Unico American Corp (UNAM) 10-K Annual Report March 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 –

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

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

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

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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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Unico American Corp provided additional information to their SEC Filing as exhibits

Exhibit 10.21: Amendment To Employment Agreement With Cary L. Cheldin

Exhibit 23.1: Consent Of Independent Registered Public Accounting Firm

Exhibit 23.2: Consent Of Independent Registered Public Accounting Firm

Exhibit 31.1: Certification

Exhibit 31.2: Certification

Exhibit 32.1: Certification Under Section 906

Exhibit 32.2: Certification Under Section 906

Ticker: UNAM
CIK: 100716
Form Type: 10-K Annual Report
Accession Number: 0000100716-17-000004
Submitted to the SEC: Thu Mar 30 2017 7:01:53 PM EST
Accepted by the SEC: Fri Mar 31 2017
Period: Saturday, December 31, 2016
Industry: Fire Marine And Casualty Insurance

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