The Crown Group Reports Significant Gains in Earnings for Q2
16 December 1998
The Crown Group Reports Significant Gains in Earnings for Second Quarter and First Half of FY1999; Revenues Approach $41 Million During Six-month Period Ended October 31, 1998
DALLAS--Dec. 15, 1998--Crown Group, Inc. today announced sharply higher revenues and earnings for the second quarter and first half of its 1999 fiscal year.
For the three months ended October 31, 1998, revenues totaled $19.8 million, compared with approximately $0.6 million in the second quarter of the previous fiscal year. Revenues during the most recent quarter were derived from the Company's four principal business segments: Paaco Automotive Group ($16.2 million), Precision IBC ($1.4 million), Concorde Acceptance Corporation ($1.6 million), and Corporate/Other ($0.7 million). Net income increased to $501,108, or $0.05 per share, in the three months ended October 31, 1998, versus a net loss of ($50,829) or ($0.01) per share, in the year-earlier quarter.
Revenues for the six-month period ended October 31, 1998, reached $40.8 million, compared with $1.0 million in the year-earlier period. Revenues during the first half of the current fiscal year were derived as follows: Paaco Automotive Group - $33.8 million; Precision IBC - $2.7 million; Concorde Acceptance Corporation - $3.2 million; and Corporate/Other - $1.4 million. The Company reported net income of $1,508,389, or $0.15 per share, during the six months ended October 31, 1998, versus a net loss of ($360,222), or ($0.04) per share, in the corresponding period of the previous fiscal year.
"We are very pleased with The Crown Group's operating performance during the quarter and six-month period ended October 31, 1998," commented Edward R. McMurphy, president and chief executive officer of The Crown Group. "While business at our automobile and casino subsidiaries slowed on a seasonal basis during the August-October period, when compared with our first quarter, each of our operating units contributed to earnings during the second quarter. Excluding Crown's share of a non-recurring charge of $225,000 at Casino Magic Neuquen, second quarter operating results were in line with management's expectations."
"Developments that we are looking forward to in the third fiscal quarter include Paaco's initial entry into the Houston market, where its first used car dealership will open in January, to be followed by a second location in February. By mid-1999, we expect three used car stores to be operating in the greater Houston metropolitan area. Our Home Stay Lodge subsidiary will open its first extended-stay facility in January and a second hotel in February. Both are located in the Pensacola, Fla. area, and their development is on schedule and on budget. Precision IBC continues to lease its fleet of intermediate bulk containers at a high level of utilization, and Concorde Acceptance Corporation is performing satisfactorily within the consolidating subprime mortgage industry."
"Finally, we expect to complete our recently-announced acquisition of America's Car-Mart, Inc. ("Car-Mart") by mid-January," continued McMurphy. "Headquartered in Rogers, Ark., Car-Mart is one of the largest "Buy-Here Pay-Here" used car dealers in the United States, with revenues of approximately $52 million in its most recent fiscal year. The company has developed a strong franchise in non-urban communities over the past 18 years, and we expect Car-Mart to complement our Paaco Automotive Group subsidiary. Management believes the Car-Mart acquisition can increase Crown's earnings per share by approximately $0.40 in the first twelve months following the closing of the acquisition, when revenues from our automotive subsidiaries should exceed $130 million."
Under a previously-authorized stock repurchase program, Crown purchased 338,290 shares of its common stock during the first half of its 1999 fiscal year, at an average purchase price of $3.32 per share. The Company has purchased 2,722,029 shares of its common stock, or approximately 23% of the total shares outstanding since March 1996.
Crown Group, Inc. is a publicly traded buy-out firm which seeks to enhance shareholder value through the acquisition, development and operation of small-cap companies with significant growth potential. Such companies can benefit from Crown's financial resources and management expertise. Crown Group currently owns (i) 65% of Paaco Automotive Group, a vertically integrated used car sales and finance company; (ii) 100% of Precision IBC, a firm specializing in the sale and rental of intermediate bulk containers; (iii) 80% of Concorde Acceptance Corporation, a sub-prime mortgage lender; (iv) 49% of Casino Magic Neuquen, a casino operator in the Province of Neuquen, Argentina; and (v) 80% of Home Stay Lodge, a partnership which is involved in the development and operation of extended-stay lodging facilities.
Crown Group, Inc. is headquartered in Dallas, and its common stock is traded on Nasdaq under the symbol "CNGR".
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 could cause or contribute to such differences include, but are not limited to, changing economic conditions, changes in interest rates, continued acceptance of the Company's products and services in the marketplace, competitive factors, dependence upon lenders, and other risks detailed in the Company's periodic 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.
CROWN GROUP, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
Three Months Ended Oct. 31,
Oct. 31, Oct. 31,
1998 1997
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Total revenues $ 19,750,024 $ 555,633
Costs and expenses 18,976,769 1,145,972
Equity in earnings of CMN 147,807 167,806
Gain on sale of securities -- 23,674
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Income (loss) before taxes
& minority interests 921,062 (398,859)
Provision (benefit) for income taxes 282,004 (348,030)
Minority interests 137,950 --
----------- ----------
Net income (loss) $ 501,108 $ (50,829)
----------- ----------
----------- ----------
Earnings (loss) per share:
Basic $ 0.05 $ (0.01)
----------- ----------
----------- ----------
Diluted $ 0.05 $ (0.01)
----------- ----------
----------- ----------
Weighed average number of shares
outstanding:
Basic 10,071,689 9,870,063
Diluted 10,177,528 9,870,063
CROWN GROUP, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
Six Months Ended Oct. 31,
Oct. 31, Oct. 31,
1998 1997
---------- ---------
Total revenues $ 40,819,814 $ 1,049,843
Costs and expenses 38,870,432 2,348,623
Equity in earnings of CMN 716,428 407,685
Gain (Loss) on sale of securities (74,403) 23,674
---------- ----------
Income (loss) before taxes
& minority interests 2,591,407 (867,421)
Provision (benefit) for income taxes 742,377 (507,199)
Minority interests 340,641 --
---------- ----------
Net income (loss) $ 1,508,389 $ (360,222)
---------- ----------
---------- ----------
Earnings (loss) per share:
Basic $ 0.15 $ (0.04)
----------- ----------
----------- ----------
Diluted $ 0.15 $ (0.04)
----------- ---------
----------- ---------
Weighed average number of shares
outstanding:
Basic 10,143,969 10,055,465
Diluted 10,305,483 10,055,465
BALANCE SHEET DATA - October 31, 1998 (Unaudited)
Cash $ 1,712,004
Total assets 116,417,261
Stockholders' equity 46,344,003
Shares outstanding 9,945,336
Book value per share $4.66