Unico American Corporation Reports Third Quarter 2015 Financial Results

Unico American Corporation (NASDAQ: UNAM) ("Unico," the "Company"), announced today its consolidated financial results for the three and nine months ended September 30, 2015. For the three months ended September 30, 2015, revenues were $8.5 million and net loss was $0.7 million ($0.12 diluted loss per share) compared with revenues of $7.8 million and net income of $0.03 million ($0.01 diluted earnings per share) for the three months ended September 30, 2014. For the nine months ended September 30, 2015, revenues were $24.6 million and net loss was $0.9 million ($0.17 diluted loss per share) compared with revenues of $22.8 million and net income of $0.9 million ($0.17 diluted earnings per share) for the nine months ended September 30, 2014.

Stockholders' equity was $70.8 million as of September 30, 2015, or $13.28 per common share including unrealized gains, net of tax, of $0.06 million, compared to stockholders' equity of $71.8 million as of December 31, 2014, or $13.44 per common share including unrealized after-tax investment gains of $0.004 million.

Headquartered in Calabasas, 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," "appears," "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)
 
      September 30       December 31
2015 2014

( Unaudited)

ASSETS
Investments
Available for sale:

Fixed maturities, at fair value (amortized cost: September 30, 2015 $68,166; December 31, 2014 $35,153)
$ 68,258 $ 35,159
Short-term investments, at fair value   38,252   72,259
Total Investments 106,510 107,418
Cash 403 309
Accrued investment income 64 43
Receivables, net 5,903 5,170
Reinsurance recoverable:
Paid losses and loss adjustment expenses 191 201
Unpaid losses and loss adjustment expenses 6,653 5,163
Deferred policy acquisition costs 4,334 3,883
Property and equipment, net 9,364 10,510
Deferred income taxes 1,362 1,519
Other assets   2,751   1,800
Total Assets $ 137,535 $ 136,016
 

LIABILITIES AND STOCKHOLDERS' EQUITY
 

LIABILITIES
Unpaid losses and loss adjustment expenses $ 45,581 $ 44,397
Unearned premiums 18,514 16,607
Advance premium and premium deposits 415 250
Accrued expenses and other liabilities   2,227   2,986
Total Liabilities $ 66,737 $ 64,240
 
Commitments and contingencies
 

STOCKHOLDERS' EQUITY

Common stock, no par - authorized 10,000,000 shares; issued and outstanding shares 5,329,313 at September 30, 2015, and 5,341,147 at December 31, 2014
$ 3,743 $ 3,732
Accumulated other comprehensive income 61 4
Retained earnings   66,994   68,040
Total Stockholders' Equity $ 70,798 $ 71,776
 
Total Liabilities and Stockholders' Equity $ 137,535 $ 136,016
 
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($ in thousands, except per share)
 
      Three Months Ended       Nine Months Ended
September 30 September 30
2015       2014 2015       2014

REVENUES
Insurance company revenues
Net premium earned $ 7,564 $ 6,687 $ 21,857 $ 19,560
Investment income 129 32 314 93
Other income   68     315   310     910
Total Insurance Company Revenues 7,761 7,034 22,481 20,563
 
Other revenues from insurance operations
Gross commissions and fees 673 713 2,066 2,197
Investment income - - - 1
Finance charges and fees earned 17 17 48 50
Other income   -     1   2     16
Total Revenues   8,451     7,765   24,597     22,827
 

EXPENSES
Losses and loss adjustment expenses 4,347 4,156 13,874 10,697
Policy acquisition costs 1,659 1,512 4,752 4,459
Salaries and employee benefits 1,255 1,226 3,669 3,779
Commissions to agents/brokers 38 49 127 147
Other operating expenses   2,120     764   3,551     2,378
Total Expenses   9,419     7,707   25,973     21,460
 
Income (loss) before taxes (968 ) 58 (1,376 ) 1,367
Income tax expense (benefit)   (318 )   25   (442 )   472
Net Income (Loss) $ (650 ) $ 33 $ (934 ) $ 895
 
 
 

PER SHARE DATA:
Basic
Earnings (loss) per share $ (0.12 ) $ 0.01 $ (0.17 ) $ 0.17
Weighted average shares 5,335,319 5,341,147 5,338,619 5,341,147
Diluted
Earnings (loss) per share $ (0.12 ) $ 0.01 $ (0.17 ) $ 0.17
Weighted average shares 5,335,319 5,343,883 5,338,619 5,344,814
 
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ in thousands)
 
      Nine Months Ended
September 30
2015       2014
Cash flows from operating activities:
Net income (loss) $ (934 ) $ 895
Adjustments to reconcile net income (loss) to net cash from operations:
Depreciation and amortization 349 422
Bond amortization, net (14 ) (2 )
Non-cash stock based compensation 17 17
Loss on asset impairment 1,287 -
Changes in assets and liabilities:
Net receivables and accrued investment income (754 ) (645 )
Reinsurance recoverable (1,480 ) (342 )
Deferred policy acquisitions costs (451 ) (220 )
Other assets (371 ) 450
Unpaid losses and loss adjustment expenses 1,184 301
Unearned premiums 1,907 1,208
Advance premium and premium deposits 165 (60 )
Accrued expenses and other liabilities (759 ) 147
Income taxes current/deferred   (453 )   (215 )
Net Cash Provided (Used) by Operating Activities   (307 )   1,956  
 
Cash flows from investing activities:
Purchase of fixed maturity investments (36,248 ) (18,074 )
Proceeds from maturity of fixed maturity investments 3,249 1,400
Net decrease in short-term investments 34,008 15,008
Additions to property and equipment   (490 )   (502 )
Net Cash Provided (Used) by Investing Activities   519     (2,168 )
 
Cash flows from financing activities:
Repurchase of common stock   (118 )   -  
Net Cash Used by Financing Activities   (118 )   -  
 
Net increase (decrease) in cash 94 (212 )
Cash at beginning of period   309     376  
Cash at End of Period $ 403   $ 164  
 
Supplemental cash flow information
Cash paid during the period for:
Interest - -
Income taxes $ 9 $ 684
 

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