EXHIBIT 99.1
CAI International, Inc. Reports Results for the Third Quarter of 2007
SAN FRANCISCO, Nov 1, 2007 (PrimeNewswire via COMTEX News Network) — CAI International, Inc. (CAI) (NYSE:CAP) reported that net income in the third quarter of 2007 increased $0.8 million, or 18.6%, to $5.4 million, compared with net income of $4.6 million in the third quarter of 2006. CAI’s basic earnings per share in the third quarter of 2007 increased 33.3% to $0.32 with 17.1 million average shares outstanding, compared with basic earnings per share of $0.24 with 21.2 million average shares outstanding in the third quarter of 2006. Fully diluted earnings per share in the third quarter of 2007 increased 52.4% to $0.32 with 17.1 million average shares outstanding, compared to fully diluted earnings per share of $0.21 with 21.7 million average shares outstanding in the third quarter of 2006.
In the third quarter of 2007, CAI’s revenue was $17.5 million, an increase of $2.2 million, or 14.7%, compared to the third quarter of 2006. Container rental revenue increased $1.5 million, or 17.8%, to $10.1 million from $8.6 million in the third quarter of 2006. Management fee revenue was $3.1 million, unchanged from the management fee revenue reported in the third quarter of 2006. Gain on sale of container portfolios increased $0.7 million, or 21.9%, to $4.0 million from $3.3 million in the third quarter of 2006. Finance lease income in the third quarter of 2007 was $0.3 million, unchanged from finance lease income reported in the third quarter of 2006.
CAI’s operating income in the third quarter of 2007 was $10.6 million, an increase of $2.2 million, or 25.7%, from $8.4 million during the third quarter of 2006. Operating income for the third quarter of 2007, compared to the third quarter of 2006, was impacted by a $0.8 million decline in depreciation expense during the quarter and a $0.9 million increase in the gain on disposition of used equipment. During the third quarter of 2007, marketing, general, and administrative expenses increased by $1.6 million, or 55.5%, to $4.5 million as a result of an increase in employee expenses relating to an increase in headcount and incentive compensation.
Comments from the CEO
Masaaki (John) Nishibori, Chief Executive Officer of CAI, commented, “We are very pleased with our results this quarter. In spite of a very competitive environment, we grew our quarter over quarter revenue and net income by 14.7% and 18.6%, respectively. Our quarterly results benefited from new leasing activity, strong secondary prices for used containers and higher utilization. By comparison, the average utilization of our operating fleet for the third quarter of 2007, net of units held at the manufacturer pending initial lease out, was 94.9%, compared to 91.9% during the third quarter of 2006. Our management business also continued to perform well. However, our management fee revenue was flat due largely to lower commission income on disposition of used containers in our managed fleet.”
“The economic slowdown in the United States has had some effect on demand for containers, but the macro environment overall has been favorable. Container traffic from Asia to the United States has been growing at a lower than expected rate this year. However, container traffic from Asia to Europe has been very strong and is expected to remain so. Intra-Asia traffic has also been increasing at a brisk pace.”
CAI’s conference call to discuss financial results for the third quarter of 2007 will be held on Thursday, November 1, 2007 at 5:30 p.m. EDT. The dial-in number for the teleconference is 1-888-230-5492; outside U.S., call 1-913-981-5534. The call may be accessed live over the internet (listen only) under the “Investors” tab of CAI’s website, www.caiintl.com, by selecting “Q3 2007 Earnings Conference Call.” A webcast replay will be available for 90 days on the Investors section of our website.
About CAI International, Inc.
CAI is one of the world’s leading managers and lessors of intermodal freight containers. As of September 30, 2007, the company operated a worldwide fleet of 724,000 TEU of containers through 10 offices located in 8 countries.
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This press release contains forward-looking statements regarding future events and the future performance of CAI International, Inc. These statements are forward looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 and involve risks and uncertainties that could cause actual results to differ materially from current expectations including, but not limited to, economic conditions, customer demand, increased competition and others. CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its registration statement on Form S-1 and its Form 10-Q for the second quarter of 2007. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.
CAI International, Inc.
Consolidated Balance Sheets
(In thousands, except share information)
(UNAUDITED)
September 30, 2007 | December 31, 2006 | ||||||
ASSETS | |||||||
Cash | $ | 13,051 | $ | 20,359 | |||
Accounts receivable (owned fleet), net of allowance for doubtful accounts of $900 and $1,045 at September 30, 2007 and December 31, 2006, respectively | 11,995 | 7,731 | |||||
Accounts receivable (managed fleet) | 24,296 | 24,061 | |||||
Related party receivables | — | 128 | |||||
Current portion of direct finance leases | 3,384 | 2,248 | |||||
Deposits, prepayments and other assets | 4,680 | 4,077 | |||||
Deferred tax assets | 963 | 915 | |||||
Total current assets | 58,369 | 59,519 | |||||
Container rental equipment, net of accumulated depreciation of $87,628 and $93,633 at September 30, 2007 and December 31, 2006, respectively | 223,793 | 161,353 | |||||
Net investment in direct finance leases | 3,022 | 4,329 | |||||
Furniture, fixtures and equipment, net of accumulated depreciation of $395 and $290 at September 30, 2007 and December 31, 2006 , respectively | 445 | 459 | |||||
Intangible assets, net of accumulated amortization of $1,235 and $307 at September 30, 2007 and December 31, 2006, respectively | 6,286 | 7,093 | |||||
Goodwill | 50,247 | 50,247 | |||||
Total assets | $ | 342,162 | $ | 283,000 | |||
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable | $ | 2,958 | $ | 3,585 | |||
Accrued expenses and other current liabilities | 3,723 | 15,276 | |||||
Due to container investors | 21,215 | 21,650 | |||||
Unearned revenue | 731 | 740 | |||||
Current portion of long-term debt | — | 5,000 | |||||
Current portion of capital lease obligation | 120 | 525 | |||||
Rental equipment payable | 36,708 | 30,788 | |||||
Total current liabilities | 65,455 | 77,564 | |||||
Revolving credit facility | 127,500 | 97,000 | |||||
Term loan | — | 13,750 | |||||
Subordinated convertible note payable | — | 37,500 | |||||
Deferred income tax liability | 24,376 | 24,500 | |||||
Capital lease obligation | — | 31 | |||||
Total liabilities | 217,331 | 250,345 | |||||
Cumulative redeemable convertible preferred stock: | |||||||
Series A 10.5% cumulative redeemable convertible preferred stock, no par value. Aggregate liquidation value of zero at September 30, 2007 and $1,531 at December 31, 2006. Authorized 1,113,840 shares; issued and outstanding, zero at September 30, 2007 and 724,920 shares at December 31, 2006 | — | 6,072 | |||||
Note receivable on preferred stock | — | (1,172 | ) | ||||
Total cumulative redeemable convertible preferred stock | — | 4,900 | |||||
Stockholders’ equity: | |||||||
Common stock, no par value; authorized 84,000,000 shares; issued and outstanding, zero at September 30, 2007, 10,584,000 shares at December 31, 2006 | — | 1,260 | |||||
Common stock, par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding, 17,144,977 shares at September 30, 2007, zero at December 31, 2006 | 2 | — | |||||
Additional paid-in capital | 90,691 | — | |||||
Accumulated other comprehensive income | 191 | 95 | |||||
Retained earnings | 33,947 | 26,400 | |||||
Total stockholders’ equity | 124,831 | 27,755 | |||||
Total liabilities and stockholders’ equity | $ | 342,162 | $ | 283,000 | |||
CAI International, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(UNAUDITED)
Successor | Predecessor | Successor | Predecessor | |||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Revenue: | ||||||||||||||||
Container rental revenue | $ | 10,148 | $ | 8,617 | $ | 26,308 | $ | 24,228 | ||||||||
Management fee revenue | 3,093 | 3,060 | 9,880 | 8,530 | ||||||||||||
Gain on sale of container portfolios | 3,955 | 3,245 | 8,946 | 8,365 | ||||||||||||
Finance lease income | 259 | 300 | 868 | 927 | ||||||||||||
Total revenue | 17,455 | 15,222 | 46,002 | 42,050 | ||||||||||||
Operating expenses: | ||||||||||||||||
Depreciation of container rental equipment | 2,315 | 3,158 | 5,766 | 9,653 | ||||||||||||
Amortization of intangible assets | 311 | — | 928 | — | ||||||||||||
Impairment of container rental equipment | 66 | 29 | 290 | 270 | ||||||||||||
Gain on disposition of used container equipment | (1,277 | ) | (419 | ) | (3,325 | ) | (804 | ) | ||||||||
Gain on settlement of lease obligation | — | — | (694 | ) | — | |||||||||||
Equipment rental expense | 77 | 395 | 895 | 1,187 | ||||||||||||
Storage, handling and other expenses | 897 | 756 | 2,287 | 2,411 | ||||||||||||
Marketing, general and administrative expense | 4,460 | 2,868 | 11,709 | 8,967 | ||||||||||||
Total operating expenses | 6,849 | 6,787 | 17,856 | 21,684 | ||||||||||||
Operating income | 10,606 | 8,435 | 28,146 | 20,366 | ||||||||||||
Interest expense | 2,095 | 1,325 | 8,022 | 4,183 | ||||||||||||
Gain on extinguishment of debt | — | — | (681 | ) | — | |||||||||||
Interest income | (6 | ) | (18 | ) | (26 | ) | (37 | ) | ||||||||
Net interest expense | 2,089 | 1,307 | 7,315 | 4,146 | ||||||||||||
Income before income taxes | 8,517 | 7,128 | 20,831 | 16,220 | ||||||||||||
Income tax expense | 3,116 | 2,574 | 7,707 | 5,856 | ||||||||||||
Net income | 5,401 | 4,554 | 13,124 | 10,364 | ||||||||||||
(Accretion)/decretion of preferred stock | — | 488 | (5,577 | ) | 1,464 | |||||||||||
Net income available to common shareholders | $ | 5,401 | $ | 5,042 | $ | 7,547 | $ | 11,828 | ||||||||
Net income per share: | ||||||||||||||||
Basic | $ | 0.32 | $ | 0.24 | $ | 0.54 | 0.56 | |||||||||
Diluted | $ | 0.32 | $ | 0.21 | $ | 0.49 | 0.48 | |||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 17,109 | 21,168 | 13,906 | 21,168 | ||||||||||||
Diluted | 17,110 | 21,735 | 16,535 | 21,735 |
As of September 30, 2007 | As of September 30, 2006 | |||||
(unaudited) | ||||||
Managed fleet in TEUs | 503,112 | 472,681 | ||||
Owned fleet in TEUs | 220,677 | 172,571 | ||||
Total | 723,789 | 645,252 | ||||
Percentage of on-lease fleet on long-term leases | 70.6 | % | 63.8 | % | ||
Percentage of on-lease fleet on short-term leases | 27.8 | 34.3 | ||||
Percentage of on-lease fleet on finance leases | 1.6 | 1.9 | ||||
Total | 100.0 | % | 100.0 | % | ||
Three Months Ended September 30, 2007 | Three Months Ended September 30, 2006 | |||||
(unaudited) | ||||||
Average fleet utilizationrate for the period | 94.9 | % | 91.9 | % |
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SOURCE: CAI International
CAI International, Inc.
Victor Garcia, Chief Financial Officer
(415) 788-0100
vgarcia@caiintl.com