Unico American Corporation Reports Second Quarter 2017 Financial Results
Stockholders’ equity was
"We continued making significant changes to infrastructure during the second quarter and the costs of these changes, including employee severance and IT consulting, impacted our results,” said Cary L. Cheldin, Unico’s President and Chief Executive Officer. Cheldin continued: “While we were successful in bringing new leadership to our P&C underwriting and marketing operations and we adopted important rate increases later in the quarter, our claims experience from prior accident years was unfavorable. Nonetheless, I am confident that the numerous initiatives that we implemented during the first half of 2017 will make a positive impact upon our future results.”
Headquartered in
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained herein that are not historical facts are forward-looking. These statements, which may be identified by forward-looking words or phrases such as “anticipate,” “appears,” “believe,” ”expect,” “intend,” “may,” “should,” and “would,” involve 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 these forward-looking statements. Factors which could cause actual results to differ materially include underwriting actions not being effective, rate increases for coverages not being sufficient, premium rate adequacy relating to competition or regulation, actual versus estimated claim experience, regulatory changes or developments, unforeseen calamities, general market conditions, and the Company’s ability to introduce new profitable products.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ($ in thousands) |
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|
|
|||||||
2017 |
2016 |
|||||||
(Unaudited) |
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ASSETS |
||||||||
Investments | ||||||||
Available for sale: | ||||||||
Fixed maturities, at fair value (amortized cost: |
||||||||
|
$ | 83,874 | $ | 80,384 | ||||
Short-term investments, at fair value |
5,093 |
10,205 |
||||||
Total Investments | 88,967 | 90,589 | ||||||
Cash and restricted cash | 13,586 | 13,496 | ||||||
Accrued investment income | 239 | 186 | ||||||
Receivables, net | 6,258 | 6,008 | ||||||
Reinsurance recoverable: | ||||||||
Paid losses and loss adjustment expenses | 81 | 261 | ||||||
Unpaid losses and loss adjustment expenses | 12,492 | 9,521 | ||||||
Deferred policy acquisition costs | 4,423 | 4,432 | ||||||
Property and equipment, net | 10,113 | 10,283 | ||||||
Deferred income taxes | 1,170 | 1,177 | ||||||
Other assets |
3,449 |
2,269 |
||||||
Total Assets |
$ |
140,778 |
$ |
138,222 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
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LIABILITIES |
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Unpaid losses and loss adjustment expenses | $ | 51,939 | $ | 47,056 | ||||
Unearned premiums | 19,877 | 19,375 | ||||||
Advance premium and premium deposits | 385 | 224 | ||||||
Accrued expenses and other liabilities |
2,708 |
2,661 |
||||||
Total Liabilities | $ |
74,909 |
$ |
69,316 |
||||
Commitments and contingencies | ||||||||
STOCKHOLDERS' EQUITY |
||||||||
Common stock, no par – authorized 10,000,000 shares; issued and | ||||||||
outstanding shares 5,307,133 at |
||||||||
|
$ | 3,773 | $ | 3,761 | ||||
Accumulated other comprehensive income (loss) | (3 | ) | 8 | |||||
Retained earnings |
62,099 |
65,137 |
||||||
Total Stockholders’ Equity | $ |
65,869 |
$ |
68,906 |
||||
Total Liabilities and Stockholders' Equity | $ |
140,778 |
$ |
138,222 |
||||
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ($ in thousands, except per share) |
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Three Months Ended | Six Months Ended | |||||||||||||||
|
|
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2017 |
2016 |
2017 |
2016 |
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REVENUES |
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Insurance company operation: | ||||||||||||||||
Net earned premium | $ | 8,220 | $ | 7,718 | $ | 16,141 | $ | 15,290 | ||||||||
Investment income | 264 | 212 | 476 | 424 | ||||||||||||
Net realized investment losses | - | - | - | (1 | ) | |||||||||||
Other income |
68 |
68 |
136 |
136 |
||||||||||||
Total Insurance Company Operation | 8,552 | 7,998 | 16,753 | 15,849 | ||||||||||||
Other insurance operations: | ||||||||||||||||
Gross commissions and fees | 671 | 709 | 1,413 | 1,366 | ||||||||||||
Finance fees earned | 18 | 15 | 36 | 32 | ||||||||||||
Other income | - | - | - | 5 | ||||||||||||
Total Revenues |
9,241 |
8,722 |
18,202 |
17,252 |
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|
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EXPENSES |
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Losses and loss adjustment expenses | 5,909 | 4,859 | 14,434 | 9,944 | ||||||||||||
Policy acquisition costs | 1,591 | 1,701 | 3,089 | 3,401 | ||||||||||||
Salaries and employee benefits | 1,965 | 1,279 | 3,313 | 2,661 | ||||||||||||
Commissions to agents/brokers | 45 | 41 | 87 | 81 | ||||||||||||
Other operating expenses |
1,082 |
633 |
1,897 |
1,226 |
||||||||||||
Total Expenses |
10,592 |
8,513 |
22,820 |
17,313 |
||||||||||||
Income (loss) before taxes | (1,351 | ) | 209 | (4,618 | ) | (61 | ) | |||||||||
Income tax expense (benefit) |
(460 |
) |
58 |
(1,580 |
) |
(13 |
) | |||||||||
Net Income (Loss) | $ |
(891 |
) |
$ |
151 |
$ |
(3,038 |
) | $ | (48 | ) | |||||
PER SHARE DATA: | ||||||||||||||||
Basic | ||||||||||||||||
Earnings (loss) per share | $ | (0.17 | ) | $ | 0.03 | $ | (0.57 | ) | $ | (0.01 | ) | |||||
Weighted average shares | 5,307,133 | 5,307,133 | 5,307,133 | 5,308,255 | ||||||||||||
Diluted | ||||||||||||||||
Earnings (loss) per share | $ | (0.17 | ) | $ | 0.03 | $ | (0.57 | ) | $ | (0.01 | ) | |||||
Weighted average shares | 5,308,501 | 5,308,501 | 5,307,133 | 5,308,255 | ||||||||||||
AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ($ in thousands) |
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Six Months Ended | |||||||||
|
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2017 |
2016 |
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Cash flows from operating activities: | |||||||||
Net Loss | $ | (3,038 | ) | $ | (48 | ) | |||
Adjustments to reconcile net loss to net cash from operations: | |||||||||
Depreciation and amortization | 265 | 240 | |||||||
Bond amortization, net | (426 | ) | (8 | ) | |||||
Bad debt expense | 15 | - | |||||||
Non-cash stock based compensation | 12 | 12 | |||||||
Changes in assets and liabilities: | |||||||||
Net receivables and accrued investment income | (318 | ) | (826 | ) | |||||
Reinsurance recoverable | (2,791 | ) | 460 | ||||||
Deferred policy acquisitions costs | 9 | (262 | ) | ||||||
Other assets | 416 | 604 | |||||||
Unpaid losses and loss adjustment expenses | 4,883 | (107 | ) | ||||||
Unearned premium | 502 | 1,186 | |||||||
Advance premium and premium deposits | 161 | 229 | |||||||
Accrued expenses and other liabilities | 47 | 122 | |||||||
Income taxes current/deferred |
(1,584 |
) |
(18 |
) | |||||
|
(1,847 |
) |
1,584 |
||||||
Cash flows from investing activities: | |||||||||
Purchase of fixed maturity investments | (29,348 | ) | (5,194 | ) | |||||
Proceeds from maturity of fixed maturity investments | 25,218 | 300 | |||||||
Proceeds from sale of fixed maturity investments | 1,050 | 746 | |||||||
Net decrease in short-term investments | 5,112 | 8,682 | |||||||
Additions to property and equipment |
(95 |
) |
(522 |
) | |||||
Net Cash Provided by Investing Activities |
1,937 |
4,012 |
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Cash flows from financing activities: |
|
||||||||
Repurchase of common stock |
- |
(90 |
) | ||||||
|
- |
(90 |
) | ||||||
Net increase in cash and restricted cash | 90 | 5,506 | |||||||
Cash and restricted cash at beginning of period |
13,496 |
8,259 |
|||||||
Cash and Restricted Cash at End of Period | $ |
13,586 |
$ |
13,765 |
|||||
Supplemental Cash Flow Information | |||||||||
Cash paid during the period for: | |||||||||
Interest | - | - | |||||||
Income taxes | $ | 9 | $ | 9 | |||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170811005618/en/
Chief Financial Officer
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