Echelon International Corporation Reports Fourth Quarter and Year End Results.ST. PETERSBURG, Fla.--(BUSINESS WIRE)--MARCH 10, 1998--ECHELON INTERNATIONAL CORPORATION (NYSE NYSE See: New York Stock Exchange : EIN EIN Employer Identification Number EIN Employee Identification Number EIN European Ideas Network (think tank) EIN Environmental Information Network EIN Equivalent Input Noise EIN Elderhostel Institute Network ), today announced financial results for its fourth quarter and year ended December 31, 1997. Net income for the quarter was $1.0 million, or $.15 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of , compared to a net loss of $(5.8) million, or $(.89) diluted earnings per share, for the same year ago period. Net income for the year was $7.6 million, or $1.12 diluted earnings per share, versus a net loss of $(27.5) million, or $(4.23) diluted earnings per share, for the year ended December 31, 1996. The net income for 1997 includes an after-tax extraordinary loss of $(1.9) million, or $(.28) diluted earnings per share, related to the early pay-off of debt and for 1996 includes an after-tax extraordinary gain of $1.8 million, or $.28 diluted earnings per share, related to extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt. Revenues for the quarter were $9.2 million compared to $14.7 million reported in the same quarter ended December 31, 1996. Revenues for the year ended December 31, 1997 were $44.2 million compared to $63.3 million for the comparable year ago period. The decrease in revenues from the previous year was primarily due to a decrease of $21 million in the sale of development properties. The decrease in the sale of development properties resulted from a strategic decision to remove most of the remaining land in the Carillon carillon, in music: see bell. carillon Musical instrument consisting of at least 23 cast bronze bells tuned in chromatic order. Usually located in a tower, it is played from a keyboard. Most carillons encompass three to four octaves. office park from the market and to develop the property for the Company's real estate portfolio. Interest income from lending and leasing operations decreased by $9.1 million from year-end 1996, and $2.8 million from fourth quarter 1996. The decrease in interest income resulted from sales and payoffs of loans receivable as the Company continues to execute its strategy to liquidate To pay and settle the amount of a debt; to convert assets to cash; to aggregate the assets of an insolvent enterprise and calculate its liabilities in order to settle with the debtors and the creditors and apportion the remaining assets, if any, among the stockholders or owners of the non-strategic assets, re-directing the capital to real estate. Investment income increased $3.2 million from year-end 1996 as a result of the Company's investments in marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has in 1997. 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. for the fourth quarter and year ended December 31, 1997 were $6.3 million and $28.5 million respectively, representing a decrease of $14.5 million and $75.4 million compared to fourth quarter and year-end 1996. The decrease in the fourth quarter is primarily due to a decrease in the cost of development properties sold of $3.2 million with the remaining decrease primarily related to non-recurring expenses incurred for the spin-off The situation that arises when a parent corporation organizes a subsidiary corporation, to which it transfers a portion of its assets in exchange for all of the subsidiary's capital stock, which is subsequently transferred to the parent corporation's shareholders. from the former parent in December 1996. The decrease for the year is primarily due to a decrease in the provision for (recovery of) lease, loan and real estate losses of $30.7 million, a decrease in the cost of development properties sold of $20.9 million, and non-recurring spin related expenses. As of December 31, 1997, the Company's long term debt/equity ratio Debt/Equity Ratio A measure of a company's financial leverage calculated by dividing long-term debt by shareholders equity. It indicates what proportion of equity and debt the company is using to finance its assets. was 27/73, with a cash position including marketable securities of $49.8 million. Highlights for the quarter include: - completion of a seven-year, fixed rate $45 million refinancing Refinancing An extension and/or increase in amount of existing debt. used to reduce the Salomon Brothers
Salomon Brothers was a Wall Street investment bank. Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Corp. loan. The refinancing saves over $800,000 annually in carrying costs Carrying costs Costs that increase with increases in the level of investment in current assets. based on the then current LIBOR LIBOR See: London Interbank Offered Rate LIBOR See London interbank offered rate (LIBOR). rate and reduces the Salomon loan balance to $13 million from the original $105 million. - securing a single-tenant ten-year lease for Bayboro Station, an existing asset in the Echelon commercial portfolio, for approximately 81,000 rentable square feet. - securing a single-tenant ten-year lease for South Core Commercial, property acquired late in the fourth quarter, for approximately 135,000 rentable square feet. - the strategic acquisition of certain assets of Mission Development Company, a Dallas-based multifamily housing developer. - the completion of an odd-lot buy-back program which eliminated approximately 15,000 stockholder accounts. Larry J. Newsome, Senior Vice President and CFO See Chief Financial Officer. , stated, "We are very pleased with the accomplishments of the fourth quarter and the year overall. Our financial leverage has been dramatically improved through the sale of non-strategic assets and re-financing of long term debt." Highlights for the year include: - the sale of three promissory notes promissory note, unconditional written promise to pay a certain sum of money at a definite time to bearer or to a specified person on his order. Promissory notes are generally used as evidence of debt. totaling $35 million secured by assisted care living facilities. - the sale and settlement of the Company's interest in an oil rig lease for $1.4 million. - the sale of an investment in an unconsolidated affiliate and settlement of two aircraft loans totaling $24.3 million. - start of construction of Echelon at Bay Isle Key, a 369 unit multifamily community in the Gateway area of Tampa Bay Tampa Bay, inlet of the Gulf of Mexico, 25 mi (40 km) long and 7 to 12 mi (11.3–19 km) wide, W Fla., separated from the Gulf by numerous small islands; it receives the Hillsborough River. St. . - initiation of site work for Echelon at The Reserve, a 314 unit multifamily community in Carillon. Carillon is a 432 acre mixed-use office park in the Gateway area of Tampa Bay. - complete repayment of the former parent debt which was initially $36 million. Darryl A. LeClair, Chairman, 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. , stated, "Echelon hit the ground running in 1997. We have simultaneously liquidated DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v. non-strategic assets, restructured our balance sheet and implemented our real estate development strategies full-force -- developing our existing land portfolio and assembling our pipeline." Looking into 1998, the Company: - will complete construction and leasing at Echelon at Bay Isle Key. - will start leasing at Echelon at The Reserve. - will continue to expand the multifamily pipeline. The Company is currently under contract or in negotiations for the acquisition of multifamily sites in Florida, Texas, Colorado, Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. and Oklahoma. - will pursue two, possibly three, commercial office projects in Carillon. - will evaluate projects designed to add amenities to Carillon such as a hotel, health-club and an entertainment/retail complex. - will continue to re-structure its aircraft portfolio as market conditions and economics warrant. - will continue to liquidate non-strategic assets as evidenced by the January 1998 sale, through a joint venture partnership 50% owned by Echelon, of two CFM-56B jet aircraft engines resulting in a pre-tax gain of approximately $1.6 million. Echelon International Corporation is a real estate company involved in the development, ownership and management of commercial and multifamily residential real estate. The Company also owns and manages a portfolio of aircraft and real estate loans and aircraft leases. Echelon plans to gradually withdraw from the aircraft and real estate lending business and focus on its core real estate operations. Cautionary Statement Regarding 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. : Certain statements contained herein regarding matters that are not historical facts are forward-looking statements, including statements concerning Echelon's expected sources and uses of funds and capital expenditures and its business strategy including its plans to gradually withdraw from the aircraft and real estate lending business and focus on its core real estate operations. Because such statements involve risks and uncertainties, actual strategies and the timing and expected results thereof may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause such differences include, but are not limited to, those set forth in materials filed by Echelon with the Securities and Exchange Commission.
ECHELON INTERNATIONAL CORPORATION
Selected Financial Information
(Unaudited)
(in millions, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
1997 1996 1997 1996
Sales and Revenues $ 9.2 $ 14.7 $ 44.2 $ 63.3
Net income (loss) before
extraordinary item 2.0 (5.5) 9.5 (29.3)
Extraordinary item (1.0) (0.3) (1.9) 1.8
Net income (loss) 1.0 (5.8) 7.6 (27.5)
Diluted earnings per share:
Net income (loss) before
extraordinary item 0.30 (0.85) 1.40 (4.51)
Extraordinary item (0.15) (0.04) (0.28) 0.28
Net income (loss) 0.15 (0.89) 1.12 (4.23)
Dilutive Equivalent Common
Shares Outstanding 6.8 6.5 6.8 6.5
SELECTED CONSOLIDATED BALANCE SHEET INFORMATION
(Unaudited)
(in millions)
December 31,
1997 1996
Cash and marketable securities $ 49.8 $ 63.3
Total current assets 93.6 144.1
Long term portion of leases,
loans & property 315.5 320.7
Total assets 460.5 531.0
Total current liabilities 29.1 92.2
Long-term debt 64.9 73.8
Deferred income taxes 154.2 163.3
Total liabilities 251.4 329.6
Stockholders' equity 209.1 201.4
CONTACT: Echelon International Corporation Susan Glatthorn Johnson, 813-803-8250 sjohnson@echelonintl.com or Lippert/Heilshorn & Assoc., Inc. John W. Heilshorn, Jr., 212-838-3777 john@lhai.com |
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