The Morgan Group, Inc., Reports 2000 2nd Quarter and 1st Half Financial Results
28 July 2000
The Morgan Group, Inc., Reports 2000 Second-Quarter and First-Half Financial Results
RYE, N.Y. - The Morgan Group, Inc., today announced financial results for 2000's second quarter and first six months ended June 30, 2000.Operating revenues for second-quarter 2000 decreased 26% to $30.0 million from $40.3 million for the 1999 second quarter. Compared with first-quarter 2000, operating revenues improved 8% primarily reflecting the seasonal effects of the typically stronger second-quarter period. EBITDA (earnings before interest, taxes, depreciation and amortization) was positive, at $401,000 versus a loss of $605,000 for 2000's first quarter. Second-quarter 2000 net income was $17,000, or $0.01 per share, compared with $169,000, or $0.07 per share, for 1999's second quarter.
For the half, operating revenues decreased 24% to $57.8 million from $75.6 million for the same period last year. The declines for both the quarter and half were principally a result of decreased revenues in the Company's manufactured housing transportation business. The net loss for the first six months of 2000 was $599,000, or $0.24 per share, compared with net income of $287,000, or $0.12 per share, for 1999's first half.
Anthony T. Castor, III, President and CEO of The Morgan Group, said, "As previously projected, softness in the manufactured housing industry persists. The industry is experiencing a decline in sales due to tightened credit standards and rising interest rates and the resultant excessive inventory level of new and repossessed homes at the retail sales centers. Importantly, we have reduced our overhead costs and will continue to adjust our cost structure accordingly.
"This industry downturn is neither unexpected nor unlike others we have experienced in our more than 60 years of doing business," he added. "While current-year results are being negatively affected, we are confident in the long-term outlook and are positioning the Company to benefit as our customers' business levels recover. Additionally, we continue to evaluate incremental sales initiatives and cost-containment actions."
The Morgan Group, Inc., through its subsidiaries Morgan Drive Away, Inc., and TDI, Inc. ("Morgan Drive Away"), is the nation's largest company managing the delivery of manufactured homes, commercial vehicles and specialized equipment in the United States. The Company has a national network of approximately 1,140 independent owner-operators and 1,460 other drivers dispatched from 94 offices in 31 states. The Company also provides insurance and financial services through its wholly owned subsidiaries, Interstate Indemnity and Morgan Finance, Inc.
The Morgan Group, Inc., and Subsidiaries
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
June 30, December 31,
2000 1999
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ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 1,349 $ 3,847
Trade accounts receivable,
less allowance for doubtful
accounts of $254 in 2000
and $313 in 1999 11,863 10,130
Accounts receivable, other 360 313
Refundable taxes 306 --
Prepaid expenses and
other current assets 1,834 1,960
Deferred income taxes 1,474 1,475
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Total current assets 17,186 17,725
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Property and equipment, net 4,139 4,309
Intangible assets, net 7,011 7,361
Deferred income taxes 2,172 2,172
Other assets 631 697
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Total assets $ 31,139 $ 32,264
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 3,941 $ 3,907
Accrued liabilities 4,945 4,852
Income taxes payable -- 278
Accrued claims payable 3,852 3,071
Refundable deposits 1,597 1,752
Current portion of long-term debt
and capital lease obligations 610 676
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Total current liabilities 14,945 14,536
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Long-term debt and capital
lease obligations, less current portion 152 289
Long-term accrued claims payable 4,623 5,347
Commitments and contingencies -- --
Shareholders' equity:
Common stock, $.015 par value
Class A:
Authorized shares - 7,500,000
Issued shares - 1,607,303 23 23
Class B:
Authorized shares - 2,500,000
Issued and outstanding
shares - 1,200,000 18 18
Additional paid-in capital 12,459 12,459
Retained earnings 2,102 2,775
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Total capital and retained earnings 14,602 15,275
Less - treasury stock at cost
(359,146 Class A shares) (3,183) (3,183)
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Total shareholders' equity 11,419 12,092
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Total liabilities and shareholders' equity $ 31,139 $ 32,264
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The Morgan Group, Inc., and Subsidiaries
Consolidated Statements of Operations
(Dollars in thousands, except share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
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Operating revenues $ 29,961 $ 40,270 $ 57,828 $ 75,595
Costs and expenses:
Operating costs 27,287 36,876 53,400 68,879
Selling, general
and administration 2,273 2,650 4,632 5,338
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Earnings (loss) before
interest, taxes,
depreciation, and
amortization (EBITDA) 401 744 (204) 1,378
Depreciation and
amortization 288 308 581 617
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Operating income (loss) 113 436 (785) 761
Interest expense, net 76 119 133 207
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Income (loss)
before income taxes 37 317 (918) 554
Income tax expense
(benefit) 20 148 (319) 267
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Net income (loss) $ 17 $ 169 $ (599) $ 287
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Net income (loss)
per basic share $ 0.01 $ 0.07 $ (0.24) $ 0.12
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