America Service Group Announces Record First Quarter Results; Company Announces Second Acquisition This Year.Business Editors NASHVILLE, Tenn.--(BW HealthWire)--April 24, 2000 America Service Group Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ASGR ASGR America Service Group Inc. ASGR Armed Services Graves Registration Office ) First Quarter Highlights: -- Completed acquisition of Correctional Physician Services, Inc. (CPS (1) (Characters Per Second) The measurement of the speed of a serial printer or the speed of a data transfer between hardware devices or over a communications channel. CPS is equivalent to bytes per second. ) -- Revenues increased 31% over first quarter of 1999 -- Earnings per share, exclusive of 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. dividends, increased 167% over first quarter of 1999 -- EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become per share increased to $0.80 versus $0.67 for the first quarter of 1999 -- Senior bank debt reduced by an additional $2.3 million prior to CPS acquisition -- Today separately announced the acquisition of Correctional Health Services health services Managed care The benefits covered under a health contract , Inc. (CHS (Cylinder Head Sector) An earlier method of addressing a hard disk by referencing all three physical elements of the drive. It was superseded by logical block addressing (see LBA). ) America Service Group Inc. (NASDAQ:ASGR) announced today record first quarter results. The Company also separately announced that it has executed a stock purchase agreement to acquire Correctional Health Services, Inc. (CHS). Michael Catalano, president and chief executive officer of America Service Group, said, "We are pleased to report solid first quarter financial results and our second acquisition this year. Clearly, our operating performance and financial strength have earned us a leadership position in the industry." Healthcare revenue for the first quarter of 2000 was $76.2 million, up 31% from $58.3 million in the year-ago quarter, primarily due to the Company's acquisition of EMSA EMSA Electrophoretic Mobility Shift Assay (molecular biology) EMSA European Maritime Safety Agency EMSA Emergency Medical Services Authority (California) EMSA European Medical Students' Association Government Services (EMSA) during the first quarter of 1999. Net income was $1.7 million for the first quarter of 2000 compared with net income of $480,000 for the first quarter of 1999. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of was $0.32 for the first quarter of 2000 compared with a loss per share of $0.42 for the first quarter of 1999, which was due to a $1.9 million noncash, nonrecurring preferred stock dividend. Excluding the impact of the noncash, nonrecurring dividend in 1999, diluted earnings per share for the first quarter of 1999 would have been $0.12. Healthcare expenses as a percent of revenue for the first quarter of 2000 were 90.1%, a slight increase over 90.0% in the first quarter of 1999. In addition, selling, general and administrative expenses improved from 5.2% of revenues in the first quarter of 1999 to 4.3% of revenues in the first quarter of 2000. On March 29, 2000, the Company announced that it had acquired the Pennsylvania and New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of operations of Correctional Physician Services, Inc. (CPS) for $14 million through an asset purchase agreement whereby the contracts for the Eastern Region of the Pennsylvania Department of Corrections and the Yonkers Region of the New York Department of Correctional Services were assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. to Prison Health Services, Inc., an operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. of America Service Group. The two contracts provided services to approximately 21,000 inmates and produced revenues of approximately $41 million during 1999. CPS is a privately held company privately held company A firm whose shares are held within a relatively small circle of owners and are not traded publicly. with headquarters located in Blue Bell, Pennsylvania Blue Bell is a census-designated place (CDP) in Whitpain Township in Montgomery County, Pennsylvania, in the United States. As of the 2000 census, its population was 6,395. . In a separate release dated April 24, 2000, the Company announced that it had signed an agreement to acquire the stock of Correctional Health Services, Inc. (CHS) for a purchase price of $17 million. CHS is a privately held company with headquarters in Verona, New Jersey Verona is a township in Essex County, New Jersey, United States. As of the United States 2000 Census, the township population was 13,533, making it the 181st most populous municipality in New Jersey (out of 566 statewide). . It presently has annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. revenues of approximately $19 million generated by 19 contracts providing services to 23 adult and juvenile detention and residential treatment facilities with a total average daily population of approximately 12,000 inmates. Closing of the CHS transaction is subject to customary regulatory clearance and is expected on June 1, 2000. A listen-only simulcast of America Service Group's first quarter conference call will be available online at www.asgr.com or www.streetevents.com on April 25, 2000, beginning at 11:00 a.m. Eastern time. The online replay will follow immediately and continue for 30 days. America Service Group Inc., based in Brentwood, Tennessee Brentwood is a city in Williamson County, Tennessee, United States. The population was 23,445 as of the U.S. Census Bureau's 2000 census, and as of 2007, Brentwood's population has increased to over 30,000. Brentwood is an affluent Nashville suburb. , is a leading provider of correctional healthcare services in the 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. . Subsequent to the CPS and CHS transactions, America Service Group Inc., through its subsidiaries, contracts with 123 government agencies to provide a wide range of managed healthcare programs for approximately 165,000 patients. The Company employs over 4,600 medical, professional and administrative staff nationwide. This press release may contain "forward-looking" statements made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. As such, they involve risk and uncertainty that actual results may differ materially from those projected in the 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. . A discussion of the important factors and assumptions regarding the statements and risks involved is contained in the Company's filings with the Securities and Exchange Commission.
AMERICA SERVICE GROUP INC.
Financial Highlights
(In thousands, except per share data)
Three Months Ended
--------------------------------------
March 31, % of March 31, % of
2000 Revenue 1999 Revenue
-------- ------- -------- -------
Condensed Income Statement Data:
Healthcare revenue $76,169 100.0 $58,281 100.0
Healthcare expenses 68,626 90.1 52,478 90.0
-------- ------- -------- -------
Gross margin 7,543 9.9 5,803 10.0
Selling, general and
administrative expenses 3,241 4.3 3,020 5.2
Depreciation and amortization 977 1.3 667 1.1
-------- ------- -------- -------
Income from operations 3,325 4.4 2,116 3.6
Interest, net (498) (0.7) (1,024) (1.8)
-------- ------- -------- -------
Income before taxes 2,827 3.7 1,092 1.9
Provision for income taxes 1,132 1.5 612 1.1
-------- ------- -------- -------
Net income 1,695 2.2 480 0.8
Preferred stock dividends 163 0.2 1,989 3.4
-------- ------- -------- -------
Net income (loss) attributable
to common shares $1,532 2.0 $(1,509) (2.6)
======== ======= ======== =======
Net income (loss) per common share:
Basic $0.41 $(0.42)
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Diluted $0.32 $(0.42)
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Diluted - exclusive of
preferred stock dividends $0.32 $0.12
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Weighted average shares
outstanding:
Basic 3,726 3,575
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Diluted 5,346 3,575
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Diluted - exclusive of
preferred stock dividends 5,346 4,166
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March 31, Dec. 31,
2000 1999
-------- --------
Condensed Balance Sheet Data:
Cash and cash equivalents $451 $444
Other current assets 48,369 48,467
-------- --------
Current assets 48,820 48,911
Cost in excess of net assets acquired 58,664 44,548
Property and equipment, net 4,077 3,932
Other assets 1,228 1,336
-------- --------
$112,789 $98,727
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Current liabilities $40,028 $39,413
Other liabilities 3,098 2,874
Long-term debt 37,200 25,500
-------- --------
Stockholders' equity 32,463 30,940
-------- --------
$112,789 $98,727
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