Exhibit 99.1

 

 

NEWS RELEASE

 

 

CONTACT: Michael Budnitsky

Chief Financial Officer

818-591-9800

 

 

UNICO AMERICAN CORPORATION REPORTS

FOURTH QUARTER AND FULL YEAR 2016 FINANCIAL RESULTS

 

Calabasas, CA, March 30, 2017

– Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and twelve months ended December 31, 2016. For the three months ended December 31, 2016, revenues were $9.0 million and net income was $0.6 million ($0.11 diluted earnings per share) compared with revenues of $8.7 million and net loss of $0.2 million ($0.05 diluted loss per share) for the three months ended December 31, 2015. For the twelve months ended December 31, 2016, revenues were $35.3 million and net loss was $1.4 million ($0.26 diluted loss per share) compared with revenue of $33.3 million and net loss of $1.2 million ($0.22 diluted loss per share) for the twelve months ended December 31, 2015.

 

Stockholders’ equity was $68.9 million as of December 31, 2016, or $12.98 per common share including unrealized after-tax investment gains of $0.008 million, compared to stockholders’ equity of $70.3 million as of December 31, 2015, or $13.23 per common share including unrealized after-tax investment losses of $0.03 million.

 

“Our fourth quarter had no surprises; it was better than the third quarter but not good enough to satisfy our growth and profit objectives,” said Cary L. Cheldin, Unico’s President and Chief Executive Officer. “Although the 2016 year’s financial results were disappointing, the work we did in 2016 serves as a solid foundation for our long term future success. In addition to continuing our work with independent strategic advisors, we also engaged investment advisors, IT advisors, marketing firms, and a product development firm. We are working towards improved growth and profitability moving forward.”

 

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,” “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 –

 

1 

 

 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands)

 

   December 31  December 31
   2016  2015
    (Unaudited)      
ASSETS          
Investments          
   Available for sale:          
      Fixed maturities, at fair value (amortized cost:  December 31, 2016 $80,372; December 31, 2015 $82,203)  $80,384   $82,161 
   Short-term investments, at fair value   10,205    15,641 
Total Investments   90,589    97,802 
Cash and restricted cash   13,496    8,259 
Accrued investment income   186    86 
Receivables, net   6,008    5,505 
Reinsurance recoverable:          
   Paid losses and loss adjustment expenses   261    751 
   Unpaid losses and loss adjustment expenses   9,521    9,637 
Deferred policy acquisition costs   4,432    4,233 
Property and equipment, net   10,283    10,221 
Deferred income taxes   1,177    1,334 
Other assets   2,269    2,343 
Total Assets  $138,222   $140,171 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
LIABILITIES          
Unpaid losses and loss adjustment expenses  $47,056   $49,094 
Unearned premiums   19,375    18,079 
Advance premium and premium deposits   224    212 
Accrued expenses and other liabilities   2,661    2,443 
Total Liabilities   $69,316   $69,828 
           
Commitments and contingencies          
           
STOCKHOLDERS'  EQUITY          
Common stock, no par – authorized 10,000,000 shares; issued and outstanding shares 5,307,133 at December 31, 2016, and 5,315,945 at December 31, 2015  $3,761   $3,743 
Accumulated other comprehensive income (loss)   8    (27)
Retained earnings   65,137    66,627 
Total Stockholders’ Equity  $68,906   $70,343 
           
Total Liabilities and Stockholders' Equity  $138,222   $140,171 

  

2 

 

  

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share)

 

   Three Months Ended  Twelve Months Ended
   December 31  December 31
   2016  2015  2016  2015
   (Unaudited)  (Unaudited)  (Unaudited)   
REVENUES            
Insurance company operation:                    
  Net premium earned  $8,085   $7,717   $31,356   $29,574 
  Investment income   222    165    881    479 
  Net realized investment losses   —      (7)   (1)   (7)
  Other income   16    65    218    375 
     Total Insurance Company Revenues   8,323    7,940    32,454    30,421 
                     
Other insurance operations:                    
  Gross commissions and fees   675    708    2,738    2,774 
  Investment income   —      —      —      —   
  Finance fees earned   18    18    69    66 
  Other income   1    2    7    4 
     Total Revenues   9,017    8,668    35,268    33,265 
                     
EXPENSES                    
Losses and loss adjustment expenses   4,845    5,289    22,827    19,163 
Policy acquisition costs   1,753    1,713    6,895    6,465 
Salaries and employee benefits   946    1,184    4,926    4,853 
Commissions to agents/brokers   40    40    162    167 
Other operating expenses   519    800    2,572    4,351 
     Total Expenses   8,103    9,026    37,382    34,999 
                     
Income (loss) before taxes   914    (358)   (2,114)   (1,734)
Income tax expense (benefit)   317    (110)   (710)   (552)

Net Income (loss)

  $597   $(248)  $(1,404)  $(1,182)
                     
                     
                     
PER SHARE DATA:                    
Basic                    
    Earnings (loss) per share  $0.11   $(0.05)  $(0.26)  $(0.22)
    Weighted average shares   5,307,133    5,326,301    5,307,694    5,335,540 
Diluted                    
    Earnings (loss) per share  $0.11   $(0.05)  $(0.26)  $(0.22)
    Weighted average shares   5,307,837    5,326,301    5,307,694    5,335,540 

 

 

3
 

 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

 

   Twelve Months Ended
      December 31
   2016  2015
   (Unaudited)   
Cash flows from operating activities:          
Net loss  $(1,404)  $(1,182)
Adjustments to reconcile net loss to net cash from operations:          
Depreciation and amortization   483    341 
Bond amortization, net   (16)   (19)
Non-cash stock based compensation   23    23 
Loss on asset impairment   —      1,287 
Net realized investment losses   1    8 
Bad debt expense   6    (1)
Changes in assets and liabilities:          
Net receivables and accrued investment income   (609)   (377)
Reinsurance recoverable   606    (5,024)
Deferred policy acquisition costs   (199)   (350)
Other assets   297    218 
Unpaid losses and loss adjustment expenses   (2,038)   4,697 
Unearned premiums   1,296    1,472 
Advance premium and premium deposits   12    (38)
Accrued expenses and other liabilities   218    (543)
Income taxes current/deferred   (85)   (561)
Net Cash Used by Operating Activities   (1,409)   (49)
           
Cash flows from investing activities:          
Purchase of fixed maturity investments   (16,772)   (57,930)
Proceeds from maturity of fixed maturity investments   18,618    10,892 
Net decrease in short-term investments   5,436    56,618 
Additions to property and equipment   (545)   (1,339)
Net Cash Provided by Investing Activities   6,737    8,241 
           
Cash flows from financing activities:          
Repurchase of common stock   (90)   (242)
Net Cash Used by Financing Activities   (90)   (242)
           
Net increase in cash   5,238    7,950 
Cash and restricted cash at beginning of period   8,259    309 
Cash and Restricted Cash at End of Period  $13,497   $8,259 
           
Supplemental Cash Flow Information          
Cash paid during the period for income taxes  $9   $9 

 

 

4 

 


The following information was filed by Unico American Corp (UNAM) on Friday, March 31, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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