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Unico American Corporation Reports First Quarter 2011 Financial Results

Stocks in this article: UNAM

Unico American Corporation (NASDAQ:UNAM) (“Unico,” the “Company”), announced today its consolidated financial results for the three months ended March 31, 2011. For the three months ended March 31, 2011, revenues were $8.6 million and net income was $1.1 million ($0.21 diluted income per share) compared with revenues of $9.9 million and net income of $0.5 million ($0.09 diluted income per share) for the three months ended March 31, 2010.

As of March 31, 2011, the Company had cash and investments (at amortized cost) of $128.3 million. $122.4 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 $74.1 million as of March 31, 2011, or $13.89 per common share including unrealized after-tax investment gains of $1.9 million, compared to stockholders’ equity of $73.4 million as of December 31, 2010, or $13.75 per common share including unrealized after-tax investment gains of $2.3 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,” “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)

 

 

          March 31           December 31

2011

2010

(Unaudited)

ASSETS

Investments
Available for sale:

Fixed maturities, at fair value (amortized cost: March 31, 2011 $122,414; December 31, 2010 $123,301)

$ 125,231 $ 126,712
Short-term investments, at cost   5,903   6,466
Total Investments 131,134 133,178
Cash 31 45
Accrued investment income 626 691
Premiums and notes receivable, net 5,117 4,364
Reinsurance recoverable:
Paid losses and loss adjustment expenses 88 49
Unpaid losses and loss adjustment expenses 10,791 11,816
Deferred policy acquisition costs 4,322 4,301
Property and equipment (net of accumulated depreciation) 1,689 1,631
Deferred income taxes 998 1,060
Other assets   507   540
Total Assets $ 155,303 $ 157,675
 

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses $ 58,078 $ 61,560
Unearned premiums 15,969 15,930
Advance premium and premium deposits 1,177 830
Income taxes payable 241 1
Accrued expenses and other liabilities   5,762   6,000
Total Liabilities $ 81,227 $ 84,321
 
Commitments and contingencies
 

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and outstanding shares 5,334,283 at March 31, 2011, and 5,333,081 at December 31, 2010

$ 3,555 $ 3,555
Accumulated other comprehensive income 1,859 2,251
Retained earnings   68,662   67,548
Total Stockholders’ Equity $ 74,076 $ 73,354
 
Total Liabilities and Stockholders' Equity $ 155,303 $ 157,675
 
 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

($ in thousands, except per share)

 
          Three Months Ended

March 31

2011

         

2010

REVENUES

Insurance Company Revenues

Premium earned $ 7,959 $ 9,389
Premium ceded   1,323   1,947
Net premium earned 6,636 7,442
Investment income 773 939
Other income   170   180
Total Insurance Company Revenues 7,579 8,561
 
Other Revenues from Insurance Operations
Gross commissions and fees 1,004 1,249
Investment income 1 1
Finance charges and fees 20 86
Other income   4   1
Total Revenues   8,608   9,898
 

EXPENSES

Losses and loss adjustment expenses 3,387 5,308
Policy acquisition costs 1,773 1,887
Salaries and employee benefits 1,013 889
Commissions to agents/brokers 54 192
Other operating expenses   655   858
Total Expenses   6,882   9,134
 
Income Before Taxes 1,726 764
Income tax expense   612   265
Net Income $ 1,114 $ 499
 
 
 
PER SHARE DATA:
Basic
Earnings Per Share $ 0.21 $ 0.09
Weighted Average Shares 5,334 5,306
Diluted
Earnings Per Share $ 0.21 $ 0.09
Weighted Average Shares 5,358 5,350
 
 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

($ in thousands)

 
          For the Three Months Ended

March 31

2011

         

2010

Cash Flows from Operating Activities:
Net Income $ 1,114 $ 499
Adjustments to reconcile net income to net cash from operations
Depreciation 14 31
Bond amortization, net 40 11
Other - 12
Changes in assets and liabilities
Premium, notes and investment income receivable (688 ) (110 )
Reinsurance recoverable 987 839
Deferred policy acquisitions costs (21 ) 109
Other assets 32 (65 )
Unpaid losses and loss adjustment expenses (3,482 ) (2,048 )
Unearned premium 39 (920 )
Advance premium and premium deposits 347 331
Accrued expenses and other liabilities (239 ) 333
Income taxes current/deferred   505     267  
Net Cash Used by Operating Activities   (1,352 )   (711 )
 
Investing Activities
Purchase of fixed maturity investments (350 ) (1,297 )
Proceeds from maturity of fixed maturity investments 1,197 8,500
Net decrease (increase) in short-term investments 563 (6,603 )
Additions to property and equipment   (72 )   -  
Net Cash Provided by Investing Activities   1,338     600  
 
Financing Activities
Proceeds from issuance of common stock   -     -  
Net Cash Provided by Financing Activities   -     -  
 
Net decrease in Cash (14 ) (111 )
Cash at beginning of period   45     119  
Cash at End of Period $ 31   $ 8  
 
Supplemental Cash Flow Information
Cash paid during the period for:
Interest - -
Income taxes $ 109 -




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