Coach Industries Group - CIGI - Reports Third Quarter 2005 Financial Results
COOPER CITY, Fla.--Nov. 15, 2005--Coach Industries Group, Inc. (OTCBB:CIGI):-- Third Quarter Revenues Increase to $65.4 Million from $17.6 Million
-- Nine months revenues increase to $186.3 Million from $26.8 Million
-- Lease Receivables increase by over 155% over 2004 year end
-- Operating Units maintain profitability for Nine Months Ended September 30, 2005
Coach Industries Group, Inc. ("Coach") (OTCBB:CIGI), which offers an array of financial services including insurance products to commercial fleet operators, today reported financial results for the quarter ended September 30, 2005.
Third quarter revenues were $65.4 million versus $17.6 million in Q3 of 2004, an increase of 270%. The increase reflects the continued growth in our financial services business units. Gross profit increased to $1.2 million from $702 thousand a year ago. Net loss for the quarter was $(1.2 million) or $(0.07) per share fully diluted versus $(1.7 million) or $(0.18) per share fully diluted in Q3 of 2004, an improvement of $500 thousand. Performance for the quarter at the operating unit level reflect profits of $237 thousand for Corporate Development Services and $88 thousand for Coach Financial Services and a loss of $(551 thousand) in the manufacturing subsidiaries.
Nine months revenues were $186.3 million for the period ending September 30, 2005, versus $26.8 million for the same period of 2004, an increase of 594%. Gross profit increased to $4.2 million from $2.2 million for the same nine month period a year ago. Net loss for the first nine months was $(1.3 million) or $(0.08) per share fully diluted versus $(2.8 million) or $(0.32) per share fully diluted for the same period of 2004, an improvement of $1.4 million. Through the nine months performance at the operating unit reflects profitability of $573 thousand for Corporate Development Services, $156 thousand for Coach Financial Services and $23 thousand for the manufacturing subsidiaries. Lease receivables grew to over $5.6 million at September 30, 2005.
Francis O'Donnell, Chairman and Chief Executive Officer of Coach commented, "Our financial services business units continue to demonstrate robust growth as we focus on simplifying the lives of our Commercial Fleet Operators. Our performance through these units identifies that our full array of product offerings are attractive to the market. Counteracting an otherwise positive performance for the quarter, the manufacturing subsidiaries experienced a revenue shortfall, and an increase in cost as a result of warranty issues relating to vehicles manufactured in 2004 and early 2005. Effective May 3, 20061, 2005 the Company reorganized the management of the manufacturing facility to install processes that enhance manufacturing and strengthen quality control. During the fourth quarter we are experiencing lower costs and a resurgence in our sales efforts as a result of these initiatives. In addition, we are investigating alternative sales outlets to strengthen the sales effort."
"The Company is much stronger today than it was a year ago," stated O'Donnell. "In October 2005, we refinanced through Laurus Master Funds, Ltd., our outstanding Convertible Debenture by securing a $7 million Non-Convertible Term Note at an interest rate of Prime plus 1.5%. We believe the extremely favorable rate of the new Non-Convertible term note, coupled with the extinguishment of over 5 million shares of registered common stock, representing over twenty percent (20%) of the fully diluted position of the company, fortifies our solid foundation for growth for the Company and shareholders."
Conference Call Reminder
The conference call will take place at 11:00 a.m. EST, on Friday, November 18, 2005. Anyone interested in participating should dial 800-865-4435 if calling within the United States or 973-935-2404 if calling internationally, approximately 5 to 10 minutes prior to 11:00 a.m. There will be a playback available until November 25, 2005. To listen to the playback, please call 877-519-4471 if calling within the United States or 973-341-3080 if calling internationally. Please use pass code 6706439 for the replay.
This call is being webcast by ViaVid Broadcasting and can be accessed at Coach's website at http://www.cigi.cc. The webcast may also be accessed at ViaVid's website at http://www.viavid.net. The webcast can be accessed through March 31, 2006 on either site. To access the webcast, you will need to have the Windows Media Player on your desktop. For the free download of the Media Player, please visit: http://www.microsoft.com/windows/windowsmedia/en/download/default.asp.
About Coach Industries Group, Inc.
Coach Industries Group, Inc. (OTCBB:CIGI) ("Coach"), is a holding company focused on providing financial services to Commercial Fleet Operators.
Safe Harbor Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The Statements which are not historical facts contained in this press release are forward-looking statements that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, government approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the Company's filings with the Securities and Exchange Commission.
COACH INDUSTRIES GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
(Unaudited) (Unaudited)
----------------------- ------------------------
2005 2004 2005 2004
----------- ------------------------ -----------
REVENUES $65,430,041 $17,648,967 $186,258,552 $26,780,778
COST OF GOODS SOLD 64,258,510 16,946,789 182,037,794 24,626,663
----------- ----------- ------------ -----------
GROSS PROFIT 1,171,531 702,178 4,220,758 2,154,115
----------- ----------- ------------ -----------
OPERATING EXPENSES:
General and
Administrative 1,534,803 1,283,105 3,672,958 2,171,240
Research and
development 93,818 82,175 199,868 829,840
Amortization of
deferred
compensation 63,873 246,083 180,286 630,000
Sales and marketing 245,090 108,924 750,290 390,129
Rent 87,699 32,524 241,894 173,839
Interest expense
associated with
Convertible Note
conversion - - 188,000 -
(Gain) loss on
settlement and
relocation related
to CTMC - 635,718 (434,000) 635,718
Interest expense 370,739 48,835 698,605 101,187
----------- ----------- ------------ -----------
Total operating
expenses 2,396,022 2,437,364 5,497,901 4,931,953
----------- ----------- ------------ -----------
Loss before provision
for income tax
benefit (1,224,491) (1,735,186) (1,277,143) (2,777,838)
----------- ----------- ------------ -----------
Income tax benefit - - - -
----------- ----------- ------------ -----------
NET LOSS $(1,224,491)$(1,735,186)$ (1,277,143)$(2,777,838)
=========== =========== ============ ===========
Basic and fully
diluted loss per
share:
Net earnings (loss)
per share $ (0.07)$ (0.18)$ (0.08)$ (0.32)
=========== =========== ============ ===========
Basic and fully
diluted weighted
average common
shares outstanding 18,342,150 9,526,431 15,812,550 8,669,165
=========== =========== ============ ===========
COACH INDUSTRIES GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
September 30, December 31,
2005 2004
---------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,541,375 $ 3,545,995
Restricted cash 763,750 500,000
Accounts receivable, net 1,864,978 1,094,196
Supply inventory 1,530,295 1,836,535
Unbilled revenue - 298,290
Lease receivable - current portion 1,332,364 523,429
Due from related party 186,498 188,862
Prepaid expenses and other current
assets 487,783 247,922
------------- -------------
Total current assets 7,707,043 8,235,229
------------- -------------
PROPERTY AND EQUIPMENT, net 2,050,946 1,968,927
INTANGIBLE - CUSTOMER LIST, net 1,070,000 1,160,000
LEASED RECEIVABLES, net 4,270,636 1,679,359
DEFERRED LOAN COSTS, net 175,603 270,728
GOODWILL 6,220,081 6,207,581
------------- -------------
$ 21,494,309 $ 19,521,824
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,195,629 $ 2,292,355
Accrued interest payable 50,984 90,682
Related party payable 387,500 95,450
Advance payment - contract settlement 1,494,116 294,561
Current portion of long-term debt 976,746 1,784,776
Current portion of lease obligation 1,306,232 361,306
Warranty reserve 149,708 148,755
Customer deposits 43,000 233,345
Accrued wages 34,618 427,205
Note payable - related parties 100,000 900,000
Lines of credit 1,462,502 1,054,909
------------- -------------
Total current liabilities 7,201,035 7,683,344
------------- -------------
OTHER LIABILITIES:
Convertible notes payable - long term 3,569,126 2,592,833
Lease financing obligation - long term 3,680,934 523,545
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock $0.001 par value; 50,000,000
shares authorized; 19,623,348 and
18,982,785 shares issued and outstanding,
respectively 19,623 18,982
Additional paid-in capital 17,017,112 17,159,784
Restricted stock - unearned compensation (810,556) (550,842)
Accumulated deficit (9,182,965) (7,905,822)
Treasury stock, zero and 1,176,471 at
September 30, 2005 and December 31, 2004,
respectively shares at cost - -
------------- -------------
Total shareholders' equity 7,043,214 8,722,102
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 21,494,309 $ 19,521,824
============= =============
The accompanying notes are an integral part of these financial statements.