Unico American Corporation Reports Third Quarter 2012 Financial Results

Unico American Corporation Reports Third Quarter 2012 Financial Results

WOODLAND HILLS, Calif.--(BUSINESS WIRE)-- Unico American Corporation (NAS: UNAM) ("Unico," the "Company") announced today its consolidated financial results for the three and nine months ended September 30, 2012. For the three months ended September 30, 2012, revenues were $8.2 million and net income was $0.7 million ($0.14 diluted income per share) compared with revenues of $9.1 million and net income of $1.3 million ($0.24 diluted income per share) for the three months ended September 30, 2011. For the nine months ended September 30, 2012, revenues were $24.8 million and net income was $1.4 million ($0.26 diluted income per share) compared with revenues of $26.3 million and net income of $3.1 million ($0.58 diluted income per share) for the nine months ended September 30, 2011.

As of September 30, 2012, the Company had cash and investments (at amortized cost) of $124.6 million. $46.5 million, or 37% of these investments were fixed maturity investments, and 76% of those fixed maturity investments were U.S. treasury securities.


Stockholders' equity was $75.2 million as of September 30, 2012, or $14.11 per common share including unrealized gains, net of tax, of $0.2 million, compared to stockholders' equity of $75.8 million as of December 31, 2011, or $14.20 per common share including unrealized gains, net of tax, of $1 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 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)

September 30

December 31

2012

2011

(Unaudited)

ASSETS

Investments

Available for sale:

Fixed maturities, at fair value (amortized cost: September 30, 2012 $46,499; December 31, 2011 $89,903)

$46,797

$91,357

Short-term investments, at fair value

78,046

38,139

Total Investments

124,843

129,496

Cash

95

467

Accrued investment income

270

681

Premiums and notes receivable, net

6,020

5,304

Reinsurance recoverable:

Paid losses and loss adjustment expenses

12

60

Unpaid losses and loss adjustment expenses

7,814

7,975

Deferred policy acquisition costs

3,928

4,158

Property and equipment (net of accumulated depreciation)

665

231

Deferred income taxes

1,836

1,394

Other assets

1,396

609

Total Assets

$146,879

$150,375

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES

Unpaid losses and loss adjustment expenses

$51,029

$54,487

Unearned premiums

16,591

15,912

Advance premium and premium deposits

930

818

Accrued expenses and other liabilities

3,103

3,310

Total Liabilities

$71,653

$74,527

Commitments and contingencies

STOCKHOLDERS' EQUITY

Common stock, no par - authorized 10,000,000 shares;

Issued and outstanding shares 5,329,597 at September 30, 2012; and at December 31, 2011

$3,633

$3,611

Accumulated other comprehensive income

196

960

Retained earnings

71,397

71,277

Total Stockholders' Equity

$75,226

$75,848

Total Liabilities and Stockholders' Equity

$146,879

$150,375

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

($ in thousands, except per share)

Three Months Ended

Nine Months Ended

September 30

September 30

2012

2011

2012

2011

REVENUES

Insurance Company Revenues

Premium earned

$8,233

$8,022

$24,236

$24,021

Premium ceded

1,292

1,321

3,799

3,974

Net premium earned

6,941

6,701

20,437

20,047

Investment income

303

733

1,359

2,272

Other income

141

746

438

1,086

Total Insurance Company Revenues

7,385

8,180

22,234

23,405

Other Revenues from Insurance Operations

Gross commissions and fees

821

876

2,536

2,791

Investment income

-

1

1

2

Finance charges and fees earned

19

16

51

55

Other income

4

5

9

12

Total Revenues

8,229

9,078

24,831

26,265

EXPENSES

Losses and loss adjustment expenses

3,572

3,358

11,620

10,616

Policy acquisition costs

1,660

1,778

5,128

5,323

Salaries and employee benefits

1,253

1,148

3,917

3,270

Commissions to agents/brokers

59

55

176

167

Other operating expenses

550

792

1,883

2,128

Total Expenses

7,094

7,131

22,724

21,504

Income Before Taxes

1,135

1,947

2,107

4,761

Income tax expense

389

672

704

1,665

Net Income

$746

$1,275

$1,403

$3,096

PER SHARE DATA:

Basic

Earnings Per Share

$0.14

$0.24

$0.26

$0.58

Weighted Average Shares

5,338

5,335

5,341

5,334

Diluted

Earnings Per Share

$0.14

$0.24

$0.26

$0.58

Weighted Average Shares

5,350

5,358

5,357

5,359

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

($ in thousands)

For the Nine Months Ended

September 30

2012

2011

Cash flows from operating activities:

Net Income

$1,403

$3,096

Adjustments to reconcile net income to net cash from operations

Depreciation

91

43

Bond amortization, net

69

121

Non-cash stock based compensation

17

23

Changes in assets and liabilities

Premium, notes and investment income receivable

(306

)

(1,109

)

Reinsurance recoverable

209

3,441

Deferred policy acquisitions costs

230

7

Other assets

(779

)

81

Unpaid losses and loss adjustment expenses

(3,457

)

(6,328

)

Unearned premiums

678

137

Advance premium and premium deposits

112

392

Accrued expenses and other liabilities

(206

)

(1,108

)

Income taxes current/deferred

(57

)

504

Net Cash Used by Operating Activities

(1,996

)

(700

)

Cash flows from investing activities:

Purchase of fixed maturity investments

(1,300

)

(6,045

)

Proceeds from maturity of fixed maturity investments

44,635

27,506

Net increase in short-term investments

(39,907

)

(20,676

)

Additions to property and equipment

(525

)

(50

)

Net Cash Provided by Investing Activities

2,903

735

Cash flows from financing activities:

Proceeds from exercise of stock options

15

2

Repurchase of common stock

(226

)

(11

)

Dividends paid to stockholders

(1,068

)

-

Net Cash Used by Financing Activities

(1,279

)

(9

)

Net (decrease) increase in cash

(372

)

26

Cash at beginning of period

467

45

Cash at End of Period

$95

$71

Supplemental Cash Flow Information

Cash paid during the period for:

Interest

-

-

Income taxes

$759

$1,159

Supplemental Schedule of Non-Cash Investing Activities

Write-offs of property and equipment

-

$1,432



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

KEYWORDS: United States North America California

INDUSTRY KEYWORDS:

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