Printer Friendly

CAPITOL AMERICAN FINANCIAL ANNOUNCES RECORD THIRD QUARTER RESULTS AND STOCK REPURCHASE PROGRAM

 CLEVELAND, Nov. 3 /PRNewswire/ -- Capitol American Financial Corporation (NYSE: CAF) announced record results for the third quarter and first nine months of 1993. The company also announced the authorization of a program to buy back up to 500,000 of its outstanding shares.
 Net income for the quarter was $12,427,000, or 67 cents per share (excluding the impact of the increase in the federal income tax rate from 34 percent to 35 percent) compared with $8,781,000 or 55 cents per share for the prior year quarter. Per share earnings are based on 18,510,390 weighted average shares outstanding for the third quarter 1993 versus 15,966,590 for the same quarter 1992, reflecting the company's initial public offering last December. The cumulative impact of the tax increase on the company is an additional $439,000 of current income tax and a one-time increase in net deferred tax liability of $1,073,000. Including the impact of the tax rate increase, net income and earnings per share for the third quarter of 1993 were $10,915,000 and 59 cents, respectively.
 Included in earnings for the third quarter of 1993 were realized capital gains of $497,000, resulting from the sale of non-utility corporate fixed income investments. The securities sold are no longer permitted by the company's investment policy. Also included in this total are gains from the call of certain preferred stocks. There were no realized capital gains in the corresponding quarter of 1992.
 David H. Gunning, chairman and CEO, said, "These results are gratifying. Increases in the persistency of policies and our ever- growing base of policies continue to produce significant growth in premium income which was a major factor in producing our record net income."
 Commenting on the share repurchase program, Gunning said, "We believe that our shares are undervalued and that the purchase of our shares in the amount that has been authorized, at recently prevailing price levels, will benefit our shareholders while leaving us with a more than comfortable level of capital."
 Revenues of the supplemental health insurance company were $70,974,000 for the quarter, an increase of 15.4 percent over year-ago revenues of $61,512,000. Premiums earned in the third quarter of 1993 were $61,691,000, an 11.1 percent increase over the premiums earned of $55,529,000 in the same period in 1992.
 Sales of new policies during the quarter totalled $16.4 million, down from $19.7 million a year ago. Gunning indicated that the decline resulted primarily from lower sales in the company's Business Marketing Group. He said, "Now that the President's National Health Care program has been spelled out, we believe that the opportunities for our business will be enhanced and the need for our products will be clearer than ever. We are very encouraged."
 Net income, excluding the increase in the tax rate, of $33,242,000 for the nine months ending Sept. 30, 1993, was 29.7 percent greater than the $25,638,000 earned in the first nine months of 1992. Per share earnings for the first nine months were $1.79 compared to $1.61 for the first nine months of 1992, excluding the increase in the tax rate. Taking the tax rate increase into effect, net income for the first nine months of 1993 was $31,730,000, or $1.71 per share.
 Revenues were $206,788,000 for the nine months ending Sept. 30, 1993, a 16.0 percent increase over a year-ago revenues of $178,293,000. Premiums earned in the first nine months of 1993 were $181,263,000, a 12.4 percent increase over premiums earned of $161,277,000 in the first nine months of 1992.
 Total assets at Sept. 30, 1993, were $634,939,000, up 15.8 percent from year-end 1992.
 Capitol American Financial Corporation is a leading supplemental insurance company with a history of substantial growth and financial strength. The company's market focus is on specialty lines including cancer, accident, intensive care and heart insurance programs. Capitol is licensed in 47 states and has more than 665,000 policies in-force.
 CAPITOL AMERICAN FINANCIAL CORPORATION
 Three Months Ended
 Sept. 30,
 (In thousands except per share data) 1993 1992
 Premiums earned $61,691 $55,529
 Income from investments 8,650 5,847
 Other income 633 136
 Total revenues 70,974 61,512
 Policyholders' benefits 14,568 13,682
 Increase in future policy benefit 16,675 14,457
 Renewal commissions 9,178 8,135
 Amortization of deferred policy
 acquisition costs 4,676 4,240
 General and administrative expenses 6,665 7,383
 Interest expense 355 423
 Total benefits and expenses 52,117 48,320
 Income before income taxes 18,857 13,192
 Income taxes 6,430 4,411
 Cumulative effect of tax rate increase 1,512 ---
 Total income taxes 7,942 4,411
 Net Income $10,915 $8,781
 Weighted average shares 18,510,390 15,966,590
 Net income per share $ 0.59 $ 0.55
 Nine Months Ended
 Sept. 30,
 (In thousands except per share data) 1993 1992
 Premiums earned $181,263 $161,277
 Income from investments 24,570 16,613
 Other income 955 403
 Total revenues 206,788 178,293
 Policyholders' benefits 42,731 39,348
 Increase in future policy benefits 48,197 40,139
 Renewal commissions 26,906 23,737
 Amortization of deferred policy
 acquisition costs 15,736 14,047
 General and administrative expenses 21,716 21,081
 Interest expense 1,128 1,208
 Total benefits and expenses 156,414 139,560
 Income before income taxes 50,374 38,733
 Income taxes 17,132 13,095
 Cumulative effect of tax rate increase 1,512 ---
 Total income taxes 18,644 13,095
 Net Income $ 31,730 $ 25,638
 Weighted average shares 18,505,389 15,966,590
 Net income per share $ 1.71 $ 1.61
 Quarter Ended Year Ended
 Balance Sheet Items Sept. 30, 1993 Dec. 31, 1992
 U.S. Treasury securities $ 361,353 $307,889
 Total investments 397,955 333,929
 Total assets 634,939 548,138
 Notes payable 20,000 20,000
 Shareholders' equity 206,107 177,770
 -0- 11/3/93
 /CONTACT: Peter H. Bryan of Capitol American Financial Corporation, 216-696-6400/
 (CAF)


CO: Capitol American Financial Corporation ST: Ohio IN: INS SU: ERN

KL-LC -- CL027 -- 0313 11/03/93 16:47 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 3, 1993
Words:1056
Previous Article:MAYFLOWER GROUP ANNOUNCES THIRD QUARTER RESULTS
Next Article:AIM 84 REPORTS THIRD QUARTER NET EARNINGS OF 10 CENTS PER UNIT
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters