Cross-Continent Revises Q2 Results
18 June 1997
Cross-Continent Anticipates Lower Than Expected Second Quarter Results on Weak Oklahoma City Sales
AMARILLO, Texas, June 18 -- Cross-Continent Auto Retailers,
Inc. today announced that its second quarter results will be below
analyst expectations primarily due to approximately $717,000 in operating
losses, or $0.05 per share, recorded in April and May at its Performance
Nissan and Performance Dodge dealerships, and lower than expected new vehicle
sales at Lynn Hickey Dodge resulting from a disruption of new vehicle
availability attributed to the Chrysler engine plant strike. The company also
anticipates that full year results will be negatively impacted by these
events.
The company also announced that it has reached an agreement in principle
to divest its Performance Nissan and Performance Dodge dealerships for total
consideration of approximately $9.0 million, subject to certain adjustments
prior to closing, to an affiliate of Emmett M. Rice, Jr., senior vice
president, chief operating officer and a director of the company. The
consideration for the purchase will be common stock of the company owned by
Emmett Rice. The transaction is subject to the execution of a definitive
agreement and required third party approvals.
Cross-Continent announced its intention to explore a possible sale of
the dealerships last month. Total revenue at the Performance Nissan
dealership approximated $32 million in 1996, and total revenue at the
Performance Dodge dealership approximated $46 million in 1996.
Under the terms of the agreement, Rice will resign as an officer and
director of Cross-Continent. "While we will miss the contribution of
Mr. Rice to our organization, we wish him well in his new endeavors,"
Bill Gilliland, chairman and chief executive officer of Cross-Continent
said.
The company's operating managers at its Amarillo and Oklahoma City
dealerships will report directly to Gilliland while the operating managers at
the Denver and Las Vegas dealerships will report to Mr. Douglas Spedding.
Robert W. Hall, the company's senior vice chairman, will assume Mr. Rice's
other duties.
Cross-Continent Auto Retailers, Inc. owns and operates a group of
franchised automobile retail dealerships in Texas, Oklahoma, Nevada and
Colorado. Through these dealerships, the company sells new and used cars and
light trucks, arranges related financing and insurance, sells replacement
parts and provides vehicle maintenance and repair services.
Cross-Continent Auto Retailers, Inc. is listed on the New York Stock
Exchange under the symbol XC.
Cross-Continent Auto Retailers, Inc. believes its shareholders benefit
from the views of management about the future of the company's business.
Included herein are forward-looking statements, including statements with
respect to anticipated revenue growth, acquisitions and profitability. These
statements involve risks and uncertainties that could cause actual results to
differ materially, including without limitation economic conditions, risks
associated with acquisitions and the risk factors set forth from time to time
in the company's filings with the Securities and Exchange Commission.
SOURCE Cross-Continent Auto Retailers