Citadel Holding Corporation Reports Fourth Quarter and Twelve Month Results

Apr 10, 2001, 01:00 ET from Citadel Holding Corporation

    LOS ANGELES, April 10 /PRNewswire/ -- Citadel Holding Corporation
 (Amex:   CDL.A, CDL.B) announced today fourth quarter and twelve-month results
 for the period ended December 31, 2000.  All amounts are in thousands of
 dollars except for per share amounts.
     Citadel Holding Corporation is in the business of owning and managing its
 real estate intensive businesses including operating its domestic based cinema
 and live theater assets.
 
     Fourth Quarter Results                2000        1999        % Change
 
     Revenues                             $4,222        $586         620.5
     Net (loss) earnings                   $(493)       $258        (291.1)
     Per basic and diluted share          $(0.02)      $0.04        (150.0)
 
     For the three months ended December 31, 2000 and 1999:
 
     -- Revenues increased as a result of the third quarter 2000 acquisition by
        the Company of (1) certain leasehold and management rights in
        connection with a Manhattan-based cinema circuit, (2) the Royal George
        Theatre in Chicago, and (3) three live theaters in New York, each of
        which was completed during the three months ended September 30, 2000,
        and collectively referred to in this release as "the Acquisition."
 
     -- The slightly negative margin produced in the fourth quarter 2000 from
        the Company's newly acquired cinema operations reflects the product-
        driven decline in cinema attendance during the 2000 quarter as compared
        to the 1999 quarter. (The Company had no cinema interests in the 1999
        quarter.)
 
     -- Operating expenses for the quarter, including general and
        administrative expenses, increased by $4,663 from prior year.  This
        increase was primarily due to direct theater expenses of $2,346, lease
        payments of $889 and additional general and administrative expenses of
        $962, all related to the Acquisition.
 
     -- As a member with Craig Corporation and Reading Entertainment, Inc. in
        the Craig Group of Companies, Citadel's general and administrative
        functions have now been fully consolidated into the Los Angeles offices
        of Craig Corporation.  This included the closure of Reading's
        administrative offices in Philadelphia.  A complete review of the
        expenses associated with these functions is currently under way.  This
        review, although not yet complete, has already resulted in a reduction
        of expenses.
 
     -- During the 2000 period, the Company advanced $508 to the agricultural
        partnerships, and consistent with the decision taken in the third
        quarter, wrote this amount off.  In 2001, the partnerships intend to
        control operating costs to a level consistent with anticipated
        revenues, thereby limiting the need for any further advances by the
        Company.
 
     -- During 1999 and 2000, the Company acquired shares totaling
        1,055,100 shares in National Auto Credit, Inc. (NAC), in open market
        transactions.  During the fourth quarter 2000, the Company accepted an
        offer from NAC to purchase these shares for $1,767, resulting in an
        $829 profit to the Company.
 
     Twelve Month Results                 2000         1999       % Change
 
     Revenues                           $7,384        $3,952         86.8
     Net (loss) earnings               $(3,542)       $9,487       (137.3)
     Per basic and diluted share        $(0.47)        $1.42       (133.1)
 
     For the twelve months ended December 31, 2000 and 1999:
 
     -- Revenues increased by about 87%, reflecting the theater-related
        revenues not present in 1999, as offset by a reduction in property
        rentals attributable to a property sold in June 1999 and with respect
        to which the Company realized a substantial gain ($13,337).
 
     -- Operating expenses increased by $5,588, almost entirely due to the
        Acquisition.
 
     -- During 2000, losses from the Company's agricultural investments
        amounting to $4,262, included periodic funding under a crop financing
        arrangement, which amounts were expensed by the Company as paid, and a
        write down of the Company's remaining investment in September 2000.
        The Company would have reported a profit for the year, were it not for
        these write-downs.
 
     Subsequent Events
 
     -- Pursuant to a right of first refusal, in February 2001, the Company
        acquired the fee interest in the building housing its Union Square
        Theatre, New York, for a purchase price of $7,700.  This property is
        zoned for commercial and residential use and has commercial tenants
        occupying the remaining space not currently used by the theater.  The
        property has air rights associated with it and is held for future
        development.
 
     -- In March 2001, the Company acquired the leasehold interest in four
        additional cinemas, consisting of 28 screens, from Reading
        Entertainment, Inc., an affiliate and member of the Craig Group of
        Companies.  The purchase price of $1,706, satisfied by the issuance of
        a two-year note, was based upon a six times multiple applied against
        the aggregate 2000 cinema level cash flow from the four cinemas.  The
        purchase price represented the carrying value on Reading's books.
 
     -- In March 2001, the Boards of Directors of each of Reading
        Entertainment, Inc., Craig Corporation, and Citadel Holding Corporation
        considered management's proposal to consolidate the three named
        companies into a single public company, with Citadel as the surviving
        entity.  The Boards further determined that it would be in the best
        interests of their respective companies and stockholders to consummate
        such a consolidation transaction, so long as the allocation of
        ownership of the resultant consolidated entity among the equity holders
        of the constituent entities was fair.  In light of all the
        circumstances, it was determined to be appropriate to delegate
        management's proposal to the Conflicts Committees of the three
        companies.
 
     This news release contains forward-looking statements regarding future
 general and administrative expense reductions, control of agricultural
 expenses in line with future revenues and asset write-downs.  These statements
 are based on information available at the time they are made and are subject
 to a number of risks and uncertainties.  Actual results could differ from
 those anticipated by these forward-looking statements as a result of a number
 of factors, some of which may be beyond the Company's control.  Among other
 things, these factors include the impact of global economic conditions,
 consolidation among competitors, the effect of any industry related industrial
 action, potential cost and interest rate increases, and taxes.
 
 
     Citadel Holding Corporation and Subsidiaries
     Consolidated Statements of Operations
     (dollars in thousands, except per share amounts)
 
                                                 Year Ended December 31,
                                              2000        1999       1998
     Operating revenues
       Theater                               $4,677      $   --     $   --
       Real estate                            2,397       3,706      5,478
       Management fee                           172          31        109
       Consulting fees from shareholder         138         215        398
                                             $7,384       3,952      5,985
     Operating expenses
       Theater                               (3,434)         --         --
       Real estate                             (748)     (1,242)    (2,279)
       General and administrative            (3,600)     (1,269)    (1,297)
       Depreciation and amortization           (657)       (340)      (414)
                                             (8,439)     (2,851)    (3,990)
 
     Operating (loss) income                 (1,055)      1,101      1,995
 
     Non-operating income (expense)
       Interest income                        1,239         536        222
       Interest income from shareholder         258         162        169
       Interest expense                      (1,111)       (587)      (977)
       Dividends on Reading Preferred Stock     455         455        455
       Equity earnings of Angelika Film
        Center LLC                              109          --         --
       Loss from investment in and advances
        to Agricultural Partnerships         (4,262)       (201)      (990)
       Gain on sale of assets                   829      13,337         --
 
     (Loss) earnings before minority
      interest and income taxes              (3,538)     14,803        874
     Minority interest                           (4)         (7)       (15)
 
     (Loss) earnings before taxes            (3,542)     14,796        859
     Income tax (expense) benefit                --      (5,309)     4,828
 
     Net (loss) earnings                     (3,542)     $9,487     $5,687
 
     Basic and diluted (loss) earnings
      per share                             $(0.47)      $ 1.42     $ 0.85
 
 
     Citadel Holding Corporation and Subsidiaries
     Consolidated Balance Sheets
     (dollars in thousands)
                                                           December 31,
                                                        2000          1999
     ASSETS
     Cash and cash equivalents                        $16,010        $24,732
     Trade receivables                                    867             --
     Receivable from affiliates                           563             95
     Inventory                                             30             --
     Investment in Gish Biomedical, Inc.                  493          1,831
     Investment in National Auto Credit, Inc.              --            214
     Deferred tax asset, net                            1,568          1,125
         Total current assets                          19,531         27,997
     Rental properties, net                             9,029          7,731
     Property, plant & equipment, net                  10,791             --
     Investment in Reading Entertainment, Inc.          7,000          7,000
     Investment in Angelika Film Center LLC             3,237             --
     Equity investment in and advances to
      Agriculture Partnerships, net                        --          2,669
     Capitalized leasing costs                            811            944
     Intangible assets, net                            10,847             --
     Other assets                                       2,676            865
         Total assets                                 $63,922        $47,206
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Liabilities
     Accounts payable and accrued liabilities         $ 5,852        $ 1,851
     Income taxes payable                               2,181            431
     Deferred theater revenue                             585             --
     Mortgage note payable - current portion              151            128
         Total current liabilities                      8,769          2,410
     Mortgage note payable - long-term portion         10,721         10,872
     Deferred real estate revenue                         195            195
     Note payable to Sutton Hill Associates             4,500             --
     Other liabilities                                    555            196
     Minority interest in consolidated affiliate           54             50
         Total liabilities                            $24,794        $13,723
     Commitments and contingencies
     Stockholders' equity
     Preferred stock, par value $0.01, 20,000,000
      shares authorized, none outstanding                  --             --
     Common stock, par value $0.01, 20,000,000
      shares authorized, none outstanding                  --             67
     Class A Nonvoting Common Stock, par value
      $0.01, 100,000,000 shares authorized,
      7,958,379 issued and outstanding                     80             --
     Class B Voting Common Stock, par value $0.01,
      20,000,000 shares authorized, 1,989,585 issued
      and outstanding                                      20             --
     Additional paid-in capital                        69,571         59,603
     Accumulated deficit                              (27,986)       (24,444)
     Accumulated other comprehensive (loss) income       (559)           255
     Note receivable from shareholder                  (1,998)        (1,998)
         Total stockholders' equity                    39,128         33,483
     Total liabilities and stockholders' equity       $63,922        $47,206
 
 

SOURCE Citadel Holding Corporation
    LOS ANGELES, April 10 /PRNewswire/ -- Citadel Holding Corporation
 (Amex:   CDL.A, CDL.B) announced today fourth quarter and twelve-month results
 for the period ended December 31, 2000.  All amounts are in thousands of
 dollars except for per share amounts.
     Citadel Holding Corporation is in the business of owning and managing its
 real estate intensive businesses including operating its domestic based cinema
 and live theater assets.
 
     Fourth Quarter Results                2000        1999        % Change
 
     Revenues                             $4,222        $586         620.5
     Net (loss) earnings                   $(493)       $258        (291.1)
     Per basic and diluted share          $(0.02)      $0.04        (150.0)
 
     For the three months ended December 31, 2000 and 1999:
 
     -- Revenues increased as a result of the third quarter 2000 acquisition by
        the Company of (1) certain leasehold and management rights in
        connection with a Manhattan-based cinema circuit, (2) the Royal George
        Theatre in Chicago, and (3) three live theaters in New York, each of
        which was completed during the three months ended September 30, 2000,
        and collectively referred to in this release as "the Acquisition."
 
     -- The slightly negative margin produced in the fourth quarter 2000 from
        the Company's newly acquired cinema operations reflects the product-
        driven decline in cinema attendance during the 2000 quarter as compared
        to the 1999 quarter. (The Company had no cinema interests in the 1999
        quarter.)
 
     -- Operating expenses for the quarter, including general and
        administrative expenses, increased by $4,663 from prior year.  This
        increase was primarily due to direct theater expenses of $2,346, lease
        payments of $889 and additional general and administrative expenses of
        $962, all related to the Acquisition.
 
     -- As a member with Craig Corporation and Reading Entertainment, Inc. in
        the Craig Group of Companies, Citadel's general and administrative
        functions have now been fully consolidated into the Los Angeles offices
        of Craig Corporation.  This included the closure of Reading's
        administrative offices in Philadelphia.  A complete review of the
        expenses associated with these functions is currently under way.  This
        review, although not yet complete, has already resulted in a reduction
        of expenses.
 
     -- During the 2000 period, the Company advanced $508 to the agricultural
        partnerships, and consistent with the decision taken in the third
        quarter, wrote this amount off.  In 2001, the partnerships intend to
        control operating costs to a level consistent with anticipated
        revenues, thereby limiting the need for any further advances by the
        Company.
 
     -- During 1999 and 2000, the Company acquired shares totaling
        1,055,100 shares in National Auto Credit, Inc. (NAC), in open market
        transactions.  During the fourth quarter 2000, the Company accepted an
        offer from NAC to purchase these shares for $1,767, resulting in an
        $829 profit to the Company.
 
     Twelve Month Results                 2000         1999       % Change
 
     Revenues                           $7,384        $3,952         86.8
     Net (loss) earnings               $(3,542)       $9,487       (137.3)
     Per basic and diluted share        $(0.47)        $1.42       (133.1)
 
     For the twelve months ended December 31, 2000 and 1999:
 
     -- Revenues increased by about 87%, reflecting the theater-related
        revenues not present in 1999, as offset by a reduction in property
        rentals attributable to a property sold in June 1999 and with respect
        to which the Company realized a substantial gain ($13,337).
 
     -- Operating expenses increased by $5,588, almost entirely due to the
        Acquisition.
 
     -- During 2000, losses from the Company's agricultural investments
        amounting to $4,262, included periodic funding under a crop financing
        arrangement, which amounts were expensed by the Company as paid, and a
        write down of the Company's remaining investment in September 2000.
        The Company would have reported a profit for the year, were it not for
        these write-downs.
 
     Subsequent Events
 
     -- Pursuant to a right of first refusal, in February 2001, the Company
        acquired the fee interest in the building housing its Union Square
        Theatre, New York, for a purchase price of $7,700.  This property is
        zoned for commercial and residential use and has commercial tenants
        occupying the remaining space not currently used by the theater.  The
        property has air rights associated with it and is held for future
        development.
 
     -- In March 2001, the Company acquired the leasehold interest in four
        additional cinemas, consisting of 28 screens, from Reading
        Entertainment, Inc., an affiliate and member of the Craig Group of
        Companies.  The purchase price of $1,706, satisfied by the issuance of
        a two-year note, was based upon a six times multiple applied against
        the aggregate 2000 cinema level cash flow from the four cinemas.  The
        purchase price represented the carrying value on Reading's books.
 
     -- In March 2001, the Boards of Directors of each of Reading
        Entertainment, Inc., Craig Corporation, and Citadel Holding Corporation
        considered management's proposal to consolidate the three named
        companies into a single public company, with Citadel as the surviving
        entity.  The Boards further determined that it would be in the best
        interests of their respective companies and stockholders to consummate
        such a consolidation transaction, so long as the allocation of
        ownership of the resultant consolidated entity among the equity holders
        of the constituent entities was fair.  In light of all the
        circumstances, it was determined to be appropriate to delegate
        management's proposal to the Conflicts Committees of the three
        companies.
 
     This news release contains forward-looking statements regarding future
 general and administrative expense reductions, control of agricultural
 expenses in line with future revenues and asset write-downs.  These statements
 are based on information available at the time they are made and are subject
 to a number of risks and uncertainties.  Actual results could differ from
 those anticipated by these forward-looking statements as a result of a number
 of factors, some of which may be beyond the Company's control.  Among other
 things, these factors include the impact of global economic conditions,
 consolidation among competitors, the effect of any industry related industrial
 action, potential cost and interest rate increases, and taxes.
 
 
     Citadel Holding Corporation and Subsidiaries
     Consolidated Statements of Operations
     (dollars in thousands, except per share amounts)
 
                                                 Year Ended December 31,
                                              2000        1999       1998
     Operating revenues
       Theater                               $4,677      $   --     $   --
       Real estate                            2,397       3,706      5,478
       Management fee                           172          31        109
       Consulting fees from shareholder         138         215        398
                                             $7,384       3,952      5,985
     Operating expenses
       Theater                               (3,434)         --         --
       Real estate                             (748)     (1,242)    (2,279)
       General and administrative            (3,600)     (1,269)    (1,297)
       Depreciation and amortization           (657)       (340)      (414)
                                             (8,439)     (2,851)    (3,990)
 
     Operating (loss) income                 (1,055)      1,101      1,995
 
     Non-operating income (expense)
       Interest income                        1,239         536        222
       Interest income from shareholder         258         162        169
       Interest expense                      (1,111)       (587)      (977)
       Dividends on Reading Preferred Stock     455         455        455
       Equity earnings of Angelika Film
        Center LLC                              109          --         --
       Loss from investment in and advances
        to Agricultural Partnerships         (4,262)       (201)      (990)
       Gain on sale of assets                   829      13,337         --
 
     (Loss) earnings before minority
      interest and income taxes              (3,538)     14,803        874
     Minority interest                           (4)         (7)       (15)
 
     (Loss) earnings before taxes            (3,542)     14,796        859
     Income tax (expense) benefit                --      (5,309)     4,828
 
     Net (loss) earnings                     (3,542)     $9,487     $5,687
 
     Basic and diluted (loss) earnings
      per share                             $(0.47)      $ 1.42     $ 0.85
 
 
     Citadel Holding Corporation and Subsidiaries
     Consolidated Balance Sheets
     (dollars in thousands)
                                                           December 31,
                                                        2000          1999
     ASSETS
     Cash and cash equivalents                        $16,010        $24,732
     Trade receivables                                    867             --
     Receivable from affiliates                           563             95
     Inventory                                             30             --
     Investment in Gish Biomedical, Inc.                  493          1,831
     Investment in National Auto Credit, Inc.              --            214
     Deferred tax asset, net                            1,568          1,125
         Total current assets                          19,531         27,997
     Rental properties, net                             9,029          7,731
     Property, plant & equipment, net                  10,791             --
     Investment in Reading Entertainment, Inc.          7,000          7,000
     Investment in Angelika Film Center LLC             3,237             --
     Equity investment in and advances to
      Agriculture Partnerships, net                        --          2,669
     Capitalized leasing costs                            811            944
     Intangible assets, net                            10,847             --
     Other assets                                       2,676            865
         Total assets                                 $63,922        $47,206
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Liabilities
     Accounts payable and accrued liabilities         $ 5,852        $ 1,851
     Income taxes payable                               2,181            431
     Deferred theater revenue                             585             --
     Mortgage note payable - current portion              151            128
         Total current liabilities                      8,769          2,410
     Mortgage note payable - long-term portion         10,721         10,872
     Deferred real estate revenue                         195            195
     Note payable to Sutton Hill Associates             4,500             --
     Other liabilities                                    555            196
     Minority interest in consolidated affiliate           54             50
         Total liabilities                            $24,794        $13,723
     Commitments and contingencies
     Stockholders' equity
     Preferred stock, par value $0.01, 20,000,000
      shares authorized, none outstanding                  --             --
     Common stock, par value $0.01, 20,000,000
      shares authorized, none outstanding                  --             67
     Class A Nonvoting Common Stock, par value
      $0.01, 100,000,000 shares authorized,
      7,958,379 issued and outstanding                     80             --
     Class B Voting Common Stock, par value $0.01,
      20,000,000 shares authorized, 1,989,585 issued
      and outstanding                                      20             --
     Additional paid-in capital                        69,571         59,603
     Accumulated deficit                              (27,986)       (24,444)
     Accumulated other comprehensive (loss) income       (559)           255
     Note receivable from shareholder                  (1,998)        (1,998)
         Total stockholders' equity                    39,128         33,483
     Total liabilities and stockholders' equity       $63,922        $47,206
 
 SOURCE  Citadel Holding Corporation