LV timeshare company returns to profitability

Tuesday, Nov. 16, 1999 | 10:34 a.m.

Mego Financial Corp. of Las Vegas reported a net profit for the quarter and fiscal year ending Aug. 31, turning around a stretch of losses stretching back two years.

The company reported net income of $1.05 million for the fiscal year, or 30 cents per share. During the previous fiscal year, Mego lost $3.23 million, or 92 cents per share. Revenues rose 8.6 percent, to $74.5 million.

The company's profitability was the direct result of a strong fourth quarter. During the quarter, Mego earned $1.17 million, or 33 cents a share, compared to a year-ago loss of $468,000, or 13 cents per share. Revenues rose 12 percent to $21.42 million. It marked the company's second consecutive quarter of profitability.

Mego attributed its strong performance to a variety of factors, including lowered marketing and sales expenses, a 10 percent reduction in its workforce and overhauled sales programs. The company said it also benefitted from continued strong economic conditions.

Mego projected that growth would continue to strengthen in fiscal 2000, with revenue growing about 13 percent. That would put 2000 revenues at about $85 million.

"You will see a steady stream of earnings growth now that we are profitable," company President Jerome Cohen told Dow Jones News Service.

Cohen said he expects Mego to sell "at least one major non-core asset" in Pahrump in the next six months, according to Dow Jones.

The company owns the Central Nevada Utility Co., two golf courses and several large land parcels in Pahrump.