FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(x) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarter ended September 30, 1995
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from __________ to __________
Commission File Number 0-14391
AMERICAN TRAVELLERS CORPORATION
(Exact name of Registrant as specified in its charter)
Pennsylvania 23-1738097
(State or other jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
3220 Tillman Drive, Bensalem, Pennsylvania 19020
(Address of Principal Executive Offices) (Zip Code)
(215) 244-1600
(Registrant's telephone number, including area code)
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirement for the past 90
days.
Yes ( x ) No ( )
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
As of November 10, 1995, there were 10,568,631 shares of the
registrant's common stock, $.01 par value, outstanding. The
registrant has no other classes of common stock.
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PART 1 - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
AMERICAN TRAVELLERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands) September 30, 1995 December 31, 1994
(Unaudited)
INVESTMENTS:
Bonds, at amortized cost
(market value $320,047
and $228,971).................... $313,701 $238,198
Mortgage Loan ................... 451 --
TOTAL INVESTMENTS .......... 314,152 238,198
CASH & CASH EQUIVALENTS ......... 52,517 9,133
ACCRUED INVESTMENT INCOME ....... 5,685 4,192
PREMIUMS DUE AND DEFERRED ....... 5,760 5,518
DEFERRED POLICY ACQUISITION COSTS 137,945 122,070
PROPERTY AND EQUIPMENT, at
cost (net of accumulated
depreciation of $3,489 and $4,192).. 4,256 5,168
GOODWILL (net of amortization
of $12,160 and $10,603)......... 12,806 14,316
OTHER ASSETS ................... 5,197 2,209
TOTAL ASSETS.............. $538,318 $400,804
The accompanying notes are an integral part of these statements.
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AMERICAN TRAVELLERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
(In Thousands except for per share data)
September 30, 1995 December 31, 1994
(Unaudited)
POLICY LIABILITIES:
Future policy benefits
and claim reserves $209,158 $169,285
Unearned premium reserve 36,240 35,133
Total Policy Liabilities .. 245,398 204,418
OTHER LIABILITIES ...... 6,673 5,185
NOTES PAYABLE ......... -- 20,000
CURRENT AND DEFERRED INCOME TAXES . 29,274 34,862
6.5% CONVERTIBLE
SUBORDINATED DEBENTURES..... 103,500 --
Total Liabilities ... 384,845 264,465
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value;
5,000,000 shares authorized;
No shares issued . -- --
Common stock, $.01 par value;
25,000,000 shares authorized;
(10,702,070 and 10,641,512 shares
issued at September 30, 1995 and
December 31, 1994 ) .... 107 106
Capital in excess of par value .......60,153 59,480
Retained earnings ................... 93,962 77,502
Less: shares of common stock held
in treasury at cost (133,439 shares
at Sept. 30, 1995 & Dec. 31, 1994) (749) (749)
Total Shareholders' Equity ........ 153,473 136,339
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY . $538,318 $400,804
The accompanying notes are an integral part of these statements.
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AMERICAN TRAVELLERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
(In Thousands except for per share data)
Three Months Ended September 30,
1995 1994
REVENUES:
Accident and health premiums ...... $ 61,435 $47,304
Life premiums ..................... 2,101 2,087
Net investment income ............. 4,587 2,655
Realized investment gains(losses).. 155 (3)
Total revenues ............. 68,278 52,043
BENEFITS AND EXPENSES:
Benefits to policyholders.. 38,934 27,916
Commissions ............... 17,531 15,195
General and administrative . 7,939 7,129
Amortization of deferred policy
acquisition ............. 5,440 4,936
Less: Policy acquisition costs
deferred .................... (10,496) (10,269)
Interest expense............. 614 242
Total Benefits and Expenses ..... 59,962 45,149
INCOME BEFORE PROVISION FOR
INCOME TAXES ............. 8,316 6,894
PROVISION FOR INCOME TAXES ........ 2,589 2,178
NET INCOME ................. $ 5,727 $ 4,716
PRIMARY EARNINGS PER SHARE........ $ .53 $ .44
PRIMARY NUMBER OF SHARES
OUTSTANDING ............. 10,844 10,772
FULLY DILUTED EARNINGS PER
COMMON SHARES.............. $ .52 $ .44
FULLY DILUTED NUMBER OF
SHARES OUTSTANDING......... 11,299 10,772
The accompanying notes are an integral part of these statements.
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AMERICAN TRAVELLERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Nine Months Ended September 30,
(In Thousands except for per share data)
1995 1994
REVENUES:
Accident and health premiums ........... $179,898 $139,704
Life premiums .......................... 6,294 5,039
Net investment income .................. 12,697 7,524
Realized investment gains (losses)...... 179 (9)
Total Revenues ......................... 199,068 152,258
BENEFITS AND EXPENSES:
Benefits to policyholders .............. 111,724 80,099
Commissions ............................ 54,011 46,791
General and administrative ............. 23,789 21,613
Amortization of deferred policy
acquisition costs ...................... 16,394 15,064
Less: Policy acquisition costs deferred (32,269) (31,401)
Interest expense ....................... 1,477 627
Total Benefits and Expenses ............ 175,126 132,793
INCOME BEFORE PROVISION FOR INCOME TAXES 23,942 19,465
PROVISION FOR INCOME TAXES ............. 7,483 6,117
NET INCOME ................................ $16,459 $ 13,348
PRIMARY EARNINGS PER SHARE................. $ 1.52 $ 1.25
PRIMARY NUMBER OF SHARES OUTSTANDING....... 10,836 10,720
FULLY DILUTED EARNINGS PER COMMON SHARE.... $ 1.51 $ 1.25
FULLY DILUTED NUMBER OF SHARES OUTSTANDING. 10,987 10,720
The accompanying notes are an integral part of these statements.
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AMERICAN TRAVELLERS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended September 30,
(In Thousands) 1995 1994
CASH FLOWS - OPERATING ACTIVITIES
Net Income .............................. $ 16,459 $ 13,348
Adjustments to reconcile net income to
net cash provided by operating activities . -- --
Amortization of deferred policy
acquisition costs ................. 16,394 15,064
Depreciation and amortization ............ 3,725 4,440
Realized investment (gains) losses on
securities held to maturity (153) 9
Increase in reserves.......................... 40,980 27,420
Current and deferred income taxes............. (5,317) 4,634
Increase (decrease) in other liabilities .... 1,488 (661)
Deferred policy acquisition costs ........... (32,269) (31,402)
Increase in other assets .................. (1,132) (625)
Total adjustments ....................... 23,716 18,879
Net cash provided by operating activities 40,175 32,227
CASH FLOWS - INVESTING ACTIVITIES
Proceeds from calls and maturities of
Investments ............. . 29,045 11,434
Purchase of investments ................... (105,396) (55,754)
Purchase of property and equipment ..... (439) (453)
Net cash (used in) investing activities (76,790) (44,773)
CASH FLOWS - FINANCING ACTIVITIES
Proceeds from issuance of Subordinated
Debentures............ 103,500 --
Debentures issue costs...................... (3,905) --
(Repayments)Borrowing on notes payable ..... (20,000) 8,000
Exercise of options ................... 404 137
Net cash provided by financing activities 79,999 8,137
Net change in cash ....................... 43,384 (4,409)
CASH, Beginning ......................... 9,133 10,286
CASH, Ending ..................... $ 52,517 $ 5,877
Supplemental disclosure of cash flow information
Cash paid during period for:,
Interest ............................... $ 1,262 $ 554
Income taxes .......................... $ 12,800 $ 2,165
The accompanying notes are an integral part of these statements.
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AMERICAN TRAVELLERS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1- STATEMENT OF ACCOUNTING POLICIES:
The financial results of this report are stated in conformity with
generally accepted accounting principles. The information for the
three months and nine months ended September 30, 1995 and 1994 is
unaudited. However, in the opinion of the Company's management, all
adjustments necessary for a fair presentation of the financial
position and the results of the operations of the Company at September
30, 1995 and 1994 and for the three and nine months then ended have
been included. Results for these interim periods are not necessarily
indicative of results for a full year.
NOTE 2 - ACCOUNTING FOR INVESTMENTS:
The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities", effective January 1, 1994. The Company has the positive
intent and the ability to hold its debt securities to maturity. Under
these circumstances, SFAS No. 115 requires that the Company record its
investments in debt securities at amortized cost. Because the
Company's previous accounting policy was to value these securities at
amortized cost, the adoption of SFAS No. 115 had no effect on the
Company's financial position and results of operation.
Debt securities are generally purchased with the intention to hold to
maturity. For financial reporting purposes the Company's entire
investment portfolio at September 30, 1995 and December 31, 1994 has
been designated as "hold to maturity" securities and reported at
amortized cost pursuant to the requirements of SFAS No. 115. During
the quarter ended June 30, 1995, the Company purchased and sold $7.2
million in debt securities which, for purposes of SFAS No. 115, were
categorized as "available for sale."
NOTE 3 - 6.5 % CONVERTIBLE SUBORDINATED DEBENTURES DUE 2005
On September 22, 1995, the Company issued $103.5 million of 6.5%
Convertible Subordinated Debentures due October 1, 2005. The
debentures are convertible into common stock of the Company at any
time at or prior to maturity at a conversion price of $22.75
(equivalent to a conversion rate of 43.96 shares per $1,000 principal
amount of Debentures), subject to adjustment under certain
circumstances. Interest on the Debentures is payable semi-annually on
April 1 and October 1, commencing April 1, 1996. The Debentures are
redeemable, in whole or in part, at the option of the Company, for
cash at any time on or after October 9, 1998.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Revenues-
Premiums
For the quarter ended September 30, premiums increased 28.5% to $63.5
million in 1995 from $49.4 million in 1994. For the nine months ended
September 30, premiums increased 28.7% to $186.2 million in 1995 from
$144.7 million in 1994. These increases reflect the continued
expansion of the Company's policyholder base. The 1995 premiums
include $5.4 million for the quarter and $17.3 million for the nine
months from the JC Penney long term care business acquired in October
1994.
The components of annualized premiums in force are summarized below:
Annualized Premiums in Force
($ in millions)
As of September 30,
1995 1994 Percentage Change
Nursing home .............. $164.7 $119.5 37.9%
Home Health Care ........ 60.2 45.6 32.1%
Total Long Term Care ....... 224.9 165.1 36.3%
Medicare Supplement ........ 23.2 27.4 (15.4%)
Other Accident and Health ... 8.9 9.6 (7.3%)
Life Insurance .............. 8.7 6.8 28.0%
Total Premiums in Force .....$265.7 $208.9 27.2%
The Company's long term care annualized premiums in force have
increased significantly, and include $22.2 million, at September 30,
1995, attributable to policies acquired from JC Penney. The overall
improvement in long term care sales (reflecting both new business and
renewal premiums) is the result of: (i) the success of long term
care products introduced in 1991 and 1992; (ii) the expansion during
1992 of issue age limits from age 84 to age 99 (policyholders over age
84 accounted for 10% and 13% of total new business for the three
months and 10% and 15% of total new business for the nine months ended
September 30, 1995 and 1994, respectively); (iii) the elimination
during 1992 of substandard rating categories; (iv) the introduction
during 1992 of sales brochures that were easier for agents to use;
(v) the introduction during late 1992 and 1993 of a new, more
affordable home health care plan; and (vi) ongoing product
introductions during 1993 and 1994. Certain of these changes,
principally, the increase in issue age limits and the elimination of
substandard rating categories, may expose the Company to additional
underwriting risk. Management believes, but there can be no assurance,
that the additional risk accompanying these changes has been moderated
by a combination of increased volume and improved underwriting techniques.
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Partially offsetting the growth in long term care premiums is a
reduction in Medicare supplement business, for which new sales have
been negligible since 1992, when management decided to de-emphasize
this product line. Life insurance premiums have increased as a result
of the introduction of a new whole life plan during 1993, offering up
$10,000 face amount coverage to applicants up to age 85.
New business premiums are summarized by line of business below:
New Business Premiums
($ in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 % Change 1995 1994 % Change
Nursing Home .......... $10.6 $9.6 10.5% $31.4 $30.5 3.0%
Home Health Care ........ 4.8 5.0 (4.0%) 15.3 15.4 (0.7%)
Total Long Term Care .... 15.4 14.6 5.5% 46.7 45.9 1.8%
Medicare Supplement ...... 0.0 0.0 0% 0.0 0.0 0%
Other Accident & Health .. 0.5 0.5 0% 1.5 1.4 7.2%
Life Insurance ........... 0.8 0.9 (11.2%) 2.7 2.6 3.9%
Total New Business .... $16.7 $16.0 4.4% $50.9 $49.9 2.1%
The limited growth in new business is attributable to: (i)
policyholders' selection of monthly premium payment plans as opposed
to annual premium payments, a practice which the Company promotes;
(ii) the lingering effect of the recent debate over national health
care, which, in management's opinion, raised public expectations that
long term care expenses would be covered under a federal program,
making the purchase of private long term care insurance unnecessary;
and (iii) increased competition. The Company does not know to what
extent its competition is likely to increase or change in any material
respects but believes that it is well positioned to remain competitive
in all of its markets.
Investment Income
For the quarter ended September 30, investment income, including
securities gains and losses, increased 78% to $4.8 million in 1995
from $2.7 million in 1994. For the nine months ended September 30,
investment income increased 72% to $12.9 million in 1995 from $7.5
million in 1994. These increases reflect the availability of
additional cash and invested assets, which have increased by $160.8
million, principally from net cash flow from operations, the JC Penney
acquisition and the net proceeds from the Company's recently concluded
convertible subordinated debentures offering (the "Debt Offering").
During 1993, the Company began purchasing tax-free municipal
securities, which provided superior after-tax yields when compared to
taxable securities of similar quality and maturity. In the fourth
quarter of 1994, the investment criteria were changed back to taxable
securities in response to changing tax planning requirements. The
Company invests in investment grade debt instruments. It does not
invest in high-yield debt securities, equities, derivatives or real
estate, and has historically held its investment portfolio at
amortized cost.
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Benefits and Expenses-
Benefits to Policyholders
For the quarter ended September 30, benefits to policyholders
increased 39.5% to $38.9 million in 1995 from $27.9 million in 1994.
For the nine months ended September 30, benefits to policyholders
increased 39.7% to $111.7 million in 1995 from $80.1 million in 1994.
These increases in benefits to policyholders follow the increases in
premiums for the corresponding periods.
The components of benefits to policyholders are:
Benefits to Policyholders
($ in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 % Change 1995 1994 % Change
Paid Claims .......... $24.6 $18.7 31.6% $71.8 $56.5 27.1%
Reserve Increase ...... 14.3 9.2 55.5% 39.9 23.5 69.8%
Total Benefits .........$38.9 $27.9 39.5% $111.7 $80.0 39.7%
The components of benefits to policyholders as a percentage of total
premiums are:
Benefits to Policyholders as a Percentage of Total Premiums
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Paid Claims ............ 38.7% 37.9% 38.6% 39.0%
Reserve Increase ...... 22.5% 18.6% 21.4% 16.3%
Total Benefits ......... 61.3% 56.5% 60.0% 55.3%
The "paid claims to total premiums" ratio has been consistent for the
periods presented. The increase in "reserve increase to total
premiums" ratio corresponds to the growth in long term care business,
for which higher levels of reserves are held.
Claims are actively monitored and reserves are reviewed annually by an
independent actuarial firm to ensure that claim and benefit reserves
are adequate. Adjustments, if necessary, are made in marketing
strategy, product design and pricing when appropriate.
Commissions
For the quarter ended September 30, commission expense increased 15.2%
to $17.5 million in 1995 from $15.2 million in 1994; as a percentage
of premiums, commission expense decreased to 27.6% in 1995 from 30.8%
in 1994. For the nine months ended September 30, commission expense
increased 15.5% to $54.0 million in 1995 from $46.8 million in 1994;
as a percentage of premiums, commission expense decreased to 29.1% in
1995 from 32.4% in 1994. The decreases in effective commission rates
are directly related to the growth in the renewal business relative to
total business.
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General and Administrative
For the quarter ended September 30, general and administrative
expenses increased 11.3% to $7.9 million in 1995 from $7.1 million in
1994; as a percentage of premiums, general and administrative expenses
decreased to 13.4% in 1995 from 14.6% in 1994. For the nine months
ended September 30, general and administrative expenses increased
10.2% to $23.8 million in 1995 from $21.6 million in 1994; as a
percentage of premiums, general and administrative expenses decreased
to 12.8% in 1995 from 15.0% in 1994.
The components of general and administrative expenses are:
General and Administrative Expenses
($ in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 % Change 1995 1994 % Change
General and
Administrative ........ $5.8 $5.5 5.5% $18.0 $16.7 7.8%
Premium Taxes ......... 1.4 1.1 27.3% 4.3 3.3 30.4%
Goodwill Amortization . 0.7 0.5 40.0% 1.5 1.6 (6.3%)
Total .............. $7.9 $7.1 11.3% $23.8 $21.6 10.2%
The components of general and administrative expenses as a percentage
of total premiums are:
General and Administrative Expenses as a Percentage of Total Premiums
Three Month Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
General and
Administrative 9.1% 11.1% 9.7% 11.6%
Premium Taxes ......... 2.3% 2.3% 2.4% 2.3%
Goodwill Amortization.. 1.1% 1.0% 0.7% 1.2%
Total 12.5% 14.4% 12.8% 15.0%
The decrease in "general and administrative expenses (exclusive of
premium taxes and goodwill amortization) to total premiums" ratio
reflects the Company's ability to process additional premium volume at
lower marginal costs. The increase in premium taxes is directly
related to the increase in premiums; the premium tax rate is
consistent between periods. The decrease in goodwill amortization is
a reflection of the lapse rates on acquired blocks of business which
have declined relative to prior periods.
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Interest Expense
For the quarter ended September 30, interest expense increased 154% to
$0.6 million in 1995 from $0.2 million in 1994. For the nine months
ended September 30, interest expense increased 136% to $1.5 million in
1995 from $0.6 million in 1994. These increases reflect: (i) higher
outstanding revolving credit borrowings in 1995 ($20 million) than in
1994 ($12 million); and (ii) higher interest rates in 1995 (9.0%)
than in 1994 (6.0%). As of September 22, 1995, the revolving credit
was paid down to zero with the proceeds of the Debt Offering. As a
result of the Debt Offering, interest expense will remain at increased
levels for the foreseeable future.
Amortization of Deferred Acquisition Costs
For the quarter ended September 30, amortization of deferred policy
acquisition costs increased 10% to $5.4 million in 1995 from $4.9
million in 1994. For the nine months ended September 30, amortization
of deferred policy acquisition costs increased 9.4% to $16.4 million
in 1995 from $15.0 million in 1994. These increases reflect the
higher levels of deferred policy acquisition costs, which have
increased by $32.3 million.
Amortization of deferred policy acquisition costs varies with and is
directly related to the lapse rates of premiums in force. Improved
persistency in 1995 has resulted in decreased amortization of deferred
policy acquisition costs in relation to the average deferred policy
acquisition cost asset during the periods when compared with prior
periods.
Policy Acquisition Costs Deferred
For the quarter ended September 30, policy acquisition costs deferred
increased 2% to $10.5 million in 1995 from $10.3 million in 1994. For
the nine months ended September 30, policy acquisition costs deferred
increased 2.9% to $32.3 million in 1995 from $31.4 million in 1994.
Policy acquisition costs, which consist of principally excess first
year commissions and policy issue and underwriting costs, vary with
and are directly related to new business premiums.
Income Taxes
For the quarter ended September 30, the provision for income taxes
increased 18.2% to $2.6 million in 1995 from $2.2 million in 1994.
For the nine months ended September 30, the provision for income taxes
increased 23% to $7.5 million in 1995 from $6.1 million in 1994.
These increases correspond to an increase in income before the
provision for income taxes, as adjusted for the effects of tax-free
investment income.
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The components of the income tax provisions are:
Provision for Income Taxes
($ in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Income before Provision
for Income Taxes .... $ 8.3 $ 6.9 $ 23.9 $ 19.5
Tax-Free Income ....... (0.8) (0.7) (2.4) (2.0)
Taxable Income ... $ 7.5 $ 6.2 $ 21.5 $ 17.5
Effective Tax Rate
(As a % of Income Before Provision for Income Taxes)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Applicable Tax Rate 35.0% 35.0% 35.0% 35.0%
Tax-Free Income ..... (3.8%) (3.4%) (3.7%) (3.5%)
Effective Tax Rate .. 31.2% 31.6% 31.3% 31.5%
For the quarter ended September 30, the current tax provision increased
200% to $3.0 million in 1995 from $1.0 million in 1994. For the nine
months ended September 30, the current tax provision increased 204% to
$8.8 million in 1995 from $2.9 million in 1994. The significant
increases in taxes currently payable is the result of continued
growth which limits the availability of the "small life company
deduction", while at the same time increasing other temporary
differences. These temporary differences are expected to grow during
1995 and 1996. Although these differences will not increase the
effective tax rate for financial reporting purposes, they will result
in greater amounts of tax which are currently payable.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of cash are premiums and investment
income. Its primary uses of cash are payments of benefits, policy
acquisition costs, operating costs and income taxes. The Company has
a $20.0 million revolving credit facility that was paid down to $0, on
September 22, 1995. The revolving credit facility is still available.
There are no other lines of credit currently in place. As of
September 30, 1995, the Company had no material commitments for any
capital expenditures.
On September 22, 1995, the Company issued $103.5 million of 6.5%
Convertible Subordinated Debentures due October 1, 2005. The net
proceeds from this issuance were used to repay in full the existing
revolving credit facility, to make an additional $58.0 million surplus
contribution to ATLIC, which is our primary insurance subsidiary, and
for general corporate purposes. State insurance laws and regulations
require statutory capital and surplus be maintained at specific
levels. As of September 30, 1995, the Company's insurance
subsidiaries were above all required capitalization levels.
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On October 25, 1995, the Company announced that it has signed a Letter
of Intent with Transport Life Insurance Company and Continental Life
Insurance Company, both of Fort Worth, Texas. Transport and
Continental are subsidiaries of Texas-based Transport Holding, Inc.
The Letter of Intent contemplates the Company's purchase of a book of
long term care business with an estimated total annualized premium of
$100 million. This transaction is subject to the execution of a
definitive reinsurance and purchase agreement.
Management believes that the effect of inflation is insignificant to
its insurance operations, except with respect to its Medicare
supplement product line.
Part II - OTHER INFORMATION
ITEM 4: NONE
ITEM 6: NONE
SIGNATURE
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.
AMERICAN TRAVELLERS CORPORATION
Date : November 10, 1995 By: /s/ John A Powell
JOHN A. POWELL
Chairman of the Board &
Chief Executive Officer
Date: November 10, 1995 By: /s/ Benedict J. Iacovetti
BENEDICT J. IACOVETTI
Principal Financial Officer
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