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TheStreet Open House

Unico American Corporation Reports First Quarter 2012 Financial Results

Unico American Corporation (NASDAQ: UNAM) (“Unico,” the “Company”) announced today its consolidated financial results for the three months ended March 31, 2012. For the three months ended March 31, 2012, revenues were $8.3 million and net income was $0.5 million ($0.09 diluted income per share) compared with revenues of $8.6 million and net income of $1.1 million ($0.21 diluted income per share) for the three months ended March 31, 2011.

As of March 31, 2012, the Company had cash and investments (at amortized cost) of $127.7 million. $88.5 million, or 69% of these investments were fixed maturity investments, and 83% of those fixed maturity investments were U.S. treasury securities.

Stockholders’ equity was $74.9 million as of March 31, 2012, or $14.03 per common share including unrealized after-tax investment gains of $0.6 million, compared to stockholders’ equity of $75.8 million as of December 31, 2011, or $14.20 per common share including unrealized after-tax investment gains of $1 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
  2012   2011
( Unaudited)

ASSETS

Investments
Available for sale:
Fixed maturities, at fair value (amortized cost: March 31,
2012 $88,481; December 31, 2011 $89,903) $ 89,400 $ 91,357
Short-term investments, at cost   39,014   38,139
Total Investments 128,414 129,496
Cash 156 467
Accrued investment income 685 681
Premiums and notes receivable, net 5,872 5,304
Reinsurance recoverable:
Paid losses and loss adjustment expenses 4 60
Unpaid losses and loss adjustment expenses 7,775 7,975
Deferred policy acquisition costs 4,077 4,158
Property and equipment (net of accumulated depreciation) 321 231
Deferred income taxes 1,651 1,394
Other assets   415   609

Total Assets

$ 149,370 $ 150,375
 

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses $ 52,485 $ 54,487
Unearned premiums 16,020 15,912
Advance premium and premium deposits 1,346 818
Income taxes payable 110 -
Accrued expenses and other liabilities 3,415 3,310
Dividends payable   1,068   -
Total Liabilities $ 74,444 $ 74,527
 
 

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and
outstanding shares 5,341,492 at March 31, 2012, and 5,341,992 at
December 31, 2011 $ 3,617 $ 3,611
Accumulated other comprehensive income 606 960
Retained earnings   70,703   71,277
Total Stockholders’ Equity $ 74,926 $ 75,848
 
Total Liabilities and Stockholders' Equity $ 149,370 $ 150,375
 
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($ in thousands, except per share)
 
Three Months Ended
March 31
  2012     2011

REVENUES

Insurance Company Revenues
Premium earned $ 7,962 $ 7,959
Premium ceded   1,247   1,323
Net premium earned 6,715 6,636
Investment income 582 773
Other income   112   170
Total Insurance Company Revenues 7,409 7,579
 
Other Revenues from Insurance Operations
Gross commissions and fees 906 1,004
Investment income - 1
Finance charges and fees earned 16 20
Other income   4   4
Total Revenues   8,335   8,608
 

EXPENSES

Losses and loss adjustment expenses 3,722 3,387
Policy acquisition costs 1,762 1,773
Salaries and employee benefits 1,359 1,013
Commissions to agents/brokers 60 54
Other operating expenses   659   655
Total Expenses   7,562   6,882
 
Income Before Taxes 773 1,726
Income Tax Expense   273   612
Net Income $ 500 $ 1,114
 
 
 
PER SHARE DATA:
Basic
Earnings Per Share $ 0.09 $ 0.21
Weighted Average Shares 5,342 5,334
Diluted
Earnings Per Share $ 0.09 $ 0.21
Weighted Average Shares 5,361 5,358
 
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ in thousands)
 
For the Three Months Ended
March 31
  2012       2011  
Cash flows from operating activities:
Net Income $ 500 $ 1,114
Adjustments to reconcile net income to net cash from operations
Depreciation 13 14
Bond amortization, net 27 40
Non cash stock based compensation 6 -
Changes in assets and liabilities
Premium, notes and investment income receivable (573 ) (688 )
Reinsurance recoverable 256 987
Deferred policy acquisitions costs 82 (21 )
Other assets (44 ) 32
Unpaid losses and loss adjustment expenses (2,002 ) (3,482 )
Unearned premium 107 39
Advance premium and premium deposits 528 347
Accrued expenses and other liabilities 106 (239 )
Income taxes current/deferred   274     505  
Net Cash Used by Operating Activities   (720 )   (1,352 )
 
Cash flows from investing activities:
Purchase of fixed maturity investments (150 ) (350 )
Proceeds from maturity of fixed maturity investments 1,544 1,197
Net (increase) decrease in short-term investments (875 ) 563
Additions to property and equipment   (104 )   (72 )
Net Cash Provided by Investing Activities   416     1,338  
 
Cash flows from financing activities:
Proceeds from exercise of stock options   -     -  
Repurchase and adjustment of common stock   (7 )   -  
Net Cash Used by Financing Activities   (7 )   -  
 
Net decrease in cash (311 ) (14 )
Cash at Beginning of period   467     45  
Cash at End of Period $ 156   $ 31  
 
Supplemental cash flow information
Cash paid during the period for:
Interest - -
Income taxes $ 9 $ 109
 




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