Automobile Protection Corporation (APCO) Announces Record Fourth Quarter and Full Year Results
4 February 1998
Automobile Protection Corporation (APCO) Announces Record Fourth Quarter and Full Year Results
ATLANTA, Feb. 4 -- Automobile Protection Corporation
announces record revenues and net income for its fourth quarter
and year ended December 31, 1997. Revenues for the quarter were $22,955,000
compared to $16,487,000 for 1996, an increase of 39%. Net income was
$1,194,000 compared to a net loss of $122,000 for 1996. Diluted EPS was $0.10
compared to a loss of $0.01 for 1996. Revenues for the year were $93,935,000
compared to $67,208,000 for 1996, an increase of 40%. Net income was
$4,051,000 compared to $1,564,000 for 1996. Diluted EPS was $0.35 compared to
$0.14 for 1996.
Larry I. Dorfman, President/CEO stated: "The fourth quarter is typically
difficult for automobile dealers and consequently also their service contract
providers. This year was no exception; nevertheless, we are very satisfied
with our sales and net income for the quarter. Sales for the fourth quarter
increased 39% over the fourth quarter of the prior year, which was in line
with our expectations and our year to date sales growth rate. Net income for
this quarter was $1,194,000, which included a benefit of approximately
$165,000 ($0.01 per share) from an adjustment to a vendor payment in prior
periods. Net income (excluding the adjustment) of $1,029,000 ($0.09 per
share) increased by 143% over recurring net income for the prior year of
$423,000 ($0.04 per share). We are extremely pleased to report that we
achieved net income in excess of $4 million for 1997, which is a near doubling
of our 1996 recurring net income. It is especially exciting to look back to
1994, which was our turnaround year, to compare current year sales of $94
million to $30 million in 1994 and current year net income of $4 million to
$1 million in 1994."
Mr. Dorfman also stated: "We continue to see excellent growth
opportunities for APCO in our core EasyCare(R) and EasyCare(R) Certified
products. We are extremely pleased with the recently announced agreement with
Sonic Automotive holdings, Inc. , which we expect to be an
important source of revenue growth for 1998. In addition to the above, we are
preparing to launch a major new service contract product line, which will
enable us to penetrate lower price points. We expect this product line to
both take us into new geographical markets and also to fill out our existing
distribution system. In addition to the expected growth within our
established distribution system, we continue to work on several longer term
projects with major partners, which we expect to be an important source of
future growth."
As required by the Financial Accounting Standards Board, the Company
adopted SFAS 128 this quarter, which requires earnings per share for the
current year, future years and all prior periods to be computed under a
different methodology. Under SFAS 128, our diluted earnings per share for the
first nine months was $0.25, compared to $0.24 reported under the previous
methodology.
APCO (established 1984) and its administrative subsidiary, The Aegis
Group, Inc., is a leading marketer and administrator of vehicle service
contract and warranty products for the automotive and recreational vehicle
industries.
"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 & Exchange Commission in connection with its 1996 year.
AUTOMOBILE PROTECTION CORPORATION - APCO
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Three Months Ended
12/31/97 12/31/96
Revenues $22,954,961 $16,486,521
Cost of Sales:
Premiums and Taxes 14,249,721 10,432,183
Commissions and other
costs 3,301,077 2,254,073
Total cost of sales 17,550,798 12,686,256
Total 5,404,163 3,800,265
Expenses:
Compensation, selling
and administrative 3,722,956 3,257,447
Depreciation and
amortization 123,152 112,966
Interest, dividend and
other income (351,668) (246,509)
Other item --- 875,000
Total 3,494,440 3,998,904
Income before provision
for income taxes 1,909,723 (198,639)
Provision for income taxes 715,311 (77,000)
Net income $1,194,412 $(121,639)
Net income per share:
Basic $0.11 $(0.01)
Diluted $0.10 $(0.01)
Number of shares used in
computing net income
per share:
Basic 10,940,000 10,543,000
Diluted 12,050,000 11,543,000
Year Ended Year Ended
12/31/97 12/31/96
Revenues $93,935,167 $67,208,406
Cost of Sales:
Premiums and Taxes 60,233,162 43,138,395
Commissions and other
costs 13,650,324 9,360,491
Total cost of sales 73,883,486 52,498,886
Total 20,051,681 14,709,520
Expenses:
Compensation, selling
and administrative 14,243,932 11,658,784
Depreciation and
amortization 448,652 440,760
Interest, dividend and
other income (1,171,619) (791,943)
Other item --- 875,000
Total 13,520,965 12,182,601
Income before provision
for income taxes 6,530,716 2,526,919
Provision for income taxes 2,480,000 963,000
Net income $4,050,716 $1,563,919
Net income per share:
Basic $0.38 $ 0.16
Diluted $0.35 $ 0.14
Number of shares used in
computing net income
per share:
Basic 10,760,000 10,078,000
Diluted 11,584,000 10,980,000
SOURCE Automobile Protection Corporation