The Major Automotive Companies Reports Nine Months Results
LONG ISLAND CITY, N.Y.--Nov. 19, 2001--The Major Automotive Companies, Inc. (f/k/a Fidelity Holdings, Inc.) today reported record revenues and gross profits for the nine months ended September 30, 2001.
Revenues for the nine months of ended September 30, 2001 were $281,685,839 compared with $244,641,929 for the comparable 2000 period. Income from continuing operations for the first nine months of 2001 was $1,520,933 ($.20 per diluted share) compared with $1,385,118 ($.25 per diluted share) for the 2000 period. There was no loss from discontinued operations in the first nine months of 2001 compared with a loss of $(16,371,328) (($2.95) per diluted share) from discontinued operations in the 2000 comparable quarter, because in the year 2000 period, provision had been made for the estimated additional cost related to those operations. Net income for the nine months ended September 30, 2001 was $1,520,933, or $.20, per diluted share versus a net loss of $(14,986,210) or $(2.70) per diluted share for the nine months ended September 30, 2000. The average number of shares used in the computation in the 2000 period was 7,663,707, compared with 5,543,735 shares (as adjusted for the 1-for-5 reverse split effected in May 2001) in the comparable prior period.
For the quarter ended September 30, 2001, revenues increased to $91,249,742 from $91,067,546 for the quarter ended September 30, 2000. Gross profits for the current quarter rose to $16,037,110 from $13,645,460 for the comparable 2000 quarter. Income from continuing operations was $797,216 ($.10 per diluted share) in the third quarter of 2001 compared with a loss from continuing operations of $(996,809) (($.19) per diluted share) for the same quarter in 2000. There was no loss from discontinued operations in the third quarter of 2001 compared with a loss of $(14,472,020) (($2.81) per diluted share) from discontinued operations in the 2000 comparable quarter, because in the year 2000, provision had been made for the estimated additional cost related to those operations. Net income was $797,216 or $.10 per diluted share for the quarter ended September 30, 2001 versus net loss of $(15,468,829) or $(3.00) per diluted share for the comparable quarter in the prior year. The average number of shares used in the computations (as adjusted for a 1-for-5 reverse split in May 2001) was 7,637,074 and 5,150,031 in the 2001 and 2000 quarters, respectively.
Bruce Bendell, Chairman and Chief Executive Officer of Major stated, "We are thankful that our dedicated employees have successfully weathered the aftermath of the terrorist attack of September 11th and have continued to provide our quality service to our customers. We believe that our ability as a company to persevere in this difficult time is demonstrative of the basic soundness of our business and our vision. Even with the decline in new car sales during the immediate post-tragedy period in September, we are significantly ahead of last year's revenues and gross profits for the nine months. We are proud to be recognized throughout the New York metropolitan area as a leading dealer offering a variety of new car brands and well-priced quality used vehicles."
Richard L. Feinstein, Chief Financial Officer, noted: "We have made significant strides in focusing on effectively reducing our costs, both on an operational and overhead level. This effect is obvious by observing that even though our third quarter revenues were relatively flat in 2001 compared with the prior year's third quarter, our gross profits increased by more than 17%. We have also made significant cuts in our corporate overhead. We expect that the results of our cost cutting efforts will become more apparent in future periods. Absent the significant charges we incurred in the current quarter in connection with long-standing litigation, the effects of September 11th not withstanding, our results are evidence that our strategies are having a positive effect."
The Major Automotive Companies is a holding company for the Major Automotive Group, a leading consilidator of automobile dealerships in the New York metropolitan area.
For additional information, visit the Company's website at http://www.majorworld.com/
THE MAJOR AUTOMOTIVE COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended Sept. 30, Three Months Ended Sept. 30,
2001 2000 2001 2000
Sales $ 281,685,839 $ 244,641,929 $91,249,742 $91,067,546
Cost of
sales 235,530,538 206,531,567 75,212,632 77,422,086
Gross
profit 46,155,301 38,110,362 16,037,110 13,645,460
Operating
expenses 41,387,348 34,073,068 14,699,092 13,150,418
Interest
expense 2,111,128 1,745,430 466,822 585,105
Income (loss)
before
litigation
costs, income
tax expense
and loss from
discontinued
operations 2,656,825 2,291,864 871,196 (90,063)
Litigation costs 1,085,892 - 923,980 -
Income (loss)
before income
tax expense
and loss from
discontinued
operations 1,570,933 2,291,864 (52,784) (90,063)
Income tax
expense
(benefit) 50,000 906,746 (850,000) 906,746
Income (loss)
from continuing
operations 1,520,933 1,385,118 797,216 (996,809)
Loss from
discontinued
operations - (16,371,328) - (14,472,020)
Net income
(loss) $ 1,520,933 $(14,986,210) $ 797,216 $ (15,468,829)
Income (loss)
per common
share -
continuing
operations:
Basic $ 0.24 $ 0.27 $ 0.11 $ (0.19)
Diluted $ 0.20 $ 0.25 $ 0.10 $ (0.19)
Loss per
common share
- discontinued
operations:
Basic - $ (3.23) - $ (2.81)
Diluted - $ (2.95) - $ (2.81)
Net income
(loss) per
common share:
Basic $ 0.24 $ (2.96) $ 0.11 $ (3.00)
Diluted $ 0.20 $ (2.70) $ 0.10 $ (3.00)
Average number
of shares used
in computation:
Basic 6,244,355 5,069,247 7,302,066 5,150,031
Diluted 7,663,707 5,543,735 7,637,074 5,150,031