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FORM 10Q -- QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ____________ TO ____________
Commission File Number: 0-20135
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AMERICA SERVICE GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0332317
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
105 WESTPARK DRIVE, SUITE 300
BRENTWOOD, TENNESSEE 37027
(Address and zip code of principal executive office)
(615) 373-3100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed under Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
There were 3,613,379 shares of Common Stock outstanding as of October 29,
1999.
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AMERICA SERVICE GROUP INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at September 30, 1999 and December 31, 1998..................... 3
Condensed Consolidated Income Statement for the quarters and nine months ended September 30,
1999 and September 30, 1998.......................................................................... 4
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 1999 and
September 30, 1998................................................................................... 5
Notes to Condensed Consolidated Financial Statements.................................................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations........... 8
PART II. OTHER INFORMATION
Item 4: Submission of Matters to a Vote of Security Holders............................................. 12
Item 5: Other Events.................................................................................... 12
Item 6: Exhibits and Reports on Form 8-K................................................................ 12
Signature page.......................................................................................... 13
</TABLE>
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PART I:
FINANCIAL INFORMATION
AMERICA SERVICE GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................................... $ 2,752 $ 7,211
Accounts receivable: healthcare and other, less allowance
for doubtful accounts..................................... 35,145 13,760
Prepaid expenses and other current assets.................... 3,751 1,098
Current deferred taxes....................................... 2,730 2,730
---------------------------
Total current assets................................. 44,378 24,799
Property and equipment, net.................................... 3,707 1,886
Deferred taxes................................................. 1,341 1,341
Cost in excess of net assets acquired, net..................... 45,137 ---
Other assets................................................... 832 349
===========================
$ 95,395 $ 28,375
===========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable............................................. $ 8,023 $ 2,438
Accrued expenses............................................. 27,880 11,846
Subordinated notes........................................... -- ---
---------------------------
Total current liabilities............................ 35,903 14,284
Noncurrent portion of accrued expenses......................... 2,520 1,300
Long-term debt................................................. 28,000 ---
Commitments and contingencies
Mandatory redeemable preferred stock........................... 12,369 ---
Mandatory redeemable common stock.............................. 1,842 1,842
Common stock................................................... 37 36
Additional paid in capital..................................... 12,370 8,351
Shareholders' notes receivable (1,059) ---
Retained earnings.............................................. 3,413 2,562
===========================
Total liabilities and stockholders' equity........... $ 95,395 $ 28,375
===========================
</TABLE>
See notes to condensed consolidated financial statements.
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AMERICA SERVICE GROUP INC.
CONDENSED CONSOLIDATED INCOME STATEMENT
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS
SEPTEMBER 30, ENDED SEPTEMBER 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Healthcare revenue........................ $69,667 $28,215 $200,166 $ 83,678
Healthcare expenses....................... 62,493 25,183 180,232 75,188
--------------------------------------------------------------
Gross margin.............................. 7,174 3,032 19,934 8,490
Selling, general and administrative
expenses 3,058 2,284 9,022 7,354
Depreciation and amortization............. 997 179 2,695 991
MedPartners settlement.................... --- (960) --- (3,515)
--------------------------------------------------------------
Income from operations.................... 3,119 1,529 8,217 3,660
Interest, net............................. (924) 169 (3,215) 503
--------------------------------------------------------------
Income before taxes....................... 2,195 1,698 5,002 4,163
Provision for income taxes................ 878 113 2,001 118
--------------------------------------------------------------
Net income................................ 1,317 1,585 3,001 4,045
Preferred stock dividends................. 97 --- 2,150 ---
==============================================================
Net income attributable to common shares.. $ 1,220 $ 1,585 $ 851 $ 4,045
==============================================================
Net income per common share:
Basic................................... $ 0.34 $ 0.44 $ 0.24 $ 1.14
==============================================================
Diluted................................. $ 0.28 $ 0.43 $ 0.24 $ 1.10
==============================================================
Weighed average shares outstanding:
Basic................................... 3,613 3,564 3,588 3,550
==============================================================
Diluted................................. 4,786 3,662 4,412 3,663
==============================================================
</TABLE>
See notes to condensed consolidated financial statements.
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AMERICA SERVICE GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
NINE MONTHS
SEPTEMBER 30,
1999 1998
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<S> <C> <C>
Operating activities:
Net income.......................................... $3,001 $ 4,045
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization..................... 2,695 991
Accretion of subordinated notes................... 540 ---
Changes in operating assets and liabilities, net of
effects from acquisition:
Accounts receivable............................ 18,067 (4,033)
Prepaid expenses and other current assets...... (1,854) 808
Other assets................................... (403) (6)
Accounts payable............................... 5,585 (719)
Accrued expenses............................... (5,447) (941)
----------------------------
Net cash provided by operating activities........... 22,184 145
Investing activities:
Cash paid for acquisition, net of cash acquired..... (66,077) ---
Capital expenditures................................ (1,424) (367)
Sale of property and equipment --- 533
Change in short-term investments.................... --- (1,826)
Change in restricted investments.................... --- (1,326)
----------------------------
Net cash used in investing activities............... (67,501) (2,986)
Financing activities................................
Proceeds from long-term debt........................ 47,000 ---
Proceeds from mandatory redeemable preferred stock.. 5,000 ---
Proceeds from subordinated notes.................... 15,000 ---
Payments on long-term debt.......................... (19,000) ---
Payments on subordinated notes...................... (7,500) ---
Exercise of stock options........................... 358 340
----------------------------
Net cash provided by financing activities........... 40,858 340
Net decrease in cash and cash equivalents........... (4,459) (2,501)
Cash and cash equivalents, beginning of period...... 7,211 3,445
----------------------------
Cash and cash equivalents, end of period............ $ 2,752 $ 944
============================
</TABLE>
See notes to condensed consolidated financial statements.
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AMERICA SERVICE GROUP INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. BASIS OF PRESENTATION
The interim consolidated financial statements as of September 30, 1999 and
for the nine months and quarter then ended are unaudited, but in the opinion of
management, have been prepared in conformity with generally accepted accounting
principles applied on a basis consistent with those of the annual audited
consolidated financial statements. Such interim consolidated financial
statements reflect all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the financial position and the results of
operations for the nine months and quarter presented. The results of operations
for the nine months presented are not necessarily indicative of the results to
be expected for the year ending December 31, 1999. The interim consolidated
financial statements should be read in connection with the audited consolidated
financial statements for the year ended December 31, 1998.
2. RECLASSIFICATIONS
Certain reclassifications have been made to the September 1998 Condensed
Consolidated Income Statement relating to the presentation of the MedPartners
Release and Settlement Agreement as discussed in Note 4. Specifically, $0.4 and
$1.1 million for the quarter and nine months of reimbursements relating to
healthcare and lease costs are now reflected in healthcare expenses and $1.2
million for nine months of costs associated with the failed merger are included
in selling, general and administrative expenses and amortization expense. The
reclassifications increased the nonrecurring gain by $0.4 million for the
quarter and $2.3 million for the nine months. The gain now reflected for the
quarter and nine months is $1.0 and $3.5 million, respectively. The
reclassifications did not impact net income or earnings per share calculations
and were discussed in conjunction with the Company's September 1998 10-Q's
Management's Discussion and Analysis of Financial Condition and Results of
Operations.
3. ACQUISITION OF GOVERNMENT SERVICES DIVISION
On January 26, 1999, the Company purchased all of the outstanding stock of
EMSA Government Services, Inc. ("EMSA") from InPhyNet Administrative Services,
Inc. ("InPhyNet") for $67.0 million in cash pursuant to a Stock Purchase
Agreement, dated as of December 18, 1998 (the "Stock Purchase Agreement"), as
amended by the First Amendment to Stock Purchase Agreement, dated as of January
26, 1999 (the "First Amendment"), between the Company and InPhyNet. InPhyNet is
a wholly-owned subsidiary of MedPartners, Inc. ("MedPartners").
EMSA conducts its operations through two wholly-owned subsidiaries, EMSA
Correctional Care, Inc. and EMSA Military Services, Inc., each of which became
indirect subsidiaries of the Company pursuant to its acquisition of EMSA. EMSA
Correctional provides comprehensive managed healthcare solutions to state and
local correctional facilities, managing healthcare for approximately 70,000
inmates. Following the EMSA acquisition, the Company, through EMSA Correctional
and Prison Health Services, Inc. ("PHS"), manages healthcare for approximately
133,000 inmates in 25 states. EMSA Military contracts with the U.S. Department
of Defense (the "DOD") and the Veterans Administration (the "VA") to provide
emergency medicine and primary healthcare services to active and retired
military personnel and their dependents at medical facilities operated by the
DOD and the VA.
The purchase price paid to InPhyNet was subject to increase or decrease on a
dollar-for-dollar basis by an amount equal to the amount by which EMSA's working
capital, as defined, and as reflected on its balance sheet as of January 25,
1999 (the "Closing Date Balance Sheet"), was in excess of or was less than $27.6
million. The Closing Date Balance Sheet reflected working capital, as defined,
of $24.0 million. Accordingly, the Company received $3.6 million in March 1999
as part of the purchase price adjustment. The Company accounted for the EMSA
acquisition using the purchase method of accounting.
In connection with the EMSA acquisition: (i) the Company and all of its
subsidiaries, including EMSA, EMSA Military and EMSA Correctional, entered into
an Amended and Restated Credit Agreement, dated as of January 26, 1999, with
NationsBank, N.A., as Administrative Agent and Issuing Bank ("NationsBank"),
which now provides for a Senior Revolving Credit Facility of up to $52.0 million
(the "Credit Facility") subject to scheduled reductions and (ii) the Company
entered into a Securities Purchase Agreement, dated as of January 26, 1999 (the
"Securities Purchase Agreement") with Health Care Capital Partners L.P.
("Capital Partners") and Health Care Executive Partners L.P. ("Executive
Partners"), investment funds managed by Ferrer Freeman Thompson
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& Co. (collectively, with Capital Partners and Executive Partners, "FFT"). On
January 26, 1999, pursuant to the Securities Purchase Agreement, the Company
issued to Capital Partners and Executive Partners (i) $15.0 million aggregate
principal amount of the Company's 12% Subordinated Convertible Bridge Notes due
January 26, 2000 (the "Notes") with detachable warrants (the "Warrants") to
purchase an aggregate 135,000 shares of the Company's common stock, par value
$0.01 per share (the "Common Stock"), and (ii) 50,000 shares of the Company's
Series A Convertible Preferred Stock, par value $0.01 per share (the "Preferred
Stock"), for $5.0 million. The Preferred Stock is subject to mandatory
redemption on July 26, 2005. The Notes, Warrants and Preferred Stock are
referred to collectively as the "Convertible Shares."
The Company has obtained an independent valuation computation of the fair
values of the Warrants ($4.88 per Warrant). Significant assumptions used in the
fair value calculation include: risk-free interest rate (4.79%); expiration
period (7 years); volatility (49%); and dividend per share (zero). The proceeds
from the sale of the Notes and Warrants were allocated in January 1999 based on
the relative fair values of the Warrants and Notes, with the fair value of the
Warrants being accounted for as an addition to paid-in capital. The resulting
discount on the Notes is accounted for as such and is being accreted and charged
to interest expense over the one-year life of the notes.
Preferred stock dividends of $2.1 million relate to the 5% coupon rate on
the $5.0 million of Convertible Preferred Stock issued as part of the EMSA
acquisition, which equates to $0.2 million and a noncash, nonrecurring dividend
of $1.9 million, which increased paid-in capital and represents a $3.68 dividend
on each outstanding share of Convertible Preferred Stock. The dividend equals
the increase in the fair market value of a share of the Company's Common Stock
from the date the Company entered into a commitment to issue the Convertible
Preferred Stock ($9.45 per share) to the Company's issuance of the convertible
Preferred Stock on January 26, 1999 ($13.125 per share).
The Company follows the requirements of Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings per Share. Diluted earnings per share will
include shares to be issued relating to the Warrants under the treasury stock
method and the conversion of Preferred Stock to Common Stock at the applicable
conversion ratio.
The Company has included in its proxy statement filing a detailed
description of the Notes, the Warrants and the Preferred Stock, including
conversion features and redemption requirements.
The Company used $47.0 million in borrowings under the Credit Facility and
the aggregate $20.0 million in proceeds received from its issuance of the
Convertible Securities to Capital Partners and Executive Partners to finance, in
part, the EMSA acquisition, which consisted of assets acquired of $89.2 million,
including cash of $0.9 million and $46.7 million of cost in excess of net assets
acquired and the assumption of $22.2 million in liabilities. The following
unaudited pro forma results of operations give effect to the operations of the
Company as if the acquisition had occurred effective January 1, 1999 and January
1, 1998 (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1999 1998 1999 1998
------------------------------------------------------------
<S> <C> <C> <C> <C>
Healthcare revenue............................ $ 69,667 $ 71,795 $ 209,894 $ 203,266
Net income attributable to common shares...... 1,220 1,742 849 892
Net income per common share:
Basic....................................... $ 0.34 $ 0.49 $ 0.24 $ 0.25
============================================================
Diluted..................................... $ 0.28 $ 0.45 $ 0.24 $ 0.25
============================================================
</TABLE>
4. RELEASE AND SETTLEMENT AGREEMENT
On October 1, 1997, the Company entered into a Plan and Agreement of Merger
(the "Merger Agreement") with MedPartners, Inc., a Delaware corporation
("MedPartners"), and a wholly-owned subsidiary of MedPartners, pursuant to which
the Company would have been acquired by MedPartners (the "Merger"). In
connection with the Merger, each issued and outstanding share of the Company's
Common Stock, $0.01 par value per share (the "Company's Common Stock") would
have been converted into the right to receive 0.71 of a share of MedPartners'
Common Stock. On October 28, 1997, MedPartners entered into a Plan and Agreement
of Merger (the "PhyCor Merger Agreement") with PhyCor, Inc., a Delaware
corporation ("PhyCor"), pursuant to which MedPartners would have been acquired
by PhyCor and each issued and outstanding share of MedPartners' Common Stock
would have been converted into the right to receive 1.18 shares of PhyCor Common
Stock.
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The Company mailed a Proxy Statement to the holders of its Common Stock on
November 20, 1997. The Proxy Statement related to a special meeting of the
Company's stockholders scheduled to be held on December 29, 1997, for the
purpose of considering and voting upon the Merger. On December 29, the Company
postponed the special meeting at the request of MedPartners until January 20,
1998.
On January 20, 1998, the Company announced that it would not hold the
special meeting of its stockholders originally scheduled for December 29, 1997,
and that it was engaged in discussions with MedPartners regarding the Merger
Agreement. On February 26, 1998, the Company announced the termination of the
Merger Agreement and the execution of a Release and Settlement Agreement (the
"Settlement Agreement") with MedPartners relating to the Merger Agreement.
Pursuant to the Settlement Agreement, MedPartners agreed to pay the Company
approximately $3.5 million in cash and to reimburse or assume certain other
costs incurred by the Company in connection with the Merger in the amount of
approximately $2.0 million.
ITEM 2. -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This quarterly report on Form 10-Q contains and incorporates by reference
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Those statements include, among other things, discussions of the
Company's business strategy and expectations concerning the Company's position
in the industry, future operations, margins, profitability, liquidity and
capital resources. All these forward-looking statements are based on estimates
and assumptions made by management of the Company that, although believed to be
reasonable, are inherently uncertain. Therefore, undue reliance should not be
placed on such statements and estimates. No assurance can be given that any of
such estimates or statements will be realized, and it is likely that actual
results may differ materially from those contemplated by such forward-looking
statements. Factors that may cause such differences include, but are not limited
to, those set forth in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998 (the "1998 Form 10-K") under the heading "Item 1.
Business -- Cautionary Statements," which cautionary statements are hereby
incorporated herein by reference. All forward-looking statements attributable to
the Company or persons acting on behalf of the Company are expressly qualified
in their entirety by the cautionary statements set forth in the 1998 Form 10-K.
In light of these and other uncertainties, the inclusion of forward-looking
statements herein or in any statement made by the Company should not be regarded
as a representation by the Company that the Company's plans and objectives will
be achieved.
GENERAL
The financial statements of the Company for the nine months ended September
30, 1999 include the operations of EMSA since January 26, 1999, the date of
acquisition. The acquisition was strategic in that it positions the Company as
the second largest provider of comprehensive managed healthcare for incarcerated
individuals in the United States and positions the Company to capitalize on
opportunities within the $4.5 billion correctional healthcare industry. Through
the acquisition of EMSA, the Company was able to (1) increase its contracts from
thirty-five to ninety-six; (2) increase the number of inmates served from 64,000
to 133,000; (3) diversify its revenue base, so that no one contract exceeds 8%
of combined revenue; (4) increase its market presence from sixteen to
twenty-five states; (5) leverage its corporate general and administrative
expenses; (6) obtain more favorable pricing in areas such as pharmacy, medical
supplies and lab costs; and (7) strengthen certain critical disciplines such as
marketing and operations management.
In addition to the strategic advantages, EMSA's contracts are similar to the
Company's prison and jail contracts, which will allow the Company to implement
its operational process, which includes (1) a claims management tracking system
that monitors incidents, claims and litigation; (2) a Daily Operating Report to
control staffing and off-site utilization; (3) biweekly pharmacy reports; and
(4) a comprehensive cost review system that analyzes average costs per inmate at
each facility. Through the implementation of the above processes, the Company
anticipates an overall improvement in EMSA's margins.
RESULTS OF OPERATIONS
THIRD QUARTER SEPTEMBER 1999 COMPARED TO THIRD QUARTER SEPTEMBER 1998
Healthcare revenues for the quarter September 1999 increased to $69.7
million from $28.2 million in the third quarter 1998. The $41.5 million increase
is attributable to the acquisition of EMSA, an increase in inmate population and
automatic pricing adjustments
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of existing PHS contracts and new business. Revenue from EMSA was $34.8 million,
existing PHS contracts increased $2.3 million or 8.2% as compared to September
1998 and new business was $4.4 million.
Healthcare expenses during the third quarter 1999 were $62.5 million or
89.7% of revenue versus $25.2 million or 89.3% of revenue for the same period in
1998. The $37.3 million increase is mainly attributable to the EMSA acquisition.
Selling, general and administrative expenses for the quarter ended September
1999 increased $0.8 million as compared to September 1998, due to the additional
costs related to the EMSA acquisition. As a percent of revenue, selling, general
and administrative expenses are 4.4% for September 1999 versus 8.1% for
September 1998. The percentage decrease demonstrates the leverage on selling,
general and administrative expense provided by the EMSA acquisition.
Depreciation and amortization increased $0.8 million to $1.0 million for
September 1999. The increase is mainly due to the amortization of cost in excess
of net assets related to the EMSA acquisition, totaling $46.7 million, which is
being amortized over twenty years.
Net interest expense of $0.9 million for September 1999, which includes $0.3
million of noncash accretion on the Convertible Subordinated Notes, relates to
the financing of the EMSA acquisition through the Senior Revolving Credit
Facility of $47.0 million and the $15.0 million Convertible Subordinated Notes.
The Company paid $7.5 million of the Convertible Subordinated Notes on July 2,
1999 and converted the remaining $7.5 million to redeemable Convertible
Preferred Stock on August 30, 1999. Interest expense of $1.0 million was offset
by $0.1 million of interest income. An additional $2.0 million was paid on the
Senior Revolving Credit Facility, leaving an outstanding balance of $28.0
million as of September 1999.
Income taxes for September 1999 were $0.9 million, which equates to a 40%
effective tax rate. The September 1998 financial statements have minimal income
taxes due to the utilization of income tax loss carryforwards.
The Company recorded a gain of $1.0 million in the third quarter of 1998
related to the Settlement Agreement between the Company and MedPartners. As part
of the Settlement Agreement, the Company received a $0.6 million payment and had
$0.4 million in employee healthcare and lease costs reimbursed by MedPartners
for the quarter ended September 1998.
Preferred stock dividends of $0.1 million relate to the 5% coupon rate on
the $12.5 million of Convertible Preferred Stock.
NINE MONTHS SEPTEMBER 1999 COMPARED TO NINE MONTHS SEPTEMBER 1998
Healthcare revenues for the nine months September 1999 increased to $200.2
million from $83.7 million for nine months 1998. The $116.5 million increase is
attributable to the acquisition of EMSA, an increase in inmate population and
automatic pricing adjustments of existing PHS contracts and new business.
Revenue from EMSA was $103.2 million, existing PHS contracts increased $6.9
million or 8.2% as compared to September 1998 and new business was $6.4 million.
Healthcare expenses during the nine months ended September 1999 were $180.2
million or 90.0% of revenue versus $75.2 million or 89.9% of revenue for the
same period in 1998. The $105.0 million increase is primarily attributable to
the EMSA acquisition.
Selling, general and administrative expenses for the nine months ended
September 1999 increased $1.7 million as compared to September 1998, due to the
additional costs related to the EMSA acquisition. Selling, general and
administrative expenses for the nine months ended September 1998 include $0.7
million of costs related to the failed merger with MedPartners. As a percent of
revenue, selling, general and administrative expenses are 4.5% for September
1999 versus 8.0% for September 1998, exclusive of the costs associated with the
failed merger. The percentage decrease demonstrates the leverage on selling,
general and administrative expense provided by the EMSA acquisition.
Depreciation and amortization increased $1.7 million to $2.7 million for
September 1999. The increase of $1.7 million is mainly due to the amortization
of cost in excess of net assets related to the EMSA acquisition, totaling $46.7
million, which is being amortized over twenty years.
Net interest expense of $3.2 million for September 1999, which includes $0.5
million of noncash accretion on the Convertible Subordinated Notes, relates to
the financing of the EMSA acquisition through the Senior Revolving Credit
Facility of $47.0 million and the $15.0 million Convertible Subordinated Notes.
Interest expense of $3.4 million was offset by $0.2 million of interest income.
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The outstanding balance of the Senior Revolving Credit Facility was $28.0
million as of September 1999. The Company repaid $7.5 million of the $15.0
million Convertible Subordinated Notes on July 2, 1999 and converted the
remaining $7.5 million to redeemable Convertible Preferred Stock on August 30,
1999.
Income taxes for September 1999 were $2.0 million, which equates to a 40%
effective tax rate. The September 1998 financial statements have minimal income
taxes due to the utilization of income tax loss carryforwards.
The Company recorded a gain of $3.5 million for the nine months of 1998
related to the Settlement Agreement between the Company and MedPartners. As part
of the Settlement Agreement, the Company received payments totaling $2.8
million, of which $1.0 million reimbursed the Company for costs directly
associated with the terminated merger transaction. In addition to the $1.8
million recognized from payments from MedPartners, an additional $1.7 million in
employee healthcare and lease costs were reimbursed by MedPartners for the nine
months ended September 1998.
Preferred stock dividends of $2.1 million relate to the 5% coupon rate on
the Convertible Preferred Stock issued as part of the EMSA acquisition, which
equates to $0.2 million and a noncash, nonrecurring dividend of $1.9 million,
which increased paid-in capital and represents a $3.68 dividend on each
outstanding share of Convertible Preferred Stock. The dividend equals
the increase in the fair market value of a share of the Company's Common Stock
from the date the Company entered into a commitment to issue the Convertible
Preferred Stock ($9.45 per share) to the Company's issuance of the convertible
Preferred Stock on January 26, 1999 ($13.125 per share).
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents at September 30, 1999, were $2.8
million, compared with cash and cash equivalents of $7.2 million at December 31,
1998. Cash provided by operating activities during the nine months ended
September 30, 1999 was $22.2 million compared to cash provided by operations of
$0.1 million for the comparable 1998 period. The overall increase in cash from
operating activities was due to acceleration in the transitioning of EMSA's
corporate finance functions, including processing of vendor and medical claims
invoices and accounts receivable. With the completion of the transition,
accounts receivable during the third quarter were reduced by an additional $7.3
million and have been reduced by $18.1 million for the nine-month period.
Accounts payable and accrued expenses declined by an additional $3.3 million for
the quarter. Due to the significant improvement in cash flow from operations,
the Company was able to reduce the Convertible Subordinated Notes by $7.5
million and the Senior Revolving Credit Facility by $2.0 million. Year to date,
$26.5 million of total debt has been repaid.
The transitioning of corporate finance functions would have been more
efficient if not for the time and effort required to complete the independent
financial statement audits for EMSA for January 25, 1999, for working capital
statement purposes, and as of December 31, 1998 and for three years ending
December 31, 1998. The working capital audit was required to be completed within
60 days of the closing date while the December audits had a 90-day deadline. The
task of completing four audits mandated the full attention of the entire EMSA
finance department. Additionally, no employees within the EMSA finance
department relocated to Brentwood, Tennessee where the Company maintains its
corporate headquarters. Accordingly, during the months of February and March
replacements were recruited and hired at the Brentwood location to support the
EMSA contracts.
The following transition tasks have been completed and are operational: (1)
general ledger conversion; (2) medical claims adjudication through its medical
claims system; (3) billing and collection functions are in place with daily and
weekly cash reports being generated which has reduced accounts receivable
outstanding by $19.7 million from March 31, 1999 to September 30, 1999; (4)
Daily Operations Reports used to manage site financial operations; (5) biweekly
reports for staffing and pharmacy costs; (6) site, contract and region specific
operating statements; and (7) utilization management reports identifying open
authorizations which will reduce potential delinquent medical claims payment.
The Company believes the impact the transition had on vendor relations was
minimal as the Company had notified its vendors and EMSA medical and non-medical
providers of the acquisition. However, the Company has implemented a priority
list, so that any medical open or disputed invoices can be quickly researched
and resolved. Additionally, the sites are receiving weekly reports, so any
missing authorizations for outside services can be identified. The Company is
not aware of any violations under its agreements with its providers.
The Company believes that the disciplines impacted by the EMSA transition
including medical claims and vendor payables processing, billing and collections
and daily operational reporting are functioning in a manner similar to the
Company's other
10
<PAGE> 11
operating subsidiary, Prison Health Services, Inc. Accounts receivables and
accounts payable days outstanding will continue to trend towards the Company's
levels prior to the acquisition.
Management believes that the current levels of cash, when coupled with
internally generated funds, acquired working capital of $24.0 million from the
EMSA acquisition and the line of credit is sufficient to meet the Company's
foreseeable cash needs.
YEAR 2000 UPDATE
The Year 2000 problem is the result of two potential malfunctions that could
have an impact on the Company's operations. The first is computer systems and
software being programmed to use two rather than four digits to define the
applicable year. The second is the use of embedded chips that have been designed
using two rather than four digits to define the applicable year. These chips are
often used in medical equipment used in certain Company sites.
The Company has completed the evaluation of all computer systems and
software it currently utilizes and has determined that 85% of all computer
systems and software will be in compliance without modification. The Company has
completed the process of modifying or replacing the remaining 15% of its
computer systems and software. The general ledger, accounts payable, accounts
receivable and timekeeping systems have been upgraded, tested and are in
production. The Company's most significant outsourcing contract is for medical
claims processing and payment and that vendor has certified that all Year 2000
modifications will be completed by December 31, 1999.
The Company has undertaken a program to inventory, assess and correct or
replace the equipment that contains embedded chips. The Company has completed
its inventory of its sites and its inventory with contract vendors. The
analysis, replacement or modification, or implementation of alternative plans
for equipment that will have a direct impact on patient safety and health has
been completed.
The Company is relying on information that is being provided by equipment
and medical device manufacturers regarding the Year 2000 compliance status of
their products. While the Company has evaluated information provided by its
present vendors, there can be no assurances that in all instances accurate
information is being provided. Contingency planning will be established and
implemented in an effort to minimize any impact from Year 2000-related failures
of such equipment. The Company has completed its contingency planning for this
aspect of its Year 2000 assessment. Costs as a result of these types of
occurrences were not material to the financial statements.
The Company has also initiated communications with suppliers and vendors
whose supplies are essential for day-to-day operations regarding their state of
Year 2000 readiness. The Company has completed its efforts to obtain such
information from all critical suppliers and vendors. Failure of certain
suppliers and vendors to remain in business without interruptions following
December 31, 1999 could have a material impact on operations or the Company's
ability to provide healthcare services. Contingency plans may include
stockpiling medical supplies and materials, increasing inventory levels and
securing alternate sources of supply.
Because the Company's physical sites are located within facilities owned and
operated by other entities whose Year 2000 readiness efforts it does not
control, there will be issues that arise which are dependent on these clients'
efforts. The Company has communicated with each of its clients on these matters.
The Company incurred approximately $0.1 million in connection with
evaluating, modifying and replacing its computer systems and software and
expects to fund such expenditures through operating cash flows. This process has
been completed.
11
<PAGE> 12
PART II:
OTHER INFORMATION
ITEM 4. -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the annual meeting of stockholders, held August 30, 1999, the
stockholders of the Company voted to:
(a) Elect the Company's Board of Directors: Scott L. Mercy, Chairman
(3,077,677 affirmative votes and 110,198 votes withheld); Michael
Catalano (3,079,027 affirmative votes and 108,848 votes withheld);
William D. Eberle (3,079,027 affirmative votes and 108,848 votes
withheld); John W. Gildea (3,079,177 affirmative votes and 108,698
votes withheld); Carol R. Goldberg (3,079,177 affirmative votes and
108,698 votes withheld); David A. Freeman (3,079,177 affirmative votes
and 108,698 votes withheld); Jeffrey L. McWaters (3,078,527
affirmative votes and 109,348 votes withheld); Richard M. Mastaler
(3,078,527 affirmative votes and 109,348 votes withheld); Richard D.
Wright (3,077,027 affirmative votes and 110,848 votes withheld).
(b) Ratify the private placement (to be voted on by holders of common
stock only): (1,988,094 affirmative votes, 341,385 negative votes and
6,722 abstentions).
(c) Approve the issuance of shares of common stock and preferred stock
upon the conversion of exercise, as applicable, of the Convertible
Securities (1,988,391 affirmative votes, 343,885 negative votes and
3,925 abstentions).
(d) Approve and adopt the America Service Group Inc. 1999 Incentive Stock
Plan (1,229,267 affirmative votes, 777,034 negative votes and 329,000
abstentions).
ITEM 5. -- OTHER EVENTS
On October 20, 1999, the Company issued a press release discussing its
third quarter 1999 operating performance. A copy of such press release is
attached hereto as Exhibit 99.1 and is hereby incorporated herein by reference.
ITEM 6. -- EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
3.1 -- Amended and Restated Certificate of Incorporation of America Service
Group Inc. (incorporated by reference to Exhibit 3.1 of the
Registrant's Registration Statement on Form S-1, Registration No.
33-43306, as amended).
3.2 -- Amended and Restated By-Laws of America Service Group Inc.
(incorporated by reference to Exhibit 3.2 of the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1996).
4.1 -- Specimen Common Stock Certificate (incorporated by reference to
Exhibit 4.1 of the Registrant's Registration Statement on Form S-1,
Registration No. 33-43306).
11.1 -- Statement re-computation of per share earnings.
27.1 -- Financial Data Schedule for the quarter and nine months ended
September 30, 1999 (for SEC use only)
27.2 -- Financial Data Schedule for the quarter and nine months ended
September 30, 1998 (for SEC use only)
99.1 -- September 1999 Earnings Release
(B) Reports on Form 8-K
1. On August 31, 1999, the Company filed Form 8-K, announcing the
conversion of $7.5 million in bridge notes to Convertible Preferred
Stock and that new members had been elected to the Company's Board
of Directors.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly authorized this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICA SERVICE GROUP INC.
/s/ MICHAEL CATALANO
--------------------------------------------------
Michael Catalano
President & Chief Executive Officer
/s/ BRUCE A. TEAL
--------------------------------------------------
Bruce A. Teal
Executive Vice President & Chief Financial Officer
Dated: November 14, 1999
13
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<S> <C> <C>
11.1 -- Statement re-computation of per share earnings.................................................
27.1 -- Financial Data Schedule for the quarter and nine months ended September 30, 1999
(for SEC use only) ...........................................................................
27.2 -- Restated Financial Data Schedule for the quarter and nine months ended September 30, 1998
(for SEC use only)............................................................................
99.1 -- September 1999 Earnings Release................................................................
</TABLE>
14
<PAGE> 1
EXHIBIT 11.1
AMERICA SERVICE GROUP INC.
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED QUARTER ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- ---------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 851 $ 4,045 $ 1,220 $1,585
Preferred stock dividends --- --- 97 ---
-------------------------------------------------------------------
---
Numerator for basic earnings per share - income
available to common stock holders $ 851 $ 4,045 $ 1,317 $1,585
===================================================================
Denominator for basic earnings per share - weighted
average shares 3,588 3,550 3,613 3,564
Effect of dilutive securities --- 113 1,173 90
-------------------------------------------------------------------
Weighted average common shares outstanding - diluted
3,588 3,663 4,786 3,662
===================================================================
Basic earnings per share $ 0.24 $ 1.14 $ 0.34 $ 0.44
===================================================================
Diluted earnings per share $ 0.24 $ 1.10 $ 0.28 $ 0.43
===================================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AMERICA SERVICE GROUP FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,752
<SECURITIES> 0
<RECEIVABLES> 36,050
<ALLOWANCES> (905)
<INVENTORY> 404
<CURRENT-ASSETS> 44,378
<PP&E> 7,809
<DEPRECIATION> (4,102)
<TOTAL-ASSETS> 95,395
<CURRENT-LIABILITIES> 35,903
<BONDS> 28,000
12,369
0
<COMMON> 37
<OTHER-SE> 16,566
<TOTAL-LIABILITY-AND-EQUITY> 95,395
<SALES> 200,166
<TOTAL-REVENUES> 200,166
<CGS> 180,232
<TOTAL-COSTS> 191,949
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,215
<INCOME-PRETAX> 5,002
<INCOME-TAX> 2,001
<INCOME-CONTINUING> 3,001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,001
<EPS-BASIC> $0.24
<EPS-DILUTED> $0.24
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AMERICA SERVICE GROUP FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 944
<SECURITIES> 3,385
<RECEIVABLES> 12,408
<ALLOWANCES> (133)
<INVENTORY> 260
<CURRENT-ASSETS> 20,296
<PP&E> 3,373
<DEPRECIATION> (1,651)
<TOTAL-ASSETS> 30,479
<CURRENT-LIABILITIES> 16,294
<BONDS> 0
0
0
<COMMON> 36
<OTHER-SE> 10,990
<TOTAL-LIABILITY-AND-EQUITY> 30,479
<SALES> 83,678
<TOTAL-REVENUES> 83,678
<CGS> 75,188
<TOTAL-COSTS> 83,533
<OTHER-EXPENSES> (3,515)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (503)
<INCOME-PRETAX> 4,163
<INCOME-TAX> 118
<INCOME-CONTINUING> 4,045
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,045
<EPS-BASIC> $1.14
<EPS-DILUTED> $1.10
<FN>
THE FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 HAVE BEEN
RESTATED TO REFLECT THE MEDPARTNERS SETTLEMENT. THE RESTATEMENT WAS A
RECLASSIFICATION OF CERTAIN ITEMS REIMBURSED AND DID NOT IMPACT NET INCOME OR
EARNINGS PER SHARE CALCULATIONS.
</FN>
</TABLE>
<PAGE> 1
America Service Group Inc.
N E W S R E L E A S E
FOR IMMEDIATE RELEASE
CONTACT: MICHAEL CATALANO BRUCE A. TEAL
PRESIDENT AND CHIEF EXECUTIVE VICE PRESIDENT AND
EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
(615) 376-1319 (615) 376-1361
AMERICA SERVICE GROUP CONTINUES
STRONG FINANCIAL RESULTS
Third Quarter Highlights:
$ Strong financial performance continues
$ Senior bank debt reduced by an additional $2 million
$ Remaining bridge notes converted to redeemable preferred stock
NASHVILLE, Tennessee (October 20, 1999) -- America Service Group Inc.
(NASDAQ:ASGR) announced today that results for the third quarter and nine
months ended September 30, 1999, reached record levels.
Healthcare revenue for the third quarter of 1999 was $69.7 million, up
147% from $28.2 million in the year-ago quarter, primarily due to the Company's
acquisition of EMSA Government Services (EMSA) during the first quarter of
1999. Net income attributable to common shares, exclusive of transitional and
nonrecurring costs related to the EMSA acquisition, was $1.3 million, or $0.30
per diluted share, compared with net income of $0.6 million, or $0.17 per
diluted share, for the third quarter of 1998, exclusive of the gain from the
MedPartners settlement. Including $0.2 million of nonrecurring costs related to
the EMSA acquisition, net income attributable to common stock for the third
quarter of 1999 was $1.2 million, or $0.28 per diluted share.
Michael Catalano, president and chief executive officer of America Service
Group, said, "We are pleased to report that the strong momentum developed
during the first six months of the year has continued in the third quarter."
Healthcare expenses as a percent of revenue improved to 89.7% in the third
quarter of 1999 versus 90.4% for the second quarter of 1999 and were slightly
higher than the 89.3% in the quarter ended September 30, 1998. In addition,
selling, general and administrative expenses improved from 8.1% of revenues in
the third quarter of 1998 to 4.4% of revenues in the third quarter of 1999.
-MORE-
105 Westpark Drive - Suite 300 - Brentwood, TN 37027
615-373-5100 - Fax 615-376-9862
<PAGE> 2
ASGR Reports Third Quarter Results
Page 2
October 20, 1999
Healthcare revenue for the nine months ended September 30, 1999, was
$200.2 million, up 139% from $83.7 million a year ago, again primarily as a
result of the EMSA acquisition. Net income attributable to common shares,
exclusive of a noncash, nonrecurring dividend and transitional costs related to
the EMSA acquisition, was $3.5 million or $0.79 per diluted share, compared
with net income, excluding the $3.5 million gain from the MedPartners
settlement, of $0.7 million, or $0.14 per diluted share, for the nine months
ended September 30, 1998.
In September, the Company reduced its senior bank debt by an additional $2
million. Also during the third quarter, as previously reported, the Company's
shareholders approved the conversion of $7.5 million of Bridge Notes into
75,000 shares of the Company's Series A Convertible Preferred Stock.
America Service Group Inc., based in Brentwood, Tennessee, is a leading
provider of correctional healthcare services in the United States. America
Service Group contracts with approximately one hundred government agencies to
provide a wide range of managed healthcare programs tailored to specific client
needs. The Company employs over 4,200 medical, professional and administrative
staff nationwide.
This press release may contain "forward-looking" statements made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. As such, they involve risk and uncertainty that actual results may
differ materially from those projected in the forward-looking statements. A
discussion of the important factors and assumptions regarding the statements
and risks involved is contained in the Company's filings with the Securities
and Exchange Commission.
-MORE-
<PAGE> 3
ASGR Reports Third Quarter Results
Page 3
October 20, 1999
AMERICA SERVICE GROUP INC.
CONSOLIDATED INCOME STATEMENT
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------
Sept. 30, % of Sept. 30, % of
1999 Revenue 1998 Revenue
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Healthcare revenue $ 69,667 100.0 $ 28,215 100.0
Healthcare expenses 62,493 89.7 25,183 89.3
-------- ----- -------- -----
Gross margin 7,174 10.3 3,032 10.7
Selling, general and administrative expenses 3,058 4.4 2,284 8.1
Depreciation and amortization 997 1.4 179 0.6
MedPartners settlement -- -- (960) (3.4)
-------- ----- -------- -----
Income from operations 3,119 4.5 1,529 5.4
Interest, net (924) (1.3) 169 0.6
-------- ----- -------- -----
Income before taxes 2,195 3.2 1,698 6.0
Provision for income taxes 878 1.3 113 0.4
-------- ----- -------- -----
Net income 1,317 1.9 1,585 5.6
Preferred stock dividends 97 0.1 -- --
-------- ----- -------- -----
Net income attributable to common shares $ 1,220 1.8 $ 1,585 5.6
======== ===== ======== =====
Net income per common share:
Basic $ 0.34 $ 0.44
======== ========
Diluted $ 0.28 $ 0.43
======== ========
Diluted - exclusive of nonrecurring items(1,2) $ 0.30 $ 0.17
======== ========
Weighted average shares outstanding:
Basic 3,613 3,564
======== ========
Diluted 4,786 3,662
======== ========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended
-----------------------------------------------
Sept. 30, % of Sept. 30, % of
1999 Revenue 1998 Revenue
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Healthcare revenue $200,166 100.0 $ 83,678 100.0
Healthcare expenses 180,232 90.0 75,188 89.9
-------- ----- -------- -----
Gross margin 19,934 10.0 8,490 10.1
Selling, general and administrative expenses 9,022 4.5 7,354 8.8
Depreciation and amortization 2,695 1.4 991 1.2
MedPartners settlement -- -- (3,515) (4.3)
-------- ----- -------- -----
Income from operations 8,217 4.1 3,660 4.4
Interest, net (3,215) (1.6) 503 0.6
-------- ----- -------- -----
Income before taxes 5,002 2.5 4,163 5.0
Provision for income taxes 2,001 1.0 118 0.2
-------- ----- -------- -----
Net income 3,001 1.5 4,045 4.8
Preferred stock dividends 2,150 1.1 -- --
-------- ----- -------- -----
Net income attributable to common shares $ 851 0.4 $ 4,045 4.8
======== ===== ======== =====
Net income per common share:
Basic $ 0.24 $ 1.14
======== ========
Diluted $ 0.24 $ 1.10
======== ========
Diluted - exclusive of nonrecurring items(1,2) $ 0.79 $ 0.14
======== ========
Weighted average shares outstanding:
Basic 3,588 3,550
======== ========
Diluted 4,412 3,663
======== ========
</TABLE>
(1) Included in the income statement for the quarter and nine months ended
September 30, 1999, are $0.2 and $0.8 million, respectively, of
transitional and nonrecurring costs relating to the EMSA acquisition.
(2) Excludes "one-time" net gain in 1998 related to the MedPartners
settlement.
- MORE -
<PAGE> 4
ASGR Reports Third Quarter Results
Page 4
October 20, 1999
AMERICA SERVICE GROUP INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION>
Sept. 30, June 30, March 31, Dec. 31,
1999 1999 1999 1998
------- -------- -------- -------
<S> <C> <C> <C> <C>
CONDENSED BALANCE SHEET:
Cash and short-term investment $ 2,752 $ 5,828 $ 1,477 $ 7,211
Other current assets 41,626 48,775 61,913 17,588
------- -------- -------- -------
Current assets 44,378 54,603 63,390 24,799
Cost in excess of net assets acquired 45,137 45,360 45,933 --
Property and equipment, net 3,707 3,498 3,264 1,886
Other assets 2,173 2,437 2,168 1,690
------- -------- -------- -------
$95,395 $105,898 $114,755 $28,375
======= ======== ======== =======
Current liabilities $35,903 $ 53,831 $ 57,362 $14,284
Other liabilities 2,520 1,876 1,477 1,300
Long-term debt 28,000 30,000 37,000 --
Retained earnings 3,413 2,193 1,053 2,562
Other stockholders' equity 25,559 17,998 17,863 10,229
------- -------- -------- -------
$95,395 $105,898 $114,755 $28,375
======= ======== ======== =======
</TABLE>
- END -
