Precis, Inc. Announces First Quarter 2004 Results
Precis via BizWire
Cash-in-Trust Grew By $1.2 Million or 42.9%
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GRAND PRAIRIE, Texas--(BUSINESS WIRE)--April 29, 2004--Precis,
Inc. (NASDAQ:PCIS) a leader in healthcare services and membership
based programs, announced today financial results for the first
quarter ended March 31, 2004. The Company's business focus is to
service the ever growing number of uninsured in the United States. The
total number of uninsured Americans, which represents the Company's
largest market, now approximates 43.6 million or 15.6% of the total
population. Given the rising costs of healthcare, the market need for
Precis Inc.'s healthcare product offering is ever increasing.
Revenues for the first quarter of 2004 were $9.9 million, a
decrease of $0.9 million or 8.3% compared to $10.8 million during the
comparable 2003 period. Net earnings for the first quarter of 2004
were $0.6 million and $0.05 per fully diluted earnings per share, a
decrease as compared to net earnings of $1.2 million and $0.10 per
fully diluted earnings per share during the comparable 2003 period. As
was expected, revenues and net earnings for the first quarter of 2004
were impacted by the recent escrow based product, changes to our
healthcare product offering, as well as certain infrastructure costs
associated with our newly created Care Financial and Care125
divisions. Care Financial offers businesses and individuals health and
life insurance products. Care125 offers flexible spending plans and
healthcare reimbursement arrangements for employers.
The Company's cash and cash equivalents and cash-in-trust as of
March 31, 2004 were $12.0 million and $4.0 million, an increase of
$0.9 million and $1.2 million or 8.1% and 42.9%, respectively. The
growth in the Company's cash-in-trust (medical escrow accounts) has
continued at a significant rate throughout 2003 and for the first
quarter in 2004. Fully diluted net book value per share as of December
31, 2003 and March 31, 2004 was $2.82 and $2.87, respectively. Fully
diluted net book value per share as of March 31, 2003 was $2.57. Fully
diluted net book value per share is considered a non-generally
accepted accounting principles measure. The Company believes that this
financial measure is considered relevant given its increased financial
position.
During the first quarter of 2004, the Company's corporate sales
team, headed up by Terry Brewster, Executive Vice President of Sales
and Marketing, has begun to re-position his team in order to
successfully enter and compete in the large self-insured employer
group and medical benefits market. The Company's corporate sales team
serves to complement the individual based network marketing
distribution channel, and also allows the Company to diversify into
the large employer group medical benefits market. The employer group
market is constantly seeking ways to find alternative and innovative
means to assist in the reduction of their healthcare costs and
therefore is considered an attractive business opportunity for the
Company. The Company's group healthcare product offering, which
includes Care125 and Care Financial, provides a cost effective product
offering for this market."
Judith Henkels, Chairman, CEO, and President commented on the
results, "The changes we introduced during the latter part of 2002 and
substantively on October 1, 2003 have necessitated additional time and
resources from a business operations, implementation and execution
standpoint. This of course was to be expected. We continue our
emphasis on education and training and target marketing as it relates
to these recent product changes with the goal of improved operating
results in the latter half of 2004. As of March 31, 2004, we've had
five consecutive quarters of significant growth in our members'
medical escrow accounts and believe that this provides preliminary
market acceptance from our constituency of our enhanced product
offering. Although we're still in the very early stages, we will
continue to monitor and gauge market acceptance of our new product
offering."
Ms. Henkels commented further, "We are also encouraged by the
strategic progress our corporate sales team has made to date and
believe that we have the right group to make a sales and marketing
impact into the large employer group medical benefits market. During
this transitional period we continue to focus on the strengthening of
our group healthcare product offering, including any infrastructure
requirements, and at the same time continue to ensure that we maintain
our position of financial strength."
The conference call will commence on Thursday, April 29, 2004, at
4:30 p.m. EST and you are invited to listen to Precis, Inc.'s First
Quarter 2004 Conference Call with Judith Henkels, Chairman, CEO, and
President, and Dino Eliopoulos, Chief Financial Officer. The telephone
number for the conference call is 1-866-800-8652 (domestic), passcode
#86773805 and 1-617-614-2705 (international), or listen to the Web
cast at www.fulldisclosure.com, www.streetevents.com, or
www.precis-pcis.com.
If you are unable to participate, an audio digital replay of the
call will be available from Thursday, April 29, 2004, at 7:00 p.m. EST
until Thursday, May 13, 2004, 7:00 p.m. EST by dialing 1-888-286-8010
(domestic) or 617-801-6888 (international) using confirmation code
#90665897. A web archive will be available for 30 days at
www.fulldisclosure.com or www.streetevents.com.
PRECIS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended
March 31,
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2004 2003
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Product and service revenues $9,946,131 $10,762,309
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Operating expenses:
Cost of operations 3,301,118 3,164,785
Sales and marketing 3,197,947 4,214,254
General and administrative 2,329,234 1,596,811
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Total operating expenses 8,828,299 8,975,850
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Operating income 1,117,832 1,786,459
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Other expenses:
Interest income and expense, net 29,007 28,980
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Total other expenses 29,007 28,980
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Earnings before income taxes 1,088,825 1,757,479
Provision for income taxes 482,873 570,719
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Net Earnings $605,952 $1,186,760
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Earnings per common share:
Basic $0.05 $0.10
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Diluted $0.05 $0.10
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Weighted average number of common shares
outstanding:
Basic 11,851,655 11,862,985
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Diluted 11,930,725 11,913,927
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For the Three Months Ended
March 31,
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2004 2003
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Cash flow information:
Net cash provided by operating activities $ 1,442,889 $ 3,005,156
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Net cash used in investing activities $ (151,816) $ (201,696)
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Net cash used in financing activities $ (366,213) $ (350,885)
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As of As of
Balance Sheet Highlights March 31, December 31,
2004 2003
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Cash and cash equivalents $12,012,780 $11,087,920
Working capital $9,549,411 $8,818,823
Fixed assets $3,000,098 $3,324,410
Goodwill $21,077,285 $21,077,284
Total assets $42,599,301 $40,813,664
Capital lease obligation, net of current
portion $91,308 $275,422
Net book value $34,212,494 $33,602,104
Fully diluted net book value per share for the Company is
calculated by taking its net book value divided by its fully diluted
shares outstanding for the period under consideration.
About Precis, Inc.
Precis is a national membership marketing company that provides
membership programs to a variety of industries including: healthcare,
retail, banking, consumer finance and member based associations. Its
leading program, Care Entree, is marketed as a membership based
healthcare savings program designed to significantly reduce
out-of-pocket medical expenses at affordable rates to the consumer
while helping the medical community receive accelerated payment for
their services. The Care Financial subsidiary offers businesses and
individuals a broad range of financial solutions, including health and
life insurance, annuities and cafeteria plan style flexible spending
plans and healthcare reimbursement arrangements. For more information
on Precis, its subsidiaries Care Entree, Foresight, Inc. or Care
Financial, LLC, visit www.precis-pcis.com, www.careentree.com,
www.foresightclub.com, and www.care-financial.com, respectively.
Certain statements included in this news release constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. Certain, but not necessarily all, of
such forward-looking statements can be identified by the use of
forward-looking terminology such as "anticipate", "believes",
"expects", "may", "will", or "should", or other variations thereon, by
discussions of strategies that involve risks and uncertainties.
Precis, Inc.'s actual results or industry results may be materially
different from any future results expressed or implied by such
forward-looking statements. Factors that could cause actual results to
differ materially include general economic and business conditions;
Precis, Inc.'s ability to implement its business strategies;
competition; availability of key personnel; increasing operating
costs; unsuccessful promotional efforts; changes in brand awareness;
acceptance of new product offerings; retention of members and
independent marketing representatives; and changes in, or the failure
to comply with, government regulations. The Company undertakes no
obligation to update any forward-looking statements or to make any
other forward-looking statement, whether as a result of new
information, future events, or otherwise.