Cronos (NASDAQ:CRNS)
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From May 2019 to May 2024
The Cronos Group (Nasdaq:CRNS) today reported net income of $2.8
million, or $0.34 per diluted share, for the quarter ended September 30,
2006, compared to $2.2 million, or $0.27 per diluted share, for the
corresponding period in 2005. In addition, on November 9, 2006, the
Board of Directors declared a dividend of $0.07 per common share,
payable on January 10, 2007, for the fourth quarter of 2006 to
shareholders of record as of the close of business on December 29, 2006,
and a dividend of $0.08 per common share, payable on April 10, 2007, for
the first quarter of 2007 to shareholders of record as of the close of
business on March 23, 2007.
Gross lease revenue for the third quarter was $35.9 million, an increase
of 3% 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 third quarter at 93% as Cronos experienced
high levels of demand for all container types. Direct operating expenses
declined by $1.1 million or 25% when compared with the third quarter of
2005 due to fewer container redeliveries and reduced inventory levels.
Net income for the third quarter of 2006 was $0.6 million higher than in
the same period of 2005 due to a $0.7 million decline in Selling,
General & Administrative expenses.
The Company added $114.5 million of new container equipment to its fleet
during the first nine months of 2006, with specialized equipment
(comprising refrigerated, tank, and dry freight special containers)
representing 85% 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 growth in its fleet size. The Company’s
share of earnings from the Joint Venture Program increased to $4.2
million for the first nine months of 2006 from $2.7 million for the
corresponding period of 2005.
On November 8, 2006, the maximum debt commitment to the Joint Venture
Program was increased from $300 million to $350 million, and the
interest rate margin for this facility was reduced by 37.5 basis points
to a margin of 125 basis points over Libor (the London Inter-bank
Offered rate).
Gross lease revenue was $106.2 million for the first nine months of
2006, an increase of 3% over the same period in 2005. Net income for the
nine months ended September 30, 2006 was $7.8 million, or $0.96 per
diluted share, compared to $9.3 million, or $1.17 per diluted share for
the comparable period in 2005. The decline in net income when compared
to prior year included the impact of increased interest rates and a
reduction in the level of profit recorded on the disposition of
container assets. Net income for the first nine months of 2006 included
$0.9 million of legal fees relating primarily to the resolution of legal
claims. Net income for the first nine months of 2005 included $2.1
million of non-operating income that was recognized at the conclusion of
legal actions, $1.6 million of litigation-related legal expenses and
$0.8 million in respect of one-off termination expenses relating to
involuntary employee terminations. These items had the effect of
reducing net income by $0.3 million.
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
The Cronos Group
Condensed Unaudited Consolidated Statements of Income
(US dollar amounts in thousands, except per share amounts)
Three Months
Ended
September 30,
Nine Months
Ended
September 30,
2006
2005
2006
2005
________
________
________
________
Gross lease revenue
$35,947
$35,007
$106,249
$103,480
Equipment trading revenue
526
260
3,901
2,210
Commissions, fees and other income:
- Related parties
209
209
541
614
- Unrelated parties
1,131
1,187
3,371
3,737
- Gain on settlement of litigation
-
-
-
1,333
________
________
________
________
Total revenues
37,813
36,663
114,062
111,374
________
________
________
________
Direct operating expenses
3,179
4,264
12,494
13,504
Payments to Managed Container Programs:
- Related parties
15,135
11,381
41,486
27,816
- Unrelated parties
7,848
9,177
23,049
27,281
Equipment trading expenses
493
227
3,454
1,978
Depreciation and amortization
2,978
3,293
8,879
12,463
Selling, general and administrative expenses
4,951
5,635
15,100
16,337
Interest expense
1,844
1,562
5,343
4,937
Recovery of amount payable to Managed Container Program
-
-
-
(703)
________
________
________
________
Total expenses
36,428
35,539
109,803
103,613
________
________
________
________
Income before income taxes and equity in earnings of affiliate
1,385
1,124
4,257
7,761
Income taxes
(208)
(169)
(639)
(1,154)
Equity in earnings of unconsolidated affiliate
1,576
1,238
4,187
2,692
________
________
________
________
Net income
2,753
2,193
7,805
9,299
Basic net income per common share
$0.36
$0.30
$1.04
$1.26
Diluted net income per common share
$0.34
$0.27
$0.96
$1.17
The Cronos Group
Condensed Unaudited Consolidated Balance Sheets
(US dollar amounts in thousands, except per share amounts)
September 30,
December 31,
2006
2005
Assets
Cash and cash equivalents
$12,739
$15,829
Restricted cash
250
4,200
Amounts due from lessees, net
28,958
28,540
Amounts receivable from Managed Container Programs
2,258
3,391
New container equipment for resale
18,386
38,142
Net investment in direct financing leases
13,005
12,678
Investments in unconsolidated affiliates
41,426
31,358
Container equipment, net
121,624
121,988
Other equipment, net
660
1,130
Goodwill
11,038
11,038
Other intangible assets, net
205
345
Other assets
4,039
3,093
Total assets
$254,588
$271,732
Liabilities and shareholders’ equity
Amounts payable to Managed Container Programs
25,812
25,462
Amounts payable to container manufacturers
26,924
52,790
Direct operating expense payables and accruals
3,886
5,432
Other amounts payable and accrued expenses
5,408
11,873
Debt and capital lease obligations
96,970
87,780
Current and deferred income taxes
3,131
3,174
Deferred income and unamortized acquisition fees
7,396
7,684
Total liabilities
169,527
194,195
Shareholders’ equity
Common shares issued
15,347
15,040
Additional paid-in capital
43,489
43,807
Common shares held in treasury
(297)
(297)
Accumulated other comprehensive income
610
880
Restricted retained earnings
1,832
1,832
Retained earnings
24,080
16,275
Total shareholders’ equity
85,061
77,537
Total liabilities and shareholders’
equity
$254,588
$271,732
The Cronos Group (Nasdaq:CRNS) today reported net income of $2.8
million, or $0.34 per diluted share, for the quarter ended September
30, 2006, compared to $2.2 million, or $0.27 per diluted share, for
the corresponding period in 2005. In addition, on November 9, 2006,
the Board of Directors declared a dividend of $0.07 per common share,
payable on January 10, 2007, for the fourth quarter of 2006 to
shareholders of record as of the close of business on December 29,
2006, and a dividend of $0.08 per common share, payable on April 10,
2007, for the first quarter of 2007 to shareholders of record as of
the close of business on March 23, 2007.
Gross lease revenue for the third quarter was $35.9 million, an
increase of 3% 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 third quarter at 93% as Cronos experienced high
levels of demand for all container types. Direct operating expenses
declined by $1.1 million or 25% when compared with the third quarter
of 2005 due to fewer container redeliveries and reduced inventory
levels.
Net income for the third quarter of 2006 was $0.6 million higher
than in the same period of 2005 due to a $0.7 million decline in
Selling, General & Administrative expenses.
The Company added $114.5 million of new container equipment to its
fleet during the first nine months of 2006, with specialized equipment
(comprising refrigerated, tank, and dry freight special containers)
representing 85% 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 growth in its fleet size. The Company's
share of earnings from the Joint Venture Program increased to $4.2
million for the first nine months of 2006 from $2.7 million for the
corresponding period of 2005.
On November 8, 2006, the maximum debt commitment to the Joint
Venture Program was increased from $300 million to $350 million, and
the interest rate margin for this facility was reduced by 37.5 basis
points to a margin of 125 basis points over Libor (the London
Inter-bank Offered rate).
Gross lease revenue was $106.2 million for the first nine months
of 2006, an increase of 3% over the same period in 2005. Net income
for the nine months ended September 30, 2006 was $7.8 million, or
$0.96 per diluted share, compared to $9.3 million, or $1.17 per
diluted share for the comparable period in 2005. The decline in net
income when compared to prior year included the impact of increased
interest rates and a reduction in the level of profit recorded on the
disposition of container assets. Net income for the first nine months
of 2006 included $0.9 million of legal fees relating primarily to the
resolution of legal claims. Net income for the first nine months of
2005 included $2.1 million of non-operating income that was recognized
at the conclusion of legal actions, $1.6 million of litigation-related
legal expenses and $0.8 million in respect of one-off termination
expenses relating to involuntary employee terminations. These items
had the effect of reducing net income by $0.3 million.
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 Nine Months
Ended Ended
September 30, September 30,
2006 2005 2006 2005
________ ________ ________ ________
Gross lease revenue $35,947 $35,007 $106,249 $103,480
Equipment trading revenue 526 260 3,901 2,210
Commissions, fees and other
income:
- Related parties 209 209 541 614
- Unrelated parties 1,131 1,187 3,371 3,737
- Gain on settlement of
litigation - - - 1,333
________ ________ ________ ________
Total revenues 37,813 36,663 114,062 111,374
________ ________ ________ ________
Direct operating expenses 3,179 4,264 12,494 13,504
Payments to Managed Container
Programs:
- Related parties 15,135 11,381 41,486 27,816
- Unrelated parties 7,848 9,177 23,049 27,281
Equipment trading expenses 493 227 3,454 1,978
Depreciation and amortization 2,978 3,293 8,879 12,463
Selling, general and
administrative expenses 4,951 5,635 15,100 16,337
Interest expense 1,844 1,562 5,343 4,937
Recovery of amount payable to
Managed Container Program - - - (703)
________ ________ ________ ________
Total expenses 36,428 35,539 109,803 103,613
________ ________ ________ ________
Income before income taxes and
equity in earnings of affiliate 1,385 1,124 4,257 7,761
Income taxes (208) (169) (639) (1,154)
Equity in earnings of
unconsolidated affiliate 1,576 1,238 4,187 2,692
________ ________ ________ ________
Net income 2,753 2,193 7,805 9,299
======== ======== ========= =========
Basic net income per common share $0.36 $0.30 $1.04 $1.26
======== ======== ========= =========
Diluted net income per common
share $0.34 $0.27 $0.96 $1.17
======== ======== ========= =========
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The Cronos Group
Condensed Unaudited Consolidated Balance Sheets
(US dollar amounts in thousands, except per share amounts)
September 30, December 31,
2006 2005
------------- ------------
Assets
Cash and cash equivalents $12,739 $15,829
Restricted cash 250 4,200
Amounts due from lessees, net 28,958 28,540
Amounts receivable from Managed Container
Programs 2,258 3,391
New container equipment for resale 18,386 38,142
Net investment in direct financing leases 13,005 12,678
Investments in unconsolidated affiliates 41,426 31,358
Container equipment, net 121,624 121,988
Other equipment, net 660 1,130
Goodwill 11,038 11,038
Other intangible assets, net 205 345
Other assets 4,039 3,093
------------- ------------
Total assets $254,588 $271,732
============= ============
Liabilities and shareholders' equity
Amounts payable to Managed Container
Programs 25,812 25,462
Amounts payable to container manufacturers 26,924 52,790
Direct operating expense payables and
accruals 3,886 5,432
Other amounts payable and accrued expenses 5,408 11,873
Debt and capital lease obligations 96,970 87,780
Current and deferred income taxes 3,131 3,174
Deferred income and unamortized acquisition
fees 7,396 7,684
------------- ------------
Total liabilities 169,527 194,195
------------- ------------
Shareholders' equity
Common shares issued 15,347 15,040
Additional paid-in capital 43,489 43,807
Common shares held in treasury (297) (297)
Accumulated other comprehensive income 610 880
Restricted retained earnings 1,832 1,832
Retained earnings 24,080 16,275
------------- ------------
Total shareholders' equity 85,061 77,537
------------- ------------
Total liabilities and shareholders' equity $254,588 $271,732
============= ============
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