8-K

UNITED STATES

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): March 25, 2004

Penn Treaty American Corporation

(Exact name of registrant as specified in its charter)

Pennsylvania	001-14681	23-1664166
(State or other jurisdiction      of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3440 Lehigh Street

Allentown, Pennsylvania 18103

(Address of principal executive offices) (Zip Code)

(610) 965-2222

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Item 7. Financial Statement and Exhibits

      ( c). Exhibits

99.1 Press Release of Penn Treaty American Corporation dated March 25, 204.

Item 12. Results of Operations and Financial Condition

        On March 25, 2004, Penn Treaty American Corporation (the “Company”) announced its results of operations for the fourth quarter and year ended December 31, 2003. The Company issued a press release, dated March 25, 2004, which is furnished as an exhibit hereto and incorporated by reference herein.

        The press release referred to fully converted book value, which is a non-GAAP financial measure. Book value, on a fully converted basis, was $3.16 per share at December 31, 2003. Book value was $6.10 per share at December 31, 2003. The press release included a reconciliation of fully converted book value to GAAP book value. The Company believes that the presentation and discussion of this non-GAAP number, which is consistent with past disclosure, in conjunction with disclosure of all reconciling differences, provides a better understanding of the Company’s current value in light of future items which we believe are likely to be significantly dilutive to current shareholders.

        The information in this Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PENN TREATY AMERICAN CORPORATION

March 25, 2004	By: /s/ Cameron B. Waite
	Cameron B. Waite
	Chief Financial Officer

EXHIBIT INDEX

Number Exhibits

99.1 Press Release of Penn Treaty American Corporation dated March 25, 2004

EX-99

Exhibit 99.1

Penn Treaty American Announces 4^th Quarter Results

March 25, 2004 — Allentown, PA – Penn Treaty American Corporation (PTA-NYSE) today announced its fourth quarter and annual results for the period ended December 31, 2003.

The Company reported a net loss of $14.1 million or $.59 per share during the fourth quarter of 2003 and a net loss of $13.4 million or $.64 per share for the total year. In 2002, the Company reported a net gain of $.9 million or $.04 per fully diluted share and a net loss of $30.4 million or $1.58 per share for the fourth quarter and twelve months, respectively.

The 2003 quarter reported loss resulted from an $18 million pre-tax loss on the Company’s experience account arising from increased market interest rates. In addition, at December 31, 2003, the Company established a $2.5 million valuation allowance for its current tax net operating loss carryforwards as a result of potential future limitations on their use due to IRS Section 382 and the Company’s change of stock ownership over the past 36 months.

Excluding the impact of the Company’s experience account loss and its tax valuation allowance, the Company believes that its results for the fourth quarter of 2003 were otherwise in line with its expectations of $.03 per fully diluted share.

Basic and fully diluted earnings per share for the 2003 quarter and for the twelve months ended December 31, 2003 and 2002 exclude the impact of shares that could be converted in the future. In accordance with GAAP, in a net loss situation anti-dilutive convertible securities and options are not included in the calculation of fully diluted earnings per share.

During the fourth quarter, 2003, the Company recorded premium revenue of $78.2 million, including $2.6 million of first year premium. During the fourth quarter, 2002, the Company recorded premium revenue of $81.9 million, including $1.6 million of first year premium.

Book value, on a fully converted basis (as shown below), was $3.16 per share at December 31, 2003. During the fourth quarter of 2003, $4.9 million of the Company’s convertible subordinated notes due 2008 (‘the Notes”) were converted by existing note holders into 3.1 million shares of the Company’s common stock. Subsequent to December 31, 2003, an additional $14.6 million of Notes have been converted into 9.2 million shares of the Company’s common stock. In February and March of 2004, the Company announced that it had raised $16 million in additional Notes, representing 9.1 million shares of common stock if fully converted in the future.

(amounts in thousands, except per share amounts)
Shareholders' equity, as reported	$	150,762
Convertible debt, net of discount		88,467
Preferred interest on early conversion		3,018
Unamortized deferred offering costs		(1,693	)
Shareholders' equity, fully converted	$	240,554
Outstanding shares, as reported		24,730
Shares issuable upon conversion of debt		51,481
Outstanding shares, fully converted		76,211
Book value per share, as reported	$	6.10
Book value per share, fully converted	$	3.16

As a result of the additional issuance of Notes in 2004, the Company has modified its projected fully diluted earnings per share to approximately $.20-$.22 and $.30-$.32 in 2004 and 2005, respectively. The Company is continuing its guidance for new policy sales of $30 million in 2004 and $45 million in 2005.

William W. Hunt, President and CEO, stated, “I am pleased to say that our fourth quarter operating results are right in line with our expectations. Sales of new products during the fourth quarter, on an annualized premium basis, totaled $4 million. Sales for the entire year reached $14 million, which is 105% above sales levels in 2002. The Company’s claims experience during the fourth quarter was better than expected and this trend has continued into 2004.”

The Company will hold an investor conference call to discuss its results on Thursday, March 25, 2004, at 2:00 p.m., EST. Investors and analysts may participate by calling 1.800.450.0819. The conference call will also be available by replay until March 30, 2004 by calling 1.800.475.6701 with an access code of 725625.

Certain statements made by the Company in this press release may be considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company believes that its expectations are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations, including but not limited to, the ability of the Company to utilize some or all of its prior-period net operating loss carryforward amounts, the Company’s ability to meet its provided earnings guidance and the development of its incurred claims. For additional information and risks related to the Company, please refer to its reports filed with the Securities and Exchange Commission.

Contact: Cameron Waite, EVP & CFO 800.222.3469 cwaite@penntreaty.com

Source: Penn Treaty American Corporation

PENN TREATY AMERICAN CORPORATION AND SUBSIDIARIES Consolidated Statements of Income and Comprehensive Income (amounts in thousands, except per share data)
	Three Months Ended December 31,						Twelve Months Ended December 31,
	2003			2002			2003			2002
Revenues:	(unaudited)			(unaudited)			(unaudited)
Premium revenue	$	78,190		$	81,866		$	321,946		$	333,643
Net investment income		11,209			10,278			43,273			40,107
Net realized capital (loss) gain		(28	)		1,014			237			15,663
Market (loss) gain on notional experience
account		(18,220	)		(190	)		(9,494	)		56,555
Change in preferred interest on early
conversion liability		(714	)		--			(981	)		--
Other income		2,920			2,062			9,082			11,585
		73,357			95,030			364,063			457,553
Benefits and expenses:
Benefits to policyholders		58,927			65,126			247,730			371,998
Commissions		9,602			9,707			40,800			45,741
Net policy acquisition costs amortized		1,552			841			10,617			8,695
General and administrative expense		14,888			11,543			59,110			46,472
Expense and risk charges on reinsurance		2,768			3,577			11,073			14,308
Excise tax expense		929			734			3,065			2,919
Interest expense		2,305			2,148			8,112			5,733
		90,971			93,676			380,507			495,866
(Loss) income before federal income taxes and
cumulative
effect of change in accounting principle		(17,614	)		1,354			(16,444	)		(38,313	)
Federal income tax (benefit) provision		(3,489	)		461			(3,091	)		(13,026	)
Net (loss) income before cumulative effect of
change in accounting principle		(14,125	)		893			(13,353	)		(25,287	)
Cumulative effect of change in accounting
principle		--			--			--			(5,151	)
Net (loss) income		(14,125	)		893			(13,353	)		(30,438	)
Basic earnings per share from net (loss) income
before cumulative effect of change in accounting
principle	$	(0.59	)	$	0.05		$	(0.64	)	$	(1.31	)
Basic earnings per share from net (loss) income	$	(0.59	)	$	0.05		$	(0.64	)	$	(1.58	)
Diluted earnings per share from net (loss)
income before cumulative effect of change in
accounting principle	$	(0.59	)	$	0.04		$	(0.64	)	$	(1.31	)
Diluted earnings per share from net(loss)income	$	(0.59	)	$	0.04		$	(0.64	)	$	(1.58	)
Weighted average number of shares outstanding		23,773			19,376			20,970			19,240
Weighted average number of shares and share
equivalents		23,773			45,114			20,970			19,240