Consumers Financial Corp. announces second quarter 1996 operating results.CAMP HILL, Pa.--(BUSINESS WIRE)--Aug. 28, 1996--Consumers Financial Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CFIN CFin Computational Finance CFIN Combat Flight Inspection ) Wednesday Wednesday: see week. announced a second quarter net loss of $243,000, or 14 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , compared to a $91,000 loss, or 8 cents per share, for the same period in 1995. For the year to date, the company's loss was $667,000, or 34 cents per share, versus a 1995 loss of $486,000, or 27 cents per share. Second quarter results in 1996 improved over the first quarter of 1996 due to lower credit insurance claims. Second quarter results in 1996 improved over the first quarter of 1996 due to lower credit insurance claims. Second quarter pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta results showed even greater improvement compared to the first quarter; however, income tax expense increased in the second quarter and for the year as a result of the company's decision to carry back its 1995 operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. to 1993 rather than carrying the loss over to future years as had previously been anticipated. The tax benefit from the carryback carryback n. in taxation accounting, using a current tax year's deductions, business losses or credits to refigure and amend a previously filed tax return to reduce the tax liability. (See: carryover) was about $217,000 less than previously recognized using the carryforward carryforward 1. A business operating loss that, for tax purposes, may be claimed a certain number of years in the future, often up to 15 years. assumption. The company announced in March 1996 that it had retained a financial advisor to assist management in evaluating various alternatives for preserving shareholder value. The alternatives being considered include the sale of the insurance operations (either the existing business and the marketing organization or only the marketing organization), the sale of the auto auction business, the sale of the entire company or a combination of the company with another organization. The company's management and its board of directors are now completing their review of the final offers which have been received. While there can be no assurance that any of these transactions can be completed in 1996, the company believes it is probable PROBABLE. That which has the appearance of truth; that which appears to be founded in reason. that one of the alternatives outlined above will be consummated con·sum·mate tr.v. con·sum·mat·ed, con·sum·mat·ing, con·sum·mates 1. a. To bring to completion or fruition; conclude: consummate a business transaction. b. before year end with no adverse effects to the company. Automotive Resource Division Credit insurance premium revenues in the first half of the year declined 4.2% from $16.9 million last year to $16.2 million in 1996. However, the company's cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. , during the past 12 months, of all accounts in two unprofitable states has resulted in a $945,000 decline in premium revenues. Premiums from continuing and new accounts have therefore increased by about $236,000 in the first half of 1996. The Division's pre-tax operating results in the second quarter improved significantly compared to both the first quarter of 1996 and the second quarter of 1995. The Division reported a pre-tax loss of $97,000 in the second quarter compared to a $229,000 loss in the same period in 1995 and a $715,000 loss in the first quarter of this year. Significant cost reductions implemented over the past year and a slightly better claims ratio are responsible for the improvement over the second quarter of 1995. A substantial reduction in claims from the first quarter, which generally occurs each year in the second quarter, and lower general expenses account for the improved results compared to the first quarter of the year. Through the first six months of the year, pre-tax results have declined because, despite the improved second quarter claims experience, claims ratios for the year remain above the 1995 level. In addition, profits from the Division's service contract business are also lower. Individual Life Insurance Division Since the end of 1994, the operations of this Division have been limited to one closed block of assumed universal life business. Higher than normal death claims in 1995 resulted in a $70,000 loss in this Division in the first six months of 1995. A significant reduction in claims during the first half of 1996 has produced a $127,000 improvement and a $75,000 pre-tax profit. The company has had ongoing discussions with the direct writer of the UL policies concerning the sale of this block of business, but the parties have not yet agreed to the terms of any sale. Auto Auction Division Fee revenues from the Auto Auction Division increased 4% in the first half of 1996 despite a 4.4% decline in the volume of vehicles sold through the Auction. Fee revenues, which totaled $1.5 million in 1996 compared to $1.4 million in the same period last year, increased as a result of changes in the auction's fee structure. Pre-tax profits from the Auction also increased from $390,000 last year to $436,000. Consumers Financial Corp., an insurance holding company, operates through the following business units: the Automotive Resource Division, which provides management training and education services as well as credit insurance and other products to automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of dealers; the Auto Auction Division, which operates a wholesale automobile auction, and the Individual Life Insurance Division, which administers a small closed block of universal life insurance business. -0-
Consumers Financial Corp.
Financial Highlights (Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
(in thousands, except -------------------- -------------------
per share data) 1996 1995 1996 1995
-------------------- -------------------
Revenues:
Premiums written and
policy charges $9,886 $10,555 $18,504 $19,917
Net investment income 666 720 1,325 1,473
Net realized investment
gains (losses) (22) 2 (22) (23)
Fees and other income 1,157 1,353 2,399 2,378
----- ----- ----- -----
$11,687 $12,630 $22,206 $23,745
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Loss before income taxes ($64) ($40) ($602) ($454)
Income taxes 179 51 65 32
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Net loss ($243) ($91) ($667) ($486)
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Per share data:
Net loss ($0.14) ($0.08) ($0.34) ($0.27)
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Cash dividends declared
per common share NONE NONE NONE $0.05
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June 30, Dec. 31,
(in thousands, except per share data) 1996 1995
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Assets $120,787 $123,322
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Total debt $2,207 $2,537
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Shareholders' equity and redeemable
preferred stock $13,786 $15,671
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Shareholders' equity per common share $3.49 $4.20
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CONTACT: Consumers Financial Corp., Camp Hill Christy chris·ty n. Variant of christie. L. Leo Leo, in astronomy Leo [Lat.,=the lion], northern constellation lying S of Ursa Major and on the ecliptic (apparent path of the sun through the heavens) between Cancer and Virgo; it is one of the constellations of the zodiac. , investor relations Investor relations The process by which the corporation communicates with its investors. , 717/761-4230 |
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