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Press Press Releases 2001 Pethealth Inc. Announces Q2 2001 Results Oakville, Ontario - Monday, August 13, 2001, 12:38 PM EDT Highlights
Pethealth Inc. ("Pethealth" or "the Company") (CDNX: PTZ) achieved gross premium collections of $703,265 for Q2, up 260% from Q2 2000 and 34% since Q1 2001. Policies in force at the end of Q2 totalled 14,577, a 231% increase from the number of policies outstanding after Q2 2000 and a 33% increase from the number outstanding after Q1 2001. For the first six months ended June 30 2001 net policy sales totalled 6,261 vs 2,606 for the six months ended June 30 2000, representing a 140% increase. The strong growth is attributable to the continued success of the Company's direct to consumer advertising campaign, increased sales from its strategic alliances and its increased presence within the veterinary community. Brokerage commissions earned for Q2 were $243,319, up from $70,449 a year ago representing a 247% increase. Administration fees earned were $41,305 vs $18,218 in Q2 2000. Brokerage commissions for the first six months ended June 30 2001 were $421,771, up 262% from the six months ended June 30 2000. Selling, general and administrative expenses totalled $2,681,570 for the quarter vs $1,029,920 in Q2 2000. Marketing costs increased to $1,614,904 vs $563,910 in Q2 2000. The Q2 2001 loss also reflects significant costs associated with the establishment of the Company's U.S. operations and costs associated with test marketing initiatives in the United States. Employment costs rose to $461,164 from $261,962 in Q2 2000. Increased staffing costs were incurred as staff were hired, trained and licensed to prepare for the Company's launch into the U.S. during the quarter. As a result the Company incurred a net loss after tax of $2,358,943, or $0.01 per share vs $915,327, or $0.01 per share for Q2 2000. Cash resources of the Company stood at $3,698,560. During the second quarter of 2001, the Company began selling pet insurance policies for the first time in the United States. Two major tests were conducted: the first in May with both an in-magazine advertising campaign to a segment of the Reader's Digest circulation base and a direct mail piece to Reader's Digest customers; the second in June which included a direct mail and e-mail test to customers of Petco Animal Supplies. While the marketing costs associated with these tests were incurred during the second quarter, the full results were still not known by the end of the quarter. During the second quarter of 2001 the Canadian Veterinary Medical Association ("CVMA") agreed to extend its exclusive endorsement of the Company's products in Canada for a further two years. The extension of the Shared Advertising Agreement, signed on April 26, 2001, will allow the Company to continue to enjoy the benefit of displaying the CVMA logo on all forms of consumer advertising until July 2003, and also forming closer ties with the CVMA and the Canadian veterinary community. "We are pleased with the early results of our testing in the U.S. and the co-operation we have received from our partners to date," said Mark Warren, President & C.E.O. "The full results of the tests have not been completely reflected in these numbers, so I anticipate we will have a pretty strong third quarter when we will also be rolling out the full fall program with our partners. Furthermore, our Canadian business is on pace to reach breakeven, excluding our investments in advertising and marketing costs, by the end of the current fiscal year." Forward-Looking Statements Included in this press release are forward-looking statements with respect to the Company. These forward-looking statements by their nature necessarily involve risk and uncertainties that could cause the actual results to differ materially from those contemplated by such statements. The Company considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautions the reader that these assumptions may ultimately prove to be incorrect due to events which may be beyond the Company's control. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. About Pethealth Pethealth, through its subsidiaries PetCare Insurance Brokers Ltd. in Canada, and PetCare Insurance Agency, Ltd in the United States, currently offers pet insurance products to owners of dogs and cats in North America. PetCare products in Canada, which include: QuickCare(TM) Original - an accident-only product ideal for puppies and kittens; QuickCare(TM) for Indoor Cats - an inexpensive product which provides limited accident and illness coverage; QuickCare(TM) Senior - the first product designed for previously uninsured senior dogs and cats; MasterCare(TM)/MasterCare(TM) Plus and MasterCare(TM) Premiere - which offer comprehensive coverage for dogs and cats; TenantCare(TM) - specially designed for pet owners living in rental accommodation; PetCare Travel(TM) - accident and illness coverage for those travelling with their dogs and cats are underwritten by ING Wellington, a member of the ING Group, and CGU Elite Insurance Company, a member of CGU Group Canada Ltd. PetCare products in the United States are underwritten by Lincoln General Insurance Company and sold through Avalon Risk Management Inc. Pethealth was founded in February 1998 and is based in Oakville, Ontario. Institutional investors include the VC Advantage Fund and Dynamic Mutual Funds, through its Dynamic Venture Opportunities Fund. The Canadian Venture Exchange Inc. has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. Not for dissemination in the United States of America or to United States news wire services. For further information: E. Mark Warren, President and Chief Executive Officer of Pethealth or Glen H. Tennison, Chief Financial Officer of Pethealth at (905) 842 2615. |
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