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Unico American Corporation Reports Fourth Quarter And Full Year 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 and twelve months ended December 31, 2011. For the three months ended December 31, 2011, revenues were $8.3 million and net income was $0.6 million ($0.12 diluted income per share) compared with revenues of $8.7 million and net income of $0.8 million ($0.14 diluted income per share) for the three months ended December 31, 2010. For the twelve months ended December 31, 2011, revenues were $34.6 million and net income was $3.7 million ($0.70 diluted income per share) compared with revenue of $37.1 million and net income of $2.3 million ($0.44 diluted income per share) for the twelve months ended December 31, 2010.

As of December 31, 2011, the Company had cash and investments (at amortized cost) of $128.5 million. $89.9 million, or 70% of these investments were fixed maturity investments, and 82% of those fixed maturity investments were U.S. treasury securities.

Stockholders’ equity was $75.8 million as of December 31, 2011, or $14.20 per common share including unrealized after-tax investment gains of $1 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 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

2011

2010

(Unaudited)

ASSETS

Investments
Available for sale:
Fixed maturities, at fair value (amortized cost: December 31,
2011 $89,903; December 31, 2010 $123,301) $91,357 $126,712
Short-term investments, at cost 38,139 6,466
Total Investments 129,496 133,178
Cash 467 45
Accrued investment income 681 691
Premium and notes receivable, net 5,304 4,364
Reinsurance recoverable:
Paid losses and loss adjustment expenses 60 49
Unpaid losses and loss adjustment expenses 7,975 11,816
Deferred policy acquisition costs 4,158 4,301
Property and equipment (net of accumulated depreciation) 231 1,631
Deferred income taxes 1,394 1,060
Other assets 609 540
Total Assets $ 150,375 $ 157,675
 

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses $54,487 $61,560
Unearned premium 15,912 15,930
Advance premium and premium deposits 818 830
Income taxes payable - 1
Accrued expenses and other liabilities 3,310 6,000
Total Liabilities $ 74,527 $ 84,321
 
 

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and
Outstanding shares 5,341,992 at December 31, 2011, and 5,333,081 at
December 31, 2010 $3,611 $3,555
Accumulated other comprehensive income 960 2,251
Retained earnings 71,277 67,548
Total Stockholders’ Equity $ 75,848 $ 73,354
 
Total Liabilities and Stockholders' Equity $ 150,375 $ 157,675
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share)
   
Three Months Ended Twelve Months Ended
December 31 December 31
2011     2010 2011     2010
(Unaudited) (Unaudited) (Unaudited)

REVENUES

Insurance Company Revenues

Premium earned $8,051 $8,444 $32,072 $35,579
Premium ceded 1,374 1,770 5,348 7,427
Net premium earned 6,677 6,674 26,724 28,152
Investment income 624 805 2,897 3,490
Other income 86 187 1,171 692
Total Insurance Company Revenues 7,387 7,666 30,792 32,334
 
Other Revenues from Insurance Operations
Gross commissions and fees 907 1,035 3,698 4,492
Investment income - - 2 3
Finance charges and fees earned 16 40 71 277
Other income 2 6 14 15
Total Revenues 8,312 8,747 34,577 37,121
 

EXPENSES

Losses and loss adjustment expenses 3,771 4,086 14,387 18,470
Policy acquisition costs 1,758 1,747 7,081 7,283
Salaries and employee benefits 1,064 1,036 4,335 4,317
Commissions to agents/brokers 58 121 225 638
Other operating expenses 671 623 2,799 3,193
Total Expenses 7,322 7,613 28,827 33,901
 
Income Before Taxes 990 1,134 5,750 3,220
Income tax provision 346 376 2,010 891
Net Income $ 644 $ 758 $ 3,740 $ 2,329
 
 
 
PER SHARE DATA:
Basic
Earnings Per Share $0.12 $0.14 $0.70 $0.44
Weighted Average Shares 5,339 5,319 5,336 5,313
Diluted
Earnings Per Share $0.12 $0.14 $0.70 $0.44
Weighted Average Shares 5,361 5,353 5,359 5,352
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
 
For the Twelve Months Ended

December 31

2011

 

2010

(Unaudited)
Cash Flows from Operating Activities:
Net Income $3,740 $2,329
Adjustments to reconcile net income to net cash from operations
Depreciation 59 127
Bond amortization, net 154 115
Non cash stock based compensation expense 31 -
Tax benefit from disqualified incentive stock options (3 ) (40 )
Changes in assets and liabilities
Premium, notes and investment income receivable (929 ) 73
Reinsurance recoverable 3,830 4,764
Deferred policy acquisition costs 142 655
Other assets 161 (62 )
Unpaid losses and loss adjustment expenses (7,073 ) (10,025 )
Unearned premium (17 ) (2,882 )
Advance premium and premium deposits (12 ) (204 )
Accrued expenses and other liabilities (1,259 ) (794 )
Income taxes current/deferred 103   58  
Net Cash Used by Operating Activities (1,073 ) (5,886 )
 
Cash Flows from investing Activities
Purchase of fixed maturity investments (14,794 ) (33,025 )
Proceeds from maturity of fixed maturity investments 48,039 38,049
Net (increase) decrease in short-term investments (31,674 ) 2,692
Additions to property and equipment (91 ) (105 )
Net Cash Provided by Investing Activities 1,480   7,611  
 
Cash Flows from financing Activities
Repurchase of common stock (11 ) -
Dividends paid to shareholders - (1,917 )
Proceeds from exercise of stock options 23 78
Tax benefit from disqualified incentive stock options 3   40  
Net Cash Provided (Used) by Financing Activities 15   (1,799 )
 
Net increase (decrease) in cash 422 (74 )
Cash at beginning of period 45   119  
Cash at End of Period $ 467   $ 45  
 
Supplemental Cash Flow Information
Cash paid during the period for:
Interest - -
Income taxes $1,909 $834
 
Supplemental Schedule of Non-Cash Investing Activities
(Write-offs) acquisition of fixed assets $(1,602 ) $1,432




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