Unico American Corporation (NASDAQ: UNAM) ("Unico," the "Company"), announced today its consolidated financial results for the three and six months ended June 30, 2013. For the three months ended June 30, 2013, revenues were $7.8 million and net income was $0.3 million ($0.05 diluted income per share) compared with revenues of $8.3 million and net income of $0.2 million ($0.03 diluted income per share) for the three months ended June 30, 2012. For the six months ended June 30, 2013, revenues were $15.7 million and net income was $0.3 million ($0.05 diluted income per share) compared with revenues of $16.6 million and net income of $0.7 million ($0.12 diluted income per share) for the six months ended June 30, 2012.

As of June 30, 2013, the Company had cash and investments (at amortized cost) of $118.6 million. $23.9 million, or 20% of these investments were fixed maturity investments, and 67% of those fixed maturity investments were U.S. treasury securities.

Stockholders' equity was $70.6 million as of June 30, 2013, or $13.21 per common share including unrealized gains, net of tax, of $0.02 million, compared to stockholders' equity of $70.4 million as of December 31, 2012, or $13.18 per common share including unrealized gains, net of tax, of $0.1 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 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

CONSOLIDATED BALANCE SHEETS

($ in thousands)

                 
June 30 December 31
2013 2012
(Unaudited)

ASSETS

Investments
Available for sale:

Fixed maturities, at fair value (amortized cost: June 30,
2013 $23,894; December 31, 2012 $33,444)

$ 23,932 $ 33,628
Short-term investments, at fair value   94,620   86,256
Total Investments 118,552 119,884
Cash 88 161
Accrued investment income 113 156
Receivables, net 5,972 5,745
Reinsurance recoverable:
Paid losses and loss adjustment expenses 14 305
Unpaid losses and loss adjustment expenses 5,075 6,584
Deferred policy acquisition costs 3,818 3,785
Property and equipment, net 1,175 857
Deferred income taxes 1,764 1,894
Other assets   875   637
Total Assets $ 137,446 $ 140,008
 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

LIABILITIES

Unpaid losses and loss adjustment expenses $ 47,678 $ 49,785
Unearned premiums 16,207 16,030
Advance premium and premium deposits 577 756
Accrued expenses and other liabilities   2,414   3,041
Total Liabilities $ 66,876 $ 69,612
 
Commitments and contingencies
 

STOCKHOLDERS' EQUITY

Common stock, no par - authorized 10,000,000 shares; issued and
outstanding shares 5,341,147 at June 30, 2013, and 5,341,147 at
December 31, 2012

$ 3,697 $ 3,686
Accumulated other comprehensive income 25 121
Retained earnings   66,848   66,589
Total Stockholders' Equity $ 70,570 $ 70,396
 
Total Liabilities and Stockholders' Equity $ 137,446 $ 140,008
 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(In thousands, except per share)

             
Three Months Ended Six Months Ended
June 30 June 30
2013       2012 2013       2012

REVENUES

Insurance company revenues
Net premium earned $ 6,758 $ 6,781 $ 13,447 $ 13,496
Investment income 111 474 232 1,056
Other income   46   184   281   296
Total Insurance Company Revenues 6,915 7,439 13,960 14,848
 
Other revenues from insurance operations
Gross commissions and fees 829 809 1,712 1,715
Investment income 1 1 1 1
Finance charges and fees earned 17 16 37 32
Other income   1   2   3   6
Total Revenues   7,763   8,267   15,713   16,602
 

EXPENSES

Losses and loss adjustment expenses 3,891 4,326 8,447 8,048
Policy acquisition costs 1,544 1,707 2,978 3,468
Salaries and employee benefits 1,286 1,305 2,550 2,665
Commissions to agents/brokers 62 57 123 117
Other operating expenses   594   673   1,173   1,332
Total Expenses   7,377   8,068   15,271   15,630
 
Income Before Taxes 386 199 442 972
Income tax expense   136   42   184   315
Net Income $ 250 $ 157 $ 258 $ 657
 
 

PER SHARE DATA:

Basic
Earnings Per Share $ 0.05 $ 0.03 $ 0.05 $ 0.12
Weighted Average Shares 5,341 5,344 5,341 5,343
Diluted
Earnings Per Share $ 0.05 $ 0.03 $ 0.05 $ 0.12
Weighted Average Shares 5,345 5,360 5,345 5,361
 

UNICO AMERICAN CORPORATION

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

($ in thousands)

         
For the Six Months Ended
June 30
  2013             2012  
Cash flows from operating activities:
Net Income $ 258 $ 657
Adjustments to reconcile net income to net cash from operations
Depreciation and amortization 107 40
Bond amortization, net 4 54
Non-cash stock based compensation 12 12
Changes in assets and liabilities
Net receivables and accrued investment income (185 ) (651 )
Reinsurance recoverable 1,800 (652 )
Deferred policy acquisitions costs (32 ) 132
Other assets (86 ) (779 )
Unpaid losses and loss adjustment expenses (2,107 ) (1,896 )
Unearned premium 177 735
Advance premium and premium deposits (179 ) 207
Accrued expenses and other liabilities (626 ) (232 )
Income taxes current/deferred   28     (191 )
Net Cash Used by Operating Activities   (829 )   (2,564 )
 
Cash flows from investing activities:
Purchase of fixed maturity investments (2,050 ) (350 )
Proceeds from maturity of fixed maturity investments 11,595 22,340
Net increase in short-term investments (8,364 ) (18,104 )
Additions to property and equipment   (425 )   (371 )
Net Cash Provided by Investing Activities   756     3,515  
 
Cash flows from financing activities:
Proceeds from exercise of stock options - 1
Repurchase and adjustment of common stock - (54 )
Dividends paid to stockholders   -     (1,068 )
Net Cash Used by Financing Activities   -     (1,121 )
 
Net decrease increase in cash (73 ) (170 )
Cash at beginning of period   161     467  
Cash at End of Period $ 88   $ 297  
 
Supplemental Cash Flow Information
Cash paid during the period for:
Interest - -
Income taxes $ 159 $ 509

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