Exhibit 99.1

America Service Group Announces Third Quarter Results

Company Updates Full Year 2009 Guidance and Declares Regular Quarterly Dividend of $0.05 Per Share

BRENTWOOD, Tenn.--(BUSINESS WIRE)--October 28, 2009--America Service Group Inc. (NASDAQ:ASGR):

Third Quarter Highlights:

  • Increase in healthcare revenues from continuing contracts of 27.7% from the prior year quarter;
  • Increase in net income to $716,000 in the quarter, from $348,000 the prior year quarter;
  • Cash and cash equivalents of $35.6 million at September 30, 2009; and
  • No debt outstanding at September 30, 2009.

America Service Group Inc. (NASDAQ:ASGR) announced today results for the third quarter and nine months ended September 30, 2009.

Commenting on today’s announcement, Richard Hallworth, president and chief executive officer of America Service Group, said, “Although we are pleased with the financial performance of our more mature contract operations during the third quarter, we are disappointed that our results were negatively affected by the unexpected and very late receipt in August of some large inmate medical claims related to the first quarter of our start-up in Michigan. As a result, we are adjusting our guidance to reflect some tempering of our near-term financial expectations in Michigan. We remain optimistic about our long-term performance in our Michigan contract and across our contract portfolio. In addition, we are very pleased with our cash collections for the quarter in this tough economy. We are also excited about the many potential new business opportunities expected to come up for bid during the next few months. We salute the work of our men and women who deliver healthcare at the individual level to a patient population that is most often heavily weighted with chronic or difficult health issues. Our healthcare professionals take pride in their work, and we take great pride in them.”

Income Statement Presentation Format as a Result of United States Generally Accepted Accounting Principles (“GAAP”) Related to Discontinued Operations

As noted in its 2008 annual report on Form 10-K, the Company is applying the discontinued operations provisions of GAAP to all service contracts that expire subsequent to January 1, 2002. In accordance with GAAP, the results of operations of contracts that expire, less applicable income taxes are classified on the Company’s consolidated statements of operations separately from continuing operations. The presentation prescribed for discontinued operations requires the collapsing of healthcare revenues and expenses, as well as other specifically identifiable costs, into the income or loss from discontinued operations, net of taxes. Items such as indirect selling, general and administrative expenses or interest expense cannot be allocated to expired contracts. The GAAP accounting presentation as it relates to discontinued operations and the Company’s expired contracts has no impact on net income, earnings per share, total cash flows or stockholders’ equity.

As a result of the application of GAAP related to discontinued operations, “healthcare revenues” and “healthcare expenses” on the Company’s consolidated statements of operations for any period presented will only include revenues and expenses from continuing contracts. The Company will also discuss “Total Revenues,” “Total Healthcare Expenses,” and “Total Gross Margin,” which will include all of the Company’s revenues and healthcare expenses for a period (i.e., healthcare revenues plus revenues from expired service contracts, or healthcare expenses plus expenses from expired contracts less share-based compensation expense). Total Gross Margin is defined as Total Revenues less Total Healthcare Expenses. Total Gross Margin excludes share-based compensation expense. Reconciliations of healthcare revenues to Total Revenues, healthcare expenses to Total Healthcare Expenses and gross margin to Total Gross Margin are found in the attached schedules.


The following information was filed by America Service Group Inc De on Wednesday, October 28, 2009 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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