Fidelity Holdings Reports Third Quarter Results
21 November 2000
Fidelity Holdings Reports Third Quarter Results
KEW GARDENS, N.Y.--Nov. 21, 2000--- Gross Profits Increase to a Record $13,645,460 from $8,321,092 - - Pre-tax Income From Continuing Operations $134,937 versus $867,289 -
- Discontinued Operations Include Non-Cash Charges of $9,647,068 -
Fidelity Holdings, Inc. (Nasdaq NM:FDHG) today reported record gross profits for the third quarter ended September 30, 2000.
For the quarter ended September 30, 2000, revenues increased to $91,067,546 compared to $51,014,918 for the quarter ended September 30, 1999. Gross profits for the quarter rose to a record $13,645,460 from $8,321,092 for the comparable 1999 quarter. Pre-tax income from continuing operations was $134,937 for the 2000 quarter versus $867,289 in the prior comparable quarter. Loss from continuing operations was $(871,809) and loss from discontinued operations was $(10,537,020), of which $9,647,068 represents non-cash charges, in the third quarter of 2000 compared to income from continuing operations of $722,289 and a loss of $(696,151) from discontinued operations in the 1999 third quarter. Net loss was $(11,408,829) or $(0.44) per diluted share for the quarter ended September 30, 2000 versus net income of $26,138 or $0.00 per diluted share for the comparable quarter in the prior year. The average number of shares used in the computations was 25,750,156 and 26,831,289 in the 2000 and 1999 quarters, respectively.
Revenues for the first nine months of the year ended September 30, 2000 were a record $244,641,929 compared with $151,287,991 for the comparable 1999 period. Gross profits for the nine months rose to a record $38,110,362 from $23,427,899 for the comparable 1999 period. Pre-tax income from continuing operations was $2,516,864 for the 2000 period versus $2,732,979 in the prior comparable period. Income from continuing operations and loss from discontinued operations for the nine months ended September 30, 2000 was $1,510,118 and $(12,436,328), of which $9,647,068 represents non-cash charges, respectively, compared with income from continuing operations and loss from discontinued operations of $2,225,979 and $(2,039,740), respectively, for the 1999 period. Net loss was $(10,926,210) or $(0.43) per diluted share versus net income of $186,239 or $0.01 per diluted share for the nine months ended September 30, 1999. The average number of shares used in the computation in the 2000 period was 25,346,234, compared with 25,334,457 shares in the comparable prior period.
Bruce Bendell, Chairman and Chief Executive Officer of Fidelity stated, "This quarter has been one of success and re-evaluation at Fidelity Holdings. Even as we have deliberated as to the future of the non-automotive operations, including the technology division, Major Automotive has grown significantly. Revenues and gross profits have increased markedly. We are proud of our continuing success at growing the Company, including our acquisitions in Long Island, New York and New Jersey, and we expect to see further growth in our automotive activities as we continue to focus our efforts towards internal growth and acquisition opportunities. Fidelity Holdings' future is bright, especially for our shareholders, as we are now able to reduce the confusion among analysts and investors as to the nature of the Company and focus on strengthening our position as a leading consolidator of automotive dealerships in the New York Metropolitan area."
Richard L. Feinstein, Chief Financial Officer, commented, "The Company has incurred significant, one-time, primarily non-cash, charges this quarter in connection with the Board's decision to discontinue the operations of our former technology division. We believe, however, that given future funding requirements for those operations, the lower values placed on telephony technology by the capital markets and our demonstrated ability to grow as a regional automotive dealership group, this is the prudent decision for Fidelity and its shareholders."
FIDELITY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
2000 1999 2000 1999
---- ---- ---- ----
Revenues:
Sales $244,641,929 $151,287,991 $91,067,546 $51,014,918
Cost of
sales 206,531,567 127,860,092 77,422,086 42,693,826
------------ ------------ ------------ ------------
Gross
profit 38,110,362 23,427,899 13,645,460 8,321,092
Operating
expenses 33,848,068 19,410,329 12,925,418 7,047,100
Interest
expense 1,745,430 1,284,591 585,105 406,703
------------ ------------ ------------ ------------
Operating
income
before
income tax
expense 2,516,864 2,732,979 134,937 867,289
Income tax
expense 1,006,746 507,000 1,006,746 145,000
------------ ------------ ------------ ------------
Income from
continuing
operations 1,510,118 2,225,979 (871,809) 722,289
(Loss) from
discontinued
operations (12,436,328) (2,039,740) (10,537,020) (696,151)
------------ ------------ ------------ ------------
Net income
(loss) ($10,926,210) $186,239 ($11,408,829) $26,138
============ ============ ============ ============
Per common
share:
Income from
continuing
operations:
Basic $0.06 $0.11 ($0.03) $0.03
Diluted $0.06 $0.09 ($0.03) $0.03
(Loss) from
discontinued
operations:
Basic ($0.49) ($0.10) ($0.41) ($0.03)
Diluted ($0.49) ($0.08) ($0.41) ($0.03)
Net income
(loss):
Basic ($0.43) $0.01 ($0.44) $0.00
Diluted ($0.43) $0.01 ($0.44) $0.00
Average number
of shares used
in computation
Basic 25,346,234 20,162,231 25,750,156 21,659,063
Diluted 25,346,234 25,334,457 25,750,156 26,831,289