| [August 11, 2017] |
 |
Unico American Corporation Reports Second Quarter 2017 Financial Results
Unico American Corporation (NASDAQ - "UNAM") ("Unico," the "Company"),
announced today its consolidated financial results for the three and six
months ended June 30, 2017. For the three months ended June 30, 2017,
revenues were $9.2 million and net loss was $0.9 million ($0.17 diluted
loss per share) compared with revenues of $8.7 million and net income of
$0.2 million ($0.03 diluted income per share) for the three months ended
June 30, 2016. For the six months ended June 30, 2017, revenues were
$18.2 million and net loss was $3.0 million ($0.57 diluted loss per
share) compared with revenues of $17.3 million and net loss of $0.05
million ($0.01 diluted loss per share) for the six months ended June 30,
2016.
Stockholders' equity was $65.9 million as of June 30, 2017, or $12.41
per common share including unrealized losses, net of tax, of $0.003
million, compared to stockholders' equity of $68.9 million as of
December 31, 2016, or $12.98 per common share including unrealized
investment gains, net of tax, of $0.008 million.
"We continued making significant changes to infrastructure during the
second quarter and the costs of these changes, including employee
severance and IT consulting, impacted our results," said Cary L.
Cheldin, Unico's President and Chief Executive Officer. Cheldin
continued: "While we were successful in bringing new leadership to our
P&C underwriting and marketing operations and we adopted important rate
increases later in the quarter, our claims experience from prior
accident years was unfavorable. Nonetheless, I am confident that the
numerous initiatives that we implemented during the first half of 2017
will make a positive impact upon our future results."
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
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
|
|
|
|
|
|
|
June 30
|
|
December 31
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Investments
|
|
|
|
|
|
|
|
Available for sale:
|
|
|
|
|
|
|
|
Fixed maturities, at fair value (amortized cost: $83,878 at
|
|
|
|
|
|
|
|
June 30, 2017, and $80,372 at December 31, 2016)
|
|
|
$
|
83,874
|
|
|
$
|
80,384
|
|
Short-term investments, at fair value
|
|
|
|
5,093
|
|
|
|
10,205
|
|
Total Investments
|
|
|
|
88,967
|
|
|
|
90,589
|
|
Cash and restricted cash
|
|
|
|
13,586
|
|
|
|
13,496
|
|
Accrued investment income
|
|
|
|
239
|
|
|
|
186
|
|
Receivables, net
|
|
|
|
6,258
|
|
|
|
6,008
|
|
Reinsurance recoverable:
|
|
|
|
|
|
|
|
Paid (News - Alert) losses and loss adjustment expenses
|
|
|
|
81
|
|
|
|
261
|
|
Unpaid losses and loss adjustment expenses
|
|
|
|
12,492
|
|
|
|
9,521
|
|
Deferred policy acquisition costs
|
|
|
|
4,423
|
|
|
|
4,432
|
|
Property and equipment, net
|
|
|
|
10,113
|
|
|
|
10,283
|
|
Deferred income taxes
|
|
|
|
1,170
|
|
|
|
1,177
|
|
Other assets
|
|
|
3,449
|
|
|
|
2,269
|
|
Total Assets
|
|
|
$
|
140,778
|
|
|
$
|
138,222
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
Unpaid losses and loss adjustment expenses
|
|
|
$
|
51,939
|
|
|
$
|
47,056
|
|
Unearned premiums
|
|
|
|
19,877
|
|
|
|
19,375
|
|
Advance premium and premium deposits
|
|
|
|
385
|
|
|
|
224
|
|
Accrued expenses and other liabilities
|
|
|
|
2,708
|
|
|
|
2,661
|
|
Total Liabilities
|
|
|
$
|
74,909
|
|
|
$
|
69,316
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Common stock, no par - authorized 10,000,000 shares; issued and
|
|
|
|
|
|
|
|
outstanding shares 5,307,133 at June 30, 2017, and
|
|
|
|
|
|
|
|
December 31, 2016
|
|
|
$
|
3,773
|
|
|
$
|
3,761
|
|
Accumulated other comprehensive income (loss)
|
|
|
|
(3
|
)
|
|
|
8
|
|
Retained earnings
|
|
|
|
62,099
|
|
|
|
65,137
|
|
Total Stockholders' Equity
|
|
|
$
|
65,869
|
|
|
$
|
68,906
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity
|
|
|
$
|
140,778
|
|
|
$
|
138,222
|
|
|
|
|
|
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
($ in thousands, except per share)
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
June 30
|
|
June 30
|
|
|
|
|
2017
|
|
|
2016
|
|
2017
|
|
|
2016
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance company operation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earned premium
|
|
|
$
|
8,220
|
|
|
$
|
7,718
|
|
$
|
16,141
|
|
|
$
|
15,290
|
|
|
Investment income
|
|
|
|
264
|
|
|
|
212
|
|
|
476
|
|
|
|
424
|
|
|
Net realized investment losses
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
(1
|
)
|
|
Other income
|
|
|
68
|
|
|
68
|
|
136
|
|
|
136
|
|
|
Total Insurance Company Operation
|
|
|
|
8,552
|
|
|
|
7,998
|
|
|
16,753
|
|
|
|
15,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other insurance operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross commissions and fees
|
|
|
|
671
|
|
|
|
709
|
|
|
1,413
|
|
|
|
1,366
|
|
|
Finance fees earned
|
|
|
|
18
|
|
|
|
15
|
|
|
36
|
|
|
|
32
|
|
|
Other income
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
5
|
|
|
Total Revenues
|
|
|
|
9,241
|
|
|
|
8,722
|
|
|
18,202
|
|
|
|
17,252
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses
|
|
|
|
5,909
|
|
|
|
4,859
|
|
|
14,434
|
|
|
|
9,944
|
|
|
Policy acquisition costs
|
|
|
|
1,591
|
|
|
|
1,701
|
|
|
3,089
|
|
|
|
3,401
|
|
|
Salaries and employee benefits
|
|
|
|
1,965
|
|
|
|
1,279
|
|
|
3,313
|
|
|
|
2,661
|
|
|
Commissions to agents/brokers
|
|
|
|
45
|
|
|
|
41
|
|
|
87
|
|
|
|
81
|
|
|
Other operating expenses
|
|
|
1,082
|
|
|
|
633
|
|
|
1,897
|
|
|
|
1,226
|
|
|
Total Expenses
|
|
|
|
10,592
|
|
|
|
8,513
|
|
|
22,820
|
|
|
|
17,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before taxes
|
|
|
|
(1,351
|
)
|
|
|
209
|
|
|
(4,618
|
)
|
|
|
(61
|
)
|
|
Income tax expense (benefit)
|
|
|
|
(460
|
)
|
|
|
58
|
|
|
(1,580
|
)
|
|
|
(13
|
)
|
|
Net Income (Loss)
|
|
|
$
|
(891
|
)
|
|
$
|
151
|
|
$
|
(3,038
|
)
|
|
$
|
(48
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.03
|
|
$
|
(0.57
|
)
|
|
$
|
(0.01
|
)
|
|
Weighted average shares
|
|
|
|
5,307,133
|
|
|
|
5,307,133
|
|
|
5,307,133
|
|
|
|
5,308,255
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.03
|
|
$
|
(0.57
|
)
|
|
$
|
(0.01
|
)
|
|
Weighted average shares
|
|
|
|
5,308,501
|
|
|
|
5,308,501
|
|
|
5,307,133
|
|
|
|
5,308,255
|
|
|
|
|
|
|
|
|
|
|
UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
($ in thousands)
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
June 30
|
|
|
|
|
2017
|
|
2016
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net Loss
|
|
|
$
|
(3,038
|
)
|
|
$
|
(48
|
)
|
|
Adjustments to reconcile net loss to net cash from operations:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
265
|
|
|
|
240
|
|
|
Bond amortization, net
|
|
|
|
(426
|
)
|
|
|
(8
|
)
|
|
Bad debt expense
|
|
|
|
15
|
|
|
|
-
|
|
|
Non-cash stock based compensation
|
|
|
|
12
|
|
|
|
12
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
Net receivables and accrued investment income
|
|
|
|
(318
|
)
|
|
|
(826
|
)
|
|
Reinsurance recoverable
|
|
|
|
(2,791
|
)
|
|
|
460
|
|
|
Deferred policy acquisitions costs
|
|
|
|
9
|
|
|
|
(262
|
)
|
|
Other assets
|
|
|
|
416
|
|
|
|
604
|
|
|
Unpaid losses and loss adjustment expenses
|
|
|
|
4,883
|
|
|
|
(107
|
)
|
|
Unearned premium
|
|
|
|
502
|
|
|
|
1,186
|
|
|
Advance premium and premium deposits
|
|
|
|
161
|
|
|
|
229
|
|
|
Accrued expenses and other liabilities
|
|
|
|
47
|
|
|
|
122
|
|
|
Income taxes current/deferred
|
|
|
|
(1,584
|
)
|
|
|
(18
|
)
|
|
Net Cash (Used) Provided by Operating Activities
|
|
|
|
(1,847
|
)
|
|
|
1,584
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchase of fixed maturity investments
|
|
|
|
(29,348
|
)
|
|
|
(5,194
|
)
|
|
Proceeds from maturity of fixed maturity investments
|
|
|
|
25,218
|
|
|
|
300
|
|
|
Proceeds from sale of fixed maturity investments
|
|
|
|
1,050
|
|
|
|
746
|
|
|
Net decrease in short-term investments
|
|
|
|
5,112
|
|
|
|
8,682
|
|
|
Additions to property and equipment
|
|
|
|
(95
|
)
|
|
|
(522
|
)
|
|
Net Cash Provided by Investing Activities
|
|
|
|
1,937
|
|
|
|
4,012
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Repurchase of common stock
|
|
|
|
-
|
|
|
|
(90
|
)
|
|
Net Cash Used by Financing Activities
|
|
|
|
-
|
|
|
|
(90
|
)
|
|
|
|
|
|
|
|
|
Net increase in cash and restricted cash
|
|
|
|
90
|
|
|
|
5,506
|
|
|
Cash and restricted cash at beginning of period
|
|
|
|
13,496
|
|
|
|
8,259
|
|
|
Cash and Restricted Cash at End of Period
|
|
|
$
|
13,586
|
|
|
$
|
13,765
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
Interest
|
|
|
|
-
|
|
|
|
-
|
|
|
Income taxes
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170811005618/en/
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