Crown Group, Inc. Reports Record Revenues and Earnings for FY1999
16 August 1999
Crown Group, Inc. Reports Record Revenues and Earnings for FY1999; Earnings Per Diluted Share of $1.68 Compared With $0.04 in FY1998
DALLAS--Aug. 16, 1999--Crown Group, Inc. today announced increased revenues and earnings for the quarter and fiscal year ended April 30, 1999.For the year ended April 30, 1999, the Company earned $17,508,410, or $1.68 per diluted share, on revenues of $111.3 million. This compared with restated earnings of $367,166, or $0.04 per diluted share, on revenues of $21.2 million for the fiscal year ended April 30, 1998. The Company's pretax income for FY1999 approximated $26.0 million, which included gains on the sale of securities of $24.7 million. In the previous fiscal year, pretax income totaled $647,209 and included gains on the sale of securities totaling $38,258. Revenues for the year ended April 30, 1999 were derived as follows (before intercompany eliminations): Automotive Sales and Finance -- $97.8 million; Precision IBC -- $5.3 million; Concorde Acceptance Corporation -- $6.3 million; and Other -- $2.8 million.
For the three months ended April 30, 1999, the Company's revenues approximated $47.2 million, which represented a 148% increase when compared with revenues of $19.0 million in the fourth quarter of FY1998. Net income totaled $4,841,532, or $0.45 per diluted share, in the fourth quarter of FY1999, versus restated net income of $713,693, or $0.07 per diluted share, in the corresponding period of the previous fiscal year. Pretax income approximated $7.6 million in the quarter ended April 30, 1999, which included gains of $5.8 million from the sale of securities. In the prior-year quarter, pretax income totaled $1,597,084, including $26,311 in losses from the sale of securities.
"Fiscal 1999 was a year of dramatic growth and record earnings for our Company, as reflected in the 425% increase in revenues to $111.3 million and $1.68 in diluted earnings per share," stated Edward R. McMurphy, president and chief executive officer of Crown Group, Inc. "With the exception of Paaco Automotive Group, each of our majority-owned operating subsidiaries posted impressive gains in earnings for the year, as did Casino Magic Neuquen, which is 49%-owned by Crown. If gains from the sale of securities were excluded from our results, the Company would have earned $1,460,476, or $0.14 per diluted share, in Fiscal 1999, compared with $341,916, or $0.03 per share, in the previous year, after restating Paaco's results to reflect previously disclosed accounting irregularities and errors at that subsidiary." Crown's quarterly earnings for FY1998 and the first three quarters for FY1999 have been restated to reflect adjustments resulting from the irregularities at Paaco (see quarterly earnings schedule at the end of this release).
"Highlights of the most recent fiscal year included the sale of our investment in Inktomi Corporation common stock for a pretax gain of approximately $25.1 million, following a successful public offering by that company," continued McMurphy. "We significantly expanded the scope of our automotive business through the acquisition of America's Car-Mart in January 1999, and Car-Mart provided a healthy contribution to earnings during the fourth quarter. Concorde Acceptance, which was formed in June 1997, achieved profitability during Fiscal 1999, despite a difficult competitive environment in the subprime mortgage industry. Precision IBC expanded the size of its rental fleet of intermediate bulk containers by 63% and posted an 81% increase in pretax earnings in Fiscal 1999. Home Stay Lodges opened its first two extended-stay facilities in the Pensacola, Fla., area, and we acquired an ownership interest in Atlantic Castings, an investment casting manufacturer of turbine engine components."
"Benefitting from a full year's contribution by Car-Mart, we expect revenues for the fiscal year ending April 30, 2000, to exceed $170 million without any further acquisitions. During the first quarter of the current fiscal year, we opened our first two casinos in El Salvador and have been very pleased with customers' enthusiastic response to American-style gaming in that country. Having restructured the management team at Paaco Automotive and addressed the accounting issues which came to light at that subsidiary in July, we are optimistic that Crown can continue to increase its earnings, exclusive of securities transactions, in the fiscal year 2000."
As of April 30, 1999, Crown Group's shareholders' equity totaled $53.1 million, which was equivalent to approximately $5.25 for each share of common stock outstanding.
Under a previously-authorized stock repurchase program, Crown purchased 492,909 shares of its common stock during the 1999 fiscal year. The Company has repurchased over 2.8 million shares of its common stock, or approximately 25% of the total shares outstanding, since March 1996. On Aug. 4, 1999, the Company announced approval by its Board of Directors for the repurchase of up to an additional one million shares of common stock in the open market, or in private transactions, whenever management considers such repurchases to be in the best interests of shareholders.
Crown Group, Inc. seeks to enhance shareholder value through the acquisition, development and operation of small-cap companies with significant growth potential. Crown Group currently owns (i) 100% of America's Car-Mart, Inc. and 85% of Paaco Automotive Group, Inc., vertically integrated used car sales and finance companies; (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; (v) 50.1% of CGI S.A. de C.V., which operates two casinos in El Salvador; (vi) 80% of Home Stay Lodges, a partnership which is involved in the development and operation of extended-stay lodging facilities; and (vii) 45% of Atlantic Castings, Inc, an investment castings manufacturer of turbine engine components.
Crown Group, Inc. is headquartered in Dallas, and its common stock is traded on the Nasdaq National Market 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, those relating to the development of the Company's businesses, continued availability of lines of credit for the Company's businesses, changes in interest rates, changes in the industries in which the Company operates, competition, dependence on existing management, the stability of Argentina's and El Salvador's governments, currency exchange rate fluctuations, the repatriation of funds from Argentina and El Salvador, domestic or global economic conditions (particularly in the states of Texas and Arkansas), changes in foreign or domestic tax laws or the administration of such laws and changes in gaming or lending laws or regulations. 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
Year Ended
April 30, April 30,
1999 1998
--------------- ---------------
(Restated)(a)
Total revenues $111,286,215 $21,187,861
Costs and expenses 111,277,488 21,505,508
Equity in earnings of
unconsolidated subsidiaries 1,259,734 926,598
Gain on sale of securities 24,689,130 38,258
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Income before taxes
& minority interests 25,957,591 647,209
Provision (benefit) for income taxes 9,000,661 (91,030)
Minority interests (551,480) 371,073
------------- -------------
Net income $17,508,410 $367,166
============= =============
Earnings per share:
Basic $1.73 $0.04
============= =============
Diluted $1.68 $0.04
============= =============
Weighed average number of shares
outstanding:
Basic 10,095,614 9,829,392
Diluted 10,400,504 9,905,819
(a) Note: Restated to reflect certain accounting adjustments at Paaco
Automotive Group. For further information, refer to Company news
releases dated July 23, 1999 and July 28, 1999.
CROWN GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
Three Months Ended
April 30, April 30,
1999 1998
(Restated)(a)
--------------- ---------------
Total revenues $47,177,435 $18,973,380
Costs and expenses 45,894,273 17,743,695
Equity in earnings of
unconsolidated subsidiaries 505,289 393,710
Gain on sale of securities 5,799,297 (26,311)
------------ ------------
Income before taxes
& minority interests 7,587,748 1,597,084
Provision (benefit) for income taxes 2,934,979 512,318
Minority interests (188,763) 371,073
------------ ------------
Net income $4,841,532 $713,693
============ ============
Earnings per share:
Basic $0.48 $0.08
============ ============
Diluted $0.45 $0.07
============ ============
Weighed average number of shares
outstanding:
Basic 10,154,039 9,456,917
Diluted 10,641,530 9,608,354
(a) Note: Restated to reflect certain accounting adjustments at Paaco
Automotive Group. For further information, refer to Company news
releases dated July 23, 1999 and July 28, 1999.
CROWN GROUP, INC. AND SUBSIDIARIES
REVENUE CONTRIBUTION ($000) FY1999 FY1998
Automobile $97,759 $15,732
IBCs 5,256 1,351
Mortgage 6,250 1,915
Other 2,840 2,577
Eliminations (819) (388)
-------- --------
Consolidated Revenues $111,286 $21,187
======== ========
INCOME (LOSS) BEFORE TAXES
AND MINORITY INTERESTS ($000) FY1999 FY1998
Automobile $1,685 $1,147
IBCs 508 281
Mortgage 240 (807)
Other (Incl. gains on sale of
securities) 23,525 26
-------- --------
Income before taxes and minority
interests $25,958 $647
======== ========
BALANCE SHEET DATA -- April 30, 1999
Cash $12,910,535
Total assets 168,134,579
Stockholders' equity 53,058,884
Shares outstanding 10,096,842
Book value per share $5.25
CROWN GROUP, INC. AND SUBSIDIARIES
QUARTERLY RESULTS OF OPERATIONS
Year Ended April 30, 1999
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
Revenue, as previously
reported $21,070 $19,750 $23,289
Revenue, as restated 21,070 19,750 23,289 $47,177 $111,286
Net income, as
previously reported $1,007 $501 $12,587
Net income, as
restated 766 46 11,855 $4,841 $ 17,508
EPS, as previously
reported $0.10 $0.05 $1.21
EPS, as restated $0.07 $0.00 $1.14 $0.45 $ 1.68
Year Ended April 30, 1998
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
(Restated)(Restated)
Revenue $494 $556 $1,165 $18,973 $21,188
Net income (loss) (309) (51) 14 713 367
EPS $(0.03) $(0.01) $0.00 $0.07 $0.04
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