Smart Choice Automotive Group Reports Record Revenues and Earnings
14 July 1998
Smart Choice Automotive Group Reports Record Revenues and Earnings for Quarter Ended June 30, 1998
Company Sold 2,098 Used Cars During Most Recent Quarter and
Resumed Store Expansion Program
TITUSVILLE, Florida, July 14 -- Smart Choice Automotive
Group, Inc. , a leading consolidator within the 'dealer-
financed' used car retailing industry, today announced record revenues and
earnings for the second quarter and first half of its 1998 year.
For quarter ended June 30, 1998, revenues increased 166% to approximately
$39.1 million, compared with revenues of approximately $14.7 million in the
second quarter of 1997. The Company reported net income of $2,430,118
($0.19 per share) for the quarter ended June 30, 1998, versus a net loss of
$363,788 ($0.04 per share) in the year-earlier period.
Revenues for the six-month period ended June 30, 1998 approximated
$77.8 million, which represented a 240% increase when compared with
approximately $22.9 million in revenues during the first half of last year.
Net income of $4,096,710 ($0.35 per share) was recorded during the first six
months of 1998, versus a net loss of $7,266,123 ($0.87 per share) during the
six-month period ended June 30, 1997.
"Income for the second quarter and first half of 1998 was non-taxed, due
to tax loss carryforward benefits which we anticipate will be realized in the
future," noted Joseph Mohr, Chief Financial Officer of Smart Choice Automotive
Group, Inc. "The quality of our earnings is bolstered by the strength of our
customer receivables portfolio which now exceeds $91 million in size. We
closely monitor our cash collections and charge offs, and we update our static
pool monthly. Our portfolio continues to meet or exceed management's
performance expectations on a consistent basis."
The Company reported that its First Choice Auto Finance retailing
subsidiary sold 2,098 used cars during the quarter ended June 30, 1998,
compared with 680 used vehicles sold during the corresponding period in 1997.
For the six-month period ended June 30, 1998, used car sales totaled 4,378
units, versus 1,277 used cars sold in the prior-year period. Most of these
sales were financed through the Company's Florida Finance Group subsidiary.
"We resumed our store expansion program during the second quarter, opening
used car dealerships in Titusville and Clearwater, Florida," commented Gary
Smith, President and Chief Executive Officer of the Company. "Shortly after
the end of our second quarter, we opened a store in Deland, Florida, and we
anticipate further store openings during the second half of 1998.
"Retail used car sales in the United States exceed $650 billion annually,
and we believe this industry can be highly profitable if properly managed,"
continued Smith. "We intend to pursue a strategy of consolidation within the
'dealer-financed' segment of the industry during the next several years. As
our organization has matured, we believe that Smart Choice is making solid
progress towards its objective of becoming the premiere company in our
industry."
Smart Choice Automotive Group, Inc. operates a network of 27 new and used
car stores in the Southeastern United States. The Company underwrites,
finances and services retail installment contracts generated from the sale of
used cars by its stores. Its Eckler's 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, receivables
portfolio risks, dependence upon third-party vendors, and other risks detailed
in the Company's S-3 and other 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 at (407) 269-0834
or
R. Jerry Falkner, CFA, Investor Relations at (800) 377-9893
SMART CHOICE AUTOMOTIVE GROUP AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
Three Months Ended
June 30, June 30,
1998 1997
Vehicle and Revenues:
Sales of New Vehicles $6,353,295 $---
Sales of Used Vehicles 21,096,829 7,003,702
Income on Finance Receivables 5,407,440 1,927,736
Income from Insurance & Training 245,810 388,976
Income from Parts & Accessories 6,047,504 5,473,447
39,150,878 14,793,861
Cost of Vehicle & Vehicle Related Revenues:
Cost of New Vehicles Sold 5,527,530 --
Cost of Used Vehicles Sold 14,453,284 5,304,253
Cost of Insurance & Training 28,838 23,149
Cost of Parts & Accessories Sold 3,879,897 3,347,344
Provision for Credit Losses 3,060,709 499,131
Net Revenues from Vehicle Sales and
Vehicle Related Activities 12,200,620 5,619,984
Expenses:
Operating Expenses 8,358,726 4,938,188
Compensation Exp. Related to
Employee Stock Options 0 88,890
8,358,726 5,027,078
Income from Operations 3,841,894 592,906
Other Expense (Income):
Interest Expense 2,147,612 1,055,996
Other Income (741,176) (104,576)
Miscellaneous Expense 5,340 5,274
Net Income (Loss) $2,430,118 $(363,788)
Earnings (Loss) Per Basic Share $0.19 $(0.04)
Earnings (Loss) Per Diluted Share $0.19 N/A
Average No. of Basic
Shares Outstanding 12,775,914 8,936,308
Average No. of Diluted
Shares Outstanding 13,036,850 N/A
SMART CHOICE AUTOMOTIVE GROUP AND SUBSIDIARIES
Selected Financial Highlights (Unaudited)
Six Months Ended
June 30, June 30,
1998 1997
Vehicle and Revenues:
Sales of New Vehicles $14,476,719 $---
Sales of Used Vehicles 42,942,388 11,788,779
Income on Finance Receivables 9,553,655 2,450,675
Income from Insurance & Training 426,032 651,256
Income from Parts & Accessories 10,411,541 7,972,200
77,810,335 22,862,910
Cost of Vehicle & Vehicle Related Revenues:
Cost of New Vehicles Sold 12,714,615 ---
Cost of Used Vehicles Sold 29,541,558 8,694,545
Cost of Insurance & Training 59,595 36,714
Cost of Parts & Accessories Sold 6,676,788 4,909,266
Provision for Credit Losses 5,964,837 1,548,811
Net Revenues from Vehicle Sales and
Vehicle Related Activities 22,852,942 7,673,574
Expenses:
Operating Expenses 16,338,537 10,019,848
Compensation Exp. Related to
Employee Stock Options 0 3,214,767
Income (Loss) from Operations 6,514,405 (5,561,041)
Other Expense (Income):
Interest Expense 4,057,283 1,748,613
Other Income (1,660,589) (113,749)
Miscellaneous Expense 21,001 70,218
Net Income (Loss) $4,096,710 $(7,266,123)
Earnings (Loss) Per Basic Share $0.35 $(0.87)
Earnings (Loss) Per Diluted Share $0.35 N/A
Average No. of Basic
Shares Outstanding 11,581,852 8,397,713
Average No. of Diluted
Shares Outstanding 11,842,788 N/A