Interstate National Dealer Services, Inc. Announces Second Quarter Fiscal 2000 Results
13 June 2000
Interstate National Dealer Services, Inc. Announces Second Quarter Fiscal 2000 Results
Mitchel Field, N.Y. - Interstate National Dealer Services, Inc. today announced its second quarter results for the period ended April 30, 2000.Revenues for the three months ended April 30, 2000 increased approximately 12% to $15,347,002, compared to $13,749,522 for the same period a year earlier.
Net income for the three months ended April 30, 2000 was approximately $740,000, or $0.15 per share on 4,897,372 diluted weighted average shares outstanding, exclusive of approximately $260,000, or $0.05 per share impact to net income from expenses incurred in establishing the company's complete business-to-business (B2B) car buying site, Uautobid.com, compared to net income of $749,267, or $0.15 per share on 5,034,595 diluted weighted average shares outstanding for the comparable period a year earlier. Including Uautobid.com expenses, the per share results for the quarter ended April 30, 2000 compared to the prior year's quarter were $0.10 versus $0.15.
Revenues for the six months ended April 30, 2000 rose approximately 13% to $28,579,788 compared to $25,284,013 for the six months ended April 30, 1999. Net income for the six months ended April 30, 2000 was approximately $1,394,000, or $0.29 per share on 4,873,366 diluted weighted average shares outstanding, exclusive of approximately $500,000, or $0.11 per share impact to net income from expenses incurred in establishing the company's complete business-to-business (B2B) car buying site, Uautobid.com, compared to net income of $1,240,708, or $0.25 per share on 5,041,978 diluted weighted average shares outstanding for the six months ended April 30, 1999. Including Uautobid expenses, the six months ended April 30, 2000 compared to the prior year's six months were $0.18 versus $0.25.
The increase in revenues for the six months ended April 30, 2000 was primarily due to: (i) an increase in the recognition of deferred contract revenue as a result of an increase in the total number of unexpired service contracts under administration; and (ii) an increase in administrative and insurance fees resulting from an increase in the fees charged per contract.
Mr. Chester J. Luby, Chairman and CEO, stated, "Operating margins have been impacted by the expenses associated with establishing Uautobid.com, the increased cost of claims, and certain non-recurring professional fees. We have responded to the pressures on our margins by increasing the price of our warranties and extended service contracts. This will increase current income and strengthen our claim reserves, the benefit of which should be reflected in future quarters. I am pleased to note that Uautobid.com's expenses should drop significantly going forward as we have successfully repositioned it in the business-to-business (B2B) sector and expect that Interstate's financial support can now be substantially diminished without impacting its future success."
"Our financial condition remains strong as our cash and securities are now at an all time high of nearly $52 million, or $10.61 per share. These assets are invested for the benefit of our shareholders in high quality, interest-bearing securities. We have recently engaged a second highly regarded money management firm to invest a portion of these assets to further increase our return", Mr. Luby added.
"During the most recent quarter, the company announced its intention to repurchase up to 500,000 shares of its outstanding shares subject to market conditions and the price of the common stock. To date we have repurchased approximately 45,000 shares and will continue to do so, particularly if the market price remains at price levels that we consider significantly undervalued relative to our fundamental strengths and prospects. We believe that our record of consistent growth and superior performance is not being given the recognition that it deserves and that the repurchase of our shares is one of the best investments that we can make on behalf of all our shareholders. We are as confident as ever about our long term prospects", Mr. Luby concluded.
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A conference call to discuss Interstate's
second quarter results will take place on
Tuesday, June 13th at 10:00 am EST. The toll
free number is
888-283-1720
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Interstate is a leading nationwide provider of service contracts and extended warranties, primarily for new and used cars and recreational vehicles, as well as watercraft, manufactured housing, motorcycles and other power sport vehicles.
This press release contains forward-looking statements, which are subject to risks and uncertainties. Such statements are based on assumptions and expectations which may not be realized and are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy and some of which might not even be anticipated. Future events and actual results, financial and otherwise, may differ from the results discussed in the forward-looking statements. A number of these risks and other factors that might cause differences, some of which could be material, along with additional discussion of forward-looking statements, are set forth in the Company's Report on Form 8-K filed with the Securities and Exchange Commission on December 23, 1996.
INTERSTATE NATIONAL DEALER SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the Six Months For the Three Months Ended April 30, Ended April 30, --------------- --------------- 2000 1999 2000 1999 ------------ ------------- ------------ ------------ REVENUES $ 28,579,788 $ 25,284,013 $ 15,347,002 $ 13,749,522 Net income $ 896,286* $ 1,240,708 $ 479,623* $ 749,267 ============ ============= ============ ============ NET INCOME PER SHARE: Basic $ .19** $ .27 $ .10** $ .16 ============ ============= ============ ============ Weighted average shares outstanding 4,677,805 4,659,051 4,683,601 4,665,070 ============ ============= ============ ============ Diluted $ .18** $ .25 $ .10** $ .15 ============ ============= ============ ============ Weighted average shares outstanding 4,873,366 5,041,978 4,897,372 5,034,595 ============ ============= ============ ============ * Net income excluding Uautobid.com expenses would be approximately $1.4 million for the six months and $740,000 for the three months ended April 30, 2000 ** Net income per share excluding Uautobid.com expenses would be approximately $0.29 for the six months ended April 30, 2000 and $0.15 for the three months ended April 30, 2000. CONSOLIDATED BALANCE SHEETS April 30, October 31, 2000 1999 ------ ------ (Unaudited) Cash and cash equivalents, U.S. Treasury Bills, at cost, and marketable securities $ 51,964,317 $ 50,626,697 Working capital 28,327,898 42,638,101 Total assets 73,964,528 68,661,087 Total stockholders' equity 21,587,851 20,924,415