SAN FRANCISCO, July 25, 2007 (PRIME NEWSWIRE) -- CAI International, Inc. (CAI) (NYSE:CAP) reported that net income in the second quarter of 2007 increased $0.5 million, or 13.3%, to $4.1 million, compared with net income of $3.6 million in the second quarter of 2006. CAI's basic earnings per share in the second quarter of 2007 increased 52.6% to $0.29 with 14.0 million average shares outstanding, compared with basic earnings per share of $0.19 with 21.2 million average shares outstanding in the second quarter of 2006. Fully diluted earnings per share in the second quarter of 2007 increased 35.3% to $0.23 with 17.1 million average shares outstanding, compared to fully diluted earnings per share of $0.17 with 21.7 million average shares outstanding in the second quarter of 2006.
In the second quarter of 2007, CAI's revenue was $14.0 million, unchanged from the total revenue reported in the second quarter of 2006. Container rental revenue increased $0.8 million, or 9.7%, to $8.3 million from $7.5 million in the second quarter of 2006. Management fee revenue increased $0.5 million, or 16.3%, to $3.4 million from $2.9 million in the second quarter of 2006. The increase in container rental and management fee revenue was offset by a decline in gain on sale of container portfolios of $1.1 million, or 34.3%, to $2.1 million from $3.2 million in the second quarter of 2006. Finance lease income in the second quarter of 2007 was $0.3 million, unchanged from finance lease income reported in the second quarter of 2006.
CAI's operating income in the second quarter of 2007 was $8.5 million, an increase of $1.6 million, or 22.9%, from $6.9 million during the second quarter of 2006. Operating income for the second quarter of 2007, compared to the second quarter of 2006, was impacted by a $1.4 million decline in depreciation expense during the quarter, a $0.8 million increase in the gain on disposition of used equipment, and a $0.7 million gain on settlement of lease obligation. During the second quarter of 2007, marketing, general, and administrative expenses increased by $1.2 million, or 43.5%, to $3.9 million as a result of increased cash and stock-based incentive compensation expenses.
Comments from the CEO
Masaaki (John) Nishibori, Chief Executive Officer of CAI, commented, "The second quarter of 2007 was an historic quarter for CAI. During the quarter we successfully completed our initial public offering and used the proceeds to reduce our outstanding debt. Our balance sheet is now significantly less leveraged and will enable us to better seek growth opportunities."
"We were able to complete our public equity offering while maintaining our focus on operations. During the second quarter, the seasonal increase in lease outs of new containers were approximately a month delayed from our expectations. Despite the delay, we increased the number of TEU factory lease outs by 60% compared to the factory lease outs during the second quarter of 2006. The average utilization of our operating fleet for the second quarter of 2007, net of units held at the manufacturer pending initial lease out, was 93.7%, compared to 89.4% during the second quarter of 2006. Secondary sales activity of containers also has remained very strong. We expect utilization and the value of used containers to remain strong during the second half of the year. Overall, we expect demand for new containers in 2007 to be strong. However, rates on new leases remained subject to strong competitive pressure during the quarter and we expect this competitive environment to persist for the rest of the year."
CAI's conference call to discuss financial results for the second quarter of 2007 will be held on Thursday, July 26, 2007 at 2:00 p.m. EDT. The dial-in number for the teleconference is 1-800-310-7032; outside U.S., call 1-719-457-2694. The call may be accessed live over the internet (listen only) under the "Investors" tab of CAI's website, www.caiintl.com, by selecting "Q2 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 June 30, 2007, the company operated a worldwide fleet of 689,000 TEU of containers through 10 offices located in 8 countries.
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. 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.
The CAI International logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3968
CAI International, Inc.
Consolidated Statements of Income
(in thousands, except per share data)
(UNAUDITED)
Successor Predecessor Successor Predecessor
---------------------- ----------------------
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
2007 2006 2007 2006
---------------------- ----------------------
Revenue:
Container
rental
revenue $ 8,280 $ 7,549 $16,160 $15,611
Management fee
revenue 3,368 2,896 6,787 5,470
Gain on sale
of container
portfolios 2,096 3,188 4,991 5,120
Finance lease
income 290 320 609 627
------- ------- ------- -------
Total revenue 14,034 13,953 28,547 26,828
------- ------- ------- -------
Operating expenses:
Depreciation of
container
rental
equipment 1,761 3,128 3,451 6,495
Amortization of
intangible
assets 309 -- 617 --
Impairment of
container rental
equipment 105 4 224 241
Gain on
disposition of
used container
equipment (1,043) (238) (2,048) (385)
Gain on
settlement of
lease
obligation (694) -- (694) --
Equipment rental
expense 423 396 818 792
Storage,
handling and
other expenses 719 988 1,390 1,655
Marketing,
general and
administrative
expense 3,947 2,750 7,249 6,099
------- ------- ------- -------
Total operating
expenses 5,527 7,028 11,007 14,897
------- ------- ------- -------
Operating income 8,507 6,925 17,540 11,931
Interest expense 2,688 1,253 5,927 2,858
Gain on
extinguishment
of debt (681) -- (681) --
Interest income (11) (10) (20) (19)
------- ------- ------- -------
Net interest
expense 1,996 1,243 5,226 2,839
------- ------- ------- -------
Income before
income taxes 6,511 5,682 12,314 9,092
Income tax
expense 2,400 2,051 4,591 3,282
------- ------- ------- -------
Net income 4,111 3,631 7,723 5,810
(Accretion)/
decretion of
preferred stock (5) 488 (5,577) 976
------- ------- ------- -------
Net income
available to
common
shareholders $ 4,106 $ 4,119 $ 2,146 $ 6,786
======= ======= ======= =======
Net income per share:
Basic $ 0.29 $ 0.19 $ 0.17 $ 0.32
Diluted $ 0.23 $ 0.17 $ 0.17 $ 0.27
Weighted average shares
outstanding:
Basic 13,954 21,168 12,278 21,168
Diluted 17,136 21,735 12,278 21,764
CAI International, Inc.
Consolidated Balance Sheet
(In thousands, except share information)
(UNAUDITED)
June 30, December 31,
ASSETS 2007 2006
--------- ---------
Cash $ 9,536 $ 20,359
Accounts receivable (owned fleet), net of
allowance for doubtful accounts of $851 and
$1,045 at June 30, 2007 and December 31,
2006, respectively 9,245 7,731
Accounts receivable (managed fleet) 24,588 24,061
Related party receivables -- 128
Current portion of direct finance leases 3,375 2,248
Deposits, prepayments and other assets 3,763 4,077
Deferred tax assets 963 915
Total current assets 51,470 59,519
Container rental equipment, net of
accumulated depreciation of $89,636 and
$93,633 at June 30, 2007 and December 31,
2006, respectively 180,927 161,353
Net investment in direct finance leases 4,030 4,329
Furniture, fixtures and equipment, net of
accumulated depreciation of $323 and
$290 at June 30, 2007 and December 31,
2006, respectively 459 459
Intangible assets, net of accumulated
amortization of $925 and $307 at June 30,
2007 and December 31, 2006, respectively 6,584 7,093
Goodwill 50,247 50,247
--------- ---------
Total assets $ 293,717 $ 283,000
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Accounts payable $ 3,986 $ 3,585
Accrued expenses and other current
liabilities 4,346 15,276
Due to container investors 21,154 21,650
Unearned revenue 782 740
Current portion of long-term debt -- 5,000
Current portion of capital lease obligation 207 525
Rental equipment payable 26,679 30,788
Total current liabilities 57,154 77,564
Revolving credit facility 93,090 97,000
Term loan -- 13,750
Subordinated convertible note payable -- 37,500
Deferred income tax liability 24,413 24,500
Capital lease obligation -- 31
--------- ---------
Total liabilities 174,657 250,345
Cumulative redeemable convertible preferred
stock:
Series A 10.5% cumulative redeemable
convertible preferred stock, no par value
Aggregate liquidation value of zero at
June 30, 2007 and $1,531 at December 31,
2006. Authorized 1,113,840 shares; issued
and outstanding, zero at June 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,
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, 17,108,920 shares at June
30, 2007 2 --
Additional paid-in capital 90,410 --
Accumulated other comprehensive income 102 95
Retained earnings 28,546 26,400
Total stockholders' equity 119,060 27,755
--------- ---------
Total liabilities and stockholders' equity $ 293,717 $ 283,000
========= =========
As of December 31,
-------------------------
As of
June 30,
2007 2006 2005 2004
------- ------- ------- -------
Selected Operating Data: (unaudited)
Managed fleet in TEUs 514,120 483,333 456,076 416,254
Owned fleet in TEUs 175,325 185,645 141,653 171,790
------- ------- ------- -------
Total 689,445 668,978 597,729 588,044
======= ======= ======= =======
Percentage of on-lease
fleet on long-term leases 70.7% 65.3% 64.7% 57.7%
Percentage of on-lease
fleet on short-term leases 27.5 32.8 33.5 41.2
Percentage of on-lease
fleet on finance leases 1.8 1.9 1.8 1.1
------- ------- ------- -------
Total 100.0% 100.0% 100.0% 100.0%
======= ======= ======= =======
Year Ended December 31,
--------------------------
Three
Months
Ended
June 30,
2007 2006 2005 2004
------- ------- ------- -------
(unaudited)
Average leased fleet
utilization rate
for the period 93.7% 90.6% 90.7% 89.8%