RESEARCH INVESTMENT GROUP ANNOUNCES:
REVOLUTIONARY E-COMMERCE SYSTEM DEVELOPED BY VIKING CAPITAL GROUP, INC. ("VGCP" OTC - BB) TO SERVE THE INSURANCE, BANKING AND FINANCIAL SERVICES /
BROKERAGE INDUSTRIES IS NOW OPERATIONAL !!
VIKING CAPITAL GROUP, INC. ("VGCP" on OTC - BB)
5420 LBJ Freeway Two Lincoln Centre Suite 300
Dallas, Texas 75240 Phone: (972) 386 - 9996 Fax: (972) 386 - 7864 website: vcgi.com
Viking Capital Group is also close to announcing successful negotiation of a US$250+ million financing that will be applied to acquire a portfolio of operating life insurance companies. Upon restructuring, these assets would be capable of generating over US$56.8 million per year in net income !!
WHO IS VIKING CAPITAL?
Viking Capital Group, Inc. ("Viking Capital" or the "Company") is set to become the nation's premiere provider of specialized administration and data processing services to insurance companies, banks and self-insured employee benefit programs. Using its proprietary large-scale, web-based (Internet) transaction and information technology, Viking Capital is able to provide superior customer service to its clients at significant cost savings.
In January 1999, Viking Capital introduced a revolutionary e-commerce system integrating insurance products, traditional banking services and an array of financial / brokerage offerings.
The Company plans to acquire life insurance companies, and provide a full array of insurance products and banking / trading services via the
Internet. Viking Capital's strategic goal is to acquire US$1.5 billion in
insurance-managed assets through the purchase of existing life insurance companies during 1999. Post-acquisition, Viking Capital will out-source the portfolio management of the acquired companies, with expected increases in the average net investment yields of at least 200 to 300 basis points.
Viking Capital's sustainable, long-term competitive advantage is its
large-scale, Internet-based transaction and information technology
developed over the past five years at a cost of nearly US$10 million. The Viking System, which is now fully-operational, provides superior customer service and cost-reduction capabilities that are years ahead of and far beyond the monetary and / or technological capabilities of Viking's clients and potential competitors.
Following nearly twenty years of steadily declining profits and escalating costs, the insurance industry is on the verge of a major restructuring. Viking Capital is positioned to make money off of the insurance industry's need to cut costs by offering administrative and data management services on an outsourcing basis; with the Viking system, smaller insurance companies will be able to achieve comparable economies of scale to their larger competitors while remaining independent. However, these outsourcing operations are just a small part of Viking's business. Viking Capital plans to operate as a vertically-integrated insurance company where the traditional sectors of a life insurance company - administration, marketing, data processing and financial services - are handled by separate, wholly-owned business units run as independent profit centers (instead of cost centers). Viking Capital plans to grow its insurance-related business lines rapidly, primarily through acquisitions of companies and books of business.
The Company's President & CEO, William J. Fossen, has already guided the Company through the purchase of an insurance marketing company and a policy administration company, and he is now looking at other potential targets on the life side.
Prior to acquiring Viking Capital in 1989, Mr. Fossen was part of an
executive team that grew Life Investors Insurance Company from a small Iowa-based firm into a national company with US$10.5 billion of insurance in force and US$1.2 billion of managed assets. Commensurate with its growth through a series of acquisitions, Life Investors' share price rose from its historic US$2 - US$3 range, ultimately bringing shareholders a US$36 / share cash buyout from a major European conglomerate.
Information regarding Viking Capital Group's stellar management team, Board of Directors and Advisory Board may be found at vcgi.com
News releases, chronicling the company's rapid growth over the past year may be found at vcgi.com.
SHARE STRUCTURE & TRADING PRICES (as of January 2, 1999)
Shares Issued: 26.5 million 52-week high: US$1.38 Float: 8.7 million 52-week low: US$0.13
Current bid / ask: US$0.62 by US$0.72 Last trade (1-15-99): US$0.72
Of the 26.5 million shares currently outstanding, officers, directors and
insiders hold approximately 27%, with the Fossen family holding
approximately 15% of Viking Capital. William Fossen, the Company's
President & CEO, personally controls the Company's management and the Board of Directors via 100% ownership of Viking Capital's Class B stock, which can elect a majority of the directors.
Viking Capital is fully-reporting company with the SEC, and has over 1,000 shareholders. The Company began trading on the OTC BB on January 20, 1995.
Research Investment Group estimates that out of the approximately 8.7 million shares in the public float, only about three million shares are actively traded, with the balance being held by long-term investors.
For additional information on the Company's capital structure, please see: vcgi.com
Stock quotes and recent news about Viking Capital are available through Yahoo!Finance at: quote.yahoo.com
HOW VIKING CAPITAL WILL GENERATE REVENUES & OPERATING PROFITS
Viking Capital will generate revenues from several wholly-owned operating subsidiaries.
Viking Insurance Services, Inc. markets, sells and services insurance,
specializing in the "Viking Travel Plan", a very profitable, short-term,
combined health / life / accident policy ultimately to be sold through
airport kiosks and travel agencies to foreigners traveling in the United
States.
Though no longer a wholly-owned subsidiary of Viking Capital, Triple A Annuity Marketing, Inc. has agreed to market any of the Company's A-rated purchased life insurance products via its network of 3,000+ general agents who have written in excess of US$25 million of annualized premiums and represent an excellent distribution system in place for distributing current and future Company products and services.
Viking Financial Services, Inc. currently provides corporate strategic and financial consulting on a fee basis. Viking Systems, Inc. provides all of the Company's MIS needs as well as providing for-profit data processing services for other client insurance companies, employee benefit plans and insurance-related operations for banks.
Viking Administrators, Inc. and NIAI Insurance Administrators, Inc. provide all of Viking Capital Life Insurance's administrative needs, while generating profits by providing administration services for other client insurance companies under long-term contracts.
Viking Capital has launched an aggressive sales and marketing program to develop two new revenue sources / profit centers: First, Viking Capital has targeted over 1,000 smaller and mid-sized insurance companies and banks, with the goal of taking over their data processing and administration needs as it pertains to insurance-type products. On the marketing side of the business, once the Company has purchased its first life insurance company, Viking Capital will be in a position to provide other insurance companies with the ability to sell their selected insurance products through Viking Capital Life Insurance Company, so long as Viking Capital also contracts for their administration and data processing.
VIKING'S NEW E-COMMERCE SYSTEM FOR FINANCIAL, BANKING & INSURANCE SERVICES
In January 1999, Viking Capital unveiled a revolutionary new e-commerce system, designed by its wholly-owned subsidiary Viking Systems Inc., to serve the banking, insurance and brokerage industries. Using the Viking system, consumers will have the ability to enter a single web site and access multiple accounts from multiple financial institutions on a 24 hour per day, 7 day a week basis (the news release can be viewed at vcgi.com ).
Viking Capital's e-commerce system links consumers / clients to a summary of their financial information on a single screen from different financial institutions, such as banks, insurance companies, securities firms and individual employee benefit plans. This in turn allows access to each account for on-line transactions at each financial institution.
For example, if the user's financial institutions are part of the Company's network, and a consumer's bank account, insurance company account, employee benefits account and / or brokerage account are with those same institution(s), then the consumer can get all of their financial information from one screen instead of going to several separate web sites. Banking, insurance , investments and employee benefits are among the services targeted for integration under the Viking e-commerce system.
Viking Capital has created a unique e-commerce opportunity - offering unprecedented convenience, security, speed and reliability. This new e-commerce system is going to be very hard for anyone to duplicate, and as we have seen in recent years among Internet service companies, the dominant market share (and resulting stock market valuations) stays with whomever is first to market with a working product. Also, Viking's e-commerce system provides today what the merger of Citicorp / CitiBank and Travelers Insurance hopes to offer a few years down the road: vertically-integrated, one-stop shopping for banking, investment and insurance services.
Viking Capital has begun marketing its new e-commerce system to potential clients, and the reaction has been very positive. The financial service providers whom the Company is talking to understand the value of giving their customers a greater level of convenience than they can obtain anywhere else.
UNIVERSAL IP
In April 1998, the Company unveiled "Universal IP", a revolutionary,
state-of-the-art, Internet-based, data management service (using a private, secure and lightening-fast fiber optic network) for insurance firms. Universal IP links policy-holders and agents to each other via the Internet, allowing policy-holders to access account information and
transact business at any time of the day or night. Viking Capital's
Universal IP provides simple, user-friendly, point-and-click access to
real-time policy holder services and financial information. Through Viking System's partners, consumers can also access a wide range of personalized banking and investment services tailored to their individual needs.
With this service, smaller and mid-tier insurance companies are able to significantly improve their competitive positioning against larger
competitors. Because Universal IP will be marketed as a turnkey
(outsourcing) service, client companies will not incur the high overhead associated with internal development projects to create the middleware software required to connect an Internet site to a company's existing account management systems.
Universal IP is fully-Y2K compliant!
TWO STRATEGIC ALLIANCES TO DELIVER THE PRODUCTS & SERVICES
How does Viking Capital plan to integrate client employee benefit plans and other insurance companies into its systems onto the Internet?
First, Viking Capital has signed a strategic alliance with Transaction
Information Systems, Inc. ("TIS") to develop the technical architecture
that will allow Viking to place all of its databases and its customers on
the Internet. Each corporate account contracted with the Company will be integrated by TIS, who has over 500 technical employees nationwide. Also, TIS will integrate the databases of Viking Capital's purchased insurance companies and its corporate clients, as well as servicing web sites for Viking Capital and the Company's clients worldwide.
Data transportation services and cable installations (all the way to the
desk top) will be provided by iXNet, a high quality, private fiber optic
network offering secure, high-speed audio, video and data transmissions. iXNet has over 800 technical employees and serves all of the world's major financial centers, connecting markets and trading companies around the world to each other and their customers.
Further information on TIS and iXNet can be found at tisny.com and ixnet.com
VIKING CAPITAL's BUSINESS STRATEGY HAS NO COMPETITION
No real competition exists in the revolutionary new business arena being developed by Viking Capital.
Until now, only a few companies have offered insurance data processing / administration services on an outsourcing basis. Viking Capital, however, has taken this concept and wrapped it in 21st-century technology, positioning the Company several years ahead of its peers and potential competitors.
Viking Capital, through its new and exclusive administration and data
processing systems (including video capabilities and web-based transactions for insurance, banking and securities trading) allows self-insured employee benefit plans and banks to offer insurance products and employee benefit plan payroll services, through the company within existing banking regulations without excessive overhead and allows insurance companies the ability to out-source their current data processing and / or administration at a reduced cost because of the Company's superior economies of scale. In each case, the Company's corporate customers will be able to allow their
individual account holder to access their account via the Internet
utilizing the Viking Systems Network. Viking Capital is also able to offer complete telecommunications services (including unified billing) to all its customers.
On the acquisition side, there is also no direct competition.
Only a limited number of Viking Capital's competitors specialize in growth by acquisition. However, these are exclusively large firms that are concentrating on assets in the US$1+ billion range. Viking Capital's niche is purchasing insurance companies with assets of less than US$500 million (est'd purchase prices of US$20 - US$125 million) - no one else is targeting that market segment.
MOST-RECENT FINANCING
On December 23, 1998 Viking Capital announced a US$2.5 million private placement of restricted common shares; this financing closed on December 31st. The news release can be viewed at vcgi.com
TWO MAJOR FINANCINGS (US$25 MM & US$250+ MM) NEARING COMPLETION
Within the next 45 days, Viking Capital expects to close on approximately US$25 million in State Industrial Development Funding. This money will be used for purchasing an administrative work facility of about 300,000 square feet, to pay for the hiring and training of approximately 1,200 new employees, as well as the purchase of required computer equipment for the Company's operations.
Viking Capital's management hopes to announce its Phase III financing by the end of March; negotiations are currently in progress with a private investment company concerning the terms and structure of a US$250 million private convertible preferred stock offering. These funds will be applied to the Company's acquisition of six operating life insurance companies pursuant to Viking Capital's strategic plan.
LIFE INSURANCE COMPANY ACQUISITION TARGETS
Viking Capital is proposing to purchase six life insurance companies to reach its immediate goal of US$1.5 billion in managed insurance assets. Two such companies have been targeted for purchase immediately upon completion of the Phase III acquisition financing (US$250 million). Management has identified several other targets that are available.
Acquisition target #1 specializes in accident & health insurance, operates in 31 states, has a portfolio of US$115 million, collects US$49 million in premium income - yet earned less than US$1.8 million in 1997 (post-tax). The second acquisition target specializes in disability income, operates in 47 states, has a portfolio of US$403 million, collects US$55 million in premium income - yet earned less than US$5.7 million during fiscal 1997 (post-tax).
Pro-forma financial statements prepared by Viking Capital indicate that the six proposed acquisitions would generate an estimated US$56.8 million in combined profits.
Assuming that a total of 50 million shares of VGCP are issued and
outstanding following completion of these deals, net income would be on the order of US$1.14 per share. Applying an industry-average P/E multiple of 16 suggests an equity market valuation of over US$18 - just on the earnings from the first six operating life insurance company acquisitions!
GROUND-FLOOR OPPORTUNITY FOR INVESTORS (WITH TREMENDOUS UPSIDE POTENTIAL)
Viking Capital Group, Inc. has all of the ingredients for success:
excellent management, diverse products, a sound business plan,
revolutionary technology that is available TODAY, and the financial ability to make everything happen. Viking Capital has met every corporate goal and performance objective that they have set over the last several years - something that we do not see very often. Viking Capital's ability to consistently accomplish what it says it will (when it will) makes us firm believers in Viking's business plan / strategy, growth objectives and the high probability of major financial success in the months and years to come. We expect Viking Capital's stock to do very well in the future.
From a technical standpoint, we believe that Viking Capital is on the verge of a major breakout. As market awareness of the new e-commerce system increases, the stock should move much higher. With the successful completion of the Phase II funding and announcements regarding the US$250 million Phase III financing during 1Q 1999, Viking Capital could potentially be trading in the US$8 to US$12 range.
For more information, please contact:
William J. Fossen - President & CEO
Matthew W. Fossen - Chief Financial Officer
Phone: (972) 386 - 9996
e-mail: viking@vcgi.com
Disclaimer
RESEARCH INVESTMENT GROUP is not a Registered Investment Advisor or a Broker / Dealer. This communication reflects opinions from Viking Capital Group, Inc. Readers are advised that this electronic publication is issued solely for information purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy.
The opinions and analysis included herein are based on sources believed to be reliable and in good faith but no representation or warranty, expressed or implied, is made as to their accuracy, completeness or correctness. This information is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. The foregoing discussion contains forward-looking statements which are based on current expectations
and differences can be expected. The information contained herein has been provided by the Company to RESEARCH INVESTMENT GROUP for information purposes only; in addition, the information contained in this report is not intended to be a complete discussion of information regarding some of the current and/or intended business activities of the Company.
Readers are urged to consult with independent financial advisors with
respect to an investment in the shares mentioned herein. Investors should review a complete information package on Viking Capital Group, Inc. (the "Company"), which should include, but not be limited to, the Company's annual report, quarterly report, press releases, as well as all regulatory filings. All information contained in this report should be independently verified with the Company mentioned herein. Any opinions expressed in this report are statements of judgment as of the date of publication and are subject to change without further notice, and may not necessarily be reprinted in future publications or elsewhere. Neither RESEARCH INVESTMENT GROUP nor its officers, directors, partners or employees / consultants accept no liability whatsoever for any direct or consequential loss arising from any use of this report or its contents.
The company has paid RESEARCH INVESTMENT GROUP a retainer fee of 120,000 free-trading common shares of Viking Capital Group plus US$5,000 cash per month for consulting services including, but not limited to, project analysis, assisting in locating funding sources as well as evaluating and reporting on projects the Company may have acquired or seek to acquire in
the future. Prior to RESEARCH INVESTMENT GROUP disseminating this information, Viking Capital Group reviewed and approved the contents hereof.
RESEARCH INVESTMENT GROUP, its officers, directors, partners and employees / consultants may profit in the event the shares of the Company increase in value. These positions may be liquidated from time to time even after RESEARCH INVESTMENT GROUP, its officers, directors, partners and employees / consultants have made positive comments on the Company.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK.
We encourage the reader to review the investing information available with the Securities and Exchange Commission ("SEC") at sec.gov <http://www.sec.gov> and / or the National Association of Securities Dealers ("NASD") at nasdr.com <http://www.nasdr.com>. Readers can review all public filings by the Company at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its website.
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