Carbiz Inc.
OTC Bulletin Board : CBZFF

Carbiz Inc.

October 09, 2007 09:01 ET

CarBiz Inc. CEO Discusses Recent Acquisition and Company's Vision

SARASOTA, FLORIDA--(Marketwire - Oct. 9, 2007) - Following announcements last week regarding an acquisition and related financing, Carl Ritter, chief executive officer of Sarasota-based CarBiz Inc. (OTCBB:CBZFF) ("CarBiz"), discussed the impact of these milestones on the company and its vision for the future.

According to Ritter, the recent acquisition of the Calcars business in the Midwest catapulted CarBiz into a strong regional position as the nation's fourth-largest chain of "buy-here pay-here" automotive dealerships. The purchase included a regional office and 26 retail facilities across seven states. It also included a portfolio of consumer loans in excess of $27 million and fixed assets valued in excess of $800,000. CarBiz paid approximately $18.6 million for all of these assets and was able to make this purchase primarily because of the target company's liquidity restraints, Ritter said.

Prior to the acquired company's liquidity restraints, Calcars historically sold and financed about 500 vehicles per month, Ritter said. CarBiz expects to begin sales operations in these new Midwest locations in November after acquiring inventory, training employees and improving facilities.

The funding package for the acquisition includes a senior credit facility with a maximum commitment of $30 million that provides for floor planning, strong inventory levels, a term loan for acquiring the assets and a credit facility to provide capital for growing the business. In addition to the senior credit facility, the company obtained $3.3 million in junior debt in the form of convertible debentures. Since the vast majority of the funding package is straight debt, there is minimal dilution to shareholders, Ritter said.

The consolidated operations of CarBiz are expected to generate revenues of approximately $40 million annually, based on historical results from CarBiz and the Calcars business. In the final four months of the CarBiz fiscal year, through January 31, 2008, management will apply CarBiz's proven processes and techniques to the newly acquired locations, then work to optimize results in the first quarter of next fiscal year.

"Looking ahead, the alternative financial services market is growing and consolidating," Ritter said. "Consider the number of check cashing stores and pay day loan businesses that seem to have come out of nowhere. We see this market consolidating and creating new alternative financial services institutions that are a conglomerate of many or all of these products and services.

"As a result of these transactions, CarBiz now enjoys a much improved balance sheet, access to capital for growth, and a technology and consulting division that continues aggressive organic growth," Ritter said. "We added the nation's fourth-largest chain of 'buy-here pay-here' dealerships to the company and will continue to grow that division as we investigate opportunities with other related businesses in the alternative financial markets."

This press release is available on the CarBiz IR HUB for investor commentary, feedback and questions. Investors are asked to visit . Alternatively, investors are asked to e-mail all questions and correspondence to where they can also request addition to the investor e-mail list to receive all future press releases and correspondence directly.

About CarBiz

Based in Sarasota, Florida, CarBiz owns and operates the nation's fourth-largest chain of "buy-here pay-here" dealerships through its CarBiz Auto Credit division. The company is also a leading provider of software, training and consulting solutions to the United States automotive industry. CarBiz's suite of business solutions includes dealer software products focused on the "buy-here pay-here," sub-prime finance and automotive accounting markets. Capitalizing on expertise developed over 10 years of providing software and consulting services to "buy-here pay-here" businesses across the United States, CarBiz entered the market in 2004 with a location in Palmetto, Florida. CarBiz has added two more credit centers since - in Tampa and St. Petersburg - and recently acquired a large regional chain in the Midwest, bringing the total number of dealerships to 26 in eight states. For more information about CarBiz and its services, visit CarBiz's web site:

Forward-Looking Statements

All statements, other than statements of historical fact, in this news release are forward-looking statements that involve various risks and uncertainties, including, without limitation, statements regarding the future growth plans and objectives of CarBiz. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements as a result of known and unknown risks, uncertainties and other factors. Such factors that could cause actual results and future events to differ from those anticipated in such statements include, but are not limited to, the market acceptance of CarBiz's Auto Credit Centers, the ability of CarBiz to effectively integrate the Calcars dealerships into its dealership network, the ability of CarBiz to effectively deploy the funds received from the new credit facilities and convertible debenture financings, the possibility that the liquidated damage provisions or the default provisions could be triggered under the terms of the convertible debenture financing which could be adverse to CarBiz, CarBiz's ability to measure the default rate of its borrowers, competition, the impact of any changes in applicable government regulation and general economic conditions. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. CarBiz assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

Contact Information