UNICO AMERICAN CORP - FORM 8-K - EX-99.1 - EXHIBIT 99-1

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8-K - FORM 8-K - UNICO AMERICAN CORP	form8k.htm

EXHIBIT 99.1

NEWS RELEASE

CONTACT: Lester A. Aaron

Chief Financial Officer

818-591-9800

UNICO AMERICAN CORPORATION REPORTS

THIRD QUARTER 2012 FINANCIAL RESULTS

Woodland Hills, CA, November 12, 2012 – Unico American Corporation. (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and nine months ended September 30, 2012. For the three months ended September 30, 2012, revenues were $8.2 million and net income was $0.7 million ($0.14 diluted income per share) compared with revenues of $9.1 million and net income of $1.3 million ($0.24 diluted income per share) for the three months ended September 30, 2011. For the nine months ended September 30, 2012, revenues were $24.8 million and net income was $1.4 million ($0.26 diluted income per share) compared with revenues of $26.3 million and net income of $3.1 million ($0.58 diluted income per share) for the nine months ended September 30, 2011.

As of September 30, 2012, the Company had cash and investments (at amortized cost) of $124.6 million. $46.5 million, or 37% of these investments were fixed maturity investments, and 76% of those fixed maturity investments were U.S. treasury securities.

Stockholders’ equity was $75.2 million as of September 30, 2012, or $14.11 per common share including unrealized gains, net of tax, of $0.2 million, compared to stockholders’ equity of $75.8 million as of December 31, 2011, or $14.20 per common share including unrealized gains, net of tax, of $1 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 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)

		September 30		December 31
		2012		2011
		(Unaudited)
ASSETS
Investments
Available for sale:
Fixed maturities, at fair value (amortized cost:
September 30, 2012 $46,499; December 31, 2011 $89,903)	$	46,797	$	91,357
Short-term investments, at fair value		78,046		38,139
Total Investments		124,843		129,496
Cash		95		467
Accrued investment income		270		681
Premiums and notes receivable, net		6,020		5,304
Reinsurance recoverable:
Paid losses and loss adjustment expenses		12		60
Unpaid losses and loss adjustment expenses		7,814		7,975
Deferred policy acquisition costs		3,928		4,158
Property and equipment (net of accumulated depreciation)		665		231
Deferred income taxes		1,836		1,394
Other assets		1,396		609
Total Assets	$	146,879	$	150,375

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Unpaid losses and loss adjustment expenses	$	51,029	$	54,487
Unearned premiums		16,591		15,912
Advance premium and premium deposits		930		818
Accrued expenses and other liabilities		3,103		3,310
Total Liabilities	$	71,653	$	74,527

Commitments and contingencies

STOCKHOLDERS' EQUITY
Common stock, no par – authorized 10,000,000 shares;
Issued and outstanding shares 5,329,597 at September 30, 2012; 5,341,992 at
and at December 31, 2011	$	3,633	$	3,611
Accumulated other comprehensive income		196		960
Retained earnings		71,397		71,277
Total Stockholders’ Equity	$	75,226	$	75,848

Total Liabilities and Stockholders' Equity	$	146,879	$	150,375

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

($ in thousands, except per share)

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2012		2011		2012		2011
REVENUES
Insurance Company Revenues
Premium earned	$	8,233	$	8,022	$	24,236	$	24,021
Premium ceded		1,292		1,321		3,799		3,974
Net premium earned		6,941		6,701		20,437		20,047
Investment income		303		733		1,359		2,272
Other income		141		746		438		1,086
Total Insurance Company Revenues		7,385		8,180		22,234		23,405

Other Revenues from Insurance Operations
Gross commissions and fees		821		876		2,536		2,791
Investment income		—		1		1		2
Finance charges and fees earned		19		16		51		55
Other income		4		5		9		12
Total Revenues		8,229		9,078		24,831		26,265

EXPENSES
Losses and loss adjustment expenses		3,572		3,358		11,620		10,616
Policy acquisition costs		1,660		1,778		5,128		5,323
Salaries and employee benefits		1,253		1,148		3,917		3,270
Commissions to agents/brokers		59		55		176		167
Other operating expenses		550		792		1,883		2,128
Total Expenses		7,094		7,131		22,724		21,504

Income Before Taxes		1,135		1,947		2,107		4,761
Income tax expense		389		672		704		1,665
Net Income	$	746	$	1,275	$	1,403	$	3,096



PER SHARE DATA:
Basic
Earnings Per Share	$	0.14	$	0.24	$	0.26	$	0.58
Weighted Average Shares		5,338		5,335		5,341		5,334
Diluted
Earnings Per Share	$	0.14	$	0.24	$	0.26	$	0.58
Weighted Average Shares		5,350		5,358		5,357		5,359

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

($ in thousands)

	For the Nine Months Ended
	September 30
	2012			2011
Cash flows from operating activities:
Net Income	$	1,403		$	3,096
Adjustments to reconcile net income to net cash from operations
Depreciation		91			43
Bond amortization, net		69			121
Non-cash stock based compensation		17			23
Changes in assets and liabilities
Premium, notes and investment income receivable		(306	)		(1,109	)
Reinsurance recoverable		209			3,441
Deferred policy acquisitions costs		230			7
Other assets		(779	)		81
Unpaid losses and loss adjustment expenses		(3,457	)		(6,328	)
Unearned premiums		678			137
Advance premium and premium deposits		112			392
Accrued expenses and other liabilities		(206	)		(1,108	)
Income taxes current/deferred		(57	)		504
Net Cash Used by Operating Activities		(1,996	)		(700	)

Cash flows from investing activities:
Purchase of fixed maturity investments		(1,300	)		(6,045	)
Proceeds from maturity of fixed maturity investments		44,635			27,506
Net increase in short-term investments		(39,907	)		(20,676	)
Additions to property and equipment		(525	)		(50	)
Net Cash Provided by Investing Activities		2,903			735

Cash flows from financing activities:
Proceeds from exercise of stock options		15			2
Repurchase of common stock		(226	)		(11	)
Dividends paid to stockholders		(1,068	)		—
Net Cash Used by Financing Activities		(1,279	)		(9	)

Net (decrease) increase in cash		(372	)		26
Cash at beginning of period		467			45
Cash at End of Period	$	95		$	71

Supplemental Cash Flow Information
Cash paid during the period for:
Interest		—			—
Income taxes	$	759		$	1,159

Supplemental Schedule of Non-Cash Investing Activities
Write-offs of property and equipment		—		$	1,432

UNICO AMERICAN CORP - FORM 8-K - EX-99.1 - EXHIBIT 99-1 - November 13, 2012

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UNICO AMERICAN CORP Reports