August 24, 1999.... letter was submitted in place of the promised MTM...
Tuesday, August 24, 2:00 PM Eastern Time
Letter from the Chairman's office
The U.S. Stock Market moved higher during the first half of 1999, with major market indexes setting all time record highs along the way. In May the Dow rose above 11,000 driven in part by investor demand for value stocks and for companies whose stocks are under valued. The technology-laden NASDAQ index has also seen record highs fueled by demand for Internet related stocks at almost any price. While all the markets are increasingly volatile on a day-to-day basis, most people believe our continued healthy economy will lead to impressive long-term growth.ÿ
As PanAmerican began its new fiscal year in February, we renewed our commitment to operate a financial services company that will continue to create a "value" for you, our shareholders. We are well underway in accomplishing this.
In March the management team held a series of meetings that addressed both sides of the company's balance sheet, revenues, as well as expenses. As an outcome of those meetings an action-plan was developed. The focus is to ensure that PanAmerican is operating with the greatest efficiency. We must target the best markets and customers to generate planned revenue and institute measures to hold our people accountable for their performance. As of this date we have made many strides in achieving our plan. We still have much to do.
The impetus of our plan is centered around PanAmerican's mission to be a premier financial services company, not only with the products and services that it provides, but also in the delivery, utilizing Internet technology, and quality of those products. We are working hard to make sure that the actions of our managers and employees speak as loud as their words. In keeping with this, we made several changes throughout PanAmerican BanCorp.
In 1999, a startup year, Healthcorp began to grow much faster and in different ways than planned. We were fortunate to contract with several major clients, however,ÿwe became so focused on sales and marketing that we took our eyes off product development. Consequently, the implementation of ?Digibill?? the automated hand held PC device for the medical industry was not introduced into the market. We are currently directing our focus on implementing streamlined back office procedures and awaiting the roll-out of ?Digibill??.ÿ
The back-room operation of Healthcorp also suffered. As of this writing, we are in the process of moving the back-room operations, which includes all billing, coding and claims collection, to Norristown, PA. As part of our continuing contractual agreement with FirstStates, they will ensure that day-to-day operations are achieving projected turn around times for customer billings and that the latest technology is being utilized in the process.
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As the proforma shows, Healthcorp did not achieve the type of revenues expected duringÿ the first six months of this year. Additionally, the cost structure to operate Healthcorp was unacceptable. We have taken the necessary actions to correct this, and the results will be reflected before the end of the year. We are projecting revenues of $1.3 million next year for Healthcorp with expenses slightly over $900 thousand, which includes ongoing R&D costs to keep Healthcorp on the cutting edge of technology.
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Insider Trading continues its solid growth and we remain committed to looking for ways to ensure that our day trading division sustains the type of revenue stream that we have seen during the first half of this year.
For the first five months of our fiscal year (2/99-7/99) Insider Trading has produced over $396 thousand in revenues. We feel that our revenue projections of $692 thousand for 1999 will be achieved. But, like Healthcorp, we are taking the necessary actions to ensure that operating efficiencies, product development and delivery, as well as training and support are an integral part of the future of Insider Trading.ÿ
Within the next sixty days we will announce our plan to franchise Insider Trading in Florida. Because I am restricted by certain regulatory guidelines to discuss our franchise plans, I will defer them to our announcement. At this time, I will also lay out our plan to insure the consistent earnings of Insider Trading.
Affordable Housing will show a modest profit in 1999. We estimate revenues of approximately $150 thousand against expenses of just over $70 thousand. My focus during the next few months will be on Affordable Housing and the development of our plan to originate mortgage backed securities in Belize and Argentina. Our preliminary studies show that both of these countries have the potential to generate enough high yield guaranteed mortgages, that fund brokers in the U.S. will be interested in establishing a secondary market for their investors.
In an effort to control expenses and increase efficiencies PanAmerican BanCorp will be consolidating divisional operations in an expanded Hauppauge facility. As a result BanCorp management can pool resources that will enable us to effectively meet day-to-day challenges. Currently I am negotiating a lease that will allow Healthcorp sales and marketing, the entire Internet Group, BanCorp operations, and theÿ BanCorp executive team to all be under one roof. It should also reduce rental expenses by almost $72 thousand over the next 12 months.
We are looking to achieve greater efficiency in PABN Human Resources. We have developed a comprehensive employee policy manual that spans all divisions.ÿ Toÿ ensure fair market compensation and parity among comparable jobs, we have developed a salary grade system. This will ensure that annual salary increases and employee costs can be accurately budgeted and routinely monitored. Theseÿ measures, coupled with improved hiring practices, will reduce employment and turnover costs substantially.
During the upcoming weeks, I will have regular periodic information updated on this website. These updates will highlight a specific division or aspect of the company which will serve to educate and inform interested parties and shareholders about company progress.
Thank you for your continued support.
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ÿÿÿÿ CONTACT: PanAmerican BanCorp
ÿÿÿÿÿÿÿÿÿÿÿÿÿ Investor Relations
ÿÿÿÿÿÿÿÿÿÿÿÿÿ Raymond Gamble, 516/951-1638
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Contact:
ÿÿÿÿ PanAmerican BanCorp
ÿÿÿÿ Investor Relations
ÿÿÿÿ 516-951-1638 |
