-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SLKCG+Tk98iE/NVfGy6LONmnT1HF1tdENxjVfkejE6C923MJaHYjKKvgt3/N7LK5 ugbWVDRM0Ose5N9QY6SmuA== 0000024090-98-000002.txt : 19980518 0000024090-98-000002.hdr.sgml : 19980518 ACCESSION NUMBER: 0000024090-98-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980515 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS INC CENTRAL INDEX KEY: 0000024090 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 840755371 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-13004 FILM NUMBER: 98621684 BUSINESS ADDRESS: STREET 1: P O BOX 149151 CITY: AUSTIN STATE: TX ZIP: 78714 BUSINESS PHONE: 5128377100 MAIL ADDRESS: STREET 1: P O BOX 149151 CITY: AUSTIN STATE: TX ZIP: 78714 FORMER COMPANY: FORMER CONFORMED NAME: CONTINENTAL INVESTORS LIFE INC DATE OF NAME CHANGE: 19881222 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X]Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the period ended March 31, 1998 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: 1-13004 CITIZENS, INC. (Exact name of registrant as specified in its charter) Colorado 84-0755371 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 400 East Anderson Lane, Austin, Texas 78752 (Address of principal executive offices) (Zip Code) (512) 837-7100 (Registrant's telephone number, including area code) 7801 North Interstate 35, Austin, Texas 78753 (Former name, former address and former fiscal year, if changed since last report.) Indicate by 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. [X] Yes [ ] No As of March 31, 1998, Registrant had 20,765,088 shares of Class A common stock, No Par Value, outstanding and 621,049 shares of Class B common stock, No Par Value, outstanding. CITIZENS, INC. AND SUBSIDIARIES INDEX Page Number Part I. Financial Information Item 1. Financial Statements Balance sheets, March 31, 1998 (Unaudited) and December 31, 1997 3 Statements of Operations, Three-Months Ended March 31, 1998 and 1997 (Unaudited) 5 Statements of Cash Flows, Three-Months Ended March 31, 1998 and 1997 (Unaudited) 6 Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations 9 Part Other Information 15 II. CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, 1998 and December 31, 1997 (Unaudited) March 31, December 1998 31, 1997 Assets Investments: Fixed maturities held for investment, at amortized cost (market $5,722,000 in 1998 and $5,704,000 in 1997) $5,614,442 $ 5,617,131 Fixed maturities available for sale, at lower of cost or market (cost $133,339,097 in 1998 and $130,621,420 in 1997 135,739,097 133,021,681 Equity securities, at market (cost in $815,270 in 1998 and $983,513 in 1997) 800,378 978,391 Mortgage loans on real estate (net of reserve of $50,000 in 1998 and 1997) 1,258,149 1,287,295 Policy loans 20,554,697 20,466,184 Guaranteed student loans (net of reserve of $10,000 in 1998 and 1997) 32,596 81,681 Other long-term investments 896,016 899,329 Short-term investments 700,000 300,000 Total investments 165,595,375 162,651,692 Cash 4,314,450 6,454,956 Prepaid reinsurance 1,424,865 - Reinsurance recoverable 1,719,205 2,069,423 Other receivables 956,223 1,007,878 Accrued investment income 1,458,586 2,010,512 Deferred policy acquisition costs 36,507,763 37,107,070 Cost of insurance acquired 10,255,627 10,639,667 Excess of cost over net assets 17,002,957 17,466,123 acquired Other intangible assets 2,520,125 2,596,925 Property, plant and equipment 5,700,190 5,795,573 Deferred Federal income tax 1,243,209 572,430 Other assets 979,040 1,147,186 Total assets 249,677,615 249,519,435 (Continued) CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED BALANCE SHEETS March 31, 1998 and December 31, 1997 (Unaudited) March 31, December 1998 31, 1997 Liabilities and Stockholders' Equity Liabilities: Future policy benefit reserves 153,759,218 152,119,042 Dividend accumulations 4,772,091 4,789,194 Premium deposits 2,059,248 2,010,102 Policy claims payable 2,762,466 3,488,484 Other policyholders' funds 1,906,586 1,873,588 Total policy liabilities 165,259,609 164,280,410 Other liabilities 1,950,973 2,703,346 Commissions payable 774,929 880,811 Notes payable 933,208 937,430 Federal income tax payable 768,745 762,992 Amounts held on deposit 217,143 372,748 Total liabilities 169,904,607 169,937,737 Stockholders' Equity: Common stock: Class A, no par value, 50,000,000 shares authorized, 21,838,494 shares issued in 1998 and 1997, including shares in treasury of 1,944,735 in 1998 and 1997 52,790,642 52,790,643 Class B, no par value, 1,000,000 shares authorized, 621,049 shares issued and outstanding in 1998 and 1997 283,262 283,262 Unrealized gain on investments 1,659,517 1,580,790 Retained earnings 26,968,741 26,856,157 81,702,162 81,510,852 Treasury stock, at cost (1,929,154) (1,929,154) Total stockholders' equity 79,773,008 79,581,698 Commitments and contingencies Total liabilities and stockholders' 249,677,615 249,519,435 equity CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three-Months Ended March 31, 1998 and 1997 (Unaudited) Three-months ended March 31, 1998 1997 Revenues: Premiums $13,420,674 $11,510,447 Annuity and Universal life 66,498 104,268 considerations Net investment income 2,842,631 2,353,826 Other income 118,419 63,977 Realized gains on investments 30,651 117,840 Interest expense (18,592) (10,365) 16,460,281 14,139,993 Benefits and expenses: Insurance benefits paid or provided: Increase in future policy benefit 1,511,674 1,427,297 reserves Policyholders' dividends 690,280 479,687 Claims and surrenders 6,771,493 7,019,684 Annuity expenses 98,572 185,932 9,072,019 9,112,600 Commissions 2,886,216 2,288,367 Underwriting, acquisition and 2,859,351 2,226,492 insurance expenses Capitalization of deferred policy (1,514,707) (2,062,089) acquisition costs Amortization of deferred policy 2,114,014 2,345,108 acquisition costs Amortization of cost of insurance acquired and excess of cost over net 893,882 420,171 assets acquired 16,310,775 14,330,649 Income (loss) before federal income $149,506 $(190,656) tax Federal income tax: Federal income tax expense (benefit) 36,922 (68,972) Net Income (Loss) $112,584 $(121,684) Per Share Amounts: Basic and diluted earnings per share $0.01 $(0.01) of common stock Weighted average shares outstanding 21,386,137 20,470,711 CITIZENS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three-Months Ended March 31, 1998 and 1997 (Unaudited) Three-months ended March 31, 1998 1997 Cash flows from operating activities: Net gain (loss) 112,584 (121,684) Adjustments to reconcile net gain to net cash provided by operating activities: Accrued investment income 551,926 314,914 Deferred policy acquisition costs 599,307 283,019 Amortization of cost of insurance acquired and excess cost over net assets acquired 847,206 420,171 Prepaid reinsurance (1,424,865) (1,717,236) Reinsurance recoverable 350,218 (907,404) Other receivables 51,655 (67,048) Deferred Federal income tax (670,779) 0 Property, plant and equipment 95,383 102,278 Future policy benefit reserves 1,640,176 2,215,825 Other policy liabilities (660,977) (46,684) Commissions payable and other 858,256 (1,302,182) liabilities Amounts received (paid out) as trustee (155,605) 7,848 Federal income tax payable 5,753 103,351 Other, net (1,624,935) 981,785 Net cash provided (used) by operating activities 575,303 (266,953) Cash flows from investing activities: Maturity of fixed maturities 1,126,716 966,518 Sale of fixed maturities available for 5,184,949 7,841,188 sale Purchase of fixed maturities available (8,764,433) (9,724,071) for sale Sale of equity securities 151,463 0 Principal payments on mortgage loans 29,146 106,127 Net change in guaranteed student loans 49,085 (6,162) Purchase of other long-term 0 (19,174) investments Increase in policy loans (net) (88,513) (9,593) Net cash provided (used) by investing activities (2,311,587) (845,167) (Continued) CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three-Months Ended March 31, 1998 and 1997 (Unaudited) Three-months ended March 31, 1998 1997 Cash flows from financing activities: Exercise of stock options 0 140,500 Sale of stock 0 192,426 Repayment of note payable (4,222) (10,498) Net cash provided (used) by financing activities (4,222) 322,428 Net decrease in cash and short-term investments (1,740,506) (255,786) Cash and short term investments at beginning of period 6,754,956 6,285,383 Cash and short term investments at end $5,014,450 $6,029,597 of period CITIZENS, INC. AND CONSOLIDATED SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1998 (Unaudited) (1) Financial Statements The balance sheet for March 31, 1998, the statements of operations for the three-month periods ended March 31, 1998 and 1997, and the statements of cash flows for the three-month periods then ended have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and changes in cash flows at March 31, 1998 and for comparative periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1997 annual 10-K report filed with the Securities and Exchange Commission. The results of operations for the period ended March 31, 1998 are not necessarily indicative of the operating results for the full year. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS Certain statements contained in this Form 10Q are not statements of historical fact and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act (the "Act"), including, without limitation, the italicized statements and the statements specifically identified as forward- looking statements within this document. In addition, certain statements in future filings by the Company with the Securities and Exchange Commission, in press releases, and in oral and written statements made by or with the approval of the Company which are not statements of historical fact constitute forward- looking statements within the meaning of the Act. Examples of forward-looking statements, include, but are not limited to: (i) projections of revenues, income or loss, earnings or loss per share, the payment or non-payment of dividends, capital structure, and other financial items, (ii) statements of plans and objectives of the Company or its management or Board of Directors including those relating to products or services, (iii) statements of future economic performance and (iv) statements of assumptions underlying such statements. Words such as "believes", "anticipates", "expects", "intends", "targeted", "may", "will" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: (i) the strength of foreign and U.S. economies in general and the strength of the local economies in which operations are conducted; (ii) the effects of and changes in trade, monetary and fiscal policies and laws; (iii) inflation, interest rates, market and monetary fluctuations and volatility; (iv) the timely development and acceptance of new products and services and perceived overall value of these products and services by existing and potential customers; (v) changes in consumer spending, borrowing and saving habits; (vi) concentrations of business from persons residing in third world countries; (vii) acquisitions; (viii) the persistency of existing and future insurance policies sold by the Company and its subsidiaries; (ix) the dependence of the Company on its Chairman of the Board; (x) the ability to control expenses; (xi) the effect of changes in laws and regulations (including laws and regulations concerning insurance) with which the Company and its subsidiaries must comply, (xii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as the Financial Accounting Standards Board, (xiii) changes in the Company's organization and compensation plans; (xiv) the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; and (xv) the success of the Company at managing the risks involved in the foregoing. Such forward-looking statements speak only as of the date on which such statements are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made to reflect the occurrence of unanticipated events. Three-months ended March 31, 1998 and 1997 Net income for the three-months ended March 31, 1998 was $112,584 compared to a loss of $121,684 for the same period in 1997. Revenues increased to $16,460,2819,763,884, an increase of 16.4% over the first three months of 1997 when revenues were $14,139,993. The increase in revenues was driven by a 16.6% increase in premium income and a 20.8% increase in investment income. Increased revenues from 1997 acquisitions coupled with increased international sales offset higher expenses associated with the conversion of these two companies and fueled the improved earnings. Premium income for the first three months of 1998 was $13,420,674 compared to $11,510,447 for the same period in 1997. Production of new premiums by the agents of Citizens Insurance Company of America ("CICA") was higher during the first quarter of 1998 than in the previous year. Management introduced a new line of ordinary whole life products during January 1998 which will, in the opinion of management, have considerable impact on new production once they are assimilated by the marketing force. Additionally, the premiums of United Security Life Insurance Company (USLIC) and National Security Life and Accident Insurance Co. (NSLIC), both acquired in 1997, are included in the 1998 results. Net investment income increased 20.8% in the first three months of 1998 compared to the same period in 1997. Net investment income for the three months ended March 31, 1998 was $2,842,631 compared to $2,353,826 in 1997. This increase reflects the earnings on the growth in the Company's asset base that is occurring, as well as the earnings on assets of USLIC and NSLIC. A shift in investment strategy implemented in 1996 to shift away from U.S. Treasury instruments to government guaranteed mortgage backed securities and agency issues will, in the opinion of management, continue to offer greater return with a minimum amount of additional risk. Claims and surrenders expense decreased from $7,019,684 at March 31, 1997 to $6,771,493 for the same period in 1998. Death claims decreased to $914,381 in 1998 from $1,375,403 in 1997. While management is pleased with the decrease, it believes the decline to be a temporary benefit of timing. Surrender expense decreased to $3,343,683 from $3,845,231. Management constantly monitors this activity to insure that the Company's persistency is holding at levels equal to or above assumptions. The decrease in the first quarter is, in management's opinion, a result of the settling of the American Liberty block of business following the acquisition and subsequent merger of said Company, as well as a re-emphasis on conservation on the part of CICA's sales force. Coupons and endowments increased to $1,133,891 in 1998 from $1,092,958 in 1997. The endowment benefits are factored into the premium much like dividends and therefor, the increase does not pose a threat to future profitability. Management expects to see further increases in this category in the future. Accident and Health benefits were $1,142,036 in 1998, compared to $490,599 in 1997. This increase is directly related to the USLIC and NSLIC blocks of business which consist of large amounts of scheduled benefit daily indemnity policies and were not included in the first quarter of 1997 due to the date of their respective acquisition. The remaining components of claims and expenses, consisting of supplemental contracts and payments of dividends and endowments previously earned and held at interest, amounted to $237,502 in 1998, compared to $215,493 in 1997. Commission expense increased to $2,886,216 from $2,288,367. The increase reflects the execution of an agreement with Worldwide Professional Associates, Inc. to manage the Company's international marketing operations in exchange for an overriding commission. This agreement, as discussed below, is expected to generate significant expense savings in future years. Deferred policy acquisition costs capitalized in 1998 were $1,514,707 compared to $2,062,089 in the prior year. Amortization of these costs was $2,114,014 for the first quarter of 1998 compared to $2,345,108 for 1997. Underwriting, acquisition and insurance expenses increased from $2,226,492 in the first quarter of 1997 to $2,859,351. The increase is primarily attributable to the absorption of the operating expenses of USLIC and NSLIC. Management believes that through economies of scale which can be achieved in the future after conversion of systems of these companies that additional expense reductions can be made. The first quarter of 1997 includes a one-time charge of approximately $400,000 as the result of the acquisition of a 5.52% interest in First American Investment Corporation, a 94.48% subsidiary of American Liberty. Management expects to achieve significant reductions in expenses due to the execution of an agreement with Worldwide Professional Associates, Inc., an international marketing company, in April, 1997, to manage the Company's international sales activities in exchange for an overriding commission on new sales. By taking such actions, management believes a significant amount fixed overhead can be converted to a variable expense in 1998 and thereafter. Management has utilized firms such as this in previous periods with great success at obtaining increases in sales and expense reductions. Amortization of cost of insurance acquired and excess of cost over net assets acquired increased to $893,882 in 1998 from $420,171 in 1997. The increase is attributable to the goodwill and cost of insurance recorded on the acquisitions of USLIC, NSLIC, American Liberty and Insurance Investors & Holding. Because of the slowdown in sales activity on the part of the agency operations previously associated with American Liberty, management is monitoring the goodwill associated with the acquisition of this company in 1995. Should actual production levels be less than anticipated production, the potential exists that the Company would have to charge-off the goodwill associated with such decline. Management, in conjunction with its independent actuaries is monitoring this recoverability on a quarterly basis. At December 31, 1997, all goodwill on the Company's balance sheet was recoverable within the period of amortization. Production from these agents began to recover in late 1997; however, due to the nature of their market, management believes it will be the third quarter of 1998 before significant levels of production are obtained from these agents. As such, a $250,000 write-down of the American Liberty goodwill was recorded during the first quarter of 1998. Management believes that there should not be future issues associated with such goodwill recovery; however, in the event any such amount proved unrecoverable, a charge in the appropriate period will be booked. Liquidity and Capital Resources Stockholders' equity increased to $79,773,008 at March 31, 1998 from $79,581,698 at December 31, 1997. The income from operations, as well as an increase in the market value of the Company's bond portfolio, were the reasons for the increase. Invested assets grew to $165,595,375 in 1998 from $162,651,692 at December 31, 1997. At December 31, 1997, fixed maturities have been categorized into two classifications: Fixed maturities held to maturity, which are valued at amortized cost, and fixed maturities available for sale which are valued at market. The Company does not have a plan to make material dispositions of fixed maturities during 1998; however, because of continued uncertainty regarding long-term interest rates, management cannot rule out sales during 1998. Fixed maturities held to maturity, amounting to $5,614,442, consist primarily of U.S. Treasury securities. Management has the intent and believes the Company has the ability to hold the securities to maturity. The Company's mortgage loan portfolio, which constitutes 0.8% of invested assets at December 31, 1997 and March 31, 1998, has historically been composed of small residential loans in Texas. At December 31, 1997 and March 31, 1998, one mortgage loan was in default with an outstanding principal balance of $31,000. Management has established a reserve of $50,000 at March 31, 1998 and December 31, 1997 (approximately 3% of the mortgage portfolio's balance) to cover potential unforeseen losses in the Company's mortgage portfolio. Policy loans comprise 12.4% of invested assets at March 31, 1998 and December 31, 1997. These loans, which are secured by the underlying policy values, have yields ranging from 5% to 10% percent and maturities that are related to the maturity or termination of the applicable policies. Management believes that the Company maintains more than adequate liquidity despite the uncertain maturities of these loans. Cash balances of the Company in its primary depository, Texas Commerce Bank Austin, Texas, were significantly in excess of Federal Deposit Insurance Corporation (FDIC) coverage at March 31, 1998 and December 31, 1997. Management monitors the solvency of all financial institutions in which it has funds to minimize the exposure for loss. At March 31, 1998, management does not believe the Company is at risk for such a loss. During 1998, the Company intends to utilize short-term Treasury Bills and highly- rated commercial paper as cash management tools to minimize excess cash balances and enhance return. In February 1992, the Company paid cash for an 80,000 square foot office building in Austin, Texas to serve as its primary office. This building will, in the opinion of management, provide adequate space for the Company's operations for many years. The Company relocated to the building in September 1993. The Company occupies approximately 35,000 square feet of space in the building, which is 100% leased. The Company's former office property, consisting of approximately 13,000 square feet in Austin, with a carrying value of $104,000 was leased to a third party on a triple-net basis for three years during 1995. At March 31, 1998, this property was under a sales contract for $850,000 with closing expected on or before July 7, 1998. The Company will record a gain of approximately $700,000 on the transaction.. CICA owned 1,821,332 shares of Citizens Class A common stock at March 31, 1998 and December 31, 1997. Statutory accounting practices prescribed by Colorado require that the Company carry its investment at market value reduced by the percentage ownership of Citizens by CICA, limited to 2% of admitted assets. As of March 31, 1998 and December 31, 1997, the Company valued the shares in accordance with prescribed statutory accounting practices. In the Citizens' consolidated financial statements, this stock is shown as treasury stock. CICA had outstanding at March 31, 1998 and December 31, 1997, a $400,000 surplus debenture payable to Citizens. For statutory accounting purposes, this debenture is a component of surplus, while for GAAP it is eliminated in consolidation. Citizens has recognized a liability for its related obligation to a bank in a like amount. The NAICNational Association of Insurance Commissioners ("NAIC") has established minimum capital requirements in the form of Risk- Based Capital ("RBC"). Risk-based capital factors the type of business written by a company, the quality of its assets, and various other factors into account to develop a minimum level of capital called "authorized control level risk-based capital" and compares this level to an adjusted statutory capital that includes capital and surplus as reported under Statutory Accounting Principles, plus certain investment reserves. Should the ratio of adjusted statutory capital to control level risk- based capital fall below 200%, a series of actions by the Company would begin. At December 31, 1997, CICA, NSLIC, USLIC and CILIC were well above required minimum levels. Information Systems and the Year 2000 The inability of computers, software and other equipment utilizing microprocessors to recognize and properly process data fields containing a two-digit year is generally referred to as the Year 2000 compliance issue. As the year 2000 approaches, such systems may be unable to accurately process certain date- based or date-sensitive information. The Company is in the process of identifying all significant applications that will require modification to ensure Year 2000 compliance. Internal resources will be used as necessary to make the required modifications and to test and verify Year 2000 compliance. Due to the nature of the programming of the Company's core processing systems, such date oriented issues are not a problem since the dates are stored as the number of days since the year 1900, rather than as a two-digit field. Accordingly a significant part of the Company's efforts to ensure Year 2000 compliance will be to obtain assurances from vendors that timely upgrades will be made available to make third party software Year 2000 compliant. Additionally, the Company will contact companies with whom it does business and upon whose systems the Company may indirectly rely, to obtain assurances that such systems will be timely modified. The Company anticipates that it will complete this process in early 1999, leaving adequate time to assess and resolve any significant remaining issues. The cost of Year 2000 compliance is not expected to be material to the Company's financial position or results of operations in any one year. Financial Accounting Standards In February 1997, the FASB issued Statement 128 "Earnings per Share" ("Statement 128"). Statement 128 establishes the standards for computing and presenting earnings per share ("EPS"). This statement replaces the presentation of primary EPS with a presentation of basic EPS and requires dual presentation of basic and diluted EPS. Statement 128 is effective for fiscal years ending after December 15, 1997. Implementation did not have a material impact on the Company's earnings per share. In June 1997, the FASB issued Statement 130 "Reporting Comprehensive Income" ("Statement 130"). Statement 130 establishes the standards for reporting and display of comprehensive income and its components in a full set of general- purpose financial statements. Statement 130 is effective for fiscal periods beginning after December 15, 1997. The Company does not believe that this statement will have an impact on future operations or liquidity. PART II. OTHER INFORMATION Item 1. Legal Proceedings None. Item 2 Changes in Securities None, other than disclosed in the Notes to the Financial Statements or Management's Discussion and Analysis of Financial Condition and Results of Operations. Item 3. Defaults upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information The Annual meeting of stockholders will be held on Tuesday, June 2, 1998, at 10:00 a.m. at the Company's executive offices. The record date for the meeting was April 15, 1998. Item 6. Exhibits and Reports on Form 8-K None. 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 thereunto duly authorized. CITIZENS, INC. By:/s/ Mark A. Oliver_____ Mark A. Oliver, FLMI President Date: May 15, 1995May 14, 1998 EX-27 2
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