Unico American Corporation Reports Third Quarter 2011 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 nine months ended September 30, 2011. For the three months ended September 30, 2011, revenues were $9.1 million and net income was $1.3 million ($0.24 diluted income per share) compared with revenues of $9.1 million and net income of $0.6 million ($0.12 diluted income per share) for the three months ended September 30, 2010. For the nine months ended September 30, 2011, revenues were $26.3 million and net income was $3.1 million ($0.58 diluted income per share) compared with revenues of $28.4 million and net income of $1.6 million ($0.29 diluted income per share) for the nine months ended September 30, 2010. Revenues for the three and nine months ended September 30, 2011, includes other income of $0.6 million from the final settlement of provisional rated reinsurance treaties covering the years 1985 through 1997.

As of September 30, 2011, the Company had cash and investments (at amortized cost) of $128.9 million. $101.7 million, or 79% of these investments were fixed maturity investments, and 82% of those fixed maturity investments were U.S. treasury securities.

Stockholdersa equity was $75.9 million as of September 30, 2011, or $14.24 per common share including unrealized after-tax investment gains of $1.7 million, compared to stockholdersa equity of $73.4 million as of December 31, 2010, or $13.75 per common share including unrealized after-tax investment gains of $2.3 million.

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 Crusaderas 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 Companyas ability to introduce new profitable products.



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

	September 30		December 31
	2011		2010
	(Unaudited)
ASSETS
Investments
Available for sale:
Fixed maturities, at fair value (amortized cost: September 30, 2011 - $101,719; December 31, 2010 - $123,301)	$	104,343	$	126,712
Short-term investments, at cost		27,142		6,466
Total Investments		131,485		133,178
Cash		71		45
Accrued investment income		604		691
Premiums and notes receivable, net		5,560		4,364
Reinsurance recoverable:
Paid losses and loss adjustment expenses		22		49
Unpaid losses and loss adjustment expenses		8,402		11,816
Deferred policy acquisition costs		4,294		4,301
Property and equipment (net of accumulated depreciation)		206		1,631
Deferred income taxes		1,079		1,060
Other assets		461		540
Total Assets	$	152,184	$	157,675

LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses	$	55,232	$	61,560
Unearned premiums		16,067		15,930
Advance premium and premium deposits		1,222		830
Income taxes payable		258		1
Accrued expenses and other liabilities		3,461		6,000
Total Liabilities	$	76,240	$	84,321

Commitments and contingencies

STOCKHOLDERS' EQUITY
Common stock, no par a" authorized 10,000,000 shares; issued and outstanding shares 5,334,992 at September 30, 2011, and 5,333,081 at December 31, 2010	$	3,579	$	3,555
Accumulated other comprehensive income		1,732		2,251
Retained earnings		70,633		67,548
Total Stockholdersa Equity	$	75,944	$	73,354

Total Liabilities and Stockholders' Equity	$	152,184	$	157,675



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

	Three Months Ended				Nine Months Ended
	September 30				September 30
	2011		2010		2011		2010
REVENUES
Insurance Company Revenues
Premium earned	$	8,022	$	8,784	$	24,021	$	27,136
Premium ceded		1,321		1,837		3,974		5,658
Net premium earned		6,701		6,947		20,047		21,478
Investment income		733		839		2,272		2,685
Other income		746		150		1,086		505
Total Insurance Company Revenues		8,180		7,936		23,405		24,668

Other Revenues from Insurance Operations
Gross commissions and fees		876		1,078		2,791		3,456
Investment income		1		1		2		3
Finance charges and fees earned		16		70		55		237
Other income		5		4		12		10
Total Revenues		9,078		9,089		26,265		28,374

EXPENSES
Losses and loss adjustment expenses		3,358		4,501		10,616		14,384
Policy acquisition costs		1,778		1,806		5,323		5,536
Salaries and employee benefits		1,148		1,112		3,270		3,281
Commissions to agents/brokers		55		154		167		517
Other operating expenses		792		829		2,128		2,570
Total Expenses		7,131		8,402		21,504		26,288

Income Before Taxes		1,947		687		4,761		2,086
Income tax provision		672		63		1,665		515
Net Income	$	1,275	$	624	$	3,096	$	1,571



PER SHARE DATA:
Basic
Earnings Per Share	$	0.24	$	0.12	$	0.58	$	0.30
Weighted Average Shares		5,335		5,317		5,334		5,311
Diluted
Earnings Per Share	$	0.24	$	0.12	$	0.58	$	0.29
Weighted Average Shares		5,358		5,353		5,359		5,351



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

	For the Nine Months Ended
	September 30
	2011			2010
Cash flows from operating activities:
Net Income	$	3,096		$	1,571
Adjustments to reconcile net income to net cash from operations
Depreciation		43			96
Bond amortization, net		121			75
Non-cash stock based compensation		23			-
Changes in assets and liabilities
Premium, notes and investment income receivable		(1,109	)		268
Reinsurance recoverable		3,441			3,023
Deferred policy acquisitions costs		7			426
Other assets		81			15
Unpaid losses and loss adjustment expenses		(6,328	)		(7,435	)
Unearned premiums		137			(2,006	)
Advance premium and premium deposits		392			114
Accrued expenses and other liabilities		(1,108	)		(272	)
Income taxes current/deferred		504			(70	)
Net Cash (Used) by Operating Activities		(700	)		(4,195	)

Cash flows from investing activities:
Purchase of fixed maturity investments		(6,045	)		(24,586	)
Proceeds from maturity of fixed maturity investments		27,506			33,799
Net increase in short-term investments		(20,676	)		(4,793	)
Additions to property and equipment		(50	)		(76	)
Net Cash Provided by Investing Activities		735			4,344

Cash flows from financing activities:
Proceeds from issuance of common stock		2			34
Repurchase of common stock		(11	)		-
Net Cash (Used) Provided by Financing Activities		(9	)		34

Net increase in cash		26			183
Cash at beginning of period		45			118
Cash at End of Period	$	71		$	301

Supplemental Cash Flow Information
Cash paid during the period for:
Interest		-			-
Income taxes	$	1,159		$	584

Supplemental Schedule of Non-Cash Investing Activities
(Write-offs) acquisition of fixed assets	$	(1,432	)	$	1,118

Contributing Sources

Market Wire

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Unico American Corporation Reports Third Quarter 2011 Financial Results