FORT LAUDERDALE, FL--(Marketwire - August 13, 2007) - Universal Insurance Holdings, Inc.
("UIH") (
AMEX:
UVE), a vertically integrated insurance holding company,
announced second-quarter 2007 net income of $17.6 million, or $0.43 per
diluted share, compared to $2.0 million, or $0.05 per diluted share, in the
second quarter of 2006.
Gross premiums written increased 70.5 percent to $131.6 million in the
second quarter of 2007 from $77.2 million for the same period of 2006
primarily attributable to an increase in new business as well as premium
rate increases. Increased new business is due to heightened relationships
with existing agents, an increase in new agents, a new web-based policy
administration platform, and the disruption in the marketplace as a result
of the windstorm catastrophes in 2004 and 2005.
In the 2007 second quarter, net premiums earned increased 545.5 percent to
$43.2 million from $6.7 million in the 2006 second quarter, due primarily
to an increase in new business, premium rate increases, and changes in the
Company's reinsurance program.
Investment income increased 369.7 percent to $2.7 million for the
three-month period ended June 30, 2007, from $585,216 for the three-month
period ended June 30, 2006. The increase is primarily due to higher
investment balances and a higher interest rate environment during the 2007
period.
Comparing the second quarter of 2007 with the same period of 2006,
commission revenue increased 321.1 percent to $7.4 million from $1.8
million due mainly to an increase in the managing general agent's policy
fee income and a greater amount of reinsurance commission sharing.
Net losses and loss adjustment expenses (LAE) increased 171.9 percent to
$12.5 million in the 2007 second quarter compared to $4.6 million in the
same period of 2006. Losses and LAE increased as a result of increased
premium volume and changes in the Company's reinsurance program. The
Company's net loss ratio for the three-month period ended June 30, 2007,
was 28.9 percent compared to 68.7 percent for the same period ended June
30, 2006.
Second-quarter general and administrative expenses increased 337.7 percent
to $11.3 million in the 2007 period from $2.6 million in the 2006 period
due primarily to an increase in direct written and ceded written premiums
and changes in the Company's reinsurance program.
During the second quarter of 2007, the Company's balance sheet improved, as
total assets were $556.0 million versus $481.6 million at December 31,
2006. In the second quarter of 2007, stockholders equity increased to
$51.7 million from $22.0 million at December 31, 2006, and total debt was
reduced to $28.1 million from $37.4 million at December 31, 2006.
As of June 30, 2007, the Company was servicing approximately 341,000
homeowner's and dwelling fire insurance policies and in-force premiums of
approximately $510.0 million, while its statutory capital and surplus was
$82.7 million.
First Half Results
First-half 2007 net income was $29.9 million, or $0.73 per diluted share,
compared to $5.3 million, or $0.14 per diluted share, in the same period of
2006.
In the first six months of 2007, gross premiums written increased 130.3
percent to $262.6 million from $114.0 million for the same period of 2006,
primarily attributable to an increase in new business as well as premium
rate increases. In the 2007 six-month period, net premiums earned
increased 652.8 percent to $82.6 million from $11.0 million in the 2006
period, due primarily to an increase in new business, premium rate
increases and changes in the reinsurance program.
Investment income increased 464.9 percent to $5.5 million for the six-month
period ended June 30, 2007, from $969,183 for the six-month period ended
June 30, 2006. The increase is primarily due to higher investment balances
and a higher interest rate environment during the 2007 period.
Comparing the first half of 2007 with the same period of 2006, commission
revenue increased 259.9 percent to $9.8 million from $2.7 million due
mainly to an increase in the managing general agent's policy fee income and
a greater amount of reinsurance commission sharing.
Net losses and LAE increased 316.2 percent to $24.9 million in the 2007
first half compared to $6.0 million in the same period of 2006. Losses and
LAE increased as a result of increased premium volume and changes in the
Company's reinsurance program. The Company's net loss ratio for the
six-month period ended June 30, 2007, was 30.1 percent compared to 54.4
percent for the same period ended June 30, 2006.
First six-month general and administrative expenses increased 943.7 percent
to $21.3 million in the 2007 period from $2.0 million in the 2006 period
due to the reasons listed above.
The Company announced on July 13, 2007, a cash dividend on its common
stock. Stockholders of record as of September 27, 2007, will receive $0.08
for each share owned on that date, payable on October 22, 2007.
Management Comments
Bradley I. Meier, president and chief executive officer, commented, "Our
results this quarter illustrate the diligent execution of our strategies
for growth, productivity, and efficiency. We met our overall corporate
performance expectations while we continued to position Universal Insurance
Holdings for success in the future. The Company's sound balance sheet and
positioning within the Florida market have allowed us to capture a greater
market share. We remain committed to further growing the Company while
focusing on profitability and writing rate adequate business."
About Universal Insurance Holdings, Inc.
The Company is a vertically integrated insurance holding company operating
solely in the state of Florida. Through its subsidiaries, the Company is
currently engaged in insurance underwriting, distribution and claims.
Universal Property & Casualty Insurance Company (UPCIC), which generates
revenue from the collection and investment of premiums, is one of the top
10 leading writers of homeowners insurance in the state of Florida and has
aligned itself with well respected service providers in the industry.
Readers should refer generally to reports filed by the Company with the
Securities and Exchange Commission (SEC), and specifically to the Company's
Form 10-KSB for the year ended December 31, 2006 for a discussion of the
risk factors that could affect its operations. Such factors include,
without limitation, exposure to catastrophic losses; reliance on the
Company's reinsurance program; underwriting performance on catastrophe and
non-catastrophe risks; the ability to maintain relationships with
customers, employees or suppliers; and competition and its effect on
pricing, spending, third-party relationships and revenues. Additional
factors that may affect future results are contained in the Company's
filings with the SEC, which are available on the SEC's web site at
http://www.sec.gov. The Company disclaims any obligation to update and
revise statements contained in this press release based on new information
or otherwise.
Cautionary Language Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. The words "remain
committed," "believe," "expect," "anticipate" and "project," and similar
expressions identify forward-looking statements, which speak only as of the
date the statement was made. Such statements may include, but not be
limited to, projections of revenues, income or loss, expenses, plans, and
assumptions relating to the foregoing. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified. Future results could differ materially from those
described in forward-looking statements.
Financial tables to follow...
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Six Months Ended Three Months Ended
June 30, 2007 June 30, 2006 June 30, 2007 June 30, 2006
------------- ------------- ------------- -------------
PREMIUMS EARNED
AND OTHER
REVENUES:
Direct premiums
written $ 262,563,270 $ 114,003,676 $ 131,573,917 $ 77,159,159
Ceded premiums
written (185,148,008) (77,945,774) (91,071,965) (45,963,214)
------------- ------------- ------------- -------------
Net premiums
written 77,415,262 36,057,902 40,501,952 31,195,945
Decrease
(increase) in
net unearned
premiums 5,228,113 (25,079,437) 2,703,160 (24,503,066)
------------- ------------- ------------- -------------
Premiums
earned, net 82,643,375 10,978,465 43,205,112 6,692,879
Net investment
income 5,475,079 969,183 2,748,858 585,216
Commission
revenue 9,773,589 2,715,592 7,420,733 1,762,219
Other revenue 110,233 16,202 58,531 9,853
------------- ------------- ------------- -------------
Total
premiums
earned and
other
revenues 98,002,276 14,679,442 53,433,234 9,050,167
------------- ------------- ------------- -------------
OPERATING COSTS
AND EXPENSES
Losses and loss
adjustment
expenses 24,866,277 5,974,787 12,497,543 4,597,154
General and
administrative
expenses 21,304,473 2,041,208 11,292,398 2,579,902
------------- ------------- ------------- -------------
Total
operating
costs and
expenses 46,170,750 8,015,995 23,789,941 7,177,056
------------- ------------- ------------- -------------
INCOME BEFORE
INCOME TAXES 51,831,526 6,663,447 29,643,293 1,873,111
------------- ------------- ------------- -------------
Income taxes,
current 23,105,624 2,615,933 13,731,190 1,337,068
Income taxes,
deferred (1,202,361) (1,238,670) (1,641,331) (1,437,547)
------------- ------------- ------------- -------------
Income taxes,
net 21,903,263 1,377,263 12,089,859 (100,479)
------------- ------------- ------------- -------------
NET INCOME $ 29,928,263 $ 5,286,184 $ 17,553,434 $ 1,973,590
============= ============= ============= =============
INCOME PER
COMMON SHARE:
Basic $ 0.84 $ 0.15 $ 0.49 $ 0.06
============= ============= ============= =============
WEIGHTED
AVERAGE COMMON
SHARES
OUTSTANDING -
BASIC 35,528,000 34,373,000 35,577,000 34,306,000
============= ============= ============= =============
INCOME PER
COMMON SHARE:
Diluted $ 0.73 $ 0.14 $ 0.43 $ 0.05
============= ============= ============= =============
WEIGHTED
AVERAGE COMMON
SHARES
OUTSTANDING -
DILUTED 41,217,000 36,863,000 40,851,000 37,300,000
============= ============= ============= =============
CASH DIVIDEND
DECLARED PER
COMMON SHARE $ 0.07 $ 0.08 $ - $ 0.04
============= ============= ============= =============
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
June 30, 2007
(Unaudited)
ASSETS
Cash and cash equivalents $ 256,049,954
Real estate, net 3,211,986
Prepaid reinsurance premiums 180,970,635
Reinsurance recoverables and other reinsurance receivable 86,036,298
Premiums and other receivables, net 19,223,252
Property and equipment, net 607,620
Deferred income taxes 9,874,117
Other assets 16,222
--------------
Total assets $ 555,990,084
==============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses $ 52,130,976
Unearned premiums 271,885,614
Deferred ceding commission, net 1,558,077
Accounts payable 1,673,508
Reinsurance payable 101,898,123
Federal and state income taxes payable 19,401,565
Dividends payable 2,446,392
Other accrued expenses 13,279,300
Other liabilities 11,987,103
Loans payable 3,025,940
Long-term debt 25,040,870
--------------
Total liabilities 504,327,468
--------------
STOCKHOLDERS' EQUITY:
Cumulative convertible preferred stock, $.01 par value,
1,000,000 shares authorized, 138,640 shares issued and
outstanding, minimum liquidation preference of $1,419,700 1,387
Common stock, $.01 par value, 55,000,000 shares authorized,
39,057,103 shares issued and 35,762,729 shares outstanding 390,572
Common stock in treasury, at cost - 394,374 shares (974,746)
Common stock held in trust, at cost - 2,900,000 shares (2,349,000)
Additional paid-in capital 21,759,615
Retained earnings 32,834,788
--------------
Total stockholders' equity 51,662,616
--------------
Total liabilities and stockholders' equity $ 555,990,084
==============
Contact Information: Investor Contact:
Philip Kranz
Dresner Corporate Services
312-780-7240
pkranz@dresnerco.com