Exhibit 99.1
AMERICAN PHYSICIANS SERVICE GROUP, INC.
ANNOUNCES THIRD QUARTER RESULTS
AUSTIN, TEXAS, November 4, 2004 - American Physicians Service Group, Inc.
("APS") (NASDAQ: AMPH) today announced results, which include a writedown of
investment securities held, for the quarter and nine months ended September 30,
2004. For the three months ended September 30, 2004, revenues were $7,593,000
compared to $9,049,000 in the year-ago period. The net loss was $834,000 or $.32
per share, compared to earnings of $729,000 or $.31 per share, in the comparable
year-ago period. For the nine months ended September 30, 2004, revenues were
$22,178,000 compared to $22,609,000 in the year-ago period. Net earnings were
$549,000 or $.19 per share, compared to $1,965,000 or $.86 per share in the
year-ago period. The 2004 results include the writedown of a long-term
investment security, which represented substantially all of the decline in net
income.
Ken Shifrin, APS Chairman of the Board stated, "As we previously reported
in a Form 8K dated October 15, 2004, we recorded the decline in value of our
shares in Financial Industries Corporation ("FIC") as "other than temporary",
taking a writedown, net of taxes, of approximately $1,567,000. While this
investment-related non-cash charge adversely affected our financial results, it
should be noted that our core businesses continued to perform well. Inflation
and economic outlook uncertainties have kept our rate-sensitive financial
services segment from matching 2003's record performance, but our insurance
services segment has helped narrow the difference with its performance. Total
operating income through nine months in 2004 trailed 2003 by only 5% and net
income, exclusive of the impairment charge, showed a small increase over last
year."
Mr. Shifrin continued, "We are, of course, disappointed that our investment
in FIC has taken a downturn. We viewed the investment as a long-term turnaround
opportunity and believe that, while the time horizon may have been extended, a
long-term opportunity remains. We enter the fourth quarter, traditionally our
best, with high expectations for our core businesses and a solid balance sheet
that gives us the ability to steadily follow our objective of increasing
long-term shareholder value."
APS is a management and financial services firm with subsidiaries that
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 the 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.
AMERICAN PHYSICIANS SERVICE GROUP, INC.
SELECTED FINANCIAL DATA
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30 September 30
--------------------------- ------------------------
2004 2003 2004 2003
---- ---- ---- ----
Revenues $7,593 $9,049 $22,178 $22,609
Expenses 6,556 7,815 19,527 19,777
Gain on sale of assets -- -- 56 8
------ ------- ------ ------
Operating income 1,037 1,234 2,707 2,840
Gain (loss) on sale of
investments (2,374) -- (2,130) 89
Gain on forgiveness of debt -- -- 76 --
------ ------ ------ ------
Income (loss) from operations
before interest, income taxes,
minority interest and equity in
gain of unconsolidated affiliates (1,337) 1,234 653 2,929
Interest and other income 118 21 289 167
Income tax expense (benefit) (386) 414 392 1,207
Minority interest 1 77 1 184
Equity in gain of unconsolidated
affiliates -- 25 -- 260
------- -------- -------- -------
Net income (loss) $ (834) $ 729 $ 549 $ 1,965
======== ====== ======== =======
Diluted earnings (loss) per share:
Income (loss) from operations $ (.32) $ 0.31 $ 0.19 $ .86
Net income $ (.32) $ 0.31 $ 0.19 $ .86
======= ====== ====== ======
Weighted average shares
outstanding (diluted) 2,589 2,357 2,823 2,284
For further information, visit APS's 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