Unico American Corporation Reports Fourth Quarter and Full Year 2010 Financial Results

WOODLAND HILLS, Calif.--([ BUSINESS WIRE ])--Unico American Corporation (NASDAQ:UNAM) (aUnico,a the aCompanya), announced today its consolidated financial results for the three and twelve months ended December 31, 2010. For the three months ended December 31, 2010, revenues were $8.7 million and net income was $0.8 million ($0.14 diluted income per share) compared with revenues of $10.1 million and net income of $0.6 million ($0.11 diluted income per share) for the three months ended December 31, 2009. For the twelve months ended December 31, 2010, revenues were $37.1 million and net income was $2.3 million ($0.44 diluted income per share) compared with revenue of $41.6 million and net income of $2.9 million ($0.53 diluted income per share) for the twelve months ended December 31, 2009.

As of December 31, 2010, the Company had cash and investments (at amortized cost) of $129.8 million. $123.3 million, or 95% of these investments were fixed maturity investments, and 78% of those fixed maturity investments were U.S. treasury securities.

Stockholdersa� equity was $73.4 million as of December 31, 2010, or $13.75 per common share including unrealized after-tax investment gains of $2.3 million, compared to Stockholdersa� equity of $73.3 million as of December 31, 2009, or $13.82 per common share including unrealized after-tax investment gains of $2.7 million. The Company paid cash dividends to shareholders of $0.36 per share on December 29, 2010.

Headquartered in Woodland Hills, California, Unico is an insurance holding company that underwrites property and casualty insurance through its insurance company subsidiary; provides property, casualty, and health insurance through its agency subsidiaries; and through its other subsidiaries provides insurance premium financing and membership association services. Unico has conducted the majority of its operations through its subsidiary Crusader Insurance Company since 1985. For more information concerning Crusader Insurance Company, please visit the Crusadera�s Web site at [ www.crusaderinsurance.com ].

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements contained herein that are not historical facts are forward-looking. These statements, which may be identified by forward-looking words or phrases such as aanticipate,a abelieve,a aexpect,a aintend,a amay,a ashould,a and awould,a involve risks and uncertainties, many of which are beyond the control of the Company. Such risks and uncertainties could cause actual results to differ materially from these forward-looking statements. Factors which could cause actual results to differ materially include underwriting actions not being effective, rate increases for coverages not being sufficient, premium rate adequacy relating to competition or regulation, actual versus estimated claim experience, regulatory changes or developments, unforeseen calamities, general market conditions, and the Companya�s ability to introduce new profitable products.


UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in thousands)

	December 31		December 31
	2010		2009
	(Unaudited)
ASSETS
Investments
Available for sale:
Fixed maturities, at fair value (amortized cost: December 31, 2010 $123,301; December 31, 2009 $128,441)	$	126,712	$	132,595
Short-term investments, at cost		6,466		9,158
Total Investments		133,178		141,753
Cash		45		119
Accrued investment income		691		764
Premium and notes receivable, net		4,364		4,365
Reinsurance recoverable:
Paid losses and loss adjustment expenses		49		453
Unpaid losses and loss adjustment expenses		11,816		16,176
Deferred policy acquisition costs		4,301		4,956
Property and equipment (net of accumulated depreciation)		1,631		221
Deferred income taxes		1,060		633
Other assets		540		669
Total Assets	$	157,675	$	170,109

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses	$	61,560	$	71,585
Unearned premium		15,930		18,812
Advance premium and premium deposits		830		1,034
Income taxes payable		1		-
Accrued expenses and other liabilities		6,000		5,363
Total Liabilities	$	84,321	$	96,794

STOCKHOLDERS' EQUITY
Common stock, no par a" authorized 10,000,000 shares; issued and Outstanding shares 5,333,081 at December 31, 2010, and 5,306,204 at December 31, 2009	$	3,555	$	3,437
Accumulated other comprehensive income		2,251		2,742
Retained earnings		67,548		67,136
Total Stockholdersa� Equity	$	73,354	$	73,315

Total Liabilities and Stockholders' Equity	$	157,675	$	170,109

UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share)


	Three Months Ended				Twelve Months Ended
	December 31				December 31
	2010		2009		2010		2009
	(Unaudited)		(Unaudited)		(Unaudited)
REVENUES
Insurance Company Revenues
Premium earned	$	8,444	$	9,866	$	35,579	$	40,051
Premium ceded		1,770		2,326		7,427		9,276
Net premium earned		6,674		7,540		28,152		30,775
Investment income		805		946		3,490		4,325
Other income		187		262		692		837
Total Insurance Company Revenues		7,666		8,748		32,334		35,937

Other Revenues from Insurance Operations
Gross commissions and fees		1,035		1,229		4,492		5,301
Investment income		-		-		3		1
Finance charges and fees earned		40		90		277		369
Other income		6		4		15		9
Total Revenues		8,747		10,071		37,121		41,617

EXPENSES
Losses and loss adjustment expenses		4,086		5,193		18,470		19,546
Policy acquisition costs		1,747		1,842		7,283		7,612
Salaries and employee benefits		1,036		1,185		4,317		5,200
Commissions to agents/brokers		121		229		638		1,090
Other operating expenses		623		901		3,193		4,005
Total Expenses		7,613		9,350		33,901		37,453

Income Before Taxes		1,134		721		3,220		4,164
Income tax provision		376		125		891		1,237
Net Income	$	758	$	596	$	2,329	$	2,927



PER SHARE DATA:
Basic
Earnings Per Share	$	0.14	$	0.11	$	0.44	$	0.53
Weighted Average Shares		5,319		5,394		5,313		5,507
Diluted
Earnings Per Share	$	0.14	$	0.11	$	0.44	$	0.53
Weighted Average Shares		5,353		5,438		5,352		5,548


UNICO AMERICAN CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands)

	For the Twelve Months Ended
	December 31
	2010			2009
	(Unaudited)
Cash Flows from Operating Activities:
Net Income	$	2,329		$	2,927
Adjustments to reconcile net income to net cash from operations
Depreciation		127			196
Bond amortization, net		115			224
Tax benefit from disqualified incentive stock options		(40	)		-
Changes in assets and liabilities
Premium, notes and investment income receivable		73			853
Reinsurance recoverable		4,764			3,301
Deferred policy acquisition costs		655			264
Other assets		(62	)		129
Unpaid losses and loss adjustment expenses		(10,025	)		(7,069	)
Unearned premium		(2,882	)		(1,151	)
Advance premium and premium deposits		(204	)		(158	)
Accrued expenses and other liabilities		(794	)		(1,119	)
Income taxes current/deferred		58			(1,061	)
Net Cash (Used) by Operating Activities		(5,886	)		(2,664	)

Cash Flows from investing Activities
Purchase of fixed maturity investments		(33,025	)		(36,074	)
Proceeds from maturity of fixed maturity investments		38,049			42,950
Net decrease in short-term investments		2,692			344
Additions to property and equipment		(105	)		(58	)
Net Cash Provided by Investing Activities		7,611			7,162

Cash Flows from financing Activities
Repurchase of common stock		-			(2,448	)
Dividends paid to shareholders		(1,917	)		(1,959	)
Proceeds from exercise of stock options		78			-
Tax benefit from disqualified incentive stock options		40			-
Net Cash (Used) by Financing Activities		(1,799	)		(4,407	)

Net (decrease) increase in cash		(74	)		91
Cash at beginning of period		119			28
Cash at End of Period	$	45		$	119

Supplemental Cash Flow Information
Cash paid during the period for:
Interest		-			-
Income taxes	$	834		$	2,309

Supplemental Schedule of Non-Cash Investing Activities
Acquisition of fixed assets	$	1,432			-

Contributing Sources

Market Wire

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Unico American Corporation Reports Fourth Quarter and Full Year 2010 Financial Results