EXHIBIT 99.1

 

NEWS RELEASE

 

 

CONTACT: Michael Budnitsky

Chief Financial Officer

818-591-9800

 

UNICO AMERICAN CORPORATION REPORTS

FOURTH QUARTER AND FULL YEAR 2018 FINANCIAL RESULTS

 

Calabasas, CA, February 28, 2019

– Unico American Corporation (NASDAQ – “UNAM”) (“Unico,” the “Company”), announced today its consolidated financial results for the three and twelve months ended December 31, 2018. For the three months ended December 31, 2018, revenues were $8.0 million and net loss was $0.5 million ($0.09 diluted loss per share) compared with revenues of $9.3 million and net loss of $2.8 million ($0.52 diluted loss per share) for the three months ended December 31, 2017. For the twelve months ended December 31, 2018, revenues were $33.6 million and net loss was $3.2 million ($0.60 diluted loss per share) compared with revenue of $36.8 million and net loss of $8.7 million ($1.64 diluted loss per share) for the twelve months ended December 31, 2017.

 

Stockholders’ equity was $55.9 million as of December 31, 2018, or $10.54 per common share including net unrealized after-tax investment losses of $1.1 million, compared to stockholders’ equity of $59.9 million as of December 31, 2017, or $11.30 per common share including net unrealized after-tax investment losses of $0.2 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, including Section 27A of the Securities Act of 1933, as amended (or “the Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (or “the Exchange Act”). In this context, 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.

 

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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, uncertainties and other factors that may cause the Company’s actual results to be materially different from those expressed or implied by any forward-looking statement. Many of these factors are beyond the Company’s ability to control or predict. The Company’s actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors. Such factors include, but are not limited to, failure to meet minimum capital and surplus requirements; vulnerability to significant catastrophic property loss; a change in accounting standards issued by the Financial Accounting Standards Board; ability to adjust claims accurately; insufficiency of loss and loss adjustment expense reserves to cover future losses; changes in federal or state tax laws; ability to realize deferred tax assets; ability to accurately underwrite risks and charge adequate premium; ability to obtain reinsurance or collect from reinsurers and or losses in excess of reinsurance limits; extensive regulation and legislative changes; reliance on subsidiaries to satisfy obligations; downgrade in financial strength rating by A.M. Best; changes in interest rates; investments subject to credit, prepayment and other risks; geographic concentration; reliance on independent insurance agents and brokers; insufficient reserve for doubtful accounts; litigation; enforceability of exclusions and limitations in policies; reliance on information technology systems; single operating location; ability to prevent or detect acts of fraud with disclosure controls and procedures; change in general economic conditions; dependence on key personnel; ability to attract, develop and retain employees and maintain appropriate staffing levels; insolvency, financial difficulties, or default in performance of obligations by parties with significant contracts or relationships; ability to effectively compete; maximization of long-term value and no focus on short-term earnings expectations; control by a small number of shareholders; limited trading of stock; failure to maintain effective system 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 2017 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 important factors that could cause the Company’s actual results to differ materially from its current expectations and 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.

 

Financial Tables Follow –

 

 

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  UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

($ in thousands)

 

   December 31  December 31
   2018  2017
    (Unaudited)      
ASSETS          
Investments          
Available-for-sale:          
Fixed maturities, at fair value (amortized cost:  December 31, 2018 $78,303; December 31, 2017 $58,153)  $76,910   $57,849 
Held-to-maturity:          
Fixed maturities, at amortized cost (fair value:  December 31, 2018 $7,126; December 31, 2017 $28,098)   7,126    28,098 
Short-term investments, at fair value   4,691    1,848 
Total Investments   88,727    87,795 
Cash, cash equivalents, and restricted cash   4,918    9,366 
Accrued investment income   394    491 
Receivables, net   3,933    6,006 
Reinsurance recoverable:          
Paid losses and loss adjustment expenses   (1)   127 
Unpaid losses and loss adjustment expenses   9,532    8,394 
Deferred policy acquisition costs   3,490    4,163 
Property and equipment, net   9,561    10,015 
Deferred income taxes   4,375    3,381 
Other assets   688    561 
Total Assets  $125,617   $130,299 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
LIABILITIES          
Unpaid losses and loss adjustment expenses  $51,657   $49,077 
Unearned premiums   15,965    18,768 
Advance premium and premium deposits   234    208 
Accrued expenses and other liabilities   1,845    2,301 
Total Liabilities   $69,701   $70,354 
           
Commitments and contingencies          
           
STOCKHOLDERS'  EQUITY          
Common stock, no par – authorized 10,000,000 shares; 5,307,103 and 5,307,133 shares issued and outstanding at December 31, 2018, and at December 31, 2017, respectively  $3,773   $3,773 
Accumulated other comprehensive loss   (1,100)   (240)
Retained earnings   53,243    56,412 
Total Stockholders’ Equity  $55,916   $59,945 
           
Total Liabilities and Stockholders' Equity  $125,617   $130,299 

 

 

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 UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

($ in thousands, except per share)

 

   Three Months Ended  Twelve Months Ended
   December 31  December 31
   2018  2017  2018  2017
   (Unaudited)  (Unaudited)  (Unaudited)   
REVENUES            
Insurance company operation:                    
Net premium earned  $6,786   $8,034   $28,755   $32,343 
Investment income   523    505    1,908    1,290 
Net realized investment gains   —      —      —      1 
Other income   72    94    366    338 
Total Insurance Company Revenues   7,381    8,633    31,029    33,972 
                     
Other insurance operations:                    
Gross commissions and fees   573    646    2,429    2,744 
Investment income   —      1    —      1 
Finance fees earned   47    17    145    75 
Other income   —      —      10    —   
Total Revenues   8,001    9,297    33,613    36,792 
                     
EXPENSES                    
Losses and loss adjustment expenses   5,188    6,139    23,558    30,491 
Policy acquisition costs   1,397    1,521    5,909    6,464 
Salaries and employee benefits   1,035    1,309    4,593    5,844 
Commissions to agents/brokers   51    39    176    166 
Other operating expenses   920    1,115    3,303    3,707 
Total Expenses   8,591    10,123    37,539    46,672 
                     
Loss before taxes   (590)   (826)   (3,926)   (9,880)
Income tax expense (benefit)   (121)   1,950    (757)   (1,155)
Net Loss  $(469)  $(2,776)  $(3,169)  $(8,725)
                     
                     
                     
PER SHARE DATA:                    
Basic                    
Loss per share  $(0.09)  $(0.52)  $(0.60)  $(1.64)
Weighted average shares   5,307,103    5,307,133    5,307,121    5,307,133 
Diluted                    
Loss per share  $(0.09)  $(0.52)  $(0.60)  $(1.64)
Weighted average shares   5,307,103    5,307,133    5,307,121    5,307,133 

 

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UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

($ in thousands)

 

   Twelve Months Ended
   December 31
   2018  2017
   (Unaudited)   
Cash flows from operating activities:          
Net loss  $(3,169)  $(8,725)
Adjustments to reconcile net loss to net cash from operations:          
Depreciation and amortization   (153)   518 
Bond amortization, net   201    (664)
Non-cash stock based compensation   —      12 
Net realized investment gains   —      (1)
Bad debt expense   24    16 
Changes in assets and liabilities:          
Net receivables and accrued investment income   2,146    (319)
Reinsurance recoverable   (1,010)   1,261 
Deferred policy acquisition costs   673    269 
Other assets   (123)   400 
Unpaid losses and loss adjustment expenses   2,580    2,021 
Unearned premiums   (2,803)   (607)
Advance premium and premium deposits   26    (16)
Accrued expenses and other liabilities   (456)   (360)
Income taxes current/deferred   (769)   (828)
Net Cash Used by Operating Activities   (2,833)   (7,023)
           
Cash flows from investing activities:          
Purchase of fixed maturity investments   (25,633)   (60,292)
Proceeds from maturity of fixed maturity investments   24,984    53,936 
Proceeds from sale or call of fixed maturity investments   1,270    1,142 
Net increase in short-term investments   (2,843)   (750)
Changes in property and equipment   607    (250)
Net Cash Used by Investing Activities   (1,615)   (6,214)
           
Cash flows from financing activities:          
Repurchase of common stock   —      —   
Net Cash Used by Financing Activities   —      —   
           
Net decrease in cash, cash equivalents, and restricted cash   (4,448)   (13,237)
Cash, cash equivalents, and restricted cash at beginning of period   9,366    22,603 
Cash, Cash Equivalents, and Restricted Cash at End of Period  $4,918   $9,366 
           
Supplemental Cash Flow Information          
Cash paid during the period for:          
Interest   —      —   
Income taxes  $9   $9 

 

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The following information was filed by Unico American Corp (UNAM) on Thursday, February 28, 2019 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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