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| 8-K - FORM 8-K - UNICO AMERICAN CORP | form8k1210.htm |
EXHIBIT 99.1
NEWS RELEASE
CONTACT: Lester A. Aaron
Chief Financial Officer
818-591-9800
UNICO AMERICAN CORPORATION REPORTS
FOURTH QUARTER AND FULL YEAR 2010 FINANCIAL RESULTS
Woodland Hills, CA, March 29, 2011 – Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and twelve months ended December 31, 2010. For the three months ended December 31, 2010, revenues were $8.7 million and net income was $0.8 million ($0.14 diluted income per share) compared with revenues of $10.1 million and net income of $0.6 million ($0.11 diluted income per share) for the three months ended December 31, 2009. For the twelve months ended December 31, 2010, revenues were $37.1 million and net income was $2.3 million ($0.44 diluted income per share) compared with revenue of $41.6 million and net income of $2.9 million ($0.53 diluted income per share) for the twelve months ended December 31, 2009.
As of December 31, 2010, the Company had cash and investments (at amortized cost) of $129.8 million. $123.3 million, or 95% of these investments were fixed maturity investments, and 78% of those fixed maturity investments were U.S. treasury securities.
Stockholders’ equity was $73.4 million as of December 31, 2010, or $13.75 per common share including unrealized after-tax investment gains of $2.3 million, compared to Stockholders’ equity of $73.3 million as of December 31, 2009, or $13.82 per common share including unrealized after-tax investment gains of $2.7 million. The Company paid cash dividends to shareholders of $0.36 per share on December 29, 2010.
Headquartered in Woodland Hills, California, Unico is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and through its other subsidiaries provides insurance premium financing and membership association services. Unico has conducted the majority of its operations through its subsidiary Crusader Insurance Company since 1985. For more information concerning Crusader Insurance Company, please visit the Crusader’s Web site at www.crusaderinsurance.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained herein that are not historical facts are forward-looking. These statements, which may be identified by forward-looking words or phrases such as “anticipate,” “believe,” ”expect,” “intend,” “may,” “should,” and “would,” involve risks and uncertainties, many of which are beyond the control of the Company. Such risks and uncertainties could cause actual results to differ materially from these forward-looking statements. Factors which could cause actual results to differ materially include underwriting actions not being effective, rate increases for coverages not being sufficient, premium rate adequacy relating to competition or regulation, actual versus estimated claim experience, regulatory changes or developments, unforeseen calamities, general market conditions, and the Company’s ability to introduce new profitable products.
Financial Tables Follow –
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
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December 31
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December 31
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|||||||
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2010
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2009
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|||||||
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(Unaudited)
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||||||||
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ASSETS
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||||||||
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Investments
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||||||||
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Available for sale:
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Fixed maturities, at fair value (amortized cost:
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||||||||
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December 31, 2010 $123,301; December 31, 2009 $128,441)
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$ | 126,712 | $ | 132,595 | ||||
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Short-term investments, at cost
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6,466 | 9,158 | ||||||
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Total Investments
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133,178 | 141,753 | ||||||
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Cash
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45 | 119 | ||||||
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Accrued investment income
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691 | 764 | ||||||
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Premium and notes receivable, net
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4,364 | 4,365 | ||||||
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Reinsurance recoverable:
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||||||||
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Paid losses and loss adjustment expenses
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49 | 453 | ||||||
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Unpaid losses and loss adjustment expenses
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11,816 | 16,176 | ||||||
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Deferred policy acquisition costs
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4,301 | 4,956 | ||||||
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Property and equipment (net of accumulated depreciation)
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1,631 | 221 | ||||||
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Deferred income taxes
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1,060 | 633 | ||||||
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Other assets
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540 | 669 | ||||||
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Total Assets
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$ | 157,675 | $ | 170,109 | ||||
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LIABILITIES AND STOCKHOLDERS' EQUITY
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LIABILITIES
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Unpaid losses and loss adjustment expenses
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$ | 61,560 | $ | 71,585 | ||||
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Unearned premium
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15,930 | 18,812 | ||||||
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Advance premium and premium deposits
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830 | 1,034 | ||||||
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Income taxes payable
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1 | - | ||||||
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Accrued expenses and other liabilities
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6,000 | 5,363 | ||||||
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Total Liabilities
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$ | 84,321 | $ | 96,794 | ||||
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STOCKHOLDERS' EQUITY
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Common stock, no par – authorized 10,000,000 shares; issued and Outstanding
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shares 5,333,081 at December 31, 2010, and 5,306,204 at December 31, 2009
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$ | 3,555 | $ | 3,437 | ||||
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Accumulated other comprehensive income
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2,251 | 2,742 | ||||||
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Retained earnings
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67,548 | 67,136 | ||||||
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Total Stockholders’ Equity
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$ | 73,354 | $ | 73,315 | ||||
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Total Liabilities and Stockholders' Equity
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$ | 157,675 | $ | 170,109 | ||||
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share)
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Three Months Ended
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Twelve Months Ended
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December 31
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December 31
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2010
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2009
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2010
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2009
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(Unaudited)
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(Unaudited)
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(Unaudited)
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REVENUES
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Insurance Company Revenues
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Premium earned
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$ | 8,444 | $ | 9,866 | $ | 35,579 | $ | 40,051 | ||||||||
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Premium ceded
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1,770 | 2,326 | 7,427 | 9,276 | ||||||||||||
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Net premium earned
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6,674 | 7,540 | 28,152 | 30,775 | ||||||||||||
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Investment income
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805 | 946 | 3,490 | 4,325 | ||||||||||||
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Other income
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187 | 262 | 692 | 837 | ||||||||||||
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Total Insurance Company Revenues
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7,666 | 8,748 | 32,334 | 35,937 | ||||||||||||
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Other Revenues from Insurance Operations
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Gross commissions and fees
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1,035 | 1,229 | 4,492 | 5,301 | ||||||||||||
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Investment income
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- | - | 3 | 1 | ||||||||||||
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Finance charges and fees earned
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40 | 90 | 277 | 369 | ||||||||||||
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Other income
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6 | 4 | 15 | 9 | ||||||||||||
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Total Revenues
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8,747 | 10,071 | 37,121 | 41,617 | ||||||||||||
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EXPENSES
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Losses and loss adjustment expenses
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4,086 | 5,193 | 18,470 | 19,546 | ||||||||||||
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Policy acquisition costs
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1,747 | 1,842 | 7,283 | 7,612 | ||||||||||||
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Salaries and employee benefits
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1,036 | 1,185 | 4,317 | 5,200 | ||||||||||||
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Commissions to agents/brokers
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121 | 229 | 638 | 1,090 | ||||||||||||
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Other operating expenses
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623 | 901 | 3,193 | 4,005 | ||||||||||||
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Total Expenses
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7,613 | 9,350 | 33,901 | 37,453 | ||||||||||||
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Income Before Taxes
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1,134 | 721 | 3,220 | 4,164 | ||||||||||||
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Income tax provision
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376 | 125 | 891 | 1,237 | ||||||||||||
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Net Income
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$ | 758 | $ | 596 | $ | 2,329 | $ | 2,927 | ||||||||
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PER SHARE DATA:
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Basic
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Earnings Per Share
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$ | 0.14 | $ | 0.11 | $ | 0.44 | $ | 0.53 | ||||||||
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Weighted Average Shares
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5,319 | 5,394 | 5,313 | 5,507 | ||||||||||||
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Diluted
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Earnings Per Share
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$ | 0.14 | $ | 0.11 | $ | 0.44 | $ | 0.53 | ||||||||
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Weighted Average Shares
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5,353 | 5,438 | 5,352 | 5,548 | ||||||||||||
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
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For the Twelve Months Ended
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December 31
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2010
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2009
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(Unaudited)
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Cash Flows from Operating Activities:
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Net Income
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$ | 2,329 | $ | 2,927 | ||||
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Adjustments to reconcile net income to net cash from operations
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||||||||
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Depreciation
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127 | 196 | ||||||
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Bond amortization, net
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115 | 224 | ||||||
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Tax benefit from disqualified incentive stock options
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(40 | ) | - | |||||
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Changes in assets and liabilities
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||||||||
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Premium, notes and investment income receivable
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73 | 853 | ||||||
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Reinsurance recoverable
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4,764 | 3,301 | ||||||
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Deferred policy acquisition costs
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655 | 264 | ||||||
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Other assets
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(62 | ) | 129 | |||||
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Unpaid losses and loss adjustment expenses
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(10,025 | ) | (7,069 | ) | ||||
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Unearned premium
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(2,882 | ) | (1,151 | ) | ||||
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Advance premium and premium deposits
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(204 | ) | (158 | ) | ||||
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Accrued expenses and other liabilities
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(794 | ) | (1,119 | ) | ||||
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Income taxes current/deferred
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58 | (1,061 | ) | |||||
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Net Cash (Used) by Operating Activities
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(5,886 | ) | (2,664 | ) | ||||
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Cash Flows from investing Activities
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||||||||
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Purchase of fixed maturity investments
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(33,025 | ) | (36,074 | ) | ||||
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Proceeds from maturity of fixed maturity investments
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38,049 | 42,950 | ||||||
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Net decrease in short-term investments
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2,692 | 344 | ||||||
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Additions to property and equipment
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(105 | ) | (58 | ) | ||||
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Net Cash Provided by Investing Activities
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7,611 | 7,162 | ||||||
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Cash Flows from financing Activities
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Repurchase of common stock
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- | (2,448 | ) | |||||
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Dividends paid to shareholders
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(1,917 | ) | (1,959 | ) | ||||
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Proceeds from exercise of stock options
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78 | - | ||||||
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Tax benefit from disqualified incentive stock options
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40 | - | ||||||
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Net Cash (Used) by Financing Activities
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(1,799 | ) | (4,407 | ) | ||||
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Net (decrease) increase in cash
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(74 | ) | 91 | |||||
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Cash at beginning of period
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119 | 28 | ||||||
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Cash at End of Period
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$ | 45 | $ | 119 | ||||
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Supplemental Cash Flow Information
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Cash paid during the period for:
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Interest
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- | - | ||||||
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Income taxes
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$ | 834 | $ | 2,309 | ||||
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Supplemental Schedule of Non-Cash Investing Activities
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Acquisition of fixed assets
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$ | 1,432 | - | |||||