Access Plans USA, Inc. - Financial Highlights
(Dollars in Thousands, except per share amounts)
For the Quarter Ended
March 31,
--------------------- %
2008 2007 Change
---- ---- ------
Commission and Service Revenues $ 10,585 $ 8,325 27%
Net Loss (1,043) (325) **
Net Loss per Share $ (0.05) $ (0.02) **
Core Earnings:*
Excluding Regional Healthcare $ 407 $ (45) **
Regional Healthcare (234) 292 **
--------- ---------
Total Core Earnings $ 173 $ 247 -30%
========= =========
* Core Earnings comprise pre-tax income before charges for
depreciation, amortization, non-cash stock compensation, goodwill
and other non-cash charges, accelerated commission payments,
restructuring charges, and significant legal/settlement costs
related to prior year activities.
** Not meaningful.
IRVING, Texas, May 9, 2008 (PRIME NEWSWIRE) -- Access Plans USA, Inc. (Nasdaq:AUSA), a nationwide distributor of health insurance and non-insurance healthcare programs that provide access to affordable healthcare for the growing number of uninsured and/or underinsured in the United States, reported its financial results for the quarter ended March 31, 2008.
First quarter revenue grew 27% to $10.6 million, primarily reflecting revenue increases attributable to the acquisitions of the Insurance Marketing operations on January 30, 2007 and Protective Marketing Enterprises, Inc. (PME) on October 1, 2007. The 27% revenue growth is net of a $0.9 million loss of revenue in Regional Healthcare resulting from the previously disclosed loss of two major contracts. The Regional Healthcare revenue loss also had an adverse impact on total core earnings, resulting in a $74 thousand decline to $173 thousand for the 2008 first quarter. Absent Regional Healthcare, core earnings, inclusive of the Company's two principal operating units, grew from a modest loss in last year's first quarter to core earnings of $407 thousand for the 2008 first quarter.
The Company continues to measure its performance on "core earnings", in addition to GAAP (generally accepted accounting principles) results, because the Company believes the "core earnings" measure better recognizes the underlying operating activity and improvements of the company. The tables that follow include a reconciliation of non-GAAP financial measures to comparable GAAP measures.
Net loss for the 2008 first quarter was $1.04 million, a $718 thousand increase over the loss of $325 thousand in the corresponding prior year first quarter. Regional Healthcare accounted for $665 thousand of this variance. Additionally, 2008 first quarter charges included $327 thousand attributable to the immediate expensing of accelerated commissions paid on a new Consumer Plan program and $300 thousand in connection with a re-assessment of the Company's exposure attributable to the previously disclosed litigation resulting from prior years' activities.
"Our first quarter results were not unexpected -- as we noted in our announcement of year-end 2007 results, we expect volatility in our results, particularly during the first half of 2008," said Ian R. Stuart, Interim President and Chief Executive Officer of Access Plans USA. "We have started the year with positive momentum in the underlying results of both our Consumer Plan and Insurance Marketing divisions. During the first quarter of 2008, Consumer Plan focused its efforts on integrating the merger of the PME back-office operations with the Company's legacy Capella operations, developing new products and pursuing a number of new marketing opportunities which the Company believes will generate increased revenue and earnings in the second half of the year. In Insurance Marketing, we concentrated on growing the major medical book of business and further developing with Health Benefits Direct the new Insurint(tm) quoting technology, which we rolled out to our agents on May 1, 2008."
"We also have started to make progress toward rehabilitating our Regional Healthcare Division," Stuart added. "Recently, the Ysleta Independent School District, which currently accounts for 45% of this division's revenue, determined it was in its best interests to retain the current contract through the end of 2009. Additionally, we have received preliminary expressions of interest from several parties regarding leveraging Regional Healthcare's claims administration capabilities and accessing our local proprietary hospital and physician networks. We also recently commenced pro-active marketing of the division's products and services. Our objective is to eliminate, later this year, the Regional Healthcare losses we are currently experiencing."
Additional financial information is set forth on the following pages:
* Condensed Consolidated Statement of Operations, Cash Flow and Balance Sheet Data * Reconciliation of GAAP to Non-GAAP (Core Earnings) Financial Measures * Supplementary Financial Data
About Access Plans USA
Access Plans USA provides access to affordable healthcare to individuals and families. Our health insurance products and our non-insurance healthcare discount programs are designed as affordable solutions for the growing number of uninsured and underinsured seeking a way to address rising healthcare costs. We also offer third party claims administration, provider network management, and utilization management services to employers and groups that choose to utilize partially self funded strategies to finance their benefit programs. We are committed to assuring that our clients have access to the healthcare that they need at prices they can afford. For more information on Access Plans USA, Inc. please visit www.accessplansusa.com.
The Access Plans USA, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3487
Disclaimer
Certain statements included in this news release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate", "believes", "expects", "may", "will", or "should", or other variations thereon, and by discussions of strategies that involve risks and uncertainties. Access Plans USA, Inc. actual results or industry results may be materially different from any future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include those set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2007 and each of the Quarterly Reports on Form 10-Q filed since such date. The Company undertakes no obligation to update any forward-looking statements or to make any other forward-looking statement, whether as a result of new information, future events, or otherwise.
Access Plans USA, Inc.
Condensed Consolidated Statement of Operations, Cash Flow and
Financial Condition
(Dollars in Thousands, except per share amounts)
For the Quarter Ended
March 31,
--------------------
2008 2007
-------- --------
Statement of Operations Data
Commission and service revenue $ 10,585 $ 8,325
Total operating expenses 11,607 8,621
-------- --------
Loss before income taxes (1,022) (296)
Provision for income tax expense 21 29
-------- --------
Net loss $ (1,043) $ (325)
======== ========
Net loss per share - fully diluted(1) $ (0.05) $ (0.02)
======== ========
(1) Basic per share amounts approximate fully diluted per share
amounts.
For the Quarter Ended
March 31,
--------------------
2008 2007
-------- --------
Statement of Cash Flows Data
Net cash provided (used) by:
Operating activities $ (793) $ 659
Investing activities (1,339) (108)
Financing activities 793 (34)
-------- --------
Net increase (decrease) in cash $ (1,339) $ 517
======== ========
March 31, December 31,
Balance Sheet Data 2008 2007
-------- --------
Unrestricted cash $ 1,372 $ 2,711
Total debt 1,860 1,255
Working capital 1,283 1,076
Goodwill and other intangible assets 9,196 9,449
Shareholders' equity 10,250 11,257
Access Plans USA, Inc.
Reconciliation of GAAP to Non-GAAP (Core Earnings) Financial Measures
(Dollars in Thousands)
Year
ended
2008 2007 Dec 31,
------- -------------------------------- --------
1Q 4Q 3Q 2Q 1Q 2007
------- ------ ------- ------- ------ --------
Pre-tax earnings
(loss) - GAAP
* Consumer
Plan $ (270) $ 267 $(3,179) $ (640) $ 156 $(3,396)
* Insurance
Marketing 258 228 (4,452) (107) (40) (4,371)
* Regional
Healthcare (405) 300 (44) (4,086) 265 (3,565)
* Corporate (605) (594) (546) (597) (677) (2,414)
------- ------ ------- ------- ------ -------
Consolidated
Total $(1,022) $ 201 $(8,221) $(5,430) $ (296) $(13,746)
------- ------ ------- ------- ------ -------
Reconciling items
- add back:
a) Goodwill
valuation
charges:
* Consumer Plan -- -- 3,377 -- -- 3,377
* Insurance
Marketing -- -- 4,600 -- -- 4,600
* Regional
Healthcare -- -- -- 4,092 -- 4,092
b) Other
impairment
charges
relating to
unsuccessful
marketing
initiatives:
* Consumer Plan -- 28 -- 522 -- 550
* Insurance
Marketing -- -- -- 174 -- 174
c) Intangible
asset
amortization:
* Consumer
Plan 46 46 -- -- -- 46
* Insurance
Marketing 209 209 209 209 140 767
d) Depreciation
charges
* Consumer Plan 45 53 36 27 75 191
* Insurance
Marketing 9 7 6 5 3 21
* Regional
Healthcare 25 25 25 26 27 103
* Corporate 2 2 1 1 2 6
e) Non-cash stock
compensation:
* Corporate 36 34 52 59 259 404
f) Legal and
settlement
costs:
* Consumer Plan 300 53 93 406 37 589
* Regional
Healthcare 146 49 219 239 -- 507
* Corporate 50 -- -- -- -- --
g) PME upfront
commissions
paid:
* Consumer Plan 327 53 93 406 37 589
Pre-tax core
earnings -
non-GAAP:
* Consumer
Plan $ 448 $ 447 $ 327 $ 315 $ 268 $ 1,357
* Insurance
Marketing 476 444 363 281 103 1,191
* Regional
Healthcare (234) 374 200 271 292 1,137
* Corporate (517) (558) (493) (537) (416) (2,004)
------- ------ ------- ------- ------ -------
$ 173 $ 707 $ 397 $ 330 $ 247 $ 1,681
======= ====== ======= ======= ====== =======
Access Plans USA, Inc.
Supplementary Financial Information
(Dollars in Thousands)
Year
ended
2008 2007 Dec. 31,
------- ---------------------------------- -------
1Q 4Q 3Q 2Q 1Q 2007
------- ------- ------- ------- ------- -------
Consumer Plan
Division(1)
Member count at
quarter-end:(2)
Program 46,655 38,270 27,902 28,965 30,649 38,270
Network Access 38,895 46,718 n/a n/a n/a 46,718
Revenues $ 3,928 $ 4,273 $ 3,140 $ 3,269 $ 3,121 $13,803
Core Earnings 448 447 327 315 268 1,357
Operating
margin 11.4% 10.5% 10.4% 9.6% 8.6% 9.8%
======= ======= ======= ======= ======= =======
Insurance
Marketing
Division(3)
Policies
in-force at
quarter-end:
Major medical
policies 17,455 16,440 15,317 14,353 13,665 16,440
Medicare
supplement
policies 10,844 12,873 13,305 13,549 14,107 12,873
Revenues $ 5,809 $ 5,640 $ 5,675 $ 5,403 $ 3,416 $20,134
Core Earnings 476 444 363 281 103 1,191
Operating
margin 8.2% 7.9% 6.4% 5.2% 3.0% 5.9%
======= ======= ======= ======= ======= =======
Regional
Healthcare
Division
Member count at
quarter-end: 11,067 25,612 28,215 29,666 31,005 25,612
Revenues $ 848 $ 1,603 $ 1,619 $ 1,709 $ 1,770 $ 6,701
Core Earnings (234) 374 200 271 292 1,137
Operating
margin -27.6% 23.3% 12.4% 15.9% 16.5% 17.0%
======= ======= ======= ======= ======= =======
Total Revenues
Consumer Plan $ 3,928 $ 4,273 $ 3,140 $ 3,269 $ 3,121 $13,803
Insurance
Marketing 5,809 5,640 5,675 5,403 3,416 20,134
Regional
Healthcare 848 1,603 1,619 1,709 1,770 6,701
Corporate -- 4 5 9 18 36
------- ------- ------- ------- ------- -------
Consolidated
total revenue $10,585 $11,520 $10,439 $10,390 $ 8,325 $40,674
======= ======= ======= ======= ======= =======
Total Core
Earnings
Consumer Plan $ 448 $ 447 $ 327 $ 315 $ 268 $ 1,357
Insurance
Marketing 476 444 363 281 103 1,191
Regional
Healthcare (234) 374 200 271 292 1,137
Corporate (517) (558) (493) (537) (416) (2,004)
------- ------- ------- ------- ------- -------
Consolidated
total $ 173 $ 707 $ 397 $ 330 $ 247 $ 1,681
======= ======= ======= ======= ======= =======
(1) Protective Marketing Enterprises (PME) was acquired October 1,
2007. Accordingly, results for fiscal 3Q07 and prior exclude PME
results.
(2) Consumer Plan member count has been segregated into two
categories: a) "program members" -- customers who purchase an
entire product/program that we have developed and sold, either
directly or through a wholesale relationship - and b) "network
access" members where we provide access to networks, primarily our
proprietary dental and vision networks, through wholesale lease
arrangements.
(3) The Insurance Marketing Division was acquired January 30, 2007.
Accordingly, results for January 2007 have been excluded.