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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):
October 7, 1998
THE GUARANTEE LIFE COMPANIES INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-26788 47-0785066
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification Number)
8801 Indian Hills Drive,
Omaha, Nebraska 68114
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(Address of principal executive offices) (Zip Code)
(402) 361-7300
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(Registrant's telephone number, including area code)
Not applicable
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS.
(a) The registrant issued the following press release on
October 7, 1998:
FOR IMMEDIATE RELEASE
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Company Contact: Contact:
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William L. Bauhard, CFO John Lovallo, SVP
The Guarantee Life Companies Inc. Makovsky & Company
Diane T. Kohout, Director IR John Menditto, Account Exec.
The Guarantee Life Companies Inc. Makovsky & Company
(402) 361-2848 (212) 508-9600
THE GUARANTEE LIFE COMPANIES INC.
COMMENTS ON EXPECTED THIRD QUARTER EARNINGS
Omaha, Nebraska, October 7, 1998 -- The Guarantee Life Companies Inc.
(Nasdaq: GUAR) today announced that it expects its earnings for the third
quarter ending September 30, 1998 to be between $0.20 and $0.24 per diluted
share, excluding realized investment gains, versus the mean analyst estimate on
First Call of $0.36 per diluted share. For its third quarter 1997, Guarantee
Life earned $0.46 per diluted share, excluding realized investment gains. The
Company expects to release its third quarter 1998 and nine-month financial
results on October 22, 1998.
Guarantee Life attributes the lower than expected third quarter results
primarily to an increase in the incidence of large claims in its group life
product line. Robert D. Bates, Chairman and Chief Executive Officer, commented,
"During the quarter, our Employee Benefits Division experienced a higher than
expected number of large life claims. As we have previously discussed, and as
happened this quarter in our group life area, relatively small claim
fluctuations in any of our blocks of business can have a significant impact on
loss ratios." Mr. Bates continued, "As a result of our earlier pricing actions
and disciplined risk management, we have experienced a noticeable improvement in
our dental loss ratio during the third quarter, as compared to the first half of
the year."
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Additionally, the recognition of one-time costs associated with
Guarantee Life's reorganization activities will impact third quarter earnings.
Mr. Bates said, "As a result of our continuing efforts to operate as
effectively and efficiently as possible, organizational changes were made during
September which will reduce annual operating expenses by $2.4 million on a
pre-tax basis. We have booked a one-time expense of approximately $440,000,
after taxes, for severance arrangements, which negatively affects third quarter
earnings by about $0.05 per diluted share." Mr. Bates concluded, "We continually
evaluate opportunities within the Company to become more streamlined and
competitive in today's marketplace."
The Guarantee Life Companies Inc. operates through three subsidiaries.
Its principal subsidiary is Guarantee Life Insurance Company. The other two
subsidiaries are Westfield Life Insurance Company and PFG, Inc., including its
principal subsidiary, AGL Life Assurance Company. Guarantee Life markets group
life and health insurance products to employers and other groups, and life
insurance and annuities to individuals. The principal business operations are
conducted in 48 states and the District of Columbia. Insurance coverage and
related benefits are provided through more than 315,000 individual and group
policies issued to almost 2.0 million customers. Founded in 1901, Guarantee Life
is headquartered in Omaha, Nebraska.
Certain statements contained in this press release, including statements
regarding the anticipated development and expansion of the Company's business,
the intent, belief, or current expectations of the Company, it's directors, or
its officers, primarily with respect to the future operating performance of the
Company, and other statements contained herein regarding matters that are not
historical facts, are "forward-looking" statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995). Because such statements
are subject to risks and uncertainties, actual results may differ materially
from those expressed or implied by such forward-looking statements. Factors that
could cause actual results to differ materially from those expressed or
implied by such forward-looking statements include, but are not limited to,
uncertainties regarding the market, difficulties inherent in consummating and
merging acquisitions, and those risks and uncertainties discussed in filings
made by the Company with the Securities and Exchange Commission.
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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 hereunto duly authorized.
THE GUARANTEE LIFE COMPANIES INC.
By /s/ Richard A. Spellman
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Richard A. Spellman, Senior Vice President,
General Counsel and Secretary
October 7, 1998
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