| Contact: |
Edward J. Lawson, President CEO and Chairman, 21st Century Holding Company
(954) 308-1257 or (954) 581-9993 |
|
21st CENTURY HOLDING COMPANY REPORTS 2006 YEAR-END EARNINGS
|
Lauderdale Lakes
,
Florida
,
March 8, 2007
21st Century Holding Company (Nasdaq: TCHC), today reported results for the quarter ended December 31, 2006 (see included tables).
For the three months ended December 31, 2006, the Company reported a net loss of $4,050,889, or $0.52 per share on 7,846,037 average shares outstanding, as compared to net income of $1,418,991 or $0.22 per share on 6,502,350 average shares outstanding in the same three-month period last year.
For the twelve months ended December 31, 2006, the Company reported net income of $13,896,267, or $1.84 per share on 7,537,550 average undiluted shares outstanding, as compared to net income of $12,115,530 or $1.95 per share on 6,228,043 average undiluted shares outstanding in the same twelve-month period last year. On a diluted share basis, the Company reported earnings of $1.72 per share, based on 8,085,722 average diluted shares outstanding, as compared to $1.83 per share on 6,628,076 average diluted shares outstanding for the twelve months ended December 31, 2005.
Net premiums earned decreased $4.0 million or 18.4% to $17.6 million for the three months ended December 31, 2006 as compared to $21.5 million for the same three month period last year. Net premiums earned increased $6.9 million or 8.3% to $89.8 million for the twelve months ended December 31, 2006 as compared to $83.0 million for the same twelve month period last year.
Total revenues decreased $2.3 million or 9.5% to $22.2 million for the three months ended December 31, 2006, as compared to $24.5 million for the same three-month period last year. Total revenues increased $9.7 million or 10.3% to $104.4 million for the twelve months ended December 31, 2006, as compared to $94.7 million for the same twelve month period last year.
Edward J. (Ted) Lawson, Chairman, CEO, and President, said, “The reasons for the Company reporting a loss in our fourth quarter will be discussed in our conference call today. We are however, confident that the matters are non operational in nature and behind us. Our first quarter earnings should be reported by the end of next month and will not only be positive, but should reflect the beginning of an anticipated record year performance.”
The Company will hold an investor conference call at 4:30 PM (ET) today, March 8, 2007. 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 9482800. 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.
#####
21st CENTURY HOLDING COMPANY
Consolidated Statements of Operations
(Unaudited)
| |
Three Months Ended Dec 31, |
Twelve Months Ended Dec 31, |
| Revenue: |
2006 |
2005 |
2006 |
2005 |
| Gross premiums written |
$ 42,633,645 |
$ 32,625,110 |
$ 153,664,893 |
$ 119,440,297 |
| Gross premiums ceded |
(6,769,878) |
(19,271,029) |
(67,519,911) |
(31,413,815) |
| |
|
|
|
|
| Net premiums written |
35,863,767 |
13,354,081 |
86,144,982 |
88,026,482 |
| |
|
|
|
|
| Increase (Decrease) in prepaid reinsurance premiums |
(12,602,067) |
12,060,987 |
20,193,320 |
6,623,354 |
| (Increase) in unearned premiums |
(5,682,731) |
(3,877,832) |
(16,503,848) |
(11,686,340) |
| Net change in prepaid reinsurance premiums and
unearned premiums |
(18,284,798) |
8,183,155 |
3,689,472 |
(5,062,986) |
| |
|
|
|
|
| Net premiums earned |
17,578,969 |
21,537,236 |
89,834,454 |
82,963,496 |
| Finance revenue |
218,738 |
716,881 |
1,686,062 |
3,566,870 |
| Managing general agent fees |
641,710 |
608,441 |
2,624,817 |
2,420,017 |
| Net investment income |
1,551,798 |
1,065,056 |
5,932,683 |
3,841,154 |
| Net realized investment gains |
320,238 |
173,273 |
1,062,862 |
458,306 |
| Other income |
1,862,069 |
400,720 |
3,259,874 |
1,419,494 |
| |
|
|
|
|
| Total revenue |
22,173,522 |
24,501,607 |
104,400,752 |
94,669,337 |
| |
|
|
|
|
| Expenses: |
|
|
|
|
| Loss and loss adjustment expenses |
17,216,951 |
15,841,968 |
44,399,908 |
48,336,430 |
| Operating and underwriting expenses |
4,767,588 |
2,822,763 |
13,160,073 |
8,219,324 |
| Salaries and wages |
1,701,472 |
1,624,665 |
7,010,937 |
6,384,082 |
| Interest expense |
110,341 |
273,746 |
655,796 |
1,397,639 |
| Policy acquisition costs, net of amortization |
4,472,951 |
3,592,389 |
17,516,727 |
14,561,110 |
| |
|
|
|
|
| Total expenses |
28,269,303 |
24,155,531 |
82,743,441 |
78,898,585 |
| |
|
|
|
|
| Income (loss) from cont’d ops before provision for income tax expense |
(6,095,781) |
346,076 |
21,657,311 |
15,770,752 |
| Provision (benefit) for income tax expense |
(2,044,892) |
(1,072,915) |
7,761,044 |
4,689,826 |
| Net income (loss) from continuing operations |
(4,050,889) |
1,418,991 |
13,896,267 |
11,080,926 |
| Discontinued operations: |
|
|
|
|
| Income from discontinued operations
(including gain on disposal of $0 and $1,630,000, respectively) |
-- |
-- |
-- |
1,630,000 |
| Provision for income tax expense |
-- |
-- |
-- |
595,396 |
| Income from discontinued operations |
-- |
-- |
-- |
1,034,604 |
| Net income (loss) |
$ (4,050,889) |
$ 1,418,991 |
$ 13,896,267 |
$ 12,115,530 |
| Basic net income (loss) per share from continuing operations |
$ (0.52) |
$ 0.22 |
$ 1.84 |
$ 1.78 |
| Basic net income per share from discontinued operations |
$ -- |
$ -- |
$ -- |
$ 0.17 |
| Basic net income (loss) per share |
$ (0.52) |
$ 0.22 |
$ 1.84 |
$ 1.95 |
| Fully diluted net income (loss) per share from continuing operations |
$ (0.52) |
$ 0.21 |
$ 1.72 |
$ 1.67 |
| Fully diluted net income per share from discontinued operations |
$ -- |
$ -- |
$ -- |
$ 0.16 |
| Fully diluted net income (loss) per share |
$ (0.52) |
$ 0.21 |
$ 1.72 |
$ 1.83 |
| |
|
|
|
|
| Weighted average number of common shares outstanding |
7,846,037 |
6,502,350 |
7,537,550 |
6,228,043 |
| |
|
|
|
|
| Weighted average number of common shares outstanding (assuming dilution) |
7,846,037 |
6,872,879 |
8,085,722 |
6,628,076 |
| |
|
|
|
|
| Dividends declared per share |
$ 0.12 |
$ 0.08 |
$ 0.48 |
$ 0.32 |
21st CENTURY HOLDING COMPANY
Other Selected Data
(Unaudited)
| Balance Sheet |
Period Ending |
| |
12/31/06 |
12/31/05 |
| Total Cash & Investments |
$142,750,333 |
$106,157,869 |
| Total Assets |
$212,297,686 |
$290,154,753 |
| Unpaid Loss and Loss Adjustment Expense |
$39,615,478 |
$154,038,543 |
| Total Liabilities |
$146,454,268 |
$249,387,383 |
| Total Shareholders’ Equity |
$65,843,418 |
$40,767,370 |
| Common Stock Outstanding |
7,896,919 |
6,771,864 |
| Book Value Per Share |
$8.34 |
$6.02 |
| Premium Breakout |
| |
3 Months Ending |
12 Months Ending |
| Line of Business |
12/31/06 |
12/31/05 |
12/31/06 |
12/31/05 |
| |
(Dollars in thousands) |
| Homeowners’ |
$33,523 |
$22,820 |
$114,388 |
$76,182 |
| General Liability |
8,463 |
5,616 |
33,213 |
22,593 |
| Automobile |
648 |
4,189 |
6,064 |
20,665 |
| |
|
|
|
|
| Gross Written Premiums |
$42,634 |
$32,625 |
$153,665 |
$119,440 |
Commercial General Liability
Written Premium by State |
| |
3 Months Ending |
12 Months Ending |
| State |
12/31/06 |
12/31/05 |
12/31/06 |
12/31/05 |
| |
(Dollars in thousands) |
| Florida |
$5,796 |
$3,773 |
$23,965 |
$18,293 |
| Georgia |
575 |
281 |
1,805 |
1,258 |
| Kentucky |
9 |
-- |
9 |
-- |
| Louisiana |
1,509 |
1,561 |
5,743 |
3,042 |
| South Carolina |
77 |
-- |
77 |
-- |
| Texas |
464 |
-- |
1,581 |
-- |
| Virginia |
10 |
-- |
10 |
-- |
| |
|
|
|
|
| Gross Written Premiums |
$8,441 |
$5,615 |
$33,190 |
$22,593 |
| Loss Ratios |
| |
3 Months Ending |
12 Months Ending |
| Line of Business |
12/31/06 |
12/31/05 |
12/31/06 |
12/31/05 |
| Homeowners’ |
103.9% |
67.6% |
46.7% |
65.5% |
| General Liability |
87.3% |
24.7% |
37.6% |
19.1% |
| Automobile |
117.7% |
128.9% |
84.0% |
75.5% |
| All Lines |
97.9% |
73.6% |
49.4% |
58.3% |
|
|
|
