PCIS Precis

GRAND PRAIRIE, Texas, Aug. 15 /PRNewswire-FirstCall/ -- Precis Inc. (NASDAQ:PCIS), a provider of access to affordable healthcare services to the ever growing number of uninsured and/or underinsured in the United States, announced its financial results for the quarter ended June 30, 2005. For the second quarter, the price of the company's stock declined significantly, necessitating an impairment analysis of the fair value of goodwill related to one of the company's subsidiaries, The Capella Group, Inc. The result of that impairment analysis is a non-cash charge to earnings of $9,900,000 to reduce the carrying value of that goodwill. As the result of that charge, the company reported a loss for the second quarter of $10,826,000 or $(0.89) per diluted share. The company reported revenue of $8,037,000, a decrease of $1,366,000, or 14.5%, compared to $9,403,000 during the comparable quarter in 2004 and a decrease of $663,000 or 7.6% compared to $8,700,000 during the first quarter of 2005. The company's net loss for the second quarter of 2005 also included a charge of $800,000 during the quarter for officer severance payments. Despite the loss, the company's operations provided net cash of $909,000 for the second quarter, and the company ended the quarter with $7,778,000 of cash and no debt. Nicholas Zaffiris, Chairman of the Board of Precis Inc., commented, "While the goodwill impairment charge and the severance charge result in a significant net loss, I am nonetheless pleased with the progress that we made this quarter in effecting the transition to our new management team. Cost reductions to which our Board of Directors has been previously committed were largely achieved. We continue to vigorously pursue new marketing initiatives, including the launch of our nutraceuticals line of products." "With respect to the lawsuit filed against us by the State of Texas, we are meeting with representatives of the Attorney General's office and remain hopeful that we can resolve this matter in the near future," Mr. Zaffiris concluded. Precis Inc. (NASDAQ:PCIS) will conduct a conference call to discuss financial results for the second quarter ended June 30, 2005 on Monday, August 15, 2005 at 4:00 p.m. Eastern time. Interested parties can access the call by dialing 877-407-8035 or 201-689-8035 or by accessing the web cast at: http://www.vcall.com/CEPage.asp?ID=94034. A replay of the call will be available at 877-660-6853 or 201-612-7415, account number 286 and conference ID 165550, for 7 days following the call; and the web cast can be accessed at http://www.vcall.com/CEPage.asp?ID=94034 for 30 days. About Precis Inc. Precis Inc. and its subsidiaries market non-insurance health care savings programs, administer tax-favored reimbursement accounts, and provide third party administration services to self funded employer groups. For more information on Precis, its subsidiaries Care 125 and Access Administrators visit http://www.precis-pcis.com/, http://www.care125.com/ and http://www.accesshealthsource.com/ respectively. Disclaimer Certain statements included in this news release constitute "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. Certain, but not necessarily all, of such forward-looking statements can be identified by the use of forward-looking terminology such as "anticipate," "believes," "expects," "may," "will," or "should," or other variations thereon, by discussions of strategies that involve risks and uncertainties. Precis Inc.'s actual results or industry results may be materially different from any future results expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include general economic and business conditions; Precis Inc.'s ability to implement its business strategies; competition; availability of key personnel; increasing operating costs; unsuccessful promotional efforts; changes in brand awareness; acceptance of new product offerings; retention of members and independent marketing representatives; and changes in, or the failure to comply with, government regulations. The Company undertakes no obligation to update any forward-looking statements or to make any other forward-looking statement, whether as a result of new information, future events, or otherwise. Contact: Bob Bintliff Joe Diaz Chief Financial Officer The RCG Group Precis Inc. 480-675-0400 972-343-6501 Precis Inc. and Subsidiaries Condensed Consolidated Statement of Operations and Balance Sheet Data Dollars in Thousands, except per share amounts For the Three Months For the Six Months Ended Ended June 30, June 30, 2005 2004 2005 2004 Statement of Operations Data: Product and service revenues $8,037 $9,403 $16,737 $19,349 Total operating expenses 18,906 8,801 27,700 17,630 Operating (loss) income (10,869) 602 (10,963) 1,719 (Loss) earnings before income taxes (10,843) 580 (10,924) 1,669 (Benefit) provision for income taxes (17) 292 (47) 775 Net (loss) earnings applicable to shareholders $(10,826) $288 $(10,877) $894 (Loss) earnings applicable to shareholders per share: Basic $(0.89) $0.02 $(0.90) $0.08 Diluted $(0.89) $0.02 $(0.90) $0.07 June 31, December 31, 2005 2004 Balance Sheet Data: Cash and cash equivalents $7,778 $8,283 Working capital $4,579 $6,345 Total assets $33,341 $41,975 Total liabilities $11,658 $9,606 Stockholders' equity $21,683 $32,369 http://www.vcall.com/CEPage.asp?ID=94034DATASOURCE: Precis Inc. CONTACT: Bob Bintliff, Chief Financial Officer of Precis Inc., +1-972-343-6501; or Joe Diaz of The RCG Group, +1-480-675-0400, for Precis Inc. Web site: http://www.precis-pcis.com/

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