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American Physicians Service Group, Inc. Announces Increase in Revenues, Operating Income

Posted on: Thursday, 11 May 2006, 09:09 CDT

American Physicians Service Group, Inc. ("APS") (NASDAQ: AMPH) today announced results for the first quarter of 2006. For the three months ended March 31, 2006, revenues were $7,233,000 compared to $6,662,000 a year-ago. Operating income was $676,000 versus $577,000 a year earlier, while net income of $562,000 compares to net income of $853,000 in the same quarter of 2005. In 2005, gains on sales of investments had added $591,000 to pretax income versus $7,000 in the current period. Diluted earnings per share in the current quarter were $0.19 compared to $0.30 in the first quarter of 2005.

Ken Shifrin, APS Chairman of the Board, stated, "We are very pleased with first quarter results. Revenues were up 9% and operating income was up 17%, compared to the same quarter last year. Net income had been positively impacted in the quarter ended March 31, 2005 by a large, one-time, investment gain that we did not have in the quarter just ended, but our core businesses continued to perform well."

Mr. Shifrin continued, "Our insurance segment beefed up its marketing effort last year and has increased the number of insured doctors for its managed insurance company by about 12% since March 31, 2005. Our financial services segment benefited from its entry last year into investment banking and trade claims clearing, boosting revenue quarter-to-quarter in what was a challenging market for its core fixed-income business. We are proud of the resourcefulness that our management team has shown."

Mr. Shifrin concluded, "Attention to shareholder value continues to be an integral part of our business plan. Book value per share was $10.16 per share at March 31, 2006 compared to $9.32 at March 31, 2005. A year before that it was $8.18, a trend reflective of our excellent earnings and our consistent stock repurchases. Our balance sheet continues to give us stability and opportunity, with outstanding working capital, liquidity, and no debt."

APS is a management and financial services firm with subsidiaries and affiliates which provide: medical malpractice insurance services for doctors; and brokerage and investment services to institutions and high net worth individuals. The Company is headquartered in Austin, Texas and maintains offices in Dallas and Houston.

This press release includes forward-looking statements related to the Company that involve risks and uncertainties that could cause actual results to differ materially. These forward-looking statements are made in reliance on the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. For further information about these factors that could affect the Company's future results, please see the Company's recent filings with the Securities and Exchange Commission. Prospective investors are cautioned that forward-looking statements are not guarantees of future performance. Actual results may differ materially from management expectations. Copies of the filings are available upon request from the Company's investor relations department.

                        AMERICAN PHYSICIANS SERVICE GROUP, INC.                          UNAUDITED SELECTED FINANCIAL DATA                        (In thousands, except per share data)                                                     Three Months Ended                                                          March 31,                                                         ----------                                                     2006         2005                                                  ----------   ---------- Revenues: Financial services                               $    3,578   $    3,267 Insurance services                                    3,655        3,395                                                  ----------   ----------   Total revenues                                      7,233        6,662 Expenses: Financial services                                    3,285        2,950 Insurance services                                    2,754        2,503 General and administrative                              518          667 Gain on sale of assets                                   --          (35)                                                  ----------   ----------   Total expenses                                      6,557        6,085                                                  ----------   ---------- Operating income                                        676          577 Sale of investments and other                             7          591                                                  ----------   ---------- Income from operations before interest,  income taxes and minority interests                    683        1,168 Interest and other income                               203          173 Income tax expense                                      323          477 Minority interests                                        1           11                                                  ----------   ----------   Net income                                     $      562   $      853                                                  ==========   ========== Diluted income per share:   Net income                                     $     0.19   $     0.30                                                  ==========   ========== Weighted average shares outstanding (diluted)         2,909        2,867                    AMERICAN PHYSICIANS SERVICE GROUP, INC.                 UNAUDITED SELECTED FINANCIAL DATA, continued (In thousands)                                                          March 31,                                                         ----------                                                     2006         2005                                                  ----------   ---------- ASSETS Current assets                                   $   21,472   $   12,601 Notes receivable, less current portion                  405          107 Property and equipment                                  669          670 Investment in available for sale equity and  fixed income securities-non-current                  8,544       13,343 Goodwill                                              1,247        1,247 Other assets                                            812          299                                                  ----------   ----------   Total Assets                                   $   33,149   $   28,267                                                  ==========   ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities                              $    5,147   $    2,971 Other liabilities                                        --          688                                                  ----------   ----------   Total liabilities                                   5,147        3,659 Minority interests                                       16           13 Shareholders' Equity: Common stock                                            275          264 Additional paid-in capital                            7,826        7,838 Retained earnings                                    19,300       14,801 Accumulated other comprehensive income,  net of taxes                                           585        1,692                                                  ----------   ----------   Total shareholders' equity                         27,986       24,595                                                  ----------   ---------- Total Liabilities and Shareholders' Equity       $   33,149   $   28,267                                                  ==========   ========== 

 For further information, visit APS' website at www.amph.com or contact:  Mr. Kenneth Shifrin Chairman of the Board (or) Mr. W. H. Hayes Sr. Vice President - Finance American Physicians Service Group, Inc. 1301 Capital of Texas Highway, C-300 Austin, Texas 78746 (512) 328-0888  

SOURCE: American Physicians Service Group, Inc.

Source: MARKET WIRE

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