SOURCE: Access Plans, Inc.

Access Plans, Inc.

May 13, 2011 08:28 ET

Access Plans, Inc. Reports 155% Increase in Second Quarter Earnings

Diluted Earnings per Share Rise 113% to $0.17 in First Half of FY2011 Versus $0.08 in Prior-Year Period

NORMAN, OK--(Marketwire - May 13, 2011) - Access Plans, Inc. (OTCBB: APNC), a leading membership benefits marketing company, today announced record operating results for the second quarter and first half of FY2011. The Company will host an investor conference call at 1:00 p.m. Eastern Time today to discuss its operating results and other topics of interest (details provided below).

Revenues for the three months ended March 31, 2011 increased 2% to approximately $13.8 million, compared with approximately $13.5 million in the second quarter of FY2010. Operating income increased 144% to approximately $3.1 million, versus approximately $1.3 million in the prior-year period, reflecting continued moderation of variable expenses associated with Wholesale Plans Division offerings and income associated with programs implemented during 2010 in the Retail Plans Division. Net income increased 155% to approximately $1.9 million, or $0.09 per diluted share, in the second quarter of FY2011, compared with $0.7 million, or $0.04 per diluted share, in the corresponding period of the previous fiscal year.

For the six months ended March 31, 2011, revenues increased 5% to approximately $28.1 million, compared with approximately $26.8 million in the first half of FY2010. The increase in revenues was primarily due to continued membership growth in the Wholesale and Retail Plans divisions, partially offset by a reduction in Insurance Marketing Division revenue. Net income rose 107% to approximately $3.4 million, or $0.17 per diluted share, for the first six months of FY2011, compared with approximately $1.6 million, or $0.08 per diluted share, in the corresponding period of the previous fiscal year.

"The first six months of Fiscal 2011 produced record earnings for our Company," noted Danny Wright, Chairman and Chief Executive Officer of Access Plans, Inc. "Variable expense moderation and improved efficiencies within our Wholesale Plans and Retail Plans divisions have successfully mitigated the challenges our Insurance Marketing Division faced due to the reduction in Major Medical Insurance commissions mandated by the Healthcare Reform Act enacted in March 2010. We launched our newest supplemental insurance and discount program, the Smart Solutions series, in 22 states early in the second quarter, and we look forward to expanding the offering and adding new supplemental products later this year."

Wholesale Plans

Wholesale Plans Division revenue increased 12% to $6.3 million in the most recent quarter, versus $5.6 million in the second quarter of FY2010, while operating income increased 259% to $1.8 million, compared with $0.5 million in the prior-year period.

For the six months ended March 31, 2011, revenues in the Wholesale Plans Division increased 15% to $12.4 million, versus $10.8 million in the prior-year period. The increase in revenues was attributable to improved sell-through at existing customer locations, along with the addition of new accounts and new locations within existing accounts. Gross profits improved 104% to $4.6 million, compared with $2.3 million in the first half of FY2010, due to the revenue increase and a reduction in involuntary unemployment waiver expenses resulting from lower levels of initial unemployment claims nationally and the expiration of certain waiver benefits. Operating income at the division increased 200% to $3.7 million for the six-month period, versus $1.2 million in the first six months of FY2010.

Retail Plans

For the quarter, revenue within the Retail Plans Division increased 4% to $4.3 million, versus $4.1 million in the FY2010 second quarter. Operating income increased 84%, from $0.9 million in the second quarter of FY2010 to $1.7 million in the most recent quarter, due to continued emphasis on margin growth within the division.

Revenues in the Retail Plans Division increased 10% during the six months ended March 31, 2011 to $8.9 million, prior to inter-company eliminations, versus $8.0 million in the prior-year period. The increase was attributable primarily to contributions from new programs that offset anticipated revenue declines in the Company's legacy business. Gross profits increased 16%, from $4.3 million in the first half of FY2010 to $5.0 million in the six months ended March 31, 2011. Operating income at the division increased 59% to $3.0 million for the six-month period, versus $1.9 million in the first six months of FY2010.

Insurance Marketing

Insurance Marketing Division revenues decreased 6% to $4.6 million in the second quarter of FY2011 when compared with $4.9 million in the second quarter of FY2010. The decline was due to the loss of two major medical carriers and reduced commission income as a result of the implementation of the Healthcare Reform Act. The division's operating income of $0.07 million in the second quarter of FY2011 was relatively unchanged relative to operating income of $0.07 million in last year's second quarter.

For the six months ended March 31, 2011, Insurance Marketing revenues decreased 7%, from $10.4 million in the first half of FY2010 to $9.7 million in the corresponding FY2011 period. Operating income for the Insurance Marketing Division decreased from $0.3 million in the six months ended March 31, 2010 to $0.1 million in the corresponding period of FY2011.

Other Matters

Cash, cash equivalents and restricted cash increased 48% during the first half of FY2011, from $6.2 million on September 30, 2010 to $9.1 million on March 31, 2011. The Company does not have any long-term debt outstanding. The Company's stockholders' equity totaled $17.7 million on March 31, 2011, which represented an increase of approximately 25% when compared with $14.2 million in stockholders' equity on September 30, 2010.

Conference Call Information

The Company will host an investor conference call at 1:00 p.m. Eastern Time today, May 13, 2011. Shareholders and other interested parties may participate in the conference call by dialing 877-317-6789 (international/local participants dial 412-317-6789) and asking to be connected to the "Access Plans, Inc. Conference Call" a few minutes before 1:00 p.m. EDT today. The call will also be broadcast live on the Internet at http://www.videonewswire.com/event.asp?id=79507.

A replay of the conference call will be available one hour after the call through Monday, May 23, 2011 at 9:00 a.m. EDT by dialing 877-344-7529 (U.S.) or 412-317-0088 (international) and entering the conference ID Number 450839.

The conference call will be archived for review on the Internet at http://www.videonewswire.com/event.asp?id=79507 and on the Company's website at www.accessplans.com through Monday, May 23, 2011.

About Access Plans, Inc.

Access Plans, Inc. (OTCBB: APNC) is a leading membership benefits marketing company with two distribution channels. The Wholesale/Retail Plans distribution channel specializes in turnkey, private-label membership benefit plans that provide discount products and services, protection benefits and retail services to more than 1 million customers in the United States and Canada. America's Health Care Plans (AHCP), the Company's Insurance Marketing distribution channel, is one of the nation's largest independent agent networks and provides major medical, life and supplemental insurance products to individuals. For more information, please visit: www.accessplans.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act:

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, Section 27A of the Securities Act of 1933, as amended and pursuant to the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may relate to financial results and plans for future business activities, and are thus prospective. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are competitive pressures, loss of significant customers, the mix of revenue, changes in pricing policies, delays in revenue recognition, lower-than-expected demand for the Company's products and services, general economic conditions, and the risk factors detailed from time to time in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and the Company assumes no responsibility for updating such forward-looking statements after the date of this release.

                            Access Plans, Inc.
                  Consolidated Statements of Operations
      (Unaudited and dollars in thousands, except earnings per share)

                For the Three Months Ended     For the Six Months Ended
                        March 31,                      March 31,
              -----------------------------  -----------------------------
                2011     2010     Change       2011     2010     Change
              -------  -------  -----------  -------  -------  -----------
Net revenues  $13,781  $13,461  $  320    2% $28,057  $26,763  $1,294    5%
Direct costs    8,143    9,461  (1,318) -14%  16,936   18,261  (1,325)  -7%
              -------  -------  ------  ---  -------  -------  ------  ---
Gross profit    5,638    4,000   1,638   41%  11,121    8,502   2,619   31%
Operating
 expenses       2,558    2,738    (180)  -7%   5,537    5,605     (68)  -1%
              -------  -------  ------  ---  -------  -------  ------  ---
Operating
 income         3,080    1,262   1,818  144%   5,584    2,897   2,687   93%
Net other
 income
 (expense)         (2)     (18)     16  -89%       1       39     (38) -97%
Provision for
 income taxes,
 net            1,207      509     698  137%   2,203    1,304     899   69%
              -------  -------  ------  ---  -------  -------  ------  ---
Net income    $ 1,871  $   735  $1,136  155% $ 3,382  $ 1,632  $1,750  107%
              =======  =======  ======  ===  =======  =======  ======  ===
Per Share
 Data:
  Basic       $  0.09  $  0.04    0.05  126% $  0.17  $  0.08    0.09  109%
              =======  =======  ======  ===  =======  =======  ======  ===
  Diluted     $  0.09  $  0.04    0.05  148% $  0.17  $  0.08    0.09  106%
              =======  =======  ======  ===  =======  =======  ======  ===

Average Shares
 Outstanding:
  Basic        19,894   19,777     117    1%  19,885   20,042    (157)  -1%
              =======  =======  ======  ===  =======  =======  ======  ===
  Diluted      20,605   20,045     560    3%  20,362   20,251     111    1%
              =======  =======  ======  ===  =======  =======  ======  ===


                For the Three Months Ended     For the Six Months Ended
                        March 31,                      March 31,
              -----------------------------  -----------------------------
                2011     2010     Change       2011     2010     Change
              -------  -------  -----------  -------  -------  -----------
Segment net
 revenues
  Wholesale
   Plans      $ 6,316  $ 5,637  $  679   12% $12,369  $10,775  $1,594   15%
  Retail
   Plans        4,276    4,129     147    4%   8,850    8,010     840   10%
  Insurance
   Marketing    4,630    4,949    (319)  -6%   9,695   10,424    (729)  -7%
  Eliminations (1,441)  (1,254)   (187)  15%  (2,857)  (2,446)   (411)  17%
              -------  -------  ------  ---  -------  -------  ------  ---
              $13,781  $13,461  $  320    2% $28,057  $26,763  $1,294    5%
              =======  =======  ======  ===  =======  =======  ======  ===


                For the Three Months Ended     For the Six Months Ended
                        March 31,                      March 31,
              -----------------------------  -----------------------------
                2011     2010     Change       2011     2010     Change
              -------  -------  -----------  -------  -------  -----------
Segment
 operating
 income
  Wholesale
   Plans      $ 1,846  $   514  $1,332  259% $ 3,657  $ 1,221  $2,436  200%
  Retail
   Plans        1,742      945     797   84%   2,980    1,880   1,100   59%
  Insurance
   Marketing       73       67       6    9%     108      323    (215) -67%
  Corporate      (581)    (264)   (317) 120%  (1,161)    (527)   (634) 120%
              -------  -------  ------  ---  -------  -------  ------  ---
              $ 3,080  $ 1,262  $1,818  144% $ 5,584  $ 2,897  $2,687   93%
              =======  =======  ======  ===  =======  =======  ======  ===




                            Access Plans, Inc.
                  Condensed Consolidated Balance Sheets
                   (Unaudited and dollars in thousands)

                                                              September 30,
                                                                  2010
                                                  March 31,  (Derived From
                                                     2011       Audited
                                                 (Unaudited)   Statements)
                                                 ------------ ------------

Total current assets                             $     17,369 $     16,297
Total assets                                     $     25,234 $     24,852
Total current and long term liabilities          $      7,529 $     10,638
Total stockholders' equity                       $     17,705 $     14,214
Total liabilities and stockholders' equity       $     25,234 $     24,852

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