Unico American Corporation Reports First Quarter 2019 Financial Results

CALABASAS, Calif.–(BUSINESS WIRE)–Unico American Corporation (NASDAQ: UNAM) (“Unico,” the “Company”)
announced today its consolidated financial results for the three months
ended March 31, 2019. For the three months ended March 31, 2019,
revenues were $7.1 million and net loss was $0.7 million ($0.13 diluted
loss per share) compared with revenues of $8.8 million and net loss of
$2.2 million ($0.42 diluted loss per share) for the three months ended
March 31, 2018.

Stockholders’ equity was $56.2 million as of March 31, 2019, or $10.59
per common share including unrealized after-tax investment losses of
$0.1 million, compared to stockholders’ equity of $55.9 million as of
December 31, 2018, or $10.54 per common share including unrealized
after- tax investment losses of $1.1 million.

About Unico

Headquartered in Calabasas, 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
Crusader’s Web site at www.crusaderinsurance.com.

Forward-Looking Statements

This press release may contain “forward-looking statements” within
the meaning of the federal securities laws. Forward-looking statements
are not historical facts and include statements about the Company plans,
objectives, beliefs and expectations. Forward-looking statements include
statements preceded by, followed by, or that include the words
“believes,” “expects,” “anticipates,” “seeks,” “plans,” “estimates,”
“intends,” “projects,” “targets,” “should,” “could,” “may,” “will,”
“can,” “can have,” “likely,” the negatives thereof or similar words and

Forward-looking statements are only predictions and are not
guarantees of future performance. These statements are based on current
expectations and assumptions involving judgments about, among other
things, future economic, competitive and market conditions and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the Company’s control. These
predictions are also affected by known and unknown risks that may cause
the Company’s actual results to be materially different from those
expressed or implied by any forward-looking statement. Such risks
include, but are not limited to, failure to meet capital and surplus
requirements; vulnerability to catastrophic property loss; changes in
accounting standards; accuracy of claims adjustments; sufficiency of
expense reserves; changes in tax laws; realization of deferred tax
assets; accuracy of underwritten risks and adequacy of
premiums; availability and cost of reinsurance; regulation and
legislative changes; reliance on subsidiaries; downgrades in financial
strength ratings; changes in interest rates;
credit and
risks; geographic concentration; reliance on
independent insurance agents and brokers; sufficiency of reserves for
doubtful accounts; litigation; enforceability of policy terms; reliance
on information technology systems; single operating location; prevention
or detection of fraud; changes in economic conditions; dependence on key
personnel; ability to attract, develop and retain employees; insolvency,
financial difficulties, or default by contractual counterparties;
competition; maximization
of long-term value; control by a small number of shareholders; limited
trading of stock; maintenance of effective systems of internal controls;
and difficulty in effecting a change of control or sale of any

Please see Part I – Item 1A – “Risk Factors” in the Company’s 2018
Annual Report on Form 10-K as filed with the U.S. Securities and
Exchange Commission (“SEC”), as well as other documents the Company
files with the SEC from time-to-time, for other factors that could cause
the Company’s actual results to differ materially from the
forward-looking statements discussed herein. Because of these and other
risks, uncertainties and assumptions, you should not place undue
reliance on these forward-looking statements. In addition, these
statements speak only as of the date of this press release and, except
as may be required by law, the Company undertakes no obligation to
revise or update publicly any forward-looking statements for any reason.





($ in thousands)

March 31 December 31
  2019     2018  


Fixed maturities, at fair value (amortized cost: March 31,
2019 $80,847; December 31, 2018 $78,303) $ 80,690 $ 76,910
Fixed maturities, at amortized cost (fair value: March 31,
2019 $5,878; December 31, 2018 $7,126) 5,878 7,126
Short-term investments, at fair value   697     4,691  
Total Investments 87,265 88,727
Cash and cash equivalents 3,646 4,918
Accrued investment income 511 394
Receivables, net 4,270 3,933
Reinsurance recoverable:
Paid losses and loss adjustment expenses 987 (1 )
Unpaid losses and loss adjustment expenses 11,679 9,532
Deferred policy acquisition costs 3,571 3,490
Property and equipment, net 9,789 9,692
Deferred income taxes 4,266 4,375
Other assets   206     557  
Total Assets $ 126,190   $ 125,617  




Unpaid losses and loss adjustment expenses $ 51,333 $ 51,657
Unearned premiums 16,526 15,965
Advance premium and premium deposits 343 234
Accrued expenses and other liabilities   1,767     1,845  
Total Liabilities $ 69,969   $ 69,701  
Commitments and contingencies


Common stock, no par – authorized 10,000,000 shares; 5,307,103
shares issued and outstanding at March 31, 2019, and
December 31, 2018 $ 3,773 $ 3,773
Accumulated other comprehensive loss (124 ) (1,100 )
Retained earnings   52,572     53,243  
Total Stockholders’ Equity $ 56,221   $ 55,916  
Total Liabilities and Stockholders’ Equity $ 126,190   $ 125,617  





($ in thousands, except per share)

Three Months Ended
March 31
  2019       2018  


Insurance company operation:

Net premium earned $ 6,264 $ 7,682
Investment income 533 445
Net realized investment losses (8 )
Other income (loss)   (261 )   55  
Total Insurance Company Operation 6,528 8,182
Other insurance operations:
Gross commissions and fees 547 607
Finance charges and fees earned 49 18
Other income   11      
Total Revenues   7,135     8,807  


Losses and loss adjustment expenses 5,154 7,802
Policy acquisition costs 1,087 1,622
Salaries and employee benefits 1,028 1,288
Commissions to agents/brokers 50 40
Other operating expenses   628     867  
Total Expenses   7,947     11,619  
Loss before taxes (812 ) (2,812 )
Income tax benefit   141     605  
Net Loss $ (671 ) $ (2,207 )


Loss Per Share $ (0.13 ) $ (0.42 )
Weighted Average Shares 5,307,103 5,307,133
Loss Per Share $ (0.13 ) $ (0.42 )
Weighted Average Shares 5,307,103 5,307,133





($ in thousands)

Three Months Ended
March 31
  2019       2018  
Cash flows from operating activities:
Net Loss $ (671 ) $ (2,207 )
Adjustments to reconcile net loss to net cash from operations:
Depreciation and amortization 135 140
Bond amortization, net 7 99
Bad debt expense 3
Net realized investment losses 8
Changes in assets and liabilities:
Net receivables and accrued investment income (457 ) 535
Reinsurance recoverable (3,135 ) (3,589 )
Deferred policy acquisition costs (81 ) 224
Other assets 349 35
Unpaid losses and loss adjustment expenses (324 ) 4,837
Unearned premiums 561 (714 )
Advance premium and premium deposits 109 101
Accrued expenses and other liabilities (78 ) (431 )
Income taxes current/deferred   (149 )   (607 )
Net Cash Used by Operating Activities   (3,723 )   (1,578 )
Cash flows from investing activities:
Purchase of fixed maturity investments (3,574 ) (8,161 )
Proceeds from maturity of fixed maturity investments 1,780 4,837
Proceeds from sale of call of fixed maturity investments 483
Net decrease in short-term investments 3,994 1,647
Additions to property and equipment   (232 )   (37 )
Net Cash Provided (Used) by Investing Activities   2,451     (1,714 )
Cash flows from financing activities:
Net Cash Used by Financing Activities        
Net decrease in cash and cash equivalents (1,272 ) (3,292 )
Cash and cash equivalents at beginning of period   4,918     9,367  
Cash and Cash Equivalents at End of Period $ 3,646   $ 6,075  
Supplemental cash flow information
Cash paid during the period for:
Income taxes $ 9


Michael Budnitsky
Chief Financial Officer

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