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Unico American Corporation Reports Fourth Quarter And Full Year 2010 Financial Results

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.

 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)
     
December 31 December 31

2010

2009

(Unaudited)

ASSETS

Investments
Available for sale:

Fixed maturities, at fair value (amortized cost: December 31, 2010 $123,301; December 31, 2009 $128,441)

$ 126,712 $ 132,595
Short-term investments, at cost 6,466 9,158
Total Investments 133,178 141,753
Cash 45 119
Accrued investment income 691 764
Premium and notes receivable, net 4,364 4,365
Reinsurance recoverable:
Paid losses and loss adjustment expenses 49 453
Unpaid losses and loss adjustment expenses 11,816 16,176
Deferred policy acquisition costs 4,301 4,956
Property and equipment (net of accumulated depreciation) 1,631 221
Deferred income taxes 1,060 633
Other assets 540 669
Total Assets $ 157,675 $ 170,109
 

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses $ 61,560 $ 71,585
Unearned premium 15,930 18,812
Advance premium and premium deposits 830 1,034
Income taxes payable 1 -
Accrued expenses and other liabilities 6,000 5,363

Total Liabilities

$ 84,321 $ 96,794
 

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and Outstanding shares 5,333,081 at December 31, 2010, and 5,306,204 at December 31, 2009

$ 3,555 $ 3,437
Accumulated other comprehensive income 2,251 2,742
Retained earnings 67,548 67,136
Total Stockholders’ Equity $ 73,354 $ 73,315
 
Total Liabilities and Stockholders' Equity $ 157,675 $ 170,109
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share)

 

 

 
 

Three Months Ended

Twelve Months Ended

December 31

December 31

2010

 

2009

2010

 

2009

(Unaudited) (Unaudited) (Unaudited)

REVENUES

Insurance Company Revenues
Premium earned $ 8,444 $ 9,866 $ 35,579 $ 40,051
Premium ceded 1,770 2,326 7,427 9,276
Net premium earned 6,674 7,540 28,152 30,775
Investment income 805 946 3,490 4,325
Other income 187 262 692 837
Total Insurance Company Revenues 7,666 8,748 32,334 35,937
 
Other Revenues from Insurance Operations
Gross commissions and fees 1,035 1,229 4,492 5,301
Investment income - - 3 1
Finance charges and fees earned 40 90 277 369
Other income 6 4 15 9
Total Revenues 8,747 10,071 37,121 41,617
 

EXPENSES

Losses and loss adjustment expenses 4,086 5,193 18,470 19,546
Policy acquisition costs 1,747 1,842 7,283 7,612
Salaries and employee benefits 1,036 1,185 4,317 5,200
Commissions to agents/brokers 121 229 638 1,090
Other operating expenses 623 901 3,193 4,005
Total Expenses 7,613 9,350 33,901 37,453
 
Income Before Taxes 1,134 721 3,220 4,164
Income tax provision 376 125 891 1,237
Net Income $ 758 $ 596 $ 2,329 $ 2,927
 
 
 
PER SHARE DATA:
Basic
Earnings Per Share $ 0.14 $ 0.11 $ 0.44 $ 0.53
Weighted Average Shares 5,319 5,394 5,313 5,507
Diluted
Earnings Per Share $ 0.14 $ 0.11 $ 0.44 $ 0.53
Weighted Average Shares 5,353 5,438 5,352 5,548
 
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
 
For the Twelve Months Ended

December 31

2010

 

2009

(Unaudited)
Cash Flows from Operating Activities:
Net Income $ 2,329 $ 2,927
Adjustments to reconcile net income to net cash from operations
Depreciation 127 196
Bond amortization, net 115 224
Tax benefit from disqualified incentive stock options (40 ) -
Changes in assets and liabilities
Premium, notes and investment income receivable 73 853
Reinsurance recoverable 4,764 3,301
Deferred policy acquisition costs 655 264
Other assets (62 ) 129
Unpaid losses and loss adjustment expenses (10,025 ) (7,069 )
Unearned premium (2,882 ) (1,151 )
Advance premium and premium deposits (204 ) (158 )
Accrued expenses and other liabilities (794 ) (1,119 )
Income taxes current/deferred 58   (1,061 )
Net Cash (Used) by Operating Activities (5,886 )   (2,664 )
 
Cash Flows from investing Activities
Purchase of fixed maturity investments (33,025 ) (36,074 )
Proceeds from maturity of fixed maturity investments 38,049 42,950
Net decrease in short-term investments 2,692 344
Additions to property and equipment (105 )   (58 )
Net Cash Provided by Investing Activities 7,611   7,162
 
Cash Flows from financing Activities
Repurchase of common stock - (2,448 )
Dividends paid to shareholders (1,917 ) (1,959 )
Proceeds from exercise of stock options 78 -
Tax benefit from disqualified incentive stock options 40   -
Net Cash (Used) by Financing Activities (1,799 )   (4,407 )
 
Net (decrease) increase in cash (74 ) 91
Cash at beginning of period 119   28
Cash at End of Period $ 45 $ 119
 
Supplemental Cash Flow Information
Cash paid during the period for:
Interest - -
Income taxes $ 834 $ 2,309
 
Supplemental Schedule of Non-Cash Investing Activities
Acquisition of fixed assets $ 1,432 -




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