Penn Treaty Announces Q1 Earnings Expectations

May 14, 2003

Allentown’s Penn Treaty American Corporation announced that “its expectations for first quarter net income and diluted earnings per share of $3,118,000 and $.07, respectively.” The anticipated results in the quarter include a pre-tax realized gain from its notional experience account and sales of fixed income securities of $4,381,000 or $.05 per share.

Penn Treaty said it had not yet “finalized its first quarter, 2003, results due to its continued research, along with its independent accountant, to ensure the appropriate accounting treatment of the technical issues and valuation related to the embedded derivative within its newly-issued convertible subordinated debt.” It expects to conclude this research prior to the filing of its Form 10-Q for the period. It added that “earnings expectations appropriately recognize all aspects of its normal operations. The Company does not expect the resolution of these technical issues to have any material negative effect upon its financial condition or results of operations.”

The bulletin noted that in “the first quarter of 2002, the Company recorded a net loss of $18,777,000, representing a loss of $1.00 per diluted share. The 2002 results included a pre-tax net loss from the Company’s notional experience account and sales of equity and fixed income securities of $11,430,000. The Company expects premium revenue for the 2003 quarter of $83,578,000, compared to $84,236,000 in the 2002 quarter.”

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