Amacore Group Reports Increased Revenue and Improved Gross Margins for the First Quarter 2009.Acquisitions, Increased Memberships and New Products Contribute to Continued Growth MAITLAND, Fla. -- The Amacore Group, Inc., (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB: ACGI ACGI Asynchronous Common Gateway Interface (web-server extension) ACGI Associate of the City and Guilds Institute (Graduate of Imperial College, London, England) ACGI Advanced Computer-Generated Image ), a leader in providing membership benefit programs, insurance programs, and other innovative and high-quality benefit solutions to individuals, families and employer groups employer group Association of employers Managed care An entity with a current group benefits agreement in effect with a health plan to provide covered health care services to its employee-subscribers and eligible dependents. nationwide, reports financial results for the first quarter ended March 31, 2009. Revenue for the first quarter ending March 31, 2009 increased 48% over the first quarter of 2008 to $7.4 million, compared with $5.0 million for the first quarter of 2008. Increased revenue for the quarter is the result of Amacore's addition of strategic direct marketing relationships through expansion of new product offerings, extension of marketing channels and the continued growth in the Company's overall membership base. Gross profit for the first quarter of 2009 improved to $2.8 million, compared with gross profit of $1.0 million for the first quarter of 2008. Gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the quarter improved to 37% from approximately 20% in last year's first quarter. While much of the improvement in gross profit margins was from the acquisition of United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Health Benefits Group (USHBG), there were improvements in gross profit and gross profit margins from its LifeGuard and Zurvita business units as well. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the first quarter of 2009 were $7.5 million, compared with operating expenses of $5.9 million for the first quarter of 2008. The increase in operating expenses resulted from increased payroll and office expenses related to the acquisition of USHBG, increased professional fees and legal expenses incurred as a result of the Company's involvement in various legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. , as well as audit fees incurred in connection with Amacore's new independent registered public accounting firm's first year audit of the company. These increases were offset somewhat by decreased sales and marketing expenses from newly negotiated marketing campaigns with more favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. terms for the Company, a reduction in amortization related to certain intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , as well as some reductions in travel expenses. The Company's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the first quarter 2009 was $4.7 million, compared with an operating loss of $4.9 million in the first quarter of 2008. The Company reported net income available to common stockholders for the quarter of $1.4 million, or $0.00 per share, compared with a net loss available to common stockholders of $13.6 million or $0.10 per share in the prior year's quarter. Included in net income was a $6.6 million non-cash gain on change in the fair value of warrants, compared with a non-cash loss on the change of fair value of warrants of $8.2 million in the year-ago quarter. The Company's weighted average number of common shares outstanding increased to approximately 1.4 billion at March 31, 2009 as compared to 141 million as of March 31, 2008. This increase is mainly attributable to certain preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. conversions which occurred in December of 2008. The Company ended the March 31, 2009 quarter with $3.1 million in cash, compared with $238,000 as of December 31, 2008. The increase in the Company's cash position is a result of two equity investments by its majority shareholders during the three months ended March 31, 2009 in the aggregate amount of $8 million. Jay Shafer, Chairman and Chief Executive Officer of Amacore Group said, "Our financial results this quarter were driven by strong contributions from several of our operating segments. Our in-house enrollment center, USHBG, has contributed greatly to our improved overall gross margin, but we also enjoyed growth from Zurvita, our multi-level marketing Multi-level marketing (MLM, now sometimes called network marketing) is a business model that combines direct marketing with franchising. Multi-level marketing businesses function by recruiting salespeople (also called Distributors, Independent Business operations and LifeGuard, which sells healthcare benefit membership plans." Guy Norberg, President of Amacore added, "The management team has concentrated on cutting costs in order to attain profitability. Part of these efforts has included reviewing old agreements and instituting new contracts with more favorable terms to the Company, resulting in the successful reduction of selling and marketing costs by approximately $145,000. Simultaneously, we have driven revenue through increased membership numbers. These combined actions are expected to result in a reduced operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. in the future. Further, during the quarter we made a significant investment in a new accounting software package that has advanced analysis and reporting capabilities. This program will provide the executive management key information with respect to specific revenue and cost streams on a timely basis to aid in decision making. It also will serve as an important tool in improving the Company's internal controls as we look to reduce or eliminate the material weaknesses reported in the Company's previously filed Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. ." Mr. Norberg added, "While Amacore is well-positioned in the health care industry, we continue to develop new programs to build and expand our footprint particularly in the consumer market. In 2009 we expect to open new channels of distribution and increase our geographic presence. We have an agile and experienced team, and look forward to continued improvements in revenues, margins and operations throughout the remainder of the year." Mr. Shafer concluded, "Our revenue continues to increase, reflecting our strengthening of the Company since 2008. In 2008 we took a number of one-time and non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. that we believe will contribute to the Company's future profitability. We continue to review all operations and anticipate a number of new product promotions throughout the remainder of the year which, we believe, will enhance our membership base and further our efforts towards achieving profitability." About The Amacore Group, Inc. (www.amacoregroup.com) The Amacore Group, Inc. is primarily a provider and marketer of healthcare related products, including healthcare benefits, vision and dental networks, and administrative services such as billing, fulfillment, patient advocacy Patient advocacy refers to speaking on behalf of a patient in order to protect their rights and help them obtain needed information and services. The role of patient advocate is frequently assumed by nurses, social workers, and other healthcare providers. , claims administration and servicing. The Company primarily markets healthcare-related membership programs such as limited and major medical programs, supplemental medical and discount dental programs to individuals and families. It distributes these products and services through various distribution methods such as its agent network, direct response marketing companies, DRTV DRTV Direct Response Television (media) (Direct Response TV), inbound in·bound 1 adj. Bound inward; incoming: inbound commuter traffic. Adj. 1. inbound call centers, in-house sales representatives, network marketing and affinity marketing partners. The Company's secondary line of business is to place membership programs through these same marketing channels. These membership programs utilize the same back office and systems creating marketing efficiencies to provide low cost ancillary products such as pet insurance, home warranty A Home warranty is an insurance contract that covers the repair and replacement costs of home appliances. The warranty generally covers equipment and appliances such as dishwashers, plumbing systems, electrical systems etc. , involuntary involuntary adj. or adv. without intent, will, or choice. Participation in a crime is involuntary if forced by immediate threat to life or health of oneself or one's loved ones, and will result in dismissal or acquittal. INVOLUNTARY. unemployment insurance, and accident insurance. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties. These forward-looking statements include information about possible or assumed future results of our business, including anticipated growth and geographic expansion, new products and services, new business development and opportunities, anticipated revenues, possible reduction or elimination of material weaknesses, anticipated revenue growth, expenses, profitability, losses and profit margins. In some cases, you may identify forward-looking statements by words such as "may," "should," "plan," "intend," "potential," "continue," "believe," "expect," "predict," "anticipate" and "estimate," the negative of these words or other comparable words. These statements are only predictions. One should not place undue reliance on these forward-looking statements. The forward-looking statements are qualified by their terms and/or important factors, many of which are outside the Company's control, involve a number of risks, uncertainties and other factors that could cause actual results and events to differ materially from the statements made. The forward-looking statements are based on the Company's beliefs, assumptions and expectations of the Company's future performance, taking into account information currently available to the Company. These beliefs, assumptions and expectations can change as a result of many possible events or factors, including those events and factors described in "Risk Factors" in the Company's Annual Report on Form 10-KSB for 2008 filed with the Securities and Exchange Commission, not all of which are known to the Company. The Company will update the information in this press release only to the extent required under applicable securities laws. If a change occurs, the Company's business, financial condition, liquidity and results of operations may vary materially from those expressed in the aforementioned forward-looking statements. (Tables Follow) [TABLE OMITTED] [TABLE OMITTED] |
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