The Cronos Group (NASDAQ:CRNS) today reported that the Company�s
net income for the year ended December 31, 2006 was $9.2 million,
or $1.14 per diluted share, compared with net income of $7.8
million, or $0.98 per diluted share, for 2005. Net income for 2006
included the impact of expense items that, in aggregate, reduced
net income by $1.6 million, or $0.20 per diluted share. These items
included professional fees relating to certain litigation against
the Company and the recently announced proposed transaction for the
sale of the Company, as well as charges recorded in connection with
the implementation of restructuring plans. Net income for the year
ended December 31, 2005, included the effect of non-operational
items that reduced net income by $4.9 million, or $0.63 per diluted
share. Total revenues for 2006 were $151.8 million compared with
$148.3 million for 2005. Gross lease revenue for 2006 of $141.9
million was 2% higher than for 2005. Net income for the fourth
quarter of 2006 was $1.4 million or $0.17 per diluted share.
Non-operational expenses had the impact of reducing net income by
$0.6 million, or $0.07 per diluted share. The Company recorded a
net loss of $1.5 million, or $0.19 per diluted share, for the
fourth quarter of 2005. This included the impact of a $4.6�million,
or $0.57 per diluted share, of non-operational charges including a
$4.1 million charge relating to the estimated cost of resolving
certain litigation against the Company. Dennis J. Tietz, Chairman
and CEO of Cronos, stated, �We are pleased with our performance in
2006. These results reflect the continued strong demand for all
product types in 2006, as well as the growth and profitability of
the Joint Venture Program. The lease market for new equipment
recovered from the slowdown experienced during the summer months,
and we saw strong demand for all product types throughout the
fourth quarter. �We added $155.1 million of new container equipment
to our fleet during 2006. Our focus on diversified equipment has
allowed us to continue the expansion of our product and customer
bases. Utilization of the Company�s combined container fleet was
92.1% at the end of 2006, compared with 90.8% at the beginning of
the year.� Cronos is one of the world�s leading lessors of
intermodal containers, owning and managing a fleet of over 440,000
TEU (twenty-foot equivalent units). The diversified Cronos fleet of
dry cargo, refrigerated and other specialized containers is leased
to a customer base of approximately 450 ocean carriers and
transport operators around the world. Cronos provides
container-leasing services through an integrated network of offices
through state-of-the-art information technology. This release
discusses certain forward-looking matters that involve risks and
uncertainties that could cause actual results to vary materially
from estimates. Risks and uncertainties include, among other
things, changes in international operations, exchange rate risks,
changes in market conditions for the Company�s container lease
operations and the Company�s ability to provide innovative and
cost-effective solutions. For further discussion of the risk
factors attendant to an investment in the Company�s common shares,
see the Introductory Note in the Company�s Annual Report on Form
10-K that was filed with the SEC on March 16, 2007. This press
release and other information concerning Cronos can be viewed on
Cronos� website at www.cronos.com. The Cronos Group Consolidated
statements of income For the years ended December 31, 2006, 2005
and 2004 (US dollar amounts in thousands, except per share amounts)
� 2006� 2005� 2004� � Gross lease revenue $141,883� $139,024�
$132,096� Equipment trading revenue 4,669� 2,210� 4,698�
Commissions, fees and other operating income: - Related parties
721� 802� 953� - Unrelated parties 4,024� 4,577� 2,641� Gain on
settlement of litigation -� 1,333� -� Interest income 545� 344�
120� Total revenues and other income 151,842� 148,290� 140,508�
Direct operating expenses 16,643� 18,091� 20,563� Payments to
Managed Container Programs: - Related parties 56,551� 40,826�
31,638� - Unrelated parties 30,374� 36,177� 36,323� Equipment
trading expenses 4,085� 1,978� 4,018� Amortization of intangible
assets 188� 188� 188� Depreciation 11,648� 15,141� 17,993� Selling,
general and administrative expenses 20,791� 21,909� 18,834�
Interest expense 7,358� 6,186� 5,178� Recovery of amount payable to
Managed Container Program -� (703) -� Recovery of related party
loan note -� -� (1,280) Provision against legal claims -� 4,100� -�
Total expenses 147,638� 143,893� 133,455� Income before income
taxes and equity in earnings of affiliate 4,204� 4,397� 7,053�
Income taxes provision (954) (864) (1,071) Equity in earnings of
unconsolidated affiliate 5,977� 4,269� 2,883� Net income 9,227�
7,802� 8,865� Basic net income per common share $1.22� $1.06�
$1.22� Diluted net income per common share $1.14� $0.98� $1.14� The
Cronos Group Consolidated balance sheets December 31, 2006 and 2005
(US dollar amounts in thousands, except per share amounts) � 2006�
2005� � Assets Cash and cash equivalents $8,498� $15,829�
Restricted cash 250� 4,200� Amounts due from lessees, net 30,913�
28,540� Amounts receivable from Managed Container Programs 3,033�
3,391� New container equipment for resale 35,131� 38,142� Net
investment in direct financing leases 12,222� 12,678� Investment in
unconsolidated affiliates 43,710� 31,358� Container equipment, net
113,081� 121,988� Other equipment, net 632� 1,130� Goodwill 11,038�
11,038� Other intangible assets, net 157� 345� Income taxes 282� -�
Other assets 4,252� 3,093� Total assets $263,199� $271,732� �
Liabilities and shareholders' equity Amounts payable to Managed
Container Programs $24,171� $25,462� Amounts payable to container
manufacturers 34,809� 52,790� Direct operating expense payables and
accruals 4,821� 5,432� Other amounts payable and accrued expenses
7,381� 11,873� Debt and capital lease obligations 95,875� 87,780�
Income taxes -� 209� Deferred income taxes 3,650� 2,965� Deferred
income and deferred acquisition fees 7,005� 7,684� Total
liabilities 177,712� 194,195� � Shareholders� equity Common shares
15,356� 15,040� Additional paid-in capital 42,489� 43,807� Common
shares held in treasury (297) (297) Accumulated other comprehensive
income 605� 880� Restricted retained earnings 1,832� 1,832�
Unrestricted retained earnings 25,502� 16,275� Total shareholders�
equity 85,487� 77,537� Total liabilities and shareholders' equity
$263,199� $271,732�
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