PCIS Precis

GRAND PRAIRIE, Texas, Aug. 14 /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, 2006. Precis reported revenue from continuing operations of $5.7 million for the second quarter, compared to $7.8 million during the comparable quarter in 2005. The Company reported earnings from continuing operations of $360,000, or $0.03 per fully diluted share, versus a net loss of $10.8 million, or $(0.90) per fully diluted share, for the comparable quarter in 2005. Precis recorded a loss from discontinued operations during the quarter of $539,000 to close down its Vergance nutraceuticals division. Including the impact of discontinued operations, the Company recorded a net loss for the quarter of $179,000, or $(0.04) per fully diluted share, compared to a net loss of $10.8 million, or $(0.90) per fully diluted share, in the second quarter of the previous year. The Company's operations provided net cash of $1.25 million during the quarter. The majority of that cash was from a refund of federal income taxes previously paid, which were recovered as the result of successfully implementing several tax strategies at the end of 2005. Additionally, the Company's earnings for the second quarter were positively impacted by a successful re-determination of the manner by which the Company should be assessed Texas franchise taxes. The re-determination resulted in a reduction of a previously recorded franchise tax liability of $209,000 as well as recording an anticipated refund of previously paid taxes of $350,000. Nicholas Zaffiris, Chairman of Precis, Inc., commented, "We are pleased that the operating efficiencies that we worked hard to create over the past year are beginning to impact our cash flow. Our net cash from operations, largely from the favorable cash effect of tax savings strategies and the success of our Access HealthSource subsidiary, has left us with an improved balance sheet." Mr. Zaffiris continued, "From an operating standpoint, we continue to see a decline in the overall number of memberships in our discount card product. This is a matter of concern and we hope that, as our product and channel development efforts begin to show results, this trend will be reversed. From a strategic standpoint, we made the difficult decision to shutdown our Vergance nutraceuticals division. We did not achieve a return on investment that justified continuing the operation. In that regard, we will review all of our operating units to maximize performance as we work our way toward completing the proposed acquisition of Insuraco USA, LLC. We are currently carrying out our review of Insuraco and working toward the completion of other matters necessary for the closing of the transaction, which we expect to occur during the fourth quarter of the year." "We expect that the Precis / Insuraco integration will be seamless and that the combined company will be well-positioned to present a comprehensive suite of products and services that will help address the growing problem of escalating healthcare costs. We believe that the combined products and distribution channels of the resulting company will provide consumers powerful new cost-effective solutions to better manage their lifestyles and quality of life," concluded Mr. Zaffiris. Precis, Inc. (NASDAQ:PCIS) will conduct a conference call to discuss financial results for the second quarter ended June 30, 2006 on Monday, August 14, 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/ir/IRindex.html and clicking on the second quarter 2006 teleconference icon. A replay of the call will be available at 800-642-1687 or 706-645-9291, conference ID 4408968, for 3 days following the call; and the web cast can be accessed at http://www.precis-pcis.com/ir/IRindex.html 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 Access Administrators and Care 125, visit http://www.precis-pcis.com/, http://www.accesshealthsource.com/ and http://www.care125.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. 602-889-9660 972-343-6501 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 June 30, Ended June 30, 2006 2005 2006 2005 Statement of Operations Data: Product and service revenues $5,665 $7,773 $11,771 $16,266 Total operating expenses 5,857 18,829 11,829 27,272 Operating (loss) income (192) (10,906) (58) (11,006) (Loss) earnings before income taxes (101) (10,880) 106 (10,967) (Benefit) provision for income taxes (461) (31) (465) (63) Net earnings (loss) from continuing operations 360 (10,849) 571 (10,904) (Loss) earnings from discontinued operations (539) 23 (789) 27 Net (loss) earnings applicable to shareholders $(179) $(10,826) $218 $(10,877) (Loss) earnings applicable to shareholders per share: Basic: Continuing operations $0.03 $(0.90) $0.04 $(0.90) Discontinued operations $(0.04) $0.00 $(0.06) $0.00 Diluted: Continuing operations $0.03 $(0.90) $0.04 $(0.90) Discontinued operations $(0.04) $0.00 $(0.06) $0.00 June 30, December 31, 2006 2005 Balance Sheet Data: Cash and cash equivalents $7,035 $6,261 Working capital $5,205 $4,692 Total assets $28,058 $30,864 Total liabilities $7,347 $10,500 Stockholders' equity $20,711 $20,364 DATASOURCE: Precis Inc. CONTACT: Bob Bintliff, Chief Financial Officer of Precis, Inc., +1-972-343-6501; or Joe Diaz of Lytham Partners, LLC, +1-602-889-9660, for Precis, Inc. Web site: http://www.precis-pcis.com/

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