FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended June 30, 2003
Commission file number 0-15886
The Navigators Group, Inc.
(Exact name of registrant as specified in its charter)
|
Delaware |
|
13-3138397 |
|
(State or other jurisdiction of |
|
(IRS Employer |
|
|
|
|
|
One Penn Plaza, New York, New York |
|
10119 |
|
(Address of principal executive offices) |
|
(Zip Code) |
|
|
|
|
|
(212) 244-2333 |
||
|
(Registrant’s telephone number, including area code) |
||
|
|
||
|
|
||
|
(Former name, former address and former fiscal year, if changed since last report.) |
||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes ý |
|
No o |
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
|
Yes ý |
|
No o |
Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.
On August 6, 2003, there were 8,529,360 shares of $0.10 par value common stock issued and outstanding.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
INDEX
2
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
|
|
|
June 30, |
|
December
31, |
|
||
|
|
|
(Unaudited) |
|
|
|
||
|
ASSETS |
|
|
|
|
|
||
|
Investments and cash: |
|
|
|
|
|
||
|
Fixed maturities, available-for-sale, at fair value |
|
|
|
|
|
||
|
(amortized cost: 2003, $419,489; 2002, $351,821) |
|
$ |
438,913 |
|
$ |
366,676 |
|
|
|
|
|
|
|
|
||
|
Equity securities, available-for-sale, at fair value (cost: 2003, $11,969; 2002, $12,286) |
|
12,550 |
|
11,674 |
|
||
|
Short-term investments, at cost which approximates fair value |
|
62,957 |
|
61,092 |
|
||
|
Cash |
|
4,950 |
|
13,443 |
|
||
|
Total investments and cash |
|
519,370 |
|
452,885 |
|
||
|
|
|
|
|
|
|
||
|
Premiums in course of collection |
|
146,709 |
|
108,672 |
|
||
|
Commissions Receivable |
|
2,946 |
|
3,112 |
|
||
|
Prepaid reinsurance premiums |
|
102,048 |
|
58,902 |
|
||
|
Reinsurance receivable on paid and unpaid losses and loss adjustment expenses |
|
254,850 |
|
243,153 |
|
||
|
Federal income tax recoverable |
|
|
|
826 |
|
||
|
Net deferred income tax benefit |
|
5,768 |
|
6,470 |
|
||
|
Deferred policy acquisition costs |
|
26,052 |
|
23,632 |
|
||
|
Accrued investment income |
|
4,610 |
|
3,309 |
|
||
|
Goodwill |
|
5,238 |
|
5,167 |
|
||
|
Other assets |
|
13,586 |
|
11,791 |
|
||
|
Total assets |
|
$ |
1,081,177 |
|
$ |
917,919 |
|
|
|
|
|
|
|
|
||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||
|
Liabilities: |
|
|
|
|
|
||
|
Reserves for losses and loss adjustment expenses |
|
$ |
543,390 |
|
$ |
489,642 |
|
|
Unearned premium |
|
230,862 |
|
167,372 |
|
||
|
Reinsurance balances payable |
|
91,423 |
|
55,574 |
|
||
|
Notes payable to banks |
|
11,000 |
|
14,500 |
|
||
|
Payable for securities |
|
4,619 |
|
5,327 |
|
||
|
Federal income tax payable |
|
89 |
|
|
|
||
|
Accounts payable and other liabilities |
|
12,663 |
|
14,229 |
|
||
|
Total liabilities |
|
894,046 |
|
746,644 |
|
||
|
|
|
|
|
|
|
||
|
Stockholders’ equity: |
|
|
|
|
|
||
|
Preferred stock, $.10 par value; 1,000,000 shares authorized; none issued |
|
|
|
|
|
||
|
Common stock, $.10 par value; 20,000,000 shares authorized for 2003 and 2002; issued and outstanding 8,515,535 for 2003 and 8,486,272 (net of treasury stock) for 2002 |
|
852 |
|
851 |
|
||
|
Additional paid-in capital |
|
40,617 |
|
40,141 |
|
||
|
Treasury stock held at cost (shares: 16,423 for 2002) |
|
|
|
(236 |
) |
||
|
Accumulated other comprehensive income |
|
13,767 |
|
9,732 |
|
||
|
Retained earnings |
|
131,895 |
|
120,787 |
|
||
|
Total stockholders’ equity |
|
187,131 |
|
171,275 |
|
||
|
Total liabilities and stockholders’ equity |
|
$ |
1,081,177 |
|
$ |
917,919 |
|
3
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except net income per share)
|
|
|
Three
Months Ended |
|
||||
|
|
|
2003 |
|
2002 |
|
||
|
|
|
(Unaudited) |
|
||||
|
Revenues: |
|
|
|
|
|
||
|
Net earned premium |
|
$ |
65,264 |
|
$ |
50,923 |
|
|
Commission income |
|
1,486 |
|
993 |
|
||
|
Net investment income |
|
4,552 |
|
4,162 |
|
||
|
Net realized capital gains |
|
669 |
|
201 |
|
||
|
Other income |
|
415 |
|
641 |
|
||
|
Total revenues |
|
72,386 |
|
56,920 |
|
||
|
|
|
|
|
|
|
||
|
Operating expenses: |
|
|
|
|
|
||
|
Net losses and loss adjustment expenses incurred |
|
43,291 |
|
32,406 |
|
||
|
Commission expense |
|
8,876 |
|
10,328 |
|
||
|
Other operating expenses |
|
12,237 |
|
8,983 |
|
||
|
Interest expense |
|
87 |
|
145 |
|
||
|
Total operating expenses |
|
64,491 |
|
51,862 |
|
||
|
|
|
|
|
|
|
||
|
Income before income tax expense |
|
7,895 |
|
5,058 |
|
||
|
|
|
|
|
|
|
||
|
Income tax expense (benefit): |
|
|
|
|
|
||
|
Current |
|
3,437 |
|
1,344 |
|
||
|
Deferred |
|
(1,816 |
) |
(60 |
) |
||
|
Total income tax expense |
|
1,621 |
|
1,284 |
|
||
|
|
|
|
|
|
|
||
|
Net income |
|
$ |
6,274 |
|
$ |
3,774 |
|
|
|
|
|
|
|
|
||