The Cronos Group Reports First Quarter 2007 Results
May 09 2007 - 1:27PM
Business Wire
The Cronos Group (NASDAQ:CRNS) today reported that the Company�s
net income for the quarter ended March 31, 2007 was $2.3 million,
or $0.28 per diluted share, compared with net income of $2.6
million, or $0.32 per diluted share, for the comparable quarter in
2006. This decline in earnings for the first quarter of 2007 was
primarily due to the impact of $600,000 of professional fees,
relating to the proposed transaction for the sale of the Company,
that had the effect of reducing net income by $0.07 per diluted
share. Gross lease revenue for the first quarter of 2007 was $35.7
million, an increase of $0.5 million when compared with the first
quarter of 2006. Gross lease revenue for specialized containers for
the quarter increased by $3.4 million when compared with the same
period in the prior year, reflecting the growth in the size of the
Company�s specialized container fleet. This was partially offset by
a $2.9 million decline in gross lease revenue for dry cargo
containers as Cronos disposed of equipment at the end of its useful
economic life for maritime leasing. The Company added $48.7 million
of new container equipment to its fleet during the quarter, with
specialized equipment accounting for 82% of the new additions.
Utilization of the combined container fleet was 92% at March 31,
2007, reflecting continued strong demand for all container types,
as all major trade routes reported high volumes of containerized
trade during the period. Direct operating expenses declined by $1.2
million, or 23%, when compared with the first quarter of 2006 due
to a reduction in activity-related costs that resulted from lower
volumes of container redeliveries and reduced inventories. Cronos
is one of the world�s leading lessors of intermodal containers,
owning and managing a fleet of over 447,000 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 � Condensed
Unaudited Consolidated Statements of Income (US dollar amounts in
thousands, except per share amounts) � Three Months Ended March 31,
2007� 2006� Gross lease revenue $ 35,722� $ 35,264� Equipment
trading revenue 925� 1,726� Commissions, fees and other income: -
Related parties 160� 203� - Unrelated parties 1,266� 987� Total
revenues 38,073� 38,180� � Direct operating expenses 3,909� 5,107�
Payments to Managed Container Programs: - Related parties 15,314�
12,459� - Unrelated parties 6,947� 7,799� Equipment trading
expenses 750� 1,572� Depreciation and amortization 2,964� 2,950�
Selling, general and administrative expenses 5,658� 5,134� Interest
expense 1,808� 1,644� Total expenses 37,350� 36,665� Income before
income taxes and equity in earnings of affiliate 723� 1,515� Income
taxes (145) (227) Equity in earnings of unconsolidated affiliate
1,725� 1,271� � � Net income 2,303� 2,559� � � Basic net income per
common share $ 0.30� $ 0.34� � � Diluted net income per common
share $ 0.28� $ 0.32� The Cronos Group � Condensed Unaudited
Consolidated Balance Sheets (US dollar amounts in thousands, except
per share amounts) � March 31, Dec. 31, 2007� 2006� Assets Cash and
cash equivalents $ 8,789� $ 8,498� Restricted cash -� 250� Amounts
due from lessees, net 32,189� 30,913� Amounts receivable from
Managed Container Programs 2,224� 3,033� New container equipment
for resale 42,041� 35,131� Net investment in direct financing
leases 11,482� 12,222� Investments in unconsolidated affiliates
46,900� 43,710� Container equipment, net 111,562� 113,081� Other
equipment, net 582� 632� Goodwill 11,038� 11,038� Other intangible
assets, net 111� 157� Current and deferred income taxes 447� 282�
Other assets 3,913� 4,252� Total assets $ 271,278� $ 263,199� �
Liabilities and shareholders� equity Amounts payable to Managed
Container Programs 24,792� 24,171� Amounts payable to container
manufacturers 43,767� 34,809� Direct operating expense payables and
accruals 3,965� 4,821� Other amounts payable and accrued expenses
6,427� 7,381� Debt and capital lease obligations 93,651� 95,875�
Deferred income taxes 3,656� 3,650� Deferred income and unamortized
acquisition fees 7,449� 7,005� Total liabilities 183,707� 177,712�
� Shareholders� equity Common shares issued (7,678,073 shares)
15,356� 15,356� Additional paid-in capital 42,555� 42,489� Common
shares held in treasury (112,000 shares) (297) (297) Accumulated
other comprehensive income 320� 605� Restricted retained earnings
1,832� 1,832� Retained earnings 27,805� 25,502� � Total
shareholders� equity 87,571� 85,487� � � Total liabilities and
shareholders� equity $ 271,278� $ 263,199�
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