| Contact: |
Peter J. Prygelski, CFO, 21st Century Holding Company
(954) 308-1252 or (954) 581-9993 |
|
21st CENTURY HOLDING COMPANY REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS AND DECLARES QUARTERLY DIVIDEND
|
Lauderdale Lakes
,
Florida
,
March 5, 2009
21st Century Holding Company (Nasdaq: TCHC), today reported results for the quarter and year ended December 31, 2008 and announced that its Board of Directors declared a quarterly dividend of $0.06 per common share payable on June 1, 2009 to shareholders of record as of May 1, 2009 at its regular quarterly meeting. The Company believes that it is a prudent measure to take in reducing the dividend to a level that the Company can support under normal operating conditions, as well as to preserve capital for future opportunities.
For the three months ended December 31, 2008, the Company reported a net loss of $2.8 million, or $0.35 per share on 8,013,894 average shares outstanding, as compared to net income of $8.1 million, or $1.02 per share on 7,913,249 average shares outstanding in the same three-month period last year.
For the twelve months ended December 31, 2008, the Company reported a net loss of $2.5 million, or $0.31 per share on 7,979,436 average undiluted shares outstanding, as compared to net income of $21.3 million, or $2.69 per share on 7,922,542 average undiluted shares outstanding in the same twelve-month period last year. On a diluted share basis, the Company reported a net loss of $0.31 per share, based on the same 7,979,436 average undiluted shares outstanding, as compared to $2.65 per share, based on 8,030,205 average diluted shares outstanding for the twelve months ended December 31, 2007.
Realized investment losses of $0.8 million, net of a $0.5 million income tax benefit, were reported by the Company for the three months ended December 31, 2008. Excluding these losses, the net loss would have been $2.0 million for the same three month period. Realized investment losses of $6.6 million, net of a $4.0 million income tax benefit, were reported by the Company for the twelve months ended December 31, 2008. Excluding these losses, the net income would have been $4.1 million for the same twelve month period.
Net premiums earned decreased $10.0 million or 40.4% to $14.8 million for the three months ended December 31, 2008 as compared to $24.9 million for the same three month period last year. Net premiums earned decreased $34.1 million or 34.4% to $65.1 million for the twelve months ended December 31, 2008 as compared to $99.2 million for the same twelve month period last year.
Total revenues decreased $13.6 million or 46.0% to $15.9 million for the three months ended December 31, 2008, as compared to $29.5 million for the same three-month period last year. Total revenues decreased $51.8 million or 43.5% to $67.4 million for the twelve months ended December 31, 2008, as compared to $119.1 million for the same twelve month period last year.
Michael H. Braun, Chief Executive Officer, said, “Although 2008 results were disappointing, the Company intends on increasing its premiums by expanding the scope of its authorized lines of business and enhancing the marketing activities of its insurance products.
We believe that Federated National is well positioned in today’s homeowners’ property insurance market place and poised to significantly expand its market share. We expect that there will be increased demand for insurance policies in the Florida property market in 2009 and 2010. One of the reasons for this increase is the continued exodus of the national property insurance carriers from Florida. During 2009 we expect to grow in-force homeowner policies with new marketing initiatives and the Citizen Property Insurance Company assumption program.
American Vehicle is also positioned in today’s market place with new products to complement its established commercial general liability core product line. During 2009, we expect to see a modest growth in premiums and the introduction of several new insurance products to complement the needs of our commercial general liability customers.”
The Company’s CEO, Michael H. Braun, and its CFO, Peter J. Prygelski, III, will discuss the financial results and review the outlook for the Company at a conference call to be held on Thursday, March 5 at 4:30p.m. (ET]. Messrs. Braun and Prygelski invite interested parties to participate in the conference call. A live webcast of the call will be available online at http://www.21stcenturyholding.com in the Conference Calls section. Listeners interested in participating in the Q&A session can access the conference call by dialing toll free 877-591-4959. Please call at least five minutes in advance to ensure that you are connected prior to the presentation.
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: |
2008 |
2007 |
2008 |
2007 |
| Gross premiums written |
$ 17,553,107 |
$ 23,875,468 |
$ 88,247,981 |
$ 133,591,334 |
| Gross premiums ceded |
(621,998) |
1,994,459 |
(34,553,348) |
(44,550,721) |
| |
|
|
|
|
| Net premiums written |
16,931,109 |
25,869,927 |
53,694,633 |
89,040,613 |
| |
|
|
|
|
| (Decrease) in prepaid reinsurance premiums |
(7,962,192) |
(12,755,101) |
(6,131,063) |
(11,251,117) |
| (Increase) decrease in unearned premiums |
5,846,852 |
11,741,312 |
17,566,101 |
21,434,625 |
| Net change in prepaid reinsurance premiums and unearned premiums |
(2,115,340) |
(1,013,789) |
11,435,038 |
10,183,508 |
| |
|
|
|
|
| Net premiums earned |
14,815,769 |
24,856,138 |
65,129,671 |
99,224,121 |
| Commission Income |
401,453 |
291,866 |
1,611,886 |
7,213,752 |
| Finance revenue |
81,731 |
81,925 |
350,198 |
1073">544,893 |
| Managing general agent fees |
369,471 |
434,329 |
1,745,243 |
2,034,503 |
| Net investment income |
1,037,206 |
1,935,790 |
6,354,084 |
7,964,444 |
| Net realized investment (losses) gains |
(1,284,130) |
1,343,808 |
(10,592,770) |
(145,419) |
| Regulatory assessments recovered |
485,518 |
394,359 |
2,104,113 |
1,654,685 |
| Other income |
14,500 |
144,742 |
654,482 |
641,151 |
| |
|
|
|
|
| Total revenue |
15,921,518 |
29,482,957 |
67,356,907 |
119,132,130 |
| |
|
|
|
|
| Expenses: |
|
|
|
|
| Loss and loss adjustment expenses |
11,612,927 |
9,008,716 |
41,868,260 |
47,618,922 |
| Operating and underwriting expenses |
2,402,942 |
1,734,648 |
7,102,328 |
12,683,627 |
| Salaries and wages |
1,820,021 |
1,666,624 |
7,427,785 |
6,731,533 |
| Interest expense |
-- |
(260) |
-- |
172,817 |
| Policy acquisition costs, net of amortization |
2,966,437 |
4,524,145 |
14,760,249 |
19,419,915 |
| |
|
|
|
|
| Total expenses |
18,802,327 |
16,933,873 |
71,158,622 |
86,626,814 |
| |
|
|
|
|
| (Loss) income before provision for income tax (benefit) expense |
(2,880,809) |
12,549,084 |
(3,801,715) |
32,505,316 |
| Provision for income tax (benefit) expense |
(107,450) |
4,459,323 |
(1,323,775) |
11,225,519 |
| Net (loss) income |
$ (2,773,359) |
$ 8,089,761 |
$ (2,477,940) |
$ 21,279,797 |
| Basic net (loss) income per share |
$ (0.35) |
$ 1.02 |
$ (0.31) |
$ 2.69 |
| Fully diluted net (loss) income per share |
$ (0.35) |
$ 1.01 |
$ (0.31) |
$ 2.65 |
| |
|
|
|
|
| Weighted average number of common shares outstanding |
8,013,894 |
7,913,249 |
7,979,436 |
7,922,542 |
| |
|
|
|
|
| Weighted average number of common shares outstanding (assuming dilution) |
8,013,894 |
7,988,203 |
7,979,436 |
8,030,205 |
| |
|
|
|
|
| Dividends paid per share |
$ 0.18 |
$ 0.18 |
$ 0.72 |
$ 0.72 |
21st CENTURY HOLDING COMPANY
Other Selected Data
(Unaudited)
Balance Sheet
| |
Period Ending |
| |
12/31/08 |
12/31/07 |
| Total Cash & Investments |
$150,642,267 |
$158,748,019 |
| Total Assets |
$197,109,242 |
$219,360,763 |
| Unpaid Loss and Loss Adjustment Expense |
$64,782,486 |
$59,684,790 |
| Total Liabilities |
$120,878,326 |
$138,104,140 |
| Total Shareholders’ Equity |
$76,230,916 |
$81,256,623 |
| Common Stock Outstanding |
8,013,894 |
7,871,234 |
| Book Value Per Share |
$9.51 |
$10.32 |
Premium Breakout
| |
3 Months Ending |
12 Months Ending |
12 Months Ending |
| Line of Business |
12/31/08 |
12/31/07 |
12/31/08 |
12/31/07 |
| |
(Dollars in thousands) |
(Dollars in thousands) |
| Homeowners’ |
$12,389 |
$17,031 |
$60,709 |
$99,502 |
| Commercial General Liability |
4,404 |
6,620 |
23,790 |
32,222 |
| Federal Flood |
648 |
-- |
3,262 |
-- |
| Automobile |
112 |
225 |
487 |
1,867 |
| |
|
|
|
|
| Gross Written Premiums |
$17,553 |
$23,875 |
$88,248 |
$133,591 |
Commercial General Liability
Written Premium by State
| |
3 Months Ending |
12 Months Ending |
| State |
12/31/08 |
12/31/07 |
12/31/08 |
12/31/07 |
| |
(Dollars in thousands) |
(Dollars in thousands) |
| Alabama |
$19 |
$26 |
$117 |
$26 |
| Arkansas |
-- |
-- |
12 |
-- |
| California |
18 |
23 |
269 |
23 |
| Florida |
3,119 |
4,125 |
16,011 |
21,192 |
| Georgia |
97 |
223 |
568 |
1,023 |
| Kentucky |
-- |
3 |
1 |
8 |
| Louisiana |
980 |
1,548 |
4,481 |
5,595 |
| Maryland |
-- |
-- |
2 |
-- |
| South Carolina |
4 |
48 |
70 |
182 |
| Texas |
168 |
611 |
2,252 |
4,127 |
| Virginia |
-- |
14 |
7 |
46 |
| |
|
|
|
|
| Gross Written Premiums |
$4,405 |
$6,621 |
$23,790 |
$32,222 |
Loss Ratios
| |
3 Months Ending |
12 Months Ending |
| Line of Business |
12/31/08 |
12/31/07 |
12/31/08 |
12/31/07 |
| Homeowners’ |
49.3% |
28.6% |
56.2% |
37.4% |
| Commercial General Liability |
120.4% |
69.4% |
77.0% |
58.9% |
| Automobile |
(78.3)% |
(4.0)% |
1.8% |
140.0% |
| All Lines |
78.4% |
36.3% |
64.3% |
48.0% |
|
|
