The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America, which differ in certain respects from those followed in financial statements prepared for regulatory authorities. See Notes to the accompanying Consolidated Financial Statements.
The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements of the Company and the notes thereto appearing elsewhere in this Form 10-K. Except for the historical information contained herein, the following discussion contains forward- looking statements that involve risks and uncertainties. The Company's actual results could differ materially from those projected in the forward-looking statements discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this section, as well as in other sections herein.
The consolidated net income for the year 2000 was $118,203 ($0.05 per share). For the year 1999, the consolidated net loss was ($37,567) (-$0.01 per share).
Consolidated investment income in 2000 was $39,275 as compared to $152,527 in 1999. The decrease in 2000 was due to the Company's distribution of $2.23 per share in May 1999 as a partial liquidating distribution.
The Company reported a net realized loss of $10,410 in 1999.
Consolidated revenues during the years ended December 31, 1999 and 1998 were $3,505,816 and $1,483,080 respectively, from the Company's continuing third party administrative service operations. During the year ended December 31, 1999, the Company operated solely as a Provider. In comparison, the Company operated as a Provider during the last six months of the year ended December 31, 1998 and as a part-time Provider as well as a full-time New York State statutory disability benefits insurer during the first six months of the year ended December 31, 1998. Revenues more than doubled, primarily due to the fees earned on the primary client's major acquisitions, which the Company now administers.
The consolidated net loss for the year 1999 was $37,567 ($0.01 per share). For the year 1998, the Company reported a loss from continuing operations of $238,254 ($0.09 per share) and a net gain on disposal of discontinued operations of $671,049 ($0.26 per share), resulting in consolidated net income for 1998 totaling $432,795 ($0.17 per share).
Revenue from discontinued insurance operations (consisting of net earned premiums) for the year 1998, was $5,161,632. For the year 1998, net income from discontinued operations of $671,049 ($0.26 per share) consisted of a net loss from operations of the disposed segment of $167,122 ($0.06 per share) and a net gain on disposal of discontinued operations of $838,171 ($0.32 per share).
Consolidated investment income in 1999 was $157,527 as compared to $543,856 in 1998. The decrease in 1999 was due to the elimination of investment income earned on the proceeds received by Arista from the issuance of a $3,000,000 surplus note that was repaid at the end of 1998 together with Arista's
disposal of most of its investments in 1999 in order to pay extraordinary dividends to the Company. This disposal of such investments in 1999 resulted in a net realized loss of $10,410.
Despite the reduction in assets and liabilities at December 31, 2000 as compared to December 31, 1999, the Company's financial condition remains stable. These reductions pertain mainly to reductions in receivables from third party administration and from payables to related parties.
The Company considered the impact of Year 2000 issues on its computer systems and applications and developed a remediation plan. Conversion activities were completed by the middle of 1999. All expenses
The response to this item is submitted in Part IV of this Form 10-K on page (F-1 to S-5).