C2, Inc. Reports Record Quarter and Two Major Contract Awards.Business Editors MILWAUKEE--(BUSINESS WIRE)--April 23, 2002 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 today its financial results for the first quarter ended March 31, 2002. Net earnings for the first quarter increased 167 percent to $753,000, or $0.14 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to $282,000, or $0.05 per fully diluted share reported for the same period last year. Consolidated revenues for the quarter increased 32.1 percent to $64,640,000, driven by strong growth in integrated logistic lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation service revenue from its wholly-owned subsidiary, Total Logistic Control (TLC TLC total lung capacity; thin-layer chromatography. TLC abbr. 1. thin-layer chromatography 2. ). Both of C2's business units, TLC and Zero Zone, contributed to the strong improvement in operating results. In addition to the financial results for the quarter, C2 announced that its subsidiary, Total Logistic Control, was awarded two major, multi-year management contracts to staff and operate two dedicated 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. distribution facilities in Phoenix, Arizona Phoenix /ˈfiːˌnɪks/ (English: Phoenix, Navajo: Hoozdo, lit. "the place is hot", Western Apache: Fiinigis) is the capital and the most populous city of the U.S. and Rochelle, Illinois Rochelle is a city in Ogle County, Illinois, United States. The population was 9,424 at the 2000 census. As of the 2005 estimate, the population had risen to 9,712. Rochelle is about 75 miles west of Chicago and 25 miles south of Rockford. for Sara Lee
Sara Lee Corporation (NYSE: SLE) is a global consumer-goods company based in Downers Grove, Illinois, USA. Corporation. As a part of this award, TLC will sell one of its refrigerated logistic centers in Rochelle to Sara Lee for $9,800,000 which will generate a gain on sale of approximately $750,000. Completion of the facility sale is expected in May. Commenting on the reports, 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 financial performance in the quarter reflects the initial stage of what we expect will be a longer term trend of meaningful growth in both revenues and, more importantly, in operating profitability. Both of our businesses made important steps in recent periods to broaden the base on which further business expansion is being developed. TLC is progressing extremely well on its strategic initiatives of building long-term, contractual operating relationships in its Dedicated Facility Solutions and Transportation businesses. Zero Zones' recent acquisition of Zero Zone Refrigeration refrigeration, process for drawing heat from substances to lower their temperature, often for purposes of preservation. Refrigeration in its modern, portable form also depends on insulating materials that are thin yet effective. has been immediately accretive and now provides the Company with an integrated product line. Our outlook for 2002 and beyond is for continued improvement in operating profitability at both companies, driven by new dedicated facility and logistic management projects, increased capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. across its network of warehousing and transportation facilities and increased sales at Zero Zone in both refrigerated merchandising casements and refrigeration control systems." First Quarter Financial Results: Revenues for the first quarter ended March 31, 2002 increased 32.1 percent to $64,640,000, due primarily to growth in integrated logistic services at TLC. Logistics Services revenues increased 40.7 percent to a record $45,441,000, due to growth in TLC's Logistic Management Services, Dedicated Facility Solutions and Transportation Operations. Products Sales increased 15.4 percent quarter-to-quarter to $19,199,000, due primarily to the addition of Zero Zone Refrigeration which was acquired in January, 2002. 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 $4,712,000, an increase of 9.2 percent, compared to $4,315,000 reported for last year's first quarter. Growth in EBITDA was due primarily to increased volume in TLC's operations. Net interest expense declined 26.4 percent quarter-to-quarter, reflecting lower interest rates on borrowings at both TLC and Zero Zone. Net earnings for the quarter totaled $753,000, or $0.14 per fully diluted share, reflecting an increase of 167 percent, compared to $282,000, or $0.05 per fully diluted share reported for last year's first quarter. Increased volume, higher earnings from operations and lower interest expense, all contributed to the earnings improvement. C2, Inc. is a Milwaukee-based public company with two operating businesses, Total Logistic Control and Zero Zone. 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 national provider of integrated logistic services which include refrigerated and dry warehousing, transportation operations, supply chain management, dedicated third-party 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. , food distribution, and fulfillment services for e-commerce applications. Operations are conducted through a network of 28 logistic centers with 36.3 million cubic feet of refrigerated capacity and over 2 million square feet of dry warehouse space making it the tenth largest provider of refrigerated warehousing services in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . TLC operates a fleet of over 350 tractors with 560 refrigerated and dry trailers. 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 Excellence for the fourth year in a row. TLC is a 100 percent owned subsidiary of C2, Inc. Zero Zone Zero Zone, headquartered in North Prairie, Wisconsin North Prairie is a village in Waukesha County, Wisconsin. It is located in the Town of Genesee, near the town's southwestern corner. As of the 2000 census, the village had a total population of 1,571. Government North Prairie is a village, with a village board. is a manufacturer of refrigerated and freezer freezer the compartment in which meat and offal are stored at freezing temperatures of 10 to 16°F (-12 to -9°C) although there is a trend to lower temperatures of 0 to -22°F (-18 to -30°C). display cases used in grocery, convenience and drug store chains for retail merchandising or food, beverage and floral products. Zero Zone recently announced the acquisition of Zero Zone Refrigeration which manufactures refrigeration houses and racks to power and control the refrigeration systems, electrical panels, air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. and stand-by power for supermarkets, convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. and industrial applications. Zero Zone is a 70.6 percent owned subsidiary of C2, Inc. 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, refrigerated display and refrigeration control systems 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 portion which bears interest at variable interest rates. -- The Company's profitability may be adversely affected by performance which does not meet standards established in contractual agreements relating to transportation operations, logistics management and dedicated facility operations. -- Consolidations within the food industry or food retailers could negatively impact the Company's customers. -- The Company's market share may be adversely affected as a result of new or increased competitive conditions in warehousing, transportation or display case and refrigeration control systems 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 2001 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,
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2002 2001
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Revenues:
Logistics Services $ 45,441 $ 32,294
Product Sales 19,199 16,636
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64,640 48,930
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Costs and Expenses:
Logistics Expense 40,386 27,471
Cost of Product Sales 15,582 13,237
Depreciation and Amortization 2,080 2,141
Selling, General & Administrative Expenses 3,960 3,907
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62,008 46,756
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Earnings from Operations 2,632 2,174
Other Income (Expense):
Interest Expense, net (1,067) (1,449)
Other Income (Expense) (110) 2
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(1,177) (1,447)
Earnings before Income Taxes, and
Minority Interest 1,455 727
Income Tax Provision 577 325
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Net Earnings before Minority Interest 878 402
Minority Interest 125 120
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Net Earnings $ 753 $ 282
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Basic Net Earnings Per Share $ 0.15 $ 0.06
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Diluted Net Earnings Per Share $ 0.14 $ 0.05
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Average Number of Shares Outstanding 5,081,864 5,081,864
Diluted Number of Shares Outstanding 5,232,428 5,229,795
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