Wednesday August 12, 12:29 pm Eastern Time
Company Press Release
The Crown Group Reports Fourth Quarter E.P.S. of
$0.07 Versus Prior-year Loss, On Revenues of $19
Million
Company Earns $348,095 for Fiscal Year, Compared With Loss in FY1997 (Exclusive of Securities
Transactions and Non-recurring Gains)
DALLAS--(BUSINESS WIRE)--Aug. 12, 1998-- Crown Group, Inc. (Nasdaq:CNGR - news) today announced improved
operating results for its fourth quarter and 1998 fiscal year.
For the fourth quarter ended April 30, 1998, revenues approximated $19.0 million, compared with revenues of approximately
$277,000 in the fourth quarter of the previous fiscal year. The Company reported net income of $694,000, or $0.07 per share, in the
three-month period ended April 30, 1998, versus a net loss of $762,000 or ($0.07) per share in the prior-year quarter.
Revenues for the fiscal year ended April 30, 1998, increased more than ninefold to approximately $21.2 million, versus revenues of
approximately $2.03 million in the Company's 1997 fiscal year. Pretax income, exclusive of a gain on the sale of securities and
minority interest, improved to $517,422 during FY1998, compared with a pretax loss of $2,759,800, exclusive of a net loss on the
sale of securities and a gain on the sale of an equity interest in St. Charles Gaming Company (SCGC). Total net income after taxes
and minority interest totaled $348,095, or $0.04 per share, for the fiscal year ended April 30, 1998. This compared with total net
income of $8,859,885, or $0.82 per basic share in FY1997. Results for the fiscal year ended April 30, 1997 included a gain of $14.9
million from the sale of the Company's remaining interest in SCGC, along with a $5.3 million loss on the sale of other securities.
The weighted average number of basic common and common equivalent shares outstanding decreased 10% to 9,829,392 during
the 1998 fiscal year, compared with 10,868,119 in the previous fiscal year. This reflects the Company's repurchase of common
shares under a stock repurchase program approved by its Board of Directors in March 1996.
''Management was very pleased to report a $0.07 per-share profit in the fourth quarter of fiscal 1998 and a modest profit for the
entire fiscal year,'' commented Edward R. McMurphy, president and chief executive officer of The Crown Group. ''This was a
significant transitional year for our Company. Following our exit from the domestic gaming industry, we invested substantial
amounts of capital into several companies with exciting growth prospects during fiscal 1998 . The three-month period ended April
30, 1998 represented the first full quarter when Crown's operating results reflected our ownership interests in Paaco, Precision
IBC, Concorde Acceptance Corporation, and Casino Magic Neuquen. With the exception of Concorde, which did not begin
operations until June 1997, all of our subsidiary companies contributed to earnings during the most recent quarter.''
''The current outlook for Fiscal 1999 is very positive at all of our subsidiary companies. Paaco expects to open its first used car
dealerships in the Houston market this year, Precision IBC is well ahead of its budgeted plans for the expansion of its rental IBC
fleet, and Concorde Acceptance Corporation's growth in subprime mortgage originations should assure profitability for the year.
Casino Magic Neuquen continues to provide earnings, fees and cash distributions which are consistent with our expectations at the
time we invested in that company.''
''Since the end of our fiscal year, Crown has announced its entry into the hospitality industry by purchasing an 80% equity interest
in Home Stay Lodges I, Ltd., which is developing and will operate extended-stay lodging facilities in the Southeastern U. S. We
believe that Home Stay Lodges has identified a potentially large market for low-to-moderately priced extended-stay lodging which
is underserved by its competitors, and the first two Home Stay Lodges are currently under construction in Pensacola, Florida. In
June we announced the proposed acquisition of Bengal Chemical, Inc., which markets a line of highly effective insecticide products
to control wasps, hornets, fleas, fire ants, mosquitoes, and other pests, primarily in the Southeastern U. S. We believe that Bengal's
market share can be expanded significantly in a number of markets where household pests are a problem, particularly in the
Southeastern United States.''
''The Crown Group has invested in a number of companies with excellent long-term growth prospects during the past year, and we
are confident that our corporate strategy will maximize shareholder values in coming years. Revenues should exceed $100 million
for the first time in our Company's history during the current fiscal year, and operating earnings should also establish new records.''
The Crown Group seeks to enhance shareholder value through the acquisition, development, and operation of small-cap companies
with significant growth potential. Such companies can benefit from Crown's financial and management expertise. The achievement
of Crown's investment objectives may involve initial public offerings, mergers, spinoff transactions or sales to strategic partners.
The Company's common stock is traded on Nasdaq under the symbol ''CNGR''.
This press release may include statements that constitute ''forward-looking'' statements, usually containing the words ''believe'',
''estimate'', ''project'', ''expect'' or similar expressions. These statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such
differences include, but are not limited to, changing economic conditions, interest rate trends, continued acceptance of the
Company's products and services in the marketplace, competitive factors, dependence upon third-party vendors, and other risks
detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking
statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this
release. |
