NEW YORK, March 16, 2009 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2008 fourth-quarter and annual 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
The Company's operating income(1) for the three months ended December 31, 2008 was $0.6 million ($.08 per share, diluted), as compared to $0.4 million ($.04 per share, diluted) for the three months ended December 31, 2007. The Company's operating income was $4.5 million ($.53 per share, diluted) for the year ended December 31, 2008, as compared to $1.5 million ($.18 per share, diluted) for the year ended December 31, 2007.
Revenues decreased to $25.9 million for the three months ended December 31, 2008, compared to revenues of $28.5 million for the three months ended December 31, 2007. Net income (loss) decreased to $(1.2) million ($(.14) per share), net of an income tax benefit of $(0.6) million, for the three months ended December 31, 2008, compared to $0.3 million ($.04 per share, diluted), net of a provision for income taxes of $0.2 million, for the three months ended December 31, 2007. As of December 31, 2008, AMIC had approximately $276 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. In the fourth quarter of 2008, the Company became aware of certain activities engaged in by the non-affiliate broker-dealer that managed a trading account of the Company. The Company recorded a loss of $1.3 million, net of tax ($.15 per share) in the fourth quarter of 2008 relating to assets invested with this broker-dealer. The Company also recorded a loss on the impairment of certain securities of $0.2 million, net of tax ($.03 per share) in the fourth quarter of 2008 relating to bonds 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 $1.0 million ($.11 per share, diluted), net of a provision for income taxes of $0.6 million, for the year ended December 31, 2008, compared to $1.1 million ($.13 per share, diluted), net of a provision for income taxes of $0.7 million, for the year ended December 31, 2007. The Company recorded a loss on the impairment of certain securities of $0.7 million, net of tax ($.08 per share, diluted) for the year ended 2008 relating to bonds and preferred stocks of financial institutions. Revenues decreased to $113.3 million for the year ended December 31, 2008, compared to revenues of $119.1 million for the year ended December 31, 2007.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "We are pleased that our operating income from continuing operations increased to $.53 per share, diluted, for the year ended December 31, 2008, as compared to $.18 per share, diluted, for the year ended December 31, 2007. The decrease in net income for 2008 as compared to 2007 is primarily due to realized losses of $2.9 million. The improvement in operating income is largely due to improved underwriting results on our medical stop-loss line of business, offset by reduced medical stop-loss premiums and lower margins on certain group major medical lines of business. In addition, the individual health business produced by our affiliate, Independent Producers of America (IPA), continues to grow as planned. Independence American Insurance Company's annualized earned premium produced by IPA has grown from $2.2 million prior to our acquiring them to $7.4 million as of December 31, 2008. Underwriting profit for business generated by IPA is achieving expected results. We are confident that our improved overall operating results will continue in 2009."
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.
(1) Operating income is a non-GAAP measure and is defined as net income excluding non-cash charges related to the amortization of certain intangible assets recorded in purchase accounting, net realized investment losses, losses from discontinued operations and the federal income tax charge related to deferred taxes. The Company believes that the presentation of operating income may offer a better understanding of the core operating results of the Company. A reconciliation of net income to operating income is presented as an attachment to this press release.
AMERICAN INDEPENDENCE CORP.
FOURTH QUARTER REPORT
DECEMBER 31, 2008
(In thousands except per share data)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
2008 2007 2008 2007
---- ---- ---- ----
Premiums earned $ 23,138 $ 25,395 $ 96,984 $106,100
MGU and agency income 3,964 2,323 14,539 9,452
Net investment income 951 915 3,527 3,611
Net realized investment gains
(losses) (2,347) 149 (2,902) 321
Other income (loss) 192 (281) 1,164 (388)
-------- -------- -------- --------
Revenues 25,898 28,501 113,312 119,096
-------- -------- -------- --------
Insurance benefits, claims
and reserves 16,858 19,039 70,114 78,618
Selling, general and
administrative expenses 10,428 8,659 40,263 37,463
Amortization and depreciation 208 242 793 971
Minority interest 150 66 471 215
-------- -------- -------- --------
Expenses 27,664 28,006 111,641 117,267
-------- -------- -------- --------
Income (loss) from continuing
operations before income tax (1,746) 495 1,671 1,829
Provision (benefit) for
income tax (600) 190 631 691
-------- -------- -------- --------
Income (loss) from continuing
operations (1,146) 305 1,040 1,138
Gain (loss) on disposition of
discontinued operations, net
of tax (75) -- (75) --
-------- -------- -------- --------
Net income (loss) $ (1,221) $ 305 $ 965 $ 1,138
======== ======== ======== ========
Basic income (loss) per
common share:
Income (loss) from continuing
operations $ (.13) $ .04 $ .12 $ .13
Gain (loss) on disposition of
discontinued operations, net
of tax (.01) -- (.01) --
-------- -------- -------- --------
Net income (loss) $ (.14) $ .04 $ .11 $ .13
======== ======== ======== ========
Weighted-average shares
outstanding 8,504 8,504 8,504 8,484
======== ======== ======== ========
Diluted income (loss) per
common share:
Income (loss) from continuing
operations $ (.13) $ .04 $ .12 $ .13
Gain (loss) on disposition of
discontinued operations, net
of tax (.01) -- (.01) --
-------- -------- -------- --------
Net income (loss) $ (.14) $ .04 $ .11 $ .13
======== ======== ======== ========
Weighted-average diluted
shares outstanding 8,504 8,532 8,504 8,535
======== ======== ======== ========
As of December 31, 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 Ended Year Ended
December 31, December 31,
------------------ ------------------
2008 2007 2008 2007
---- ---- ---- ----
Income (loss) from continuing
operations $ (1,146) $ 305 $ 1,040 $ 1,138
Amortization of intangible
assets related to purchase
accounting 35 50 110 194
Net realized investment
(gains) losses 2,347 (149) 2,902 (321)
Federal income tax charge
(benefit) related to deferred
taxes for operating income (595) 146 497 518
-------- -------- -------- --------
Operating Income from
continuing operations $ 641 $ 352 $ 4,549 $ 1,529
======== ======== ======== ========
Non - GAAP Basic Income Per
Common Share:
Operating Income from
continuing operations $ .08 $ .04 $ .53 $ .18
======== ======== ======== ========
Non - GAAP Diluted Income Per
Common Share:
Operating Income from
continuing operations $ .08 $ .04 $ .53 $ .18
======== ======== ======== ========