Cronos (NASDAQ:CRNS)
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The Cronos Group (Nasdaq:CRNS) today reported net income
of $2.6 million, or $0.32 per diluted share, for the quarter ended
March 31, 2006, compared to $3.6 million, or $0.46 per diluted share,
for the quarter ended March 31, 2005.
Results for the first quarter of 2005 included the impact of the
following items that had the net effect of increasing net income by
$1.6 million, or $0.22 per diluted share: a gain of $1.3 million that
was recorded on the receipt of amounts owed by a former chairman and
CEO of the Company; $0.8 million that was recognized on the recovery
of an amount payable to a managed container program; and, $0.5 million
of legal expenses relating to the foregoing and other actions.
Total revenues for the first quarter of 2006 were $38.2 million
compared with $36.5 million for the comparable quarter in 2005. Gross
lease revenue for the first quarter of 2006 was $1.3 million higher
than in the corresponding period of 2005 reflecting strong demand for
leased containers and the growth of the Company's Joint Venture
Program. Utilization of the combined container fleet was 90% at March
31, 2006.
Cronos purchased $53 million of new container equipment for its
owned and managed fleets in the first quarter of 2006. Specialized
equipment, comprising refrigerated, tank and dry freight special
containers, accounted for 88% of total additions and reflected the
strong demand experienced by Cronos for each of these products.
Cronos is one of the world's leading lessors of intermodal
containers, owning and managing a fleet of over 442,000 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 30, 2006.
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
and Comprehensive Income
(US dollar amounts in thousands, except per share amounts)
Three Months Ended
March 31,
2006 2005
-------- --------
Gross lease revenue $35,264 $34,004
Equipment trading revenue 1,726 135
Commissions, fees and other income:
- Related parties 203 187
- Unrelated parties 987 875
Gain on settlement of litigation - 1,333
-------- --------
Total revenues 38,180 36,534
-------- --------
Direct operating expenses 5,107 4,552
Payments to Managed Container Programs:
- Related parties 12,459 8,188
- Unrelated parties 7,799 9,069
Equipment trading expenses 1,572 127
Depreciation and amortization 2,950 4,592
Selling, general and administrative expenses 5,134 5,793
Interest expense 1,644 1,521
Recovery of amount payable to Managed Container
Program - (703)
-------- --------
Total expenses 36,665 33,139
-------- --------
Income before income taxes and equity in earnings
of unconsolidated affiliate 1,515 3,395
Income taxes (227) (509)
Equity in earnings of unconsolidated affiliate 1,271 743
-------- --------
Net income 2,559 3,629
======== ========
Basic net income per common share $ 0.34 $ 0.50
======== ========
Diluted net income per common share $ 0.32 $ 0.46
======== ========
Condensed Unaudited Consolidated Balance Sheets
(US dollar amounts in thousands, except per share amounts)
March 31, December 31,
========= ============
2006 2005
--------- ---------
Assets
Cash and cash equivalents $ 15,816 $ 15,829
Restricted cash 685 4,200
Amounts due from lessees 28,123 28,540
Amounts receivable from Managed Container
Programs 5,072 3,391
New container equipment for resale 35,420 38,142
Net investment in direct financing leases 11,063 12,678
Investments in unconsolidated affiliates 35,151 31,358
Container equipment, net 124,678 121,988
Other equipment, net 1,087 1,130
Goodwill 11,038 11,038
Other intangible assets, net 299 345
Other assets 4,655 3,093
--------- ---------
Total assets $273,087 $271,732
========= =========
Liabilities and shareholders' equity
Amounts payable to Managed Container Programs $ 23,879 $ 25,462
Amounts payable to container manufacturers 42,664 52,790
Direct operating expense payables and accruals 5,847 5,432
Other amounts payable and accrued expenses 5,835 11,873
Debt and capital lease obligations 102,574 87,780
Current and deferred income taxes 3,098 3,174
Deferred income and unamortized acquisition fees 7,994 7,684
--------- ---------
Total liabilities 191,891 194,195
--------- ---------
Shareholders' equity
Common shares issued 15,267 15,040
Additional paid-in capital 44,164 43,807
Common shares held in treasury (297) (297)
Accumulated other comprehensive income 1,396 880
Restricted retained earnings 1,832 1,832
Retained earnings 18,834 16,275
--------- ---------
Total shareholders' equity 81,196 77,537
--------- ---------
Total liabilities and shareholders' equity $273,087 $271,732
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