Ugly Duckling Corporation Announces Reclassification of Cygnet Dealer Into Continuing Operations and Anticipated First Quarter Results
PHOENIX--(BUSINESS WIRE)--March 16, 1999--Ugly Duckling Corporation (Nasdaq NM: UGLY) today announced a reclassification of Cygnet Dealer into continuing operations and anticipated first quarter results.
RECLASSIFICATION OF CYGNET DEALER INTO CONTINUING OPERATIONS: The Board of Directors has determined at this time to cease efforts to pursue strategic alternatives for the Company's Cygnet Dealer subsidiary due to a lack of interest and other factors. As a consequence, Ugly Duckling announced the reclassification of this non-dealership operation from discontinued to continuing operations in its financial statements for 1998, 1997 and 1996. The reclassification of Cygnet Dealer does not materially affect previously announced results for 1998. Earlier this month, Ugly Duckling announced the reclassification of certain other non-dealership operations consisting of its Cygnet Financial Services. As a result of these two reclassification announcements, only the Company's Champion Financial branch office network, which was closed in February, 1998, remains in discontinued operations. The Cygnet Dealer subsidiary provides various credit facilities to third party used car dealers. Cygnet Financial Services purchases and services auto finance portfolios.
EXPECTED FIRST QUARTER 1999 RESULTS: The Company reported that it expects its actual results for the first quarter 1999 to exceed analysts' consensus estimates. Analysts' estimates range from $(.13) to $(.18) loss per share for the quarter. The Company estimates that for the quarter it will be at or near break-even from its continuing operations. Although the quarter is not over, Ugly Duckling believes that a few factors, most notably a greater number of vehicles being sold, will lead to the better than expected results for Q1. However, there can be no assurance that the Company's expectation and estimates for first quarter 1999 will prove correct. Further, although the Company did not provide any guidance on annual results for 1999, it did note that vehicle sales are typically strongest in its first quarter, and thus, may not be reflective of annual results. |
