SECURITIES EXCHANGE COMMISSION
WASHINGTON, D.C. 20552
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 22, 1997
AmVestors Financial Corporation
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(Exact Name of Registrant as Specified in its Charter)
Kansas
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(State or Other Jurisdiction of Incorporation)
1-3685
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(Commission File Number)
48-1021516
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(I.R.S. Employer Identification Number)
415 Southwest Eighth Avenue
Topeka, Kansas 66603
(913) 232-6945
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(Address, including zip code, and telephone number
of principal executive offices)
Not Applicable
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(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. Other Events
See Exhibit 99.1.
See Exhibit 99.2.
ITEM 7. Exhibits
(c) Exhibits.
The following exhibits are filed with this report:
Number Description
------ -----------
99.1 Press release dated July 22, 1997.
99.2 Press release dated August 13, 1997.
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.
AMVESTORS FINANCIAL CORPORATION
DATE: August 13, 1997 By: Mark V. Heitz
------------------------------------
Name: Mark V. Heitz
Title: President
2
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
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99.1 Press release dated July 22, 1997
99.2 Press release dated August 13, 1997
3
EXHIBIT 99.1
[CORPORATE LOGO]
AMVESTORS FINANCIAL
CORPORATION
FOR IMMEDIATE RELEASE
For: AmVestors Financial Corporation Contact: Ralph W. Laster, Jr.
555 S. Kansas Avenue (913) 295-4406
Topeka, KS 66603
AMVESTORS FINANCIAL CORPORATION
RETAINS GOLDMAN, SACHS & CO.
TOPEKA, KS, July 22, 1997 - AmVestors Financial Corporation announced
today that the Company has retained Goldman, Sachs & Co. to act as its financial
advisor to assist it in developing and evaluating various strategic alternatives
including possible sale or merger opportunities.
Mr. Ralph W. Laster, Jr., chairman and chief executive officer of
AmVestors Financial Corporation, stated that "While we have experienced annual
growth in premiums during the past four years and throughout 1997 in excess of
26 percent, and we have enjoyed strong financial results during this same
period, with the current consolidation activity taking place within the life
insurance industry, the board of directors determined that it was appropriate to
hire a financial advisor to explore the alternatives available to maximize
shareholder value."
AmVestors Financial Corporation markets individual annuities and life
insurance policies nationwide to the savings and retirement market through its
wholly-owned subsidiaries, American Investors Life Insurance Company, Inc. and
Financial Benefit Life Insurance Company. AmVestors' common stock trades on the
New York Stock Exchange under the Symbol AMV.
####
ONE AMVESTORS PLACE
555 S. Kansas Avenue, P.O. Box 2039, Topeka, KS 66601-2039
Phone: (913) 232-6945
EXHIBIT 99.2
[CORPORATE LOGO]
AMVESTORS FINANCIAL
CORPORATION
FOR IMMEDIATE RELEASE
For: AmVestors Financial Corporation Contact: Ralph W. Laster, Jr.
555 S. Kansas Avenue (913) 295-4406
Topeka, KS 66603
AMVESTORS FINANCIAL CORPORATION REPORTS SECOND QUARTER
NET CORE OPERATING EARNINGS INCREASE 24 PERCENT AND
QUARTER NET EARNINGS INCREASE 151 PERCENT
TOPEKA, KS, August 13, 1997 - AmVestors Financial Corporation
("AmVestors") today reported a 24 percent increase in second quarter 1997 core
operating earnings and 151 percent increase in net earnings for the same period.
For the six months ended June 30, 1997, net core operating earnings increased 37
percent and net earnings increased 16 percent.
Core Earnings Increase 24 Percent and 37 Percent for Quarter and Six Months
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Net core operating earnings for the quarter ended June 30, 1997, were
$6.8 million, a 24 percent increase over 1996 second quarter net core operating
earnings of $5.5 million. On a fully diluted per share basis, this equated to 38
cents on 18.0 million shares for the 1997 quarter compared to 41 cents on 13.7
million shares for the 1996 quarter. The 4.3 million share increase in weighted
average fully diluted shares outstanding resulted primarily from the issuance of
$65 million of convertible debentures during July 1996.
Net core operating earnings for the six months ended June 30, 1997,
were $13.2 million, a 37 percent increase over 1996 second quarter net core
operating earnings of $9.7 million. On a fully diluted per share basis, this
equated to 74 cents on 17.9 million shares for the 1997 six month period
compared to 79 cents on 12.3 million shares for the 1996 period. The 5.6 million
ONE AMVESTORS PLACE
555 S. Kansas Avenue, P.O. Box 2039, Topeka, KS 66601-2039
Phone: (913) 232-6945
<PAGE>
ADD ONE
share increase in weighted average fully diluted shares outstanding resulted
primarily from the acquisition of Financial Benefit Group (FBG) during April
1996 and the issuance of the convertible debentures.
Quarter and six months ended June 30, 1997, fully diluted net earnings
increased 151 percent and 16 percent to $5.7 million, or 37 cents per share and
$11.2 million, or 73 cents per share, respectively. The difference between net
earnings per share and net core operating earnings per share is primarily
attributable to net realized investment gains.
Net realized investment gains, excluded from core operating earnings,
consist primarily of aggregate realized investment gains and losses adjusted for
income taxes and amortization of deferred policy acquisition costs (DAC).
Realized gains and losses from the company's convertible stock/bond portfolio
are included in core operating earnings.
Primary net core operating earnings were 49 cents and 95 cents per
share for the 1997 quarter and six months, respectively, compared to 41 cents
and 80 cents per share for the 1996 periods. Primary net earnings were 41 cents
and 81 cents per share for the quarter and six months, respectively, compared to
17 cents and 80 cents for the 1996 periods.
Commenting on results, Ralph W. Laster, Jr., chairman and chief
executive officer, said, "We are pleased with 1997 operations. While 1997 net
core operating earnings per share have declined because of the additional shares
issued in 1996, we are nonetheless very pleased with the strong increase in net
core operating earnings. We had anticipated that it would take a year to
more
<PAGE>
ADD TWO
overcome the dilution from shares issuable from the convertible debentures
issued last July. On that timetable, we had anticipated that 1997 second quarter
net operating earnings per share would be flat versus 1996 second quarter. Our
failure to achieve this expectation resulted from excess expenses. Once expense
levels are normalized following the FBG merger, total expenses should be only 45
basis points of average invested assets. We have not achieved that goal.
Expenses were 53 basis points for the quarter ended June 30, 1997. The
additional expenses equated to 2 cents per share for the quarter. We still
believe our targeted expense levels are achievable. While we are, of course,
disappointed about our failure to as of yet achieve our expense goal, the other
benefits from our increased size are already evident. Our strong growth in net
core operating earnings was derived from a 19 percent growth in average invested
assets and a 11 percent growth in our gross product margin, expressed as a
percent of average invested assets."
Premium Received Up 38 Percent for Quarter and 28 Percent for the Six Months
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Premium received for the quarter increased 38 percent to $159.6 million
from $115.9 million in the 1996 quarter. For the six month period ended June 30,
1997, premiums received were $273.0 million, compared to $213.8 million in the
1996 six month period, a 28 percent increase period over period.
Commenting on the company's record premiums, Mark V. Heitz, president,
said that "Our marketing strategy is one of, if not the most, significant
competitive advantages we enjoy as a company."
more
<PAGE>
ADD THREE
Stockholders' Equity and Total Assets Increase
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June 30, 1997, stockholders' equity was $213.8 million, or $15.87 per
share, compared to $204.3 million, or $14.99 per share, at year-end 1996. Before
the effect of SFAS No. 115, stockholders' equity at June 30, 1987, was $199.0
million, or $15.13 per share, compared to $186.6 million and $13.80 per share on
December 31, 1996. SFAS No. 115 requires that securities which are held as
available-for-sale be marked-to-market with gains or losses and pro-forma DAC
amortization, net of tax, reflected as an increase or decrease, respectively, in
stockholders' equity.
Total assets grew 6 percent period over period to $3.4 billion at June
30, 1997, compared to $3.2 billion at June 30, 1996.
Core Operating Revenue and Net Investment Income Increase
- ---------------------------------------------------------
Core operating revenue (revenue excluding realized investment gains and
losses, other) increased 8 percent and 21 percent to $60.3 million and $117.9
million in the 1997 quarter and six months, respectively, compared to $55.8
million and $97.8 million for the 1996 quarter and six months. Net investment
income increased 5 percent and 16 percent for the quarter and six months to
$52.7 million and $103.1 million, compared to $50.0 million and $89.2 million
for the 1996 periods. The increases in both core operating revenue and net
investment income were primarily due to the more than 19 percent growth in
average invested assets.
more
<PAGE>
ADD FOUR
Product Margin Grows 10 Percent
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The company's gross margin (the difference between what the company
earns on its investments and what it credits to policyholders) continues to
grow. During the past year, this very important measure has grown to 2.93
percent of average invested assets for the quarter ended June 30, 1997, compared
to 2.86 percent in the 1996 second quarter. Invested assets, including cash,
grew $200 million, or 7 percent during the past year from $2.7 billion on June
30, 1996, to $2.9 billion on June 30, 1997. The combination of growth in
invested assets and increased margin resulted in gross product margin increasing
10 percent from $18.9 million to $20.7 million quarter over quarter.
Exploring Our Strategic Alternatives
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On July 22, 1997, AmVestors announced that it had hired Goldman Sachs &
Co. as its financial advisor to explore and advise the Board regarding various
strategic alternatives including the possible sale or merger opportunities. The
company does not intend to make any other announcement with respect to this
process unless or until a definitive agreement is signed or the process is
discontinued.
AmVestors Financial Corporation markets individual annuities and life
insurance policies nationwide to the savings and retirement market through its
wholly-owned subsidiaries, American Investors Life Insurance Company, Inc. and
Financial Benefit Life Insurance Company. AmVestors' common stock trades on the
New York Stock Exchange under the Symbol AMV.
more
<PAGE>
CORPORATE FACT SHEET
August 13, 1997
Name: AmVestors Financial Corporation
Description of Business: Insurance holding company whose principal subsidiaries
American Investors Life Insurance Company, and
Financial Benefit Life Insurance Company specialize in
the sale of deferred annuity products.
Corporate Address: 555 South Kansas Avenue
Topeka, Kansas 66603
Phone: (785) 232-6945
Trading Information: NYSE - AMV (Common Stock)
13,294,119 shares outstanding
Trailing Twelve Months Volume: 10,110,600 shares
Trailing Twelve Months Price Range: $13.375 - $23.500
Current Price: $21.750
NASDAQ - AMVWW (Warrants)
716,361 warrants outstanding
Expiration Date: April 2, 2002
Exercise Price: $16.42
Current Price: $7.750
Officers: Chairman and CEO: Ralph W. Laster, Jr.
President and General Counsel: Mark V. Heitz
Corporate Secretary: Lynn F. Hammes
Balance Sheet (000's omitted)
As of As of %
06/30/97 12/31/96 Change
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Assets:
Invested Assets ............................... $2,803,617 $2,683,780
Other Assets (1) .............................. 634,696 661,695
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Total Assets (2) .............................. $3,438,313 $3,345,475 2.8%
========== ==========
Liabilities:
Policy Liabilities (1) ........................ $3,132,245 $3,043,714
Convertible Subordinated Debentures ........... 65,000 65,000
Other Liabilities ............................. 27,259 32,414
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Total Liabilities ............................. 3,224,504 3,141,128
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Stockholders' Equity (2) ...................... 213,809 204,347 4.6%
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Total Liabilities and Stockholders' Equity .... $3,438,313 $3,345,475
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Book Value Per Share (000's omitted, except per share data)
As of As of %
06/30/97 12/31/96 Change
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Stockholders' Equity (2) ...................... $213,809 $204,347 4.6%
========== ==========
Fully Diluted Book Value Per Share (2) ....... $15.87 $14.99 5.9%
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<PAGE>
<TABLE>
Earnings by Component (000's omitted, except per share data)
<CAPTION>
Quarter Ended Six Months Ended
--------------------- % -------------------- %
06/30/97 06/30/96 Change 06/30/97 06/30/96 Change
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<S> <C> <C> <C> <C> <C> <C>
Net Core Operating Earnings
Premiums and Policy Charges (3) ....... $ 4,677 $ 3,896 $ 9,086 $ 6,353
Net Investment Income ................. 52,706 49,988 103,138 89,167
Net Investment Gains (Losses), Core (4) 1,989 1,186 4,077 1,610
Other Revenues ........................ 896 688 1,561 713
--------- --------- --------- ---------
60,268 55,758 8.1% 117,862 97,833 20.5%
--------- --------- --------- ---------
Death and Other Benefits .............. 38,707 36,145 76,471 66,765
Amortization of Policies Produced ..... 4,734 3,997 8,647 6,939
Amortization of Policies Purchased .... 1,647 2,533 3,179 2,533
General Insurance Expenses ............ 3,602 3,615 7,550 5,536
Insurance Taxes, Licenses & Fees ...... 1,015 849 1,624 1,100
Other Expenses ........................ 45 53 104 113
--------- --------- --------- ---------
49,750 47,192 5.4% 97,575 82,986 17.6%
--------- --------- --------- ---------
Operating Earnings .................... 10,518 8,566 20,287 14,847
Income Tax Expense .................... 3,680 3,029 7,100 5,197
--------- ---------- --------- ---------
Net Core Operating Earnings ........... 6,838 5,537 23.5% 13,187 9,650 36.7%
--------- --------- --------- ---------
Net Investment Gains (Losses), Other
Net Investments Gains (Losses), Other . (517) (6,279) (162) 924
Amortization of Policies Produced ..... (327) (1,554) (361) 474
Amortization of Policies Purchased .... 138 (417) 392 (417)
Income Tax Expenses (Benefit) ......... (114) (1,482) (67) (303)
--------- --------- --------- ---------
Net Investment Gains (Losses), Other .. (214) (2,826) (126) 554
--------- --------- --------- ---------
Net Interest Expense
Interest Expense ...................... (1,428) (609) (2,863) (734)
Income Tax Expense (Benefit) .......... (499) (214) (1,002) (257)
--------- --------- --------- ---------
Net Interest Expense .................. (929) (395) (1,861) (477)
--------- --------- --------- ---------
Net Extraordinary Item
Extraordinary Item .................... -- (72) -- (72)
Income Tax Expense (Benefit) .......... -- (25) -- (25)
--------- --------- --------- ---------
Net Extraordinary Item ................ -- (47) -- (47)
--------- --------- --------- ---------
Net Earnings .......................... $ 5,695 $ 2,269 151.0% $ 11,200 $ 9,890 15.6%
========= ========= ========= =========
Per Share of Common Stock:
Primary:
Net Core Operating Earnings ......... $ 0.49 $ 0.41 19.5% $ 0.95 $ 0.80 18.8%
Net Investment Gains (Losses), Other (0.01) (0.21) (0.01) 0.04
Net Interest Expense ................ (0.07) (0.03) (0.13) (0.04)
Net Extraordinary Item .............. -- -- -- --
--------- --------- --------- ---------
Net Earnings ........................ $ 0.41 $ 0.17 $ 0.81 $ 0.80
========= ========= ========= =========
Fully Diluted:
Net Core Operating Earnings ......... $ 0.38 $ 0.41 -7.3% $ 0.74 $ 0.79 -6.3%
Net Investment Gains (Losses), Other (0.01) (0.21) (0.01) (0.04)
Net Interest Expense ................ -- (0.03) -- 0.04
Net Extraordinary Item .............. -- -- -- --
--------- --------- --------- ---------
Net Earnings ........................ $ 0.37 $ 0.17 $ 0.73 $ 0.79
========= ========= ========= =========
Average Shares Outstanding:
Primary ............................... 13,925 13,574 13,824 12,086
========= ========= ========= =========
Fully Diluted ......................... 17,990 13,671 17,926 12,273
========= ========= ========= =========
<PAGE>
<FN>
Footnotes
(1) Includes reinsurance reserve credits of $227,809,978 and $238,822,734
as of June 30, 1997 and December 31, 1996, respectively, which under
the provisions of SFAS 113 can no longer be reported as an offset
against the related liabilities.
(2) Changes in Assets, Stockholders' Equity and Book Value Per Share for
the period ended June 30, 1997 as a result of the accounting for
unrealized investment gains (losses) required under the provisions SFAS
115 were as follows:
</TABLE>
<TABLE>
<CAPTION>
As of As of Change in
06/30/97 12/31/96 Unrealized
------------ ------------ ------------
<S> <C> <C> <C>
Unrealized Gain (Loss) in Securities
Available-for-Sale ............................. $ 41,715,456 $ 50,631,670 ($ 8,916,214)
Increase (Decrease) in Deferred Cost of Policies
Produced ....................................... (14,988,126) (18,175,005) 3,186,879
Increase (Decrease) in Deferred Cost of Policies
Purchased ...................................... (4,082,553) (5,112,135) 1,029,582
Increase (Decrease) in Deferred Income Taxes ... (7,859,095) (9,643,713) 1,784,618
------------ ------------ ------------
Increase (Decrease) in Stockholders' Equity .... $ 14,785,682 $ 17,700,817 ($ 2,915,135)
============ ============ ============
Increase (Decrease) in Fully Diluted Book Value Per Share.................... ($0.17)
============
</TABLE>
(3) Premiums excluded from revenue in accordance with SFAS 97 for the
quarter ended June 30, 1997 and June 30, 1996 were $158,795,624 and
$115,429,726, respectively. Premiums excluded from revenue in
accordance with SFAS 97 for the six months ended June 30, 1997 and June
30, 1996 were $271,373,803 and $212,660,283, respectively.
(4) Includes gains (losses) on both trading securities and convertible
securities sold during the period along with the change in the market
value of trading securities held at the end of the period as follows:
Quarter Quarter
06/30/97 06/30/96
------------ ------------
Sales of trading securities............... $596 $321
Sales of convertible securities........... 898 789
Change in market value of trading
securities.............................. 495 76
------------ ------------
Net investment gains (losses), core....... $1,989 $1,186
============ ============
Quarter Quarter
06/30/97 06/30/96
------------ ------------
Sales of trading securities.............. $1,086 $445
Sales of convertible securities.......... 2,650 1,060
Change in market value of trading
securities............................. 341 105
------------ ------------
Net investment gains (losses), core...... $4,077 $1,610
============ ============
