Torchmark Corporation Reports 9% Increase in First Quarter 2001 Earnings Per Share From Operations

Apr 19, 2001, 01:00 ET from Torchmark Corporation

    BIRMINGHAM, Ala., April 19 /PRNewswire/ -- Torchmark Corporation
 (NYSE:   TMK) reported today that net operating income for the first quarter,
 2001 was $.75 per share ($95 million), compared with $.69 per share
 ($90 million) for the first quarter of 2000, a 9% per share increase.
 
     OPERATING HIGHLIGHTS -- comparing first quarter 2001 with the first
 quarter of 2000:
 
      --  For the seventh consecutive quarter, total premium revenues increased
         at least 8% over the comparable prior year period.
      --  Growth in total sales was at least 10% for the 11th consecutive
         quarter when compared with the comparable prior year period.
      --  Medicare supplement sales were up 20% for the quarter on increasingly
         difficult comparisons.
      --  The UA Branch Office Agency, selling primarily Medicare supplements,
         increased its agent count by 119 to 3,780 agents during the quarter.
      --  American Income had 11% sales growth indicating this sales unit's
         "turnaround" is on schedule.
      --  Underwriting margins were steady at 25% for life insurance and 18%
         for health insurance when compared with the prior year period.
 
     The following chart displays the key per share components of Torchmark's
 net operating income:
 
 
                                         Per Share Net Operating Income
                                   Quarter Ended    Quarter Ended
                                     March 31,        March 31,          %
                                       2001             2000           Change
 
     Insurance Underwriting Income      $.73            $.67             9
 
     Excess Investment Income            .47             .44             7
 
     Other                              (.05)           (.06)
 
     Income Tax                         (.39)           (.35)           11
 
     Net Operating Income               $.75            $.69             9
 
 
     INSURANCE OPERATIONS -- comparing the first quarter of 2001 with the first
 quarter of 2000:
     Total premium revenue for the quarter increased 9% to $547 million.  Life
 premium revenue increased 5% to $281 million.  Health premium revenue
 increased 12% to $253 million.
     Insurance net underwriting income increased 6% to $93 million.  The life
 underwriting margin (before administrative expenses) was 25% of premium and
 the health underwriting margin was 18% of premium, both the same as for the
 2000 quarter.  Insurance underwriting results are summarized in the following
 chart:
 
 
                                      Insurance Net Underwriting Income
                                            (dollars in millions)
                            Quarter Ended         Quarter Ended
                              March 31,    % of     March 31,    % of     %
                                 2001    Premium      2000     Premium  Change
     Underwriting Income before
       Administrative Expenses
         Life                  $70.0        25        $66.4        25      5
         Health                 45.1        18         40.6        18     11
         Annuity                 6.4                    6.1                4
                               121.5                  113.1
     Other Income                1.2                    1.2
     Administrative Expenses   (30.0)        5        (27.3)        5     10
 
     Insurance Net Underwriting
      Income                   $92.7                  $87.1                6
 
     Total insurance sales for the quarter were $141 million, a 10% increase.
 Total life insurance sales of $77 million were up 6%.  As planned, Torchmark's
 largest life sales unit, Direct Response, held gross life sales growth to
 4% to focus on higher profit new business.  American Income had its first
 quarter in recent years with double-digit growth in life sales (11%).
     Total health insurance sales increased 15% to $64 million, including
 Medicare supplement sales of $53 million, which increased 20%.  Total health
 sales by the two United American agencies were $58 million, an 18% increase,
 and were primarily Medicare supplements.  As expected, Medicare supplement
 sales declined 30% compared to the fourth quarter 2000 when many Medicare
 beneficiaries bought Medicare supplements because their HMOs cancelled their
 coverage effective January 1, 2001.
     Sales by distribution channels are shown in the following chart:
 
 
                            Annualized Life and Health Premium Issued
                                      (dollars in millions)
 
                           Life               Health              Total
                   Quarter Ended       Quarter Ended       Quarter Ended
                     March 31,    %      March 31,    %      March 31,      %
                    2001   2000  Chg.  2001    2000  Chg.  2001      2000 Chg.
 
     Direct
      Response      $30.8  $29.5   4    $1.3   $1.9  (29)  $32.2    $31.4    2
 
     LNL Exclusive
      Agency         13.5   13.4   1     2.3    2.4   (3)   15.9     15.8    0
 
     American Income
      Agency         14.7   13.2  11     2.3    2.0   11    16.9     15.3   11
 
     United American
      Agencies
       Branch Office  1.2    1.1   8    36.6   29.6   24    37.7     30.7   23
       Independent
        Agency        7.1    5.3  36    21.6   19.9    9    28.7     25.2   14
 
     Other            9.1    9.7  (6)    ---    ---  ---     9.1      9.7   (6)
 
     Total Premium
      Issued        $76.5  $72.2   6   $64.1  $55.8   15  $140.6   $128.0   10
 
 
     INVESTMENTS -- comparing the first quarter of 2001 to the first quarter of
 2000:
     Excess investment income (investment income less interest credited on net
 policy liabilities and less financing costs) was $59 million compared with
 $57 million.  Investment income increased 2% to $122 million.  Financing costs
 decreased 7% to $16 million due to a reduction in outstanding long and
 short-term debt.  Total debt (excluding MIPS) was reduced by $112 million, or
 14%, from March 31, 2000 to March 31, 2001.
     On March 26, 2001 Torchmark announced that on April 30, 2001 its special
 purpose subsidiary, Torchmark Capital L.L.C., will redeem 2 million of the
 8 million outstanding shares of its callable 9.18% Cumulative Monthly Income
 Preferred Securities, Series A (MIPS).  The redemption price will be at par,
 $25 per share, plus the accrued and unpaid dividend to April 30, 2001.
 Torchmark does not plan to issue new securities to fund this redemption.
 
     SHARE REPURCHASE -- first quarter of 2001:
     In accordance with its ongoing share repurchase program, Torchmark
 repurchased 449 thousand shares of Torchmark Corporation common stock for a
 total cost of $15 million ($33.69 average cost per share).  At March 31, 2001,
 there were 126.0 million Torchmark shares outstanding (127.0 million on a
 diluted basis).
 
     TORCHMARK CONSOLIDATED
     Consolidated return on equity for the quarter ended March 31, 2001,
 (excluding the effect of SFAS 115 and net realized investment gains) was
 16.1%.  Total assets at March 31, 2001, were $12.8 billion and shareholders'
 equity was $2.4 billion.  Book value per share at March 31, 2001 was
 $19.14, excluding the effect of SFAS 115.  The debt to capital ratio,
 excluding the effect of SFAS 115, was 20.4% at March 31, 2001 as compared with
 24.7% at March 31, 2000 (26.3% and 30.8%, respectively, when the Monthly
 Income Preferred Securities are treated as debt rather than equity).
     Torchmark's total operating revenues for the first quarter of 2001
 increased 8% to $668 million.  Net operating income for the first quarter of
 2001 ($95 million) differs from net income by net realized investment gains
 and related DAC adjustment, a loss on the redemption of debt, and a loss on
 discontinued operations (all items net of taxes).  Net operating income for
 the first quarter of 2000 ($90 million) differs from net income for that
 quarter by net realized investment losses and related DAC adjustment (net of
 taxes).
 
     EARNINGS RELEASE CONFERENCE CALL WEBCAST
     Torchmark will provide a live audio webcast of its first quarter earnings
 release conference call with financial analysts at 10:00 a.m. (eastern time)
 today, April 19, 2001.  Access to the live webcast and replays will be
 available at www.torchmarkcorp.com on the Investor Relations page, at the
 "Conference Call on the Web" icon, or at www.PRNewswire.com.  Supplemental
 financial reports for the quarter will be available April 19th on the Investor
 Relations page of the Torchmark website at the "Financial Reports" icon.
 
     Caution regarding forward-looking statements:
     This press release may contain forward-looking statements within the
 meaning of the federal securities laws.  These prospective statements reflect
 management's current expectations, but are not guarantees of future
 performance.  Accordingly, please refer to Torchmark's cautionary statement
 regarding forward-looking statements, and the business environment in which
 the Company operates, contained in the Company's Form 10-K for the fiscal year
 ended December 31, 2000, on file with the Securities and Exchange Commission.
 Torchmark specifically disclaims any obligation to update or revise any
 forward-looking statement because of new information, future developments or
 otherwise.
 
     Torchmark Corporation is a financial services holding company specializing
 in life and supplemental health insurance for "middle income" Americans
 marketed through multiple distribution channels including direct response, and
 exclusive and independent agencies.  Subsidiary Globe Life and Accident is a
 nationally recognized direct-response provider of life insurance known for its
 administrative efficiencies.  United American has been a nationally recognized
 provider of Medicare supplement health insurance since 1966.  Liberty National
 Life, one of the oldest traditional life insurers in the Southeast, is the
 largest life insurer in its home state of Alabama.  American Income Life is
 nationally recognized for providing supplemental life insurance to labor union
 members.
 
 
                                            Summary of Financial Results
                                        (in thousands, except per share data)
                                               Quarter Ended March 31,
                                                2001               2000
     Total Revenue from Operations *         $668,222            $620,876
     Net Operating Income **                  $95,449             $90,090
       Per diluted share                          .75                 .69
     Net Income                               $96,398             $88,882
       Per diluted share                          .76                 .68
     Weighted Average Diluted Shares
      Outstanding (000 omitted)               126,772             130,823
 
      *  Total revenue from operations excludes net realized investment gains
         and losses.
      ** Net operating income excludes net realized investment gains or losses
         net of the related DAC adjustment (net of taxes), and in the 2001
         period, excludes a loss on redemption of debt and loss on discontinued
         operations (both net of taxes).
 
 

SOURCE Torchmark Corporation
    BIRMINGHAM, Ala., April 19 /PRNewswire/ -- Torchmark Corporation
 (NYSE:   TMK) reported today that net operating income for the first quarter,
 2001 was $.75 per share ($95 million), compared with $.69 per share
 ($90 million) for the first quarter of 2000, a 9% per share increase.
 
     OPERATING HIGHLIGHTS -- comparing first quarter 2001 with the first
 quarter of 2000:
 
      --  For the seventh consecutive quarter, total premium revenues increased
         at least 8% over the comparable prior year period.
      --  Growth in total sales was at least 10% for the 11th consecutive
         quarter when compared with the comparable prior year period.
      --  Medicare supplement sales were up 20% for the quarter on increasingly
         difficult comparisons.
      --  The UA Branch Office Agency, selling primarily Medicare supplements,
         increased its agent count by 119 to 3,780 agents during the quarter.
      --  American Income had 11% sales growth indicating this sales unit's
         "turnaround" is on schedule.
      --  Underwriting margins were steady at 25% for life insurance and 18%
         for health insurance when compared with the prior year period.
 
     The following chart displays the key per share components of Torchmark's
 net operating income:
 
 
                                         Per Share Net Operating Income
                                   Quarter Ended    Quarter Ended
                                     March 31,        March 31,          %
                                       2001             2000           Change
 
     Insurance Underwriting Income      $.73            $.67             9
 
     Excess Investment Income            .47             .44             7
 
     Other                              (.05)           (.06)
 
     Income Tax                         (.39)           (.35)           11
 
     Net Operating Income               $.75            $.69             9
 
 
     INSURANCE OPERATIONS -- comparing the first quarter of 2001 with the first
 quarter of 2000:
     Total premium revenue for the quarter increased 9% to $547 million.  Life
 premium revenue increased 5% to $281 million.  Health premium revenue
 increased 12% to $253 million.
     Insurance net underwriting income increased 6% to $93 million.  The life
 underwriting margin (before administrative expenses) was 25% of premium and
 the health underwriting margin was 18% of premium, both the same as for the
 2000 quarter.  Insurance underwriting results are summarized in the following
 chart:
 
 
                                      Insurance Net Underwriting Income
                                            (dollars in millions)
                            Quarter Ended         Quarter Ended
                              March 31,    % of     March 31,    % of     %
                                 2001    Premium      2000     Premium  Change
     Underwriting Income before
       Administrative Expenses
         Life                  $70.0        25        $66.4        25      5
         Health                 45.1        18         40.6        18     11
         Annuity                 6.4                    6.1                4
                               121.5                  113.1
     Other Income                1.2                    1.2
     Administrative Expenses   (30.0)        5        (27.3)        5     10
 
     Insurance Net Underwriting
      Income                   $92.7                  $87.1                6
 
     Total insurance sales for the quarter were $141 million, a 10% increase.
 Total life insurance sales of $77 million were up 6%.  As planned, Torchmark's
 largest life sales unit, Direct Response, held gross life sales growth to
 4% to focus on higher profit new business.  American Income had its first
 quarter in recent years with double-digit growth in life sales (11%).
     Total health insurance sales increased 15% to $64 million, including
 Medicare supplement sales of $53 million, which increased 20%.  Total health
 sales by the two United American agencies were $58 million, an 18% increase,
 and were primarily Medicare supplements.  As expected, Medicare supplement
 sales declined 30% compared to the fourth quarter 2000 when many Medicare
 beneficiaries bought Medicare supplements because their HMOs cancelled their
 coverage effective January 1, 2001.
     Sales by distribution channels are shown in the following chart:
 
 
                            Annualized Life and Health Premium Issued
                                      (dollars in millions)
 
                           Life               Health              Total
                   Quarter Ended       Quarter Ended       Quarter Ended
                     March 31,    %      March 31,    %      March 31,      %
                    2001   2000  Chg.  2001    2000  Chg.  2001      2000 Chg.
 
     Direct
      Response      $30.8  $29.5   4    $1.3   $1.9  (29)  $32.2    $31.4    2
 
     LNL Exclusive
      Agency         13.5   13.4   1     2.3    2.4   (3)   15.9     15.8    0
 
     American Income
      Agency         14.7   13.2  11     2.3    2.0   11    16.9     15.3   11
 
     United American
      Agencies
       Branch Office  1.2    1.1   8    36.6   29.6   24    37.7     30.7   23
       Independent
        Agency        7.1    5.3  36    21.6   19.9    9    28.7     25.2   14
 
     Other            9.1    9.7  (6)    ---    ---  ---     9.1      9.7   (6)
 
     Total Premium
      Issued        $76.5  $72.2   6   $64.1  $55.8   15  $140.6   $128.0   10
 
 
     INVESTMENTS -- comparing the first quarter of 2001 to the first quarter of
 2000:
     Excess investment income (investment income less interest credited on net
 policy liabilities and less financing costs) was $59 million compared with
 $57 million.  Investment income increased 2% to $122 million.  Financing costs
 decreased 7% to $16 million due to a reduction in outstanding long and
 short-term debt.  Total debt (excluding MIPS) was reduced by $112 million, or
 14%, from March 31, 2000 to March 31, 2001.
     On March 26, 2001 Torchmark announced that on April 30, 2001 its special
 purpose subsidiary, Torchmark Capital L.L.C., will redeem 2 million of the
 8 million outstanding shares of its callable 9.18% Cumulative Monthly Income
 Preferred Securities, Series A (MIPS).  The redemption price will be at par,
 $25 per share, plus the accrued and unpaid dividend to April 30, 2001.
 Torchmark does not plan to issue new securities to fund this redemption.
 
     SHARE REPURCHASE -- first quarter of 2001:
     In accordance with its ongoing share repurchase program, Torchmark
 repurchased 449 thousand shares of Torchmark Corporation common stock for a
 total cost of $15 million ($33.69 average cost per share).  At March 31, 2001,
 there were 126.0 million Torchmark shares outstanding (127.0 million on a
 diluted basis).
 
     TORCHMARK CONSOLIDATED
     Consolidated return on equity for the quarter ended March 31, 2001,
 (excluding the effect of SFAS 115 and net realized investment gains) was
 16.1%.  Total assets at March 31, 2001, were $12.8 billion and shareholders'
 equity was $2.4 billion.  Book value per share at March 31, 2001 was
 $19.14, excluding the effect of SFAS 115.  The debt to capital ratio,
 excluding the effect of SFAS 115, was 20.4% at March 31, 2001 as compared with
 24.7% at March 31, 2000 (26.3% and 30.8%, respectively, when the Monthly
 Income Preferred Securities are treated as debt rather than equity).
     Torchmark's total operating revenues for the first quarter of 2001
 increased 8% to $668 million.  Net operating income for the first quarter of
 2001 ($95 million) differs from net income by net realized investment gains
 and related DAC adjustment, a loss on the redemption of debt, and a loss on
 discontinued operations (all items net of taxes).  Net operating income for
 the first quarter of 2000 ($90 million) differs from net income for that
 quarter by net realized investment losses and related DAC adjustment (net of
 taxes).
 
     EARNINGS RELEASE CONFERENCE CALL WEBCAST
     Torchmark will provide a live audio webcast of its first quarter earnings
 release conference call with financial analysts at 10:00 a.m. (eastern time)
 today, April 19, 2001.  Access to the live webcast and replays will be
 available at www.torchmarkcorp.com on the Investor Relations page, at the
 "Conference Call on the Web" icon, or at www.PRNewswire.com.  Supplemental
 financial reports for the quarter will be available April 19th on the Investor
 Relations page of the Torchmark website at the "Financial Reports" icon.
 
     Caution regarding forward-looking statements:
     This press release may contain forward-looking statements within the
 meaning of the federal securities laws.  These prospective statements reflect
 management's current expectations, but are not guarantees of future
 performance.  Accordingly, please refer to Torchmark's cautionary statement
 regarding forward-looking statements, and the business environment in which
 the Company operates, contained in the Company's Form 10-K for the fiscal year
 ended December 31, 2000, on file with the Securities and Exchange Commission.
 Torchmark specifically disclaims any obligation to update or revise any
 forward-looking statement because of new information, future developments or
 otherwise.
 
     Torchmark Corporation is a financial services holding company specializing
 in life and supplemental health insurance for "middle income" Americans
 marketed through multiple distribution channels including direct response, and
 exclusive and independent agencies.  Subsidiary Globe Life and Accident is a
 nationally recognized direct-response provider of life insurance known for its
 administrative efficiencies.  United American has been a nationally recognized
 provider of Medicare supplement health insurance since 1966.  Liberty National
 Life, one of the oldest traditional life insurers in the Southeast, is the
 largest life insurer in its home state of Alabama.  American Income Life is
 nationally recognized for providing supplemental life insurance to labor union
 members.
 
 
                                            Summary of Financial Results
                                        (in thousands, except per share data)
                                               Quarter Ended March 31,
                                                2001               2000
     Total Revenue from Operations *         $668,222            $620,876
     Net Operating Income **                  $95,449             $90,090
       Per diluted share                          .75                 .69
     Net Income                               $96,398             $88,882
       Per diluted share                          .76                 .68
     Weighted Average Diluted Shares
      Outstanding (000 omitted)               126,772             130,823
 
      *  Total revenue from operations excludes net realized investment gains
         and losses.
      ** Net operating income excludes net realized investment gains or losses
         net of the related DAC adjustment (net of taxes), and in the 2001
         period, excludes a loss on redemption of debt and loss on discontinued
         operations (both net of taxes).
 
 SOURCE  Torchmark Corporation

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http://www.torchmarkcorp.com