Primerica Inc (PRI) 2010 Q1 法說會逐字稿

Good morning, and welcome to the First Quarter 2010 Primerica Earnings Conference Call.

After the speakers' opening remarks, there will be a question-and-answer period.

(Operator Instructions)

As a reminder, ladies and gentlemen, this conference call is being recorded. I would now like to turn the call over to Kathryn Kieser, Senior Vice President and Investor Relations Officer for Primerica.

Ms. Kieser, please go ahead, please.

Good morning, everyone. Thank you for joining us today as we discuss Primerica's results for the first quarter 2010. Yesterday afternoon, we issued our press release reporting financial results for the quarter ended March 31, 2010. A copy of the press release is available in the Investor Relations section of our website, investors.primerica.com.

With us on the call this morning are Rick Williams, our Chairman and Co-CEO; John Addison, Chairman of Primerica Distribution and Co-CEO; and Alison Rand, our CFO.

We reference certain non-GAAP financial measures in our press release, and on this call. These non-GAAP measures are provided because management uses them in making financial decisions, operating and planning decisions, and in evaluating the Company's performance.

We believe these measures will assist you in assessing the Company's underlying performance for the periods being reported. These non-GAAP measures have limitations. And reconciliations between non-GAAP and GAAP financial measures are attached to our press release.

On today's call, we will make forward-looking statements in accordance with the Safe Harbor provisions of the Securities Litigation Reform Act of 1995. Forward-looking statements, including any statements that may project, indicate or imply future results, events, performance or achievement, and may contain words such as, expect, intend, plan, anticipate, estimate, and, believe, or similar words derived from those words. They are not guarantees. And such statements involve risks and uncertainties that could cause actual results to differ materially from these statements.

Please see our registration statement on Form F1, originally filed on November 5, 2009, and amended through March 31, 2010, for a discussion of these risks.

This morning's call is being recorded, and a webcast is live on the Internet. The webcast and corresponding slides will be available in the Investor Relations section of our Website for at least 30 days after the presentation. After the prepared remarks, we will open the call for questions from our dial-in participants.

Now, I will turn the call over to Rick Williams.

Thank you, Kathryn, and good morning, everyone. I am very pleased to welcome you to Primerica's first earnings call as a public company. Since many of you who are listening today may be new to our Company, I'm going to start by telling you a little bit about who we are. Next, I'd like to spend some time talking about how we got here today, through our very successful initial public offering on April 1st. And, finally, before I turn the call over to John and Alison, I'll give you some highlights from our first quarter.

Primerica is a leading distributor of financial products to middle-income households in North America, with approximately 100,000 licensed sales representatives. We assist our clients in meeting their needs for term life insurance, which we underwrite, and mutual funds, variable annuities, and other financial products, which we distribute primarily on behalf of third parties.

We ensure more than 4.3 million lives, and more that 2 million clients maintain their investment accounts with us. We believe that our distribution model uniquely positions us to reach underserved middle-income consumers in a cost-effective manner. This model has proven itself in both favorable and challenging economic environments.

We are proud to have completed our successful IPO in April of this year. As a result of the transaction, we have a much different ownership profile. We issued to Citi a total of 75 million shares. Citi sold 24.6 million shares in the IPO, sold 16.4 million shares, plus warrants to purchase of 4.1 million shares to Warburg Pincus, and contributed around 5 million shares back to Primerica for us to grant in the form of equity awards to certain management and sales-force leaders. Citi now owns less than 40% of Primerica, and Warburg Pincus owns just over 20%.

We are still in the process of constructing our nine-member Board of Directors. We have seven positions filled, with the recent addition of George Benson, the President of the College of Charleston, and we are looking for two additional members. Besides George Benson and Bob McCullough, our Audit Committee Chair, Citi nominated Mark Mason, Warburg nominated Michael Martin and Daniel Zilberman, and John and I serve as employee-directors.

With the completion of the restructuring transactions, we are a more nimble, independent organization, with a capital structure that positions us to pursue opportunities to grow our business and build stockholder value.

While Alison will go into these restructuring transactions and first-quarter results in greater detail, let me take a minute to set the stage. The first thing to know, of course, is that our first-quarter performance was pre-IPO. However, a number of transactions reflected in our actual results for the quarter were complete in anticipation of our becoming a public company.

The most important of these was the reinsurance to Citi of between 80% and 90% of our in-force business at year end 2009. This transaction occurred on March 31st of this year, and had the effect of shrinking our financial profile on both our balance sheet and income statement, and enhancing our growth profile as we add new business to our now relatively small amount of in-force business.

Our purpose today is to set a baseline for you to understand and evaluate our future prospects. For that reason, we have provided a pro forma statement of operating income for the first quarter 2010, and the same period last year, for comparison. We believe this is the most appropriate measure for you to use to gauge our performance. So we will focus most of our comments on the quarter's results using that measure.

As you can see on slide two, our net income for the first quarter was $143 million, versus $113 million in the same period a year ago. And pro forma net operating income for the first quarter was $38 million, versus $29 million in the same period a year ago. Pro forma operating revenue was $225 million, up 6% from 2009.

A highlight for the quarter was the 34% increase in Investment and Savings Product sales, and a 41% increase in account values, which reflects improved market conditions and an increased emphasis on investment and savings products.

Other performance measures were relatively stable compared to the same period last year. During or at the end of the first quarter of 2010, we had recruits of 58,085. Our life-licensed sales force was 97,354. And we issued 52,445 term life policies. These results are in line with our expectations, and are especially satisfying when we consider that they occurred during a period of uncertainty leading up to the IPO.

The good news for us is that our target market is both vast and underserved. And we have a very large and motivated sales force to reach this market. We believe the combination of our 30-year track record, capital strength, attractive products, significant market opportunity, and strong distribution capabilities will enable us to capture the substantial growth opportunity before us.

With that, let me introduce John Addison, who will explain what is going on in the distribution side of our business, and why we are optimistic about our ongoing sales and recruiting efforts.

Thanks, Rick. Good morning, everybody. These are exciting times for Primerica. Many of you have heard the story of the long process we went through to get to the IPO. The sales force's reaction to our finally becoming a public company has exceeded our expectations. Most importantly for our sales force, the IPO removed the uncertainty about the future, and whether we would be a stand a lone company. We're very excited to be moving down the path of actually building and growing Primerica.

There are a handful of key themes and field initiatives I want to tell you about that we expect to drive the growth of our business. They are the field equity and incentives program, as well as our new communication and sales materials. These things, collectively, are creating an alignment of Company and field interests.

Our regional vice presidents, or RVPs, as we call them, were so enthusiastic about owning the stock, that our IPO-directed share program was approximately two times over-subscribed. Between the DSP and the field equity grants, around 3,000 RVPs, which is approximately 75% of all of our RVPs, own shares of Primerica. This ownership aligns the interests of our sales force, stockholders, and the Company.

The events around the IPO transaction were amazing, and we had an incredible time celebrating. But now we are focused on capitalizing on the momentum coming out of the IPO and turning it into results.

One of the incentive programs we have announced since the IPO is the opportunity for RVPs to compete for equity awards during the second quarter. This competition is based on growth of life-insurance premium, combined with factors that lead to growth in the size of our sales force -- Primerica's key long-term growth drivers.

We are also currently running an incentive to take 1,600 couples to San Diego, California, this fall. This will be the first ever business-incentive event for the new Primerica. Representatives at all levels are competing based upon life-insurance premium, combined with growth and distribution.

To continue the enthusiasm and momentum coming out of the IPO, and as a part of the re-launch of our Company, we're holding eight large sales events in the US and Canada over the next few weeks. We expect more than 30,000 representatives to attend one of these meetings.

At the meetings, we are rolling out the new Primerica, which includes several new sales and recruiting brochures and a new recruiting video promoting the incredible business opportunity we offer to our sales force. I'm talking about the new alignment created by the sales force equity programs and the synergy and momentum it's creating. And I talk about the key drivers for developing a healthy, independent Primerica business, which are growing recruits and the size of our sale force, which grows product sales, as well as cash flow to our representatives.

Response from the three meetings we have already held has been great. We are encouraged by the spirit of our sales force, and the engagement of our sales-force leaders. They are grateful, excited and motivated to be leading the re-founding of Primerica with us.

The events relating to the IPO have kindled our entrepreneurial spirit and given a new level of pride to our sales force and employees. It's really too early to tell the full impact of the re-founding and the incentive programs we put in place, but what I can tell you is that we're encouraged by the excitement we're seeing in our sales force.

With that, I'll turn it over to Alison to take you through our first-quarter results.

Thank you, John, and good morning. I'd like to start by taking a few minutes to discuss the basis of presentation for our financials this quarter, specifically the adjustments we have made to make the numbers more meaningful, and to provide a baseline for setting future expectations. To do that, let me briefly highlight some of the IPO-related reinsurance and reorganization transactions that we effected in March and April, that are noted on slide three of the presentation.

Through a series of reinsurance agreements, we reinsured between 80% and 90% of our business that was in-force, as of the end of 2009 and we declared extraordinary dividends of $676 million to Citi. We issued a $300 million note to Citi bearing a 5.5% annual interest rate, and maturing on March 31, 2015.

We granted approximately 5 million shares in equity awards to certain management and sales-force leaders, of which approximately 200,000 shares were granted to replace unvested Citi awards. We also accelerated the vesting of certain other Citi awards. And we will make an election under Section 338(h)(10) of the Internal Revenue Code, effective as of April 1st, which will change our deferred-tax balances and reduce stockholders' equity.

Of these transactions, the only two that occurred in the first quarter are the reinsurance transactions and the declaration of the extraordinary dividend. These transactions are reflected in the balance sheet for the first quarter 2010, but not in the statement of income, since the reinsurance transactions were not entered into until March 31st, and the extraordinary dividends were not settled until April.

These transactions had a significant impact on the Company's financial position, and will cause its financial results in future periods to be materially different from those reflected in our historical financials. For this reason, we present pro forma financial results for the first quarter of 2010 as if all of the IPO-related transactions had occurred on March 31st for the balance sheet, and January 1st for the statement of income.

We also provide a pro forma statement of income for the first quarter 2009 as if all of the IPO-related transaction had occurred on January 1, 2009, to provide a basis for comparison.

As you can see on slide four, our financials changed dramatically as a result of these IPO-related transactions. We emerged from the IPO with substantially smaller revenues and net income and, in fact, a profile that, in many ways, reflects a startup company. Our pro forma adjusted stockholders' equity, a non-GAAP financial measure which adjusts equity for the impact of unrealized gains and losses and our invested-asset portfolio, is also substantially smaller than stockholders' equity was at year-end 2009.

When combined with our proven business model and reduced pro forma stockholders' equity, we believe we are well positioned for growth from both an earnings and return-on-equity perspective. This slide also presents pro forma operating results.

We believe pro forma operating revenues, operating income before income taxes, and net operating income are key non-GAAP financial measures that best reflect our ongoing business and underlying profitability drivers. In addition to adjusting for the IPO-related transactions, these measures exclude realized investment gains and losses, the impact of the initial equity grants awarded at the IPO, and the one-time accelerated vesting of existing Citi awards.

Moving to slide five, you will see that first-quarter 2010 pro forma operating revenue and pro forma operating income before income taxes both increased by about $13 million year-over-year. It should be noted that first quarter 2010 pro forma operating results do not include expenses we expect to incur as we separate from Citi and become a public company, or one-time launch-related expenses associated with the IPO.

In addition, there are expenses we expected to incur in the first quarter, such as payroll taxes on management bonuses that will actually be incurred in the second quarter. We believe that segments provide the best basis for discussing our operating results. Primerica operates in two primary business segments -- term life insurance, and investments and savings products.

Additionally, we have a third segment -- corporate and other distributed products. Note that all the adjustments we made to derive our non-GAAP operating measures are reflected in this last segment.

In our term life insurance segment, we earned underwriting profits on our in-force book of term life insurance, net of the Citi and other reinsurance arrangements in effect. Our products are underwritten by our three life-insurance subsidiaries in the US and Canada. This segment also includes net investment income on the portion of our invested-asset portfolio used to meet our required statutory reserves and targeted capital.

In our Investment and Savings Products segment, we generate net-sales based and net-asset based revenues, which we define as commission and fee revenue, less commission expense. These are derived from the distribution of mutual funds, variable annuities and segregated funds, and from the values in clients' accounts, respectively.

We also earn account-based revenue for the administrative services we provide to certain of our US mutual-fund clients. We distribute our investment and savings products on behalf of third parties, except for segregated funds, which are underwritten by us in Canada.

In our Corporate and Other Distributed Products segment, we earned commissions and fees from the distribution of various third-party products and from our mail-order student life insurance and short-term disability benefit insurance, which we underwrite through our New York Insurance subsidiary.

Realized investment gains and losses and net investment income and operating expenses not allocated to our two primary segments are also reflected in the Corporate and Other Distributed Products segment.

Looking at our Term Life segment on slide six, pro forma income before income taxes increased to $37.3 million in first quarter 2010, from approximately $32 million in the same period last year. The $2.6 million, or 3%, increase in premiums reflects a modest improvement in persistency.

Around $4.2 million, or 24%, less investment income, was allocated to this segment, largely due to the increase in fair value of total company assets. This caused a decline in the ratio of the book value of invested assets required by the segment to the fair value of total company invested assets.

While in line with our expectations, we had $3.2 million, or 16%, more death claims incurred in first quarter 2010, compared to favorable claims experience in first quarter 2009. We also had $11.4 million lower expenses, primarily related to an $8.2 million special sale-force payment in the first quarter of 2009.

On page seven, you'll see the results for our Investment and Savings Product segment. Because the IPO-related transactions had no effect on this segment, pro forma and actual results are the same. Income before income taxes increased 25% to $25.4 million, compared with $20.4 million in the first quarter 2009.

Net sales' base revenue grew $3.1 million, or 43%, as sales rose 34% to $974 million in first quarter 2010, due to improved market conditions and a greater emphasis on these products by our sales-force leaders. Similarly, net-asset-based revenues increased $6.5 million, or 45%, as client account values increased by 41%, to $33 billion, in first quarter 2010, from $23 billion in the same period last year.

Account-based revenues were down $0.9 million, or 8%, consistent with a 5% decline in fee-generating accounts. A $3.3 million increase in operating expenses, largely due to growth in client account values, also occurred.

Our third segment -- Corporate and Other Distributed Products is highlighted on slide eight. Again, this segment reflects both pro forma adjustments for the IPO-related transactions, as well as operating adjustments to remove net realized investment gains and losses and the impact of the initial equity grant awarded at IPO, and the one-time accelerated vesting of existing Citi awards.

Net investment income increased by about $4.3 million, correlating with a decrease in net investment income that I described earlier in the Term Life segment. With respect to our other products, depressed loan sales was the largest factor in the declines of both commission and fee revenue and expenses. Revenue and expenses for our Other Distributed Products remained relatively stable.

Turning now to the balance sheet on slide nine. As I mentioned earlier, our actual balance sheet as of March 31st already reflects the Citi reinsurance transactions and the extraordinary dividends declared. It also reflects a return of capital to Citi equal to the earnings on the policies underlying the reinsurance transactions between January 1st and March 31, 2010.

We have shown the pro forma adjustments necessary to reflect the other reorganization transactions that we discussed earlier in the call. On a pro forma basis, we have a strong capital position and a conservative debt-to-capital ratio of 19.2%. As of March 31, 2010, we had statutory capital substantially in excess of the applicable statutory requirements to support existing operations and to fund our future growth.

Turning to slide ten. As of March 31st, we had invested assets of $3 billion, down from $7.1 billion at December 31st, as a result of the reinsurance and reorganization transactions. The $3 billion included $929 million in cash, which was used to pay dividends in payables to Citi under the reinsurance transactions in April.

Excluding cash, all but 1% of our invested assets were in fixed-income investments, of which 93% were investment grade. The average duration of our fixed-income portfolio is currently 3.6 years. While shorter than our general target of five to seven years, we do not believe this creates concerns with matching the duration of assets to our policy liabilities, as expected future premiums exceed expected future claims and expenses on such policies.

Since on an economic basis, the product cash flows are actually an asset and not a liability, no cash flows from invested assets are required to support our policy liabilities. Currently, our portfolio has a book yield of 5.79%, and has a net -- and is in a net unrealized-gain position of $135 million. To sum up, we have a strong balance sheet, conservative leverage, and stable financial performance. We believe we are well capitalized for future growth.

With that, I will turn the call back over to Rick.

Thank you, Alison. Before we begin our question-and-answer session, let me highlight our Company's strengths. Primerica has a proven 30-year-old franchise with the growth profile of a startup; basic products focused on the vast underserved middle-income market; unparalleled scale of face-to-face financial services distribution; conservative capitalization with a clean balance sheet and low-risk investment portfolio; highly effective risk management with a strong system of controls; and experienced and aligned leadership.

As I noted earlier, we are all extremely proud of this Company, and view our re-founding as an opportunity to share it will new investors. As this is our first earnings call as a public company, we'd like each of our participants to have the opportunity to ask a question. So I'd request that everyone limit themselves to one question today.

With that, I'd like to open up the call for Q&A.

(Operator Instructions)

Your first question comes from the line of Steven Schwartz with Raymond James & Associates. Please, proceed.

Hey, good morning, everybody.

Good morning.

Morning.

Ton of questions -- but I'll stick to the rules here. John, maybe you could talk about this -- working out the numbers in the supplement, it looked like productivity probably picked up from the first quarter a year ago, but down from the fourth quarter. Is there a seasonality pattern that we should know about?

And your question on productivity -- are you talking about life insurance or are you talking about the securities business?

Life insurance -- excuse me.

Life insurance -- if you look on our life-insurance business as -- and I know you sat in on some of the presentations that we did early on -- those move in a very narrow range. Okay? Our productivity moves -- there is a little bit of seasonality with the productivity, but really there was no -- there's no significant shift in productivity that's going to affect, one way or another, the long-range prospects of Primerica.

Okay -- all right. I'll get -- I'll play by the rules and get back in the queue.

All right, thank you. Nice talking to you again.

It's good talking to you.

Your next question comes from the line of Mark Finkelstein with Macquarie. Please, proceed.

Okay. Can you just, I guess, elaborate more on the agent-count numbers? I guess they were slightly below what I thought they would be at the end of the first quarter. But I guess -- what are you seeing in terms of the -- kind of the ramp-up? And do you have any expectations that you can share with us on where you expect to be at year end, based on what you're seeing currently?

Okay, thanks for the question, Mark.

Our -- we're not giving forward-looking guidance on the size of the sales force -- those kinds of things and stuff. The sales-force number was really affected by two things. I mean, number one, understand all of the numbers that are in this, as Rick said very well in the opening, were pre-IPO.

So these results and these numbers come from the period of time where there has been quite a bit of economic challenges in the middle market; but, very importantly for us, a lot of uncertainty as it led up to the actual culmination of the IPO, which happened on April 1.

Fourth-quarter recruiting of last year was down a little bit, which -- recruiting in the third and fourth quarter is what's going to drive a lot of what happens in licensing in the first quarter. As you -- your question, very specifically, around the re-founding, and what we see coming out of that -- I will say that the events that we're having -- the spirit that I see in our organization and our leadership -- is very strong -- is really strong. And the degree of alignment that I see in our leadership right now is, candidly, what we hoped to accomplish with the IPO.

It's still very early to tell about the timing of when that attitude, those feelings, turn into the numbers that we all want to see at the end of the pipeline. So --

Okay. All right, I'll play by the rules as well.

Thank you.

Hey, very nice to talk to you again.

Thanks.

Your next question comes from the line of Mark Hughes with SunTrust.

Please proceed.

Thank you very much, and congratulations also.

Hey, Mark -- good to be in Atlanta.

Yes, yes.

How about the platform funds? What was your -- what's the trend there in terms of your sales in Investment and Savings Products, where you're generating a bit more revenue from the accounts?

Okay. The percentage mix did not change very much in the first quarter of this year, versus first quarter of last year. As I think you know, we are in the middle of rolling out some new technology related to the turbo apps, where you can take a mutual-fund application on the handheld. That will be only available to the platform funds. And that's just beginning to roll out now. But the mix year-over-year is pretty flat from where it was last year, but we do believe that will change.

Thank you.

(Operator Instructions)

Your next question comes from the line of Darin Arita with Deutsche Bank.

Please proceed.

Hi. Good morning, and congratulations on your IPO.

Thank you very much, Darin.

I was wondering if you could talk a little bit more about these competitions that you're having with the RVPs and the sales agents -- the San Diego trip. What metrics will the competition be based on?

Well, we are in, right now, the final month of the San Diego competition, which will lead to another competition that I can't announce yet, because we're -- we save those exciting moments up to the last. But the metrics that drive it are something we call builder's premium, which we adjust from time to time. But builder's premium is life-insurance premium, along with the dynamics that lead to growing the licensed life-insurance sales force.

But more importantly than the San Diego competition, I would just focus you on the equity competition that we have right now for our regional vice presidents, which is very much in the same alignment.

So to just give you a feel for that -- right now, we have a competition going for shares of the new Primerica, which people in our sales force are very excited and happy about -- of our RVPs, which are our key people, our goal always is to build the cash flow and the position of our regional vice presidents. Their financial stability is extremely critical to us as an organization.

We have a competition going right now where every one of them is competing in this quarter for shares in the Company. The best thing in a competition -- my years of experience doing this -- is when about 25% -- everybody thinks they can win, 25% win. Okay? That means everybody competes and feels like it's not like buying a lottery ticket to have Ed McMahon, who is now passed away, show up at your house with a bunch of roses and a check, so that it's a real competition.

The metrics that drive that are how they're competing -- they're broken down into tiers based upon their production -- is life-insurance applications, recruits, attendees to PFSU, which begins to get the person in the process of getting licensed; completion of PFSU, which completes the class to go take the test; life insurance -- and, then, life-insurance licensing, as well as securities licensing.

So it really gives a one-two punch, which is life-insurance production, which drives production of that and cash flow to our sales force, but then, very importantly, growth in our distribution system.

So we feel very good, to answer your question, about the alignment that we have within the organization -- that the activities of doing this actually lead to the long-term growth dynamics that we were referencing in the previous question.

So thank you for your question.

Great. Thanks very much.

Your next question comes from the line of Jeff Schuman with KBW.

Please proceed.

Thank you. Good morning. I was wondering, Alison, if we could go back and just clarify and talk a little more about the mortality experience in the quarter. I wasn't sure -- the $3.2 million less-favorable mortality was that relative to your expectation, or was that relative to the year-ago period, first of all?

Yes. It was actually -- our results were actually in line with our expectations, so the comparison I was giving was to the prior-year quarter. In the first quarter of 2009, we did have unusually favorable mortality experience. So, again, to reiterate, what we experienced in the first quarter of 2010 was very much in line with our expectations, but albeit less favorable than what we experienced a year prior.

Okay. So fluctuations like you had a year ago of $3 million, which, in that case, was favorable, but I assume -- I mean, how often do you see fluctuations of that magnitude, whether they're favorable or unfavorable?

I think you'll see them frequently in that relative magnitude. Understand that since we have reinsured a significant portion of our in-force book of business, the relative size that we can see is pretty much limited in the near term. We're not going to see those kind of exposures on our new business, especially since we reinsure 90% of the mortality risk to third parties. So most of the in-force exposure, again, has been seeded back to Citi.

What I will say is that I think this is at the high end of the volatility, because we did have a very strong quarter last year -- unexpectedly strong. And it didn't normalize out throughout the rest of 2009.

Okay. That's helpful. Thank you.

Your next question is a follow-up from the line of Steven Schwartz with Raymond James & Associates. Please, proceed.

Hey, there.

Hey, Steven.

I can ask some more. Alison, you mentioned that there were some expenses that you thought were going to occur in this quarter that, now, you're expecting to occur in the second quarter. Could you give us the amount of that, please?

Sure. The amount specifically associated with that is largely related to payroll taxes on our bonuses for management. Historically, Citi had paid those bonuses in the first quarter, so we had a large portion of our payroll taxes incurred in the first quarter. Citi did decide to change its structure this year and paid the vast majority of the compensation in the second quarter. And so, obviously, the payroll taxes will be pushed off accordingly.

Okay. And do you know the amount off the top of your head?

It's somewhere in the range of $2 million to $3 million.

All right. Okay, that's good. And, just, as another one, if I may -- do you know off the top of your head, Alison, what your annualized premium in-force was at the end of the quarter?

It is in -- oh, in-force?

Yes.

In-force is a tough one because, remember, we ceded off a significant portion of it.

Okay.

So we really focus on annualized issued premium.

Sure.

And that's a number that's provided in the statistical supplement.

Right. I've got that one. I was looking for the actual total in-force.

Yes. The in-force, quite frankly, we don't find to be all that valuable, mainly because so much of it has now been ceded off as part of the Citi transaction.

Okay -- all right. Thank you very much.

Your next question is a follow-up from the line of Mark Hughes with SunTrust. Please, proceed.

Yes, I wonder if you could give us some sense on whether the economy, maybe, is less of a headwind now versus three or 12 months ago.

Very good question, Mark. And I'll give you kind of two answers to that. Okay? As it relates to -- one of the things Rick mentioned in the open, that we feel very good about, was what happened in our Savings and Investment business in the first quarter. And so, that shows a very positive side to us -- that people are -- between the focus of our sales force and our people -- that shows a positive side.

On the other side, the middle market is still very concerned. Okay? The reality of dealing in the middle market is they're very concerned. And people still have a lot of questions and wonder about the future. And from our perspective -- our view is, with getting the IPO done -- that the biggest thing that that did for our organization is it removed the uncertainty of kind of the, where is Primerica going to be? What's going to happen?

These results, as Rick said, happened prior to that happening. And so removing that level of uncertainty from our sales force, because recruiting requires confidence and emotion, from our view, is much bigger than what's going on in the economy.

Rick, do you want to --?

Yes. I'll just sort of add just a few points onto that. On the life side, our average face did not increase. It still stayed down. So we did not see a return on that. But as Alison mentioned, we did see an improvement in persistency. It's a very short period of time to look at, but that was a hopeful sign.

Great. Thank you.

We'll use the word, cautiously optimistic.

Yes.

There are no further questions at this time. I would now like to turn the call over to Mr. Rick Williams for closing remarks.

Thank you, everybody, for joining us this morning on our first earnings call. We look forward to speaking with you in the future. Have a great day.

Have a great day, everyone.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect your line. Good day.