EX-99.77Q1 2 exh_991.txt PRESS RELEASE 1ST QTR 2006 EARNINGS Exhibit 99.1 [GRAPHIC OMITTED] AMERICAN PHYSICIANS SERVICE GROUP, INC. ANNOUNCES INCREASE IN REVENUES, OPERATING INCOME AUSTIN, TEXAS, May 11, 2006 - American Physicians Service Group, Inc. ("APS") (NASDAQ: AMPH) today announced results for the first quarter of 2006. For the three months ended March 31, 2006, revenues were $7,233,000 compared to $6,662,000 a year-ago. Operating income was $676,000 versus $577,000 a year earlier, while net income of $562,000 compares to net income of $853,000 in the same quarter of 2005. In 2005, gains on sales of investments had added $591,000 to pretax income versus $7,000 in the current period. Diluted earnings per share in the current quarter were $0.19 compared to $0.30 in the first quarter of 2005. Ken Shifrin, APS Chairman of the Board, stated, "We are very pleased with first quarter results. Revenues were up 9% and operating income was up 17%, compared to the same quarter last year. Net income had been positively impacted in the quarter ended March 31, 2005 by a large, one-time, investment gain that we did not have in the quarter just ended, but our core businesses continued to perform well." Mr. Shifrin continued, "Our insurance segment beefed up its marketing effort last year and has increased the number of insured doctors for its managed insurance company by about 12% since March 31, 2005. Our financial services segment benefited from its entry last year into investment banking and trade claims clearing, boosting revenue quarter-to-quarter in what was a challenging market for its core fixed-income business. We are proud of the resourcefulness that our management team has shown." Mr. Shifrin concluded, "Attention to shareholder value continues to be an integral part of our business plan. Book value per share was $10.16 per share at March 31, 2006 compared to $9.32 at March 31, 2005. A year before that it was $8.18, a trend reflective of our excellent earnings and our consistent stock repurchases. Our balance sheet continues to give us stability and opportunity, with outstanding working capital, liquidity, and no debt." APS is a management and financial services firm with subsidiaries and affiliates which provide: medical malpractice insurance services for doctors; and brokerage and investment services to institutions and high net worth individuals. The Company is headquartered in Austin, Texas and maintains offices in Dallas and Houston. This press release includes forward-looking statements related to the Company that involve risks and uncertainties that could cause actual results to differ materially. These forward-looking statements are made in reliance on the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. For further information about these factors that could affect the Company's future results, please see the Company's recent filings with the Securities and Exchange Commission. Prospective investors are cautioned that forward-looking statements are not guarantees of future performance. Actual results may differ materially from management expectations. Copies of the filings are available upon request from the Company's investor relations department. For further information, visit APS' website at www.amph.com or contact: Mr. Kenneth Shifrin, Chairman of the Board (or) Mr. W. H. Hayes, Sr. VicePresident - Finance American Physicians Service Group, Inc. 1301 Capital of Texas Highway, C-300 Austin, Texas 78746 (512)328-0888 AMERICAN PHYSICIANS SERVICE GROUP, INC. UNAUDITED SELECTED FINANCIAL DATA (In thousands, except per share data) Three Months Ended March 31, 2006 2005 ------------------------- Revenues: Financial services $3,578 $3,267 Insurance services 3,655 3,395 ------ ------ Total revenues 7,233 6,662 Expenses: Financial services 3,285 2,950 Insurance services 2,754 2,503 General and administrative 518 667 Gain on sale of assets -- (35) ------ ------ Total expenses 6,557 6,085 ------ ------ Operating income 676 577 Sale of investments and other 7 591 ------ ------ Income from operations before interest, income taxes and minority interests 683 1,168 Interest and other income 203 173 Income tax expense 323 477 Minority interests 1 11 ------ ------ Net income $ 562 $853 ====== ====== Diluted income per share: Net income $ 0.19 $0.30 ====== ====== Weighted average shares outstanding (diluted) 2,909 2,867 AMERICAN PHYSICIANS SERVICE GROUP, INC. UNAUDITED SELECTED FINANCIAL DATA, continued (In thousands) March 31, 2006 2005 --------- -------- ASSETS Current assets $21,472 $12,601 Notes receivable, less current portion 405 107 Property and equipment 669 670 Investment in available for sale equity and fixed income securities-non-current 8,544 13,343 Goodwill 1,247 1,247 Other assets 812 299 ------- ------- Total Assets $33,149 $28,267 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities $ 5,147 $ 2,971 Other liabilities -- 688 -------- ------- Total liabilities 5,147 3,659 Minority interests 16 13 Shareholders' Equity: Common stock 275 264 Additional paid-in capital 7,826 7,838 Retained earnings 19,300 14,801 Accumulated other comprehensive income, net of taxes 585 1,692 ------- ------- Total shareholders' equity 27,986 24,595 ------- ------- Total Liabilities and Shareholders' Equity $33,149 $28,267 ======= =======