SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1995
[ ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from to
Commission file number 1-10522
PIONEER FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 36-2479273
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1750 East Golf Road, Schaumburg, Illinois 60173
(Address of principal executive, offices) (Zip Code)
Registrant's telephone number, including area code (708) 995-0400
Indicate by a check mark 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 requirements for the past 90 days.
YES X NO ____
The number of shares of the registrant's common stock, $1.00 par value per
share, outstanding as of July 31, 1995 was 5,939,373.
PIONEER FINANCIAL SERVICES, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
(Unaudited)
<S> <C> <C>
ASSETS
Investments-Note and
Securities available for sale
Fixed maturities, at fair value
(cost: 1995-$456,432; 1994-$232,769) $ 476,766 $ 218,748
Equity securities, at fair value
(cost: 1995-$18,391; 1994-$12,484) 22,073 15,440
Fixed maturities held to maturity, at amortized cost
(fair value: 1995-$365,244; 1994-$338,540) 371,227 378,650
Mortgage loans--at unpaid balance 9,699 1,806
Real estate--at cost, less accumulated depreciation 17,073 16,959
Policy loans--at unpaid balance 78,485 23,082
Short-term investments--at cost,
which approximates fair value 37,581 69,152
Total Investments 1,012,904 723,837
Cash 20,199 8,612
Premiums and other receivables, less
allowance for doubtful accounts 25,109 20,102
Amounts on deposit and due from reinsurers 153,844 41,426
Deferred policy acquisition costs 221,171 225,618
Land, building and equipment-at cost, less
accumulated depreciation 23,016 20,314
Accrued investment income 13,112 8,873
Deferred federal income taxes - 7,262
Other 25,995 19,656
$1,495,350 $1,075,700
LIABILITIES, REDEEMABLE PREFERRED STOCK,
AND STOCKHOLDERS' EQUITY
Policy liabilities:
Future policy benefits $ 952,768 $ 620,562
Policy and contract claims 154,859 155,373
Unearned premiums 71,881 76,266
Other 29,708 16,407
1,209,216 868,608
General expenses and other liabilities 42,830 31,793
Amounts due to reinsurers 50,979 5,249
Deferred federal income taxes 784 -
Short-term notes payable 4,633 20,093
Long-term notes payable 18,186 2,520
Convertible Subordinated Debentures 57,427 57,427
1,384,055 985,690
Redeemable Preferred Stock, no par value:
$2.125 cumulative convertible exchangeable
preferred stock
Authorized: 5,000,000 shares
Issued and outstanding:
(1995: 848,900 shares; 1994: 867,300 shares) 21,222 21,682
Stockholders' Equity
Common Stock, $1 par value:
Authorized: 20,000,000 shares
Issued, including shares in treasury
(1995-7,071,673; 1994-6,996,157) 7,072 6,996
Additional paid-in capital 29,917 29,299
Unrealized appreciation (depreciation) of
available-for-sale securities - Note 3 5,464 (7,193)
Retained earnings 57,840 48,960
Less treasury stock at cost (10,220) (9,734)
(1995-1,132,300 shares; 1994-1,078,400 shares)
Total Stockholders' Equity 90,073 68,328
$1,495,350 $1,075,700
See notes to condensed consolidated financial statements.
</TABLE>
PIONEER FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Income:
Premiums and policy charges $171,192 $176,802 340,767 $349,700
Net investment income 17,338 10,130 34,835 21,234
Other income and realized gains
and losses from investments 9,129 6,797 16,076 14,060
197,659 193,729 391,678 384,994
Benefits and expenses:
Benefits 113,413 117,694 230,374 238,763
Insurance and general expenses 56,413 46,723 107,078 88,869
Interest expense 1,612 1,396 3,322 2,543
Amortization of deferred policy
acquisition costs 18,334 21,450 35,508 41,430
189,772 187,263 376,282 371,605
INCOME BEFORE INCOME TAXES 7,887 6,466 15,396 13,389
Federal income taxes 2,527 2,064 5,081 4,487
NET INCOME 5,360 4,402 10,315 8,902
PREFERRED STOCK DIVIDENDS 446 493 904 996
INCOME APPLICABLE TO
COMMON STOCKHOLDERS $ 4,914 $ 3,909 $ 9,411 7,906
NET INCOME PER COMMON SHARE
Primary $ .78 $ .59 $ 1.52 $ 1.19
Fully Diluted $ .48 $ .40 $ .94 $ .80
DIVIDENDS DECLARED
PER COMMON SHARE $ .045 $ .0375 $ .09 $ .075
AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING
Primary 6,284 6,597 6,185 6,649
Fully Diluted 12,638 12,922 12,629 12,974
See notes to condensed consolidated financial statements.
</TABLE>
PIONEER FINANCIAL SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1995 1994
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 18,140 $ 1,284
INVESTING ACTIVITIES
Net decrease in short-term investments 31,571 29,593
Purchases of investments (105,976) (164,557)
Sale of investments 78,839 92,714
Maturities of investments 1,145 44,966
Net purchase of property and equipment (1,273) (3,903)
Purchase of subsidiary net
of cash acquired (7,629) -
NET CASH USED BY
INVESTING ACTIVITIES (3,323) (1,187)
FINANCING ACTIVITIES
Increase in note payable 21,850 -
Repayments of notes payable (21,643) (1,852)
Proceeds from sale of agent receivables 8,864 13,013
Transfer of collections on previously
sold agent receivables (10,616) (14,394)
Dividends paid - preferred (903) (975)
Dividends paid - common (531) (261)
Stock options exercised 682 382
Purchase of treasury stock (485) (1,149)
Retirement of preferred stock (460) (1,275)
Other 12 37
NET CASH USED BY
FINANCING ACTIVITIES (3,230) (6,474)
INCREASE (DECREASE) IN CASH 11,587 (6,377)
CASH AT BEGINNING OF PERIOD 8,612 23,379
CASH AT END OF PERIOD $ 20,199 $ 17,002
See notes to condensed consolidated financial statements.
</TABLE>
PIONEER FINANCIAL SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
June 30, 1995
NOTE 1 -- ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles (GAAP) for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the six month period ended June 30, 1995
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Pioneer Financial
Services, Inc. ("Pioneer" or "the Company") Annual Report on Form 10-K for the
year ended December 31, 1994.
EARNINGS PER SHARE
Primary earnings per share of Common Stock are determined by dividing net income
for the period, less dividends on Preferred Stock, by the weighted average
number of common stock and common stock equivalents (dilutive stock options)
outstanding. Fully diluted earnings per share assumes conversion of the
Preferred Stock outstanding and conversion of the Subordinated Debentures with
related tax-effected interest added back to net income. (See discussion in
Exhibit 11 on page 16).
NOTE 2 -- STOCKHOLDERS' EQUITY
The statutory accounting practices prescribed for Pioneer's insurance
subsidiaries by regulatory authorities differ from GAAP. The combined
statutory-basis capital and surplus of Pioneer's direct insurance subsidiaries
was $115,676,000 and $124,284,000 at June 30, 1995 and December 31, 1994,
respectively. Statutory net income of the insurance subsidiaries amounted to
$1,792,000 and $624,000 for the three month periods ended June 30, 1995 and
1994, respectively, and $3,617,000 and $1,316,000 for the six month periods
ended June 30, 1995 and 1994, respectively.
NOTE 3 -- INVESTMENTS
Realized investment gains for the three month period ended June 30, 1995 were
$1,098,000 compared to realized losses of $30,000 for the same period in 1994.
Realized investment gains were $1,415,000 and $223,000 for the six month periods
ended June 30, 1995 and 1994, respectively.
Unrealized appreciation of available-for-sale securities at June 30, 1995 of
$5,464,000 included unrealized gains of $24,016,000 less unrealized gains of
$15,610,000 on investments in trust accounts that are guaranteed as to principal
value by reinsurers and taxes of $2,942,000. Unrealized depreciation at
December 31, 1994 of $7,193,000 included unrealized losses of $11,066,000 net of
tax benefits of $3,873,000.
NOTE 4 -- CONTINGENCIES
Pioneer and its subsidiaries are named as defendants in various legal actions,
some claiming significant damages, arising primarily from claims under insurance
policies, disputes with agents, reinsurance arbitrations, and other items.
Pioneer's management and its legal counsel are of the opinion that the
disposition of these actions will not have a material adverse effect on
Pioneer's financial position.
NOTE 5 -- BUSINESS COMBINATION
On January 31, 1995, Pioneer acquired for a cost of $23,700,000 the outstanding
common shares of Connecticut National Life Insurance Company (CNL). The
acquisition was accounted for by the purchase method and, accordingly, the
purchase price was allocated to assets and liabilities acquired based on
estimates of their fair values.
The following unaudited pro-forma consolidated results of operations have been
prepared as if the acquisition had been completed as of January 1, 1994:
(In thousands except per share amounts)
Year-Ended
December 31, 1994
Revenues $ 809,500
Net income 18,700
Net income per share
Primary 2.60
Fully Diluted 1.70
CNL did not prepare quarterly financial statements in accordance with generally
accepted accounting principles prior to the acquisition by Pioneer. The
foregoing pro-forma information is not necessarily indicative of either the
results of operations that would have occurred had the acquisition been
effective January 1, 1994 or of the future results of operations of the
consolidated companies.
NOTE 6 -- SUBSEQUENT EVENT
In August 1995, the Company accepted the conversion of approximately $46,900,000
of the outstanding 8% convertible subordinated debentures. The effect of the
conversion will be an increase in stockholders' equity of approximately
$41,700,000. The cost of the bond conversion transaction will result in an
after-tax charge to earnings in the third quarter of 1995 of approximately
$3,400,000.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations - Three and Six Month Periods ended June 30, 1995 compared
to 1994.
Division Overview
The income (loss) before income taxes by division for the second quarter and
first six months of 1995 and 1994 respectively, are as follows (in thousands):
Three Months Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Group Medical $ 7,576 $ 4,416 $12,452 $ 6,323
Senior Health 588 2,284 4,086 7,070
Life Insurance 2,277 1,878 2,863 4,320
Medical Utilization
Management 243 429 779 530
Corporate Expenses (2,797) (2,541) (4,784) (4,854)
Total $ 7,887 $ 6,466 $15,396 $13,389
Group Medical
The increase in pre-tax income for the three and six month periods was due to
improvement in major medical loss ratios. The major medical loss ratio
decreased to 63% from 68% for the three month period and to 62% from 70% for the
six month period of 1995 as compared to 1994. The improvement in the loss ratio
was due to continued increases in PPO penetration and higher than projected
claim costs in the first two quarters of last year. The significant improvement
in loss ratios was partially offset by a 10% reduction in earned premium and an
increase in general expense ratios.
Senior Health
The decrease in pre-tax income for the three month period was due to slightly
higher than projected claims on the Company's standardized medicare supplement
products as well as increased expenses related to several new marketing
programs. The medicare supplement loss ratio increased to 70% from 62% for the
three month period and to 69% from 63% for the six month period in 1995 as
compared to 1994.
Life Insurance
The decrease in pre-tax income for the six month period was primarily due to
higher mortality on an old block of interest sensitive life business in the
first quarter and expenses incurred subsequent to the January 1995 purchase of
Connecticut National Life Insurance Company (CNL).
Medical Utilization Management
The medical utilization management division showed continued improvement in
profit for the six month period. The division expanded sales to unaffiliated
clients with a $451,000 or 19% increase in the three month period and $1,369,000
or 31% for the six month period in 1995 compared to 1994. In addition, the
consolidation of the Milwaukee office in the second quarter of 1994 resulted in
reduced levels of expenses in the first and second quarters of 1995 compared to
the same periods last year.
Corporate Expenses and Interest
Interest expense increased in 1995 as compared to 1994 due to the utilization of
a portion of the line of credit by the Company beginning in the fourth quarter
of 1994 and continuing through the second quarter of 1995.
CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company reported consolidated net income of $5,360,000 for the quarter ended
June 30, 1995 as compared to $4,402,000 for the comparable period in 1994.
Total premiums and policy charges decreased $5,610,000 or 3% for the three month
period and $8,933,000 or 3% for the six month period in 1995 as compared to
1994. Accident and health premiums decreased $15,711,000 or 10% for the three
month period and $23,871,000 or 7% for the six month period in 1995 compared to
1994. Of this amount premiums from major medical products decreased $15,615,000
or 14% for the three month period and $21,338,000 or 10% for the six month
period in 1995 compared to 1994. Total premiums attributable to the remaining
mix of Medicare supplement and long-term care products increased $1,339,000 or
3% and decreased $209,000 for the three and six month periods in 1995 as
compared to 1994. The decrease in premiums was primarily due to lower average
premiums per policy sold, which resulted from the Company initiating sales of
new managed care products, and lower than projected levels of new business
sales. Life insurance premiums increased $10,101,000 or 84% for the three month
period and $14,938,000 or 67% for the six month period in 1995 as compared to
1994. The increase was primarily due to the acquisition of CNL.
Net investment income increased $7,208,000 or 71% for the three month period and
$13,601,000 or 64% for the six month period in 1995 as compared to 1994.
Annualized investment yields increased for the six month period from 6.3% to
7.0% in 1995 as compared to 1994. The increases are primarily due to the
acquisition of CNL and the general increase in interest rates.
Other income and realized investment gains increased $2,332,000 or 34% for the
three month period and $2,016,000 or 14% for the six month period in 1995 as
compared to 1994. The increase in other income was due to sales to unaffiliated
clients by the medical
utilization management division. The remaining other income generated by the
Company's other non-insurance subsidiaries remained relatively unchanged.
Total benefits decreased $4,281,000 or 4% for the three month period and
$8,389,000 or 4% for the six month period in 1995 as compared to 1994. Accident
and health benefits, which include the change in unearned premiums, decreased
$11,247,000 or 10% for the three month period and $23,866,000 or 11% for the six
month period in 1995 as compared to 1994. The decrease was primarily due to
improved loss ratios on major medical products and the decrease in collected
premium. The accident and health loss ratios decreased to 65% from 66% for the
three month period and to 64% from 67% for the six month period in 1995 as
compared to 1994. Improved loss ratios on the major medical products were
partially offset by higher claim levels on the standardized Medicare supplement
products. Life and annuity benefits increased $6,966,000 or 68% for the three
month period and $15,477,000 or 75% for the six month period in 1995 as compared
to 1994. The increase is due to the acquisition of CNL and higher than
projected mortality in the first quarter of 1995.
Insurance and general expenses (which includes commission compensation to
agents) increased $9,690,000 or 21% for the three month period and $18,209,000
or 20% for the six month period in 1995 as compared to 1994. Expenses for the
medical utilization management division increased due to the increase in sales.
Expenses in the insurance divisions increased due to the development of new
marketing and sales incentive programs, system development costs, and the
acquisiton of CNL.
Amortization of deferred policy acquisition costs decreased $3,116,000 or 15%
for the three month period and $5,922,000 or 14% for the six month period 1995
as compared to 1994.
The effective federal income tax rate decreased in the second quarter of 1995
due to the increased investment in tax-exempt securities included in the
Company's portfolio and utilization of net operating loss carryforwards of
subsidiaries.
Investments, premiums and other receivables, amounts on deposit and due from
reinsurers, accrued investment income and other assets increased principally due
to the acquisition of CNL. The decrease in short-term notes payable and the
increase in long-term notes payable resulted from the conversion of the
Company's line of credit agreement at December 31, 1994 to a term loan during
the first quarter of 1995. General expenses and other liabilities, and amounts
due to reinsurers increased due primarily to the acquisition of CNL. The
remaining balance sheet amounts remained relatively consistent with the amounts
at December 31, 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated liquidity requirements are created and met primarily
by operations of its insurance subsidiaries. The insurance subsidiaries'
primary sources of cash are premiums, investment income, and investment sales
and maturities. The primary uses of cash are operating costs, policy
acquisition costs, payments to policyholders and investment purchases.
In addition, liquidity requirements of the Company are created by the dividend
requirements of the $2.125 Preferred Stock, common stock dividends, interest
payments on the Convertible Subordinated Debentures and other debt service
requirements. The Company's liquidity requirements are met primarily by
dividends declared by its subsidiaries. Payments of dividends by the insurance
subsidiaries to the Company is subject to certain regulatory restrictions.
The Company's life and health insurance subsidiaries require capital to fund
acquisition costs incurred in the initial year of policy issuance and to
maintain adequate surplus levels for regulatory purposes. These capital
requirements have been met principally from internally generated funds,
including premiums and investment income, and capital provided from reinsurance
and the financing or sale of agent debit balances.
The Company has offered agent commission financing to certain of its agents and
marketing organizations which consists primarily of annualization of first year
commissions. This means that when the first year premium is paid in
installments, the Company will advance a percentage of the commissions that the
agent would otherwise receive over the course of the first policy year. The
Company through a subsidiary has entered into an agreement with an unaffiliated
corporation to provide financing for its agent commission financing program
through the sale of agent receivables. Proceeds from such sales for the six
month period ended June 30, 1995 and 1994 were $8.9 million and $13.0 million,
respectively. The termination date of the current program is December 31, 1997,
subject to extension or termination as provided therein.
In July 1993 the Company issued $57,477,000 of 8% convertible subordinated
debentures due 2000. Net proceeds from the offering totaled approximately
$54,000,000. The debentures are convertible into the Company's common stock at
any time prior to maturity, unless previously redeemed, at a conversion price of
$11.75 per share.
In August 1993 a subsidiary of the Company borrowed $1,500,000 to finance the
acquisition of Healthcare Review Corporation. Interest on the note is payable
quarterly at six percent. The note requires principal repayments of $75,000 per
quarter through July 31, 1998.
In January 1995, a subsidiary of the Company issued a note in the amount of
$1,660,000 as a portion of the acquisition price of CNL. The principal balance
of the note may be reduced by the former parent of CNL for capital losses
incurred on mortgage loan and real estate holdings until January 31, 1997.
Interest is payable at the average earnings rate of the investments, currently
eight percent.
In March 1995, the Company borrowed $15,000,000 to replace the line of credit
utilized at December 31, 1994. Interest on the note is payable quarterly
currently at five percent. The note requires principal repayments of $535,700
per quarter with a final payment on December 31, 1999. The Company holds
matching certificate of deposits at the bank in an amount equal to the
outstanding principal balance.
At March 31, 1995 a subsidiary of the Company had an unsecured loan of $380,000.
The note bears interest at prime and is payable quarterly with the final payment
due December 31, 1999.
In June 1995, a subsidiary of the Company borrowed $1,200,000. Interest on the
note is payable quarterly at prime. The note requires principal repayments of
$60,000 per quarter with a final payment on May 30, 2000.
The Company has a line of credit arrangement for short-term borrowings with
three banks amounting to $17 million through April 1996, of which $3,950,000 was
used at June 30, 1995. The line of credit arrangement can be terminated, in
accordance with the agreement, at the Company's option.
In March and June 1995, the Company's Board of Directors announced a quarterly
Common Stock dividend of 4.5 cents per share, with an expectation of a total of
18 cents per share to be paid for 1995.
In August 1995, the Company accepted the conversion of $46,900,000 of the
outstanding 8% convertible subordinated debentures. The effect of the
conversion will be an increase in stockholders' equity of approximately
$41,700,000.
Management believes that the diversity of the Company's investment portfolio and
the liquidity attributable to the large concentration of investments in highly
liquid United States government agency securities provide sufficient liquidity
to meet foreseeable cash requirements. Because the Company's insurance
subsidiaries experience strong positive cash flows, including monthly cash flows
from mortgage-backed securities, the Company does not expect its insurance
subsidiaries to be forced to sell the held to maturity investments prior to
their maturities and realize material losses or gains. Although the Company has
the ability and intent to hold those securities to maturity, there could occur
infrequent and unusual conditions under which it would sell certain of these
securities. Those conditions would include unforeseen changes in asset quality,
significant changes in tax law affecting the taxation of securities, a
significant business acquisition or disposition, and changes in regulatory
capital requirements or permissible investments.
Life insurance and annuity liabilities are generally long term in nature
although subject to earlier surrender as a result of the policyholder's ability
to withdraw funds or surrender the policy, subject to surrender and withdrawal
penalties. The Company believes its policyholder liabilities should be backed
by an investment portfolio that generates predictable investment returns. The
Company seeks to limit exposure to risks associated with interest rate
fluctuations by concentrating its invested assets principally in high quality,
readily marketable debt securities of intermediate duration and by attempting to
balance the duration of its invested assets with the estimated duration of
benefit payments arising from contract liabilities.
The Company has no material commitments for capital expenditures at the present
time.
The Company has hired an investment banker to review the group major medical
division to determine how it best fits into the Company's long term corporate
strategy. The Company is evaluating several alternatives including an outright
sale of the division or joint venture/partnership arrangements with another
insurance company or a national managed care provider organization.
PIONEER FINANCIAL SERVICES, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's annual meeting was held on May 25, 1995.
(b) Not applicable.
(c) 1. At the Company's annual meeting the following persons
were elected as directors of the Company and received the following
votes:
FOR WITHHELD
Michael A. Cavataio 5,255,541 58,496
R. Richard Bastion, III 5,256,388 57,649
William B. Van Vleet 5,252,391 61,646
The following person's term of office as a director continued after
the meeting:
Richard R. Halderman
Karl-Heinz Klaeser
Charles R. Scheper
Thomas J. Brophy
Peter W. Nauert
Robert F. Nauert
Michael K. Keefe
Carl Hulbert
2. At the Company's annual meeting, a proposal to amend the
Company's 1994 Omnibus Stock Incentive Program was approved by
the stockholders. 4,294,069 shares were voted in favor of this
proposal, 58,945 shares abstained and 961,023 shares voted against
the proposal.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Statement of Computation of Per
Share Earnings
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the second quarter of 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Pioneer Financial Services, Inc.
August 12, 1995 /s/ Peter W. Nauert
Date Peter W. Nauert
Chairman and Chief Executive Officer
August 12, 1995 /s/ David I. Vickers
Date David I. Vickers
Treasurer and Chief Financial Officer
EXHIBIT 11
PIONEER FINANCIAL SERVICES, INC.
STATEMENT OF COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Net income $ 5,360 $ 4,402 $10,315 $ 8,902
Average shares outstanding 5,919 6,338 5,911 6,358
Common Stock equivalents from
dilutive stock options,
based on the treasury stock
method using average market
price 365 259 274 291
TOTAL-PRIMARY 6,284 6,597 6,185 6,649
Common Stock equivalents from
dilutive stock options, based
on the treasury stock method
using closing market price 108 -- 198 --
Additional shares assuming
conversion of
Preferred Stock 1,358 1,433 1,358 1,433
Additional shares assuming
conversion of
Subordinated Debentures 4,888 4,892 4,888 4,892
TOTAL-FULLY DILUTED 12,638 12,922 12,629 12,974
Net income per share-
Primary* $ .78 $ .59 $ 1.52 $ 1.19
Net income per share-
Fully Diluted** $ .48 $ .40 $ .94 $ .80
* Primary net income per share was calculated after deducting
dividends on Preferred Stock of $446,000 for the three month
period and $904,000 for the six month period ended June 30, 1995,
and $493,000 for the three month period and $996,000 for the six
month period ended June 30, 1994.
** Fully diluted net income per share was calculated after adding
tax effected interest on Subordinated Debentures of $769,000 and
$747,000 for the three month periods and $1,539,000 and
$1,494,000 for the six month periods ending June 30, 1995 and
1994.
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<DEBT-HELD-FOR-SALE> 476,766
<DEBT-CARRYING-VALUE> 371,227
<DEBT-MARKET-VALUE> 365,244
<EQUITIES> 22,073
<MORTGAGE> 9,699
<REAL-ESTATE> 17,073
<TOTAL-INVEST> 1,012,904
<CASH> 20,199
<RECOVER-REINSURE> 16,552
<DEFERRED-ACQUISITION> 221,171
<TOTAL-ASSETS> 1,495,350
<POLICY-LOSSES> 952,768
<UNEARNED-PREMIUMS> 71,881
<POLICY-OTHER> 154,859
<POLICY-HOLDER-FUNDS> 29,708
<NOTES-PAYABLE> 80,246<F1>
<COMMON> 7,072<F2>
0
21,222<F3>
<OTHER-SE> 83,001<F4>
<TOTAL-LIABILITY-AND-EQUITY> 1,495,350
340,767
<INVESTMENT-INCOME> 34,835
<INVESTMENT-GAINS> 1,415
<OTHER-INCOME> 14,661
<BENEFITS> 230,374
<UNDERWRITING-AMORTIZATION> 35,508
<UNDERWRITING-OTHER> 110,400
<INCOME-PRETAX> 15,396
<INCOME-TAX> 5,081
<INCOME-CONTINUING> 10,315
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,315
<EPS-PRIMARY> 1.52
<EPS-DILUTED> .94
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Includes short-term and long-term borrowings and convertible subordinated
debentures.
<F2>Common stock at par value.
<F3>Redeemable preferred stock at par value.
<F4>Includes additional paid in capital, retained earnings, and unrealized
appreciation of securities less treasury stock.
</FN>
</TABLE>
