USLICO REPORTS THIRD QUARTER EARNINGS, DECLARES CASH DIVIDEND
USLICO REPORTS THIRD QUARTER EARNINGS, DECLARES CASH DIVIDEND ARLINGTON, Va., Oct. 26 /PRNewswire/ -- USLICO Corporation (NYSE: USC) today announced that income from continuing operations for the third quarter of 1992 was $2.3 million, or 22 cents per share, compared to a loss of $15.1 million, or $1.41 per share, for the third quarter of 1991. Year-to-date 1992 income from continuing operations was $11.4 million, or $1.06 per share, compared to a loss of $6.7 million, or 63 cents per share, for the first nine months of 1991. As reported last year, the 1991 losses were caused by the write-off of USLICO's Liberian investment and losses on group health business administered by a third-party administrator, both of which were recognized in the third quarter of 1991. Net income for the 1992 third quarter of $2.3 million compares to $7.5 million for the 1991 quarter. The year-to-date 1992 net income of $11.4 million compares to $15 million in the first nine months of 1991. Net income for the quarter and year-to-date is lower in 1992 when compared to 1991 because of the gain of approximately $22 million in 1991 from discontinued property-casualty operations. Additional details regarding year-to-year comparisons are presented below. Asset Quality. USLICO also reported that the high quality of its investment portfolio continues to be among its greatest strengths. At the end of the third quarter, 97.8 percent of all bonds held were investment grade quality while the high yield component was 2.2 percent, down from 3.2 percent at year-end 1991. All bonds were current as to interest and principal.
USLICO also reported that its consolidated 60-day delinquency rate on commercial mortgage loans was 2.0 percent at quarter-end compared to the most recently published industry average of 7.3 percent. Total statutory capital stood at 7.2 percent of insurance reserves at Sept. 30, 1992, which represents a healthy level of capital resources given the company's business mix and conservative investment strategy.
New Management Team. As previously announced, Daniel J. Callahan III assumed responsibility as chairman and chief executive officer on Oct. 1, 1992. Under Callahan's leadership, supported by David H. Roe, who became president and chief operating officer in April 1992, and Glenn H. Gettier Jr., who joined the company as chief financial officer in October 1992, the management of the company is engaged in a complete review of the company's strategy and operations. The senior executive team is thoroughly assessing the company's markets, products, cost structure and business risks. With the concurrence of the board of directors, the team has established a new focus and direction that emphasizes the need to significantly improve product profitability and to generate internally the capital needed to support profitable growth. Financial results are summarized in the following tables by major components for the current year compared to 1991. USLICO CORPORATION Three Months Ended Sept. 30, 1992 1991 + (-) (In thousands) Life insurance operations $ 3,515 $ 7,964 $(4,449) Realized investment gains(A) 1,671 264 1,407 Interest and other (2,378) (741) (1,637) Group health business --- (19,604) 19,604 Loss on Liberian Investment --- (7,189) 7,189 Federal income tax (474) 4,186 (4,660) Income (Loss) from Continuing Operations 2,334 (15,120) 17,454 Discontinued Property- Casualty Operations (after tax) --- 22,636 (22,636) Net Income $ 2,334 $ 7,516 $(5,182) Year-to-Date 1992 1991 + (-) (In thousands) Life insurance operations $15,162 $ 24,038 $(8,876) Realized investment gains* 5,454 1,727 3,727 Interest and other (4,916) (4,057) (859) Group health business --- (21,898) 21,898 Loss on Liberian Investment --- (7,189) 7,189 Federal income tax (4,345) 665 (5,010) Income (Loss) from Continuing Operations 11,355 (6,714) 18,069 Discontinued Property- Casualty Operations (after tax) --- 21,720 (21,720) Net Income $11,355 $15,006 $(3,651) (A) Realized investment gains are net of 1992 deferred acquisition cost amortization of $1.6 million for the third quarter and $3.3 million for the year-to-date. There was no such amortization of deferred acquisition cost during the first nine months of 1991. Results from life insurance operations for the third quarter and the first nine months declined in comparison to similar periods in the prior year primarily as a result of higher mortality costs, expenses related to provision for severance and related benefits caused by corporate restructuring activities and an increase in acquisition costs charged to operations as a result of reduced life insurance sales as discussed below. Realized investment gains increased by $3 million for the third quarter and $7 million for the nine months before deducting increased amortization of deferred acquisition costs caused by the higher realized gains. A substantial portion of these gains are the result of higher bond call activity as bond issuers took advantage of lower interest rates. Since the gains realized on many of these bonds represented accelerated recognition of future investment income, acquisition cost amortization increased for certain lines of business. Sales of life insurance and annuity products for the quarter and year-to-date were as shown in the following table: Annualized Premium Sales (In thousands) Third Quarter Year-to-Date 1992 1991 1992 1991 Individual Life $ 3,602 $ 5,116 $ 11,477 $ 15,695 Payroll Deduction 2,651 2,526 6,276 7,392 Group Life 448 634 1,326 11,728 Annuities 36,639 49,786 112,490 200,662 Total $43,340 $58,062 $131,569 $235,477 As previously reported, the consolidation of some service center activities in Arlington disrupted service to agents engaged in individual life sales with such sales being adversely affected. Extensive training and re-engineering of the work flow processes were overcoming most of the service problem areas as the third quarter ended. The company believes new sales momentum will be restored by year end. Annuity sales are continuing at a rate which should meet the company's lower sales goal for 1992. In the case of group sales, as was reported last quarter, 1991 results included a large group case that was not duplicated this year. Quarterly Dividend. USLICO announced that its board of directors has voted a quarterly dividend of 25 cents per share of common stock. The dividend will be paid on Dec. 8, to shareholders of record on Nov. 23. SUMMARIZED FINANCIAL INFORMATION (In millions, except per share data) Third Quarter Year-to-Date 1992 1991 1992 1991 Revenue $94.7 $103.6 $289.6 $297.2 Net Income (Loss) from Continuing Operations 2.3 (15.1) 11.4 (6.7) Net Income 2.3 7.5 11.4 15.0 Earnings Per Share: Primary Net Income (Loss) from Continuing Operations $ .22 $ (1.41) $ 1.06 $ (.63) Net Income .22 .70 1.06 1.39 Fully Diluted Net Income (Loss) from Continuing Operations $ .22 $ (1.41) $ 1.06 $(.63) Net Income .22 .63 1.06 1.34 Weighted Average Shares Outstanding: 1992 10,755,727 1991 10,783,810 An insurance holding company, USLICO Corporation is headquartered in Arlington. Its life insurance subsidiaries focus on selected market niches, including U.S. military personnel, individual life, annuity and salary deduction sales, and have more than $54 billion of life insurance in force with assets of $3 billion. -0- 10/26/92 /CONTACT: David W. Karsten of USLICO Corporation, 703-875-3445/ (USC) CO: USLICO Corporation ST: Virginia IN: INS SU: ERN DIV
TW -- DC002 -- 4544 10/26/92 08:05 EST
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|Date:||Oct 26, 1992|
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