UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: May 5, 1998
FARM FAMILY HOLDINGS, INC.
A Delaware Corporation Commission File No. 1-11941 IRS No. 14-1789227
344 Route 9W, Glenmont, New York 12077-2910
Registrant's telephone number: (518) 431-5000
<PAGE>
Item 5. Other Events
On May 4, 1998, Farm Family Holdings, Inc. issued a press release
regarding the company's decision to exercise its option to acquire Farm Family
Life Insurance Company.
Item 7. Financial Statements and Exhibits
The following exhibits are filed as part of this report:
Exhibit Index
Exhibit 99 - Press Release
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FARM FAMILY HOLDINGS, INC.
(Registrant)
May 5, 1998 /s/ Philip P. Weber
- ------------------ --------------------------------------
(Date) Philip P. Weber
President and CEO
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News Release
FOR IMMEDIATE RELEASE CONTACT: Timothy A. Walsh
Executive Vice President - Finance
& Treasurer
(518) 431-5410
Farm Family Holdings Provides Additional Pro Forma Financial Information
Regarding Acquisition of Farm Family Life
Glenmont, New York - May 4, 1998 - - On February 26, 1998, the Company's Board
of Directors approved the exercise of the Company's option to acquire Farm
Family Life Insurance Company ("Farm Family Life") pursuant to the terms of an
Amended and Restated Option Purchase Agreement (the "Amended and Restated Option
Purchase Agreement") among the Company and the shareholders of Farm Family Life.
The Company will pay an exercise price of $37.5 million to acquire Farm Family
Life consisting of $31.5 million of the Company's common stock and $6 million
stated value of the Company's 6-1/8% voting preferred stock, less certain
expenses to be paid by Farm Family Life in connection with the acquisition on
behalf of the shareholders of Farm Family Life. The proposed acquisition is
subject to certain closing conditions, including the approval of the Company's
stockholders and receipt of all required governmental approvals. The transaction
is expected to be completed in the third quarter of 1998.
The unaudited pro forma selected consolidated financial data included as part of
this press release gives effect to the acquisition of Farm Family Life using the
purchase method of accounting as if the acquisition had occurred at the
beginning of each period presented. The pro forma information is provided for
informational purposes only and is not necessarily indicative of actual results
that would have been achieved had the acquisition been consummated at the
beginning of the period presented or of future periods. The unaudited selected
pro forma consolidated financial data presented herein supplements the unaudited
pro forma consolidated financial data provided in the Company's press release
dated April 28, 1998.
Farm Family Holdings is the parent of Farm Family Casualty Insurance Company, a
specialized, regional property and casualty insurer of farms, agricultural
related businesses and residents and businesses of rural and suburban
communities.
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Safe Harbor Statement under The Private Securities Litigation Reform Act of
1995:
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that are based on management's
current knowledge, expectations, estimates, beliefs and assumptions. The
forward-looking statements in this press release include, but are not limited
to, statements with respect to the Company's potential acquisition of Farm
Family Life, the impact of the potential acquisition of Farm Family Life on the
earnings and shareholder value of the Company, statements of the plans and
objectives of the Company or its management, and statements of future economic
performance and assumptions underlying statements regarding the Company or its
business. Readers are hereby cautioned that certain events or circumstances
could cause actual results to differ materially from those estimated, projected,
or predicted. The forward-looking statements in this press release are not
guarantees of future performance and are subject to a number of important risks
and uncertainties, many of which are outside the Company's control, that could
cause actual results to differ materially. These risks and uncertainties
include, but are not limited to, the results of operations of the Company and
Farm Family Life, fluctuations in the market value of shares of the Company's
common stock, the satisfaction of the closing conditions set forth in the
Amended and Restated Option Purchase Agreement (which conditions include, but
are not limited to, the approval of the Company's shareholders and receipt of
all required government approvals), exposure to catastrophic loss, geographic
concentration of loss exposure, general economic conditions and conditions
specific to the property and casualty insurance industry, including its cyclical
nature, regulatory changes and conditions, rating agency policies and practices,
competitive factors, claims development and the impact thereof on loss reserves
and the Company's reserving policy, the adequacy of the Company's reinsurance
programs, developments in the securities markets and the impact thereof on the
Company's investment portfolio and other risks listed from time to time in the
Company's Securities and Exchange Commission filings, including the Form 10-K
filed for the fiscal year ended December 31, 1997 and the Prospectus dated July
22, 1996. Accordingly, there can be no assurance that actual results will
conform to the forward-looking statements in this press release.
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Unaudited Pro Forma Selected Consolidated Financial Data
(dollars in millions, except per share data)
The following table sets forth selected unaudited pro forma consolidated
financial information for the three months ended March 31, 1998 and for the year
ended December 31, 1997, giving effect to the acquisition of Farm Family Life
using the purchase method of accounting. Statement of Income and Balance Sheet
Data give effect to the acquisition of Farm Family Life as if it occurred at the
beginning of each period. The pro forma information is provided for
informational purposes only and is not necessarily indicative of actual results
that would have been achieved had the acquisition of Farm Family Life been
consummated at the beginning of the period presented or of future results.
<TABLE>
<CAPTION>
Three Months
Ended Year Ended
March 31, 1998 December 31, 1997
Statement of Income Data:
<S> <C> <C>
Total revenues $72.5 $279.4
Total losses, benefits and expenses 60.9 221.4
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Income before federal income tax expense 11.6 58.0
Federal income tax expense 3.7 19.8
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Income before participating policyholders' interest 7.9 38.2
Participating policyholders' interest 3.7 16.1
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Net income before preferred stock dividends 4.2 22.1
Preferred stock dividends 0.1 0.4
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Net income attributable to common shareholders $4.1 $21.7
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Operating income $4.0 $18.4
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Per Share Data:
Net income per common share - Diluted $0.67 $3.57
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Operating income per common share - Diluted (1) $0.65 $3.02
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Weighted average shares - Diluted (2) 6,126,148 6,095,597
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Balance Sheet Data (at period end):
Total assets 1,206.5 --
Participating policyholders' interest 109.1 --
Total liabilities 1,036.8 --
Redeemable preferred stock 5.9 --
Total shareholders' equity 163.8 --
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Book value per share (2) $26.96 --
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</TABLE>
(1) Operating income excludes the impact of realized investment gains (losses),
non recurring changes, and the related taxes thereon.
(2) Weighted average shares and book value per share are computed as if the
Closing of the acquisition of Farm Family Life had occurred on April 6,
1998, and assuming an average closing price of the Company's common stock of
37 9/32. The actual average closing price of the Company's common stock and
the actual number of shares of the Company's common stock that will be
issued in connection with the acquisition of Farm Family Life may vary
significantly from these amounts.
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