Fidelity Holdings Reports Record Third Quarter Gross Profits
15 November 1999
Fidelity Holdings Reports Record Third Quarter Gross Profits
KEW GARDENS, N.Y.--Nov. 15, 1999--| - | Gross Profits Increase to $8,321,092 from $5,643,248 |
| - | Income From Continuing Operations Rises to $722,289 from $663,705 |
Fidelity Holdings, Inc. today reported record gross profits for the third quarter ended September 30, 1999.
For the quarter ended September 30, 1999, revenues increased to $51,014,918 compared to $36,939,944 for the quarter ended September 30, 1998. Gross profits for the quarter rose to a record $8,321,092 from $5,643,248 for the comparable 1998 quarter. Income from continuing operations was $722,289 in the third quarter compared to $663,705 for the same quarter in 1998. Net income was $26,138 or $.00 per diluted share for the quarter ended September 30, 1999 versus net income of $448,061 or $.03 per diluted share for the comparable quarter in the prior year. The average number of diluted shares increased to 17,887,526 from 14,480,417 in the 1999 and 1998 quarters, respectively.
Revenues for the first nine months of the year ended September 30, 1999 were $151,287,991 compared with $63,427,183 for the comparable 1998 period. Income from continuing operations for the first three-quarters of 1999 was $2,225,979 ($.13 per diluted share) compared with $1,107,307 ($.07 per diluted share) for the 1998 period. Net income for the nine months ended September 30, 1999 was $186,239 or $.01 per diluted share versus $910,373 or $.06 per share for the nine months ended September 30, 1998. The average number of diluted shares in the 1999 period was 16,889,638, compared with 14,173,623 shares in the comparable prior period.
All per share amounts reflect Fidelity's 3-for-2 stock dividend effected June 1, 1999.
Bruce Bendell, Chairman of Fidelity stated, "It has been an exciting quarter, which began with the news that we had been accepted into the Russell 2000(R) Index, as well as moving our Company listing to Nasdaq National Market. We are proud of our continuing success at growing the Company. Major Automotive has grown significantly, in revenue, gross profits and income from continuing operations, with achievements both internally and via expansion to New Jersey, as we continue to implement our regional acquisition strategy. We expect to see further growth in this area as we continue to focus our efforts towards pursuit of acquisition opportunities in the coming period. We are excited to note the success of our initiatives. In particular, our efforts focusing on the growth of used cars have been greatly rewarded. We note with great pleasure setting a new record for exceeding 500 used car sales this quarter, then later passing the 600-car milestone."
Doron Cohen, President of Fidelity, added, "Our Company has much of which to be proud. Our executive team is stronger with the addition of our Executive Vice-President, Jim Wallick. Both the auto and technology divisions, have moved the Company forward. In addition to the success of Major Automotive, our telecommunication subsidiaries, CBS and IG2, Inc., in particular, have reached several notable milestones this quarter, including: Competitive Local Exchange Carrier ("CLEC") licenses in 24 states, encompassing 53 metropolitan areas; having successfully negotiated, finalized and received state regulatory approvals in 31 states with 9 Regional Bell Operating Companies ("RBOCs"), including the initiation of our system rollout in our local area; the retaining of Hon. Jack Fields, former Congressman from Texas, Chairman of the House Commerce Committee's Telecommunications and Finance Subcommittee and chief architect of the Telecommunications Act of 1996, joining our team as Chairman of our Technology Advisory Board. CBS and IG2 Inc. remain on target according to their business plan. As we consider the future of the technology division, we take into account their progress and continue to spend the funds necessary to help Fidelity realize maximum value for our shareholders."
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. Fidelity Holdings, Inc. is presently exploring the divestiture of its non-automotive activities by way of sale, merger, consolidation or other opportunities.
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 STATEMENTS OF OPERATIONS
Unaudited
NINE MONTHS ENDED SEPT 30 THREE MONTHS ENDED SEPT 30
1999 1998 1999 1998
---- ---- ---- ----
Revenues:
Sales $ 151,287,991 $ 63,427,183 $ 51,014,918 $ 36,939,944
Cost of
sales 127,860,092 54,323,663 42,693,826 31,296,696
------------- ------------- ------------- -------------
Gross
profit 23,427,899 9,103,520 8,321,092 5,643,248
Operating
expenses 19,410,329 6,914,769 7,047,100 4,424,251
Interest
expense 1,284,591 653,444 406,703 317,292
------------- ------------- ------------- -------------
Operating
income
before
income
tax
expense 2,732,979 1,535,307 867,289 901,705
Income tax
expense 507,000 428,000 145,000 238,000
------------- ------------- ------------- -------------
Income from
continuing
operations 2,225,979 1,107,307 722,289 663,705
Income
(loss) from
discontinued
operations (2,039,740) (196,934) (696,151) (215,644)
------------- ------------- ------------- -------------
Net income $ 186,239 $ 910,373 $ 26,138 $ 448,061
------------- ------------- ------------- -------------
Per common
share:
Net income
from
continuing
operations
Basic $ 0.17 $ 0.10 $ 0.05 $ 0.06
Diluted 0.13 0.07 0.04 0.05
Net income
(loss) from
discontinued
operations
Basic $ (0.16) $ (0.01) $ (0.05) $ (0.02)
Diluted (0.12) (0.01) (0.04) (0.02)
Net income:
Basic $ 0.01 $ 0.09 $ -- $ 0.04
Diluted 0.01 0.06 -- 0.03
Average number
of shares
used in
computation
Basic 13,441,487 10,722,123 14,439,375 11,030,417
Diluted 16,889,638 14,173,623 17,887,526 14,480,417