| Contact: |
Edward J. Lawson, President CEO and Chairman, 21st Century Holding Company
(954) 308-1257 or (954) 581-9993 |
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21st CENTURY HOLDING COMPANY REPORTS RECORD RESULTS WITH EARNINGS OF $1.95 PER SHARE EXCEEDING COMPANY GUIDANCE
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Lauderdale Lakes
,
Florida
,
March 6, 2006
21st Century Holding Company (Nasdaq: TCHC), today reported results for the quarter ended December 31, 2005 (see attached tables).
For the three months ended December 31, 2005, the Company reported net income of $1,418,991, or $0.22 per share on 6,502,350 undiluted shares, versus a net loss of $510,302 or $0.08 per share on 6,024,693 undiluted shares in the same three month period last year. On a diluted share basis, the Company reported earnings of $0.21 per share, based on 6,872,879 average diluted shares outstanding for the three month period.
For the twelve months ended December 31, 2005, the Company reported record net income of $12,115,530, or $1.95 per share on 6,228,043 undiluted shares versus net loss of $10,857,775 or $1.86 per share on 5,847,102 undiluted shares in the same twelve month period last year. On a diluted share basis, the Company reported record earnings of $1.83 per share, based on 6,628,076 average diluted shares outstanding for the twelve month period. Both of these results exceeded revised Company guidance of $1.80-1.82 per share.
Gross premiums written increased $5.9 million or 22.0% to $32.6 million for the three months ended December 31, 2005, as compared to $26.7 million for the same three month period last year. Gross premiums written increased $18.7 million or 18.7% to $119.4 million for the twelve months ended December 31, 2005, as compared to $100.7 million for the same twelve month period last year.
Net premiums earned increased $4.0 million or 22.8% to $21.5 million for the three months ended December 31, 2005 as compared to $17.5 million for the same three month period last year. Net Premiums earned increased $16.7 million or 25.2% to $83.0 million for the twelve months ended December 31, 2005 as compared to $66.2 million for the same twelve month period last year. Total revenues increased $4.5 million or 21.7% to $25.1 million for the three months ended December 31, 2005, as compared to $20.6 million for the same three-month period last year.
Total revenues increased $23.6 million or 33.0% to $95.3 million for the twelve months ended December 31, 2005, as compared to $76.6 million for the same twelve month period last year.
Edward J. (Ted) Lawson, Chairman, CEO, and President, said, “Overall we experienced continued growth and record profitability in 2005, despite being impacted by three hurricanes (Dennis, Katrina, and Wilma). We believe that the 2006 hurricane season will moderate more to the norm, which is typically a 50% chance of one hurricane striking Florida during any given hurricane season. Under this circumstance, the Company should make approximately $3.40 per share if one storm were to strike Florida and approximately $4.00 if no storms hit.”
Mr. Lawson continued, “For the first two months of 2006, net written premiums, in both general liability and property, are up between 30%-40% above last year’s levels and we expect this trend to continue for the balance of this year and into next year. Guidance for our first quarter ending March 31, 2006 is for the Company to earn $0.80 per share. The Company will be reporting its first quarter results at the end of April. In conclusion, we consider last year to have been a very good year and we expect this year and next to be even better.”
The Company will hold an investor conference call at 4:30 PM (ET) today, March 6, 2006. Mr. Lawson and Mr. J. Gordon Jennings III, CFO, will discuss the financial results and review the outlook for the Company. Messrs. Lawson and Jennings invite interested parties to participate in the conference call. Listeners can access the conference call by dialing toll free 888-460-6235, conference ID 5818765. Please call at least five minutes in advance to ensure that you are connected prior to the presentation. A replay of the conference call will be available for 7 days at 800-642-1687.
About the Company
The Company, through its subsidiaries, underwrites standard and non-standard personal automobile insurance, flood insurance, general liability insurance, mobile home insurance and homeowners’ property and casualty insurance in the State of Florida. The Company underwrites general liability coverage as an admitted carrier in the States of Louisiana, Texas and Alabama for more than 300 classes of business, including special events, as well as homeowners’ coverage in the State of Louisiana. The Company also operates as an approved (non-admitted) carrier in the States of Georgia and Kentucky offering the same general liability products. In addition, the Company has underwriting authority and processes claims for third party insurance companies. In addition to insurance services, the Company offers premium finance services to its insureds as well as insureds of certain third party insurance companies.
Safe harbor statements under the Private Securities Litigation Reform Act of 1995: Statements in this press release that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” or “continue” or the other negative variations thereof or comparable terminology are intended to identify forward-looking statements. The risks and uncertainties include, without limitation, uncertainties related to estimates, assumptions and projections generally; inflation and other changes in economic conditions (including changes in interest rates and financial markets); pricing competition and other initiatives by competitors; ability to obtain regulatory approval for applications to underwrite in an additional jurisdiction or for requested rate changes, and the timing thereof; legislative and regulatory developments; the outcome of litigation pending against the Company and any settlement thereof; risks related to the nature of the Company’s business; dependence on investment income and the composition of the Company’s investment portfolio; the adequacy of the Company’s liability for loss and loss adjustment expense; insurance agents; claims experience; limited experience in the insurance industry; ratings by industry services; catastrophe losses; reliance on key personnel; weather conditions (including the severity and frequency of storms, hurricanes, tornadoes and hail); changes in driving patterns and loss trends; acts of war and terrorist activities; court decisions and trends in litigation, and health care and auto repair costs; and other matters described from time to time by the Company in releases and publications, and in periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for a major contingency. Reported results may therefore appear to be volatile in certain accounting periods.
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21st CENTURY HOLDING COMPANY
Consolidated Statements of Operations
(Unaudited)
|
| |
Three Months Ended Dec 31, |
Twelve Months Ended Dec 31, |
| Revenue: |
2005 |
2004 |
2005 |
2004 |
| Gross premiums written | $ 32,625,110 |
$ 26,732,454 |
$ 119,440,297 | $ 100,662,025 |
| Gross premiums ceded | (19,271,029) |
(9,936,1912) |
(31,413,815) | (15,485,917) |
| Net premiums written | 13,354,081 |
16,796,262 |
88,026,482 | 85,176,108 |
| Increase (Decrease) in prepaid reinsurance premiums | 12,060,987 |
2,430,205 |
6,623,354 | (2,904,716) |
| (Increase) in unearned premiums | (3,877,832) |
(1,687,785) |
(11,686,340) | (16,030,048) |
| Net change in prepaid reinsurance premiums and unearned premiums | 8,183,155 |
742,420 |
(5,062,986) | (18,934,764) |
| Net premiums earned | 21,537,236 |
17,538,682 |
82,963,496 | 66,241,344 |
| Finance revenue | 716,881 |
843,269 |
3,566,870 | 3,667,837 |
| Managing general agent fees | 608,441 |
551,378 |
2,420,017 | 2,039,783 |
| Net investment income | 1,065,056 |
1,029,934 |
3,841,154 | 3,171,620 |
| Net realized investment gains | 173,273 |
427,290 |
458,306 | 688,676 |
| Other income | 988,451 |
222,864 |
2,007,225 | 762,164 |
| Total revenue | 25,089,338 |
20,613,417 |
95,257,068 | 76,571,424 |
Expenses: |
| Loss and loss adjustment expenses | 15,841,968 |
18,607,233 |
48,336,430 |
74,992,781 |
| Operating and underwriting expenses | 3,427,763 |
2,323,353 |
8,824,324 |
8,139,812 |
| Salaries and wages | 1,624,665 |
1,742,862 |
6,384,082 |
6,134,168 |
| Interest expense | 273,746 |
455,670 |
1,397,639 |
1,087,494 |
| Policy acquisition costs, net of amortization | 3,575,120 |
3,776,902 |
14,543,841 |
8,422,808 |
| Total expenses | 24,743,262 |
26,906,020 |
79,486,316 |
98,777,063 |
| Income (loss) from cont’d ops before provision (benefit) for inc tax exp | 346,076 |
(6,292,603) |
15,770,752 |
(22,205,639) |
| Provision (benefit) for income tax expense | 1,072,915) |
(2,923,519) |
4,689,826 |
(8,600,911) |
| Net income (loss) from continuing operations | 1,418,991 |
(3,369,084) |
11,080,926 |
(13,604,728) |
Discontinued operations: |
| Income from discontinued operations (including gain on disposal of $5,384,050,$1,630,000 and $5,384,050, respectively) |
$ -- |
4,657,434 |
1,630,000 |
4,483,577 |
| Provision for income tax expense |
$ -- |
1,798,652 |
595,396 |
1,736,624 |
| Income from discontinued operations |
$ -- |
2,858,782 |
1,034,604 |
2,746,953 |
| Net income (loss) | $ 1,418,991 |
$ (510,302) |
$ 12,115,530 |
$ (10,857,775) |
| Basic net income (loss) per share from continuing operations | $ 0.22 |
$ (0.56) |
$ 1.78 |
$ (2.33) |
| Basic net income per share from discontinued operations | $ -- |
$ 0.47 |
$ 0.17 |
$ 0.47 |
| Basic net income (loss) per share | $ 0.22 |
$ (0.08) |
$ 1.95 |
$ (1.86) |
| Fully diluted net income (loss) per share from continuing operations | $ 0.21 |
$ (0.56) |
$ 1.67 |
$ (2.33) |
| Fully diluted net income per share from discontinued operations | $ -- |
$ 0.47 |
$ 0.16 |
$ 0.47 |
| Fully diluted net income (loss) per share | $ 0.21 |
$ (0.08) |
$ 1.83 |
$ (1.86) |
| Weighted average number of common shares outstanding | 6,502,350 |
6,024,693 |
6,228,043 |
5,847,102 |
| Weighted average number of common shares outstanding (assuming dilution) | 6,872,879 |
6,268,876 |
6,628,076 |
6,211,625 |
| Dividends declared per share | $ 0.08 |
$ 0.08 |
$ 0.32 |
$ 0.32 |
21st CENTURY HOLDING COMPANY
Balance Sheet Data
(Unaudited)
|
| | Period Ending |
| | 12/31/05 |
12/31/04 |
| Total Cash & Investments | $106,157,869 |
$90,509,879 |
| Total Assets | $290,158,386 |
$163,601,372 |
| Unpaid Loss and Loss Adjustment Expense | $154,049,490 |
$46,570,679 |
| Total Liabilities | $249,391,016 |
$138,624,637 |
| Total Shareholders’ Equity | $40,767,370 |
$24,976,735 |
| Common Stock Outstanding | 6,771,864 |
6,047,942 |
| Book Value Per Share | $6.02 |
$4.13 |
| | Premium Breakout
12 Months Ending |
| Line of Business | 12/31/05 |
12/31/04 |
| Automobile | 17.3% |
24.1% |
| Homeowners’ | 63.4% |
62.0% |
| General Liability | 18.9% |
12.4% |
| Mobile Home Owners | 0.4% |
1.5% |
| Gross Written Premiums | 100.0% |
100.0% |
| | Loss Ratios |
| | 3 Months Ending |
12 Months Ending |
| Line of Business | 12/31/05 |
12/31/04 |
12/31/05 |
12/31/04 |
| Automobile | 123.7% |
18.9% |
74.9% |
73.2% |
| Homeowners’ | 237.9% |
371.5% |
65.4% |
163.5% |
| General Liability | 24.7% |
21.5% |
19.1% |
18.7% |
| All Lines | 160.4% |
142.0% |
58.3% |
113.2% |
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