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TheStreet Open House

Unico American Corporation Reports Fourth Quarter And Full Year 2012 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, 2012. For the three months ended December 31, 2012, revenues were $7.9 million and net income was $0.6 million ($0.10 diluted income per share) compared with revenues of $8.3 million and net income of $0.6 million ($0.12 diluted income per share) for the three months ended December 31, 2011. For the twelve months ended December 31, 2012, revenues were $32.8 million and net income was $2.0 million ($0.36 diluted income per share) compared with revenue of $34.6 million and net income of $3.7 million ($0.70 diluted income per share) for the twelve months ended December 31, 2011.

Stockholders’ equity was $70.4 million as of December 31, 2012, or $13.18 per common share including unrealized after-tax investment gains of $0.1 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 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 –

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

2012

2011

(Unaudited)

ASSETS

Investments
Available for sale:

Fixed maturities, at fair value (amortized cost: December 31, 2012 $33,444; December 31, 2011 $89,903)

$33,628 $91,357
Short-term investments, at cost 86,256 38,139
Total Investments 119,884 129,496
Cash 161 467
Accrued investment income 156 681
Receivables, net 5,745 5,304
Reinsurance recoverable:
Paid losses and loss adjustment expenses 305 60
Unpaid losses and loss adjustment expenses 6,584 7,975
Deferred policy acquisition costs 3,785 4,158
Property and equipment, net 857 231
Deferred income taxes 1,894 1,394
Other assets 637 609
Total Assets $ 140,008 $ 150,375
 

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses $49,785 $54,487
Unearned premiums 16,030 15,912
Advance premium and premium deposits 756 818
Accrued expenses and other liabilities 3,041 3,310
Total Liabilities $ 69,612 $ 74,527
 
Commitments and contingencies
 

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and Outstanding shares 5,341,147 at December 31, 2012, and 5,341,992 at December 31, 2011

 

$3,686

 

$3,611

Accumulated other comprehensive income 121 960
Retained earnings 66,589 71,277
Total Stockholders’ Equity $ 70,396 $ 75,848
 
Total Liabilities and Stockholders' Equity $ 140,008 $ 150,375
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share)
 
  Three Months Ended   Twelve Months Ended

December 31

December 31

2012

 

2011

2012

 

2011

(Unaudited) (Unaudited) (Unaudited)

REVENUES

Insurance Company Revenues
Net premium earned $6,882 $6,677 $27,318 $26,724
Investment income 169 624 1,528 2,897
Other income 52 86 490 1,171
Total Insurance Company Revenues 7,103 7,387 29,336 30,792
 
Other Revenues from Insurance Operations
Gross commissions and fees 803 907 3,339 3,698
Investment income - - 1 2
Finance charges and fees earned 19 16 70 71
Other income 1 2 11 14
Total Revenues 7,926 8,312 32,757 34,577
 

EXPENSES

Losses and loss adjustment expenses 3,613 3,771 15,234 14,387
Policy acquisition costs 1,616 1,758 6,744 7,081
Salaries and employee benefits 1,262 1,064 5,180 4,335
Commissions to agents/brokers 60 58 236 225
Other operating expenses 626 671 2,508 2,799
Total Expenses 7,177 7,322 29,902 28,827
 
Income Before Taxes 749 990 2,855 5,750
Income Tax Expense 198 346 901 2,010
Net Income $ 551 $ 644 $ 1,954 $ 3,740
 
 
 
PER SHARE DATA:
Basic
Earnings Per Share $0.10 $0.12 $0.37 $0.70
Weighted Average Shares 5,333 5,339 5,339 5,336
Diluted
Earnings Per Share $0.10 $0.12 $0.36 $0.70
Weighted Average Shares 5,342 5,361 5,353 5,359
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)
 
  For the Twelve Months Ended

December 31

2012

 

2011

(Unaudited)
Cash flows from operating activities:
Net Income $1,954 $3,740
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization 139 59
Bond amortization, net 78 154
Non-cash stock based compensation expense 23 31
Tax benefit from disqualified incentive stock options (16 ) (3 )
Changes in assets and liabilities
Net receivables and accrued investment income 84 (929 )
Reinsurance recoverable 1,146 3,830
Deferred policy acquisition costs 373 142
Other assets (122 ) 161
Unpaid losses and loss adjustment expenses (4,702 ) (7,073 )
Unearned premiums 118 (17 )
Advance premium and premium deposits (62 ) (12 )
Accrued expenses and other liabilities (269 ) (1,259 )
Income taxes current/deferred 42   103  
Net Cash Used by Operating Activities (1,214 ) (1,073 )
 
Cash flows from investing activities
Purchase of fixed maturity investments (1,700 ) (14,794 )
Proceeds from maturity of fixed maturity investments 58,080 48,039
Net increase in short-term investments (48,117 ) (31,674 )
Additions to property and equipment (765 ) (91 )
Net Cash Provided by Investing Activities 7,498   1,480  
 
Cash flows from financing activities
Repurchase of common stock (243 ) (11 )
Dividends paid to stockholders (6,409 ) -
Proceeds from exercise of stock options 46 23
Tax benefit from disqualified incentive stock options 16   3  
Net Cash (Used) Provided by Financing Activities (6,590 ) 15  
 
Net (decrease) increase in cash (306 ) 422
Cash at beginning of period 467   45  
Cash at End of Period $ 161   $ 467  
 
Supplemental Cash Flow Information
Cash paid during the period for:
Interest - -
Income taxes $859 $1,909
 
Supplemental schedule of non-cash investing activities
Write-offs of fixed assets - $(1,602 )




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