-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MfYGvsV13O+U6CP7RSkrxr/5hHZsOds98VECy2ksEbtieuOqlJEMrt8mNEY62bZi 24OUdAE2Y3Z/vOFNTD0bdQ== 0000724024-97-000017.txt : 19970815 0000724024-97-000017.hdr.sgml : 19970815 ACCESSION NUMBER: 0000724024-97-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN PHYSICIANS SERVICE GROUP INC CENTRAL INDEX KEY: 0000724024 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MANAGEMENT SERVICES [8741] IRS NUMBER: 751458323 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11453 FILM NUMBER: 97660427 BUSINESS ADDRESS: STREET 1: 1301 CAPITAL OF TEXAS HWY STREET 2: C-300 CITY: AUSTIN STATE: TX ZIP: 78746 BUSINESS PHONE: 5123280888 MAIL ADDRESS: STREET 1: 1301 CAPITAL OF TEXAS HIGHWAY CITY: AUTIN STATE: TX ZIP: 78746 10-Q 1 JUNE 30, 1997 FORM 10-Q ===================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED JUNE 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO -------------------- -------------------- COMMISSION FILE NUMBER 0-11453 AMERICAN PHYSICIANS SERVICE GROUP, INC. (Exact name of registrant as specified in its charter) TEXAS 75-1458323 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 1301 CAPITAL OF TEXAS HIGHWAY AUSTIN, TEXAS 78746 (Address of principal executive offices) (Zip Code) (512) 328-0888 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d ) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------- ------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. NUMBER OF SHARES OUTSTANDING AT TITLE OF EACH CLASS July 31, 1997 -------------------- ---------------- Common Stock, $.10 par value 4,124,195 ============================================================================ PART I FINANCIAL INFORMATION -2- AMERICAN PHYSICIANS SERVICE GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In thousands, except per share data)
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 ---------- ---------- ---------- --------- REVENUES: Financial services $1,718 1,822 3,759 4,152 Real estate 168 169 350 338 Investments and other 52 157 236 267 ---------- ---------- ---------- --------- Total revenues 1,937 2,148 4,344 4,757 EXPENSES: Financial service expense 1,950 1,761 3,795 3,766 Real estate 129 129 258 257 General and administrative 522 (174) 781 89 Interest 2 13 5 29 ---------- ---------- ---------- --------- Total expenses 2,603 1,728 4,839 4,140 ---------- ---------- ---------- --------- Operating income/(loss) (666) 420 (495) 617 Equity in earnings of unconsolidated affiliate (Note 3) 580 (72) 1,041 328 ---------- ---------- ---------- --------- Earnings/(loss) from continuing operations before income taxes (87) 348 546 945 Gain on sale of portion of subsidiary 1,899 0 1,899 0 Income tax expense 622 108 847 291 Discontinued operations: Income/(loss) from discontinued operations net of income tax benefit of $21 and $(9), and $71 and $1 for the threeand six months in 1997 and 1996, respectively. (97) 18 (138) (1) Loss on disposal of computer software segment, net of income tax benefit of $411 and $0 and $411 and $0 for the three and six months in 1997 and 1996, respectively. (798) 0 (798) 0 ---------- ---------- ---------- --------- NET EARNINGS 296 259 662 653 ========== ========== ========== =========
See accompanying notes to consolidated financial statements - 3 - EARNINGS PER COMMON SHARE:
Primary $0.07 0.06 0.16 0.15 ========== ========== ========== ========= Fully Diluted $0.07 0.06 0.16 0.15 ========== ========== ========== ========= Primary weighted average shares outstanding 4,230 4,346 4,201 4,293 ========== ========== ========== ========= Fully Diluted weighted average shares outstanding 4,270 4,360 4,259 4,353 ========== ========== ========== =========
See accompanying notes to consolidated financial statements - 4 - AMERICAN PHYSICIANS SERVICE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands) June 30, December 31, 1997 1996 ------------- ------------- ASSETS Current Assets: Cash and cash investments $4,997 5,770 Marketable securities (Note 2) 3 29 Trading account securities 551 699 Notes receivable - current 3,545 3,447 Management fees and other receivables 3,105 512 Receivable from clearing broker 0 279 Deferred income tax receivable 392 650 Prepaid expenses and other 358 239 ------------- ------------- Total current assets 12,951 11,625 Notes receivable, less current portion 84 179 Property and equipment 1,919 1,781 Investment in affiliates 9,946 8,905 Other assets 1,351 1,226 ------------- ------------- Total Assets $26,251 23,716 ============= ============= See accompanying notes to consolidated financial statements - 5 - AMERICAN PHYSICIANS SERVICE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands) June 30, December 31, 1997 1996 ----------- ----------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of obligations under capital leases $ ---- 542 Accounts payable - trade 345 382 Payable to clearing broker 18 --- Accrued compensation 201 252 Accrued expenses and other liabilities (Note 5) 4,004 2,144 ----------- ----------- Total current liabilities 4,568 3,320 Net deferred income tax liability 629 766 ----------- ----------- Total liabilities 5,197 4,086 Shareholders' Equity: Preferred stock, $1.00 par value, 1,000,000shares authorized ---- ---- Common stock, $0.10 par value, shares authorized 20,000,000; issued 4,124,165 at 6/30/97 and 4,049,195 at 12/31/96 414 405 Additional paid-in capital 5,384 4,614 Unrealized holding losses (28) (11) Retained earnings 15,284 14,622 ----------- ----------- Total shareholders' equity 21,054 19,630 Total Liabilities and Shareholders' Equity $26,251 23,716 =========== =========== See accompanying notes to consolidated financial statements - 6 - AMERICAN PHYSICIANS SERVICE GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Six Months Ended June 30, 1997 1996 ----------- ----------- Cash flows from operating activities: Cash received from customers $3,561 5,513 Cash paid to suppliers and employees (3,145) (5,033) Change in trading account securities 148 465 Change in receivable from clearing broker (297) (461) Interest paid (5) (29) Income taxes paid (244) (603) Interest, dividends and other investment proceeds 89 182 ----------- ----------- Net cash provided by (used in) operating activities 108 34 Cash flows from investing activities: Proceeds from the sale of marketable securities --- 1,655 Payments for purchase property and equipment (236) (85) Funds loaned to others (30) (65) Collection of notes receivable 15 49 Other 10 62 ----------- ----------- Net cash provided by (used in) investing activities (241) 1,616 Cash flows from financing activities: Repayment of long term obligations (542) (144) Purchase/retire treasury stock (317) --- Exercise of stock options 219 517 ----------- ----------- Net cash provided by (used in) financing activities (640) 373 ----------- ----------- Net change in cash and cash equivalents ($773) 2,023 =========== =========== Cash and cash equivalents at beginning of period 5,770 6,798 ----------- ----------- Cash and cash equivalents at end of period $4,997 8,821 =========== =========== See accompanying notes to consolidated financial statements - 7 - AMERICAN PHYSICIANS SERVICE GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS, continued (In thousands) Six Months Ended June 30, 1997 1996 --------- --------- Reconciliation of net earnings to net cash from operating activities: Net earnings $662 653 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation and amortization 180 175 Loss from discontinued operations 210 13 Loss on disposal of discontinued operations 1,209 --- Gain on sale of securities --- (55) Undistributed earnings of affiliate (1,041) (328) Change in federal income tax payable 258 (596) Provision for deferred tax asset (137) 284 Change in trading securities 148 465 Change in receivable from clearing broker (297) (461) Change in management fees & other receivables (2,593) 1,005 Change in prepaids & other current assets (119) 1 Change in other assets (125) (154) Change in trade payables (58) (35) Change in accrued expenses & other liabilities 1,811 (934) --------- --------- Net cash from operating activities $108 34 ========= ========= Summary of non-cash transactions: At June 30, 1997, the Company recognized a gain on the sale of 20% of its professional liability insurance subsidiary. Since cash was not collected until July 2, 1997, the results of this transaction were to increase management fees and other receivables ($2,000,000), gain on sale of subsidiary ($1,899,000), and accrued expenses and other liabilities ($101,000). See accompanying notes to consolidated financial statements - 8 - AMERICAN PHYSICIANS SERVICE GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 1997 (Unaudited) 1. GENERAL The accompanying unaudited consolidated financial statements have been prepared in conformity with the accounting principles stated in the audited financial statements for the year ended December 31, 1996 and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the financial position as of June 30, 1997 and the results of operations for the periods presented. These statements have not been audited or reviewed by the Company's independent certified public accountants. The operating results for the interim periods are not necessarily indicative of results for the full fiscal year. The notes to consolidated financial statements appearing in the Company's Annual Report on Form 10-KSB for the year ended December 31, 1996 filed with the Securities Exchange Commission should be read in conjunction with this Quarterly Report on Form 10-Q. There have been no significant changes in the information reported in those notes other than from normal business activities of the Company. Certain reclassifications have been made to amounts presented in prior periods to be consistent with the 1997 presentation. 2. MARKETABLE SECURITIES Marketable securities include equity securities and investments in bonds that are intended to be held less than one year. At January 1, 1994, the Company began recording these securities at fair value, with unrealized holding gains and losses reported as a separate component of shareholders' equity, per SFAS-115. 3. CONTINGENCIES In conjunction with a settlement agreement, the Company's broker/dealer subsidiary, APS Financial, has guaranteed the future yield of a customer's investment portfolio beginning in November 1994 for up to a five and one-half year period. Management believes that the Company's financial statements adequately provide for any loss that might occur under this agreement; however, as defined in AICPA Statement of Position 94-6, it is reasonably possible that the Company's estimate of loss could change over the remaining term of the agreement. Management is unable to determine the range of potential adjustment since it is based on securities markets, which are beyond its ability to control. - 9 - 4. EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATE At June 30, 1997 the Company owned 15.9% (3,064,000 shares) of the outstanding common stock of Prime Medical Services, Inc. ("Prime"). The Company records its pro-rata share of Prime's results on the equity basis. Prime is in the business of providing lithotripsy services. The common stock of Prime is traded in the over-the-counter market under the symbol "PMSI". Prime is a Delaware corporation which is required to file annual, quarterly and other reports and documents with the Securities and Exchange Commission, which reports and documents contain financial and other information regarding Prime. Such reports and documents may be examined and copies may be obtained from the offices of the Securities and Exchange Commission. In the Form 10-Q dated March 31, 1997, the Company combined the equity in earnings/losses of Prime and Syntera Technologies, Inc. ("Syntera"), a computer systems/software affiliate, into Equity in Earnings of Unconsolidated Affiliates. At May 15, 1997, Syntera and International Software Solutions, Inc. ("ISSI") agreed to terminate the Joint Development Agreement which they had entered into July 1, 1996. Also on this date the Company decided to discontinue product development and marketing efforts. Under the termination agreement, ISSI relinquished its 51% ownership interest in Syntera, making Syntera once again a wholly owned subsidiary of the Company. As such, Syntera is no longer considered an affiliate and therefore, results of its operations are no longer accounted for as equity in earnings of unconsolidated affiliates of the parent company, but rather, they are reported in discontinued operations. 5. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consists of the following: Jun Dec 1997 1996 ---- ---- Taxes payable-other $ 47,000 74,000 Commissions payable 73,000 18,000 Deferred income 1,330,000 339,000 Health insurance and other claims payable 78,000 87,000 Contractual/legal claims 1,342,000 1,352,000 Vacation payable 105,000 77,000 Funds held for others 40,000 63,000 Syntera disposition costs 917,000 --- Other 72,000 134,000 -------- ------- $4,004,000 2,144,000 ========= ========= - 10 - 6. DISCONTINUED OPERATIONS At May 15, 1997, Syntera and ISSI agreed to terminate the Joint Development Agreement which they had entered into July 1, 1996. Also on this date the Company decided to discontinue product development and marketing efforts. Net assets/(liabilities) of the discontinued computer systems and software segment as of June 30, 1997 consisted of the following: Cash and cash investments 71.3 Trade accounts receivable 231.9 Other receivables 2.8 Prepaid and other current assets 53.4 Fixed assets, net of depreciation 144.0 Intercompany receivables 521.0 Trade accounts payable (22.1) Accrued expenses (1,057.9) Deferred Income (20.0) -------- Net liabilities (75.6) - 11 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS REVENUES Revenues from operations decreased $211,000 (9.8%) and $413,000 (8.7%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. All segments recorded less revenue during the second quarter of 1997 compared to 1996. For the six months, financial services and investments and other decreased while real estate increased in 1997 compared to 1996. Financial services revenues decreased $104,000 (5.7%) and $393,000 (9.5%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. The decrease in both periods of 1997 was due primarily to market value adjustments of securities held in the investment portfolio at the Company's broker/dealer subsidiary, APS Financial Corp. Barring further declines in the investment portfolio, revenues from broker/dealer operations should improve due to the Company's opening of a branch office in Houston, Texas on March 1, 1997. The new office currently employs fourteen brokers. Revenues from premium-based insurance management fees were down $85,000 (7.7%) and $117,000 (5.2%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996, due primarily to a lower number of insureds brought about by stiffer competition in the Texas professional liability insurance market which has resulted in lower premium rates. Rather than renew certain insureds at rates which would result in underwriting losses, the Company has elected not to renew these insureds, resulting in a decline in premium volume. Real estate revenues dropped $1,000 (0.9%) but increased $12,000 (3.4%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. The decrease in revenue in the current quarter was due to reclassifying Syntera as a wholly owned subsidiary, whose lease income is now eliminated at consolidation. The six month increase in 1997 over 1996 was due to rising lease rates. Given the current economic good health of the Austin real estate market, it is reasonable to expect rental and occupancy rates to remain favorable throughout 1997. Investment and other income decreased $105,000 (66.9%) and $31,000 (11.8%) for the three and six month period ended June 30, 1997, respectively, compared to the same periods in 1996. The decrease in the current quarter was due to reduced interest income arising from a lower investable cash balance. Cash and cash investments was lower due to the purchase of Exsorbet Industries, Inc. common stock which subsequently was converted to a note receivable. (See Item 5). The six month decrease in investment and other income was partially offset by a first quarter 1997 gain from the dissolution of an inactive insurance entity. - 12 - EXPENSES Total expenses increased $875,000 (50.6%) and $699,000 (16.7%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. Financial services and general and administrative increased during the current three and six month periods compared to 1996 while real estate services stayed the same and interest expenses declined. Financial services expense increased $189,000 (10.7%) and $29,000 (0.8%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. Expenses at the insurance management subsidiary increased $65,000 (10.7%) and $173,000 (9.9%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996 due primarily to personnel additions in the marketing department as well as annual merit increases. Partially offsetting these increases was lower costs incurred in broker/dealer operations. Legal fees were reduced as prior year claims were settled satisfactorily and no new suits required significant actual or accrued expenditures. Reduced general and administrative expenses within the broker/dealer subsidiary have also contributed to the decrease. General and administrative expense increased $696,000 and $692,000 (777.5%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. The increase was due primarily to the fact that prior year expenses were down as a result of reversals of contractual/legal contingency accruals resulting from the Company prevailing in litigation. No such reversals occurred in 1997. In addition, expenses were incurred associated with a potential new physician practice startup. Prospects for this new venture are still uncertain but the Company is expected to continue to fund approximately $50,000 per month in salaries and general & administrative expense. Interest expense decreased $11,000 (85.2%) and $24,000 (83.0%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. The decrease in both periods was due to the early payoff of the note payable for the office space owned by the Company. EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES The Company's equity in earnings of Prime Medical Services, Inc. ("Prime") increased $652,000 and $713,000 (217.4%) for the three and six month periods ended June 30, 1997, respectively, compared to the same periods in 1996. Prior year earnings in the second quarter were adversely affected by two non-recurring write-offs: (1) costs associated with Prime's acquisition of Lithotripters, Inc.; and (2) costs associated with a secondary offering. As mentioned in Note 4 of the Notes to the Consolidated Financial Statements, the earnings of Syntera Technologies, Inc. are no longer accounted for as Equity in Unconsolidated Affiliates. Since the Company reacquired 100% ownership of Syntera on May 15, 1997, and simultaneously decided to cease product development and marketing efforts, results of operations of Syntera are now reported in Discontinued Operations. - 13 - GAIN ON SALE OF PORTION OF SUBSIDIARY Effective June 30, 1997, the Company sold 20% of the shares of its medical professional liability insurance management subsidiary, APS Insurance Services, Inc. to Florida Physicians Insurance Company ("FPIC"). This strategic alliance was formed in an effort to strengthen and expand both company's presence in the Texas market for medical professional liability insurance. The gain from this sale represents the sales price of $2,000,000 less closing costs and the Company's basis in the stock sold. LIQUIDITY AND CAPITAL RESOURCES Current assets exceeded current liabilities by $8,383,000 and $8,305,000 at June 30, 1997, and December 31, 1996, respectively. A large increase in current receivables resulting from the sale of 20% of APS Insurance Services, Inc. was chiefly offset by an increase in accrued liabilities resulting from the disposition of Syntera Technologies, Inc. In addition, cash was reduced by the purchase and retirement of approximately $245,000 of common stock of the Company. Capital expenditures through the period ended June 30, 1997 were approximately $236,000. Total capital expenditures are expected to be approximately $325,000 in 1997. Historically, the Company has maintained a strong working capital position and, has been able to satisfy its operational and capital expenditure requirements with cash generated from its operating and investing activities. These same sources of funds have also allowed the Company to pursue investment and expansion opportunities consistent with its growth plans. The ability of the Company to borrow against its investment in the common stock of Prime Medical (market value $33,136,000 at June 30, 1997) gives it significant additional liquidity. ADOPTION OF ACCOUNTING STANDARDS The Financial Accounting Standards Board issued Statement of Accounting Standards No. 128, Earnings Per Share ("Statement 128") which replaces Primary EPS and Fully Diluted EPS with Basic EPS and Diluted EPS, respectively. Statement 128 was issued to simplify the computation of EPS and to make the U.S. standard more compatible with the EPS standards of other countries and that of the International Accounting Standards Committee (IASC). Implementation of Statement 128 is scheduled to begin for fiscal years beginning after December 15, 1997. If the Company had applied Standard 128 for the quarter ended June 30, 1997, the rounded earnings per share calculations for both Basic EPS and Diluted EPS would have been the same as Primary EPS and Fully Diluted EPS, respectively. - 14 - PART II OTHER INFORMATION - 15 - Item 1. LEGAL PROCEEDINGS The Company is involved in various claims and legal actions that have arisen in the ordinary course of business. The Company believes that the liability provision in its financial statements is sufficient to cover any unfavorable outcome related to lawsuits in which it is currently named. Management believes that liabilities, if any, arising from these actions will not have a significant adverse effect on the financial condition of the Company. However, due to the uncertain nature of legal proceedings, the actual outcome of these lawsuits may differ from the liability provision recorded in the Company's financial statements. Item 4. RESULTS OF VOTES OF SECURITY HOLDERS On June 19, 1997 the annual meeting of shareholders of American Physicians Service Group, Inc. was held in Austin, Texas. The names of the directors elected at the meeting along with number of votes for, against and withheld are as follows: Name For Against Withheld ------------------- --------- ---------- ----------- Richard J. Clark 3,598,632 22,000 --- Jack Murphy 3,599,631 21,001 --- Robert L. Myer 3,598,632 22,000 --- William A. Searles 3,598,632 22,000 --- Kenneth S. Shifrin 3,599,632 21,000 --- No other matters were voted upon at this meeting. Item 5. OTHER INFORMATION On October 31, 1996, the Company invested $3,300,000 in common stock of Exsorbet Industries, Inc. ("Exsorbet") (NASDAQ:EXSO) with a put option. Exsorbet is a diversified environmental and technical services company. On November 26, 1996, the Company exercised its put in exchange for a note receivable from Exsorbet. The note is secured by the shares which were subject to the put plus all the stock and substantially all of the assets of a wholly-owned subsidiary of Exsorbet. According to documents which Exsorbet has filed with the Securities and Exchange Commission, Exsorbet has limited liquidity, which would currently not allow payment of the Company's note, and is considering various options to secure such funding, including a private placement of debt or equity. The Company does not expect such financing to be available by the October 1, 1997 due date and expects to renegotiate the terms of the note. As of July 31, 1997 there has been no change in the status of this note. On December 20, 1996, the Company announced its intention to purchase up to 500,000 shares of the Company's common stock. As of July 31, 1997, the Company has bought back approximately 51,000 shares and expects to repurchase shares so long as they are trading below adjusted book value. On April 4, 1997, the Company formed an alliance with FPIC Insurance Group, Inc. and its subsidiary, Florida Physicians Insurance Company, Inc. ("FPIC") (NASDAQ:FPIC) in a plan to strengthen and expand its presence in the Texas market for medical professional liability insurance. With the subsequent approval on June 30, 1997 by the Texas Department of Insurance, FPIC has purchased a 20% interest in the Company's subsidiary, APS Insurance Services, Inc. for two million dollars. FPIC also has an option to purchase an additional 35% within two years. - 16 - Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS 11 Computation of Net Income Per Share at June 30, 1997 and 1996. (b) CURRENT REPORTS ON FORM 8-K A report on Form 8-K was filed with the Securities and Exchange Commission on April 15, 1997 disclosing the Company's sale of 20% of its professional liability insurance subsidiary, APS Insurance Services, Inc. - 17 - SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN PHYSICIANS SERVICE GROUP, INC. Date: August 14, 1997 By: /s/ William H. Hayes -------------------------------------- William H. Hayes, Vice President and Chief Financial Officer - 18 - EX-11 2 EXHIBIT 11 : EPS CALCULATION (3 & 6 MOS) EXHIBIT 11 AMERICAN PHYSICIANS SERVICE GROUP, INC. COMPUTATION OF NET INCOME PER SHARE FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996 (In thousands, except earnings per share) Primary Fully Diluted Earnings Earnings Per Share Per Share ---------- ---------- 1997 Net Income applicable to common stock $296 296 Average number of shares outstanding 4,111 4,111 Average stock option shares 119 159 ----------- ---------- Shares for earnings calculation 4,230 4,270 Net income per share $0.07 0.07 =========== ========== 1996 Net Income applicable to common stock $259 259 Average number of shares outstanding 4,018 4,018 Average stock option shares 328 342 ----------- ---------- Shares for earnings calculation 4,346 4,360 Net income per share $0.06 0.06 =========== ========== NOTE: Primary and fully diluted income per share were computed by dividing net income by the average number of shares outstanding plus the common stock equivalents which, would arise from the exercise of dilutive stock options. - 19 - EXHIBIT 11 AMERICAN PHYSICIANS SERVICE GROUP, INC. COMPUTATION OF NET INCOME PER SHARE FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (In thousands, except earnings per share) Primary Fully Diluted Earnings Earnings Per Share Per Share ---------- ---------- 1997 Net Income applicable to common stock $662 662 Average number of shares outstanding 4,059 4,059 Average stock option shares 142 200 ----------- ---------- Shares for earnings calculation 4,201 4,259 Net income per share $0.16 0.16 =========== ========== 1996 Net Income applicable to common stock $653 653 Average number of shares outstanding 3,983 3,983 Average stock option shares 310 370 ----------- ---------- Shares for earnings calculation 4,293 4,353 Net income per share $0.15 0.15 =========== ========== NOTE: Primary and fully diluted income per share were computed by dividing net income by the average number of shares outstanding plus the common stock equivalents which, would arise from the exercise of dilutive stock options. - 20 - EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30, 1997 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS 6-MOS DEC-31-1997 DEC-31-1997 APR-01-1997 JAN-01-1997 JUN-30-1997 JUN-30-1997 4,997 4,997 3 3 6,675 6,675 25 25 11 11 12,951 12,951 5,604 5,604 3,685 3,685 26,251 26,251 4,568 4,568 0 0 0 0 0 0 414 414 20,640 20,640 26,251 26,251 0 0 1,937 4,344 0 0 2,441 4,632 160 202 0 0 2 5 (87) 546 622 847 (709) (301) (895) (936) 0 0 0 0 296 662 0.07 0.16 0.07 0.16
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