Fidelity Holdings Reports Record First Quarter Results
17 May 1999
Fidelity Holdings Reports Record First Quarter Results
KEW GARDENS, N.Y.--May 17, 1999--Fidelity Holdings, Inc. today reported record revenues and earnings for the quarter ended March 31, 1999.
For the quarter ended March 31, 1999, revenues increased to $45,842,659 compared to $165,152 for the quarter ended March 31, 1998. There was a 38 fold increase in gross profits for the quarter aggregating $7,049,714 compared to $165,152 for the comparable 1998 quarter. Income from continuing operations was $844,180 in the first quarter compared with a loss of ($87,551) for the same quarter in 1998. Net income for the same period rose to $115,688 versus a loss of ($68,572) for the quarter ended March 31, 1998. These significant increases reflect the results from the Major Automotive Group which was acquired in May 1998.
"Used car sales, greater than 400 cars each month, were a significant factor in this quarter's record-breaking performance. Our previously announced branding as "Major World" and our Internet initiatives have helped us in attaining this volume. The number of vehicles sold represented the greatest level in Major's history," stated Bruce Bendell, Chairman and CEO of Fidelity. "With our continued emphasis on the Company's regional acquisition strategy, increasing auto sales levels, and profitability, we believe the Company is poised to be a front-runner."
Rick Feinstein, Chief Financial Officer, added, "We are pleased that the Company has strengthened its financial position. We believe that the significant transactions this quarter including an $11.3 million debt facility, the acquisition of Universal Kia and contracts to acquire Compass Lincoln-Mercury, Compass Dodge and Hempstead Mazda, indicate that our strategic plan is being successfully executed."
Doron Cohen, President of Fidelity, concluded, "The entire management team and Board of Directors is enthused that we are able to reward our shareholders with a dividend in the form of common stock, as previously announced. Additionally, we expect that the accomplishments of our Technology Division will allow us to further our activities in their divestiture in an economically productive and efficient manner."
Fidelity Holdings, Inc. is presently exploring the divestiture of its non-automotive activities by way of sale, merger, consolidation or other opportunities.
Fidelity Holdings has been a diversified holding company that utilizes information and technology to target industries experiencing consolidation and/or deregulation. The Company has operated two divisions - Automotive and Technology. The Automotive Division operates through Major Automotive Group, a leading consolidator of automotive dealerships in the New York Metropolitan area. The Technology Division operates under Computer Business Sciences and its IG2, Inc. subsidiary and its plastics subsidiary.
The information contained in this press release, including any "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934 contained herein, should be reviewed in conjunction with the Company's annual report on Form 10-KSB and other publicly available information regarding the Company, copies of which are available from the Company upon request. Such publicly available information sets forth many risks and uncertainties related to the Company's business and such statements, including risks and uncertainties related to that are unpredictable and outside of the influence and/or control of the Company.
FIDELITY HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(Unaudited)
Quarter Ended March 31,
1999 1998
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Revenue $45,842,659 $165,152
Cost of Sales 38,792,945 _________
Gross Profit 7,049,714 165,152
Operating expense 5,571,251 247,480
Interest expense 444,283 28,223
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Income From continuing
operations before taxes 1,034,180 (108,551)
Income tax expense (credit) 190,000 (21,000)
Income (loss) from continued
operations 884,180 (87,551)
Loss from discontinued operations (728,492) 18,979
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Net Income $115,688 $68,572
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Per Common Share
Income (loss) from continuing operations
Basic $0.10 $(0.01)
Diluted 0.08 (0.01)
Income (loss) from discontinued operations
Basic $(0.09) $0.00
Diluted (0.07) 0.00
Net Income (loss) per share
Basic $0.01 $(0.01)
Diluted $0.01 (0.01)
Average number of shares used in the computation
Basic 8,494,642 6,895,700
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Diluted 11,469,404 7,395,700
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