare interests held for sale              19,632             23,307
     Land and improvements inventory                 3,126              4,113
     Other investments                               4,485              4,492
     Property and equipment, net of
      accumulated depreciation of
      $16,158 at February 28,
      2001 and $17,632 at August 31,
       2000                                         16,771             23,167
     Deferred selling costs                          5,665              5,231
     Prepaid debt expenses                           2,004              2,060
     Other assets                                   16,128             18,041
 
          TOTAL ASSETS                            $167,328           $168,592
 
 
     LIABILITIES AND STOCKHOLDERS'
      EQUITY
     Liabilities:
      Notes and contracts payable                 $103,577           $109,131
      Accounts payable and accrued
       liabilities                                  22,755             19,544
      Reserve for notes receivable sold
       with recourse                                 3,931              4,033
      Deposits                                       3,362              2,841
      Accrued income taxes                           2,311              2,975
 
          Total liabilities before
           subordinated debt                       135,936            138,524
 
     Subordinated debt                               4,286              4,286
 
     Stockholders' equity:
      Preferred stock, $.01 par value
       (authorized_5,000,000 shares,
       none outstanding)
      Common stock, $.01 par value
       (authorized_50,000,000 shares;
       3,500,557 shares
       issued and outstanding at
        February 28, 2001 and August 31,
        2000)                                           35                 35
      Additional paid-in capital                    13,068             13,068
      Retained earnings                             15,025             12,679
      Accumulated other comprehensive
       loss                                         (1,022)                --
 
          Total stockholders' equity                27,106             25,782
 
          TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY                   $167,328           $168,592
 
 
                       MEGO FINANCIAL CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED INCOME STATEMENTS
                  (thousands of dollars, except per share amounts)
                                    (unaudited)
 
                                  Three Months Ended      Six Months Ended
                            February 28, February 29, February 28, February 29,
 
                                   2001       2000        2001          2000
     REVENUES
      Timeshare interest sales,
       net                         $12,108    $10,906    $26,126       $22,897
      Land sales, net                5,085      4,563      9,827         8,582
      Interest income                3,550      3,172      6,759         6,043
      Financial income                 850        269      1,329           541
      Gain on sale of notes
       receivable                       --         --        292            --
      Gain on sale of
       investments                      --        678      1,608           678
      Incidental operations            388        511        878         1,135
      Other                            932        919      1,974         1,839
          Total revenues            22,913     21,018     48,793        41,715
 
     COSTS AND EXPENSES
      Direct cost of:
       Timeshare interest sales      2,455      2,210      5,612         4,588
       Land sales                      777        741      1,546         1,297
      Interest expense               3,088      3,113      6,132         5,979
      Marketing and sales           11,057      8,593     22,521        17,867
      General and administrative     4,409      4,395      9,323         8,273
      Incidental operations            353        499        707         1,099
      Depreciation                     351        461        743           951
          Total costs and
           expenses                 22,490     20,012     46,584        40,054
 
 
     INCOME BEFORE INCOME TAXES        423      1,006      2,209         1,661
 
     INCOME TAXES (BENEFIT)             --         --       (137)           --
 
 
     NET INCOME APPLICABLE TO
      COMMON STOCK                    $423     $1,006     $2,346        $1,661
 
     INCOME PER COMMON SHARE
      Basic:
       Net income applicable to
        common stock                 $0.12      $0.29      $0.67         $0.47
 
 
       Weighted-average number
        of common shares and
        common share equivalents
        outstanding              3,500,557  3,500,557  3,500,557     3,500,557
 
      Diluted:
       Net income applicable to
        common stock                 $0.12      $0.29      $0.67         $0.47
 
 
       Weighted-average number
        of common shares and
        common share equivalents
        outstanding              3,500,557  3,500,557  3,500,557     3,500,557
 
 

SOURCE Mego Financial Corp.
    LAS VEGAS, April 16 /PRNewswire/ -- Mego Financial Corp. (Nasdaq:   MEGO)
 announced today financial results for the second quarter and the first six
 months of fiscal 2001, ended February 28, 2001.
     Commenting on today's news, Jerome J. Cohen, President of Mego Financial,
 said, "We are pleased to report the eighth consecutive quarter of
 profitability for our Company since our turnaround efforts began in early
 1999.  Although we did not have any gain on sale of investments during the
 second quarter, for the six months the Company had a gain of $1.6 million.
 We continue to market our non-core assets and hope to be able to close an
 additional sale during fiscal 2001."
     Mr. Cohen continued, "Our timeshare properties, especially those in
 Florida, Colorado and Las Vegas, continue to be in high demand and are
 experiencing strong sales generated on-site, but more importantly, our ongoing
 off-site sales efforts are proving successful, albeit at somewhat higher
 costs."  Mr. Cohen reiterated his previous guidance of a 12% to 15% increase
 in 'same store sales' in fiscal 2001 via a combination of expanded hours of
 operation and improved sales efficiencies.
     Finally, Mr. Cohen noted Mego's strong position in the timeshare market as
 reflected in the Company's recently announced acquisition of 42 additional
 units at its Ramada Vacation Suites at Orlando resort, and its ability to
 secure $4.5 million of acquisition and construction financing along with the
 extension of its existing $30 million receivables line of credit covering the
 resort.  The 42 units, which should be available to purchasers by August of
 this year, could generate up to $31 million in additional revenues for the
 Company.  Mego Financial continues to seek other avenues of expansion of its
 business.
 
     First Half and Second Quarter Results
     For the six months ended February 28, 2001, Mego Financial reported a
 17% increase in total revenues, to $48,793,000, compared to $41,715,000 last
 year. The increase in revenues was primarily generated by a 14% increase in
 net timeshare and land sales and a $1.6 million gain on sale of non-core
 assets, both significantly higher than last year's period.
     Income before income taxes for the six months ended February 28, 2001 was
 $2,209,000.  This compares to income before income taxes of $1,661,000 in the
 same period of fiscal 2000, or a 33% gain.  Net income applicable to common
 stock was $2,346,000, or $0.67 per common share based on 3,500,557 common
 shares and common share equivalents outstanding for the six months ended
 February 28, 2001.  In the same period of fiscal 2000, Mego Financial reported
 net income applicable to common stock of $1,661,000, or $0.47 per common share
 based on 3,500,557 common shares and common share equivalents outstanding.
     For the three months ended February 28, 2001, Mego Financial reported
 total revenues of $22,913,000, up 9% from $21,018,000 in the same period of
 fiscal 2000.  The increase in revenues was primarily generated by an 11%
 increase in net timeshare and land sales at PEC.   Income before income taxes
 for the quarter ended February 28, 2001 was $423,000.  This compares to income
 before income taxes of $1,006,000 in the second quarter of fiscal 2000, which
 included a $678,000 gain on sale of non-core assets.
     The Company reported net income applicable to common stock of $423,000, or
 $0.12 per common share based on 3,500,557 common shares and common share
 equivalents outstanding for the quarter ended February 28, 2001.  In the same
 period of fiscal 2000, Mego Financial reported net income applicable to common
 stock of $1,006,000, or $0.29 per common share based on 3,500,557 common
 shares and common share equivalents outstanding.
 
     Mego Financial is a premier developer and operator of timeshare properties
 and a provider of consumer financing to purchasers of timeshare interests and
 land parcels through its wholly owned subsidiary, Preferred Equities
 Corporation, established in 1970.  Mego Financial is headquartered in Las
 Vegas, Nevada and has properties it operates under the banner of Ramada
 Vacation Suites in Nevada, New Jersey, Colorado, Florida and Hawaii.  Mego
 Financial also owns Central Nevada Utilities, serving a large portion of the
 fast-growing Pahrump Valley, near Las Vegas.
 
     To receive Mego Financial's latest news and other corporate documents via
 FAX -- no cost -- please dial 1-800-PRO-INFO.  Use Mego Financial's ticker
 symbol, MEGO.
     Or view our pages on FRB's website http://www.frbinc.com .
 
     This press release contains "forward-looking statements" within the
 meaning of the Private Securities Litigation Reform Act of 1995.  Such
 forward-looking statements involve known and unknown risks, uncertainties or
 other factors which may cause actual results, performance or achievements of
 Mego Financial to be materially different from any future results, performance
 or achievements express or implied by such forward-looking statements.
 Factors that might cause such a difference, include, but are not limited to
 those discussed in the Management's Discussion and Analysis of Financial
 Condition and Results of Operations in Mego Financial's Annual Report on Form
 10-K for the year ended August 31, 2000, the Form 10Q for the period ended
 November 30, 2001, and subsequent documents filed by Mego Financial Corp. with
 the Securities and Exchange Commission.
 
 
                       MEGO FINANCIAL CORP. AND SUBSIDIARIES
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                 (thousands of dollars, except per share amounts)
                                    (unaudited)
 
                                                 February 28,        August 31,
     ASSETS                                          2001               2000
     Cash and cash equivalents                      $1,323             $1,069
     Restricted cash                                 3,123              1,255
     Notes receivable, net of allowance
      for cancellations and discounts of
      $13,839 at
      February 28, 2001 and $13,234 at
       August 31, 2000                              92,117             83,156
     Interest only receivables, at fair
      value                                          2,954              2,701
     Timeshare interests held for sale              19,632             23,307
     Land and improvements inventory                 3,126              4,113
     Other investments                               4,485              4,492
     Property and equipment, net of
      accumulated depreciation of
      $16,158 at February 28,
      2001 and $17,632 at August 31,
       2000                                         16,771             23,167
     Deferred selling costs                          5,665              5,231
     Prepaid debt expenses                           2,004              2,060
     Other assets                                   16,128             18,041
 
          TOTAL ASSETS                            $167,328           $168,592
 
 
     LIABILITIES AND STOCKHOLDERS'
      EQUITY
     Liabilities:
      Notes and contracts payable                 $103,577           $109,131
      Accounts payable and accrued
       liabilities                                  22,755             19,544
      Reserve for notes receivable sold
       with recourse                                 3,931              4,033
      Deposits                                       3,362              2,841
      Accrued income taxes                           2,311              2,975
 
          Total liabilities before
           subordinated debt                       135,936            138,524
 
     Subordinated debt                               4,286              4,286
 
     Stockholders' equity:
      Preferred stock, $.01 par value
       (authorized_5,000,000 shares,
       none outstanding)
      Common stock, $.01 par value
       (authorized_50,000,000 shares;
       3,500,557 shares
       issued and outstanding at
        February 28, 2001 and August 31,
        2000)                                           35                 35
      Additional paid-in capital                    13,068             13,068
      Retained earnings                             15,025             12,679
      Accumulated other comprehensive
       loss                                         (1,022)                --
 
          Total stockholders' equity                27,106             25,782
 
          TOTAL LIABILITIES AND
           STOCKHOLDERS' EQUITY                   $167,328           $168,592
 
 
                       MEGO FINANCIAL CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED INCOME STATEMENTS
                  (thousands of dollars, except per share amounts)
                                    (unaudited)
 
                                  Three Months Ended      Six Months Ended
                            February 28, February 29, February 28, February 29,
 
                                   2001       2000        2001          2000
     REVENUES
      Timeshare interest sales,
       net                         $12,108    $10,906    $26,126       $22,897
      Land sales, net                5,085      4,563      9,827         8,582
      Interest income                3,550      3,172      6,759         6,043
      Financial income                 850        269      1,329           541
      Gain on sale of notes
       receivable                       --         --        292            --
      Gain on sale of
       investments                      --        678      1,608           678
      Incidental operations            388        511        878         1,135
      Other                            932        919      1,974         1,839
          Total revenues            22,913     21,018     48,793        41,715
 
     COSTS AND EXPENSES
      Direct cost of:
       Timeshare interest sales      2,455      2,210      5,612         4,588
       Land sales                      777        741      1,546         1,297
      Interest expense               3,088      3,113      6,132         5,979
      Marketing and sales           11,057      8,593     22,521        17,867
      General and administrative     4,409      4,395      9,323         8,273
      Incidental operations            353        499        707         1,099
      Depreciation                     351        461        743           951
          Total costs and
           expenses                 22,490     20,012     46,584        40,054
 
 
     INCOME BEFORE INCOME TAXES        423      1,006      2,209         1,661
 
     INCOME TAXES (BENEFIT)             --         --       (137)           --
 
 
     NET INCOME APPLICABLE TO
      COMMON STOCK                    $423     $1,006     $2,346        $1,661
 
     INCOME PER COMMON SHARE
      Basic:
       Net income applicable to
        common stock                 $0.12      $0.29      $0.67         $0.47
 
 
       Weighted-average number
        of common shares and
        common share equivalents
        outstanding              3,500,557  3,500,557  3,500,557     3,500,557
 
      Diluted:
       Net income applicable to
        common stock                 $0.12      $0.29      $0.67         $0.47
 
 
       Weighted-average number
        of common shares and
        common share equivalents
        outstanding              3,500,557  3,500,557  3,500,557     3,500,557
 
 SOURCE  Mego Financial Corp.