Crown Group, Inc. Reports Record Third Quarter Earnings -- Excluding Securities Gains
15 March 2000
Crown Group, Inc. Reports Record Third Quarter Earnings -- Excluding Securities Gains
DALLAS--March 15, 2000--On Revenues of $153 Million, in First Nine Months of FY2000
Crown Group, Inc. today announced significant increases in revenues and earnings (excluding gains on the sale of securities) for the third quarter and first nine months of fiscal year 2000.
For the three months ended January 31, 2000, revenues increased 152% to $58.7 million, compared with $23.3 million in the third quarter of the previous fiscal year. Net income for the most recent quarter (excluding gains on the sale of securities) increased to $1.4 million, or $0.15 per diluted share, when compared with a net loss (excluding gains on the sale of securities) of $0.5 million, or ($0.05) per diluted share, in the year-earlier period. Including gains on the sale of securities, Crown earned $1,480,482, or $0.16 per diluted share, in its most recent quarter, versus net income of $11,855,048, or $1.14 per diluted share, in the third quarter of FY1999. The third quarter of FY1999 included an after-tax gain on the sale of the Company's investment in Inktomi Corporation common stock of approximately $12.3 million.
For the nine-month period ended January 31, 2000, the Company earned $4.9 million, or $0.50 per diluted share (excluding gains on the sale of securities), compared with net income of $0.4 million, or $0.04 per diluted share (excluding gains on the sale of securities), in the first nine months of the previous fiscal year. Revenues increased 138% to $152.8 million, versus $64.1 million in the corresponding period of FY1999. Including gains on the sale of securities, the Company reported net income of $11,665,367, or $1.18 per diluted share, in the first nine months of FY2000, compared with net income of $12,666,878, or $1.23 per diluted share, in the prior-year period.
Revenues during the first nine months of FY2000 were derived as follows (before intercompany eliminations): Automotive Sales and Finance -- $139.9 million; Precision IBC -- $5.1 million; Concorde Acceptance Corporation -- $5.0 million; and Other -- $4.3 million.
"Crown is having another outstanding year, and management is very pleased with the growth in revenues and earnings during the most recent quarter and nine-month period," stated Edward R. McMurphy, president and chief executive officer of Crown Group, Inc. "Our automotive subsidiaries, which generate the vast majority of Crown's revenues and earnings, are performing above expectations. America's Car-Mart had another record quarter, while our majority-owned Smart Choice Automotive Group (OTCBB:SMCH) subsidiary achieved an impressive turnaround under its revised capital structure and new management team. Paaco Automotive Group, which is now part of Smart Choice, generated record third quarter sales, and we have been pleased with the results of Smart Choice's operations in Florida since we acquired a 70% interest in that company in December 1999. Excluding Crown, our non-automotive operations reported a loss of $0.6 million during the third quarter, with earnings at Precision IBC offset by losses at Concorde Acceptance, Home Stay, Atlantic Castings and our casinos in El Salvador."
"The outlook for our fourth quarter appears quite promising, based upon the strong performance of our automotive businesses during February. We remain comfortable with analysts' published estimates that Crown should earn $0.70-$0.75 per diluted share (excluding gains from the sale of securities) for the year ending April 30, 2000."
"We repurchased another 489,600 shares of Crown common stock in the open market during the third quarter, bringing the total number of shares repurchased since March 1996 to over 3.7 million," continued McMurphy. "With our stock trading below book value, we continue to view the repurchase of shares as an appropriate utilization of capital and in the best interests of our shareholders." As of January 31, 2000, Crown Group's shareholders' equity totaled $57.0 million, which was equivalent to approximately $6.68 for each share of common stock outstanding.
Crown Group, Inc. is one of America's largest companies involved primarily in the sale and financing of pre-owned vehicles, through its majority ownership interests in companies which operate dealerships in five states. In addition, the Company seeks to enhance shareholder value through timely investments and the acquisition, development and operation of small-cap companies with significant growth potential. Crown Group currently owns (i) 99% of America's Car-Mart, Inc. and 70% of Smart Choice Automotive Group, Inc. (OTCBB:SMCH), 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) 50.1% of CG Incorporated S.A. de C.V., which operates two casinos in El Salvador; and (v) 45% of Atlantic Castings, Inc, an investment castings manufacturer of turbine engine components.
Crown Group, Inc. is headquartered in Dallas, Texas, 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)
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Three Months Ended
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Jan. 31, Jan. 31,
2000 1999
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Total revenues $ 58,720,887 $ 23,288,966
Costs and expenses 55,533,211 24,872,402
Equity in earnings
(loss) of unconsolidated
subsidiaries (312,534) 38,017
Gain on sale of
securities, net 123,268 18,964,236
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Income before taxes
& minority interests 2,998,410 17,418,817
Provision for income taxes 1,256,205 5,914,692
Minority interests 261,723 (350,923)
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Net income $ 1,480,482 $ 11,855,048
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Earnings per share:
Basic $ 0.17 $ 1.19
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Diluted $ 0.16 $ 1.14
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Weighed average number
of shares outstanding:
Basic 8,790,490 9,942,386
Diluted 9,179,744 10,372,333
CROWN GROUP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS (Unaudited)
-----------------------------------------
Nine Months Ended
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Jan. 31, Jan. 31,
2000 1999
------------- -------------
Total revenues $152,806,804 $ 64,108,780
Costs and expenses 144,773,149 65,383,215
Equity in earnings of
unconsolidated subsidiaries 630,309 754,445
Gain on sale of
securities, net 10,361,100 18,889,833
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Income before taxes
& minority interests 19,025,064 18,369,843
Provision for income taxes 7,266,343 6,065,681
Minority interests 93,354 ( 362,716)
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Net income $ 11,665,367 $ 12,666,878
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Earnings per share:
Basic $ 1.23 $ 1.26
------------- -------------
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Diluted $ 1.18 $ 1.23
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Weighted average number of
shares outstanding:
Basic 9,508,064 10,076,775
Diluted 9,911,777 10,335,480
CROWN GROUP, INC. AND SUBSIDIARIES
(Unaudited)
Quarter Ended January 31,
-------------------------
REVENUE CONTRIBUTION ($000) 2000 1999
---------- ----------
Automobile $ 54,376 $ 20,307
IBCs 1,867 1,191
Mortgage 1,561 1,278
Other 1,596 703
Eliminations (679) (190)
---------- ----------
Consolidated Revenues $ 58,721 $ 23,289
---------- ----------
INCOME (LOSS) BEFORE TAXES
AND MINORITY INTERESTS ($000) 2000 1999
---------- ----------
Automobile $ 4,002 $ (773)
IBCs 194 146
Mortgage (216) (163)
Other (982) 18,209
---------- ----------
Income before taxes and
minority interests $ 2,998 $ 17,419
---------- ----------
---------- ----------
Nine Months Ended January 31,
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REVENUE CONTRIBUTION ($000) 2000 1999
---------- ----------
Automobile $139,885 $ 54,135
IBCs 5,138 3,871
Mortgage 5,012 4,438
Other 4,348 2,114
Eliminations (1,576) (449)
---------- ----------
Consolidated Revenues $152,807 $ 64,109
---------- ----------
INCOME (LOSS) BEFORE TAXES
AND MINORITY INTERESTS ($000) 2000 1999
---------- ----------
Automobile $ 10,950 $ (784)
IBCs 482 674
Mortgage (143) 16
Other 7,736 18,464
---------- ----------
Income before taxes and
minority interests $ 19,025 $ 18,370
---------- ----------
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BALANCE SHEET DATA -- January 31, 2000 (Unaudited)
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Cash $ 5,097,901
Total assets 270,374,379
Stockholders' equity 57,047,451
Shares outstanding 8,540,862
Book value per share $6.68