AUSTIN, Texas, March 22, 2002 (PRIMEZONE) -- American Physicians Service Group, Inc. ("APS") (Nasdaq:AMPH) today announced results for the fourth quarter and year-end 2001.
For the year ended December 31, 2001, APS reported total revenues from continuing operations of $23,120,000 versus $18,347,000 in 2000. A net loss of $3,982,000 compared to a loss of $1,402,000 in 2000. Diluted net loss per share was $1.70 versus $.56 in 2000. For the three months ended December 31, 2001, revenues from continuing operations were $5,269,000 versus $4,260,000 in the comparable period a year ago. The net loss for the quarter was $4,508,000, compared to $1,795,000 in last year's fourth quarter. Diluted loss per share was $1.92 for the quarter ended December 31, 2001 versus $.66 in the year-ago period.
Ken Shifrin, APS Chairman of the Board stated: "The sale of two investments, together with non-recurring charges taken by an affiliate, dominated the quarterly and annual results. In November we completed the sale and partial leaseback of our office building, realizing approximately $6 million in cash. Proceeds were primarily used to reduce debt. Approximately $2 million of the $5 million book gain was recognized in the fourth quarter, with the balance to be deferred and recognized in future periods, based primarily on the sale/leaseback requirements of generally accepted accounting principles. Real estate revenue and expenses have been reclassified to discontinued operations in all periods reported, as the office building constituted our entire real estate segment. As a result of the large tax gain generated by this sale we re-evaluated our investment position regarding the stock we own in a single-specialty physician practice management company. While this company continues to move forward, we determined that the present value of $1.7 million in immediate tax savings that could be generated by the sale of 63% of the stock was greater than a future return with an uncertain 'exit' date. The 37% of the stock that was retained was also written down in anticipation that it would not be held for the long term. Total losses from the sale and writedown were $5.1 million and were non-cash.
"Our affiliate, Prime Medical Services, Inc. (Nasdaq:PMSI) reported a fourth quarter non-recurring charge to earnings of approximately $36 million, in mostly non-cash expenses, primarily related to the writedown of goodwill associated with their refractive vision correction segment, to recognize impairment to certain lithotripsy assets and to increase bad debt reserves. In 2001, we accounted for our ownership in Prime on the equity method and recognized a pretax charge in the fourth quarter of approximately $3.6 million related to Prime's non-recurring charges. There was no cash impact to us.
"Our other affiliate, UnCommon Care, Inc., developer and operator of care facilities for those with Alzheimer's disease, made progress in 2001. Occupancy has now reached 90%, from 66% at the beginning of 2001, and internal cash flow is now supporting all operations. The focus is now on refinancing their debt and securing new capital for expansion purposes. Through equity method accounting, we recognized approximately a $1 million pretax loss from this investment in 2001. The loss reduced our basis to zero, so we will record no additional losses on our existing investment while Uncommon Care pursues its expansion toward profitability.
"Our core businesses, Insurance Services and Financial Services both experienced excellent quarterly and annual performances. Taken together, revenues increased by 32% and 30% for the quarter and year, respectively. Profit contributions were even more dramatic in these core businesses, with both the quarter and annual periods improving by over 100%, compared to the same periods in the prior year.
"We are pleased with the performance in our core businesses and believe that they will continue to make progress in 2002. While we can never be pleased with an investment loss, our balance sheet is now stronger and we believe that the stage is set for improved bottom line results in 2002," Mr. Shifrin concluded.
APS is a management and financial services firm with subsidiaries and affiliates which provide: medical malpractice insurance services for doctors; brokerage, and investment services to institutions and individuals; lithotripsy services in 33 states; refractive vision correction; manufacturing of mobile medical and specialty equipment units; and dedicated care facilities for Alzheimer's patients. The Company is headquartered in Austin, Texas and maintains offices in Dallas and Houston.
This press release, particularly the statements by Mr. Shifrin, includes forward-looking statements related to the Company that involve risks and uncertainties that could cause actual results to differ materially. These forward-looking statements are made in reliance on the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. For further information about these factors that could affect the Company's future results, please see the Company's recent filings with the Securities and Exchange Commission. Prospective investors are cautioned that forward-looking statements are not guarantees of future performance. Actual results may differ materially from management expectations. Copies of the filings are available upon request from the Company's investor relations department.
AMERICAN PHYSICIANS SERVICE GROUP, INC.
SELECTED FINANCIAL DATA
(In thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
2001 2000 2001 2000
-------- -------- -------- --------
Revenues $ 5,269 $ 4,260 $ 23,120 $ 18,347
Expenses 10,965 6,614 27,868 20,882
-------- -------- -------- --------
Operating loss (5,696) (2,354) (4,748) (2,535)
Equity in loss of
unconsolidated affiliates (3,129) (378) (3,191) (467)
-------- -------- -------- --------
Loss from continuing
operations before income
taxes and minority interest (8,825) (2,732) (7,939) (3,002)
-------- -------- -------- --------
Income tax benefit (3,064) (924) (2,704) (956)
Minority interest 52 23 157 42
-------- -------- -------- --------
Loss from
continuing operations (5,813) (1,831) (5,392) (2,088)
Discontinued operations:
profits from discontinued
operations net of income tax
of $672 and $18 for the
three months and $727 and
$354 for the year in 2001
and 2000, respectively 1,305 36 1,410 686
-------- -------- -------- --------
Net loss $ (4,508) $ (1,795) $ (3,982) $ (1,402)
======== ======== ======== ========
Diluted loss per share:
Loss from
continuing operations $ (2.48) $ (.68) $ (2.30) $ (.84)
Discontinued operations .56 .02 .60 .28
Net loss $ (1.92) $ (.66) $ (1.70) $ (.56)
Weighted average shares
outstanding (diluted) 2,343 2,726 2,343 2,490