Carey International Announces First Quarter Results
5 April 2000
Carey International Announces First Quarter Results - Company Explores Strategic Alternatives -
WASHINGTON, April 4 Carey International, Inc.
today reported results for the first quarter ended February 29,
2000.
Revenues for the 2000 first quarter were $48.9 million, a 34.1% increase
from the $36.4 million in the prior year period. First quarter operating
income was $2.0 million compared to $2.8 million in 1999. First quarter net
income was $1.0 million, or $0.10 per diluted share, as compared to net income
of $1.7 million, or $0.17 per diluted share, in the 1999 first quarter.
The Company attributed the shortfall in earnings to challenges associated
with the strong internal growth over the last two quarters, 24% and 19%,
respectively. The increased demand has triggered additional investment in
infrastructure and personnel at the Company's call centers and has caused the
Company to subcontract a larger portion of its business resulting in continued
margin pressure. Additionally, lower-than-anticipated sales in certain
subsidiaries and delays in transitioning others reduced profitability. The
Company also has experienced the effects of seasonality in new acquisitions.
Vincent A. Wolfington, Chairman and Chief Executive Officer of Carey
International, commented, "The Company has taken aggressive measures to
overcome the effects of lower earnings in the first quarter. Principally, we
are continuing to expand the independent operator pool, having added
79 chauffeurs since the beginning of the year and anticipate adding 100 more
in the next 90 days. We also are accelerating the conversion to the
independent operator model and consolidating back office functions in acquired
companies as well as reducing personnel and other related costs in certain
subsidiaries. These measures should improve gross profit margins and lower
administrative overhead."
Mr. Wolfington continued, "The Company's earnings results principally stem
from better-than-anticipated growth and consequent capacity constraints. We
remain optimistic about the Company's prospects because business continues to
be robust, and initial indications reflect that the initiatives undertaken in
the first quarter place the Company in a position to meet revenue and earnings
expectations in subsequent quarters."
Separately, the Company reported that it engaged a private investment
banking firm, Benedetto, Gartland & Company, Inc., last Fall to assist the
Company in exploring various strategic alternatives for enhancing shareholder
value. The Company has pursued several such opportunities and will continue
to explore all strategic alternatives. No decision has been made by the Board
of Directors with respect to any of these alternatives and no implications
should be drawn from this press release as to what definitive decision will be
reached by the Board or as to the timing of any decision.
Carey International is the world's largest chauffeured services company.
The Company provides chauffeured sedan, limousine, van, and minibus
transportation through a worldwide network of owned and operated companies,
licensees, and affiliates serving 480 cities in 75 countries.
The information set forth above contains forward-looking statements, which
involves risks and uncertainties. The Company's actual results could differ
materially from the results anticipated in these forward-looking statements.
Readers should refer to discussion under "Risk Factors" contained in the
Company's Registration Statement on Form S-1 (No. 333-59599) filed with the
Securities and Exchange Commission, which is incorporated herein by reference,
concerning certain factors which could cause the Company's actual results to
differ materially from the results anticipated in the forward-looking
statements contained herein.
CAREY INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended
February 28, February 29,
1999 2000
Revenue, net $36,440 $48,879
Cost of revenue 24,403 34,236
Gross profit 12,037 14,643
Selling, general and administrative expense 9,232 12,621
Operating income 2,805 2,022
Other income (expense):
Interest expense (108) (440)
Interest income 117 94
Gain on sale of fixed assets 32 52
Income before provision for income taxes 2,846 1,728
Provision for income taxes 1,193 726
Net income $1,653 $1,002
Net income per common share - basic $0.17 $0.10
Net income per common share - diluted $0.17 $0.10
Weighted average common shares used in
computing net income per common share - basic 9,488 9,706
Weighted average common shares used in
computing net income per common share - diluted 9,886 10,226