-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, U7TAHPjZSCRYrWSMObQUpuB0futNcClPwBHjw7rgfrzo51GSIrLPGt06KfSOJRar aatD+hNFyMcSN7vEYHoF2Q== 0000930661-95-000122.txt : 19950517 0000930661-95-000122.hdr.sgml : 19950516 ACCESSION NUMBER: 0000930661-95-000122 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 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: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11453 FILM NUMBER: 95537803 BUSINESS ADDRESS: STREET 1: 1301 CAPITAL OF TEXAS HWY CITY: AUSTIN STATE: TX ZIP: 78746 BUSINESS PHONE: 5123280888 MAIL ADDRESS: STREET 1: 1301 CAPITAL OF TEXAS HIGHWAY CITY: AUTIN STATE: TX ZIP: 78746 10QSB 1 FORM 10-QSB ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 ------------- Form 10-QSB [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 1995 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 April 28, 1995 ------------------- -------------- Common Stock, $.10 par value 3,571,684 ================================================================================ 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 March 31, 1995 1994 -------- -------- Revenues: Financial services $2,830 2,765 Computer systems/software 1,273 825 Publications 0 1 Real estate 162 125 Investments and other 418 148 -------- -------- Total revenue 4,683 3,864 Expenses: Financial services 2,541 2,505 Computer systems/software 1,107 857 Publications 139 79 Real estate 123 109 General and administrative 738 242 Interest 26 46 -------- -------- Total expenses 4,674 3,838 -------- -------- Operating income 9 26 Equity in earnings of unconsolidated affiliate 301 173 -------- -------- Earnings before income taxes 310 199 Income tax expense 108 62 -------- -------- Net earnings $202 137 ======== ======== Earnings per common share: Primary $0.06 0.04 ======== ======== Fully Diluted $0.06 0.04 ======== ======== Primary weighted average shares outstanding 3,580 3,540 ======== ======== Fully Diluted weighted average shares outstanding 3,601 3,540 ======== ========
See accompanying notes to consolidated financial statements - 3 - AMERICAN PHYSICIANS SERVICE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands) March 31, December 31, 1995 1994 --------- ------------ [S] [C] [C] ASSETS Current Assets: Cash and cash investments $4,460 3,266 Marketable securities 598 1,491 Trading account securities 1,653 661 Notes receivable - current 310 325 Management fees and other receivables 1,826 2,932 Receivable from clearing broker -- 491 Deferred income taxes 120 163 Prepaid expenses and other 931 806 --------- -------- Total current assets 9,898 10,135 Notes receivable, less current portion 695 915 Property and equipment 2,064 2,025 Investment in Prime Medical Services, Inc. 5,959 5,658 Other assets 1,184 1,185 --------- -------- Total Assets $19,800 19,918 ========= ======== See accompanying notes to consolidated financial statements - 4 - AMERICAN PHYSICIANS SERVICE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands)
March 31, December 31, 1995 1994 --------- ------------ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current installments of obligations under capital leases $279 327 Accounts payable - trade 406 809 Accrued compensation 118 488 Payable to clearing broker 432 ---- Accrued expenses and other liabilities 2,557 2,168 Federal income taxes payable (61) 257 --------- ------------ Total current liabilities 3,731 4,049 Long-term obligations 806 878 --------- ------------ Total liabilities 4,537 4,927 Shareholders' Equity: Preferred stock, $1.00 par value, 1,000,000 shares authorized ---- ---- Common stock, $0.10 par value, shares authorized 20,000,000; issued 3,521,684 at 3/31/95 and 3,471,684 at 12/31/94 352 347 Additional paid-in capital 4,539 4,469 Unrealized holding gains 39 44 Retained earnings 10,876 10,674 Reciprocal stockholdings (543) (543) --------- ------------ Total shareholders' equity 15,263 14,991 Total Liabilities and Shareholders' Equity $19,800 19,918 ========= ============
See accompanying notes to consolidated financial statements - 5 - AMERICAN PHYSICIANS SERVICE GROUP, INC. Consolidated Statements of Cash Flows (Unaudited) (In thousands)
Three Months Ended March 31, 1995 1994 -------- -------- Cash flows from operating activities: Cash received from customers $5,268 4,067 Cash paid to suppliers and employees (5,089) (4,384) Change in trading account securities (992) (1,430) Change in payable to clearing broker 923 1,373 Interest paid (26) (46) Income taxes paid (253) --- Interest, dividends and other investment proceeds 416 149 -------- -------- Net cash provided by (used in) operating activities 247 (271) Cash flows from investing activities: Proceeds from the sale of marketable securities 885 --- Payments for purchase of marketable securities --- (484) Proceeds from the sale of fixed assets --- 14 Payments for purchase property and equipment (122) (38) Collection of notes receivable 229 985 -------- -------- Net cash provided by investing activities 992 477 Cash flows from financing activities: Repayment of long term obligations (120) (226) Increase in minority interest --- 27 Exercise of Stock Options 75 --- -------- -------- Net cash used in financing activities (45) (199) -------- -------- Net change in cash and cash equivalents $1,194 7 ======== ======== Cash and cash equivalents at beginning of period 3,266 2,544 -------- -------- Cash and cash equivalents at end of period $4,460 2,551 ======== ========
See accompanying notes to consolidated financial statements - 6 - AMERICAN PHYSICIANS SERVICE GROUP, INC. Consolidated Statements of Cash Flows, continued (In thousands)
Three Months Ended March 31, 1995 1994 -------- -------- Reconciliation of net earnings to net cash from operating activities: Net earnings $202 137 Adjustments to reconcile net earnings to net cash from operating activities: Depreciation and amortization 94 90 Minority interest in consolidated earnings --- 15 Undistributed earnings of affiliate (301) (173) Change in federal income tax payable (318) (94) Provision for deferred tax asset 43 108 Change in trading securities (992) (1,430) Change in payable to clearing broker 923 1,373 Change in management fees & other receivables 1,104 336 Change in prepaids & other current assets (126) 2 Change in other assets (1) (35) Change in trade payables (354) (311) Change in accrued expenses & other liabilities (27) (289) -------- -------- Net cash from operating activities $247 (271) ======== ========
See accompanying notes to consolidated financial statements - 7 - AMERICAN PHYSICIANS SERVICE GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 1995 (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, 1994 and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the financial position as of March 31, 1995 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, 1994 filed with the Securities Exchange Commission should be read in conjunction with this Quarterly Report on Form 10-QSB. There have been no significant changes in the information reported in those notes other than from normal business activities of the Company. Certain classifications in 1994 have been reclassified to be consistent with 1995 classifications. 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. -8- 3. Equity in Earnings of Unconsolidated Affiliate ---------------------------------------------- At March 31, 1995 the Company owned 23% (3,302,000 shares) of the outstanding common stock of Prime Medical Services, Inc. ("Prime"). The Company has granted to a third party the right to purchase 237,500 of such shares at $1.25 per share and expects to exchange these shares for a note payable from Prime amounting to $296,875. These options become exercisable in June, 1995 and expire in June, 1996. 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. -9- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Results of Operations - --------------------- Revenues - -------- Revenues from operations increased $819,000 (21.2%) for the three months ended March 31, 1995, compared to the same period in 1994. Financial services, computer systems and software sales, real estate and investments & other increased during the first quarter of 1995 while publications revenues remained the same compared to the same period in 1994. Financial services revenues increased $64,000 (2.3%) for the three months ended March 31, 1995, compared to the same period in 1994. This increase was primarily due to slightly higher broker/dealer commissions, a result of the recent stabilization of interest rates bringing investors slowly back into the bond market. Revenues from premium-based insurance management fees were virtually the same in the first quarter of 1995, compared to the same period in 1994. In April, 1995, 1994's top producing broker in the Company's broker/dealer subsidiary, accounting for 40% and 9%, respectively, of 1994's and 1993's gross commissions, terminated his employment to pursue an equity interest with another firm. The Company is uncertain whether several experienced brokers, hired in late 1994, together with the additional experienced brokers being sought will offset any financial impact this loss may cause. Computer systems and software sales revenues increased $448,000 (54.3%) for the three months ended March 31, 1995, compared to the same period in 1994. The increase was primarily due to new contracts for hardware and software begun in the latter half of 1994 and continuing in 1995. In addition, hardware upgrades by existing clients increased the positive revenue variance of this quarter compared to the first quarter of 1994. There were no Publications revenues for the three months ended March 31, 1995. In April, 1995, revenue of approximately $752,000 will be recognized for the 1994 Spanish Yellow Page Directory. The Company recognizes revenues upon distribution of its directories. Expenses related to marketing and production of the directory remain in work in progress and will be charged to expense in April upon distribution of the directory. Additional expenses for printing and distribution will also be charged in April. There will be no material financial impact resulting from publication of the directory. -10- Real estate revenues rose $38,000 (30.2%) for the three months ended March 31, 1995, compared to the same period in 1994. The increase was due to achieving full occupancy and also 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 the remainder of the year. Investment and other income increased $270,000 (182.5%) for the three months ended March 31, 1995, compared to the same period in 1994. The variance is primarily due to reimbursements received in 1995 for the release and settlement of the THIE lawsuit described in the 1994 Form 10-KSB. Negotiations as to the final amount of the costs the Company can recover in defending this lawsuit continue. Expenses -------- Total expenses increased $856,000 (22.6%) for the three month period ended March 31, 1995, when compared to the same period in 1994. All segments of the Company experienced increases for the three month period in 1995. Financial services expense increased $35,000 (1.4%) for the three month period ended March 31, 1995, compared to the same period in 1994. A majority of this increase was the result of higher commissions paid in broker/dealer operations arising from the higher commission revenues generated in the current period. Partially offsetting this increase was a decrease in total expenses at the medical malpractice management company. This decrease was primarily caused by lower legal fees incurred in 1995 resulting from settlement of the THIE lawsuit. Computer systems/software expense increased $251,000 (29.2%) for the three month period ended March 31, 1995, compared to the same period in 1994. The increase is due to cost of sales connected with the new contracts which increased directly with the increase in revenues. In addition, staff increases associated with installing and servicing these new contracts resulted in higher personnel costs. Publications expense increased $60,000 (76.7%) for the three month period ended March 31, 1995, compared to the same period in 1994. The delay in distributing the 1994 directory until April, 1995 has caused a timing difference in the way expenses are placed in work in progress compared to the first quarter of 1994. Marketing costs such as sales salaries and advertising, which would normally be placed in work in progress for the 1995 directory, are instead being expensed since the sale of the new directory has not yet commenced. -11- Real estate expense increased $15,000 (13.4%) for the three month period ended March 31, 1995, compared to the same period in 1994. The increase is primarily attributable to higher interest expense, caused by higher interest rates on a variable rate loan, as well as to higher property taxes, caused by appreciation in the taxable value of the building used as corporate headquarters for the Company. General and administrative expense increased $496,000 (205.0%) during the three month period ending March 31, 1995, compared to the same period in 1994. This increase was due primarily to accruals made for certain contingent liabilities associated with ongoing litigation. Liquidity and Capital Resources ------------------------------- Current assets exceeded current liabilities by $6,167,000 and $6,086,000 at March 31, 1995, and December 31, 1994, respectively. The increase is primarily attributable to reimbursement received for certain litigation related expenses. To further its ability to meet its liquidity requirements, the Company has established a $2,000,000 revolving line of credit with a bank. The loan is renewable annually and bears interest at the bank's prime rate. The loan is secured by accounts receivable and is guaranteed by APS Facilities Management, Inc. and APS Systems, Inc., two subsidiaries of the Company. The Company plans to use this line of credit to supplement its working capital. No funds were advanced under this line at March 31, 1995. Capital expenditures through the quarter ended March 31, 1995 were approximately $122,000 and total capital expenditures are expected to be approximately $350,000 in 1995. Management believes that its working capital position together with funds generated from operations and from available lines of credit will provide sufficient resources to meet all present and reasonably foreseeable and capital needs. -12- PART II OTHER INFORMATION -13- 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 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits 11 Computation of Net Income Per Share at March 31, 1995 and 1994. (b) Current reports on Form 8-K. No current reports on Form 8-K were filed during the quarter ended March 31, 1995. -14- 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: April 28, 1995 By: /s/ William H. Hayes ----------------------------------- William H. Hayes, Vice President and Chief Financial Officer -15- EX-11 2 COMP. NET INC. PER SHARE EXHIBIT 11 AMERICAN PHYSICIANS SERVICE GROUP, INC. COMPUTATION OF NET INCOME PER SHARE FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(In thousands, except earnings per share) Primary Fully Diluted Earnings Earnings Per Share Per Share ------------- ------------- 1995 Net Income applicable to common stock $202 202 Average number of shares outstanding 3,250 3,250 Average stock option shares 330 351 ------------- ------------- Shares for earnings calculation 3,580 3,601 Net income per share $0.06 0.06 ------------- ------------- 1994 Net Income applicable to common stock $137 137 Average number of shares outstanding 3,295 3,295 Average stock option shares 245 245 ------------- ------------- Shares for earnings calculation 3,540 3,540 Net income per share $0.04 0.04 ------------- -------------
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. - 16 - EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 31, 1995 FORM 10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 4,460 2,251 2,136 0 26 9,898 5,019 2,955 19,800 3,731 0 352 0 0 14,911 19,800 4,198 4,683 472 3,460 716 0 26 310 108 202 0 0 0 202 0.06 0.06
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