UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2004
Commission file number 0-15886
The Navigators Group, Inc.
(Exact name of Registrant as specified in its charter)
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Delaware |
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13-3138397 |
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(State or
other jurisdiction of |
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(IRS
Employer |
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One Penn Plaza, New York, New York |
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10119 |
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(Address of principal executive offices) |
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(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
The number of common shares outstanding as of October 27, 2004 was 12,625,706.
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
INDEX
2
Part 1. Financial Information
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands, except share data)
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September 30, |
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December 31, |
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(Unaudited) |
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ASSETS |
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Investments and cash: |
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Fixed
maturities, available-for-sale, at fair value |
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$ |
699,828 |
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$ |
588,545 |
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Equity securities, available-for-sale, at fair value (cost: 2004, $17,708; 2003, $11,977) |
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19,198 |
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13,446 |
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Short-term investments, at cost which approximates fair value |
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104,794 |
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83,202 |
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Cash |
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16,029 |
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8,399 |
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Total investments and cash |
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839,849 |
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693,592 |
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Premiums in course of collection |
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155,209 |
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128,676 |
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Commissions receivable |
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2,829 |
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3,970 |
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Prepaid reinsurance premiums |
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138,957 |
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102,141 |
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Reinsurance receivable on paid losses |
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17,787 |
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26,270 |
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Reinsurance receivable on unpaid losses and loss adjustment expense |
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469,428 |
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350,441 |
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Federal income tax recoverable |
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— |
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8,747 |
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Net deferred income tax benefit |
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17,292 |
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15,195 |
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Deferred policy acquisition costs |
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28,540 |
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24,720 |
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Accrued investment income |
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6,906 |
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5,546 |
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Goodwill |
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5,128 |
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5,093 |
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Other assets |
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10,578 |
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15,067 |
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Total assets |
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$ |
1,692,503 |
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$ |
1,379,458 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Liabilities: |
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Reserves for losses and loss adjustment expenses |
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$ |
909,507 |
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$ |
724,612 |
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Unearned premium |
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287,450 |
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238,803 |
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Reinsurance balances payable |
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139,518 |
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97,583 |
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Federal income tax payable |
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1,821 |
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— |
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Payable for securities purchased |
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12,737 |
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12,857 |
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Accounts payable and other liabilities |
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24,872 |
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15,575 |
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Total liabilities |
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1,375,905 |
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1,089,430 |
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Stockholders’ equity: |
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Preferred stock, $.10 par value, authorized 1,000,000 shares, none issued |
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— |
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— |
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Common
stock, $.10 par value, 20,000,000 shares authorized; |
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1,263 |
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1,254 |
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Additional paid-in capital |
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153,881 |
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151,765 |
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Accumulated other comprehensive income |
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8,752 |
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8,537 |
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Retained earnings |
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152,702 |
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128,472 |
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Total stockholders’ equity |
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316,598 |
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290,028 |
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Total liabilities and stockholders’ equity |
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$ |
1,692,503 |
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$ |
1,379,458 |
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See accompanying notes to interim consolidated financial statements.
3
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
($ and shares in thousands, except net income per share)
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Three Months Ended |
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2004 |
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2003 |
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(Unaudited) |
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Gross written premium |
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$ |
151,178 |
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$ |
139,632 |
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Revenues: |
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Net written premium |
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$ |
65,992 |
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$ |
70,631 |
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Decrease in unearned premium |
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9,145 |
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3,906 |
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Net earned premium |
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75,137 |
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74,537 |
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Commission income |
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1,121 |
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23 |
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Net investment income |
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6,881 |
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4,634 |
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Net realized capital gains |
|
271 |
|
349 |
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Other income (expense) |
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(127 |
) |
139 |
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Total revenues |
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83,283 |
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79,682 |
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Operating expenses: |
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