Smart Choice Announces Q1 Earnings
15 April 1998
Smart Choice Automotive Group Announces First Quarter Earnings Of $0.16 Per Share on Record Sales
2,332 Used Cars Sold by First Choice Auto Finance in Period
TITUSVILLE, Fla., April 15 -- Smart Choice Automotive Group,
Inc. , a leading consolidator of the 'dealer-financed' used car
retailing industry in the Southeastern United States, today announced
operating results for the first quarter of its 1998 year.
For the three months ended March 31, 1998, revenues reached a record
$38.7 million, which represented a 361% increase when compared with revenues
of $8.4 million in the first quarter of 1997. The Company reported a net
profit of $1,666,592 ($0.16 per basic share) for the most recent quarter,
versus a net loss of $5,455,740 ($0.69 per share) in the prior-year period.
The Company's First Choice Auto Finance used-car dealerships sold 2,332
vehicles during the quarter ended March 31, 1998, compared with 597 cars sold
in the first quarter of 1997.
"We are pleased to report record sales and earnings in our first quarter,"
commented Joseph Mohr, chief financial officer of Smart Choice Automotive
Group, Inc. "Our earnings of $0.16 per share are non-taxed, due to our
anticipation that we will realize benefits from certain tax loss carryforwards
in the future. On a fully-taxed basis, we earned $0.09 per share during the
first quarter. Our results benefited from the restructuring of operations
late last year and have begun to reflect our strategic growth potential. In
addition to our impressive financial performance, we completed the
consolidation of our operating systems, expanded our loan portfolio, and
implemented stronger controls in all divisions during the past three months.
Our Florida Finance Group subsidiary's $72 million gross receivables portfolio
is stronger than ever."
"We think it is important for our shareholders to recognize that Smart
Choice follows conservative accounting principles when reporting its operating
results," continued Mohr. "We recognize income on our loan portfolio as it is
received and do not utilize 'gain-on-sale' accounting, which has become
somewhat controversial within the subprime lending industry. "
"Our objective is to become the leader in subprime automobile retailing
and finance. Our plan is to expand consistent with the capabilities of our
operating and management infrastructure," commented Gary Smith, president and
chief executive officer of the Company. "Competition continues to erode in a
number of our markets, as funding for many companies in the subprime lending
industry has dried up, and we plan to take advantage of this through the
selective opening of additional dealerships during the balance of 1998."
Smart Choice Automotive Group, Inc. operates a network of 24 new and used
car dealerships in the Southeastern United States. The Company underwrites,
finances and services retail installment contracts generated from the sale of
used cars by its dealerships. Its Eckler's Industries subsidiary is one of
the world's largest aftermarket suppliers of Corvette parts and accessories.
The Company also provides training and insurance services to automobile
dealerships throughout the United States.
Smart Choice Automotive Group, Inc. is headquartered in Titusville,
Florida and its common stock trades on Nasdaq under the symbol "SMCH".
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 would cause or contribute to such
differences include, but are not limited to, continued acceptance of the
Company's products in the marketplace, competitive factors, dependence upon
third-party vendors, and other risks detailed in the Company's periodic report
filings with the Securities and Exchange Commission. 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.
For further information, please contact: Joseph Mohr, Chief Financial
Officer (888) 762-7816, or R. Jerry Falkner, CFA, Investor Relations Counsel
at (800) 377-9893.
SMART CHOICE AUTOMOTIVE GROUP AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
Three Months Ended
March 31, March 31,
1998 1997
Vehicle and Revenues:
Sales of New Vehicles $ 8,123,424 $ --
Sales of Used Vehicles 21,845,559 4,488,493
Income on Finance Receivables 4,146,215 834,363
Income from Insurance & Training 180,222 302,775
Income from Parts & Accessories 4,364,037 2,802,215
38,659,457 8,427,846
Cost of Vehicle & Vehicle Related Revenues:
Cost of New Vehicles Sold 7,187,085 --
Cost of Used Vehicles Sold 15,088,274 3,599,885
Cost of Insurance & Training 30,757 16,041
Cost of Parts & Accessories Sold 2,796,891 1,720,715
Provision for Credit Losses 2,904,128 903,531
Net Revenues from Vehicle Sales and
Vehicle Related Activities 10,652,322 2,187,674
Expenses:
Operating Expenses 7,979,811 4,895,834
Income (Loss) from Operations 2,672,511 (2,708,160)
Other Expense (Income):
Interest Expense 1,909,671 469,485
Other Income (919,413) (15,855)
Miscellaneous Expense 15,661 57,075
Compensation Related to Employee Stock Options -- 2,236,875
Net Income (Loss) $1,666,592 $(5,455,740)
Earnings (Loss) Per Basic Share $0.16 $(0.69)
Earnings (Loss) Per Diluted Share $0.15 $(0.69)
Average No. of Basic Shares Outstanding 10,380,260 7,853,134
Average No. Of Diluted Shares Outstanding 11,226,758 7,853,134
SOURCE Smart Choice Automotive Group, Inc.