APCO Announces Record First Quarter Results
29 April 1999
Automobile Protection Corporation - APCO Announces Record First Quarter Results
ATLANTA, April 29 -- Automobile Protection Corporation
announces record first quarter revenues and net income for the
three months ended March 31, 1999. Revenues were also the second highest for
any quarter in the Company's history.
Revenues for the quarter were $30,836,000 compared to $25,814,000 for
1997, an increase of 19%. Net income for the quarter was $1,762,000 compared
to $1,368,000 for 1997, an increase of 29%. Diluted EPS for the quarter was
$0.14 compared to $0.11 for 1997, an increase of 27%. Included in net income
is a positive after tax adjustment of $67,000 to an abandonment reserve
established in 1998 relating to the Company's relocation in 1999, which has
been delayed by four months. This had less than a $0.01 impact on diluted
earnings per share.
Mr. Dorfman commented: "We experienced solid growth in our core EasyCarea
service contract business. We are pleased to report that volumes from our
third party administrative business rose significantly over the first quarter
of 1998 and also over the fourth quarter of 1998. On a per unit basis, this
business generates lower revenues than our core service contract business, as
we only receive and report an administrative fee, as compared to the rate
charged to the dealer in our service contract business, which includes the
administrative fee and cost of insurance, brokerage fees and taxes. We are
extremely encouraged by this new business and expect it to become an important
contributor to our overall business."
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 EasyCarea
vehicle service contracts. The Company also administers warranty and service
contract products under private labels.
"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 1998
year.
AUTOMOBILE PROTECTION CORPORATION -- APCO
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended Three Months Ended
March 31, 1999 March 31, 1998
Revenues $30,836,000 $25,814,000
Cost of sales:
Premiums and Taxes 19,932,000 15,967,000
Commissions
and other costs 3,976,000 4,002,000
Total cost of sales 23,908,000 19,969,000
6,928,000 5,845,000
Expenses:
Compensation, selling
and administrative 4,482,000 3,908,000
Depreciation and
amortization 120,000 118,000
Interest, dividend
and other income (467,000) (352,000)
4,135,000 3,674,000
Income before provision
for income taxes 2,793,000 2,171,000
Provision for income taxes 1,031,000 803,000
Net income $1,762,000 $1,368,000
Net income per share:
Basic $0.15 $0.12
Diluted $0.14 $0.11
Number of shares used in computing
net income per share:
Basic 11,862,000 11,207,000
Diluted 12,796,000 12,287,000