APCO Announces Q1 Results
28 April 1998
Automobile Protection Corporation Announces Record Results for the First Quarter
ATLANTA, April 28 -- Automobile Protection Corporation
(APCO), announces record first quarter results. Revenues
increased 28% to $25,813,000 from $20,095,000; net income increased 117% to
$1,368,000 from $629,000 and diluted earnings per share increased 120% to
$0.11 from $0.05.
Larry I. Dorfman, President/CEO of APCO said; "We are pleased to report a
117% increase in net income, which is attributable to strong sales growth and
leverage of our cost infrastructure. Sales growth was achieved through
innovative marketing programs, such as motorsports sponsorships, and from
providing the best service in the industry. APCO has made a major commitment
to its dealer training and development programs, which are designed to
increase finance and insurance income for the dealer. Additionally, we
believe continual investment in our claims administration system is critical
to providing the level of service which EasyCare(R) vehicle service contracts
have become known for. The EasyCare(R) brand name continues to gain
acceptance among automobile dealers, and more recently, among recreational
vehicle dealers too.
During the past few months, we have been awarded four large contracts,
which we expect will provide us with strong growth for the next several years.
In late 1997, we signed an exclusive agreement with Sonic Automotive,
currently ranked by Automotive News as the 8th largest dealer group. A few
weeks ago, we signed an exclusive agreement with Kelley Automotive, the 38th
largest dealer group. We are naturally delighted to have relationships with
these fast growing dealerships. Although both relationships originated from
our motorsports sponsorship programs, the ultimate decision by these dealers
to select us was based on our reputation for service, training and
development.
In March, our subsidiary, The Aegis Group, Inc., announced an agreement to
provide administrative services to Allstate Insurance Company, which has
developed a mechanical breakdown insurance policy to be offered by their
agents and through direct marketing to Allstate policy holders and others.
Allstate selected Aegis as an outsourcing vendor, based on its reputation for
service and its demonstrated administrative capabilities.
Also in March, Banc One Insurance Services Corporation selected Aegis to
administer a private label service contract program, called The One(R) Care,
which it will offer to those dealers Bank One has banking relationships with.
This agreement is a direct result of our reputation for service and the long
standing relationship we have had with Bank One in Kentucky for several years.
We are extremely honored that Sonic Automotive, Allstate Insurance
Company, Banc One Insurance Services Corporation and Kelley Automotive have
recently chosen us to provide them with our expertise in administration,
marketing and design of vehicle service contract and mechanical breakdown
insurance products."
"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 1997 year.
APCO, established in 1984, is a leading marketer and administrator of
products and services to automobile and recreational vehicle dealers. The
Company's core business is the marketing and administration of EasyCare(R)
Vehicle Service Contracts and the EasyCare(R) Certified Pre-Owned Vehicle
Merchandising Program. The Company also administers warranty and service
contract products under private labels for financial institutions, an
insurance company and a manufacturer.
AUTOMOBILE PROTECTION CORPORATION - APCO
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Ended
March 31, 1998 March 31, 1997
Revenues $25,813,000 $20,095,000
Cost of sales:
Premiums and taxes 15,967,000 12,931,000
Commissions and other costs 4,002,000 2,893,000
Total cost of sales 19,969,000 15,824,000
5,844,000 4,271,000
Expenses:
Compensation, selling and administrative 3,908,000 3,387,000
Depreciation and amortization 118,000 104,000
Interest, dividend and other income (353,000) (234,000)
3,673,000 3,257,000
Income before provision for income taxes 2,171,000 1,014,000
Provision for income taxes 803,000 385,000
Net income $ 1,368,000 $ 629,000
Net income per share:
Basic $ 0.12 $ 0.06
Diluted $ 0.11 $ 0.05
Number of shares used in computing
net income per share:
Basic 11,207,000 10,633,000
Diluted 12,287,000 11,419,000
SOURCE Automobile Protection Corporation