APCO Announces Record Fourth Quarter and Annual Results
4 February 1999
Automobile Protection Corporation (APCO) Announces Record Fourth Quarter and Annual Results
ATLANTA, Feb. 3 -- Automobile Protection Corporation
announces record revenues and net income for its fourth quarter
and year ended December 31, 1998.
Revenues for the quarter were $30,394,000 compared to $22,955,000 for
1997, an increase of 32%. Net income for the quarter was $1,516,000 compared
to $1,194,000 for 1997, an increase of 27%. Diluted EPS for the quarter was
$0.12 compared to $0.10 for 1997, an increase of 20%. The fourth quarter 1997
results included a benefit of $0.01 from an adjustment to a vendor payment
earlier in 1997. Excluding this adjustment last year, fourth quarter EPS
would have increased 33% in 1998 compared to 1997.
Revenues for the year were $119,954,000 compared to $93,935,000 for 1997,
an increase of 28%. Net income for the year was $6,606,000 compared to
$4,051,000 for 1997, an increase of 63%. Diluted EPS for the year was $0.53
compared to $0.35 for 1997, an increase of 51%.
Larry I. Dorfman, President/CEO stated: "The fourth quarter and the entire
1998 were exceptional periods for APCO. We experienced record sales and net
income for the fifth consecutive year. Our core EasyCare(R) service contract
business continues to grow strongly. It is exciting to look at our
development over a period of time, such as the past five years, and notice our
growth in dollars, not just percentages. Sales have grown from slightly less
than $30 million in 1994 to almost $120 million in 1998, a four-fold increase.
Net income has grown from approximately $1 million in 1994 to $6.6 million in
1998, a more than six-fold increase. Shareholders' equity has grown from
$5.4 million in 1994 to $35.4 million in 1998, a more than six-fold increase.
During this time, we have grown the number of sales representatives,
dealers, employees and administrative capabilities, such that we are now
recognized as one of the leading service contract administrators in the
industry. During the past year, we entered into or renewed alliances with
prestigious companies such as American Honda Finance Corporation, AllState
Insurance Company, Autoconnect.com, Banc One Insurance Services Corporation,
Kelley Automotive, Manheim Auto Auctions and Sonic Automotive. We are also in
the process of finalizing other such alliances, which we hope to announce
soon. Our core agent driven business, along with these alliances, should
enable us to continue our growth into the future.
We are focusing our efforts on helping dealers' increase sales,
profitability and very importantly, ways to generate repeat business for the
service department. In this regard, we made an announcement last week
regarding the release of Service Advisor Plusa by EasyCare, which is a
maintenance reminder software package. We clearly lead the service contract
industry with products such as Service Advisor Plus by EasyCare and our
relationship with Autoconnect.com(R), which we believe will generate a
significant amount of interest in the dealer community during 1999."
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.
"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. The
specific risk factors are described in the Company's Form 10-K that has been
filed with the Securities & Exchange Commission in connection with its 1997
year.
AUTOMOBILE PROTECTION CORPORATION -- APCO
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended Three Months Ended
December 31, 1998 December 31, 1997
Revenues $30,394,000 $22,955,000
Cost of sales:
Premiums and Taxes 19,695,000 14,250,000
Commissions and other
costs 4,190,000 3,301,000
Total cost of sales 23,885,000 17,551,000
6,509,000 5,404,000
Expenses:
Compensation, selling
and administrative 4,479,000 3,724,000
Depreciation and
amortization 99,000 123,000
Interest, dividend and
other income (477,000) (352,000)
4,101,000 3,495,000
Income before provision
for income taxes 2,408,000 1,909,000
Provision for income taxes 892,000 715,000
Net income $1,516,000 $1,194,000
Net income per share:
Basic $0.13 $0.11
Diluted $0.12 $0.10
Number of shares used in
computing net income
per share:
Basic 11,785,000 10,940,000
Diluted 12,645,000 12,050,000
AUTOMOBILE PROTECTION CORPORATION -- APCO
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Year Ended Year Ended
December 31, December 31,
1998 1997
Revenues $119,954,000 $93,935,000
Cost of sales:
Premium and taxes 76,857,000 60,233,000
Commissions and other costs16,887,000 13,650,000
Total cost of sales 93,744,000 73,883,000
26,210,000 20,052,000
Expenses:
Compensation, selling and
administrative 17,029,000 14,244,000
Depreciation and amortization 438,000 449,000
Interest, dividend and
other income (1,744,000) (1,172,000)
15,723,000 13,521,000
Income before provision
for income taxes 10,487,000 6,531,000
Provision for income taxes 3,881,000 2,480,000
Net income $6,606,000 $4,051,000
Net income per share:
Basic $0.57 $0.38
Diluted $0.53 $0.35
Number of shares used in computing
net income per share:
Basic 11,584,000 10,760,000
Diluted 12,508,000 11,584,000