Crown Group, Inc. Reports Second-Quarter FY2002 Earnings From Continuing Operations of $0.29 Per Diluted Share, Excluding One-Time Charges
IRVING, Texas--Dec. 18, 2001--Crown Group, Inc. ("Crown" or the "Company") today announced its operating results for the second quarter and first half of FY2002.The Company's results for the quarter are segmented into continuing and discontined operations, reflecting its recent decision to sell all businesses and investments other than its America's Car-Mart subsidiary. Continuing operations principally consist of America's Car-Mart and corporate operations.
For the three months ended October 31, 2001, revenues from continuing operations increased 23% to $31.8 million, compared with $25.8 million in the second quarter of FY2001. Excluding one-time charges, net income from continuing operations for the quarter increased 27% to $2.0 million, or $0.29 per diluted share, versus $1.6 million, or $0.19 per diluted share in the same period last year.
Including a loss from discontinued operations and certain one-time charges, the net loss for the most recent quarter totaled $15.0 million or $(2.22) per diluted share. The net loss included (i) a loss from discontinued operations of $12.8 million related to the write-off of the Company's investment in its 70%-owned Smart Choice Automotive Group subsidiary; (ii) a $2.3 million after-tax charge related to the write-down of certain investments and equipment; and (iii) a $1.8 million after-tax charge related to relocation of the Company's corporate offices and severance pay. Thus, net loss from continuing operations for the quarter including the one-time charges was $2.2 million, or $(0.32) per diluted share.
For the six months ended October 31, 2001, revenues from continuing operations increased 24% to $62.3 million, compared with $50.2 million for the first half of FY2001. Excluding one-time charges, net income from continuing operations for the most recent six months increased 29% to $4.2 million, or $0.60 per diluted share, versus $3.3 million, or $0.39 per diluted share in the same period last year.
Including a loss from discontinued operations of $13.6 million, the above-mentioned second-quarter charges and a first-quarter after-tax charge of $0.3 million related to the write-down of equipment, net loss for the first half of FY2002 totaled $13.8 million, or $(2.03) per diluted share, versus net income of $4.3 million, or $0.51 per diluted share, in the corresponding period of the previous fiscal year.
"Although we are disappointed to post a loss in any quarter, I am pleased to report continued growth in revenues and earnings from continuing operations (excluding one-time charges)," commented Edward R. McMurphy, President and Chief Executive Officer of Crown Group. "With the Smart Choice situation resolved, and all of our non-core subsidiaries operating profitably, we are now well-positioned to focus exclusively on Car-Mart, which increased revenues and pretax income by 24% and 10%, respectively, over the prior-year quarter," continued McMurphy. "We expect continued strong performances from Car-Mart and our non-core subsidiaries throughout the remainder of the fiscal year."
Through its 95%-owned America's Car-Mart, Inc. subsidiary, Crown Group, Inc. operates 52 automotive dealerships in seven states and is one of the largest automotive retailers in the United States focused exclusively on the "Buy Here/Pay Here" used car market segment. Based in Rogers, Arkansas, America's Car-Mart operates its dealerships primarily in small cities and rural locations throughout the South-Central United States, providing financing for substantially all of its customers, many of whom are unable to obtain financing from conventional financial institutions. All of the underwriting, financing and servicing activities related to these retail installment contracts are performed by the company. America's Car-Mart prides itself in providing quality vehicles, courteous service, flexible payment arrangements and a friendly atmosphere for its customers.
Crown Group also owns interests in other subsidiaries that are scheduled for sale, including (i) 70% of Smart Choice Automotive Group, Inc. (OTCBB:SCHA), a used car sales and finance company; (ii) 80% of Concorde Acceptance Corporation, a prime and sub-prime mortgage lender; and (iii) 50% of Precision IBC, Inc., a firm specializing in the sale and rental of intermediate bulk containers.
As previously announced, the Company intends to seek shareholder approval to change its corporate name to "America's Car-Mart, Inc." at its annual meeting of shareholders in January 2002.
Crown Group, Inc. is headquartered in Irving, Texas, and its common stock is listed on the Nasdaq National Market under the symbol "CNGR."
This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those relating to the development of the Company's businesses, availability of lines of credit for the Company's businesses, changes in interest rates, changes in the Company's ability to effectively underwrite and collect its installment loans, changes in estimates and assumptions in, and ongoing adequacy of, the Company's allowance for credit losses, competition, adverse economic conditions, dependence on existing management, and other risks which are discussed in the Company's periodic filings with the Securities and Exchange Commission. All forward-looking statements in this release are based upon information available as of the date of this release. Such information may change or become invalid after the date of this release, and by making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.
CROWN GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
-----------------------------
Three Months Ended October 31,
------------------------------
(in thousands, except per-share data) 2001 2000
---- ----
Total revenues $ 31,768 $ 25,772
Costs and expenses:
Operating expenses 28,245 22,943
Restructuring charge 2,732 -
Write-down of investments and equipment 3,528 -
--------- ---------
Total 34,505 22,943
--------- ---------
Income (loss) from continuing operations
before taxes and minority interests (2,737) 2,829
Provision (benefit) for income taxes (709) 1,186
Minority interests 125 82
--------- ---------
Income (loss) from continuing operations (2,153) 1,561
Discontinued operations:
Income (loss) from discontinued operations,
net of taxes and minority interests (12,814) (11)
--------- ---------
Net income (loss) $ (14,967) $ 1,550
========= =========
Basic earnings (loss) per share:
Continuing operations $ (0.32) $ 0.20
Discontinued operations (1.90) -
--------- ---------
Total $ (2.22) 0.20
========= =========
Diluted earnings (loss) per share:
Continuing operations $ (0.32) $ 0.19
Discontinued operations (1.90) -
--------- ---------
Total $ (2.22) 0.19
========= =========
Weighted average number of shares outstanding:
Basic 6,731,351 7,914,719
Diluted 6,731,351 8,299,369
CROWN GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
-----------------------------
Six Months Ended October 31,
----------------------------
(in thousands, except per-share data) 2001 2000
---- ----
Total revenues $ 62,307 $ 50,235
Costs and expenses:
Operating expenses 54,781 44,408
Restructuring charge 2,732 -
Write-down of investments and equipment 3,928 -
--------- ---------
Total 61,441 44,408
--------- ---------
Income from continuing operations before
taxes and minority interests 866 5,827
Provision for income taxes 777 2,403
Minority interests 280 156
--------- ---------
Income (loss) from continuing operations (191) 3,268
Discontinued operations:
Income (loss) from discontinued operations,
net of taxes and minority interests (13,582) 1,049
--------- ---------
Net income (loss) $ (13,773) $ 4,317
========= =========
Basic earnings (loss) per share:
Continuing operations $ (0.03) $ 0.41
Discontinued operations (2.00) 0.13
--------- ---------
Total $ (2.03) 0.54
========= =========
Diluted earnings (loss) per share:
Continuing operations $ (0.03) $ 0.39
Discontinued operations (2.00) 0.12
--------- ---------
Total $ (2.03) $ 0.51
========= =========
Weighted average number of shares outstanding:
Basic 6,799,946 8,047,055
Diluted 6,799,946 8,440,688
CROWN GROUP, INC. AND SUBSIDIARIES
BALANCE SHEET DATA, OCTOBER 31, 2001
------------------------------------
Cash and cash equivalents $ 1,285,934
Total assets $113,693,669
Stockholders' equity $ 44,183,537
Shares outstanding 6,722,267
Book value per share $ 6.57