FORT LAUDERDALE, FL--(Marketwire - November 14, 2007) - Universal Insurance Holdings, Inc.
(UIH) (
AMEX:
UVE)
-- Total premiums earned and other revenues increase to $45.7 million in
the quarter, up from $19.3 million last year
-- Earnings per diluted share of 33 cents in the quarter versus 10 cents
last year
-- Excluding FIGA assessment of $7.4 million, earnings per diluted share
totaled 44 cents in the quarter, up 340 percent year over year
-- Shareholders equity increased to $63.6 million at September 30, 2007,
up from $22.0 million at December 31, 2006
Universal Insurance Holdings, Inc. (UIH) (
AMEX:
UVE), a vertically
integrated insurance holding company, announced third-quarter 2007 net
income of $13.8 million, or $0.33 per diluted share, compared to $3.8
million, or $0.10 per diluted share, in the third quarter of 2006. On
October 11, 2007, the Board of Directors of the Florida Insurance Guaranty
Association (FIGA) determined the need for an assessment upon member
companies of 2.0 percent of the Florida net direct premiums for the
calendar year 2006. Universal Property & Casualty Insurance Company's
(UPCIC's) participation in this assessment totaled $7.4 million, which
reduced net income by $4.6 million, or $0.11 per diluted share in the third
quarter period ended September 30, 2007. Excluding the FIGA assessment,
the Company's net income was $18.4 million in the 2007 third quarter, while
earnings per diluted share were $0.44 in the third quarter 2007 period
versus $0.10 in the same period last year. Pursuant to Florida statutes,
UPCIC is permitted to recoup the assessment by adding a surcharge to
policies in an amount not to exceed the amount paid by the insurer to FIGA,
which will be assessed as part of 2008 premiums.
Gross premiums written increased 2.0 percent to $118.8 million in the third
quarter of 2007 from $116.4 million for the same period of 2006, primarily
attributable to an increase in new business as well as premium rate
increases. Increased new business is due to heightened relationships with
existing agents, an increase in new agents, a new web-based policy
administration platform, and the disruption in the marketplace as a result
of the windstorm catastrophes in 2004 and 2005.
In the 2007 third quarter, net premiums earned increased 125.2 percent to
$36.3 million from $16.1 million in the 2006 third quarter, due primarily
to an increase in new business, premium rate increases, and changes in the
Company's reinsurance program.
Investment income increased 156.6 percent to $2.8 million for the
three-month period ended September 30, 2007, from $1.1 million for the
three-month period ended September 30, 2006. The increase is primarily due
to higher investment balances and a higher interest rate environment during
the 2007 period.
Comparing the third quarter of 2007 with the same period of 2006,
commission revenue increased 206.0 percent to $6.1 million from $2.0
million due mainly to an increase in the managing general agent's policy
fee income and a greater amount of reinsurance commission sharing.
Net losses and loss adjustment expenses (LAE) increased 90.9 percent to
$13.1 million in the 2007 third quarter from $6.8 million in the same
period of 2006. Losses and LAE increased as a result of increased premium
volume and changes in the Company's reinsurance program. The Company's net
loss ratio for the three-month period ended September 30, 2007, was 36.0
percent compared to 42.5 percent for the same period ended September 30,
2006.
Third-quarter general and administrative expenses increased 93.8 percent to
$12.9 million in the 2007 period from $6.7 million in the 2006 period. The
increase in general and administrative expenses was due to several factors,
including increased commission expense of $0.3 million due to the increase
in direct written premium, and increased compensation expense of nearly
$2.7 million as the Company hired additional staff and increased incentive
compensation in order to retain existing staff to support the substantial
growth of the Company.
Also impacting third-quarter 2007 general and administrative expenses was
the FIGA assessment mentioned earlier. UPCIC's participation in the FIGA
assessment totaled $7.4 million, or 2.0 percent of the Company's net direct
premiums for calendar year 2006. This assessment reduced basic and diluted
earnings per share by $0.13 and $0.11, respectively. Pursuant to Florida
statutes, UPCIC is permitted to recoup the assessment by adding a surcharge
to policies in an amount not to exceed the amount paid by the insurer to
FIGA.
These increases in third-quarter 2007 general and administrative expenses
were somewhat offset by a decrease of approximately $2.5 million for the
change in deferred policy acquisition costs, net of deferred ceding
commissions. This decrease relates to an increase in direct and ceded
unearned premiums as well as changes in UPCIC's reinsurance program.
During the third quarter of 2007, the Company's balance sheet improved, as
total assets were $619.8 million versus $481.6 million at December 31,
2006. For the period ended September 30, 2007, stockholders equity
increased to $63.6 million from $22.0 million at December 31, 2006, and
total debt was reduced to $25.0 million from $37.4 million at December 31,
2006.
As of September 30, 2007, the Company was servicing approximately 365,000
homeowners' and dwelling fire insurance policies and in-force premiums of
approximately $526 million, while its statutory capital and surplus was
$92.0 million.
Nine-Month Results
Nine-month 2007 net income was $43.7 million, or $1.06 per diluted share,
compared to $9.0 million, or $0.24 per diluted share, in the same period of
2006. Excluding the FIGA assessment incurred in the third quarter of 2007,
net income for the nine month period of 2007 was $48.3 million versus net
income of $9.0 million for the nine month period of 2006, while earnings
per diluted share were $1.17 in the 2007 nine month period versus $0.24 in
the 2006 nine month period.
In the nine months of 2007, gross premiums written increased 65.5 percent
to $381.3 million from $230.4 million for the same period of 2006,
primarily attributable to an increase in new business as well as premium
rate increases. In the 2007 nine-month period, net premiums earned
increased 338.9 percent to $119.0 million from $27.1 million in the 2006
period, due primarily to an increase in new business, premium rate
increases and changes in the reinsurance program.
Investment income increased 302.6 percent to $8.2 million for the
nine-month period ended September 30, 2007, from $2.0 million for the
nine-month period ended September 30, 2006. The increase is primarily due
to higher investment balances and a higher interest rate environment during
the 2007 period.
Comparing the nine months of 2007 with the same period of 2006, commission
revenue increased 250.9 percent to $15.9 million from $4.5 million due
mainly to an increase in the managing general agent's policy fee income and
a greater amount of reinsurance commission sharing.
Net losses and LAE increased 196.5 percent to $37.9 million in the 2007
nine months compared to $12.8 million in the same period of 2006. Losses
and LAE increased as a result of increased premium volume and changes in
the Company's reinsurance program. The Company's net loss ratio for the
nine-month period ended September 30, 2007, was 31.9 percent compared to
47.2 percent for the same period ended September 30, 2006.
Nine-month general and administrative expenses increased 294.3 percent to
$34.2 million in the 2007 period from $8.7 million in the 2006 period.
The Company announced on October 4, 2007, a cash dividend on its common
stock. Stockholders of record as of March 10, 2008, will receive $0.09 for
each share owned on that date, payable on April 8, 2008.
Management Comments
Bradley I. Meier, president and chief executive officer, commented, "We are
extremely pleased with the third-quarter and nine-month results for 2007,
which included diluted earnings per share growth of 340% and 388%,
respectively, prior to the $7.4 million FIGA assessment, which amounted to
$0.11 per diluted share. These solid results are testimony to the business
infrastructure we have built over the past several years."
Mr. Meier concluded, "We remain focused on growing the Company, as UPCIC is
in the process of preparing Certificate of Authority applications to write
homeowners' insurance policies in five additional states including Texas,
Hawaii, Georgia, South Carolina, and North Carolina. Additionally, UPCIC
is in the process of preparing an application to become a National Flood
Insurance Program (NFIP) servicing agent."
About Universal Insurance Holdings, Inc.
The Company is a vertically integrated insurance holding company operating
solely in the state of Florida. Through its subsidiaries, the Company is
currently engaged in insurance underwriting, distribution and claims.
Universal Property & Casualty Insurance Company (UPCIC), which generates
revenue from the collection and investment of premiums, is one of the top 5
leading writers of homeowners' insurance in the state of Florida and has
aligned itself with well respected service providers in the industry.
Readers should refer generally to reports filed by the Company with the
Securities and Exchange Commission (SEC), and specifically to the Company's
Form 10-KSB for the year ended December 31, 2006 for a discussion of the
risk factors that could affect its operations. Such factors include,
without limitation, exposure to catastrophic losses; reliance on the
Company's reinsurance program; underwriting performance on catastrophe and
non-catastrophe risks; the ability to maintain relationships with
customers, employees or suppliers; and competition and its effect on
pricing, spending, third-party relationships and revenues. Additional
factors that may affect future results are contained in the Company's
filings with the SEC, which are available on the SEC's web site at
http://www.sec.gov. The Company disclaims any obligation to update and
revise statements contained in this press release based on new information
or otherwise.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. The words "remain
committed," "believe," "expect," "anticipate" and "project," and similar
expressions identify forward-looking statements, which speak only as of the
date the statement was made. Such statements may include, but not be
limited to, projections of revenues, income or loss, expenses, plans, and
assumptions relating to the foregoing. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified. Future results could differ materially from those
described in forward-looking statements.
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30, September 30, September 30,
------------- ------------- ------------- -------------
2007 2006 2007 2006
------------- ------------- ------------- -------------
PREMIUMS EARNED
AND OTHER
REVENUES:
Direct
premiums
written $ 381,318,190 $ 230,431,095 $ 118,754,920 $ 116,427,419
Ceded
premiums
written (271,847,589) (148,517,735) (86,699,581) (70,571,961)
------------- ------------- ------------- -------------
Net premiums
written 109,470,601 81,913,360 32,055,339 45,855,458
Decrease
(increase)
in net
unearned
premiums 9,492,236 (54,805,591) 4,264,123 (29,726,155)
------------- ------------- ------------- -------------
Premiums
earned, net 118,962,837 27,107,769 36,319,462 16,129,303
Net investment
income 8,241,833 2,047,374 2,766,754 1,078,191
Commission
revenue 15,879,099 4,525,861 6,105,510 1,995,396
Other revenue 618,546 303,307 508,313 101,978
------------- ------------- ------------- -------------
Total
premiums
earned and
other
revenues 143,702,315 33,984,311 45,700,039 19,304,868
------------- ------------- ------------- -------------
OPERATING COSTS
AND EXPENSES
Losses and
loss
adjustment
expenses 37,939,183 12,795,083 13,072,906 6,846,600
General and
administrative
expenses 34,227,989 8,735,407 12,923,516 6,667,895
------------- ------------- ------------- -------------
Total
operating
costs and
expenses 72,167,172 21,530,490 25,996,422 13,514,495
------------- ------------- ------------- -------------
INCOME BEFORE
INCOME TAXES 71,535,143 12,453,821 19,703,617 5,790,373
------------- ------------- ------------- -------------
Income taxes,
current 31,708,367 7,479,177 8,602,743 4,863,244
Income taxes,
deferred (3,912,189) (4,075,283) (2,709,828) (2,836,613)
------------- ------------- ------------- -------------
Income taxes,
net 27,796,178 3,403,894 5,892,915 2,026,631
------------- ------------- ------------- -------------
NET INCOME $ 43,738,965 $ 9,049,927 $ 13,810,702 $ 3,763,742
============= ============= ============= =============
INCOME PER
COMMON SHARE:
Basic $ 1.23 $ 0.26 $ 0.39 $ 0.11
============= ============= ============= =============
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
- BASIC 35,528,000 34,409,000 35,763,000 34,891,000
============= ============= ============= =============
INCOME PER
COMMON SHARE:
Diluted $ 1.06 $ 0.24 $ 0.33 $ 0.10
============= ============= ============= =============
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING
- DILUTED 41,250,000 37,170,000 41,550,000 38,194,000
============= ============= ============= =============
CASH DIVIDEND
DECLARED PER
COMMON SHARE $ 0.15 $ 0.13 $ 0.08 $ 0.05
============= ============= ============= =============
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
30-Sep-07
(Unaudited)
ASSETS
Cash and cash equivalents $ 284,763,534
Real estate, net 3,186,526
Prepaid reinsurance premiums 176,753,961
Reinsurance recoverables and other reinsurance receivable 116,051,656
Premiums and other receivables, net 25,859,211
Property and equipment, net 578,728
Deferred income taxes 12,583,944
Other assets 357
-------------
Total assets $ 619,777,917
=============
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $ 53,356,520
Unearned premiums 263,404,817
Deferred ceding commission, net 1,506,066
Accounts payable 9,460,883
Reinsurance payable 146,376,934
Federal and state income taxes payable 26,770,230
Dividends payable 2,861,018
Other accrued expenses 16,602,305
Other liabilities 10,812,529
Loans payable 5,852
Long-term debt 25,000,000
-------------
Total liabilities 556,157,154
-------------
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01 par value,
1,000,000 shares authorized, 138,640 shares issued and
outstanding, minimum liquidation preference of $1,419,700 1,387
Common stock, $.01 par value, 55,000,000 shares authorized,
39,057,103 shares issued and 35,762,729 shares outstanding 390,572
Common stock in treasury, at cost - 394,374 shares (974,746)
Common stock held in trust, at cost - 2,900,000 shares (2,349,000)
Additional paid-in capital 22,837,565
Retained earnings 43,714,985
-------------
Total stockholders' equity 63,620,763
Total liabilities and stockholders' equity $ 619,777,917
=============
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
REGULATION G: RECONCILIATION OF NON-GAAP MEASURES TO GAAP
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30, September 30, September 30,
------------- ------------- ------------- -------------
2007 2006 2007 2006
------------- ------------- ------------- -------------
Income before
income taxes per
GAAP $ 71,535,143 $ 12,453,821 $ 19,703,617 $ 5,790,373
Plus: 2007 FIGA
assessment
(Non-GAAP) 7,435,090 - 7,435,090 -
------------- ------------- ------------- -------------
Income before
income taxes and
2007 FIGA
assessment
(Non-GAAP) 78,970,233 12,453,821 27,138,707 5,790,373
Income taxes on
income before
income taxes
and 2007 FIGA
assessment
(Non-GAAP) 30,664,264 3,403,894 8,761,001 2,026,631
------------- ------------- ------------- -------------
Net income before
2007 FIGA
assessment, net
of income taxes
(Non-GAAP) $ 48,305,969 $ 9,049,927 $ 18,377,706 $ 3,763,742
============= ============= ============= =============
Income per Common
Share - Basic:
Net income before
2007 FIGA
assessment, net
of income taxes
(Non-GAAP) $ 1.36 $ 0.26 $ 0.52 $ 0.11
Less: 2007 FIGA
assessment after
tax per share
(Non-GAAP) $ 0.13 $ - $ 0.13 $ -
------------- ------------- ------------- -------------
Basic (GAAP) $ 1.23 $ 0.26 $ 0.39 $ 0.11
============= ============= ============= =============
Weighted Average
Common Shares
Outstanding -
Basic 35,528,000 34,409,000 35,763,000 34,891,000
Income per Common
Share - Diluted:
Net income before
2007 FIGA
assessment, net
of income taxes
(Non-GAAP) $ 1.17 $ 0.24 $ 0.44 $ 0.10
Less: 2007 FIGA
assessment after
tax per share
(Non-GAAP) $ 0.11 $ - $ 0.11 $ -
------------- ------------- ------------- -------------
Diluted (GAAP) $ 1.06 $ 0.24 $ 0.33 $ 0.10
============= ============= ============= =============
Weighted Average
Common Shares
Outstanding -
Diluted 41,250,000 37,170,000 41,550,000 38,194,000
Contact Information: Investor Contact:
Philip Kranz
Dresner Corporate Services
312-780-7240
pkranz@dresnerco.com