Combined Logistics International Ltd.: Report on Fourth Quarter 1997 and First Quarter 1998 Results.NASSAU, BAHAMAS--(BUSINESS WIRE)--June 5, 1998-- (CANADIAN DEALING NETWORK Canadian Dealing Network (CDN) The organized OTC market of Canada. Formerly known as the Canadian Over-the-Counter Automated Trading System (COATS), the CDN became a subsidiary of the Toronto Stock Exchange in 1991. :CLOG.) Results of Operations Combined Logistics acts as an agent in freight forwarding, utilizing its international network in 25 countries to organize freight forwarding services by air, sea, and truck, or a combination of these methods, throughout the world. Integral to these services, the company also provides customs brokerage and warehousing, consolidation and distribution services. The principal markets served by Combined Logistics include the Far East, Europe, the United Kingdom and North and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . As with other agents in the freight forwarding and logistics business, the company believes that net revenue is a better measure than total revenue of benefits derived from the provision of the company's principal services for its results of operations. This is due to the fact that Combined Logistics acts either as an indirect carrier or an agent in the areas of delivering freight locally or internationally via ocean, airfreight air·freight n. 1. A system of transporting freight by air. 2. The amount charged for transporting freight by air. air forwarding or by surface transportation or when providing customs brokerage services. The company anticipates that during 1998, its operating results will show improvement as a result of the settlement of the Elco litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with which the company was involved during the past two years. However, the company's net revenue and overall profitability will continue to be affected by price competition in its traditional lines of business. Consistent with the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the freight forwarding business, performance during the first quarter of 1998 was down. There is currently, however, increasing demand for international freight forwarding and logistics services. The performance during the first quarter was influenced by our restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). in the USA, the effects of the Asian crisis, the decline in the UK export market due to the strong pound and the resultant This article is about the resultant of polynomials. For the result of adding two or more vectors, see Parallelogram rule. For the technique in organ building, see Resultant (organ). In mathematics, the resultant of two monic polynomials pressure being placed on margins due to increased competition within the freight forwarder An individual who, as a regular business, assembles and combines small shipments into one lot and takes the responsibility for the transportation of such property from the place of receipt to the place of destination. industry. Fiscal Year Ended December 31, 1997 Compared to Fiscal Year Ended December 31, 1996 During 1997, Combined Logistics reclassified certain amounts in the 1996 financial statements to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the current year's presentation. This reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. primarily involved the elimination of revenue that was duplicated within the group where gateway services were provided on behalf of other subsidiaries. In 1996, this reclassification resulted in the elimination of overstated o·ver·state tr.v. o·ver·stat·ed, o·ver·stat·ing, o·ver·states To state in exaggerated terms. See Synonyms at exaggerate. o revenues totaling approximately $25 million. Revenue and Net Revenue Revenue decreased by 0.6 percent to $194.125 million from $195.313 million in 1996. While the company recorded significant growth in its airfreight forwarding services, this was more than offset by decreases in ocean freight forwarding, warehouse and distribution and sea/air forwarding services. Net revenue showed similar results, decreasing by 6.4 percent to $40.043 million in 1997 from $42.780 million in 1996. Again, the significant growth in airfreight forwarding services net revenue was more than offset by decreases in ocean freight forwarding, warehouse and distribution and sea/air forwarding services net revenue. The company's net revenue results for 1997 were adversely affected by a $2.5 million adjustment to cost of sales which was required to correct differences in inter-company balances. Stricter reporting procedures and requirements already introduced throughout the group are expected to reduce the need for this type of write off of inter-company accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying balances in the future. Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. Combined Logistics continued its efforts to control general and administrative expenses during 1997. These efforts resulted in the reduction of these expenses by 8.4 percent to $40.822 million in 1997 from $44.572 million in 1996. Included in these expenses were legal expenses totaling approximately $800,000, relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the litigation referred to under the Other Income (Expenses) section below. It is not expected that these high levels of legal expenses will continue in 1998. The major portion of the decreased general and administrative expenses resulted from lower salary expenses primarily as a result of a decrease in the number of employees. Other Income (Expenses) Other income and expenses was $2.375 million in 1997 compared to $6.623 million in 1996. Included in these amounts are costs related to the settlement of litigation and the impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill write-down amounting to $1.116 million in 1997 and $6.623 million in 1996, respectively. The company recorded a write-down of goodwill in 1996 eliminating all of its remaining goodwill. It evaluated the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of goodwill, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the criteria set forth in Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" and determined it to be impaired. In 1998, Combined Logistics also entered into agreements to settle all remaining litigation that had arisen following the acquisition of the Elco Freight group of companies in 1995 and the subsequent termination of a number of directors with that company. The terms of these agreements resulted in Combined Logistics incurring additional costs totaling $1.116 million to settle the matters. The company recorded the costs related to these matters in the fourth quarter of 1997, along with the $2.5 million cost of sales adjustment referred to above, resulting in a loss for the fourth quarter of $4.646 million. As the above costs and related legal expenses were non-recurring, Combined Logistics anticipates improved operating results during 1998. Income (Loss) from Operations Due to the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. , additional costs during 1997 and the resulting need to incur additional legal expenses, the company recorded a loss from operations of $0.779 million in 1997 compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in 1996 of $1.792 million. This result would have been significantly better were it not for the $2.5 million write down of inter-company receivables. Loss before Taxes Combined Logistics significantly reduced its loss before taxes during 1997 to $3.154 million from $8.415 million in 1996. As indicated above, these results were adversely affected by the costs of settling litigation, the $2.5 million adjustment to cost of sales and the write-down of impaired goodwill in 1996 by the company. Income Taxes Even though no income taxes are imposed on the company and its activities by its country of incorporation, some of its subsidiaries are liable for income taxes in the countries in which they operate. Taxes on the income of these subsidiaries for 1997 were $0.472 million compared to $0.471 million in 1996. At December 31, 1997, the company's net operating loss carry-forwards in the USA were approximately $3.879 million. These carry-forwards begin to expire in the year 2010. Liquidity and Capital Resources Cash and term deposits decreased to $5.217 million in 1997 from $7.045 million in 1996. The decrease was mainly from Combined Logistics' operating and investing activities in excess of net cash derived from the company's financing activities. The company's financing activities included $3.019 million used to reduce the company's debt and bank overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers balances and the company also issued shares during the year with proceeds totaling $3.834 million. First Quarter Ended March 31, 1998 Compared to First Quarter Ended March 31, 1997 In April, as a result of the retirement of Chairman 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. , Paul Newcombe who rendered 25 years of service to the company, Ray Simpson Ray Simpson (born January 15, 1954) has been the lead singer and "Cop" of noted musical group the Village People since 1980. His most memorable recordings with the group are from the days of the Village People film, Can't Stop the Music was appointed CEO and Bruno Roberts was appointed CFO See Chief Financial Officer. of the Combined Logistics' group of companies. Ray Simpson was formerly, the company's Chief Financial Officer and has been with Combined Logistics since 1981. Bruno Roberts, a Certified Public Accountant Certified Public Accountant (CPA) An accountant who has met certain standards, including experience, age, and licensing, and passed exams in a particular state. , was employed for many years with Ernst & Young in the USA and The Bahamas prior to joining Combined Logistics in November 1997. As outlined in the company's 1997 Annual Report, Mr. Simpson's three main objectives for the remainder of the 1998 include: improving the results of the USA operations, advancing technological developments within the company and a commitment to human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. through training and participation in the company's growth. The Company's net revenue decreased by $2.4 million to $8.5 million (10.9) during the first quarter. Net revenues were also lower than budget by $1.4 million in the first quarter. The Asian crisis directly influenced the weaker performance for the company's air and sea freight business. The United Kingdom export market is also down, due to the strong pound and this has resulted in smaller margins on business derived from this market. Combined Logistics' offices operating in and around this marketplace had to respond to the challenge. Initially, these offices made price adjustments. Meanwhile, the company is in the process of introducing a number of value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. to enhance its ability to foster customer loyalty. During the first quarter, the strategic restructuring of the company's USA operations continued in order to improve and strengthen those operations. These efforts are significantly reducing the cost of doing business in the USA marketplace. In addition, stronger linkages are also being established within the company's global network in order to bolster This article is about the pillow called a bolster. For other meanings of the word "bolster", see bolster (disambiguation). A bolster (etymology: Middle English, derived from Old English, and before that the Germanic word bulgstraz its USA operations and expand business opportunities in all markets in which it operates. The Company's operating loss was $1.3 million ($0.4 million). This loss was $0.7 million higher than the budgeted $0.6 million operating loss for the first quarter. The net loss for the period was $1.2 million (-$0.1 million). This loss was $0.3 million higher than the budgeted $0.9 million net loss for the first quarter. Operating expenses for the period for the quarter decreased by $0.5 million to $9.6 million ($10.1 million). These operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. savings resulted mainly from salary related reductions throughout the Company. Outlook for the full year The newly expanded 100,000 sq./ft Miami warehouse and logistics centre continues to position the USA operations to be more competitive as a service hub to better meet the needs of customers. The company also capitalized on niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. in Latin America and will continue to do so in 1998. One of the company's significant strengths is the fact that it has an established network of offices around the world -- Combined Logistics operates over 70 offices in 25 countries and has more than 100 independent agents on six continents Six Continents is a large retail PLC in UK which split into Six Continents Retail known as Mitchells and Butlers plc. The hotels and soft drinks business of Six Continents PLC is now known as InterContinental Hotels Group PLC. in its system. The Latin American market is expected to continue significant growth through privatization privatization: see nationalization. privatization Transfer of government services or assets to the private sector. State-owned assets may be sold to private owners, or statutory restrictions on competition between privately and publicly owned and reform. There is also increasing levels of trade among Latin American countries List of American countries Nations:
In view of the volume and price trends seen up to this point and the company's optimism regarding new business opportunities, the forecast regarding the turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. of the company's results remain achievable. Combined Logistics' fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. is December 31st and the appointed auditors are Ernst & Young. The Group's corporate headquarters is located in Nassau, Bahamas For other uses of "Nassau", see Nassau (disambiguation). Nassau is the capital city and commercial center of the Commonwealth of the Bahamas. The city has a population of 210,832 (2000 census), nearly 70 percent of the entire population of the Bahamas (303,611). . - Raymond Simpson, Chairman & CEO -0-
Combined Logistics International Ltd.
Summary of the Consolidated Income Statement (Unaudited)
(In US millions)
Quarterly Figures
1997 Q1/98
12 months 3 months
Total revenue 194.1 42.5
Net revenue 40.0 8.5
Total operating expenses 39.7 9.6
Operating income 0.3 -1.1
Depreciation -1.1 -0.3
Financial items -2.0 0.3
Minority interest -0.3 0.0
Income tax -0.5 -0.1
------------------------------
Net income -3.6 -1.2
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Summary of the Consolidated Balance Sheet (Unaudited)
(In US millions)
Assets March 31st, 1998 December 31st, 1997
Other current assets 44.0 47.0
Cash 4.0 4.9
Fixed assets 7.2 7.4
------------------------------
Total assets 55.20 59.3
------------------------------
Liabilities and Shareholders' Equity
Current liabilities 33.7 36.3
Long term liabilities
and minority interests 2.7 3.0
Shareholders' equity 18.8 20.0
------------------------------
Total liabilities and equity 55.20 59.3
------------------------------
Summary of Consolidated Statement of Cash Flows (Unaudited),
Twelve Months Ended December 31, 1997
and Three Months Ended March 31, 1998
(In US Millions)
Operating Activities 31/3/98 31/12/97
Income for the period (1.2) ($3.6)
Adjustment to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 0.3 1.1
Changes in operating
assets and liabilities 0.4 2.1
------------------------
(0.5) (0.4)
------------------------
Investing Activities
Acquisition of property
and equipment (0.2) (0.5)
Investment in advances
to other companies - 0.5
------------------------
Translation adjustment 0.1 (2.3)
------------------------
(0.1) (2.3)
------------------------
Financing Activities
Long term liabilities
and minority
interests (0.3) (2.9)
Issue of shares - 3.8
------------------------
(0.3) 0.9
------------------------
Decrease in cash and
cash equivalents (0.9) (1.8)
Cash and cash equivalents
at beginning of period 4.9 6.7
------------------------
Cash and cash equivalent
at end of period $4.0 $ 4.9
------------------------
CONTACT: Combined Logistics International Ltd. Raymond Simpson, 242/ 328-2444 242/ 328-2445 (FAX) or Combined Logistics International Ltd. Bruno Roberts, 242/ 328-2444 242/ 328-2445 (FAX) E-mail: shareholder@nas.comlog.net |
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