Smart Choice Automotive Group Earns Over $1.2 Million
21 March 2000
Smart Choice Automotive Group Earns Over $1.2 Million in First Nine Months Of FY2000, Compared With $1.0 Million Loss in Prior-Year Period
Reverse Merger Positions Smart Choice for Profitable Future
TITUSVILLE, Fla., March 20 Smart Choice Automotive Group,
Inc. (OTC Bulletin Board: SMCH), which sells and finances used cars in Florida
and Texas, today announced substantially improved operating results for the
third quarter and first nine months of FY2000.
For the three months ended January 31, 2000, revenues increased 104% to
$34.1 million, versus $15.6 million in the third quarter of FY1999. The
Company reported a net profit of $811,410, or $0.01 per diluted share, in the
most recent quarter, compared with a net loss of $998,905, or ($6.97) per
diluted share, in the prior-year period. Diluted earnings per share were
calculated on 131,143,069 weighted average diluted shares outstanding in the
quarter ended January 31, 2000, versus 143,264 shares in the year-earlier
quarter. The increase in diluted shares outstanding reflects the Company's
restructuring and its reverse merger with PAACO Automotive Group, Inc. Prior
to December 1, 1999, PAACO was a majority-owned subsidiary of Crown Group,
Inc. and, as a result of the reverse merger, Crown Group, Inc.
currently owns 70% of Smart Choice Automotive Group, Inc. The Company's
consolidated operating results for the third quarter of FY2000 include the
results of its Texas operations (PAACO) for the entire period and the results
of its Florida operations (Smart Choice) since December 1, 1999.
For the nine-month period ended January 31, 2000, revenues increased
55% to $76.1 million, compared with $49.1 million in the corresponding period
of the previous fiscal year. Net income improved to $1,251,440, or $0.02 per
diluted share, in the first nine months of FY2000, versus a net loss of
$1,034,353, or ($7.22) per diluted share, in the first nine months of FY1999.
The Company's consolidated operating results for the first nine months of
FY2000 include the results of its Texas operations (PAACO) from May 1, 1999
through January 31, 2000, and the results of its Florida operations
(Smart Choice) from December 31, 1999. The increase in diluted shares
outstanding reflects the abovementioned restructuring and merger.
The Company's gross profit margin improved to 35.3% in the most recent
quarter, compared with 30.6% in the prior-year period, reflecting an increase
in average unit selling prices and lower reconditioning and vehicle
acquisition costs, on average, than in the prior-year period. The provision
for credit losses approximated 19.2% of sales in the quarter ended
January 31, 2000, versus 21.4% in the year-earlier period. Meanwhile, the
SG&A expense ratio declined to 20.3% of sales, from 24.8% in the third quarter
of FY1999, as the Company benefited from cost reductions and the elimination
of duplicative activities and personnel following the reverse merger with
PAACO in December.
"We are extremely pleased to report a return to profitability following
the reverse merger with PAACO and the financial and operating restructuring of
the Company in December," stated Ed Ernst, Chief Executive Officer of Smart
Choice Automotive Group, Inc. "During the past three months, management has
worked diligently to reduce costs and improve operating efficiencies, in order
to assure that Smart Choice will remain profitable in the future. While this
will remain our primary objective, we expect to expand our Florida and Texas
dealerships networks at a modest pace during the final quarter of Fiscal 2000.
In Florida, Smart Choice plans to open a used car dealership in Sanford, while
PAACO will add its third dealership in Houston, prior to the end of April."
Smart Choice Automotive Group, Inc. sells and finances used cars in the
States of Florida and Texas. The Company, which is headquartered in
Titusville, Florida, currently operates eleven used car dealerships in Florida
and eleven dealerships in Texas. Its common stock trades on the OTC Bulletin
Board under the symbol "SMCH".
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, Smart Choice
undertakes no obligation to update these statements for revisions or changes
after the date of this release.
For additional information, please contact: Ed Ernst, CEO at
(407) 269-0834 or RJ Falkner & Company, Inc., Investor Relations Counsel at
(800) 377-9893 or via e-mail at info@rjfalkner.com.
SMART CHOICE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Three Months Ended
Jan 31, Jan 31,
2000 1999
Revenue
Sales $27,287,318 $13,402,803
Income on finance
receivables 6,831,645 2,229,995
Total revenues 34,118,963 15,632,798
Costs and Expenses
Cost of sales 17,649,241 9,295,695
Provision for credit losses 5,444,435 2,898,973
Selling, general &
admin. expenses 6,916,103 3,898,861
Total costs and expenses 30,009,779 16,093,529
Income (loss) from operations 4,109,184 (460,731)
Other (income) expense
Interest expense 2,959,668 1,287,583
Other income (175,042) (163,353)
2,784,626 1,124,230
Income (loss) before
income taxes 1,324,558 (1,584,961)
Provision (benefit) for
income taxes 513,148 (586,056)
Net income (loss) $811,410 $(998,905)
Net income (loss) per
common share:
Basic $0.02 $(6.97)
Diluted $0.01 $(6.97)
Weighted average common shares
and share equivalents
outstanding:
Basic 32,639,669 143,264
Diluted 131,143,069 143,264
SMART CHOICE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(unaudited)
Nine Months Ended
Jan 31, Jan 31,
2000 1999
Revenue
Sales $63,609,595 $42,975,239
Income on finance
receivables 12,530,997 6,149,320
Total revenues 76,140,592 49,124,559
Costs and Expenses
Cost of sales 41,066,165 29,051,518
Provision for credit losses 11,098,743 7,205,334
Selling, general &
admin. expenses 16,541,731 11,426,252
Total costs and expenses 68,706,639 47,683,104
Income (loss) from operations 7,433,953 1,441,455
Other (income) expense
Interest expense 5,780,025 3,537,927
Other income (389,828) (499,803)
5,390,197 3,038,124
Income (loss) before
income taxes 2,043,756 (1,596,669)
Provision (benefit) for
income taxes 792,316 (562,316)
Net income (loss) $1,251,440 $(1,034,353)
Net income (loss) per
common share:
Basic $0.08 $(7.22)
Diluted $0.02 $(7.22)
Weighted average common
shares and share
equivalents outstanding:
Basic 16,391,467 143,264
Diluted 65,643,167 143,264
SMART CHOICE AUTOMOTIVE GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
January 31, April 30,
2000 1999
(unaudited)
Assets:
Cash and cash equivalents $289,412 $62,832
Other receivables 1,006,074 727,391
Finance receivables, net 125,240,130 47,757,350
Inventories 11,741,187 6,770,755
Property and equipment, net 10,839,097 3,825,308
Deferred tax asset, net 715,950 715,950
Goodwill, net 15,717,075 --
Prepaid and other assets 1,255,167 514,446
TOTAL ASSETS $166,804,092 $60,374,032
Liabilities:
Accounts payable and
accrued expenses $12,294,846 $4,199,718
Revolving credit facility 122,467,006 41,823,680
Capital lease obligations 605,393 --
Notes payable 11,131,486 4,939,340
Deferred income tax 894,312 --
Deferred sales tax 3,636,081 2,713,914
Total Liabilities 151,029,124 53,676,652
Contingent redemption
value of common stock
put options 1,539,148 --
Shareholders' Equity:
Preferred stock ($0.01 par
value, 5,000,000 shares
authorized, 1,469,551 shares
issued and outstanding) 14,696 --
Common stock ($0.01 par
value, 50,000,000 shares
authorized, 48,887,872 and
143,264 shares issued and
outstanding) 488,879 1,419
Additional paid-in capital 13,426,880 7,642,036
Retained earnings
(accumulated deficit) 305,365 (946,075)
Total Shareholders' Equity 14,235,820 6,697,380
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $166,804,092 $60,374,032