Unico American Corporation Reports First Quarter 2014 Financial Results

WOODLAND HILLS, Calif.--()--Unico American Corporation (NASDAQ: UNAM) (“Unico,” the “Company”), announced today its consolidated financial results for the three months ended March 31, 2014. For the three months ended March 31, 2014, revenues were $7.4 million and net income was $0.6 million ($0.11 diluted income per share) compared with revenues of $7.9 million and net income of $0.1 million ($0.00 diluted income per share) for the three months ended March 31, 2013.

Stockholders’ equity was $71.5 million as of March 31, 2014, or $13.39 per common share including unrealized after-tax investment losses of $0.001 million, compared to stockholders’ equity of $70.9 million as of December 31, 2013, or $13.27 per common share including unrealized after-tax investment losses of $0.006 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 website 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.

Financial Tables Follow –

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
($ in thousands)
 
  March 31   December 31
  2014     2013  
(Unaudited)

ASSETS

Investments
Available for sale:

Fixed maturities, at fair value (amortized cost: March 31, 2014 $11,745; December 31, 2013 $11,945)

$ 11,743 $ 11,936
Short-term investments, at fair value   94,563     93,807  
Total Investments 106,306 105,743
Cash 97 376
Accrued investment income 11 5
Receivables, net 5,099 5,157
Reinsurance recoverable:
Paid losses and loss adjustment expenses 21 184
Unpaid losses and loss adjustment expenses 4,731 4,428
Deferred policy acquisition costs 3,668 3,636
Property and equipment, net 10,168 10,170
Deferred income taxes 1,446 1,373
Other assets   1,414     1,781  
Total Assets $ 132,961   $ 132,853  
 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

LIABILITIES

Unpaid losses and loss adjustment expenses $ 43,133 $ 43,877
Unearned premiums 15,133 15,261
Advance premium and premium deposits 490 465
Income taxes payable 144 -
Accrued expenses and other liabilities   2,563     2,354  
Total Liabilities $ 61,463   $ 61,957  
 
Commitments and contingencies
 

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and outstanding shares 5,341,147 at March 31, 2014, and 5,341,147 at December 31, 2013

$ 3,714 $ 3,709
Accumulated other comprehensive loss (1 ) (6 )
Retained earnings   67,785     67,193  
Total Stockholders’ Equity $ 71,498   $ 70,896  
 
Total Liabilities and Stockholders' Equity $ 132,961   $ 132,853  
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share)
 
  Three Months Ended
March 31
2014   2013

REVENUES

Insurance Company Revenues
Net premium earned $ 6,388 $ 6,690
Investment income 31 121
Other income   256   234
Total Insurance Company Revenues 6,675 7,045
 
Other Revenues from Insurance Operations
Gross commissions and fees 735 882
Investment income - -
Finance fees earned 17 20
Other income   13   3
Total Revenues   7,440   7,950
 

EXPENSES

Losses and loss adjustment expenses 2,892 4,557
Policy acquisition costs 1,477 1,434
Salaries and employee benefits 1,282 1,263
Commissions to agents/brokers 44 61
Other operating expenses   839   579
Total Expenses   6,534   7,894
 
Income Before Taxes 906 56
Income Tax Expense   314   48
Net Income $ 592 $ 8
 
 
 
PER SHARE DATA:
Basic
Earnings Per Share $ 0.11 $ 0.00
Weighted Average Shares 5,341,147 5,341,147
 
Diluted
Earnings Per Share $ 0.11 $ 0.00
Weighted Average Shares 5,345,478 5,344,463
 
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ in thousands)
 
  For the Three Months Ended
March 31
  2014       2013  
Cash flows from operating activities:
Net Income $ 592 $ 8
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization 138 53
Bond amortization, net (1 ) 5
Non-cash stock based compensation 6 6
Changes in assets and liabilities
Net receivables and accrued investment income 51 288
Reinsurance recoverable (140 ) 653
Deferred policy acquisition costs (32 ) (58 )
Other assets 120 36
Unpaid losses and loss adjustment expenses (744 ) (322 )
Unearned premiums (128 ) (130 )
Advance premium and premium deposits 25 (143 )
Accrued expenses and other liabilities 209 (359 )
Income taxes current/deferred   317     50  
Net Cash Provided by Operating Activities   413     87  
 
Cash flows from investing activities:
Purchase of fixed maturity investments - (699 )
Proceeds from maturity of fixed maturity investments 200 7,948
Net increase in short-term investments (756 ) (7,082 )
Additions to property and equipment   (136 )   (245 )
Net Cash Used by Investing Activities   (692 )   (78 )
 
Cash flows from financing activities:
Net Cash Provided (Used) by Financing Activities   -     -  
 
Net (decrease) increase in cash (279 ) 9
Cash at beginning of period   376     161  
Cash at End of Period $ 97   $ 170  
 
Supplemental cash flow information
Cash paid during the period for:
Interest - -
Income taxes - -

Contacts

Unico American Corporation
Lester A. Aaron
Chief Financial Officer
818-591-9800

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Contacts

Unico American Corporation
Lester A. Aaron
Chief Financial Officer
818-591-9800