Carey International Reports 45% Increase in Second Quarter Net Income
25 June 1998
Carey International Reports 45% Increase in Second Quarter Net Income
WASHINGTON, June 25 -- Carey International, Inc.
today reported record revenues and earnings for the second
quarter and six months ended May 31, 1998.
Second quarter adjusted net income rose 45% to $1.9 million, or
$0.22 per adjusted diluted share, from $1.3 million, or $0.17 per adjusted
diluted share, in the 1997 second quarter. Revenues for the 1998
second quarter increased 65% to $30.8 million from $18.7 million in the
prior-year period. The significant increase in revenues was due to internal
growth of 22% combined with acquisition growth of 43% year-over-year.
Results for the corresponding period of 1997 are adjusted for the May 1997
initial public offering and its corresponding recapitalization.
The Company noted that SG&A expenses as a percentage of sales were
reduced 160 basis points as a result of continued leveraging of Carey's
expanded infrastructure. Operating income improved 61% to $3.2 million due
to the reduction in operating expenses as a percentage of sales. This
increase was partially offset by a decline in gross profit margin resulting
from the Company's reliance on its outside contractors to service excess
workflow in this seasonally strong period.
For the six months ended May 31, 1998, adjusted net income increased
40% to $2.8 million, or $0.34 per adjusted diluted share, versus
$2.0 million, or $0.26 per adjusted diluted share. Revenues for the
six-month period rose 59% to $54.5 million from $34.3 million. Operating
income increased 66% to $4.8 million from $2.9 million in the
corresponding period of 1997. Results for the first six months of 1998
exclude $34,000 in expenses in the fiscal 1998 first quarter related
to a pooling-of-interests transaction at October 31, 1997. Results for
the 1997 period are adjusted for the May 1997 initial public offering and its
corresponding recapitalization.
"The investment in and success of our marketing and sales programs
continued to generate exceptional internal growth through the second
quarter," said Vincent A. Wolfington, Chairman and Chief Executive
Officer. "Our strong performance also resulted from further integration of
recent acquisitions.
"During the quarter, we completed a successful secondary
offering which raised net proceeds of approximately $30 million.
The proceeds will be used primarily to fund further acquisitions but
are also available for working capital purposes. Our recent acquisitions
in the Boston, Chicago, and Miami markets underscore our commitment and
ability to capitalize on our built-in acquisition pipeline. Currently,
we are in discussions with 63 companies representing $420 million in
revenues, and we look forward to developing these opportunities while
further benefiting from growth in our core operations."
Carey International, a leading industry consolidator, is the world's
largest chauffeured vehicle service company. The Company provides
limousine, sedan, van and minibus service through a worldwide network of
owned and operated companies, licensees and affiliates serving 420 cities
and 65 countries on six continents.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. The forward-looking
statements contained in this are subject to certain risks and uncertainties.
Actual results could differ materially from current expectations.
CAREY INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended Six months ended
May 31, May 31,
1998 1997 1998 1997
Revenue, net $30,800 $ 18,690 $ 54,451 $ 34,285
Cost of revenue 20,683 12,195 36,859 22,664
Gross profit 10,117 6,495 17,592 11,621
Selling, general and
administrative expense 6,920 4,506 12,769 8,720
Operating income 3,197 1,989 4,823 2,901
Other income (expense):
Interest expense, net (129) (424) (244) (853)
Interest income 124 29 179 60
Gain on sale of
fixed assets 47 19 79 140
Income before provision
for income taxes 3,239 1,613 4,837 2,248
Provision for
income taxes 1,351 605 2,032 874
Net income $ 1,888 $ 1,008 $ 2,805 $ 1,374
Diluted net income
per common share $0.22 -- $0.34 --
Weighted average common
shares outstanding
(diluted) 8,598 -- 8,360 --
Pro forma net income
per common share
(diluted) (Note 1) -- $0.25 -- $ 0.37
Pro forma weighted average
common shares outstanding
(diluted) -- 4,304 -- 4,238
Adjusted for Recapitalization and IPO (Note 2):
Net income $ 1,888 $ 1,305 $ 2,820 $ 2,010
Net income per common
share (diluted) $0.22 $0.17 $0.34 $0.26
Weighted average
common shares outstanding
(diluted) 8,598 7,628 8,360 7,628
Note 1: Adjusted for conversion of subordinated debt and preferred stock
to common shares under Recapitalization Plan.
Note 2: 1997 information has been adjusted for the effect of the
Recapitalization Plan and initial public offering as if they had occurred at
the beginning of the reporting period. 1998 information has been adjusted for
$34,000 in pooling expenses in the fiscal 1998 first quarter related to a
pooling-of-interests transaction at October 31, 1997.