C2, Inc. Reports Financial Results for the First Quarter Ended March 31, 2001.Business Editors MILWAUKEE--(BUSINESS WIRE)--April 26, 2001 At its Annual Shareholder Meeting today, C2, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CTOO) announced its financial results for the first quarter ended March 31, 2001. Consolidated net earnings for the quarter were $282,000, or $0.06 per share, compared to $546,000, or $0.11 per share, reported for last year's first quarter. Consolidated revenues for the quarter increased 5.2% to a record level of $48,930,000, driven by 9.8% growth in integrated logistic service revenues attributable to its wholly-owned subsidiary Logistic Control ("TLC TLC total lung capacity; thin-layer chromatography. TLC abbr. 1. thin-layer chromatography 2. "). Consolidated net earnings were lower quarter-to-quarter as product sales declined 2.8%, due primarily to deferred new retail store openings and store refurbishment re·fur·bish tr.v. re·fur·bished, re·fur·bish·ing, re·fur·bish·es To make clean, bright, or fresh again; renovate. re·fur programs within the customer base of Zero Zone, another C2, Inc., subsidiary. William T. Donovan, C2 President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said: "C2's business continues to grow in a difficult market for product distribution and retailing. We are achieving strong growth in TLC's business, particularly in outsourced logistics. The historic high rate of growth registered by Zero Zone over the last few years is moderating today as retailers have been deferring certain capital commitments for new store openings and refurbishment programs. Zero Zone continues to maintain strong exclusive or first tier supplier relationships with the large majority of its customer base and as its expansion and upgrade programs move ahead, we fully expect Zero Zone to re-establish a strong growth track." Donovan added: "During the quarter, both of C2's operating companies operating company A business that engages in transactions with outsiders. achieved meaningful awards of contractual volume from new and existing customers which are expected to be important contributors to future revenues and earnings. TLC was awarded a 10-year contract to provide fulfillment services for a publications firm which will generate incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of approximately $650,000 per year. Zero Zone was awarded a new two-year supply agreement with a major customer which will provide a strong underpinning un·der·pin·ning n. 1. Material or masonry used to support a structure, such as a wall. 2. A support or foundation. Often used in the plural. 3. Informal The human legs. Often used in the plural. for the Company's future growth." In other actions, shareholders re-elected the nominees to the Board of Directors, each to serve a one-year term: John A. Becker, Nicholas F. Brady Nicholas Frederick Brady (born April 11 1930, in New York City) was United States Secretary of the Treasury under Presidents Ronald Reagan and George H. W. Bush, and is also known for articulating the Brady Plan in March 1989. He was educated at Yale University (B.A. , William T. Donovan, William Donovan, William (Joseph) (1883–1959) soldier, public official; born in Buffalo, N.Y. A much-decorated World War I veteran, he was an assistant to the U.S. H. Lacy, David J David J. Haskins (b. April 24, 1957, in Northampton, England) is a British alternative rock musician. He was the bassist for the seminal gothic rock band Bauhaus. Life and work . Lubar and Sheldon B. Lubar. Summing Up First Quarter Financial Results: C2, Inc. consolidated revenues for the first quarter ended March 31, 2001 increased 5.2% to a record level of $48,930,000 due to growth in integrated logistic service revenues at TLC. Consolidated operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before before capital charges (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) for the quarter totaled $4,316,000, reflecting a decline of 11.3%, compared to $4,865,000 reported for last year's first quarter. The decline in consolidated EBITDA was due to lower product sales into the retail grocery, drug and convenience store markets, reflecting industry softness in these sectors. Interest expense increased slightly, reflecting a higher level of borrowings due to $7,000,000 of debt incurred on September 30, 2000, related to the acquisition of the 33.3% interest in TLC owned by Weatherford International Weatherford International Ltd (NYSE: WFT) is one of the world's largest diversified upstream oilfield service companies. Weatherford provides services ranging from directional drilling, open and cased-hole wireline logging to underbalanced systems expertise, drilling, , Inc. TLC is now a 100% owned subsidiary of C2. Net earnings for the quarter totaled $282,000, or $0.06 per share, compared to $546,000, or $0.11 per share, reported for last year's first quarter. Lower volume in product sales, increased interest expense and a higher tax rate related to Zero Zone's earnings contribution and related goodwill were the principal factors impacting this quarter's earnings level. Total Logistic Control TLC, based in Zeeland, Michigan Zeeland is a city in Ottawa County in the U.S. state of Michigan. The population was 5,805 at the 2000 census. The city is located at the western edge of Zeeland Charter Township which is politically independent. Its name is derived from the Dutch province of Zeeland. , is a unique national provider of integrated logistic services. These services include refrigerated re·frig·er·ate tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates 1. To cool or chill (a substance). 2. To preserve (food) by chilling. and dry warehousing, logistic management services, transportation, dedicated facility and operations management Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. , fulfillment services for e-commerce application, international freight forwarding, food distribution and packaging services. Operations are conducted through a network of 13 logistic centers with 36.3 million cubic feet of refrigerated capacity and more than 1 million square feet of dry warehouse space. TLC operates a fleet of 255 refrigerated transportation units. TLC recently was cited by Inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound Logistics as a Top 10 Provider of Third-Party Logistics A third-party logistics provider (abbreviated 3PL) is a firm that provides outsourced or "third party" logistics services to companies for part, or sometimes all of their supply chain management function. Excellence for the third year in a row. TLC is a wholly-owned subsidiary of C2, Inc. Zero Zone Zero Zone is a Wisconsin-based manufacturer of refrigerated and freezer display cases used in grocery, convenience and drug store chains for retail merchandising of food, beverage and floral products. C2, Inc. acquired 70.6% of Zero Zone on March 12, 1999. The statements contained in this release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Actual results may differ materially from management's expectations. The forward-looking statements involve risks and uncertainties, including but not limited to: -- Demand for warehousing, transportation logistic services and refrigerated display cases may be adversely affected by increases in interest rates, adverse economic conditions, increased energy costs, loss of a material customer, weather or other factors. -- Growth in volume of services or products may be adversely affected by reduced ability to identify and hire qualified employees. -- The company's profitability may be adversely affected by increases in interest rates because a significant portion of the Company's capital structure is debt, a substantial portion which bears interest at variable interest rates. -- Consolidations within the food industry or food retailers could impact the Company's customers. -- Company's market share may be adversely affected as a result of new or increased competitive conditions in warehousing, transportation or display case manufacturing. Additional information about risks and uncertainties discussed above as well as additional material risks in the Company's business may be found in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year 2000 and other filings the Company made from time to time with the Securities and Exchange Commission. This and other C2, Inc. news releases and additional corporate data can be accessed on the Internet at www.c2-inc.com.
C2, INC.
Consolidated Statement of Earnings
(In Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31,
------------------------
2001 2000
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Revenues:
Logistics Services $ 32,294 $ 29,421
Product Sales 16,636 17,110
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48,930 46,531
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Costs and Expenses:
Logistics Expense 27,471 24,857
Cost of Product Sales 13,237 13,137
Depreciation and Amortization 2,141 2,040
Selling, General &
Administrative Expenses 3,907 3,672
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46,756 43,706
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Earnings from Operations 2,174 2,825
Other Income (Expense):
Interest Expense, net (1,449) (1,376)
Other Income (Expense) 2 (2)
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(1,447) (1,378)
Earnings before Income Taxes, and
Minority Interest 727 1,447
Income Tax Provision 325 588
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Net Earnings before Minority Interest 402 859
Minority Interest 120 313
-------- --------
Net Earnings $ 282 $ 546
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Basic Net Earnings Per Share $ 0.06 $ 0.11
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Diluted Net Earnings Per Share $ 0.05 $ 0.10
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Average Number of Shares Outstanding 5,081,864 5,180,827
Diluted Number of Shares Outstanding 5,229,795 5,251,469
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