Unico American Corporation Reports Third Quarter 2017 Financial Results
Stockholders’ equity was
“We have identified and addressed the causes of recent quarterly losses, and we do not expect these kinds of losses to recur. For example, of the third quarter’s
“In light of the adverse development on the nightclub business we underwrote, we increased our estimate of expected ultimate loss ratios used in our IBNR calculation for policies issued to nightclubs, resulting in a significant increase in our IBNR reserves.
“Costs related to our other restructuring initiatives executed during the quarter account for most of the remaining balance of this quarter’s
“While adverse development and reserve strengthening on prior accident years reduced our earnings again, we remain strongly capitalized and we spent the quarter making positive changes. We improved our underwriting and marketing operations, completed the vendor selection phase for a new policy administration system, launched three new websites, and improved the yields on our investment portfolio. I remain extremely optimistic and confident about the future success of Unico’s current team of employees, Unico’s operations and Unico’s profitability.”
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
AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ($ in thousands) |
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2017 | 2016 | |||||||||||||||||
(Unaudited) |
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ASSETS |
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Investments | ||||||||||||||||||
Available for sale: | ||||||||||||||||||
Fixed maturities, at fair value (amortized cost: |
$ | 84,269 | $ | 80,384 | ||||||||||||||
Short-term investments, at fair value | 13,081 | 10,205 | ||||||||||||||||
Total Investments | 97,350 | 90,589 | ||||||||||||||||
Cash | 230 | 13,496 | ||||||||||||||||
Accrued investment income | 436 | 186 | ||||||||||||||||
Receivables, net | 6,047 | 6,008 | ||||||||||||||||
Reinsurance recoverable: | ||||||||||||||||||
Paid losses and loss adjustment expenses | 1,692 | 261 | ||||||||||||||||
Unpaid losses and loss adjustment expenses | 11,891 | 9,521 | ||||||||||||||||
Deferred policy acquisition costs | 4,231 | 4,432 | ||||||||||||||||
Property and equipment, net | 10,118 | 10,283 | ||||||||||||||||
Deferred income taxes | 1,231 | 1,177 | ||||||||||||||||
Other assets | 4,853 | 2,269 | ||||||||||||||||
Total Assets | $ | 138,079 | $ | 138,222 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
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LIABILITIES |
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Unpaid losses and loss adjustment expenses | $ | 53,067 | $ | 47,056 | ||||||||||||||
Unearned premiums | 19,472 | 19,375 | ||||||||||||||||
Advance premium and premium deposits | 430 | 224 | ||||||||||||||||
Accrued expenses and other liabilities | 2,156 | 2,661 | ||||||||||||||||
Total Liabilities | $ | 75,125 | $ | 69,316 | ||||||||||||||
Commitments and contingencies | ||||||||||||||||||
STOCKHOLDERS' EQUITY |
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Common stock, no par – authorized 10,000,000 shares; 5,307,133 shares issued and outstanding at |
$ | 3,773 | $ | 3,761 | ||||||||||||||
Accumulated other comprehensive (loss) income | (7 | ) | 8 | |||||||||||||||
Retained earnings | 59,188 | 65,137 | ||||||||||||||||
Total Stockholders’ Equity | $ | 62,954 | $ | 68,906 | ||||||||||||||
Total Liabilities and Stockholders' Equity | $ | 138,079 | $ | 138,222 | ||||||||||||||
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) ($ in thousands, except per share) |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||
REVENUES |
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Insurance company operation: | ||||||||||||||||||||||||
Net premium earned | $ | 8,168 | $ | 7,981 | $ | 24,309 | $ | 23,271 | ||||||||||||||||
Investment income | 310 | 235 | 785 | 659 | ||||||||||||||||||||
Net realized investment gains (losses) | - | - | 1 | (1 | ) | |||||||||||||||||||
Other income | 108 | 66 | 244 | 201 | ||||||||||||||||||||
Total Insurance Company Operation | 8,586 | 8,282 | 25,339 | 24,130 | ||||||||||||||||||||
Other insurance operations: | ||||||||||||||||||||||||
Gross commissions and fees | 685 | 697 | 2,098 | 2,064 | ||||||||||||||||||||
Finance charges and fees earned | 22 | 18 | 58 | 51 | ||||||||||||||||||||
Other income | - | 1 | - | 6 | ||||||||||||||||||||
Total Revenues | 9,293 | 8,998 | 27,495 | 26,251 | ||||||||||||||||||||
EXPENSES |
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Losses and loss adjustment expenses | 9,918 | 8,038 | 24,352 | 17,983 | ||||||||||||||||||||
Policy acquisition costs | 1,854 | 1,742 | 4,943 | 5,142 | ||||||||||||||||||||
Salaries and employee benefits | 1,221 | 1,319 | 4,535 | 3,980 | ||||||||||||||||||||
Commissions to agents/brokers | 40 | 40 | 127 | 121 | ||||||||||||||||||||
Other operating expenses | 696 | 826 | 2,592 | 2,053 | ||||||||||||||||||||
Total Expenses | 13,729 | 11,965 | 36,549 | 29,279 | ||||||||||||||||||||
Loss before taxes | (4,436 | ) | (2,967 | ) | (9,054 | ) | (3,028 | ) | ||||||||||||||||
Income tax benefit | 1,509 | 1,013 | 3,105 | 1,027 | ||||||||||||||||||||
Net Loss | $ | (2,927 | ) | $ | (1,954 | ) | $ | (5,949 | ) | $ | (2,001 | ) | ||||||||||||
PER SHARE DATA: |
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Basic | ||||||||||||||||||||||||
Loss per share | $ | (0.55 | ) | $ | (0.37 | ) | $ | (1.12 | ) | $ | (0.38 | ) | ||||||||||||
Weighted average shares | 5,307,133 | 5,307,133 | 5,307,133 | 5,307,881 | ||||||||||||||||||||
Diluted | ||||||||||||||||||||||||
Loss per share | $ | (0.55 | ) | $ | (0.37 | ) | $ | (1.12 | ) | $ | (0.38 | ) | ||||||||||||
Weighted average shares | 5,307,133 | 5,307,133 | 5,307,133 | 5,307,881 | ||||||||||||||||||||
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) ($ in thousands) |
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Nine Months Ended | |||||||||||||||||||
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2017 | 2016 | ||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||
Net loss | $ | (5,949 | ) | $ | (2,001 | ) | |||||||||||||
Adjustments to reconcile net loss to net cash from operations: | |||||||||||||||||||
Depreciation and amortization | 386 | 361 | |||||||||||||||||
Bond amortization, net | (533 | ) | (13 | ) | |||||||||||||||
Bad debt expense | 16 | - | |||||||||||||||||
Non-cash stock based compensation | 12 | 17 | |||||||||||||||||
Realized investment (gains) losses | (1 | ) | 1 | ||||||||||||||||
Changes in assets and liabilities: | |||||||||||||||||||
Net receivables and accrued investment income | (305 | ) | (727 | ) | |||||||||||||||
Reinsurance recoverable | (3,801 | ) | 237 | ||||||||||||||||
Deferred policy acquisitions costs | 201 | (314 | ) | ||||||||||||||||
Other assets | 478 | 698 | |||||||||||||||||
Unpaid losses and loss adjustment expenses | 6,011 | 728 | |||||||||||||||||
Unearned premiums | 97 | 1,323 | |||||||||||||||||
Advance premium and premium deposits | 206 | 277 | |||||||||||||||||
Accrued expenses and other liabilities | (505 | ) | 331 | ||||||||||||||||
Income taxes current/deferred | (3,109 | ) | (1,037 | ) | |||||||||||||||
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(6,796 | ) | (119 | ) | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||
Purchase of fixed maturity investments | (44,321 | ) | (12,032 | ) | |||||||||||||||
Proceeds from maturity of fixed maturity investments | 39,354 | 10,894 | |||||||||||||||||
Proceeds from sale of fixed maturity investments | 1,594 | 746 | |||||||||||||||||
Net (increase) decrease in short-term investments | (2,876 | ) | 7,467 | ||||||||||||||||
Additions to property and equipment | (221 | ) | (536 | ) | |||||||||||||||
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(6,470 | ) | 6,539 | ||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||
Repurchase of common stock | - | (90 | ) | ||||||||||||||||
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- | (90 | ) | ||||||||||||||||
Net (decrease) increase in cash | (13,266 | ) | 6,330 | ||||||||||||||||
Cash and restricted cash at beginning of period | 13,496 | 8,259 | |||||||||||||||||
Cash and Restricted Cash at End of Period | $ | 230 | $ | 14,589 | |||||||||||||||
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/20171113006432/en/
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