Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the
“Company”), announced today its consolidated financial results for
the three and twelve months ended December 31, 2017. For the three
months ended December 31, 2017, revenues were $9.3 million and net
loss was $2.8 million ($0.52 diluted loss per share) compared with
revenues of $9.0 million and net income of $0.6 million ($0.11
diluted earnings per share) for the three months ended December 31,
2016. For the twelve months ended December 31, 2017, revenues were
$36.8 million and net loss was $8.7 million ($1.64 diluted loss per
share) compared with revenue of $35.3 million and net loss of $1.4
million ($0.26 diluted loss per share) for the twelve months ended
December 31, 2016.
Stockholders’ equity was $59.9 million as of December 31, 2017,
or $11.30 per common share including net unrealized after-tax
investment losses of $0.2 million, compared to stockholders’ equity
of $68.9 million as of December 31, 2016, or $12.98 per common
share including net unrealized after-tax investment gains of $0.008
million.
“While we realized a loss during our fourth quarter, we also
experienced improving trends in both loss ratios and investment
yields, and we assigned top priority to the achievement of
immediate, less speculative results,” said Cary L. Cheldin, Unico’s
President and Chief Executive Officer. “To achieve those results,
we have realigned priorities, focusing our attention on the
improvement of loss ratios and the reduction of expenses. In fact,
loss ratios improved during the quarter and we expect continued
improvement as increased rates and a refined risk selection process
both take hold. It is important to note that over three quarters of
our net loss during the quarter was due to adjustments from the
2017 Tax Cuts and Jobs Act. The management team and I are excited
about the opportunities ahead of us and we are optimistic about our
future.”
About Unico
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.
Forward-Looking Statements
Certain statements in this press release are forward-looking
statements as defined under the Private Securities Litigation
Reform Act of 1995 and the Company intends that such
forward-looking statements are subject to the safe harbors created
thereby. These statements, which may be identified by words or
phrases such as “anticipate,” “appear,” “believe,” “estimate,”
“expect,” “intend,” “plan,” “predict,” “will,” “may,” “likely,”
“future,” “should,” “could,” and “would” and similar words, are
intended to identify forward-looking statements. In addition, any
statements that refer to projections of the Company’s future
financial performance, trends in its businesses, or other
characterizations of future events or circumstances are
forward-looking statements.
The forward-looking statements included herein are based on
current expectations of the Company’s management based on available
information and involve certain 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
those anticipated by these forward-looking statements. Factors that
could cause actual results to differ materially include, among
others: failure to meet minimum capital and surplus requirements;
vulnerability to significant catastrophic property loss; a change
in accounting standards issued by the Financial Accounting
Standards Board; ability to adjust claims accurately; insufficiency
of loss and loss adjustment expense reserves to cover future
losses; changes in federal or state tax laws; ability to realize
deferred tax assets; ability to accurately underwrite risks and
charge adequate premium; ability to obtain reinsurance or collect
from reinsurers; losses in excess of reinsurance limits; extensive
regulation and legislative changes; reliance on subsidiaries to
satisfy obligations; downgrade in financial strength rating by A.M.
Best; changes in interest rates; investments subject to credit,
prepayment and other risks; geographic concentration; reliance on
independent insurance agents and brokers; insufficient reserve for
doubtful accounts; litigation; enforceability of exclusions and
limitations in policies; reliance on information technology
systems; ability to prevent or detect acts of fraud with disclosure
controls and procedures; change in general economic conditions;
dependence on key personnel; ability to attract, develop and retain
employees and maintain appropriate staffing levels; insolvency,
financial difficulties, or default in performance of obligations by
parties with significant contracts or relationships; ability to
effectively compete; maximization of long-term value and no focus
on short-term earnings expectations; control by a small number of
shareholders; failure to maintain effective system of internal
controls; and difficulty in effecting a change of control or sale
of any subsidiaries. Except as may be required by law, the Company
undertakes no obligation to update any forward-looking statements
to reflect new information or events or circumstances after the
date hereof or to reflect the occurrence of unanticipated
events.
UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS ($ in thousands) December 31
December 31
2017
2016 (Unaudited)
ASSETS
Investments
Available-for-sale:
Fixed maturities, at fair value (amortized cost: December 31, 2017
$58,153; December 31, 2016 $19,092) $ 57,849 $ 19,104
Held-to-maturity: Fixed maturities, at amortized cost (fair value:
December 31, 2017 $28,098; December 31, 2016 $61,280) 28,098 61,280
Short-term investments, at fair value
10,440
10,205 Total Investments 96,387 90,589
Cash and restricted cash 774 13,497 Accrued investment income 491
186 Receivables, net 6,006 6,008 Reinsurance recoverable: Paid
losses and loss adjustment expenses 127 261 Unpaid losses and loss
adjustment expenses 8,394 9,521 Deferred policy acquisition costs
4,163 4,432 Property and equipment, net 10,015 10,283 Deferred
income taxes 3,381 1,177 Other assets
561
2,268 Total Assets $
130,299 $
138,222
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses $ 49,077 $ 47,056
Unearned premiums 18,768 19,375 Advance premium and premium
deposits 208 224 Accrued expenses and other liabilities
2,301 2,661 Total
Liabilities $
70,354 $
69,316
Commitments and contingencies
STOCKHOLDERS'
EQUITY
Common stock, no par – authorized 10,000,000 shares; issued and
outstanding shares 5,307,133 at December 31, 2017 and 2016 $ 3,773
$ 3,761 Accumulated other comprehensive (loss) income (240 ) 8
Retained earnings
56,412
65,137 Total Stockholders’ Equity $
59,945 $
68,906 Total
Liabilities and Stockholders' Equity $
130,299
$
138,222 UNICO AMERICAN
CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share) Three Months Ended Twelve
Months Ended
December 31 December 31
2017 2016
2017 2016
(Unaudited) (Unaudited) (Unaudited)
REVENUES
Insurance company operation:
Net premium earned $ 8,034 $ 8,085 $ 32,343 $ 31,356 Investment
income 505 222 1,290 881 Net realized investment gains (losses) - -
1 (1 ) Other income
94
16 338
218 Total Insurance Company Revenues 8,633
8,323 33,972 32,454 Other insurance operations: Gross
commissions and fees 646 675 2,744 2,738 Investment income 1 - 1 -
Finance fees earned 17 18 75 69 Other income
-
1 -
7 Total Revenues
9,297
9,017 36,792
35,268
EXPENSES
Losses and loss adjustment expenses 6,139 4,845 30,491 22,827
Policy acquisition costs 1,521 1,753 6,464 6,895 Salaries and
employee benefits 1,309 946 5,844 4,926 Commissions to
agents/brokers 39 40 166 162 Other operating expenses
1,115 519
3,707 2,572 Total
Expenses
10,123
8,103 46,672
37,382 Income (loss) before taxes (826 )
914 (9,880 ) (2,114 ) Income tax expense (benefit)
1,950 317 (1,155 )
(710 ) Net Income (loss) $ (2,776 ) $
597 $
(8,725 ) $ (1,404 )
PER SHARE
DATA:
Basic Earnings (loss) per share $ (0.52 ) $ 0.11 $ (1.64 ) $ (0.26
) Weighted average shares 5,307,133 5,307,133 5,307,133 5,307,694
Diluted Earnings (loss) per share $ (0.52 ) $ 0.11 $ (1.64 ) $
(0.26 ) Weighted average shares 5,307,133 5,307,837 5,307,133
5,307,694 UNICO AMERICAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS ($ in thousands)
Twelve Months Ended
December 31
2017 2016
(Unaudited) Cash flows from operating activities: Net loss $ (8,725
) $ (1,404 ) Adjustments to reconcile net loss to net cash from
operations: Depreciation and amortization 518 483 Bond
amortization, net (664 ) (16 ) Non-cash stock based compensation 12
23 Net realized investment (gains) losses (1 ) 1 Bad debt expense
16 6 Changes in assets and liabilities: Net receivables and accrued
investment income (319 ) (609 ) Reinsurance recoverable 1,261 606
Deferred policy acquisition costs 269 (199 ) Other assets 400 297
Unpaid losses and loss adjustment expenses 2,021 (2,038 ) Unearned
premiums (607 ) 1,296 Advance premium and premium deposits (16 ) 12
Accrued expenses and other liabilities (360 ) 218 Income taxes
current/deferred (828 ) (85 ) Net Cash Used by
Operating Activities (7,023 ) (1,409 ) Cash
flows from investing activities: Purchase of fixed maturity
investments (60,292 ) (16,772 ) Proceeds from maturity of fixed
maturity investments 53,936 17,873 Proceeds from sale of fixed
maturity investments 1,142 745 Net (increase) decrease in
short-term investments (236 ) 5,436 Additions to property and
equipment (250 ) (545 ) Net Cash (Used) Provided by
Investing Activities (5,700 )
6,737
Cash flows from financing activities: Repurchase of
common stock
- (90 ) Net Cash
Used by Financing Activities
-
(90 ) Net (decrease) increase in cash and restricted cash
(12,723 ) 5,238 Cash and restricted cash at beginning of period
13,497 8,259
Cash and Restricted Cash at End of Period $
774
$
13,497 Supplemental Cash Flow
Information Cash paid during the period for: Interest - - Income
taxes $ 9 $ 9
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version on businesswire.com: https://www.businesswire.com/news/home/20180402005852/en/
Unico American CorporationMichael BudnitskyChief Financial
Officer818-591-9800
Unico American (NASDAQ:UNAM)
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