Crescent Operating, Inc. Announces 1998 Earnings.FORT WORTH, Texas--(BUSINESS WIRE)--March 16, 1999--Crescent Operating, Inc. ("Crescent crescent, emblematic representation of the quarter moon. The crescent and star, ancient Byzantine symbols that became the emblems of Constantinople, were also assumed as the standard of the Ottoman Turks. Operating" or the "Company") (Nasdaq:COPI COPI Chevron Overseas Petroleum Inc. COPI Construction Output Price Index (UK) COPI Court-Ordered Protected Individual ) today announced its operating results for the quarter and year ended December December: see month. 31, 1998.
HIGHLIGHTS
-- Revenues for the year ended 1998 increased 204% to $493 million.
-- Net income for 1998 was $1.1 million compared to a net loss for
1997 of $22.1 million.
-- Earnings before interest, taxes, depreciation and amortization
("EBITDA") for 1998 was $24.2 million compared with EBITDA of
($13.4) million for the year ended 1997.
-- Crescent Machinery, a wholly owned subsidiary of Crescent
Operating, has grown to 16 locations in seven states with EBITDA
for the year ended December 31, 1998 of $14.8 million, up from
EBITDA of $3.3 million for the year ended December 31, 1997.
-- The Hospitality segment produced $7.9 million of EBITDA for the
year ended December 31, 1998, compared to $0.6 million of EBITDA
for the five months ended December 31, 1997 (the period since
inception of the Hospitality segment).
-- As of March 12, 1999, COPI Colorado, which is owned 50% by
Crescent Operating and 50% by Gerald W. Haddock, President and
Chief Executive Officer of Crescent Operating, John C. Goff,
Vice-Chairman of the Board of Crescent Operating and Harry H.
Frampton, III, has accumulated approximately 1.1 million shares
(9.5% of total outstanding shares) of Crescent Operating common
stock at an average price of $3.88.
FINANCIAL SUMMARY Net income for the year ended 1998 was $1.1 million, or $0.10 per share (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. ) compared with a net loss of $22.1 million or ($2.00) per share (diluted) for the year ended 1997. Revenues of $493 million for the year ended 1998 represented a 204% increase over 1997 revenues of $162 million. For the three months ended December 31, 1998, net income was $0.3 million, or $0.03 per share (diluted), on total revenues of $177 million, compared with a net loss of $14.1 million, or ($1.27) per share (diluted), on total revenues of $124 million, for the same period in 1997. SEGMENT HIGHLIGHTS Equipment Sales and Leasing Crescent Machinery Company ("CMC (Common Messaging Calls) A programming interface specified by the XAPIA as the standard messaging API for X.400 and other messaging systems. CMC is intended to provide a common API for applications that want to become mail enabled. 1. ") has experienced dramatic growth during 1998 and has continued its expansion during early 1999. For the year ended December 31, 1998, CMC had revenues of $85.4 million, net income of $2.0 million and 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 of $14.8 million, compared with revenues of $15.2 million, net income of $0.6 million and EBITDA of $3.3 million for the year ended December 31, 1997. For the three months ended December 31, 1998, revenues were $32.4 million, net income was $1.1 million and EBITDA was $6.1 million, compared with revenues of $5.6 million, net income of $0.1 million and EBITDA of $1.0 million for the same period in 1997. During 1998, CMC acquired four additional equipment companies. In January January: see month. 1999, CMC completed the acquisition of 4-K Equipment Company in Franklin Franklin, cities, United States Franklin. 1 City (1990 pop. 12,907), seat of Johnson co., S central Ind., inc. 1823. It is a farm trade center. Manufactures include auto parts, aluminum doors and windows, and copper panels. , Ind IND Investigational new drug Therapeutics A status assigned by the FDA to a drug before allowing its use in humans, exempting it from premarketing approval requirements so that experimental clinical trials may be conducted. See Phase 1.2, 3 studies, Sponsorship. ., and in March 1999, CMC completed the acquisition of Westco Tractor tractor, in agriculture, vehicle used to pull such equipment as plows, cultivators, and mowers; to power stationary devices such as saws and winches; and to push snowplows and earth-moving implements. & Equipment in Santa Rosa Santa Rosa, city, Argentina Santa Rosa, city (1991 pop. 80,629), capital of La Pampa prov., central Argentina. It is a modern city and road junction surrounded by a rich agricultural and cattle-raising area. , Calif. Jeffrey L. Stevens Stevens, family of U.S. inventors. John Stevens, 1749–1838, b. New York City, was graduated from King's College (now Columbia Univ.) in 1768. , Executive Vice President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. commented that, "We are excited about the consolidation of the equipment sales and leasing industry and the potential that exists for additional acquisitions at attractive multiples. The equipment sales and leasing business is a very good complement to our other real estate-related activities." Hospitality The Hospitality segment ended 1998 with revenues for the year of $229.5 million and net income of $4.1 million, compared with revenues of $79.5 million and net income of $0.1 million for the five months ended December 31, 1997 (since inception INCEPTION. The commencement; the beginning. In making a will, for example, the writing is its inception. 3 Co. 31 b; Plowd. 343. Vide Consummation; Progression. of the Hospitality segment). For the three months ended December 31, 1998, revenues were $59.9 million and net loss was $0.5 million, compared with revenues of $51.3 million and net loss of $43,000 for the same period in 1997. Land Development The Land Development segment ended 1998 with revenues for the year of $178 million, net income of $1.0 million and EBITDA of $3.4 million. For the three months ended December 31, 1998, revenues were $84.9 million, net income was $0.1 million and EBITDA was $1.3 million, compared with revenues of $66.9 million, net loss of $0.2 million and EBITDA of ($0.2) million for the same period in 1997. 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. Warehousing The Refrigerated Warehousing segment ended 1998 with net income for the year of $0.2 million and EBITDA of $2.5 million. For the three months ended December 31, 1998, net income was $0.2 million and EBITDA was $0.9 million, compared with net income of $1,000 and EBITDA of $0.3 million for the two months ended December 31, 1997 (the period since inception of the Refrigerated Warehousing segment). Healthcare The Healthcare segment ended 1998 with a net loss of $3.2 million and EBITDA of ($4.5) million, compared with a net loss of $11.8 million and EBITDA of ($17.1) million for the six months ended December 31, 1997 (the period since inception of the Healthcare segment). For the three months ended December 31, 1998, net loss and EBITDA were $0 as the Company's investment in Charter Behavioral Health Behavioral health was first used in the 1980's to name the combination of the fields mental health and substance abuse. As an example, an organization serving both mental health and substance abuse clients might refer to its practice as behavioral health or Systems, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control ("CBHS CBHS Christian Brothers High School (Memphis, TN) CBHS Chemical Biological Hardened Shelter ") was fully expensed in earlier periods, compared to a net loss of $6.9 million and EBITDA of ($10.1) million for the same period in 1997. Crescent Operating is a diversified management company diversified management company An investment company with a minimum of 75% of its assets as cash, government securities, securities of other investment companies, and other securities subject to a limitation of no more than 5% of the diversified management which through various subsidiaries and affiliates, owns, leases or operates a portfolio of assets consisting of six full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. hotels and two destination health and fitness resorts, a 50% interest in CBHS, an interest in refrigerated warehouse facilities, an interest in three real estate development operations, and an equipment sales and leasing business. Certain of the statements in this press release including, without limitation, statements regarding completion of referenced transactions constitute 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. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. Although Crescent Operating believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, Crescent Operating's actual results could differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from Crescent Operating's expectations include, among others, the ability of the Company to continue its acquisitions in the equipment sales and leasing sector, the availability of equity and debt financing Debt Financing When a firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. In return for lending the money, the individuals or institutions become creditors and receive a promise to repay , the possibility that Crescent Operating's outstanding debt (some of which requires so-called so-called adj. 1. Commonly called: "new buildings ... in so-called modern style" Graham Greene. 2. balloon payments The final installment of a loan to be paid in an amount that is disproportionately larger than the regular installment. When a loan is made, repayment of the principal, which is the amount of the loan, plus the interest that is owed on it, is divided into installments due at of principal) may be refinanced at higher interest rates or otherwise on terms less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to Crescent Operating and the ability of the Company's segments to continue to perform at or above current levels. For a more complete discussion of these and other risk factors, please see Crescent Operating's SEC reports, including its 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. , quarterly reports on Form 10-Q Form 10-Q See 10-Q. , reports on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. and the Company's Registration Statement on Form S-4. For further information, please contact Rick Knight knight, in ancient and medieval history, a noble who did military service as a mounted warrior. The Knight in Ancient History In ancient history, as in Athens and Rome, the knight was a noble of the second class who in military service had to , Chief Financial Officer, Crescent Operating at 817/339-2212. -0-
CRESCENT OPERATING, INC.
SEGMENT FINANCIAL INFORMATION
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998
(Amounts in thousands, except share data)
Equipment
Land Sales
Hospitality Development and Leasing
----------- ----------- -----------
Revenues $ 229,491 $ 178,392 $ 85,365
Operating expenses 222,832 178,372 79,011
----------- ----------- -----------
Income (loss) from operations 6,659 20 6,354
----------- ----------- -----------
Investment income (loss) 130 25,858 --
----------- ----------- -----------
Other (income) expense
Interest expense 402 7,700 3,098
Interest income (348) (3,365) (156)
Other (75) 425 (166)
----------- ----------- -----------
Total other (income) expense (21) 4,760 2,776
Income (loss) before income
taxes and minority interest 6,810 21,118 3,578
Income tax provision (benefit) 2,724 7,465 1,539
----------- ----------- -----------
Income (loss) before minority
interests 4,086 13,653 2,039
Minority interests 3 (12,664) --
----------- ----------- -----------
Net income (loss) $ 4,089 $ 989 $ 2,039
----------- ----------- -----------
----------- ----------- -----------
Net income (loss) per share,
basic $ 0.36 $ 0.09 $ 0.18
----------- ----------- -----------
----------- ----------- -----------
Net income (loss) per share,
diluted $ 0.35 $ 0.08 $ 0.17
----------- ----------- -----------
----------- ----------- -----------
EBITDA Calculation: (1)
Net income (loss) $ 4,089 $ 989 $ 2,039
Interest expense, net 229 224 2,942
Income tax provision
(benefit) 2,724 807 1,539
Depreciation and
amortization 890 1,332 8,290
----------- ----------- -----------
EBITDA $ 7,932 $ 3,352 $ 14,810
----------- ----------- -----------
----------- ----------- -----------
Refrigerated
Healthcare Warehousing Other Total
---------- ------------ ------ ----------
Revenues $ -- $ -- $ -- $ 493,248
Operating expenses -- 88 3,059 483,362
---------- ------------ ------ ----------
Income (loss) from operations -- (88) (3,059) 9,886
---------- ------------ ------ ----------
Investment income (loss) (5,390) 3,961 3,125 27,684
---------- ------------ ------ ----------
Other (income) expense
Interest expense -- -- 7,062 18,262
Interest income -- -- (7) (3,876)
Other -- -- (2) 182
---------- ------------ ------ ----------
Total other (income) expense -- -- 7,053 14,568
---------- ------------ ------ ----------
Income (loss) before income
taxes and minority interest (5,390) 3,873 (6,987) 23,002
Income tax provision (benefit) (2,156) -- (4,051) 5,521
---------- ------------ ------ ----------
Income (loss) before minority
interests (3,234) 3,873 (2,936) 17,481
Minority interests -- (3,679) -- (16,340)
---------- ------------ ------ ----------
Net income (loss) $(3,234) $ 194 $(2,936) $ 1,141
---------- ------------ ------ ----------
---------- ------------ ------ ----------
Net income (loss) per share,
basic $ (0.29) $ 0.02 $ (0.26) $ 0.10
---------- ------------ ------ ----------
---------- ------------ ------ ----------
Net income (loss) per share,
diluted $ (0.27) $ 0.02 $ (0.25) $ 0.10
---------- ------------ ------ ----------
---------- ------------ ------ ----------
EBITDA Calculation: (1)
Net income (loss) $(3,234) $ 194 $(2,936) $ 1,141
Interest expense, net 431 904 7,055 11,785
Income tax provision
(benefit) (2,156) 39 (4,051) (1,098)
Depreciation and
amortization 476 1,386 6 12,380
---------- ------------ ------ ----------
EBITDA $(4,483) $ 2,523 $ 74 $ 24,208
---------- ------------ ------ ----------
---------- ------------ ------ ----------
(1) EBITDA represents earnings before interest, income taxes,
depreciation and amortization. Amounts are calculated based on
the Company's ownership percentage of the EBITDA components.
Management believes that EBITDA can be a meaningful measure of
the Company's operating performance, cash generation and ability
to service debt. However, EBITDA should not be considered as an
alternative to either: (i) net earnings (determined in accordance
with GAAP); (ii) operating cash flow (determined in accordance
with GAAP); or (iii) liquidity. There can be no assurance that
the Company's calculation of EBITDA is comparable to similarly
titled items reported by other companies.
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