PCIS Precis

GRAND PRAIRIE, Texas, March 31 /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 fourth quarter and year ended December 31, 2005. For the fourth quarter the company reported revenue of $6.7 million, a decrease of $1.8 million, or 21%, compared to $8.5 million during the fourth quarter of 2004 and a decrease of $561,000, or 8%, and compared to $7.2 million during the third quarter of 2005. The company took an additional charge during the fourth quarter of $3.0 million to further reduce the carrying value of goodwill. As a result, the company's posted a net loss for the fourth quarter of 2005 of $2.6 million, or $(0.23) per share, as compared to a net loss of $2.9 million or $(0.24) per share in the comparable quarter of 2004 and net income of $98,000, or $0.01 per share, in the third quarter of 2005. Excluding the impairment charge, the company would have posted net earnings from continuing operations for fourth quarter of 2005 of $119,000 or $0.01 per share. This compares to a loss from operations of $878,000 or $(0.07) per share in the fourth quarter of 2004 (excluding a $2,000,000 goodwill impairment charge posted in that quarter). Additionally, during the fourth quarter of 2005 the company recognized a gain from the sale of its discontinued Foresight club business of $300,000, net of taxes, and an after-tax loss from operations of that business of $43,000. For the year, Precis reported revenues of $30.1 million compared to $37.4 million; a year-over-year decrease of 20%. The Company reported a net loss of $13.4 million, or $(1.10) per fully diluted share, compared to a net loss in full year 2004 of $1.95 million, or $(0.15) per fully diluted share. Financial results for 2005 were impacted by $12.9 million of goodwill impairment charges taken during the year and by approximately $1.0 million of officer severance costs taken during the first two quarters of the year. Excluding the impairment charges and severance costs, the company earned $529,000 in 2005 before taxes. The company ended the year with $6.3 million of cash and no debt and generated cash from operating activities of $989,000 in 2005. Robert Bintliff, Precis' Chief Financial Officer, commented "The declining number of members in our primary product, the Care Entree healthcare savings card, and the related decline in revenues necessitated a lower valuation of the goodwill carried by the company from its acquisition of The Capella Group, Inc. in 2001. However, we were pleased to see indications that that the membership trend improved during the first quarter of 2006." Nicholas Zaffiris, Chairman of the Board of Precis Inc., commented, "We have been successful in our cost-cutting strategies and are pleased to see our operations return to profitability. This year, we will continue to develop and diversify our product offerings in order to expand our presence in the market and generate sales growth." Precis, Inc. (NASDAQ:PCIS) will conduct a conference call to discuss financial results for the year ended December 31, 2005 on Monday, April 3, 2006 at 11:00 a.m. Eastern time. Interested parties can access the call by dialing (877) 858-9308 or (706) 643-0580 or by accessing the web cast at http://www.precis-pcis.com/. A replay of the call will be available at (800) 642-1687 or (706) 645-9291, access number 7298718, for 3 days following the call; and the web cast can be accessed at http://www.precis-pcis.com/ for 30 days. About Precis Inc. Precis, Inc. and its subsidiaries provide affordable consumer driven health care solutions as alternatives to traditional health insurance. The companies market non-insurance health care savings programs, administer tax-favored reimbursement accounts, and offer third party claims administration, provider network management, and utilization management services for employer groups that utilize partially self funded strategies to finance their employee benefit programs. 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 Lytham Partners, LLC Precis, Inc. 602-889-9700 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 Quarter Ended For the Year Ended December 31, December 31, 2005 2004 2005 2004 Statement of Operations Data: Revenues $6,658 $8,472 $30,143 $37,438 Total operating expenses 9,576 13,009 43,948 39,845 Operating loss (2,918) (4,537) (13,805) (2,407) Loss before income taxes (2,858) (4,536) (13,646) (2,464) Provision for income tax expense (benefit) 23 (1,658) 41 (650) Loss from continuing operations (2,881) (2,878) (13,687) (1,814) Gain and earnings (loss) from discontinued operations 257 (68) 316 (142) Net loss $(2,624) $(2,946) (13,371) $(1,956) Loss from continuing operations per share: Basic $(0.23) $(0.24) $(1.10) $(0.15) Diluted $(0.23) $(0.24) $(1.10) $(0.15) December 31, 2005 2004 Balance Sheet Data: Cash and cash equivalents $6,261 $8,283 Working capital $4,692 $6,451 Total assets $30,864 $41,320 Total liabilities $10,500 $8,951 Stockholders' equity $20,364 $32,369 DATASOURCE: Precis Inc. CONTACT: Bob Bintliff, Chief Financial Officer of Precis Inc., +1-972-343-6501; or Joe Diaz of Lytham Partners, LLC, +1-602-889-9700, for Precis Inc. Web site: http://www.care125.com/ Web site: http://www.accesshealthsource.com/ Web site: http://www.precis-pcis.com/

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