POLICY MANAGEMENT SYSTEMS UNABLE TO RELEASE SECOND QUARTER RESULTS
BLYTHEWOOD, S.C., Aug. 9 /PRNewswire/ -- Policy Management Systems Corporation (NYSE: PMS) announced today that, due to the company's ongoing investigation of its accounting and business practices, it will be unable to release second quarter 1993 results by Aug. 14 as expected. The accounting issues being reviewed include timing of revenue recognition under certain of the company's licensing agreements and percentage of completion contact accounting with respect to certain of the company's service contracts. Due to the complexity of the issues and the large quantities of data under review, the company does not know when the investigation will be completed. In addition, the outcome of the investigation is likely to result in the revision of PMSC's financial statements for prior periods. PMSC said that Arthur Andersen & Co., the company's independent public accountants, has informed PMSC of its intention to withdraw its audit opinion on the company's financial statements for the year ended Dec. 31, 1992 due to the significant uncertainty arising from the investigation. Accordingly, reliance should not be placed on Arthur Andersen's opinion or those financial statements. "PMSC intends to resolve all accounting issues before releasing its second quarter financial results and filing its quarterly report with the Securities and Exchange Commission," said G. Larry Wilson, PMSC's chairman, president and chief executive officer. "Until the investigation is completed, we cannot comment on current financial results or speculate on the size of any revisions of our previous financial statements," Mr. Wilson said. Mr. Wilson noted that: -- PMSC's property and casualty business is performing well; -- PMSC is investing heavily in life insurance systems development and is taking action that should get its health insurance business to a break even point; -- The outlook for additional outsourcing opportunities continues to be promising, although the company has not yet replaced all of the revenues from the New Jersey MTF contract; -- PMSC is increasing its research and development spending on Series III client/server systems and is adding additional staff; -- The company continues to review opportunities for internally generated growth as well as selective acquisitions. PMSC also announced that the Federal Trade Commission has granted early termination of the Hart-Scott-Rodino Antitrust Improvements Act waiting period in connection with PMSC's tender offer for all of the outstanding shares of Cybertek Corporation common stock. "This removes a significant impediment to proceeding with this transaction," said Charles E. Callahan, executive vice president and group manager - life insurance. The tender offer has been extended and is now set to expire at 5 p.m., New York City time on Friday, Aug. 20, 1993. The information agent for the offer is D. F. King & Co., Inc. and the dealer manager for the offer is The
Robinson-Humphrey Company. Cybertek is traded on the NASDAQ National Market System under the symbol CKCP.
Policy Management Systems corporation is a leading provider of automation and information solutions to the insurance industry. -0- 8/9/93 /CONTACT: Jim O'Brien of Manning, Selvage & Lee, 803-735-4303/ (PMS)
CO: Policy Management Systems Corporation ST: South Carolina IN: SU:
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