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PFS REPORTS INCREASE IN NET INCOME FOR FOURTH QUARTER AND FULL YEAR 1991 1991 PRE-TAX INCOME $13.3 MILLION ON REVENUE OF $707 MILLION

PFS REPORTS INCREASE IN NET INCOME FOR FOURTH QUARTER AND FULL YEAR 1991
 1991 PRE-TAX INCOME $13.3 MILLION ON REVENUE OF $707 MILLION
 ROCKFORD, Ill., March 17 /PRNewswire/ -- Pioneer Financial Services, Inc. (NYSE: PFS) has reported that for the fourth quarter ended Dec. 31, 1991, income before taxes amounted to $4.0 million. Pre-tax income for the full year of 1991 was $13.3 million.
 For the fourth quarter of 1991, net income after taxes as $2.8 million or $.34 per share on revenues of $182 million, compared to a net loss of $21.9 million or $3.33 per share on revenues of $172 million in the fourth quarter of 1990.
 For the year 1991, net income after taxes was $8.9 million or $1.02 per share on revenues of $707 million, compared to a net loss of $9.3 million or $1.72 per share on revenues of $610 million in 1990.
 Total assets ended at $969 million for the year. The quality of invested assets remained excellent with nearly 96 percent in investment grade securities. The company has no exposure to commercial mortgages, and the only real estate owned is the company's own administrative facilities.
 Peter W. Nauert, chief executive officer, said, "We are encouraged by the steady improvements that we made in 1991 after the difficulties we encountered in 1990. Our 1991 results demonstrate that the programs that we put in place in 1990 and throughout 1991 are beginning to show positive results. The improved net income for the year was due in part to administrative and marketing expense reductions, improved efficiency, reduced loss ratios of our various health insurance products compared to 1990 and an increase in realized investment gains. Our managed health care and marketing subsidiaries also began to contribute to overall profitability.
 "During 1991 net income attributable to new sales was restricted due to management's planned reduction in new insurance underwriting activities. We concentrated on developing the profitability of our existing business," Nauert added. "A general downturn in the economy and marketing agency reorganization led to a higher lapse rates on certain insurance products which resulted in an increase in the rate of amortization of deferred policy acquisition costs. Since the end of 1991 lapse rates have moderated and sales activities have begun to increase. The combined statutory capital and surplus of the company's current insurance subsidiaries increased 44 percent from $50.4 million in 1990 to $72.6 million in 1991. This provides the company greater underwriting capacity and demonstrates the increased strength of the company's insurance subsidiaries."
 The company's accident and health segment showed improvement in loss ratios for 1991 compared to 1990. The company adjusted its medical insurance premium rates to reflect increasing medical inflation and utilization. Claim cost containment programs implemented by the company in late 1990 and 1991 saved over $17 million in 1991. The largest share of these savings (nearly $12 million) resulted from policyholder use of the nationwide preferred hospital network established by PFS. These savings benefit the company's policyholders through lower insurance premium rate adjustments. The company intends to continue expanding its PPO hospital network and other cost containment programs with a goal to reduce claim costs by $30 million in 1992.
 The company's life segment, primarily through its subsidiary, Manhattan National Life Insurance Co., also showed improvement. In 1989, before PFS purchased Manhattan National Life (MNL), MNL had a loss (before realized investment gains and losses and federal income taxes) of $1 million on revenues of $39.4 million. In 1991 after extensive cost reduction and efficiency improvements, MNL on a comparable basis had income of $1.7 million on revenues of $39.5 million.
 "PFS also continued to reduce its general insurance expense ratio," Nauert said. "We emphasized increased efficiency of our operations in 1991 and will continue to stress expense controls. Expense reductions were achieved without sacrificing quality service to our customers. In fact, during 1991 we made major improvements in our level of customer service and satisfaction at the same time we reduced expenses."
 PFS plans to increase its emphasis on its marketing and managed health care subsidiaries.
 "Our corporate goal is to shift our business activities by 1995 so that our primary earnings flow is generated from our subsidiary managed health care and marketing companies, with the remaining balance coming from insurance underwriting and other operations," Nauert said.
 PFS, through the operation of its subsidiaries, provides marketing, insurance underwriting and health care related services throughout the United States.
 PIONEER FINANCIAL SERVICES, INC. AND SUBSIDIARIES
 Selected Consolidated Financial Data
 (In thousands except per share amounts, unaudited)
 Periods ended 3 Months 12 Months
 Dec. 31 1991 1990 1991 1990
 Operating Data:
 Total revenues $181,961 $172,370 $707,474 $609,942
 Net income (loss) 2,782 (21,942) 8,872 (9,346)
 Net income (loss) per share:
 Primary $.34 $(3.33) $1.02 $(1.72)
 Fully diluted (A) $.34 $(3.33) $1.02 $(1.72)
 Average common and common
 equivalent shares outstndg.:
 Primary 6,681 6,752 6,699 6,690
 Fully diluted 8,216 8,287 8,234 8,226
 Effect of realized investment
 gains on net income (B) 1,454 106 2,728 135
 Effect of realized gains
 net of taxes on net
 income per share:
 Primary $.22 $.02 $.41 $.02
 Fully diluted (A) $.22 $.02 $.41 $.02
 BALANCE SHEET DATA
 Periods ended
 Dec. 31 1991 1990 PERCENT CHANGE
 Assets $969,190 $990,560 (2)
 Stockholders' equity $ 75,470 $ 64,738 17
 Tangible book value per share $10.83 $9.35 16
 NOTE A: Fully diluted net income per share is equivalent to primary net income per share because the conversion of preferred stock would be anti-dilutive.
 NOTE B: The effect of realized investment gains on net income is net of additional deferred policy acquisition cost amortization as determined under FASB 97.
 -0- 3/17/92
 /CONTACT: Nancy Zalud of PFS, 815-987-5000 ext. 2101/
 (PFS) CO: Pioneer Financial Services, Inc. ST: Illinois IN: INS SU: ERN


AH -- NY078 -- 8851 03/17/92 15:02 EST
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Date:Mar 17, 1992
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