NEW YORK, Nov. 10, 2008 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2008 third-quarter and nine-month results. This press release contains both GAAP and non-GAAP financial information for which a reconciliation can be found on the final page.
Financial Results
Revenues remained even at $29.8 million both for the three months ended September 30, 2008 and for the three months ended September 30, 2007. Net income increased to $0.6 million ($.07 per share, diluted), net of a provision for income taxes of $0.3 million, for the three months ended September 30, 2008, compared to net loss of $1.5 million ($.17 per share), net of an income tax benefit of $0.8 million, for the three months ended September 30, 2007. As of September 30, 2008, AMIC had approximately $277 million of federal net operating loss carryforwards. To the extent that AMIC utilizes any such carryforwards, it will not pay any income taxes, except for federal alternative minimum taxes and state income taxes. The Company recorded a loss on the impairment of certain securities of $0.2 million, net of tax ($.02 per share, diluted) in the third quarter of 2008 relating to bonds and preferred stocks of financial institutions. The decrease in market value of these securities was deemed to be other than temporary in nature and these investments were written-down accordingly.
AMIC also reported net income of $2.2 million ($.26 per share, diluted), net of a provision for income taxes of $1.2 million, for the nine months ended September 30, 2008, compared to $0.8 million ($.10 per share, diluted), net of a provision for income taxes of $0.5 million, for the nine months ended September 30, 2007. The Company recorded a loss on the impairment of certain securities of $0.4 million, net of tax ($.05 per share, diluted) in the first nine months of 2008 relating to bonds and preferred stocks of financial institutions. Revenues decreased to $87.4 million for the nine months ended September 30, 2008, compared to revenues of $90.6 million for the nine months ended September 30, 2007.
On a non-GAAP basis, the Company's operating income (loss) from continuing operations excluding certain amortization expense, net realized investment gains (losses) and federal income tax charge related to deferred taxes for the three months ended September 30, 2008 was $1.2 million ($.15 per share), as compared to a loss of $2.2 million ($.26 per share,) for the three months ended September 30, 2007. On a non-GAAP basis, the Company's operating income from continuing operations was $3.9 million ($.46 per share, diluted) for the nine months ended September 30, 2008, as compared to $1.2 million ($.14 per share, diluted) for the nine months ended September 30, 2007.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "Due to the unprecedented upheaval in the financial markets and the investment losses being recognized by almost every insurance company, we recorded a minimal loss on the impairment of certain investment securities of $0.4 million, net of tax ($.05 per share, diluted) and reported non-GAAP earnings of $3.9 million ($.46 per share, diluted) for the nine months of 2008. We have appointed two new medical stop-loss managing general underwriters (MGUs) to write through Independence American, and the combined ratio on our stop-loss business has improved significantly due to corrective actions previously taken. In addition, good progress is being made by Independent Producers of America, LLC. Current income from fully insured health was lower than anticipated due to unexpected losses in one of our programs, but we have instituted changes that should result in improved performance for this program in future periods."
Non-GAAP Financial Measures
The Company provides non-GAAP financial measures to complement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures are intended to supplement the user's overall understanding of the Company's current financial performance and its prospects for the future. Specifically, the Company believes the non-GAAP results provide useful information to both management and investors by identifying certain expenses that, when excluded from the GAAP results, may provide additional understanding of the Company's core operating results or business performance. However, these non-GAAP financial measures are not intended to supersede or replace the Company's GAAP results. A reconciliation of the non-GAAP results to the GAAP results is provided in the "Reconciliation of GAAP Income from Continuing Operations to Non-GAAP Operating Income from Continuing Operations" schedule below. Operating results reported on a non-GAAP basis exclude non-cash charges related to the amortization of intangible assets recorded in purchase accounting, net realized investment gains (losses) and the Federal income tax charge related to deferred taxes to show the core operating results of the Company.
About American Independence Corp.
AMIC, through Independence American Insurance Company and its other subsidiaries, offers health insurance solutions to individuals and employer groups. AMIC provides to the individual and self-employed markets health insurance and related products, which are distributed through its subsidiaries, Independent Producers of America, LLC and healthinsurance.org, LLC. AMIC markets medical stop-loss, small group major medical, and managed care insurance and reinsurance through managing general underwriters, including IndependenceCare Holdings LLC, Marlton Risk Group LLC and Risk Assessment Strategies, Inc.
Certain statements in this news release may be considered forward-looking statements, such as statements relating to management's views with respect to future events and financial performance. Such forward-looking statements are subject to risks, uncertainties and other factors which could cause actual results to differ materially from historical experience or from future results expressed or implied by such forward-looking statements. Potential risks and uncertainties include, but are not limited to, economic conditions in the markets in which AMIC operates, new federal or state governmental regulation, AMIC's ability to effectively operate, integrate and leverage any past or future strategic acquisition, and other factors which can be found in AMIC's other news releases and filings with the Securities and Exchange Commission.
AMERICAN INDEPENDENCE CORP.
THIRD QUARTER REPORT
SEPTEMBER 30, 2008
(In thousands except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
2008 2007 2008 2007
---- ---- ---- ----
Premiums earned $ 23,881 $ 26,213 $ 73,846 $ 80,705
MGU and agency income 4,092 2,643 10,575 7,129
Net investment income 843 954 2,576 2,696
Net realized investment
gains (losses) (270) 90 (555) 172
Other income (loss) 1,302 (62) 972 (107)
-------- -------- -------- --------
Revenues 29,848 29,838 87,414 90,595
-------- -------- -------- --------
Insurance benefits, claims
and reserves 18,786 22,234 53,256 59,579
Selling, general and
administrative expenses 9,742 9,517 29,835 28,804
Amortization and
depreciation 224 243 585 729
Minority interest 169 50 321 149
-------- -------- -------- --------
Expenses 28,921 32,044 83,997 89,261
-------- -------- -------- --------
Income (loss) before income
tax 927 (2,206) 3,417 1,334
Provision (benefit) for
income taxes 331 (750) 1,231 501
-------- -------- -------- --------
Net income (loss) $ 596 $ (1,456) $ 2,186 $ 833
======== ======== ======== ========
Basic income (loss) per
common share: $ .07 $ (.17) $ .26 $ .10
======== ======== ======== ========
Shares used to compute
basic income (loss) per
share 8,504 8,504 8,504 8,477
======== ======== ======== ========
Diluted income (loss) per
common share: $ .07 $ (.17) $ .26 $ .10
======== ======== ======== ========
Shares used to compute
diluted income (loss) per
share 8,504 8,504 8,504 8,528
======== ======== ======== ========
As of September 30, 2008 there were 8,503,989 common
shares outstanding, net of treasury shares.
RECONCILIATION OF GAAP INCOME FROM CONTINUING
OPERATIONS TO NON-GAAP OPERATING INCOME FROM CONTINUING OPERATIONS
(In thousands except per share data)
Three Months Nine Months
Ended Ended
September 30, September 30,
----------------- -----------------
2008 2007 2008 2007
---- ---- ---- ----
Income (loss) from
continuing operations $ 596 $(1,456) $ 2,186 $ 833
Amortization of intangible
assets related to purchase
accounting 55 48 75 144
Net realized investment
(gains) losses 270 (90) 555 (172)
Federal income tax charge
(benefit) related to
deferred taxes for
operating income 317 (750) 1,092 372
------- ------- ------- -------
Operating Income (loss)
from continuing operations $ 1,238 $(2,248) $ 3,908 $ 1,177
======= ======= ======= =======
Non - GAAP Basic Income
(Loss) Per Common Share:
Operating Income (loss)
from continuing
operations $ .15 $ (.26) $ .46 $ .14
======= ======= ======= =======
Non - GAAP Diluted Income
(Loss) Per Common Share:
Operating Income (loss)
from continuing
operations $ .15 $ (.26) $ .46 $ .14
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