Coach Industries Group - CIGI - Reports Year End 2005 Financial Results
COOPER CITY, Fla.--March 20, 2006--Coach Industries Group, Inc. ("Coach") (OTCBB:CIGI):-- 2005 Year End Revenues Increase 208% to $256.2 Million
-- Coach Financial Services and Corporate Development Systems Achieve Record Operating Profits
-- Guidance of $68-70 Million in Revenue for the First Quarter of 2006
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 year ended December 31, 2005.
Revenues for the full year of 2005 exceeded $256.2 million versus $83.6 million for the full year of 2004, an increase of 208%. Net loss for the year ended December 31, 2005 was $(5.01 million) or $(0.25) per share fully diluted compared to $(6.5 million) or $(0.41) per share fully diluted for 2004.
The primary drivers contributing to the loss for the year ended December 31, 2005 are $3.8 million attributed to amortization, debt service and a financial restructuring charge. The financial restructuring charge resulting from the conversion of the $6.0 million convertible debenture held by Laurus Master Funds, LTD into a simple term note with an interest rate of Prime plus 1.5% provides for the extinguishment of over 5.1 million shares of registered common stock of the Company, thereby strengthening the capital structure of the Company. The manufacturing plant lost $1.2 million for the period. The loss was specifically related to a reduction in sales for the second half of 2005 driven by warranty and quality control issues. The Company strengthened its management team, installed a stringent Quality Control program and streamlined the manufacturing process, resulting in an improved Cost of Goods Sold reflected in a reduction of plant personnel from 79 associates to 45 at year end.
The operations at Corporate Development Services led to an expansion of the number of Independent Contractors supported from 5,500 drivers at December 31, 2004 to approximately 7,000 drivers at December 31, 2005, resulting in Net Income of over $668,000 for the year ended December 31, 2005 compared to $102,000 for the period September 1, 2004 to December 31, 2004. Coach Financial Services continued to build the commercial fleet lease portfolio from $2.2 million for year ending December 31, 2004 to over $5.1 million for the year ended December 31, 2005 resulting in Net Income of $169,000 compared to $16,000 for the same period in 2004.
"Over the course of 2005 Coach established itself as the premier financial service provider for the commercial fleet industry. Our evolution has transformed the Company into a predominant player offering an array of services and products to these operators," stated Francis O'Donnell, Chairman and Chief Executive Officer of Coach. "Our financial services business units have been the primary focus of our business model and we intend to continue to build these portfolios and continue to provide additional services to our commercial fleet operators. We believe that our full array of product offerings will remain attractive to the market as we increase our sales and marketing efforts. "
The Company expects revenues for the first quarter ending March 31, 2006 to range from $68.0 to $70.0 million. This represents a 16% increase of sales reported for the first quarter of 2005.
Conference Call Schedule
The conference call will take place at 4:15 p.m. EST, on Tuesday, March 21, 2006. Anyone interested in participating should dial 800-811-8845 if calling within the United States or 913-981-4905 if calling internationally, approximately 5 to 10 minutes prior to 4:15 p.m. There will be a playback available until March 28, 2006. To listen to the playback, please call 888-203-1112 if calling within the United States or 719-457-0802 if calling internationally. Please use pass code 3069415 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 June 16, 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
The statements contained in this release which are not historical facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include Coach Industries Group, Inc. entry into new commercial businesses, the risk of obtaining financing, recruiting and retaining qualified personnel, and other risks described in Coach Industries Group, Inc.'s Securities and Exchange Commission filings. The forward looking statements in this press release speak only as of the date hereof and disclaims any Coach Industries Group, Inc.'s obligation to provide updates, revisions or amendments to any forward looking statement to reflect changes in Coach Industries Group, Inc.'s expectations or future events.
COACH INDUSTRIES GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
For the Year For the Year
Ended Ended
December 31, December 31,
2005 2004
REVENUES $256,165,770 $ 83,595,584
COST OF GOODS SOLD 251,790,682 80,016,021
GROSS PROFIT (LOSS) 4,375,088 3,579,563
OPERATING EXPENSES:
General and Administrative 4,032,645 4,990,840
Provision for lease losses and
uncollectible accounts receivable 17,881 55,263
Interest expense 1,046,931 370,480
Interest expense on conversion of
convertible notes 188,000 469,000
Gain on market valuation attributed to
warrant liability (72,773) (144,920)
Interest income (3,727) (14,496)
Research and development 199,868 829,840
Sales and marketing 956,679 549,317
Rent 333,161 232,954
Amortization of intangible assets 550,815 106,667
Loss on extinguishment of convertible
notes 1,895,077 -
Loss on relocation of CTMC (22,586) 1,328,436
Amortization of deferred Compensation 266,162 1,309,000
Other - -
Total operating expenses 9,388,133 10,082,381
Loss before income taxes (5,013,045) (6,502,818)
Income taxes - -
NET LOSS $ (5,013,045) $ (6,502,818)
Basic and diluted net income (loss) per
share:
Net loss per share $ (0.25) $ (0.41)
Basic and diluted weighted average
common shares outstanding 19,731,310 15,877,662
COACH INDUSTRIES GROUP, INC.
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
2005 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 3,046,069 $ 3,545,995
Lease receivable - current 1,559,635 912,335
Accounts receivable, net 1,582,335 1,094,196
Unbilled revenues - 298,290
Supply inventory 1,363,694 1,836,535
Accounts receivable - other 190,681 188,862
Prepaid expenses and other current assets 445,915 247,922
Total current assets 8,188,329 8,124,135
PROPERTY AND EQUIPMENT, net 2,231,347 1,968,927
LEASE RECEIVABLES, NET 3,443,793 1,290,453
Restricted cash 247,196 500,000
DEFERRED LOAN COSTS, net 379,313 270,728
INTANGIBLES, net 2,290,000 1,160,000
GOODWILL 6,304,182 6,207,581
$23,084,160 $19,521,824
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 1,215,170 $ 2,292,355
Accrued interest payable 109,854 90,682
Related party payable 376,246 95,450
Accrued contract settlement 1,868,000 294,561
Current portion of long-term debt - funded 1,465,119 982,949
Current portion of long-term debt - restricted - 653,451
Current portion lease liability 1,354,167 369,145
Warrant liability 574,998 168,080
Warranty reserve 116,392 148,755
Customer deposits 41,000 233,345
Accrued wages 61,019 427,205
Note payable - related parties 650,000 900,000
Lines of credit 894,418 1,054,909
Total current liabilities 8,726,383 7,710,887
OTHER LIABILITIES:
Convertible notes payable- long term - funded - 1,159,048
Convertible notes payable - long term -
restricted - 2,178,534
Term note - long term 5,534,881 -
Lease financing obligation 3,075,971 515,706