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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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 30, 1997
PROVIDENT COMPANIES, INC
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(Exact name of registrant as specified in its charter)
Delaware 1-11834 62-1598430
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Idenfification No.)
One Fountain Square, Chattanooga, Tennessee 37402
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(Address of principal executive offices, including Zip Code)
(423) 755-1011
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Registrant's telephone number, including area code
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Item 5. Other Events
(a) On July 30, 1997, the Company issued a press release attached hereto as
Exhibit 99.
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SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
PROVIDENT COMPANIES, INC.
(REGISTRANT)
/S/J. HAROLD CHANDLER
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J. Harold Chandler
Chairman, President and
Chief Executive Officer
Date: August 12, 1997
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PROVIDENT COMPANIES, INC.
1 Fountain Square
Chattanooga, TN 37402
July 30, 1997 Contact: Thomas A. H. White
For Immediate Release (423) 755-8996
PROVIDENT COMPANIES, INC. REPORTS NET INCOME
OF $59.7 MILLION FOR SECOND QUARTER OF 1997,
DIVIDEND INCREASE AND TWO-FOR-ONE STOCK SPLIT
CHATTANOOGA, TENN. -- Provident Companies, Inc. (NYSE: PVT) today reported net
income of $59.7 million ($0.84 per common share) for the second quarter of 1997,
up from $34.1 million ($0.68 per common share) for the second quarter of 1996.
Included in the net income figures are net realized after-tax investment gains
of $1.0 million ($0.01 per common share) in the second quarter of 1997 and
losses of $3.3 million ($0.07 per common share) in the second quarter of 1996.
The results of The Paul Revere Corporation are included in Provident's reported
financial statements from April 1, 1997, and GENEX from March 1, 1997.
For the first six months of 1997, Provident reported net income of $100.5
million ($1.66 per common share), compared to $68.5 million ($1.37 per common
share) for the first six months of 1996. Included in these net income figures
are net realized after-tax investment gains totaling $4.1 million ($0.08 per
common share) in the first six months of 1997 and losses of $3.7 million ($0.08
per common share) in the first six months of 1996.
The Board of Directors today declared an 11.1 percent increase in the quarterly
cash dividend from $0.18 per common share to $0.20 per common share on a pre-
split basis. The cash dividend on the common stock will be paid on September
10, 1997, to stockholders of record on August 28, 1997. Future dividends would
be declared and paid on the basis of the split shares.
The Board also approved a two-for-one stock split in the form of a stock
dividend on the Company's common stock. The two-for-one split will be paid on
September 30, 1997, to stockholders of record on August 28, 1997.
Chairman, President and Chief Executive Officer J. Harold Chandler said, "Our
strong second quarter results reflect the benefits of the strategic initiatives
we have been implementing over the past two years. We are especially pleased
with our core individual disability income results, which were helped by the
successful integration of our acquisition of Paul Revere and the risk management
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and product reform initiatives we have implemented. Our Board's decision to
increase the dividend and split the common stock reflects our confidence in the
future of Provident and the opportunities for growth we see in the disability
marketplace."
In addition, Provident's Board has authorized the repurchase of up to 1,000,000
shares of common stock (or 2,000,000 shares on a post-split basis) over the next
five years, in open market or negotiated transactions. The timing and terms of
the purchases will be determined based on market conditions. The repurchased
shares will be available to issue in connection with benefit plans.
After-tax operating earnings (excluding net realized investment gains and
losses) were $58.7 million ($0.83 per common share) in the second quarter of
1997, compared to $37.4 million ($0.75 per common share) in the second quarter
of 1996. For the first six months of 1997, after-tax operating earnings were
$96.4 million ($1.58 per common share), compared to $72.2 million ($1.45 per
common share) for the first six months of 1996.
Provident acquired GENEX Services, Inc. and The Paul Revere Corporation on
February 28, 1997, and March 27, 1997, respectively. These financial results
include the accounts and operating results from the date of acquisition.
Revenue (excluding net realized investment gains and losses) in the Individual
Life and Disability and Employee Benefits segments totaled $830.1 million in the
second quarter of 1997. Total revenue including the Other Operations segment,
which consists of product lines closed to new business, totaled $992.3 million
for the second quarter of 1997.
RESULTS BY SEGMENT
The Individual Life and Disability segment reported income before net realized
investment gains and losses and federal income taxes ("income") of $66.0 million
in the second quarter of 1997, compared to $23.6 million in the second quarter
of 1996. This segment includes the results of the individual disability income
line of business, which recorded income of $50.0 million in the second quarter
of 1997, compared to income of $19.9 million in the year ago quarter. The
improvement in the second quarter of 1997 is due to the inclusion of the results
of the Paul Revere block of individual disability income business, as well as a
higher level of claim resolutions in the Provident block of business. Premium
income in this segment totaled $363.6 million in the second quarter of 1997,
compared to $159.6 million in the second quarter of 1996, reflecting the
acquisition of Paul Revere. New sales in the individual disability income line
totaled $32.1 million in the second quarter of 1997.
The Employee Benefits segment reported income of $14.3 million in the second
quarter of 1997, compared to $17.0 million in the second quarter of 1996. The
decline is the result of lower income in the group life, medical stop-loss and
affinity groups lines of business. Premium income for the Employee Benefits
segment totaled $200.9 million in the second quarter of 1997, compared to $124.2
million in the second quarter of 1996, reflecting the acquisition of Paul
Revere.
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The Other Operations segment reported income of $8.9 million in the second
quarter of 1997, compared to $17.9 million in the second quarter of 1996. The
decline is primarily the result of the run-off of the group pension business and
the interest expense and goodwill amortization related to the acquisitions of
Paul Revere and GENEX. Revenue (excluding net realized investment gains and
losses) in this segment declined in the second quarter of 1997 to $162.2 million
from $165.2 million in the second quarter of 1996. This is attributed to the
impact on investment income from the group pension run-off.
Provident Companies, Inc., through its subsidiaries, is a provider of
disability, life and related coverages to the individual and employee benefits
marketplaces.
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DIGEST OF EARNINGS
(Unaudited)
Provident Companies, Inc.
(NYSE)
and Subsidiaries
($ in millions except share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30 Ended June 30
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Revenue excluding net realized $ 992.3 $ 574.3 $ 1,558.9 $ 1,166.6
investment gains and losses
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Income before net realized $ 58.7 $ 37.4 $ 96.4 $ 72.2
investment gains and losses
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Net Income $ 59.7 $ 34.1 $ 100.5 $ 68.5
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Average Shares 67,073,736 45,507,537 56,896,336 45,472,124
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Income per share before net $ 0.83 $ 0.75 $ 1.58 $ 1.45
realized investment gains and
losses
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Net Income $ 0.84 $ 0.68 $ 1.66 $ 1.37
per share
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Book Value $ 39.13 $ 32.67
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Book value excluding net $ 35.59 $ 31.68
unrealized gain on securities
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</TABLE>
Note: On February 28, 1997, and March 27, 1997, the Company acquired GENEX
Services, Inc. and The Paul Revere Corporation, respectively. The consolidated
financial information above includes the accounts and operating results of GENEX
and Paul Revere from their date of acquisition.
