Cronos (NASDAQ:CRNS)
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The Cronos Group (Nasdaq:CRNS) today reported net income
of $3.6 million, or $0.46 per diluted share, for the quarter ended
March 31, 2005, compared to $789,000, or $0.10 per diluted share, for
the corresponding period in 2004.
Net income for the first quarter of 2005 included $2.1 million, or
$0.27 per diluted share, of non-operating items comprising a gain of
$1.3 million that was recorded on the receipt of amounts owed by a
former chairman and CEO of the Company, and $0.8 million that was
recognized on the recovery of an amount payable to a managed container
program.
Total revenues for the first quarter of 2005 were $36.5 million
compared to $34.0 million for the same period in the prior year. Gross
lease revenue for the first quarter of 2005 was $3.1 million higher
than in the corresponding period of 2004 reflecting an 8% increase in
the size of the Company's container fleet and strong utilization
levels for all product types. Utilization of the Company's combined
container fleet was 93% at March 31, 2005, compared to 90% at March
31, 2004.
Total expenses for the first quarter of 2005 were $33.1 million,
compared with $33.4 million for the comparable period in 2004. Direct
operating expenses for the first quarter of 2005 declined by $2.5
million when compared to the same period in 2004 due primarily to
reductions in off-hire container inventories. Payments to managed
container programs increased by $2.8 million in the first quarter when
compared to the same quarter in 2004, due to the improved performance
of each of the managed segments.
Cronos purchased $40 million of new container equipment for its
owned and managed fleets in the first quarter of 2005.
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 over 450 ocean carriers and transport operators
around the world. Cronos provides container-leasing services through
an integrated network of offices using 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 for the
year ended December 31, 2004, which was filed with the SEC on March
22, 2005.
This press release and other information concerning Cronos can be
viewed on Cronos' website at www.cronos.com.
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The Cronos Group
Condensed Unaudited Consolidated Statements of Income
Three Months Ended
March 31,
2005 2004
--------- ---------
Gross lease revenue $34,004 $30,903
Equipment trading revenue 135 2,576
Commissions, fees and other income:
- Related parties 187 223
- Unrelated parties 875 334
Gain on settlement of litigation 1,333 -
--------- ---------
Total revenues 36,534 34,036
--------- ---------
Direct operating expenses 4,552 7,008
Payments to Managed Container Programs:
- Related parties 8,188 6,490
- Unrelated parties 9,069 7,952
Equipment trading expenses 127 2,296
Depreciation and amortization 4,592 4,294
Selling, general and administrative expenses 5,793 4,242
Interest expense 1,521 1,154
Recovery of amount payable to a Managed Container
Program (703) -
--------- ---------
Total expenses 33,139 33,436
--------- ---------
Income before income taxes and equity in earnings
of affiliate 3,395 600
Income taxes (509) (343)
Equity in earnings of unconsolidated affiliate 743 532
--------- ---------
Net income 3,629 789
Other comprehensive income (loss):
- change in fair value of forward exchange
contracts, net of tax - 271
- change in fair value of derivatives held by
affiliate, net of tax 619 (237)
--------- ---------
Comprehensive income $4,248 $823
========= =========
Basic net income per common share $0.50 $0.11
========= =========
Diluted net income per common share $0.46 $0.10
========= =========
The Cronos Group
Condensed Unaudited Consolidated Balance Sheets
March 31, December 31,
2005 2004
Assets
Cash and cash equivalents $11,340 $17,579
Restricted cash 1,073 1,489
Amounts due from lessees, net 25,712 25,136
Amounts receivable from Managed Container
Programs 2,559 3,386
New container equipment for resale 26,339 17,116
Net investment in direct financing leases 8,293 7,382
Investments in unconsolidated affiliates 17,379 15,364
Container equipment, net 168,298 166,584
Other equipment, net 1,015 963
Goodwill, net 11,038 11,038
Other intangible assets, net 486 533
Related party loan receivable - 1,280
Other assets 3,386 3,899
------------ ------------
Total assets 276,918 $271,749
============ ============
Liabilities and shareholders' equity
Amounts payable to Managed Container Programs $22,686 $22,034
Amounts payable to container manufacturers 37,286 27,838
Direct operating expense payables and
accruals 4,076 5,592
Other amounts payable and accrued expenses 6,097 8,810
Debt and capital lease obligations 121,989 127,953
Current and deferred income taxes 3,417 3,238
Deferred income and unamortized acquisition
fees 6,684 5,925
------------ ------------
Total liabilities 202,235 201,390
------------ ------------
Shareholders' equity
Common shares issued (7,398,602; 7,381,349
shares) 14,797 14,763
Additional paid-in capital 45,400 45,358
Common shares held in treasury (112,000
shares) (297) (297)
Accumulated other comprehensive income 849 230
Restricted retained earnings 1,832 1,832
Retained earnings 12,102 8,473
------------ ------------
Total shareholders' equity 74,683 70,359
------------ ------------
Total liabilities and shareholders' equity $276,918 $271,749
============ ============
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