APCO Announces Q3 Revenues and Income
30 October 1997
Automobile Protection Corporation - APCO - Announces 45% Revenue Increase And 86% Net Income Increase for the Third Quarter
ATLANTA, Oct. 30 -- Automobile Protection Corporation
announced record third quarter and nine month revenues, net
income and income per share. For the third quarter ended September 30, 1997,
revenues were $27,087,863, an increase of 45% over 1996 and for the nine
months ended September 30, 1997, revenues were $70,980,206, an increase of
40% over 1996. For the third quarter, net income was $1,341,912, an increase
of 86% over 1996 and for the nine months, net income was $2,856,304, an
increase of 69% over 1996. For the third quarter, income per share was
$0.11 compared to $0.06 for 1996, an increase of 83% and for the nine months,
income per share was $0.24 compared to $0.15 for 1996, an increase of 60%.
Larry I. Dorfman, CEO/President, stated: "We are delighted with these
results, which represent the best quarter in the Company's history by a wide
margin. Major contributors to our growth and results were the EasyCare(R)
Certified Pre-Owned Vehicle Program and the program with American Honda
Finance Corporation. The EasyCare(R) Certified program was introduced late
last year and has become an important part of APCO's product line. As we
expected when the program was launched, franchise dealers are very interested
in improving the used vehicle buying experience for their customers and the
"warranty" element is vital to the experience. EasyCare(R) Certified provides
the dealer with a full range of services, including extensive training,
flexible warranty products and advertising assistance. This quarter also
showed how much operating leverage we were able to generate from our cost
structure."
Mr. Dorfman commented further: "Although automobile sales are seasonal
and a sales decline usually occurs in the fourth quarter every year, we expect
to continue showing strong year over year growth. Our product line is
attracting both additional and larger dealership groups and we feel that
continuing our commitment to providing the best training and claims service in
the industry will be the basis for our continued growth."
"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995: To the extent that this news release discusses financial
projections, information or expectations about our products or markets, or
otherwise makes statements about the future, our statements are forward
looking and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from the statements made. These
factors include, but are not limited to, the competitive nature of the
industry in which some competitors have significantly greater financial
resources and name recognition than the Company, the availability of insurance
coverage at competitive rates and of insurance funds to make claims payments,
the Company's dependence on independent sales representatives, dealers and a
major automobile manufacturer, the cyclical nature of the automobile industry,
and other risks detailed in the Company's Form 10-K that has been filed with
the Securities and Exchange Commission in connection with its 1996 year.
APCO, established in 1984, is a leading marketer and administrator of
products and services to automobile dealers which are designed to enhance
customer satisfaction and dealership profitability. The Company's core
business is the marketing and administration of the EasyCare(R) Certified Pre-
Owned Vehicle Program and Vehicle Service Contracts to automobile and
recreational vehicle dealers.
AUTOMOBILE PROTECTION CORPORATION - APCO
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three months ended
9/30/97 9/30/96
Revenues $27,087,863 $18,642,959
Cost of sales:
Premiums and taxes 17,604,493 12,016,556
Commissions and other costs 3,956,858 2,607,863
Total cost of sales 21,561,351 14,624,419
Total 5,526,512 4,018,540
Expenses:
Compensation, selling and administrative 3,565,656 2,952,983
Depreciation and amortization 111,000 121,500
Interest, dividend and other income (326,745) (212,657)
Total 3,349,911 2,861,826
Income before provision for income taxes 2,176,601 1,156,714
Provision for income taxes (834,689) (437,000)
Net income $ 1,341,912 $ 719,714
Net income per share (primary and
fully diluted) $ 0.11 $ 0.06
Number of shares used in computing
net income per share:
Primary basis 11,777,000 11,495,000
Fully diluted basis 11,881,000 11,550,000
Nine months ended
9/30/97 9/30/96
Revenues $70,980,206 $50,721,885
Cost of sales:
Premiums and taxes 45,983,441 32,706,212
Commissions and other costs 10,349,247 7,106,418
Total cost of sales 56,332,688 39,812,630
Total 14,647,518 10,909,255
Expenses:
Compensation, selling and administrative 10,520,976 8,401,337
Depreciation and amortization 325,500 327,794
Interest, dividend and other income (819,951) (545,434)
Total 10,026,525 8,183,697
Income before provision for income taxes 4,620,993 2,725,558
Provision for income taxes (1,764,689) (1,040,000)
Net income $ 2,856,304 $ 1,685,558
Net income per share (primary and
fully diluted) $ 0.24 $ 0.15
Number of shares used in computing
net income per share:
Primary basis 11,665,000 11,027,000
Fully diluted basis 11,769,000 11,081,000
SOURCE Automobile Protection Corporation