SAN FRANCISCO, Nov. 1, 2007 (PRIME NEWSWIRE) -- 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.
The CAI International logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3968
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, December 31,
ASSETS 2007 2006
-----------------------
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 Nine Months Ended
September 30, 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 As of
September 30, 2007 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 Three Months Ended
September 30, September 30,
2007 2006
------------------ ------------------
(unaudited)
Average fleet utilization
rate for the period 94.9% 91.9%