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) JUNE 18, 1998
PENN-AMERICA GROUP, INC.
(Exact name of registration as specified in this charter)
Pennsylvania 0-22316 23-2731409
(State or other jurisdiction of (Commission File (I.R.S. Employer
incorporation or organization) Number) Identification No.)
420 S. York Road, Hatboro, Pennsylvania 19040
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (215) 443-3600
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Item 5. Other Events
On June 18, 1998, the Company issued a press release (the "Press
Release") reporting the anticipated earnings for the second quarter of 1998 and
for the 1998 fiscal year and that the Company's Board of Directors had approved
the purchase by the Company of up to 350,000 shares of the Company's common
stock over the next 18 months.
A copy of the Press Release is attached as Exhibit 99.01.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial statements of business acquired:
Not applicable.
(b) Pro forma financial information:
Not applicable.
(c) Exhibits:
99.01 Penn-America Group, Inc. Press Release dated June 18,
1998.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
PENN-AMERICA GROUP, INC.
Date: June 18, 1998 BY: /s/ Rosemary Ferrero
-------------------------
Rosemary Ferrero
(Principal Accounting Officer)
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News
For release: June 18, 1998
Contact: Financial: Rosemary Ferrero, CPA
Chief Financial Officer
(215) 443-3612
Media: David Kirk, APR
(610) 792-3329
Summary: Penn-America Group, Inc. (NASDAQ:PAGI) expects to report lower
-than-anticipated second quarter and year-end 1998 results;
board of directors authorizes stock buy-back program
HATBORO, PA (June 18, 1998) - Penn-America Group, Inc. (NASDAQ:PAGI)
announced today that the company expects to report diluted earnings per share
for the second quarter between $0.22 per share and $0.23 per share and for the
year between $0.99 per share and $1.01 per share. Both ranges are below the
consensus estimates of $0.29 per share for the second quarter and $1.17 for the
year. The second quarter and 1998 year-end diluted earnings per share estimates
reflect a 22 percent increase in shares outstanding from 1997. The company
expects to release second quarter earnings on July 22.
The company also announced that its board of directors has authorized a
buy-back of up to 350,000 shares of the company's common stock during the next
18 months.
Jon Saltzman, president and ceo, said that, "For the year 1998, growth
of the company's commercial property and casualty business is likely to be in
the 12 percent to 15 percent range, noticeably higher than expected growth in
the overall insurance industry. Second quarter commercial written premiums are
expected to be flat compared with the second quarter of last year." Saltzman
also said that, "The fundamentals of the company continue to be excellent in
terms of strong agent commitment to the company, solid reserves, product
development, and prudent underwriting during continued very soft market
conditions."
Saltzman added that, "The company's commitment to non-standard personal
automobile remains strong and, in fact, there are several new programs in the
works. Earnings would be lower than expected because of actions the company
previously announced to scale back the non-standard personal automobile writings
of two agents and the slower than expected start-ups of several new programs.
These actions reflect prudent underwriting steps in response to our markets
based on our unchanged commitment to underwriting profitability rather than
growth for growth sake. Growth for both commercial lines and non-standard
personal automobile is expected to be in the 12 percent to 15 percent range for
1999."
<PAGE>
Commenting on the planned stock buy-back program, Saltzman added, "The
recent stock price is not indicative of a change in the fundamentals of the
company, all of which remain solid. We want the buy-back to send the
unmistakable signal that we have great confidence in the continued fundamental
strengths of the company."
Saltzman and Ferrero, the company's chief financial officer, will
conduct a teleconference for equity analysts and fund managers today at 2:00
p.m., Eastern Daylight Savings Time. To participate, telephone (800) 450-0786 a
few minutes before 2:00 p.m. and request the Penn-America analyst conference. A
digital recording of the teleconference will be available from 6:00 p.m. the day
of the call through midnight, June 24th. To hear the recording, telephone (800)
475-6701 at any time during the period and use access code 395612.
Penn-America Group, Inc. is a specialty property and casualty insurance
holding company which, through its subsidiaries, markets and underwrites
commercial property, general liability and multi-peril insurance for small
businesses located primarily in small towns and suburban and rural areas, and
non-standard personal automobile insurance.
Statements made in this press release which are not historical,
including statements regarding 1998 full year and second quarter performance and
expected insurance writings are forward-looking statements and as such are
subject to a number of risks. Please see the company's 1998 10-K (and other
reports filed pursuant to the Securities and Exchange Act of 1934) for
additional disclosure regarding potential risk factors.
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