UNAM Unico American Corp

Unico American Corporation (NASDAQ: UNAM) (“Unico,” the “Company”) announced today its consolidated financial results for the three months ended March 31, 2019. For the three months ended March 31, 2019, revenues were $7.1 million and net loss was $0.7 million ($0.13 diluted loss per share) compared with revenues of $8.8 million and net loss of $2.2 million ($0.42 diluted loss per share) for the three months ended March 31, 2018.

Stockholders’ equity was $56.2 million as of March 31, 2019, or $10.59 per common share including unrealized after-tax investment losses of $0.1 million, compared to stockholders’ equity of $55.9 million as of December 31, 2018, or $10.54 per common share including unrealized after- tax investment losses of $1.1 million.

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

This press release may contain “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements are not historical facts and include statements about the Company plans, objectives, beliefs and expectations. Forward-looking statements include statements preceded by, followed by, or that include the words “believes,” “expects,” “anticipates,” “seeks,” “plans,” “estimates,” “intends,” “projects,” “targets,” “should,” “could,” “may,” “will,” “can,” “can have,” “likely,” the negatives thereof or similar words and expressions.

Forward-looking statements are only predictions and are not guarantees of future performance. These statements are based on current expectations and assumptions involving judgments about, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control. These predictions are also affected by known and unknown risks that may cause the Company’s actual results to be materially different from those expressed or implied by any forward-looking statement. Such risks include, but are not limited to, failure to meet capital and surplus requirements; vulnerability to catastrophic property loss; changes in accounting standards; accuracy of claims adjustments; sufficiency of expense reserves; changes in tax laws; realization of deferred tax assets; accuracy of underwritten risks and adequacy of premiums; availability and cost of reinsurance; regulation and legislative changes; reliance on subsidiaries; downgrades in financial strength ratings; changes in interest rates; credit and prepayment risks; geographic concentration; reliance on independent insurance agents and brokers; sufficiency of reserves for doubtful accounts; litigation; enforceability of policy terms; reliance on information technology systems; single operating location; prevention or detection of fraud; changes in economic conditions; dependence on key personnel; ability to attract, develop and retain employees; insolvency, financial difficulties, or default by contractual counterparties; competition; maximization of long-term value; control by a small number of shareholders; limited trading of stock; maintenance of effective systems of internal controls; and difficulty in effecting a change of control or sale of any subsidiaries.

Please see Part I - Item 1A – “Risk Factors” in the Company’s 2018 Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission (“SEC”), as well as other documents the Company files with the SEC from time-to-time, for other factors that could cause the Company’s actual results to differ materially from the forward-looking statements discussed herein. Because of these and other risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements. In addition, these statements speak only as of the date of this press release and, except as may be required by law, the Company undertakes no obligation to revise or update publicly any forward-looking statements for any reason.

 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands)

    March 31 December 31   2019     2018   (Unaudited)

ASSETS

Investments Available-for-sale: Fixed maturities, at fair value (amortized cost: March 31, 2019 $80,847; December 31, 2018 $78,303) $ 80,690 $ 76,910 Held-to-maturity: Fixed maturities, at amortized cost (fair value: March 31, 2019 $5,878; December 31, 2018 $7,126) 5,878 7,126 Short-term investments, at fair value   697     4,691   Total Investments 87,265 88,727 Cash and cash equivalents 3,646 4,918 Accrued investment income 511 394 Receivables, net 4,270 3,933 Reinsurance recoverable: Paid losses and loss adjustment expenses 987 (1 ) Unpaid losses and loss adjustment expenses 11,679 9,532 Deferred policy acquisition costs 3,571 3,490 Property and equipment, net 9,789 9,692 Deferred income taxes 4,266 4,375 Other assets   206     557   Total Assets $ 126,190   $ 125,617    

LIABILITIES AND STOCKHOLDERS' EQUITY

 

LIABILITIES

Unpaid losses and loss adjustment expenses $ 51,333 $ 51,657 Unearned premiums 16,526 15,965 Advance premium and premium deposits 343 234 Accrued expenses and other liabilities   1,767     1,845   Total Liabilities $ 69,969   $ 69,701     Commitments and contingencies  

STOCKHOLDERS' EQUITY

Common stock, no par – authorized 10,000,000 shares; 5,307,103 shares issued and outstanding at March 31, 2019, and December 31, 2018 $ 3,773 $ 3,773 Accumulated other comprehensive loss (124 ) (1,100 ) Retained earnings   52,572     53,243   Total Stockholders’ Equity $ 56,221   $ 55,916     Total Liabilities and Stockholders' Equity $ 126,190   $ 125,617    

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

($ in thousands, except per share)

  Three Months Ended March 31   2019       2018  

REVENUES

Insurance company operation:

Net premium earned $ 6,264 $ 7,682 Investment income 533 445 Net realized investment losses (8 ) - Other income (loss)   (261 )   55   Total Insurance Company Operation 6,528 8,182   Other insurance operations: Gross commissions and fees 547 607 Finance charges and fees earned 49 18 Other income   11     -   Total Revenues   7,135     8,807    

EXPENSES

Losses and loss adjustment expenses 5,154 7,802 Policy acquisition costs 1,087 1,622 Salaries and employee benefits 1,028 1,288 Commissions to agents/brokers 50 40 Other operating expenses   628     867   Total Expenses   7,947     11,619     Loss before taxes (812 ) (2,812 ) Income tax benefit   141     605   Net Loss $ (671 ) $ (2,207 )      

PER SHARE DATA:

Basic Loss Per Share $ (0.13 ) $ (0.42 ) Weighted Average Shares 5,307,103 5,307,133   Diluted Loss Per Share $ (0.13 ) $ (0.42 ) Weighted Average Shares 5,307,103 5,307,133  

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

($ in thousands)

  Three Months Ended March 31   2019       2018   Cash flows from operating activities: Net Loss $ (671 ) $ (2,207 ) Adjustments to reconcile net loss to net cash from operations: Depreciation and amortization 135 140 Bond amortization, net 7 99 Bad debt expense 3 - Net realized investment losses 8 - Changes in assets and liabilities: Net receivables and accrued investment income (457 ) 535 Reinsurance recoverable (3,135 ) (3,589 ) Deferred policy acquisition costs (81 ) 224 Other assets 349 35 Unpaid losses and loss adjustment expenses (324 ) 4,837 Unearned premiums 561 (714 ) Advance premium and premium deposits 109 101 Accrued expenses and other liabilities (78 ) (431 ) Income taxes current/deferred   (149 )   (607 ) Net Cash Used by Operating Activities   (3,723 )   (1,578 )   Cash flows from investing activities: Purchase of fixed maturity investments (3,574 ) (8,161 ) Proceeds from maturity of fixed maturity investments 1,780 4,837 Proceeds from sale of call of fixed maturity investments 483 - Net decrease in short-term investments 3,994 1,647 Additions to property and equipment   (232 )   (37 ) Net Cash Provided (Used) by Investing Activities   2,451     (1,714 )   Cash flows from financing activities: Net Cash Used by Financing Activities   -     -     Net decrease in cash and cash equivalents (1,272 ) (3,292 ) Cash and cash equivalents at beginning of period   4,918     9,367   Cash and Cash Equivalents at End of Period $ 3,646   $ 6,075     Supplemental cash flow information Cash paid during the period for: Interest - - Income taxes $ 9 -

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Michael BudnitskyChief Financial Officer818-591-9800