Crown Group, Inc. Announces Record Q2 Revenues and Earnings
16 December 1999
Crown Group, Inc. Announces Record Second Quarter Revenues and Earnings
DALLAS--Dec. 15, 1999--Earnings of $0.11 Per Share (Before Non-recurring Gains) Compare With
Less Than $0.01 Per Share in Prior-year Period
Crown Group, Inc. (Nasdaq Nat'l Mkt:CNGR) today announced that revenues and earnings for the second quarter and first half of FY2000 significantly exceeded prior-year levels.
For the quarter ended Oct. 31, 1999, revenues increased 131% to $45.5 million, compared with $19.8 million in the second quarter of the previous fiscal year. Net income of $7,606,478, or $0.76 per diluted share, was recorded in the most recent quarter, versus net income of $46,213, or $0.00 per diluted share, in the prior-year period. Net income during the quarter ended Oct. 31, 1999, included an after-tax gain of approximately $6.6 million from the Company's October 1999 sale of its 49% equity interest in Casino Magic Neuquen ("CMN"), which operates casinos in Argentina. Excluding this non-recurring gain from the sale of securities, Crown earned approximately $1,054,000, or $0.11 per diluted share, from operations in the second quarter of FY2000.
Revenues for the second quarter of FY2000 were derived as follows (before intercompany eliminations): Automotive Sales and Finance -- $40.9 million; Precision IBC -- $1.8 million; Concorde Acceptance Corporation -- $1.6 million; and Other -- $1.6 million.
For the six months ended Oct. 31, 1999, the Company earned $10,184,885, or $0.99 per diluted share, on revenues of $94.1 million. These results compared with net income of $811,830, or $0.08 per diluted share, and revenues of $40.8 million, in the first half of the previous fiscal year. Excluding the above mentioned gain from the sale of securities during the second quarter, Crown's net income for the first half of FY2000 approximated $3,428,000, or $0.33 per diluted share.
Revenues for the first six months of FY2000 were derived as follows (before intercompany eliminations): Automotive Sales and Finance -- $85.5 million; Precision IBC -- $3.3 million; Concorde Acceptance Corporation -- $3.5 million; and Other -- $2.8 million.
"Management is very pleased to report another quarter of impressive growth in revenues and earnings from operations during the three-month period ended Oct. 31, 1999," commented Edward R. McMurphy, president and chief executive officer of Crown Group, Inc. "Earnings of more than $1 million, excluding a non-recurring gain on the sale of CMN, were in line with management's overall objectives, despite a seasonal slowdown in used car sales and greater-than-expected start-up losses at our casinos in El Salvador. America's Car-Mart enjoyed another outstanding quarter, while Paaco Automotive Group was also profitable, continuing the recovery which began in the first quarter of our current fiscal year."
"The sale of Crown's 49% equity interest in Casino Magic Neuquen during the second quarter represented the culmination of a very successful investment in the gaming industry in Argentina," continued McMurphy. "We initially purchased our interest in CMN in June 1997 for $7 million. Through a combination of fees, earnings and proceeds from the sale of our equity interest, Crown realized a 197% pretax return on invested capital from its CMN investment in a little more than two years. The approximately $6.6 million after-tax gain from the sale of our CMN investment in October 1999 increased the Company's shareholders' equity by almost 13%, and book value per share approximated $6.39 as of Oct. 31, 1999."
"Following the end of our second fiscal quarter, we completed the purchase of a 70% equity interest in Smart Choice Automotive Group, Inc., a Florida-based company which sells used cars and finances installment purchase contracts for its customers. With the completion of this transaction, Crown now owns majority interests in subprime automotive dealership companies with combined annual revenues approximating $250 million. We are very optimistic regarding the long-term prospects for sales and earnings growth at these companies."
"The outlook for the balance of FY2000 is quite encouraging, based upon current business trends. Our third fiscal quarter is typically the slowest time of the year for our used car businesses, while the fourth fiscal quarter is the strongest for such businesses, on a seasonal basis. Overall, we remain comfortable with analysts' estimates that Crown can earn $0.70-$0.75 per diluted share, excluding the non-recurring gain from the sale of CMN, for the fiscal year ending April 30, 2000," concluded McMurphy.
Crown Group, Inc. is primarily involved in the sale and financing of used cars through its 99% ownership of America's Car-Mart, Inc. and its 70% ownership of Smart Choice Automotive Group, Inc. (OTC BB:SMCH). The Company also seeks to enhance shareholder value through the acquisition, development and operation of small-cap companies with significant growth potential. In addition to its used car sales and finance operations, Crown Group currently owns (i) 100% of Precision IBC, a firm specializing in the sale and rental of intermediate bulk containers; (ii) 80% of Concorde Acceptance Corporation, a sub-prime mortgage lender; (iii) 50.1% of CG Incorporated S.A. de C.V., which operates two casinos in El Salvador; and (iv) 45% of Atlantic Castings, Inc., an investment castings manufacturer of turbine engine components. Crown Group 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, risks associated with acquisitions, 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, and other risks which are discussed 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,
1999 1998
------------- -------------
Total revenues $45,529,981 $19,750,024
Costs and expenses 43,761,101 20,057,314
Equity in earnings of
unconsolidated subsidiaries 202,041 147,807
Gain on sale of securities, net 10,237,832 --
------------- -------------
Income (loss) before taxes
& minority interests 12,208,753 (159,483)
Provision (benefit) for income taxes 4,797,101 (110,021)
Minority interests (194,826) ( 95,675)
------------- -------------
Net income $7,606,478 $46,213
============= =============
Earnings per share:
Basic $0.79 $0.00
============= =============
Diluted $0.76 $0.00
============= =============
Weighted average number of
shares outstanding:
Basic 9,665,483 10,071,689
Diluted 10,038,033 10,177,528
CROWN GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
Six Months Ended
Oct. 31, Oct. 31,
1999 1998
------------ ------------
Total revenues $94,085,917 $40,819,814
Costs and expenses 89,239,938 40,510,813
Equity in earnings of
unconsolidated subsidiaries 942,843 716,428
Gain (loss) on sale of securities, net 10,237,832 (74,403)
------------ ------------
Income before taxes
& minority interests 16,026,654 951,026
Provision for income taxes 6,010,138 150,989
Minority interests (168,369) (11,793)
------------ ------------
Net income $10,184,885 $811,830
Earnings per share:
Basic $1.03 $0.08
============ ============
Diluted $0.99 0.08
============ ============
Weighted average number of
shares outstanding:
Basic 9,866,852 10,143,969
Diluted 10,277,549 10,305,483
CROWN GROUP, INC. AND SUBSIDIARIES
(Unaudited)
Six Months Ended October 31
REVENUE CONTRIBUTION ($000) 1999 1998
-------- --------
Automobile $85,509 $33,828
IBCs 3,271 2,680
Mortgage 3,451 3,160
Other 2,752 1,411
Eliminations (897) (259)
-------- --------
Consolidated revenues $94,086 $40,820
======== ========
INCOME (LOSS) BEFORE TAXES
AND MINORITY INTERESTS ($000) FY2000 FY1999
------ ------
Automobile $6,948 $(11)
IBCs 288 528
Mortgage 73 179
Other 8,718 255
------ ------
Income before taxes and minority interests $16,027 $951
====== ======
BALANCE SHEET DATA -- October 31, 1999 (Unaudited)
Cash $11,541,662
Total assets 177,600,259
Stockholders' equity 58,993,863
Shares outstanding 9,229,212
Book value per share $6.39
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