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): November 15, 2002
FINANCIAL INDUSTRIES CORPORATION
(Exact name of Registrant as specified in charter)
Texas 0-4690 74-2126975
(State or other (Commission file number) I.R.S. employer
jurisdiction of (identification no.)
incorporation)
6500 River Place Blvd., Building One
Austin, Texas 78730
(Address of principal executive offices)
Registrant's telephone number, including area code: (512) 404-5000
______________________________
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Item 5.Other Events
On November 15, 2002, the Registrant released its earnings report for the
three-month and nine- month periods ended September 30, 2002.
In addition, the Registrant announced that it has revised its financial results
for the quarter ended June 30, 2002, to record certain policyholder benefits
that were incurred but not recognized in that quarter. Such amounts were
identified during review procedures that were initiated and completed in
connection with the preparation of the financial statements for the quarter
ended September 30, 2002. The revisions relate to death benefits for a
relatively new annuity product line, and resulted in an increase in policyholder
benefits and expenses of approximately $1.4 million (pre-tax) above the amounts
that were previously reported for the quarter ended June 30, 2002. As revised,
net income for the three months ended June 30, 2002 was $0.2 million (basic and
diluted earnings of $0.02 per common share). For the six-month period ended June
30, 2002, net income before the cumulative effect of change in accounting
principle, as revised, was $1.4 million (basic and diluted earnings of $0.14 per
common share). The Company has filed an amendment to its 10-Q filing for the
second quarter of 2002. These revisions do not affect the financial statements
for the nine-month period ended September 30, 2002.
In a separate press announcement on November 15, 2002, the Registrant announced
that the Board of Directors has appointed George M. Wise, III as Chief Financial
Officer. The announcement also commented in general terms on the Company's
strategic direction.
Except for historical factual information set forth in this Form 8-K, the
information contained herein relating to the future development of the Company's
business constitutes forward-looking statements under the Private Securities
Litigation Reform Act of 1995. Such statements are made based upon management's
current expectations and beliefs and are subject to known and unknown risks,
uncertainties and other factors contemplated by the forward-looking statements.
There can be no assurance that factors not currently anticipated by management
will not materially and adversely affect FIC.
Exhibits.
99.1* - Press Release dated November 15, 2002
99.2* - Press Release dated November 15, 2002
______________
* Filed herewith
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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.
FINANCIAL INDUSTRIES CORPORATION
Date: November 18, 2002 By: /s/ Eugene E. Payne
__________________________________
Eugene E. Payne
Chief Executive Officer
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Exhibit 99.1
FOR IMMEDIATE RELEASE
November 15, 2002
FOR MORE INFORMATION CONTACT
Robert Bender
512-404-5080
FINANCIAL INDUSTRIES CORPORATION ANNOUNCES
THIRD QUARTER RESULTS AND RESTATEMENT OF SECOND QUARTER
RESULTS
AUSTIN, Texas -- (BUSINESS WIRE) -- On November 14, 2002, Financial Industries
Corporation ("FIC") reported net income for the nine-month period ended
September 30, 2002 of $17,995,000 (or $1.89 basic and $1.87 on a diluted basis
per common share) on revenues of $92,760,000, as compared to net income of
$8,655,000 (or $1.19 basic and $1.18 on a diluted basis per common share) on
revenues of $66,682,000 for the same period in 2001. Net income for the period
ended September 30, 2002 before the cumulative effect of change in accounting
principle was $2,268,000 (basic and diluted earnings of $0.24 per common share).
Net income for the three-month period ended September 30, 2002 was $899,000 (or
$0.09 on a basic and diluted basis per common share) on revenues of $30,519,000
as compared to net income of $3,806,000 (basic and diluted earnings of $0.40 per
common share) on revenues of $33,965,000 for the three-month period ended
September 30, 2001.
Earnings per share for the nine months ended September 30, 2002 were affected by
the increase in the number of FIC's common shares outstanding due to the May 18,
2001 merger (the "Merger") between FIC and InterContinental Life Corporation
("ILCO"). Prior to the Merger, FIC owned approximately 48% of ILCO. As of
September 30, 2002, the number of FIC's weighted average common shares
outstanding was 9,543,000, as compared to weighted average shares outstanding of
7,261,000 as of September 30, 2001. The September 30, 2001 average weighted
shares outstanding takes into account the fact that additional shares were
issued on May 18, 2001 due to the Merger and were outstanding only for the
period from May 18, 2001 to September 30, 2001. Additionally, net income and
earnings per share were affected by the cumulative effect of a change in
accounting principle of $15.7 million. This amount represents the excess of fair
value of net assets acquired over cost as of the beginning of 2002 related to
the Merger. The Company recorded this cumulative effect in conjunction with
adopting Statement of Financial Accounting Standards No. 141 (FAS 141),
"Business Combinations," in the first quarter of 2002, as required by FAS 141.
Earnings per share have been calculated in accordance with FAS No.128, which
requires that earnings per share be presented on both a basic and diluted basis.
Diluted earnings per share reflect the potential dilution that could occur if
securities or other contracts to issue common stock were converted or exercised.
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The Company also announced that it will revise its financial results for the
quarter ended June 30, 2002, to record certain policyholder benefits that were
incurred but not recognized in that quarter. Such amounts were identified during
review procedures that were initiated and completed in connection with the
preparation of the financial statements for the quarter ended September 30,
2002. The revisions relate to death benefits for a relatively new annuity
product line, and resulted in an increase in policyholder benefits and expenses
of approximately $1.4 million (pre-tax) above the amounts that were previously
reported for the quarter ended June 30, 2002. As revised, net income for the
three months ended June 30, 2002 was $0.2 million (basic and diluted earnings of
$0.02 per common share). For the six-month period ended June 30, 2002, net
income before the cumulative effect of change in accounting principle, as
revised, was $1.4 million (basic and diluted earnings of $0.14 per common
share). The Company will file an amendment to its 10-Q filing for the second
quarter of 2002. These revisions do not affect the financial statements for the
nine-month period ended September 30, 2002.
9-Mos (ending 9/30) 2002 2001
Net income $17,995,000 $ 8,655,000
Net income before cumulative
effect of change in accounting
principle $ 2,268,000 $ 8,655,000
Cumulative effect of change in
accounting principle $15,727,000 $ 0
Revenues $92,760,000 $66,682,000
Earnings Per Share (Basic)
Before Cumulative effect of
change in accounting principle $ 0.24 $ 1.19
Cumulative effect of change in
accounting principle $ 1.65 $ 0
Basic earnings per share $ 1.89 $ 1.19
Earnings Per share (Diluted)
Before Cumulative effect of
change in accounting principle $ 0.24 $ 1.18
Cumulative effect of change in
accounting principle $ 1.63 $ 0
Diluted earnings per share $ 1.87 $ 1.18
Financial Industries Corporation, through its various subsidiaries, markets and
underwrites individual life insurance and annuity products. The Company's NASDAQ
symbol is FNIN. For more information on FIC, go to http://www.ficgroup.com on
the Internet.
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Exhibit 99.2
(BW) (Financial Industries Corporation) (FNIN) -- FINANCIAL INDUSTRIES
CORPORATION NAMES NEW CHIEF FINANCIAL OFFICER, ANNOUNCES NEW
STRATEGIC DIRECTION.
AUSTIN, Texas -- (BUSINESS WIRE) -- November 15, 2002 -- Financial Industries
Corporation (FIC) (NASDAQ: FNIN) announced today that George M. Wise III has
been appointed Chief Financial Officer of the Austin, TX based holding company.
The announcement follows the November 4th appointment of Eugene E. Payne Ph.D.
as President, CEO and Chairman of the Board, and completes a reorganization of
the executive management team to reflect the new strategic direction the company
will aggressively pursue.
Effective November 15, Wise replaces Jeffrey H. Demgen as CFO. Demgen returns to
Chief Marketing & Sales Officer, a position he previously held for over 5 years.
Thomas C. Richmond with 14 years company experience and Theodore A. Fleron with
over thirty years experience in the insurance industry round out the management
team as Chief Operations Officer and General Counsel respectively.
Wise, a Fellow of the Society of Actuaries and member of the American Academy of
Actuaries, recently served as President and Consulting Actuary for Austin-based
Wise, Mitchell & Associates where he provided consulting services to various
life insurance companies including affiliates of FIC. He has more than 18 years
of insurance experience specializing in acquisition analysis, product
development and profitability analysis.
Payne said Wise's appointment is a critical part of a reorganization designed to
refocus on the Company's new strategic direction. "FIC is re-energized and
dedicated to rapidly and aggressively correcting circumstances that contributed
to lower than expected results in the past. Our new strategy is a total
recommitment to profitable growth through both new acquisitions and sales," said
Payne.
The principle problems FIC has identified for immediate action are sales
expenses, a decline in investment income, and operating expenses in some areas.
FIC has already undertaken cost cutting measures to quickly streamline sales
costs while focusing sales energy on their most profitable markets and
continuing to enhance its leadership position in the mortgage life insurance
niche. Additionally, the company is developing a new diversified strategy for
investments to enhance earnings while maintaining its tradition of conservative
investment risk. But it is a re-invigorated acquisition strategy that Payne
identifies as the greatest potential. Payne, until his early retirement from the
company in 1999, served for 12 years as a leading member of the management team
that guided the company to impressive equity growth when Fortune magazine listed
FIC as the 21st top long-term growth companies in the nation. "There are many
exciting opportunities where carefully chosen, well-executed acquisitions can be
used to substantially grow this company. The first step was to ensure that we
have the experienced leadership in place. Now, with the addition of George Wise
and his wealth of acquisition experience, we have the ingredients to reenergize
the company and aggressively pursue our acquisition strategy."
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The information in this release relating to the Company's operations and
financial results, future business developments, and contingencies and
uncertainties constitute forward-looking statements under the Private Securities
Litigation Reform Act of 1995.
Financial Industries Corporation (FIC), through its various subsidiaries,
markets and underwrites individual life insurance and annuity products. For more
information on FIC, go to on the Internet.
For more information contact:
Robert Bender
512-404-5080
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