Attached files
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| 8-K - FORM 8-K - UNIVERSAL INSURANCE HOLDINGS, INC. | d579709d8k.htm |
Exhibit 99.1
UVE REPORTS SECOND-QUARTER 2013
NET INCOME GROWTH OF 119 PERCENT AND EARNINGS PER
SHARE GROWTH OF 132 PERCENT
Fort Lauderdale, Fla., August 6, 2013 - Universal Insurance Holdings, Inc. (Company) (NYSE MKT: UVE) reported net income of $17.0 million, or $0.44 per diluted share, for the second quarter of 2013, compared to net income of $7.8 million, or $0.19 per diluted share, for the same period in 2012.
Second-Quarter 2013 Highlights
| • | Strongest quarterly net income and earnings per share (EPS) since 2007. |
| • | Net income and EPS growth of 119 percent and 132 percent, respectively, compared to Q2 2012. |
| • | Net earned premiums grew by over 20 percent versus Q2 2012. |
| • | Repurchased approximately 6.7 million shares of common stock during Q2 2012 at a significant discount to market price. |
Chairman, President and CEO Sean Downes commented, “Second-quarter 2013 earnings were very strong and represented our best quarterly results since 2007. With underwriting margins continuing to improve and a significantly better investment portfolio performance, we were able to more than double earnings over the second quarter of last year. With first half EPS growth of nearly 66 percent, we believe Universal is well positioned to continue implementing our strategic business plan.”
Second-Quarter 2013 Results
Comparing the second quarter of 2013 to the second quarter of 2012, net income improved by $9.3 million, or $0.25 per diluted share, as a result of higher net earned premiums, a reduction in losses and loss adjustment expenses, as well as the absence of unrealized gains and losses for changes in the fair value of trading investments. Additionally, second-quarter 2013 EPS benefited from lower outstanding shares related to the share repurchases made by the Company during the quarter.
Net earned premiums grew $11.2 million, or 20.1 percent, in the second quarter of 2013 compared to the same quarter in 2012, primarily as a result of increases in premium rates over the past 24 months, a reduction in the quota-share cession rate from 50 percent for the 2011-2012 reinsurance program to 45 percent for the 2012-2013 and 2013-2014 reinsurance programs, and strategic initiatives the Company has undertaken to manage its exposure.
Second-quarter 2013 operating costs increased 2.4 percent compared to the same quarter last year, as general and administrative expenses increased $5.4 million, or 30.7 percent, and were partially mitigated by lower losses and loss adjustment expenses, which decreased $4.2 million, or 14.4 percent.
First Six-Months 2013 Results
For the first six months of 2013, the Company’s net income and diluted earnings per share grew 64.2 percent and 65.9 percent, respectively, compared to the same period of 2012.
Net premiums earned increased 26.8 percent for the first six months of 2013 compared to the same period of 2012, as a result of the factors mentioned above in the second-quarter discussion.
Share Repurchases
During the second quarter of 2013, the Company repurchased approximately 6.7 million shares of its common stock at a weighted average purchase price of $4.21, a significant discount compared to the market price of the stock.
Also, as announced on August 1, the Company repurchased an additional 350,000 shares of its common stock at $7.02 per share, a discount to the market price of its stock.
Cash Dividends
On April 18, 2013, the Company announced that its board of directors declared a cash dividend of $0.08 per share of common stock, which was paid on June 17, 2013, to shareholders of record on June 3, 2013. The dividend declaration was consistent with the Company’s previously announced intention to declare a dividend of $0.08 per share in the second, third and fourth quarters of 2013. If declared and paid as intended, the annual dividend in 2013 would be $0.32 for each common share.
Repositioned Investment Portfolio
During the second quarter, Universal utilized its cash position to reposition its investment portfolio to consist of a diversified available for sale portfolio of fixed maturities and equity securities through Deutsche Bank Investment Asset Division, the Company’s investment portfolio advisor. At June 30, 2013, the Company had fixed maturities of $289.4 million and equity securities of $53.5 million, which compares to $14.0 million of fixed maturities and no equity securities at March 31, 2013.
About Universal Insurance Holdings, Inc.
Universal Insurance Holdings, Inc., with its wholly-owned subsidiaries, is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Universal Property & Casualty Insurance Company (UPCIC), a wholly-owned subsidiary of the Company, is one of the leading writers of homeowners insurance in Florida and is now fully licensed and has
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commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts and Maryland. American Platinum Property and Casualty Insurance Company (APPCIC), also a wholly-owned subsidiary, currently writes homeowners multi-peril insurance on Florida homes valued in excess of $1 million, which are limits and coverages currently not targeted through its affiliate UPCIC. For additional information on the Company, please visit our investor relations website at www.universalinsuranceholdings.com.
Forward-Looking Statements and Risk Factors
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such statements may include commentary on plans, products and lines of business, marketing arrangements, reinsurance programs and other business developments and assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Future results could differ materially from those described and the Company undertakes no obligation to correct or update any forward-looking statements. For further information regarding risk factors that could affect the Company’s operations and future results, refer to the Company’s reports filed with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2012 and the Form 10-Q for the quarter ended June 30, 2013.
Investor Contact:
Philip Kranz, Dresner Corporate Services, 312-780-7240, pkranz@dresnerco.com
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)
| Three Months Ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| PREMIUMS EARNED AND OTHER REVENUES |
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| Direct premiums written |
$ | 219,946 | $ | 222,568 | ||||
| Ceded premiums written |
(133,897 | ) | (102,433 | ) | ||||
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| Net premiums written |
86,049 | 120,135 | ||||||
| Change in net unearned premium |
(19,182 | ) | (64,441 | ) | ||||
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| Premiums earned, net |
66,867 | 55,694 | ||||||
| Net investment income (expense) |
137 | (16 | ) | |||||
| Net realized gains (losses) on investments |
(1 | ) | (1,705 | ) | ||||
| Net change in unrealized gains (losses) on investments |
23 | (5,788 | ) | |||||
| Commission revenue |
5,271 | 6,131 | ||||||
| Policy fees |
3,819 | 4,072 | ||||||
| Other revenue |
1,640 | 1,540 | ||||||
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| Total premiums earned and other revenues |
77,756 | 59,928 | ||||||
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| OPERATING COSTS AND EXPENSES |
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| Losses and loss adjustment expenses |
25,199 | 29,437 | ||||||
| General and administrative expenses |
22,869 | 17,499 | ||||||
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| Total operating costs and expenses |
48,068 | 46,936 | ||||||
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| INCOME BEFORE INCOME TAXES |
29,688 | 12,992 | ||||||
| Income taxes, current |
12,351 | 9,086 | ||||||
| Income taxes, deferred |
308 | (3,871 | ) | |||||
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| Income taxes, net |
12,659 | 5,215 | ||||||
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| NET INCOME |
$ | 17,029 | $ | 7,777 | ||||
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| Basic earnings per common share |
$ | 0.47 | $ | 0.20 | ||||
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| Weighted average common shares outstanding - Basic |
36,378 | 39,668 | ||||||
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| Fully diluted earnings per common share |
$ | 0.44 | $ | 0.19 | ||||
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| Weighted average common shares outstanding - Diluted |
38,314 | 40,377 | ||||||
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| Cash dividend declared per common share |
$ | 0.08 | $ | 0.08 | ||||
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)
| Six Months Ended June 30, | ||||||||
| 2013 | 2012 | |||||||
| PREMIUMS EARNED AND OTHER REVENUES |
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| Direct premiums written |
$ | 424,085 | $ | 412,571 | ||||
| Ceded premiums written |
(275,214 | ) | (265,867 | ) | ||||
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| Net premiums written |
148,871 | 146,704 | ||||||
| Change in net unearned premium |
(16,595 | ) | (42,370 | ) | ||||
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| Premiums earned, net |
132,276 | 104,334 | ||||||
| Net investment income (expense) |
149 | (52 | ) | |||||
| Net realized gains (losses) on investments |
(16,038 | ) | (9,154 | ) | ||||
| Net change in unrealized gains (losses) on investments |
7,897 | 3,399 | ||||||
| Net foreign currency gains (losses) on investments |
— | 23 | ||||||
| Commission revenue |
10,257 | 10,672 | ||||||
| Policy fees |
7,505 | 7,973 | ||||||
| Other revenue |
3,165 | 2,980 | ||||||
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| Total premiums earned and other revenues |
145,211 | 120,175 | ||||||
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| OPERATING COSTS AND EXPENSES |
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| Losses and loss adjustment expenses |
51,682 | 55,611 | ||||||
| General and administrative expenses |
44,079 | 35,343 | ||||||
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| Total operating costs and expenses |
95,761 | 90,954 | ||||||
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| INCOME BEFORE INCOME TAXES |
49,450 | 29,221 | ||||||
| Income taxes, current |
16,298 | 9,860 | ||||||
| Income taxes, deferred |
4,164 | 1,711 | ||||||
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| Income taxes, net |
20,462 | 11,571 | ||||||
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| NET INCOME |
$ | 28,988 | $ | 17,650 | ||||
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| Basic earnings per common share |
$ | 0.76 | $ | 0.44 | ||||
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| Weighted average common shares outstanding - Basic |
38,138 | 39,528 | ||||||
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| Fully diluted earnings per common share |
$ | 0.73 | $ | 0.44 | ||||
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| Weighted average common shares outstanding - Diluted |
39,760 | 40,460 | ||||||
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| Cash dividend declared per common share |
$ | 0.16 | $ | 0.18 | ||||
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands, except per share data)
| As of | ||||||||
| June 30, 2013 |
December 31, 2012 |
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| ASSETS | ||||||||
| Cash and cash equivalents |
$ | 180,857 | $ | 347,392 | ||||
| Restricted cash and cash equivalents |
2,653 | 33,009 | ||||||
| Fixed maturities (trading), at fair value |
— | 4,009 | ||||||
| Equity securities (trading), at fair value |
— | 85,041 | ||||||
| Fixed maturities (available for sale), at fair value |
289,388 | — | ||||||
| Equity securities (available for sale), at fair value |
53,507 | — | ||||||
| Prepaid reinsurance premiums |
255,941 | 239,921 | ||||||
| Reinsurance recoverable |
79,151 | 89,191 | ||||||
| Reinsurance receivable, net |
24,542 | 24,334 | ||||||
| Premiums receivable, net |
56,846 | 50,125 | ||||||
| Receivable from securities sold |
— | 1,096 | ||||||
| Other receivables |
4,172 | 2,017 | ||||||
| Property and equipment, net |
9,309 | 8,968 | ||||||
| Deferred policy acquisition costs, net |
17,241 | 17,282 | ||||||
| Income taxes recoverable |
9,078 | 2,594 | ||||||
| Deferred income tax asset, net |
16,652 | 19,178 | ||||||
| Other assets |
2,462 | 1,578 | ||||||
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| Total assets |
$ | 1,001,799 | $ | 925,735 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| LIABILITIES: |
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| Unpaid losses and loss adjustment expenses |
$ | 166,260 | $ | 193,241 | ||||
| Unearned premiums |
420,687 | 388,071 | ||||||
| Advance premium |
25,671 | 15,022 | ||||||
| Accounts payable |
5,010 | 4,368 | ||||||
| Bank overdraft |
24,926 | 25,994 | ||||||
| Payable for securities purchased |
3,104 | 1,275 | ||||||
| Reinsurance payable, net |
134,699 | 85,259 | ||||||
| Income taxes payable |
193 | 699 | ||||||
| Other liabilities and accrued expenses |
27,745 | 28,071 | ||||||
| Long-term debt |
37,476 | 20,221 | ||||||
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| Total liabilities |
845,771 | 762,221 | ||||||
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| STOCKHOLDERS’ EQUITY: |
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| Cumulative convertible preferred stock, $.01 par value |
1 | 1 | ||||||
| Authorized shares - 1,000 |
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| Issued shares - 108 |
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| Outstanding shares - 108 |
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| Minimum liquidation preference, $2.66 per share |
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| Common stock, $.01 par value |
430 | 419 | ||||||
| Authorized shares - 55,000 |
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| Issued shares - 42,981 and 41,889 |
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| Outstanding shares - 35,297 and 40,871 |
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| Treasury shares, at cost - 7,684 and 1,018 |
(31,179 | ) | (3,101 | ) | ||||
| Additional paid-in capital |
38,975 | 38,684 | ||||||
| Accumulated other comprehensive income, net of taxes |
(2,608 | ) | — | |||||
| Retained earnings |
150,409 | 127,511 | ||||||
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| Total stockholders’ equity |
156,028 | 163,514 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 1,001,799 | $ | 925,735 | ||||
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