Unico American Corporation Reports Fourth Quarter and Full Year 2017 Financial Results
Stockholders’ equity was
“While we realized a loss during our fourth quarter, we also experienced improving trends in both loss ratios and investment yields, and we assigned top priority to the achievement of immediate, less speculative results,” said
About Unico
Headquartered in
Forward-Looking Statements
Certain statements in this press release are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 and the Company intends that such forward-looking statements are subject to the safe harbors created thereby. These statements, which may be identified by words or phrases such as “anticipate,” “appear,” “believe,” “estimate,” “expect,” “intend,” “plan,” “predict,” “will,” “may,” “likely,” “future,” “should,” “could,” and “would” and similar words, are intended to identify forward-looking statements. In addition, any statements that refer to projections of the Company’s future financial performance, trends in its businesses, or other characterizations of future events or circumstances are forward-looking statements.
The forward-looking statements included herein are based on current expectations of the Company’s management based on available information and involve certain risks and uncertainties, many of which are beyond the control of the Company. Such risks and uncertainties could cause actual results to differ materially from those anticipated by these forward-looking statements. Factors that could cause actual results to differ materially include, among others: failure to meet minimum capital and surplus requirements; vulnerability to significant catastrophic property loss; a change in accounting standards issued by the
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AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
($ in thousands) | |||||||
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2017 | 2016 | ||||||
(Unaudited) | |||||||
ASSETS |
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Investments | |||||||
Available-for-sale: |
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Fixed maturities, at fair value (amortized cost: |
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2017 |
$ | 57,849 | $ | 19,104 | |||
Held-to-maturity: | |||||||
Fixed maturities, at amortized cost (fair value: |
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2017 |
28,098 | 61,280 | |||||
Short-term investments, at fair value | 10,440 | 10,205 | |||||
Total Investments | 96,387 | 90,589 | |||||
Cash and restricted cash | 774 | 13,497 | |||||
Accrued investment income | 491 | 186 | |||||
Receivables, net | 6,006 | 6,008 | |||||
Reinsurance recoverable: | |||||||
Paid losses and loss adjustment expenses | 127 | 261 | |||||
Unpaid losses and loss adjustment expenses | 8,394 | 9,521 | |||||
Deferred policy acquisition costs | 4,163 | 4,432 | |||||
Property and equipment, net | 10,015 | 10,283 | |||||
Deferred income taxes | 3,381 | 1,177 | |||||
Other assets | 561 | 2,268 | |||||
Total Assets | $ | 130,299 | $ | 138,222 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY |
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LIABILITIES |
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Unpaid losses and loss adjustment expenses | $ | 49,077 | $ | 47,056 | |||
Unearned premiums | 18,768 | 19,375 | |||||
Advance premium and premium deposits | 208 | 224 | |||||
Accrued expenses and other liabilities | 2,301 | 2,661 | |||||
Total Liabilities | $ | 70,354 | $ | 69,316 | |||
Commitments and contingencies | |||||||
STOCKHOLDERS' EQUITY |
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Common stock, no par – authorized 10,000,000 shares; issued and | |||||||
outstanding shares 5,307,133 at |
$ | 3,773 | $ | 3,761 | |||
Accumulated other comprehensive (loss) income | (240 | ) | 8 | ||||
Retained earnings | 56,412 | 65,137 | |||||
Total Stockholders’ Equity | $ | 59,945 | $ | 68,906 | |||
Total Liabilities and Stockholders' Equity | $ | 130,299 | $ | 138,222 | |||
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AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
($ in thousands, except per share) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
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2017 | 2016 | 2017 | 2016 | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
REVENUES |
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Insurance company operation: |
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Net premium earned | $ | 8,034 | $ | 8,085 | $ | 32,343 | $ | 31,356 | |||||||
Investment income | 505 | 222 | 1,290 | 881 | |||||||||||
Net realized investment gains (losses) | - | - | 1 | (1 | ) | ||||||||||
Other income | 94 | 16 | 338 | 218 | |||||||||||
Total Insurance Company Revenues | 8,633 | 8,323 | 33,972 | 32,454 | |||||||||||
Other insurance operations: | |||||||||||||||
Gross commissions and fees | 646 | 675 | 2,744 | 2,738 | |||||||||||
Investment income | 1 | - | 1 | - | |||||||||||
Finance fees earned | 17 | 18 | 75 | 69 | |||||||||||
Other income | - | 1 | - | 7 | |||||||||||
Total Revenues | 9,297 | 9,017 | 36,792 | 35,268 | |||||||||||
EXPENSES |
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Losses and loss adjustment expenses | 6,139 | 4,845 | 30,491 | 22,827 | |||||||||||
Policy acquisition costs | 1,521 | 1,753 | 6,464 | 6,895 | |||||||||||
Salaries and employee benefits | 1,309 | 946 | 5,844 | 4,926 | |||||||||||
Commissions to agents/brokers | 39 | 40 | 166 | 162 | |||||||||||
Other operating expenses | 1,115 | 519 | 3,707 | 2,572 | |||||||||||
Total Expenses | 10,123 | 8,103 | 46,672 | 37,382 | |||||||||||
Income (loss) before taxes | (826 | ) | 914 | (9,880 | ) | (2,114 | ) | ||||||||
Income tax expense (benefit) | 1,950 | 317 | (1,155 | ) | (710 | ) | |||||||||
Net Income (loss) | $ | (2,776 | ) | $ | 597 | $ | (8,725 | ) | $ | (1,404 | ) | ||||
PER SHARE DATA: |
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Basic | |||||||||||||||
Earnings (loss) per share | $ | (0.52 | ) | $ | 0.11 | $ | (1.64 | ) | $ | (0.26 | ) | ||||
Weighted average shares | 5,307,133 | 5,307,133 | 5,307,133 | 5,307,694 | |||||||||||
Diluted | |||||||||||||||
Earnings (loss) per share | $ | (0.52 | ) | $ | 0.11 | $ | (1.64 | ) | $ | (0.26 | ) | ||||
Weighted average shares | 5,307,133 | 5,307,837 | 5,307,133 | 5,307,694 | |||||||||||
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AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
($ in thousands) | ||||||||
Twelve Months Ended | ||||||||
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2017 | 2016 | |||||||
(Unaudited) | ||||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (8,725 | ) | $ | (1,404 | ) | ||
Adjustments to reconcile net loss to net cash from operations: | ||||||||
Depreciation and amortization | 518 | 483 | ||||||
Bond amortization, net | (664 | ) | (16 | ) | ||||
Non-cash stock based compensation | 12 | 23 | ||||||
Net realized investment (gains) losses | (1 | ) | 1 | |||||
Bad debt expense | 16 | 6 | ||||||
Changes in assets and liabilities: | ||||||||
Net receivables and accrued investment income | (319 | ) | (609 | ) | ||||
Reinsurance recoverable | 1,261 | 606 | ||||||
Deferred policy acquisition costs | 269 | (199 | ) | |||||
Other assets | 400 | 297 | ||||||
Unpaid losses and loss adjustment expenses | 2,021 | (2,038 | ) | |||||
Unearned premiums | (607 | ) | 1,296 | |||||
Advance premium and premium deposits | (16 | ) | 12 | |||||
Accrued expenses and other liabilities | (360 | ) | 218 | |||||
Income taxes current/deferred | (828 | ) | (85 | ) | ||||
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(7,023 | ) | (1,409 | ) | ||||
Cash flows from investing activities: | ||||||||
Purchase of fixed maturity investments | (60,292 | ) | (16,772 | ) | ||||
Proceeds from maturity of fixed maturity investments | 53,936 | 17,873 | ||||||
Proceeds from sale of fixed maturity investments | 1,142 | 745 | ||||||
Net (increase) decrease in short-term investments | (236 | ) | 5,436 | |||||
Additions to property and equipment | (250 | ) | (545 | ) | ||||
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(5,700 | ) | 6,737 | |||||
Cash flows from financing activities: | ||||||||
Repurchase of common stock | - | (90 | ) | |||||
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- | (90 | ) | |||||
Net (decrease) increase in cash and restricted cash | (12,723 | ) | 5,238 | |||||
Cash and restricted cash at beginning of period | 13,497 | 8,259 | ||||||
Cash and Restricted Cash at End of Period | $ | 774 | $ | 13,497 | ||||
Supplemental Cash Flow Information | ||||||||
Cash paid during the period for: | ||||||||
Interest | - | - | ||||||
Income taxes | $ | 9 | $ | 9 | ||||
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