Primerica (PRI) Q2 2024 earnings summary

Executive summary

• Adjusted net operating income rose 12% year-over-year to $162.7 million, with adjusted EPS up 18% to $4.71 per share, reflecting strong core business performance and record sales force growth.

• GAAP net income dropped sharply to $1.2 million due to significant non-cash write-offs and impairment charges from the Senior Health segment exit.

• Total revenues increased 17% year-over-year to $803.4 million, driven by growth in Term Life and Investment and Savings Products.

• The Board authorized the exit of the Senior Health business, targeting abandonment of e-TeleQuote by September 30, 2024.

• Dividend increased 20% to $0.90 per share, with $143 million in stock repurchases completed during the quarter.

Financial highlights

• Adjusted operating revenues rose 9% to $753.3 million; GAAP revenues up 17% to $803.4 million.

• Diluted adjusted operating EPS increased 18% to $4.71; GAAP diluted EPS was $0.03 due to non-recurring items.

• Term Life net premiums increased 4% year-over-year to $417.8 million; adjusted direct premiums up 5%.

• Investment and Savings Products revenues up 22% to $261 million; pre-tax operating income up 26%.

• Operating cash flow for the first half of 2024 was $384.2 million, up from $311.7 million in the prior year.

Outlook and guidance

• Management expects continued momentum from strong recruiting and sales force growth, supported by a successful international convention.

• Full-year sales force growth expected around 5%, with policy issuance growth projected in the low single digits.

• Investment product sales expected to grow around 15% for 2024.

• Additional restructuring costs for the Senior Health exit expected in Q3 2024.

• Board declared a 20% increase in quarterly dividend, payable September 12, reflecting confidence in future cash flows.