Attached files
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| 8-K - FORM 8-K 06-30-14 - UNICO AMERICAN CORP | form8k.htm |
EXHIBIT 99.1
NEWS RELEASE
CONTACT: Lester A. Aaron
Chief Financial Officer
818-591-9800
UNICO AMERICAN CORPORATION REPORTS
SECOND QUARTER 2014 FINANCIAL RESULTS
Woodland Hills, CA, August 12, 2014 – Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and six months ended June 30, 2014. For the three months ended June 30, 2014, revenues were $7.6 million and net income was $0.3 million ($0.05 diluted income per share) compared with revenues of $7.8 million and net income of $0.3 million ($0.05 diluted income per share) for the three months ended June 30, 2013. For the six months ended June 30, 2014, revenues were $15.1 million and net income was $0.9 million ($0.16 diluted income per share) compared with revenues of $15.7 million and net income of $0.3 million ($0.05 diluted income per share) for the six months ended June 30, 2013.
As of June 30, 2014, the Company had cash and investments (at amortized cost) of $107.2 million. $11.9 million, or 10% of these investments were fixed maturity investments, and 44% of those fixed maturity investments were U.S. treasury securities.
Stockholders’ equity was $71.8 million as of June 30, 2014, or $13.44 per common share including unrealized gains, net of tax, of $0.002 million, compared to stockholders’ equity of $70.9 million as of December 31, 2013, or $13.27 per common share including unrealized losses, net of tax, of $0.006 million.
Headquartered in Woodland Hills, California, Unico is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and through its other subsidiaries provides insurance premium financing and membership association services. Unico has conducted the majority of its operations through its subsidiary Crusader Insurance Company since 1985. For more information concerning Crusader Insurance Company, please visit the Crusader’s Web site at www.crusaderinsurance.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained herein that are not historical facts are forward-looking. These statements, which may be identified by forward-looking words or phrases such as “anticipate,” “appears,” “believe,” ”expect,” “intend,” “may,” “should,” and “would,” involve risks and uncertainties, many of which are beyond the control of the Company. Such risks and uncertainties could cause actual results to differ materially from these forward-looking statements. Factors which could cause actual results to differ materially include underwriting actions not being effective, rate increases for coverages not being sufficient, premium rate adequacy relating to competition or regulation, actual versus estimated claim experience, regulatory changes or developments, unforeseen calamities, general market conditions, and the Company’s ability to introduce new profitable products.
Financial Tables Follow –
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
| June 30 | December 31 | |||||||
| 2014 | 2013 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Investments | ||||||||
| Available for sale: | ||||||||
| Fixed maturities, at fair value (amortized cost: June 30, 2014 $11,646; December 31, 2013 $11,945) | $ | 11,648 | $ | 11,936 | ||||
| Short-term investments, at fair value | 95,520 | 93,807 | ||||||
| Total Investments | 107,168 | 105,743 | ||||||
| Cash | 104 | 376 | ||||||
| Accrued investment income | 7 | 5 | ||||||
| Receivables, net | 5,961 | 5,157 | ||||||
| Reinsurance recoverable: | ||||||||
| Paid losses and loss adjustment expenses | 36 | 184 | ||||||
| Unpaid losses and loss adjustment expenses | 4,700 | 4,428 | ||||||
| Deferred policy acquisition costs | 3,798 | 3,636 | ||||||
| Property and equipment, net | 10,206 | 10,170 | ||||||
| Deferred income taxes | 1,506 | 1,373 | ||||||
| Other assets | 1,431 | 1,781 | ||||||
| Total Assets | $ | 134,917 | $ | 132,853 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| LIABILITIES | ||||||||
| Unpaid losses and loss adjustment expenses | $ | 44,147 | $ | 43,877 | ||||
| Unearned premiums | 16,148 | 15,261 | ||||||
| Advance premium and premium deposits | 459 | 465 | ||||||
| Accrued expenses and other liabilities | 2,386 | 2,354 | ||||||
| Total Liabilities | $ | 63,140 | $ | 61,957 | ||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock, no par – authorized 10,000,000 shares; issued and outstanding shares 5,341,147 at June 30, 2014, and 5,341,147 at December 31, 2013 | $ | 3,720 | $ | 3,709 | ||||
| Accumulated other comprehensive loss | 2 | (6 | ) | |||||
| Retained earnings | 68,055 | 67,193 | ||||||
| Total Stockholders’ Equity | $ | 71,777 | $ | 70,896 | ||||
| Total Liabilities and Stockholders' Equity | $ | 134,917 | $ | 132,853 | ||||
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share)
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30 | June 30 | |||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| REVENUES | ||||||||||||||||
| Insurance company revenues | ||||||||||||||||
| Net premium earned | $ | 6,485 | $ | 6,758 | $ | 12,873 | $ | 13,447 | ||||||||
| Investment income | 30 | 111 | 61 | 232 | ||||||||||||
| Other income | 340 | 46 | 596 | 281 | ||||||||||||
| Total Insurance Company Revenues | 6,855 | 6,915 | 13,530 | 13,960 | ||||||||||||
| Other revenues from insurance operations | ||||||||||||||||
| Gross commissions and fees | 749 | 829 | 1,484 | 1,712 | ||||||||||||
| Investment income | — | 1 | — | 1 | ||||||||||||
| Finance charges and fees earned | 16 | 17 | 33 | 37 | ||||||||||||
| Other income | 2 | 1 | 15 | 3 | ||||||||||||
| Total Revenues | 7,622 | 7,763 | 15,062 | 15,713 | ||||||||||||
| EXPENSES | ||||||||||||||||
| Losses and loss adjustment expenses | 3,648 | 3,891 | 6,540 | 8,447 | ||||||||||||
| Policy acquisition costs | 1,471 | 1,544 | 2,948 | 2,978 | ||||||||||||
| Salaries and employee benefits | 1,271 | 1,286 | 2,553 | 2,550 | ||||||||||||
| Commissions to agents/brokers | 54 | 62 | 98 | 123 | ||||||||||||
| Other operating expenses | 776 | 594 | 1,614 | 1,173 | ||||||||||||
| Total Expenses | 7,220 | 7,377 | 13,753 | 15,271 | ||||||||||||
| Income before taxes | 402 | 386 | 1,309 | 442 | ||||||||||||
| Income tax expense | 132 | 136 | 447 | 184 | ||||||||||||
Net Income | $ | 270 | $ | 250 | $ | 862 | $ | 258 | ||||||||
| PER SHARE DATA: | ||||||||||||||||
| Basic | ||||||||||||||||
| Earnings Per Share | $ | 0.05 | $ | 0.05 | $ | 0.16 | $ | 0.05 | ||||||||
| Weighted Average Shares | 5,341,147 | 5,341,147 | 5,341,147 | 5,341,147 | ||||||||||||
| Diluted | ||||||||||||||||
| Earnings Per Share | $ | 0.05 | $ | 0.05 | $ | 0.16 | $ | 0.05 | ||||||||
| Weighted Average Shares | 5,345,082 | 5,344,479 | 5,345,280 | 5,344,471 | ||||||||||||
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ in thousands)
| For the Six Months Ended | ||||||||
| June 30 | ||||||||
| 2014 | 2013 | |||||||
| Cash flows from operating activities: | ||||||||
| Net Income | $ | 862 | $ | 258 | ||||
| Adjustments to reconcile net income to net cash from operations | ||||||||
| Depreciation and amortization | 278 | 107 | ||||||
| Bond amortization, net | (2 | ) | 4 | |||||
| Non-cash stock based compensation | 12 | 12 | ||||||
| Changes in assets and liabilities | ||||||||
| Net receivables and accrued investment income | (806 | ) | (185 | ) | ||||
| Reinsurance recoverable | (125 | ) | 1,800 | |||||
| Deferred policy acquisitions costs | (162 | ) | (32 | ) | ||||
| Other assets | 296 | (86 | ) | |||||
| Unpaid losses and loss adjustment expenses | 270 | (2,107 | ) | |||||
| Unearned premium | 887 | 177 | ||||||
| Advance premium and premium deposits | (6 | ) | (179 | ) | ||||
| Accrued expenses and other liabilities | 32 | (626 | ) | |||||
| Income taxes current/deferred | (82 | ) | 28 | |||||
| Net Cash Provided (Used) by Operating Activities | 1,454 | (829 | ) | |||||
| Cash flows from investing activities: | ||||||||
| Purchase of fixed maturity investments | (100 | ) | (2,050 | ) | ||||
| Proceeds from maturity of fixed maturity investments | 400 | 11,595 | ||||||
| Net increase in short-term investments | (1,712 | ) | (8,364 | ) | ||||
| Additions to property and equipment | (314 | ) | (425 | ) | ||||
| Net Cash Provided (Used) by Investing Activities | (1,726 | ) | 756 | |||||
| Cash flows from financing activities: | ||||||||
| Proceeds from exercise of stock options | — | — | ||||||
| Repurchase and adjustment of common stock | — | — | ||||||
| Dividends paid to stockholders | — | — | ||||||
| Net Cash Used by Financing Activities | — | — | ||||||
| Net decrease in cash | (272 | ) | (73 | ) | ||||
| Cash at beginning of period | 376 | 161 | ||||||
| Cash at End of Period | $ | 104 | $ | 88 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | — | — | ||||||
| Income taxes | $ | 534 | $ | 159 | ||||