Smart Choice Automotive Group Announces Second Quarter Operating Results
21 August 1997
Smart Choice Automotive Group Announces Second Quarter Operating ResultsSecond Quarter Revenues Increase 76% Over First Quarter Levels TITUSVILLE, Fla., Aug. 21 -- Smart Choice Automotive Group, Inc. today announced operating results for the second quarter and first half of its 1997 year. For the three-month period ended June 30, 1997, the Company reported a net loss of $363,788 ($0.04 per share) on revenues approximating $14.8 million. This represented a significant improvement over the first quarter of 1997, when the Company reported a loss of $5.5 million ($0.69 per share) on $8.4 million in revenues. During the six months ended June 30, 1997, revenues reached $22.9 million and the Company recorded a net loss of $6,054,071 ($0.72 per share). "Revenues increased more than 75% between the first and second quarters of 1997, as we continued to pursue an aggressive acquisition program, consistent with our regional consolidation strategy in the new and used automobile markets," commented Gary R. Smith, President and CEO of Smart Choice Automotive Group, Inc. "We purchased four and opened three used car retail locations during the April-June period, bringing the total to sixteen by the end of the quarter. We plan to open two more used car outlets in September and are looking at a number of prospective acquisition candidates." "In addition to our used car retailing and finance operations, Smart Choice has contracted to acquire three new car franchise dealerships which sell the following brands: Acura, Nissan, Volvo, Volkswagen, Subaru and Audi," continued Smith. "We plan to introduce captive financed used car retailing to enhance the operating results of these locations." "Our finance subsidiary, Florida Finance Group, Inc., increased in size by 47% during the second quarter," noted Fred Whaley, Chief Financial Officer of the Company. "Since the first of the year, our finance subsidiary has expanded from 773 accounts and $7.6 million in gross finance receivables, to 6,855 accounts and $44.5 million in gross finance receivables." "The modest net loss in our second quarter represented a significant improvement over first quarter results, when our Company merged with Eckler Industries, Inc. and incurred significant non-recurring expenses" continued Whaley. "Second quarter revenues increased 76% from first quarter levels, and we believe that we are beginning to realize certain economies of scale within our organization. However, certain operating expenses remain high, relative to revenues, as we consolidate acquisitions, open new dealerships, and develop the operating infrastructure necessary to manage a much larger organization in the future." Headquartered in Titusville, Florida, Smart Choice Automotive Group, Inc. (formerly named "Eckler Industries, Inc.") operates a network of self-financed used vehicle and new car dealerships in the Southeastern United States. The Company also underwrites, finances and services retail installment contracts generated from the sale of used cars by its dealerships. Its Eckler's subsidiary is one of the largest aftermarket suppliers of Corvette parts and accessories in the world. The Company also provides training and insurance services for automobile dealers throughout the United States. Its common stock trades on Nasdaq under the symbol "SMCH". Any forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that actual results may differ substantially from such forward-looking statements. Forward-looking statements involve risks and uncertainties including, but not limited to, continued acceptance of the Company's products and services in the marketplace, competitive factors, receivables portfolio risks, dependence upon third-party vendors, and other risks detailed in the Company's periodic filings with the Securities and Exchange Commission. SMART CHOICE AUTOMOTIVE GROUP SELECTED FINANCIAL HIGHLIGHTS (Unaudited) Three Months Ended June 30 1997 Vehicle and Related Revenues: Sales of Used Vehicles $7,003,702 Income on Finance Receivables 1,927,736 Income from Insurance & Training 388,976 Income from Parts & Accessories 5,473,447 14,793,861 Cost of Vehicle & Vehicle Related Revenues: Cost of Used Vehicles Sold 5,304,253 Cost of Insurance & Training 23,149 Cost of Parts & Accessories Sold 3,347,344 Provision for Credit Losses 499,131 9,173,877 Net Revenues from Vehicle Sales and Vehicle Related Activities 5,619,984 Expenses: Operating Expenses 4,938,188 Compensation Expense Related to Employee Stock Options 88,890 5,027,078 Income (Loss) from Operations 592,906 Other Expense (Income): Interest Expense 1,055,996 Other Income (104,576) Miscellaneous Expense 5,274 956,696 NET LOSS $(363,788) NET LOSS PER SHARE $(0.04) Weighted Avg. Number of Shares & Equivalents Outstanding 8,936,308 SMART CHOICE AUTOMOTIVE GROUP SELECTED FINANCIAL HIGHLIGHTS (Unaudited) Six Months Ended June 30 1997 Vehicle and Related Revenues: Sales of Used Vehicles $ 11,443,778 Income on Finance Receivables 2,492,356 Income from Insurance & Training 692,795 Income from Parts & Accessories 8,275,662 Total Revenues 22,904,591 Cost of Vehicle & Vehicle-Related Revenues: Cost of Used Vehicles Sold 8,552,851 Cost of Insurance & Training 39,190 Cost of Parts & Accessories Sold 5,065,589 Provision for Credit Losses 1,548,811 15,206,441 Net Revenues from Vehicle Sales and Vehicle-Related Activities 7,698,150 Expenses: Operating Expenses 9,846,487 Compensation Expense Related to Employee Stock Options 2,325,765 12,172,252 Income (Loss) from Operations (4,474,102) Other Expense (Income): Interest Expense 1,623,500 Other Income (113,749) Miscellaneous Expense 70,218 1,579,969 NET LOSS $ (6,054,071) NET LOSS PER SHARE $(0.72) Weighted Avg. Number of Shares & Equivalents Outstanding 8,397,713 SOURCE Smart Choice Automotive Group Inc.