Attached files
| file | filename |
|---|---|
| 8-K - 8-K - UNIVERSAL INSURANCE HOLDINGS, INC. | d684461d8k.htm |
Exhibit 99.1
Universal Insurance Holdings, Inc. Reports Fourth-Quarter and Full-Year 2013 Financial Results
Full-Year 2013 Diluted EPS Grows 108 Percent Versus 2012; Fourth-Quarter 2013 Diluted EPS Increases 33 Cents Versus Same Quarter Last Year
Fort Lauderdale, FL, March 3, 2014 - Universal Insurance Holdings, Inc. (NYSE: UVE) today reported net income of $15.6 million, or $0.44 per diluted share, an increase of $0.33, for the fourth quarter of 2013, compared to a net income of $4.4 million, or $0.11 per diluted share, for the same period in 2012.
For the full year of 2013, the Company reported net income of $59.0 million and diluted earnings per share (EPS) of $1.56, an increase of 108 percent, compared to net income of $30.3 million, or $0.75 per diluted share, for the same period of 2012.
Sean P. Downes, the Company’s Chairman, President and Chief Executive Officer, stated, “Our 2013 results demonstrate the meaningful progress made against our strategic and operational initiatives to improve rate adequacy, streamline claims handling and reduce reinsurance costs. We are proud of the milestones achieved during the course of the year, including the Company’s listing on the NYSE, and believe we enter 2014 well positioned to drive additional long-term growth. Our performance during the year bolstered our healthy financial position and allowed us to deliver significant shareholder value, supporting an increase in our quarterly dividend and the completion of additional share repurchases.”
Mr. Downes continued, “Looking ahead, we remain focused on continuing to execute our proven strategic plan and are confident in the long-term prospects of our Company.”
Fourth-Quarter 2013 Highlights
| • | Best fourth quarter net income and EPS in Company history. |
| • | Net income and EPS grew $11.2 million and $0.33, respectively, compared to Q4 2012. |
| • | Net investment income grew by over 400 percent versus Q4 2012. |
| • | Losses and loss adjustment expenses declined by nearly 17 percent versus Q4 2012. |
Fourth-Quarter 2013 Results
Net income for the fourth quarter of 2013 increased $11.2 million, or $0.33 per diluted share, compared to the fourth quarter of 2012, reflecting an improvement in underwriting income, an increase in net investment income and net realized gains, the absence of net trading portfolio losses that occurred during the fourth quarter of 2012, and a non-recurring Florida Insurance Guaranty Association (FIGA) assessment charged to earnings in the fourth quarter of 2012, combined with a partial recovery of the same in the fourth quarter of 2013. Additionally, fourth quarter 2013 EPS benefitted from lower outstanding shares related to the share repurchases made by the Company during the first nine months of 2013.
1
Fourth quarter 2013 losses and loss adjustment expenses decreased $5.7 million, or 16.6%, compared to the fourth quarter of 2012, primarily attributable to an improvement in the adjustments made in the current years related to prior accident years and favorable development.
At December 31, 2013, stockholders’ equity was $175.6 million compared to $163.5 million at December 31, 2012.
Full-Year 2013 Results
For the full year of 2013, the Company’s net income and diluted earnings per share grew by 94.6 percent and 108 percent, respectively, compared to the full year of 2012.
Net premiums earned increased $36.5 million, or 15.8 percent, for the full year of 2013 compared to the same period of 2012, primarily as a result of increases in premium rates over the past 24 months. Losses and loss adjustment expenses decreased $17.6 million, or 13.9 percent, from the prior year, primarily due to a reduction in charges for the current accident year combined with favorable development.
Share Repurchases
For the full year of 2013, the Company repurchased approximately 7.3 million shares of its common stock at a weighted average purchase price of $4.46 per share. Each repurchase was at a significant discount to the then-current market price of the Company’s common stock.
Cash Dividends
On November 25, 2013, the Company announced that its board of directors declared a cash dividend of $0.23 per share of common stock which was paid on December 23, 2013, to shareholders of record on December 13, 2013. The $0.23 per share dividend included the expected $0.08 per share fourth quarter dividend and an additional special dividend of $0.15 per share. In total, $0.49 per share in cash dividends were declared and paid in 2013.
Also, on January 30, 2014, the Company announced that its board of directors declared a cash dividend of $0.10 per share of common stock, payable on March 3, 2014 to shareholders of record on February 19, 2014, consistent with the Company’s previously announced intention to increase its regular quarterly dividend to $0.10 per share from $0.08 per share beginning with the first quarter of 2014. If declared and paid as intended, the annual aggregate dividend in 2014 would be $0.40 for each common share.
Financial Results Presentation
The Company will make available an audio recording of a presentation discussing its fourth quarter and full year 2013 financial results on March 3, 2014, at approximately 5:00 p.m. Eastern. The presentation will be pre-recorded and there will be no opportunity for live questions. The audio recording will be available at www.universalinsuranceholdings.com until April 3, 2014.
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
2
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 commenced its operations in North Carolina, South Carolina, Hawaii, Georgia, Massachusetts and Maryland. American Platinum Property and Casualty Insurance Company, 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, 2013.
3
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in thousands, except per share data)
| Three Months Ended December 31, | ||||||||
| 2013 | 2012 | |||||||
| PREMIUMS EARNED AND OTHER REVENUES |
||||||||
| Direct premiums written |
$ | 173,730 | $ | 174,571 | ||||
| Ceded premiums written |
(121,941 | ) | (118,961 | ) | ||||
|
|
|
|
|
|||||
| Net premiums written |
51,789 | 55,610 | ||||||
| Change in net unearned premium |
14,663 | 11,664 | ||||||
|
|
|
|
|
|||||
| Premiums earned, net |
66,452 | 67,274 | ||||||
| Net investment income (expense) |
1,397 | 278 | ||||||
| Net realized gains (losses) on investments |
1,242 | 353 | ||||||
| Net change in unrealized gains (losses) on investments |
(62 | ) | (2,047 | ) | ||||
| Net foreign currency gains (losses) on investments |
— | (1 | ) | |||||
| Commission revenue |
4,178 | 4,889 | ||||||
| Policy fees |
2,924 | 3,041 | ||||||
| Other revenue |
1,449 | 1,440 | ||||||
|
|
|
|
|
|||||
| Total premiums earned and other revenues |
77,580 | 75,227 | ||||||
|
|
|
|
|
|||||
| OPERATING COSTS AND EXPENSES |
||||||||
| Losses and loss adjustment expenses |
28,598 | 34,275 | ||||||
| General and administrative expenses |
22,989 | 31,588 | ||||||
|
|
|
|
|
|||||
| Total operating costs and expenses |
51,587 | 65,863 | ||||||
|
|
|
|
|
|||||
| INCOME BEFORE INCOME TAXES |
25,993 | 9,364 | ||||||
| Income taxes, current |
8,776 | 7,950 | ||||||
| Income taxes, deferred |
1,635 | (2,992 | ) | |||||
|
|
|
|
|
|||||
| Income taxes, net |
10,411 | 4,958 | ||||||
|
|
|
|
|
|||||
| NET INCOME |
$ | 15,582 | $ | 4,406 | ||||
|
|
|
|
|
|||||
| Basic earnings per common share |
$ | 0.46 | $ | 0.11 | ||||
|
|
|
|
|
|||||
| Weighted average number of common shares outstanding - basic |
33,602 | 39,719 | ||||||
|
|
|
|
|
|||||
| Diluted earnings per common share |
$ | 0.44 | $ | 0.11 | ||||
|
|
|
|
|
|||||
| Weighted average number of common shares outstanding - diluted |
35,685 | 41,091 | ||||||
|
|
|
|
|
|||||
| Cash dividend declared per common share |
$ | 0.23 | $ | 0.20 | ||||
|
|
|
|
|
|||||
4
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
| For the Years Ended December 31, |
||||||||
| 2013 | 2012 | |||||||
| PREMIUMS EARNED AND OTHER REVENUES |
||||||||
| Direct premiums written |
$ | 783,894 | $ | 780,128 | ||||
| Ceded premiums written |
(522,116 | ) | (517,604 | ) | ||||
|
|
|
|
|
|||||
| Net premiums written |
261,778 | 262,524 | ||||||
| Change in net unearned premium |
5,877 | (31,404 | ) | |||||
|
|
|
|
|
|||||
| Premiums earned, net |
267,655 | 231,120 | ||||||
| Net investment income (expense) |
1,928 | 441 | ||||||
| Net realized gains (losses) on investments |
(14,740 | ) | (11,943 | ) | ||||
| Net change in unrealized gains (losses) on investments |
7,850 | 9,443 | ||||||
| Net foreign currency gains (losses) on investments |
— | 22 | ||||||
| Commission revenue |
18,615 | 20,383 | ||||||
| Policy fees |
13,661 | 14,475 | ||||||
| Other revenue |
6,190 | 5,998 | ||||||
|
|
|
|
|
|||||
| Total premiums earned and other revenues |
301,159 | 269,939 | ||||||
|
|
|
|
|
|||||
| OPERATING COSTS AND EXPENSES |
||||||||
| Losses and loss adjustment expenses |
108,615 | 126,187 | ||||||
| General and administrative expenses |
91,988 | 91,193 | ||||||
|
|
|
|
|
|||||
| Total operating costs and expenses |
200,603 | 217,380 | ||||||
|
|
|
|
|
|||||
| INCOME BEFORE INCOME TAXES |
100,556 | 52,559 | ||||||
| Income taxes, current |
34,216 | 18,434 | ||||||
| Income taxes, deferred |
7,363 | 3,813 | ||||||
|
|
|
|
|
|||||
| Income taxes, net |
41,579 | 22,247 | ||||||
|
|
|
|
|
|||||
| NET INCOME |
$ | 58,977 | $ | 30,312 | ||||
|
|
|
|
|
|||||
| Basic earnings per common share |
$ | 1.64 | $ | 0.76 | ||||
|
|
|
|
|
|||||
| Weighted average common shares outstanding - Basic |
35,866 | 39,614 | ||||||
|
|
|
|
|
|||||
| Fully diluted earnings per common share |
$ | 1.56 | $ | 0.75 | ||||
|
|
|
|
|
|||||
| Weighted average common shares outstanding - Diluted |
37,776 | 40,616 | ||||||
|
|
|
|
|
|||||
| Cash dividend declared per common share |
$ | 0.49 | $ | 0.46 | ||||
|
|
|
|
|
|||||
5
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
| December 31, | ||||||||
| 2013 | 2012 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents |
$ | 117,275 | $ | 347,392 | ||||
| Restricted cash and cash equivalents |
2,600 | 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 |
289,418 | — | ||||||
| Equity securities (available for sale), at fair value |
65,022 | — | ||||||
| Prepaid reinsurance premiums |
241,214 | 239,921 | ||||||
| Reinsurance recoverable |
107,847 | 89,191 | ||||||
| Reinsurance receivable, net |
203 | 24,334 | ||||||
| Premiums receivable, net |
46,461 | 50,125 | ||||||
| Receivable from securities sold |
— | 1,096 | ||||||
| Other receivables |
2,587 | 2,017 | ||||||
| Property and equipment, net |
9,289 | 8,968 | ||||||
| Deferred policy acquisition costs, net |
15,899 | 17,282 | ||||||
| Income taxes recoverable |
8,152 | 2,594 | ||||||
| Deferred income tax asset, net |
12,051 | 19,178 | ||||||
| Other assets |
2,072 | 1,578 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 920,090 | $ | 925,735 | ||||
|
|
|
|
|
|||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| LIABILITIES: |
||||||||
| Unpaid losses and loss adjustment expenses |
$ | 159,222 | $ | 193,241 | ||||
| Unearned premiums |
383,488 | 388,071 | ||||||
| Advance premium |
22,959 | 15,022 | ||||||
| Accounts payable |
3,441 | 4,368 | ||||||
| Book overdraft |
14,947 | 25,994 | ||||||
| Payable for securities purchased |
— | 1,275 | ||||||
| Reinsurance payable, net |
86,232 | 85,259 | ||||||
| Income taxes payable |
2,566 | 699 | ||||||
| Other liabilities and accrued expenses |
34,386 | 28,071 | ||||||
| Long-term debt |
37,240 | 20,221 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
744,481 | 762,221 | ||||||
|
|
|
|
|
|||||
| STOCKHOLDERS’ EQUITY: |
||||||||
| Cumulative convertible preferred stock, $.01 par value |
— | 1 | ||||||
| Authorized shares - 1,000 |
||||||||
| Issued shares - 30 and 108 |
||||||||
| Outstanding shares - 30 and 108 |
||||||||
| Minimum liquidation preference - $6.98 and $2.66 per share |
||||||||
| Common stock, $.01 par value |
436 | 419 | ||||||
| Authorized shares - 55,000 |
||||||||
| Issued shares - 43,641 and 41,889 |
||||||||
| Outstanding shares - 35,366 and 40,871 |
||||||||
| Treasury shares, at cost - 8,275 and 1,018 |
(35,467 | ) | (3,101 | ) | ||||
| Additional paid-in capital |
42,282 | 38,684 | ||||||
| Accumulated other comprehensive income (loss), net of taxes |
(376 | ) | — | |||||
| Retained earnings |
168,734 | 127,511 | ||||||
|
|
|
|
|
|||||
| Total stockholders’ equity |
175,609 | 163,514 | ||||||
|
|
|
|
|
|||||
| Total liabilities and stockholders’ equity |
$ | 920,090 | $ | 925,735 | ||||
|
|
|
|
|
|||||
Investor Contact:
Andy Brimmer / Steve Frankel / Mahmoud Siddig
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
6