First American Health Concepts Inc. Reports Increases in Revenues and Income From Operations.PHOENIX--(BUSINESS WIRE)--Dec. 9, 1999-- First American First American may refer to:
See: American Stock Exchange :FAH), reports a 41% increase in revenues to $2.6 million for the quarter ending October 31, 1999. Revenues for the comparable period in fiscal 1999 were $1.8 million. First American, which markets and administers third-party managed vision care plans nationwide under the trade name Eye Care Plan of America (ECPA (Electronic Communications Privacy Act of 1986) Signed into law in 1986, the ECPA extends legal protection against wiretapping and other forms of unauthorized interception to e-mail, cellular telephones, pagers, computer transmissions and communications ), also reports a significant increase in income. The company ended the first quarter of its fiscal year 2000 (August 1999 - October 1999) with net income from operations of $154,000 or $0.06 per share as compared to a net loss of $40,000 or $0.02 per share for the first quarter of the company's fiscal 1999. First American adopted SOP 98-5, Reporting for the Costs of Start-Up Activities in the first quarter of its fiscal 2000. This pronouncement mandates that all costs incurred during start-up activities, including licensing and organizational costs, be expensed as incurred. This change in accounting principle applied to First American, as the company was previously deferring start-up costs associated with its California subsidiary that will operate as a Specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. Knox-Keene Health Care Services Organization. The write off of these expenses is reported as a cumulative effect of a change in accounting principle. The company attributes its increase in revenues and operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. to its indemnity book of business. Revenues on the indemnity book increased to $1.3 million for the quarter ending October 31, 1999 versus $0.7 million for the comparable quarter in fiscal 1999. The increase is attributed to increased sales and new contract terms with First American's primary insurance carrier. Increased sales account for $0.4 million of the increase, with the remaining $0.2 million attributable to the improved contract terms. "Late last fiscal year, we renegotiated our contract in an effort to further share in the underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. gains of the primary insurance carrier," said First American Chairman John Behrmann. Total 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. increased to $2.4 million versus $2.0 million in the prior year. The increase corresponds to the increase in revenues. Total operating expenses, as a percentage of total revenues, were 92% for First American's first quarter of fiscal 2000 as compared to 107% in its first quarter 1999. First American expects the increase in revenues to continue throughout the remaining fiscal year. However, the company does expect some increase in operating expenses in relation to revenues for the second quarter. Increases are also expected from the anticipated licensure licensure (lī´s  nsh and subsequent activation activation /ac·ti·va·tion/ (ak?ti-va´shun)1. the act or process of rendering active. 2. the transformation of a proenzyme into an active enzyme by the action of a kinase or another enzyme. 3. of its California subsidiary. "The first calendar quarter is traditionally our best sales quarter because many companies have calendar-year benefit plans," said First American President John A. Raycraft. "In conjunction, we also see an increase in membership expenses associated with producing and distributing enrollment materials and identification cards for these calendar-year plans." First American's overall financial condition and liquidity remained strong with $1.8 million in cash and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and working capital at $3.7 million. Total assets were $6.4 million as of October 31, 1999. This 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. which may involve known and unknown risks, uncertainties and other factors that may cause actual results and performance to be materially different from any future results or performance suggested by these statements. -0- First Quarter Recap (a) Fiscal 2000 Fiscal 1999 Revenues $2,588 $1,836 Operating Expense $2,371 $1,970 Net Income/(Loss) from Operations $154 ($40) Net Income/(Loss) from Operations per share $0.06 ($0.02) Net Income/(Loss) After Change in Accounting Principle ($573) Net Income Per Share After Change in Accounting Principle ($0.22) (a) Figures in thousands, except per share data |
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