Cronos (NASDAQ:CRNS)
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From Jun 2019 to Jun 2024
The Cronos Group (Nasdaq:CRNS) today reported net income
of $2.5 million, or $0.31 per diluted share, for the quarter ended
June 30, 2006, compared to $3.5 million, or $0.44 per diluted share,
for the corresponding period in 2005. In addition, the Board of
Directors declared a dividend of $0.07 per common share for the third
quarter of 2006, payable October 13, 2006 to shareholders of record as
of the close of business on September 22, 2006.
Gross lease revenue for the second quarter was $35 million, an
increase of 2% over the corresponding quarter of 2005, reflecting the
growth of the Company's specialized container fleet and continued
strong utilization rates. The utilization of the combined container
fleet finished the second quarter at 93% as Cronos experienced high
levels of demand for all container types. Direct operating expenses
declined in line with lower container redeliveries and were $0.5
million, or 10%, lower than in the second quarter of 2005.
Net income for the second quarter of 2006 was $1 million lower
than in the same period of 2005 because of increased interest rates
and exceptionally high gains recorded on container dispositions and
consultancy projects in the prior year comparative period.
The Company added $88 million of new container equipment to its
fleet during the first six months of 2006, with specialized equipment
(comprising refrigerated, tank, and dry freight special containers)
representing 87% of the new acquisitions. The Company's Joint Venture
Program continues to be the primary funding source for container
acquisitions and, accordingly, earnings from this program have
increased in line with the increase in its fleet size. The Company's
equity in earnings of the Joint Venture Program increased to $2.6
million in the first half of 2006 from $1.5 million in the
corresponding period of 2005.
Gross lease revenue was $70.3 million in the first half of 2006,
an increase of 3% over the same period in 2005. Net income for the six
months ended June 30, 2006 was $5.1 million, or $0.62 per diluted
share, compared to $7.1 million, or $0.90 per diluted share for the
comparable period in the prior year. Net income for the first half of
2006 included $0.6 million of legal fees relating to the resolution of
legal claims. As a result of the settlement of these legal claims,
Cronos expects to see a significant reduction in legal expenses in
future periods. Net income for the first six months of 2005 included
$2.1 million, or $0.27 per diluted share, of non-operating income
items that were recognized at the conclusion of legal actions and $1.4
million of litigation related legal expenses.
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 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
Business section in Part I (particularly Item 1A, "Risk Factors") of
the Company's Annual Report on Form 10-K for the year ended December
31, 2005, which 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
(US dollar amounts in thousands, except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
2006 2005 2006 2005
------- ------- ------- -------
Gross lease revenue $35,038 $34,469 $70,302 $68,473
Equipment trading revenue 1,649 1,815 3,375 1,950
Commissions, fees and other income:
- Related parties 129 218 332 405
- Unrelated parties 1,253 1,675 2,240 2,550
- Gain on settlement of litigation - - - 1,333
------- ------- ------- -------
Total revenues 38,069 38,177 76,249 74,711
------- ------- ------- -------
Direct operating expenses 4,208 4,688 9,315 9,240
Payments to Managed Container
Programs:
- Related parties 13,892 8,247 26,351 16,435
- Unrelated parties 7,402 9,035 15,201 18,104
Equipment trading expenses 1,389 1,624 2,961 1,751
Depreciation and amortization 2,951 4,578 5,901 9,170
Selling, general and administrative
expenses 5,015 4,909 10,149 10,702
Interest expense 1,855 1,854 3,499 3,375
Recovery of amount payable to
Managed Container Program - - - (703)
------- ------- ------- -------
Total expenses 36,712 34,935 73,377 68,074
------- ------- ------- -------
Income before income taxes and
equity in earnings of affiliate 1,357 3,242 2,872 6,637
Income taxes (204) (476) (431) (985)
Equity in earnings of
unconsolidated affiliate 1,340 711 2,611 1,454
------- ------- ------- -------
Net income 2,493 3,477 5,052 7,106
======== ======== ======== ========
Basic net income per common share $0.33 $0.47 $0.67 $0.97
======== ======== ======== ========
Diluted net income per common share $0.31 $0.44 $0.62 $0.90
======== ======== ======== ========
The Cronos Group
Condensed Unaudited Consolidated Balance Sheets
(US dollar amounts in thousands, except per share amounts)
June 30, December 31,
2006 2005
============ ============
Assets
Cash and cash equivalents $16,785 $15,829
Restricted cash 250 4,200
Amounts due from lessees 28,468 28,540
Amounts receivable from Managed Container
Programs 3,586 3,391
New container equipment for resale 27,529 38,142
Net investment in direct financing leases 11,922 12,678
Investments in unconsolidated affiliates 39,922 31,358
Container equipment, net 117,938 121,988
Other equipment, net 711 1,130
Goodwill 11,038 11,038
Other intangible assets, net 251 345
Other assets 3,666 3,093
============ ============
Total assets $262,066 $271,732
============ ============
Liabilities and shareholders' equity
Amounts payable to Managed Container Programs 27,467 25,462
Amounts payable to container manufacturers 30,352 52,790
Direct operating expense payables and
accruals 4,755 5,432
Other amounts payable and accrued expenses 5,392 11,873
Debt and capital lease obligations 99,584 87,780
Current and deferred income taxes 3,121 3,174
Deferred income and unamortized acquisition
fees 7,706 7,684
============ ============
Total liabilities 178,377 194,195
============ ============
Shareholders' equity
Common shares issued 15,302 15,040
Additional paid-in capital 43,843 43,807
Common shares held in treasury (297) (297)
Accumulated other comprehensive income 1,682 880
Restricted retained earnings 1,832 1,832
Retained earnings 21,327 16,275
============ ============
Total shareholders' equity 83,689 77,537
============ ============
Total liabilities and shareholders' equity $262,066 $271,732
============ ============
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