C2, Inc. Reports Second Consecutive Record Quarter in Revenues and Earnings.Business Editors MILWAUKEE--(BUSINESS WIRE)--July 19, 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 second quarter and first six months of fiscal 2002. Net earnings for the three months ended June 30, 2002, increased 331 percent to $1,324,000, or $0.25 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 $307,000, or $0.06 per fully diluted share, reported for the same period last year. Included in net earnings this period is an after tax gain of $463,000, or $0.09 per fully diluted share, related to the sale of one of its 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. warehouse facilities located in 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. to Sara Lee
Sara Lee Corporation (NYSE: SLE) is a global consumer-goods company based in Downers Grove, Illinois, USA. Corporation. Excluding this gain, net earnings for the quarter were $861,000, or $0.16 per fully diluted share, which represents an increase of 180 percent over net earnings for the comparable period last year. Consolidated revenues for the quarter increased 33.5 percent, to $73,324,000, driven by continued 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 revenues from its wholly-owned subsidiary, Total Logistic Control (TLC TLC total lung capacity; thin-layer chromatography. TLC abbr. 1. thin-layer chromatography 2. ). On a sequential quarterly basis, C2's second quarter revenues and net earnings, excluding the gain on sale, improved 13 percent and 14 percent, respectively, over the first quarter of fiscal 2002. Commenting on the report, 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 is continuing to execute on its strategic growth plan of building quality, repeatable earnings, driven by providing best-in-class, integrated logistic services, refrigerated display cases and control systems. We are very pleased with the significant progress being achieved in both of our operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon and the results reflect it. TLC is being recognized in its industry as a leading provider of integrated logistic services and dedicated facility operations. Over the past year, TLC has started up four dedicated facility projects for such notable clients as Diagio, ConAgra, Sara Lee and Cadmus Communications and it has been awarded two additional projects that will commence in the third and fourth quarter of fiscal 2002. The Dedicated Facility Solutions segment of our business has added a significant new growth dynamic to our integrated logistic service business model and we have a number of high quality prospects for further growth. Donovan added, "We are making excellent progress in the development of Zero Zone as the best-in-class provider of integrated refrigerated display cases and control systems which power these units. Zero Zone had a strong quarter, recording 26 percent growth in revenues sequentially, and 9 percent growth in revenues for the second quarter, compared to the same period last year. Zero Zone is continuing to expand its customer base and as capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. by retailers increases from its depressed level, Zero Zone's performance in revenue and profits is expected to exhibit significant improvement. Our outlook is for continued growth and improvement in operating profitability at both TLC and Zero Zone driven by new dedicated facility and logistic management projects, high utilization of warehousing and transportation facilities and increased sales at Zero Zone in both refrigerated merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. cases and control systems." Second Quarter Financial Results: Revenues for the second quarter ended June 30, 2002 increased 33.5 percent to $73,324,000, due primarily to growth in integrated logistic services at TLC. Logistics services revenues increased 46.2 percent to a record $53,291,000, due to both significant new business and growth with existing customers in Dedicated Facility Solutions, Logistic Management Services and Transportation Operations. Product sales increased 8.4 percent quarter-to-quarter, to $20,033,000 aided by the addition 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. 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 ) totaled $5,114,000, an increase of 14.8 percent, compared to $4,454,000 reported for last year's second quarter. During the quarter, TLC completed the sale of a refrigerated warehouse facility to Sara Lee Corporation, realizing a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain on sale of $772,000 ($463,000 after tax). Additionally, TLC will staff and operate this facility as a dedicated distribution center for Sara Lee under a long-term management services agreement. First Six Months of Fiscal 2002: Revenues for the six months ended June 30, 2002 increased 32.8 percent to $137,964,000, compared to $103,858,000 reported for the same period last year, driven by strong growth in integrated logistic services at TLC. Consolidated operating earnings before capital charges (EBITDA) for the six-month period increased 12.1 percent to $9,827,000, compared to $8,770,000 reported for the same period last year. Net earnings for the six months totaled $2,077,000, or $0.39 per fully diluted share. Excluding the gain on sale of a refrigerated warehouse facility, net earnings were $1,614,000, or $0.31 per fully diluted share, reported for the comparable period a year ago. TLC's operating performance in this period reflected significant improvement, driven by the addition of new projects in Dedicated Facility Solutions and 50 percent growth in Logistic Management Services year-to-year. 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 ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. services for e-commerce applications. Operations are conducted through a network of 35 logistic centers with 36.3 million cubic feet of refrigerated capacity and over 3 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 flo·ral adj. Of, relating to, or suggestive of a flower: a fabric with a floral pattern. flo products. Zero Zone recently announced the acquisition of Zero Zone Refrigeration which manufactures refrigeration houses and racks to power and controls 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 Six Months Ended
June 30, June 30,
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2002 2001 2002 2001
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Revenues:
Logistics Services $ 53,291 $ 36,447 $ 98,732 $ 68,742
Product Sales 20,033 18,481 39,232 35,116
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73,324 54,928 137,964 103,858
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Costs and Expenses:
Logistics Expense 47,601 32,161 87,987 59,631
Cost of Product Sales 15,730 14,218 31,312 27,455
Depreciation and
Amortization 2,030 2,144 4,110 4,285
Selling, General &
Administrative Expenses 4,879 4,095 8,838 8,002
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70,240 52,618 132,247 99,373
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Earnings from Operations 3,084 2,310 5,717 4,485
Other Income (Expense):
Interest Expense, net (1,105) (1,288) (2,172) (2,736)
Gain of Sale of Assets 772 772
Other Income (Expense) (297) (20) (408) (19)
---------------------------------------------
(630) (1,308) (1,808) (2,755)
Earnings before Income
Taxes, and Minority
Interest 2,454 1,002 3,909 1,730
Income Tax Provision 970 439 1,548 764
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Net Earnings before
Minority Interest 1,484 563 2,361 966
Minority Interest 160 256 284 377
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Net Earnings $ 1,324 $ 307 $ 2,077 $ 589
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Basic Net Earnings Per
Share $ 0.26 $ 0.06 $ 0.41 $ 0.12
=============================================
Diluted Net Earnings Per
Share $ 0.25 $ 0.06 $ 0.39 $ 0.11
=============================================
Average Number of Shares
Outstanding 5,081,864 5,081,864 5,081,864 5,081,864
Diluted Number of Shares
Outstanding 5,277,286 5,223,411 5,261,774 5,227,245
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