| Contact: |
Peter J. Prygelski, CFO, 21st Century Holding Company
(954) 308-1252 or (954) 581-9993 |
|
21st CENTURY HOLDING COMPANY REPORTS FIRST QUARTER EARNINGS OF $0.54 PER SHARE AND ANNOUNCES RETIREMENT OF CEO/CHAIRMAN & APPOINTS SUCCESSORS
|
Lauderdale Lakes
,
Florida
,
May 6, 2008
21st Century Holding Company (Nasdaq: TCHC), today reported results for the quarter ended March 31, 2008 (see attached tables) and announced that Edward J. (Ted) Lawson, its Chief Executive Officer and Chairman of the Board, will retire from both positions effective June 30, 2008.
For the three months ended March 31, 2008, the Company reported net income of $4,308,589, or $0.54 per share on 7,912,692 average undiluted shares outstanding, as compared to net income of $842,805, or $0.11 per share on 7,958,366 average undiluted shares outstanding in the same three-month period last year. On a diluted share basis, the Company reported earnings of $0.54 per share for the three months ended March 31, 2008, based on 7,960,313 average diluted shares outstanding, as compared to $0.10 per share, based on 8,187,310 average diluted shares outstanding for the same three-month period last year.
Gross premiums written decreased $21.6 million or 43.9% to $27.6 million for the three months ended March 31, 2008, as compared to $49.2 million for the same three-month period last year.
Net premiums earned decreased $3.8 million or 16.8% to $18.6 million for the three months ended March 31, 2008, as compared to $22.4 million for the same three-month period last year.
Total revenues decreased $5.5 million or 21.7% to $20.0 million for the three months ended March 31, 2008, as compared to $25.6 million for the same three-month period last year.
Total expenses decreased $9.3 million or 38.2% to $15.0 million for the three months ended March 31, 2008, as compared to $24.3 million for the same three-month period last year.
The provision for income tax expense for the three months ended March 31, 2008 includes a one-time $0.6 million benefit in connection with the estimation of the previous years’ income taxes.
Mr. Lawson, who co-founded the Company, served as its Chairman since its inception in 1991 and served as its Chief Executive Officer from inception to June 2003 and from November 2005 to present, will be retiring from the positions of CEO and Chairman, effective June 30, 2008 and all subsidiary appointments and/or positions effective May 6, 2008. Mr. Lawson is retiring to pursue other areas of interest. He will remain a member of the Company’s Board of Directors and will continue to provide the Company with advice regarding business and growth strategy.
The Company’s Board of Directors has appointed Mr. Michael H. Braun to the position of Chief Executive Officer and Mr. Bruce F. Simberg as its Chairman of the Board.
Mr. Braun (age 40) has been with the Company since December 1998. He currently serves as Chief Operating Officer of 21st Century Holding Company and President of Federated National Insurance Company, a wholly-owned subsidiary. He will assume his role as Chief Executive Officer on July 1, 2008 and maintain his position as President of Federated National Insurance Company.
Mr. Simberg (age 59) has served as a Director of the Company since January 1998. He will assume his role as the Chairman of the Board on July 1, 2008.
The Company will hold an investor conference call at 4:30 PM (ET) today, May 6, 2008. Mr. Peter J. Prygelski, III, CFO and Mr. Michael H. Braun, COO, will discuss the financial results and review the outlook for the Company. Messrs. Prygelski and Braun invite interested parties to participate in the conference call. Listeners can access the conference call by dialing toll free 888-460-6235, conference ID 44697910. 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 March 31, |
| Revenue: |
2008 |
2007 |
| Gross premiums written |
$ 27,603,396 |
$ 49,190,729 |
| Gross premiums ceded |
64 |
(5,787) |
| |
|
|
| Net premiums written |
27,603,460 |
49,184,942 |
| |
|
|
| (Decrease) Increase in prepaid reinsurance premiums |
(11,153,834) |
(16,972,078) |
| Decrease (Increase) in unearned premiums |
2,156,215 |
(9,839,836) |
| Net change in prepaid reinsurance premiums and unearned premiums |
(8,997,619) |
(26,811,914) |
| |
|
|
| Net premiums earned |
18,605,841 |
22,373,028 |
| Commission income |
62,761 |
504,659 |
| Finance revenue |
85,749 |
186,661 |
| Managing general agent fees |
499,181 |
618,211 |
| Net investment income |
1,876,027 |
1,568,610 |
| Net realized investment gains |
(1,649,377) |
(128,132) |
| Other income |
561,453 |
461,998 |
| |
|
|
| Total revenue |
20,041,635 |
25,585,035 |
| |
|
|
| Expenses: |
|
|
| Loss and loss adjustment expenses |
7,874,332 |
14,102,655 |
| Operating and underwriting expenses |
1,555,171 |
3,965,773 |
| Salaries and wages |
1,758,512 |
1,556,252 |
| Interest expense |
-- |
85,000 |
| Policy acquisition costs, net of amortization |
3,835,841 |
4,607,964 |
| |
|
|
| Total expenses |
15,023,856 |
24,317,644 |
| |
|
|
| Income before provision for income tax expense |
5,017,779 |
1,267,391 |
| Provision for income tax expense |
709,190 |
424,586 |
| Net income |
$ 4,308,589 |
$ 842,805 |
| Basic net income per share |
$ 0.54 |
$ 0.11 |
| Fully diluted net income per share |
$ 0.54 |
$ 0.10 |
| |
|
|
| Weighted average number of common shares outstanding |
7,912,692 |
7,958,366 |
| |
|
|
| Weighted average number of common shares outstanding (assuming dilution) |
7,960,313 |
8,187,310 |
| |
|
|
| Dividends paid per share |
$ 0.18 |
$ 0.18 |
21st CENTURY HOLDING COMPANY
Other Selected Data
(Unaudited)
| Balance Sheet |
Period Ending |
| |
03/31/08 |
12/31/07 |
| Total Cash & Investments |
$168,344,628 |
$158,748,019 |
| Total Assets |
$217,688,807 |
$219,360,763 |
| Unpaid Loss and Loss Adjustment Expense |
$57,697,751 |
$59,684,790 |
| Total Liabilities |
$132,802,384 |
$138,104,140 |
| Total Shareholders’ Equity |
$84,886,423 |
$81,256,623 |
| Common Stock Outstanding |
7,938,509 |
7,871,234 |
| Book Value Per Share |
$10.69 |
$10.32 |
| Premium Breakout |
3 Months Ending |
| Line of Business |
03/31/08 |
03/31/07 |
| |
(Dollars in thousands) |
| |
|
|
| Homeowners’ |
$19,990 |
$39,864 |
| General Liability |
7,355 |
8,150 |
| Automobile |
259 |
1,177 |
| Gross Written Premiums |
$27,603 |
$49,191 |
Commercial General Liability
Written Premium by State |
| |
3 Months Ending |
| State |
09/30/06 |
09/30/05 |
| |
(Dollars in millions) |
| Alabama |
$44 |
$-- |
| Arkansas |
8 |
-- |
| California |
95 |
-- |
| Florida |
4,883 |
5,624 |
| Georgia |
187 |
297 |
| Kentucky |
-- |
1 |
| Louisiana |
1,184 |
1,202 |
| South Carolina |
32 |
44 |
| Texas |
910 |
967 |
| Virginia |
12 |
15 |
| Gross Written Premiums |
$7,355 |
$8,150 |
Commercial General Liability
Written Premium by State |
| |
3 Months Ending |
12 Months Ending |
| State |
12/31/07 |
12/31/06 |
12/31/07 |
12/31/06 |
| |
(Dollars in thousands) |
(Dollars in thousands) |
| |
|
|
|
|
| Alabama |
$26 |
$-- |
$26 |
$-- |
| California |
23 |
-- |
23 |
-- |
| Florida |
4,124 |
4,796 |
21,192 |
22,965 |
| Georgia |
223 |
575 |
1,023 |
1,805 |
| Kentucky |
3 |
9 |
8 |
9 |
| Louisiana |
1,548 |
1,509 |
5,595 |
5,743 |
| South Carolina |
48 |
77 |
182 |
77 |
| Texas |
611 |
487 |
4,127 |
1,604 |
| Virginia |
14 |
10 |
46 |
10
|
| |
|
|
|
|
| Gross Written Premiums |
$6,620 |
$7,463 |
$32,222 |
$32,213 |
| Loss Ratios |
3 Months Ending |
| Lines of Business |
03/31/08 |
03/31/07 |
| Homeowners’ |
38.58% |
70.12% |
| Commercial General Liability |
49.93% |
32.13% |
| Automobile |
2.25% |
190.40% |
| All Lines |
42.32% |
63.05% |
|
|
|
