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A STRONG THIRD QUARTER WITH INCREASED REVENUES AND EARNINGS RESULTS IN SOLID PROFITABILITY

          A STRONG THIRD QUARTER WITH INCREASED REVENUES AND
                EARNINGS RESULTS IN SOLID PROFITABILITY
    STRONGSVILLE, Ohio, Nov. 13 /PRNewswire/ -- Central Reserve Life Corporation (NASDAQ: CRLC) announced today solid improvement in profitability on increased revenues for its third quarter and nine months.  Total revenue for the three months ending Sept. 30, 1991 increased to $37,357,969, compared to $36,342,288 for the same quarter last year.  The three percent increase over last year's third quarter mirrored a similar increase for the nine months, with revenues totalling $108,715,679 for the period.
    Net income for the third quarter, $1,376,592 ($.34 per share), increased 13 percent over last year's $1,223,428 ($.30 per share) and includes an underwriting profit of approximately $470,000.  Net income for the nine months amounted to $1,692,419 ($.41 per share) as compared to $2,293,234 ($.56 per share) for the same period in 1990.
    Fred Lick Jr., chairman and chief executive officer, observed, "Results for the third quarter confirm the momentum that has been established concerning future performance.  Now we have moved to a new revenue and earnings platform from which we expect to continue to reap the benefits of our decision to consolidate operations and implement new programs.  Our increased vitality is best evidenced by the increase in the volume of certificates issued (6,442 for the quarter, compared to last year's 3,046) and the (19 percent) improvement in policy lapses."
    Although quarterly operating expenses showed an increase over the comparable 1990 quarter, the rate of increase has been consistently declining.  The third quarter comparable expense increase of 13 percent is encouraging when compared to the 16 percent increase for the second quarter.  Comparable commission expenses as a percent of premiums stabilized at 15 percent for the quarter and nine months respectively.
    Expenses for "Benefits, Claims, Losses and Settlement Expenses" as a percent of premium declined to 66 percent for the quarter, as opposed to last year's 68 percent, despite the continuing increase in the cost of health care.  The nine months, again (consistent with the first half experience) showed a similar decline to 68 percent from 69 percent for the comparable period.  While comparative nine month net investment income decreased slightly, the decrease reflects catch-up on claims processing and reduction in outstanding claims inventory and generally lower reinvestment rates for the company's securities.
    Lick commented, "One of the company's strengths is its ability to customize products, in order to reach a diversified clientele. Gemini and Eagle products have now proven themselves to be cost effective, both for us and for our customers.  We have seen a continuing increase in demand for these products, coupled with greatly improved retention rates primarily because of the Alpha Omega Renewal Option Program."
    The company continues to maintain and prudently manage a high quality investment portfolio of which 99.5 percent is investment grade. Central has no mortgage loans, nor any investments in real estate.  The company does not have any so-called "junk" bonds.
    Central Reserve Life is one of the original underwriters and leading insurers of preferred risk accident and health insurance, specializing in providing health care insurance for groups of 50 or fewer employees. Central's unique and creative customized approach to service, as well as its innovative and sophisticated product development, enables it to serve a large and diverse market.  Based in Strongsville, Ohio, the company currently concentrates its activities in 18 of the 36 states in which it is admitted to sell insurance.  Common stock is traded over the counter under the NASDAQ National Market System using the CRLC symbol.
                       CENTRAL RESERVE LIFE CORPORATION
                               AND SUBSIDIARIES
                  CONSOLIDATED CONDENSED STATEMENT OF INCOME
                                  (UNAUDITED)
                                          Three Months Ended
                                              September
                                          1991          1990
    REVENUES:
    Premiums                          $36,185,914   $35,182,583
    Investment Income                   1,089,276     1,142,004
    Gain on Sales of Investments           80,458        13,940
    Other Income                            2,321         3,761
    Total                             $37,357,969   $36,342,288
    Benefits, Losses and Expenses
    Benefits, Claims, Losses and
      Settlement Expenses             $23,785,214   $23,837,133
    Commissions                         5,297,671     5,119,165
    Other Operating Expenses            6,631,492     5,862,562
    Total                             $35,714,377   $34,818,860
    Net Income Before Federal
      Income Taxes                     $1,643,592    $1,523,428
    Federal Income Taxes:
      Current                           1,067,000       300,000
      Deferred                           (800,000)          ---
    Net Income                         $1,376,592    $1,223,428
    Weighted Average Shares
      Outstanding                       4,096,837     4,073,794
    Earnings Per Share
    Before Federal Income Taxes              $.40          $.37
    Federal Income Taxes                     $.06          $.07
    Net Income                               $.34          $.30
                                           Nine Months Ended
                                              September
                                          1991          1990
    REVENUES:
    Premiums                         $105,115,134  $102,150,186
    Investment Income                   3,377,956     3,361,469
    Gain on Sales of Investments          193,861       350,740
    Other Income                           28,728        16,941
    Total                            $108,715,679  $105,879,336
    Benefits, Losses and Expenses
    Benefits, Claims, Losses and
      Settlement Expenses             $71,632,734   $70,511,438
    Commissions                        15,055,985    15,136,272
    Other Operating Expenses           20,017,541    17,438,392
    Total                            $106,706,260  $103,086,102
    Net Income Before Federal
      Income Taxes                     $2,009,419    $2,793,234
    Federal Income Taxes:
      Current                           1,317,000       500,000
      Deferred                         (1,000,000)          ---
    Net Income                         $1,692,419    $2,293,234
    Weighted Average Shares
      Outstanding                       4,107,396     4,068,853
    Earnings Per Share
    Before Federal Income Taxes              $.49          $.68
    Federal Income Taxes                     $.08          $.12
    Net Income                               $.41          $.56
    -0-                           11/13/91
    /CONTACT:  Frank Grimone, CFO of Central Reserve Life Corporation, 216-572-2400; or Robert A. Lentz of Robert A. Lentz & Associates, Inc., 614-228-2142, for Central Reserve Life/
    (CRLC) CO:  Central Reserve Life Corporation ST:  Ohio IN:  INS SU:  ERN KK -- CL010 -- 3763 11/13/91 08:53 EST
COPYRIGHT 1991 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Nov 13, 1991
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