Quarter #2 (January - March)

After completing my first quarter at Universal the company and I had a new market understanding. With market share advantages in both Tampa and Miami we were able to reap in more of the business in these areas. By adjusting the cost per rental by just a few dollars - we made substantial profits.

We also gained a clearer understanding of our competitor’s behavior. The competitor in most cases simply wanted to match prices. If I increased costs, they increased costs. If I were to define this competitor I would categorize them as hesitant. In no way did the competitor show aggressive behavior by slashing prices, increasing fleet size etc. to increase market share. We used the competitor’s lackadaisical methodology to our advantage.

Here’s how our numbers turned out for quarter #2:

Capacity Utilization
-------------------Weekend------------- Weekday
July -----------------66%------------------- --85%
August -------------- 69% ---------------------88%
September-----------74% ----------------------95%
October-------------- 85%------------------- --100%
November----------- 88% ---------------------100%
December ------------91%-------------------- -100%
January--------------- 93% --------------------100%
February-------------- 95%-------------------- 100%
March -----------------96%------------------- -100%

As you can see careful management tactics were in place to ensure that we maintained capacity utilization. Careful price checks and comparisons were made month to month to ensure we used our capacity to our full advantage. This quarter we successfully increased our weekday capacity to 96% while maintaining our weekend capacity at 100%. These are big accomplishments given where we came from in October. In this situation I thought that managing surplus was more important to maintain. Although the company has a history of both stock-outs and unsold inventory, I chose to manage unsold inventory more closely as my overall goal for the business was to increase profits.

Here is a brief look at our monthly net income for this quarter:

Revenue from Weekday Rentals --- -----$38,718,752 ---- $38,247,044 -----$39,930,941
Revenue from Weekend Rentals --- ----- $11,600,269 --- $11,817,666 ------$12,904,906
Total Revenue --------------------------$50,319,021 ---- $50,064,710 -----$52,835,847
Variable Costs ---------------------------$18,311,988-----$18,164,098------$18,389,041
Weighted Average Profit Contribution ---$32,007,033 ----$31,900,612 -----$34,446,806
Weekday Contribution ---------------- $25,431,735 -------$24,960,027 -----$26,643,924
Weekend Contribution----------------- $6,575,298 -------$6,940,585 --- ---$7,802,882
Vehicle Inventory Costs------------------$13,644,110 ----$13,644,110 --- --$13,644,110
Net Profit Contribution ----------------- $18,362,923 ---- $18,256,501------$20,802,696
Other Fixed Costs -----------------------$8,944,024 -----$8,944,024 -------$8,944,024
Net Income------------------------------$9,418,899 ----- $9,312,477 -------$11,858,671
Accumulated Profit ----------------------$24,285,754 ----$33,598,231------$45,456,903

As you can see from our financial report Universal continues to increase profits on a month to month basis. This quarter our monthly accumulated profit average was a whopping $10.5 million. Although Universal is on the right track there is still room from improvement.