Prime Management Group announces new contracts and restructuring of warranty services division.
At the same time, the company announced that certain non-recurring expenses will be incurred in the fourth quarter of its 1994 year, in conjunction with a restructuring of its warranty services business.
Since Jan. 1, 1995, Prime Management Group has signed property management/maintenance contracts with 17 condominium and homeowner associations, representing a total of 2,398 individual residential units. Management estimates that these contracts should contribute cumulative annual revenues in excess of $1.6 million.
The company also announced a restructuring of its Prime Services division, which provides condominium owners and homeowner associations with warranty services covering the repair of major appliances, water heaters, and electrical/plumbing/heating/air- conditioning systems. In light of greater-than-anticipated losses incurred during the start-up period for this division, the company will recognize restructuring charges approximating $230,000 during the fourth quarter of its 1994 year. Such non-recurring, non-cash expenses primarily relate to (1) a partial writedown in goodwill resulting from the acquisition of an appliance maintenance business and (2) costs incurred in the development of computer software for the warranty services division.
Prime Management Group Inc. expects to report its audited operating results for the year ended Dec. 31, 1994, in early March. Based upon information currently available, management estimates that net income for the year, before non-recurring restructuring charges, approximated $0.22-$0.25 per share. After restructuring charges are included, the company expects to report a per-share profit of $0.11-$0.14 for the year. Revenues during 1994 increased approximately 28% and exceeded $9.2 million, compared with pro-forma revenues of $7.2 million in the prior year.
"Our traditional property management and maintenance business enjoyed a superb year during 1994," commented Ronald Raible, the company's executive vice president and chief operating officer. "Since the first of last year, we have increased the number of condominium units under contract to our Prime Management division by approximately 25%, to a current total exceeding 22,500. We expect the company's overall revenues and earnings to post impressive gains during the current year."
"In light of slower-than-expected initial warranty services revenue growth, we have restructured our Prime Services division, which we expect to achieve profitability during the course of the 1995 year," noted Myron I. Swatt, chairman and chief executive officer of Prime Management Group Inc. "While customer growth in our warranty services division has been disappointing to date, we remain optimistic that this can be a very profitable business over the long-term, and one which can leverage our existing relationships with over 160 condominium/homeowner associations in South Florida."
Prime Management Group Inc. is a full-service property management and maintenance company which serves condominium and homeowner associations. The company presently contracts with more than 160 associations, including some of the largest in South Florida, representing over 22,500 individual unit owners. Through its Prime Services division, the company also provides warranty services to residential owners in South Florida.
Prime Management Inc.'s common stock is traded on NASDAQ under the symbol "PMGI."
CONTACT: Prime Management Group Inc.
Myron I. Swatt, Chief Executive Officer
or William H. Aden, Chief Financial Officer
R. Jerry Falkner, CFA, Investor Relations Counsel,
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|Date:||Feb 10, 1995|
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