News Column

Unico American Corporation Reports Second Quarter 2014 Financial Results

August 12, 2014

WOODLAND HILLS, Calif.--(BUSINESS WIRE)-- Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and six months ended June 30, 2014. For the three months ended June 30, 2014, revenues were $7.6 million and net income was $0.3 million ($0.05 diluted income per share) compared with revenues of $7.8 million and net income of $0.3 million ($0.05 diluted income per share) for the three months ended June 30, 2013. For the six months ended June 30, 2014, revenues were $15.1 million and net income was $0.9 million ($0.16 diluted income per share) compared with revenues of $15.7 million and net income of $0.3 million ($0.05 diluted income per share) for the six months ended June 30, 2013.

As of June 30, 2014, the Company had cash and investments (at amortized cost) of $107.2 million. $11.9 million, or 10% of these investments were fixed maturity investments, and 44% of those fixed maturity investments were U.S. treasury securities.

Stockholders’ equity was $71.8 million as of June 30, 2014, or $13.44 per common share including unrealized gains, net of tax, of $0.002 million, compared to stockholders’ equity of $70.9 million as of December 31, 2013, or $13.27 per common share including unrealized losses, net of tax, 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 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.

Financial Tables Follow –

     

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands)

 
June 30December 31
20142013
(Unaudited)

ASSETS

Investments
Available for sale:

Fixed maturities, at fair value (amortized cost: June 30,

2014 $11,646; December 31, 2013$11,945)

$11,648$11,936
Short-term investments, at fair value 95,52093,807
Total Investments 107,168 105,743
Cash 104 376
Accrued investment income 7 5
Receivables, net 5,961 5,157
Reinsurance recoverable:
Paid losses and loss adjustment expenses 36 184
Unpaid losses and loss adjustment expenses 4,700 4,428
Deferred policy acquisition costs 3,798 3,636
Property and equipment, net 10,206 10,170

Deferred income taxes

1,506 1,373
Other assets 1,4311,781
Total Assets $134,917 $132,853
 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

LIABILITIES

Unpaid losses and loss adjustment expenses $44,147$43,877
Unearned premiums 16,148 15,261
Advance premium and premium deposits 459 465
Accrued expenses and other liabilities 2,3862,354
Total Liabilities $63,140 $61,957
 
Commitments and contingencies
 

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; issued and

outstanding shares 5,341,147 at June 30, 2014, and 5,341,147 at

December 31, 2013

 
$3,720$3,709
Accumulated other comprehensive loss 2 (6)
Retained earnings 68,05567,193
Total Stockholders’ Equity $71,777 $70,896
 
Total Liabilities and Stockholders' Equity $134,917 $132,853
   

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except per share)

 

 

 

Three Months Ended Six Months Ended
June 30June 30
2014     20132014     2013

REVENUES

Insurance company revenues
Net premium earned $6,485$6,758$12,873$13,447
Investment income 30 111 61 232
Other income 34046596281
Total Insurance Company Revenues 6,855 6,915 13,530 13,960
 
Other revenues from insurance operations
Gross commissions and fees 749 829 1,484 1,712
Investment income - 1 - 1
Finance charges and fees earned 16 17 33 37
Other income 21153
Total Revenues 7,6227,76315,06215,713
 

EXPENSES

Losses and loss adjustment expenses 3,648 3,891 6,540 8,447
Policy acquisition costs 1,471 1,544 2,948 2,978
Salaries and employee benefits 1,271 1,286 2,553 2,550
Commissions to agents/brokers 54 62 98 123
Other operating expenses 7765941,6141,173
Total Expenses 7,2207,37713,75315,271
 
Income before taxes 402 386 1,309 442
Income tax expense 132136447184
Net Income $270 $250 $862 $258
 
 
 

PER SHARE DATA:

Basic
Earnings Per Share $0.05$0.05$0.16$0.05
Weighted Average Shares 5,341,147 5,341,147 5,341,147 5,341,147
Diluted
Earnings Per Share $0.05$0.05$0.16$0.05
Weighted Average Shares 5,345,082 5,344,479 5,345,280 5,344,471
 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

($ in thousands)

 
For the Six Months Ended
June 30
20142013

Cash flows from operating activities:

Net Income $862$258
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization 278 107
Bond amortization, net (2) 4
Non-cash stock based compensation 12 12
Changes in assets and liabilities
Net receivables and accrued investment income (806) (185)
Reinsurance recoverable (125) 1,800
Deferred policy acquisitions costs (162) (32)
Other assets 296 (86)
Unpaid losses and loss adjustment expenses 270 (2,107)
Unearned premium 887 177
Advance premium and premium deposits (6) (179)
Accrued expenses and other liabilities 32 (626)
Income taxes current/deferred (82)28
Net Cash Provided (Used) by Operating Activities 1,454 (829)
 
Cash flows from investing activities:
Purchase of fixed maturity investments (100) (2,050)
Proceeds from maturity of fixed maturity investments 400 11,595
Net increase in short-term investments (1,712) (8,364)
Additions to property and equipment (314) (425)
Net Cash Provided (Used) by Investing Activities (1,726)756
 
Cash flows from financing activities:
Proceeds from exercise of stock options - -
Repurchase and adjustment of common stock - -
Dividends paid to stockholders --
Net Cash Used by Financing Activities --
 
Net decrease in cash (272) (73)
Cash at beginning of period 376161
Cash at End of Period $104 $88
 
Supplemental Cash Flow Information

Cash paid during the period for:

Interest - -
Income taxes $534$159





Unico American Corporation

Lester A. Aaron, 818-591-9800

Chief Financial Officer

Source: Unico American Corporation


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