<PAGE> 1
EXHIBIT 1
COMPANY PRESS RELEASE -
CRONOS ANNOUNCES THIRD QUARTER RESULTS
San Francisco - November 2, 2000 - The Cronos Group (NASDAQ: CRNS) today
announced its financial results for the quarter ended September 30, 2000.
The Company reported net income of $636,000, or $0.07 per share, for the third
quarter of 2000, compared to net income of $1.3 million, or $0.14 per share, for
the corresponding period in 1999. Net income for the third quarter of 2000
included a non-operating gain of $461,000, or $0.05 per share, on the sale of
investment securities and non-operating legal and other professional expenses of
$825,000, or $0.09 per share. Net income for the quarter ended September 30,
1999 included a non-operating gain of $1.2 million, or $0.13 per share, which
was partly offset by non-operating expenses of $200,000, or $0.02 per share.
Total revenues for the quarter ended September 30, 2000 were $36.8 million,
compared with $35.5 million for the same period in 1999. The increase in revenue
was primarily due to the effects of higher utilization and a larger fleet size.
Total expenses for the quarter were $36 million compared with $34.2 million for
the same quarter in the prior year. A 4% decline in direct operating expenses
was offset by an increase in payments to the Company's managed container owners
as a result of higher utilization and a larger managed fleet, as well as an
increase in SG&A expenses which was due primarily to the non-operating legal and
other professional services.
Net income for the nine-month period ended September 30, 2000 was $4.3 million,
or $0.47 per share, compared to $1.1 million, or $0.12 per share, for the same
period in the prior year. Total revenues for the nine months ended September 30,
2000 were $111.4 million, compared with $105.6 million for the corresponding
period in 1999. Total expenses for the first nine months of 2000 were $106.3
million compared with $104.6 million for the first nine months in 1999
reflecting an increase in payments to the Company's managed container owners
which was partly offset by lower direct operating expenses and reduced interest
expense.
Dennis J. Tietz, Chairman and CEO of The Cronos Group, commented, "We are
extremely pleased with the increase in lease revenues over both the prior
quarter and the prior year, as well as our continued profitability from
operations. Excluding non-operating items, net income was $1.0 million, or $0.11
per share, for the third quarter of 2000 and $259,000, or $0.03 per share, for
the third quarter of 1999. We will continue to expand the fleet through the
addition of container equipment at attractive prices and this will contribute to
future growth."
Over the past year, the Board of Directors of Cronos has explored various
alternatives to enhance value for the shareholders of the Company, including the
pursuit of a possible merger or sale of the Company. In considering a possible
transaction, Cronos has entered into numerous confidentiality agreements with
interested parties. Certain of these parties have conducted due diligence and
have held negotiations with Cronos regarding a potential transaction. Such
negotiations have been supervised by the Transaction Committee of the Company's
Board of Directors with the assistance and advice of Cronos' financial and legal
advisors. Despite these efforts, no agreement involving a sale, merger, or other
transaction involving the Company has been achieved.
<PAGE> 2
The Company's Board of Directors, in conjunction with its financial advisors,
will continue to explore various alternatives to enhance value for the
shareholders of Cronos. In addition to a possible sale or merger, the Board also
will consider the pursuit of management's business plan to remain an independent
company, to restore Cronos to sustained profitability and to resolve the claims
involving Cronos stemming from the actions of prior management. The Company is
unable to predict whether the exploration of potential alternatives involving
the Company will result in a transaction.
THE CRONOS GROUP
Cronos is one of the world's leading lessors of intermodal containers, owning
and managing a fleet of over 397,000 TEU (twenty-foot equivalent units). The
diversified Cronos fleet of dry cargo, refrigerated and other specialized
containers is leased to a customer base of approximately 400 ocean carriers and
transport operators around the world. Cronos provides container-leasing services
through an integrated network of offices through state-of-the-art information
technology.
CAUTIONARY NOTE
This release discusses certain forward-looking information that involves risks
and uncertainties that could cause actual results to vary materially from
estimates. Risks and uncertainties include, among other things, changes in
international operations, exchange rate risks, changes in market conditions for
Cronos' container lease operations, and Cronos' ability to provide innovative
and cost effective solutions. For a further discussion of the risk factors
attendant to an investment in Cronos' common shares, see the Introductory Note
in Cronos' Annual Report on Form 10-K for the year ended December 31, 1999,
which was filed with the SEC on March 30, 2000.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
Cronos will schedule its year 2000 annual meeting of shareholders for later this
year or early next year. The Company and its officers and directors may
therefore be deemed to be participants in the solicitation of proxies from the
Company's shareholders with respect to the matters to be presented to the
shareholders at the annual meeting. Information regarding the officers and
directors of the Company is included in Cronos' Annual Report on Form 10-K for
the year ended December 31, 1999, under Part III (pages 24-36). The Annual
Report is available free of charge at the SEC's website (www.sec.gov), Cronos'
website (www.cronos.com), and from Cronos' investor relations contact listed
below.
****************************
This press release and other information concerning Cronos can be viewed on
Cronos' website at www.cronos.com.
For more information contact:
Elinor A. Wexler
Vice President-Corporate Communications
(415) 677-8990
[email protected]
<PAGE> 3
THE CRONOS GROUP
CONDENSED INCOME STATEMENTS
(US DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Gross lease revenue $35,083 $32,307 $103,294 $99,139
Commissions, fees and other income:
- US Limited Partnerships 325 334 990 1,020
- Unrelated parties 970 1,665 3,479 4,267
Gain on sale of investment:
- gain on conversion of investment 461 613 1,502 613
- realized holding gain - 587 2,129 587
-------- -------- -------- --------
TOTAL REVENUES 36,839 35,506 111,394 105,626
-------- -------- -------- --------
Direct operating expenses 7,068 7,365 20,989 23,228
Payments to container owners:
- US Limited Partnerships 6,627 6,131 19,607 18,666
- Other container owners 11,499 10,297 33,741 29,535
Depreciation and amortization 3,941 3,991 11,886 12,376
Selling, general and administrative expenses 4,692 4,175 13,110 12,314
Interest expense 2,218 2,288 7,004 8,444
-------- -------- -------- --------
TOTAL EXPENSES 36,045 34,247 106,337 104,563
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 794 1,259 5,057 1,063
Income taxes 158 - 709 -
-------- -------- -------- --------
NET INCOME 636 1,259 4,348 1,063
Other comprehensive income, net of tax -
Unrealized holding loss on available for sale securities (366) - (863) -
-------- -------- -------- --------
COMPREHENSIVE INCOME $270 $1,259 $3,485 $1,063
======== ======== ======== ========
NET INCOME PER COMMON SHARE (BASIC AND DILUTED) $0.07 $0.14 $0.47 $0.12
======== ======== ======== ========
</TABLE>
<PAGE> 4
THE CRONOS GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(US DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
(Unaudited)
------------------ -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $7,755 $8,701
Amounts due from lessees (net) 28,090 26,739
Amounts receivable from container owners 12,129 9,147
New container equipment for resale 14,754 2,535
Net investment in direct finance leases 210 1,090
Investments 676 1,707
Container equipment (net) 139,365 137,547
Building and other equipment (net) 1,080 11,807
Cash deposits (restricted) 1,531 -
Intangible assets 12,873 13,405
Other assets including prepayments 17,886 19,189
---------- ----------
TOTAL ASSETS $236,349 $231,867
========== ==========
Liabilities and shareholders' equity
Amounts payable to container owners $25,056 $26,620
Amounts payable to container manufacturers 20,122 3,609
Other amounts payable and accrued expenses 16,783 13,799
Debt and capital lease obligations 94,456 109,978
Current and deferred income taxes 7,401 7,058
Deferred income and unamortized acquisition fee 8,676 10,433
---------- ----------
TOTAL LIABILITIES 172,494 171,497
---------- ----------
SHAREHOLDERS' EQUITY
Common shares 18,317 18,317
Additional paid-in capital 49,928 49,928
Share subscriptions receivable (82) (82)
Accumulated other comprehensive income, net of tax 414 1,277
Accumulated deficit (4,722) (9,070)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 63,855 60,370
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $236,349 $231,867
========== ==========
</TABLE>
