Access Plans USA, Inc. - Financial Highlights (dollars in thousands except per share amounts) Quarter Ended September 30, September 30, Year-To-Date ------------------------- -------------------------- % % 2008 2007 Change 2008 2007 Change ---- ---- ------ ---- ---- ------ Revenues $ 8,688 $ 7,482 16% $ 26,895 $ 20,365 32% Gross margin (1) 2,664 2,346 14% 8,050 7,139 13% Net loss: Continuing operations (2) $ (126) $ (3,794) *** $ (1,112) $ (5,797) *** Discontinued operations (702) (3,970) *** (1,085) (7,743) *** -------- -------- -------- -------- Total net loss $ (828) $ (7,764) *** $ (2,197) $(13,540) *** ======== ======== ======== ======== Net loss per diluted share $ (0.04) $ (0.38) *** $ (0.11) $ (0.73) *** -------- -------- -------- -------- Core earnings (loss) (3) $ 117 $ 47 149% $ 282 $ (123) *** ======== ======== ======== ======== 1) Gross margin comprises total revenue less commissions, provider network benefit costs, other costs directly related to revenue generation, and interest expense 2) Continuing operations comprise the results of our Insurance Marketing and Consumer Plan divisions, plus the costs of our Corporate and Other activities - primarily expenses attributable to operating as a public company. 3) Core earnings, a non-GAAP measure, comprise pre-tax income from continuing operations before charges for depreciation, amortization, non-cash stock compensation, goodwill and other non- cash charges, restructuring charges, and significant legal/settlement costs related to prior year activities. A reconciliation to our GAAP results is set forth in a table included in this news release. *** Not meaningful.
IRVING, Texas, Nov. 14, 2008 (GLOBE NEWSWIRE) -- Access Plans USA, Inc. (Nasdaq:AUSA), a developer and nationwide distributor of quality affordable consumer driven healthcare programs designed to deal with the rising costs of healthcare, reported its financial results for the quarter ended September 30, 2008.
The 16% increase in third quarter revenue to $8,688,000 reflects a 24% growth in Insurance Marketing revenue and increased revenue attributable to Consumer Plan's October 1, 2007 acquisition of Protective Marketing Enterprises, Inc. (PME). Core earnings grew to $117,000 for the quarter and $282,000 year-to-date. The company believes that "core earnings" better recognizes the underlying operating activity - the table set forth later in this news release provides a reconciliation of this non-GAAP financial measure to our reported GAAP results. The third quarter loss of $126,000 from continuing operations reflects a substantial reduction in prior quarter losses. This loss comprises core earnings adjusted to include non-cash depreciation, amortization and stock compensation costs of $211,000 and a provision for state franchise expense.
During the third quarter of 2008, in connection with the Company's agreement to merge with Alliance HealthCard, Inc., which was announced yesterday, the Company has undertaken an initiative to exit the third-party administration market. Accordingly, our El Paso-based Regional Healthcare has been reclassified as a discontinued operation. Discontinued operations also include the results of ACP Agency, which prior to the second quarter of 2008 were included in the Insurance Marketing division.
"Our third quarter results were fairly consistent with second quarter operating results," said Ian R. Stuart, Interim President and Chief Executive Officer of Access Plans USA. "While we generated further growth in our Insurance Marketing division and a modest Consumer Plan division earnings contribution, these combined results were insufficient to cover the substantial costs of operating as public company and significant Regional Healthcare division losses, which are now reported as discontinued operations.
"Based on our year-to-date performance and our present limited capital resources, I firmly believe that the announced merger agreement with Alliance is the best opportunity to restore value for our shareholders and to offer them the prospect of an improved return on their investment," Stuart said.
Additional financial information is set forth below:
* 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. We develop and distribute quality affordable consumer driven healthcare programs for individuals and families. Our products and programs are designed to deal with the rising costs of healthcare. They include health insurance plans and non-insurance healthcare discount programs to help provide solutions for the millions of Americans who need access to affordable healthcare. 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.globenewswire.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 Statements of Operations, Cash Flow and Balance Sheet Data (dollars in thousands except per share amounts) Quarter Ended Nine Months Ended September 30, September 30, ------------------- ------------------- 2008 2007(1) 2008 2007(1) ---- ------- ---- ------- Statement of Operations Data ----------------------- Total revenue $ 8,688 $ 7,482 $ 26,895 $ 20,365 Direct expenses 6,024 5,136 18,845 13,226 -------- -------- -------- -------- Gross margin 2,664 2,346 8,050 7,139 Personnel, general and administrative costs and depreciation/amortization 2,758 2,637 8,959 8,723 Restructuring and impairment charges -- 3,977 164 4,673 -------- -------- -------- -------- Total operating expenses 2,758 6,614 9,123 13,396 -------- -------- -------- -------- Loss from continuing operations before income taxes (94) (4,268) (1,073) (6,257) Income tax provision (benefit) 32 (474) 39 (460) -------- -------- -------- -------- Loss from continuing operations (126) (3,794) (1,112) (5,797) Loss from discontinued operations (702) (3,970) (1,085) (7,743) -------- -------- -------- -------- Net loss $ (828) $ (7,764) $ (2,197) $(13,540) ======== ======== ======== ======== Basic and diluted net income (loss) per share: Continuing operations $ (0.01) $ (0.19) $ (0.06) $ (0.31) Discontinued operations (0.03) (0.19) (0.05) (0.42) -------- -------- -------- -------- Total $ (0.04) $ (0.38) $ (0.11) $ (0.73) ======== ======== ======== ======== Statement of Cash Flows Data ----------------------- Net cash provided by (used in): Operating activities: Continuing operations $ 161 $ 218 $ (1,085) $ 136 Discontinued operations (600) 145 (592) 553 -------- -------- -------- -------- Total (439) 363 (1,677) 689 Investing activities 251 (62) 100 320 Financing activities (280) (651) 92 (735) -------- -------- -------- -------- Net change in unrestricted cash $ (468) $ (350) $ (1,485) $ 274 ======== ======== ======== ======== September 30, December 31, Balance Sheet Data 2008 2007 ------------------ ---- ---- Unrestricted cash $ 1,226 $ 2,711 Restricted short-term investments 858 1,231 Total debt 1,394 1,255 Working capital 895 1,813 Goodwill and intangible assets 8,366 8,951 Shareholder's equity 9,071 11,257 ============= ============ 1) Reclassified certain amounts to conform to the current period's presentation Access Plans USA, Inc. Reconciliation of GAAP to Non-GAAP (Core Earnings) Financial Measures (Dollars in Thousands) 2008 2007 ------------------------- ------------------------- 3Q 2Q 1Q 4Q 3Q 2Q ------- ------- ------- ------- ------- ------- Pre-tax earnings/ (loss) - GAAP ---------- * Consumer Plan $ 120 $ 116 $ (268) $ 268 $(3,179) $ (640) * Insurance Marketing (1) 259 190 182 141 (543) (150) * Corporate (473) (594) (605) (595) (546) (597) ------- ------- ------- ------- ------- ------- Consoli- dated Total (94) (288) (691) (186) (4,268) (1,387) ------- ------- ------- ------- ------- ------- Reconciling items - add back: ------------ a) Goodwill valuation charges: * Consumer Plan -- -- -- -- 3,377 -- * Insurance Marketing -- -- -- -- 600 -- b) Other impairment charges: * Consumer Plan -- -- -- 28 -- 522 * Insurance Marketing -- -- -- -- -- 174 * Corporate -- 164 -- -- -- -- c) Intangible asset amortiz- ation: * Consumer Plan 45 45 46 46 -- -- * Insurance Marketing 149 149 149 149 149 149 d) Deprecia- tion charges * Consumer Plan 48 45 45 53 36 26 * Insurance Marketing 9 9 9 7 6 5 * Corporate 1 1 2 2 2 2 e) Non-cash stock compen- sation expense * Corporate (41) 15 36 34 52 59 f) Legal and settle- ment costs: * Consumer Plan -- 45 334 53 93 406 * Corporate -- -- 50 -- -- -- Pre-tax core earnings - non-GAAP: ------------ * Consumer Plan 213 251 157 448 327 314 * Insurance Marketing (1) 417 348 340 297 212 178 * Corporate (513) (414) (517) (559) (492) (536) ------- ------- ------- ------- ------- ------- Consolid- ated Total $ 117 $ 185 $ (20) $ 186 $ 47 $ (44) ======= ======= ======= ======= ======= ======= 1) Insurance Marketing excludes the ACP Agency results reported as discontinued operations Access Plans USA, Inc. Supplementary Financial Information (Dollars in Thousands) (1) 2008 2007 ------------------------- ------------------------- 3Q 2Q 1Q 4Q 3Q 2Q ------- ------- ------- ------- ------- ------- Consumer Plan Division (2) --------------- Member count at quarter-end Program 39,855 49,709 55,535 39,737 27,902 28,965 Network 33,483 38,278 37,950 46,718 n/a n/a Revenues $ 3,304 $ 4,092 $ 3,906 $ 4,238 $ 3,146 $ 3,269 Gross margin 1,437 1,553 1,376 1,735 1,241 1,420 Core earnings 213 251 157 448 327 314 Operating margin 6.4% 6.1% 4.0% 10.6% 10.4% 9.6% ======= ======= ======= ======= ======= ======= Insurance Marketing Division ------------- Major medical policies in- force at quarter-end 20,318 19,161 17,820 16,449 15,317 14,353 Revenues $ 5,376 $ 5,268 $ 4,923 $ 4,468 $ 4,331 $ 4,077 Gross margin 1,222 1,230 1,216 1,103 1,113 1,159 Core earnings 417 348 340 297 212 178 Operating margin 7.8% 6.6% 6.9% 6.6% 4.9% 4.4% ======= ======= ======= ======= ======= ======= Total Revenues -------------- Consumer Plan $ 3,304 $ 4,092 $ 3,906 $ 4,238 $ 3,146 $ 3,269 Insurance Marketing 5,376 5,268 4,923 4,468 4,331 4,077 Corporate 8 13 5 4 5 10 ------- ------- ------- ------- ------- ------- Consolidated total $ 8,688 $ 9,373 $ 8,834 $ 8,710 $ 7,482 $ 7,356 ======= ======= ======= ======= ======= ======= Total Core Earnings ---------- Consumer Plan $ 213 $ 251 $ 157 $ 448 $ 327 $ 314 Insurance Marketing 417 348 340 297 212 178 Corporate (513) (414) (517) (559) (492) (536) ------- ------- ------- ------- ------- ------- Consolidated total $ 117 $ 185 $ (20) $ 186 $ 47 $ (44) ======= ======= ======= ======= ======= ======= 1) Certain amounts have been reclassified to conform to the current period's presentation 2) 4Q07 and later results include Protective Marketing Enterprises - acquired October 1, 2007