Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - UNICO AMERICAN CORP | form8k.htm |
Exhibit 99.1
NEWS RELEASE
CONTACT: Michael Budnitsky
Chief Financial Officer
818-591-9800
UNICO AMERICAN CORPORATION REPORTS
FOURTH QUARTER AND FULL YEAR 2016 FINANCIAL RESULTS
Calabasas, CA, March 30, 2017 – Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and twelve months ended December 31, 2016. For the three months ended December 31, 2016, revenues were $9.0 million and net income was $0.6 million ($0.11 diluted earnings per share) compared with revenues of $8.7 million and net loss of $0.2 million ($0.05 diluted loss per share) for the three months ended December 31, 2015. For the twelve months ended December 31, 2016, revenues were $35.3 million and net loss was $1.4 million ($0.26 diluted loss per share) compared with revenue of $33.3 million and net loss of $1.2 million ($0.22 diluted loss per share) for the twelve months ended December 31, 2015.
Stockholders’ equity was $68.9 million as of December 31, 2016, or $12.98 per common share including unrealized after-tax investment gains of $0.008 million, compared to stockholders’ equity of $70.3 million as of December 31, 2015, or $13.23 per common share including unrealized after-tax investment losses of $0.03 million.
“Our fourth quarter had no surprises; it was better than the third quarter but not good enough to satisfy our growth and profit objectives,” said Cary L. Cheldin, Unico’s President and Chief Executive Officer. “Although the 2016 year’s financial results were disappointing, the work we did in 2016 serves as a solid foundation for our long term future success. In addition to continuing our work with independent strategic advisors, we also engaged investment advisors, IT advisors, marketing firms, and a product development firm. We are working towards improved growth and profitability moving forward.”
Headquartered in Calabasas, 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 –
1
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
| December 31 | December 31 | |||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Investments | ||||||||
| Available for sale: | ||||||||
| Fixed maturities, at fair value (amortized cost: December 31, 2016 $80,372; December 31, 2015 $82,203) | $ | 80,384 | $ | 82,161 | ||||
| Short-term investments, at fair value | 10,205 | 15,641 | ||||||
| Total Investments | 90,589 | 97,802 | ||||||
| Cash and restricted cash | 13,496 | 8,259 | ||||||
| Accrued investment income | 186 | 86 | ||||||
| Receivables, net | 6,008 | 5,505 | ||||||
| Reinsurance recoverable: | ||||||||
| Paid losses and loss adjustment expenses | 261 | 751 | ||||||
| Unpaid losses and loss adjustment expenses | 9,521 | 9,637 | ||||||
| Deferred policy acquisition costs | 4,432 | 4,233 | ||||||
| Property and equipment, net | 10,283 | 10,221 | ||||||
| Deferred income taxes | 1,177 | 1,334 | ||||||
| Other assets | 2,269 | 2,343 | ||||||
| Total Assets | $ | 138,222 | $ | 140,171 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| LIABILITIES | ||||||||
| Unpaid losses and loss adjustment expenses | $ | 47,056 | $ | 49,094 | ||||
| Unearned premiums | 19,375 | 18,079 | ||||||
| Advance premium and premium deposits | 224 | 212 | ||||||
| Accrued expenses and other liabilities | 2,661 | 2,443 | ||||||
| Total Liabilities | $ | 69,316 | $ | 69,828 | ||||
| Commitments and contingencies | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Common stock, no par – authorized 10,000,000 shares; issued and outstanding shares 5,307,133 at December 31, 2016, and 5,315,945 at December 31, 2015 | $ | 3,761 | $ | 3,743 | ||||
| Accumulated other comprehensive income (loss) | 8 | (27 | ) | |||||
| Retained earnings | 65,137 | 66,627 | ||||||
| Total Stockholders’ Equity | $ | 68,906 | $ | 70,343 | ||||
| Total Liabilities and Stockholders' Equity | $ | 138,222 | $ | 140,171 | ||||
2
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share)
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| REVENUES | ||||||||||||||||
| Insurance company operation: | ||||||||||||||||
| Net premium earned | $ | 8,085 | $ | 7,717 | $ | 31,356 | $ | 29,574 | ||||||||
| Investment income | 222 | 165 | 881 | 479 | ||||||||||||
| Net realized investment losses | — | (7 | ) | (1 | ) | (7 | ) | |||||||||
| Other income | 16 | 65 | 218 | 375 | ||||||||||||
| Total Insurance Company Revenues | 8,323 | 7,940 | 32,454 | 30,421 | ||||||||||||
| Other insurance operations: | ||||||||||||||||
| Gross commissions and fees | 675 | 708 | 2,738 | 2,774 | ||||||||||||
| Investment income | — | — | — | — | ||||||||||||
| Finance fees earned | 18 | 18 | 69 | 66 | ||||||||||||
| Other income | 1 | 2 | 7 | 4 | ||||||||||||
| Total Revenues | 9,017 | 8,668 | 35,268 | 33,265 | ||||||||||||
| EXPENSES | ||||||||||||||||
| Losses and loss adjustment expenses | 4,845 | 5,289 | 22,827 | 19,163 | ||||||||||||
| Policy acquisition costs | 1,753 | 1,713 | 6,895 | 6,465 | ||||||||||||
| Salaries and employee benefits | 946 | 1,184 | 4,926 | 4,853 | ||||||||||||
| Commissions to agents/brokers | 40 | 40 | 162 | 167 | ||||||||||||
| Other operating expenses | 519 | 800 | 2,572 | 4,351 | ||||||||||||
| Total Expenses | 8,103 | 9,026 | 37,382 | 34,999 | ||||||||||||
| Income (loss) before taxes | 914 | (358 | ) | (2,114 | ) | (1,734 | ) | |||||||||
| Income tax expense (benefit) | 317 | (110 | ) | (710 | ) | (552 | ) | |||||||||
Net Income (loss) | $ | 597 | $ | (248 | ) | $ | (1,404 | ) | $ | (1,182 | ) | |||||
| PER SHARE DATA: | ||||||||||||||||
| Basic | ||||||||||||||||
| Earnings (loss) per share | $ | 0.11 | $ | (0.05 | ) | $ | (0.26 | ) | $ | (0.22 | ) | |||||
| Weighted average shares | 5,307,133 | 5,326,301 | 5,307,694 | 5,335,540 | ||||||||||||
| Diluted | ||||||||||||||||
| Earnings (loss) per share | $ | 0.11 | $ | (0.05 | ) | $ | (0.26 | ) | $ | (0.22 | ) | |||||
| Weighted average shares | 5,307,837 | 5,326,301 | 5,307,694 | 5,335,540 | ||||||||||||
| 3 |
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
| Twelve Months Ended | ||||||||
| December 31 | ||||||||
| 2016 | 2015 | |||||||
| (Unaudited) | ||||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | (1,404 | ) | $ | (1,182 | ) | ||
| Adjustments to reconcile net loss to net cash from operations: | ||||||||
| Depreciation and amortization | 483 | 341 | ||||||
| Bond amortization, net | (16 | ) | (19 | ) | ||||
| Non-cash stock based compensation | 23 | 23 | ||||||
| Loss on asset impairment | — | 1,287 | ||||||
| Net realized investment losses | 1 | 8 | ||||||
| Bad debt expense | 6 | (1 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Net receivables and accrued investment income | (609 | ) | (377 | ) | ||||
| Reinsurance recoverable | 606 | (5,024 | ) | |||||
| Deferred policy acquisition costs | (199 | ) | (350 | ) | ||||
| Other assets | 297 | 218 | ||||||
| Unpaid losses and loss adjustment expenses | (2,038 | ) | 4,697 | |||||
| Unearned premiums | 1,296 | 1,472 | ||||||
| Advance premium and premium deposits | 12 | (38 | ) | |||||
| Accrued expenses and other liabilities | 218 | (543 | ) | |||||
| Income taxes current/deferred | (85 | ) | (561 | ) | ||||
| Net Cash Used by Operating Activities | (1,409 | ) | (49 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchase of fixed maturity investments | (16,772 | ) | (57,930 | ) | ||||
| Proceeds from maturity of fixed maturity investments | 18,618 | 10,892 | ||||||
| Net decrease in short-term investments | 5,436 | 56,618 | ||||||
| Additions to property and equipment | (545 | ) | (1,339 | ) | ||||
| Net Cash Provided by Investing Activities | 6,737 | 8,241 | ||||||
| Cash flows from financing activities: | ||||||||
| Repurchase of common stock | (90 | ) | (242 | ) | ||||
| Net Cash Used by Financing Activities | (90 | ) | (242 | ) | ||||
| Net increase in cash | 5,238 | 7,950 | ||||||
| Cash and restricted cash at beginning of period | 8,259 | 309 | ||||||
| Cash and Restricted Cash at End of Period | $ | 13,497 | $ | 8,259 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash paid during the period for income taxes | $ | 9 | $ | 9 | ||||
4