NEW YORK, Aug. 10, 2011 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2011 second-quarter and six-month results. This press release contains both GAAP and non-GAAP financial information for which reconciliations can be found at the end of this release.
Financial Results
Net income attributable to AMIC decreased to $0.1 million ($.02 per share, diluted), for the three months ended June 30, 2011, compared to $0.5 million ($.06 per share, diluted), for the three months ended June 30, 2010. Net income attributable to AMIC decreased to $1.1 million ($.13 per share, diluted), for the six months ended June 30, 2011, compared to $1.3 million ($.16 per share, diluted), for the six months ended June 30, 2010.
The Company's operating income1 for the three months ended June 30, 2011 was $0.1 million ($.02 per share, diluted), as compared to $0.6 million ($.07 per share, diluted) for the three months ended June 30, 2010. Operating income was $1.6 million ($.19 per share, diluted), for the six months ended June 30, 2011, as compared to $1.7 million ($.20 per share, diluted) for the six months ended June 30, 2010.
Revenues decreased to $22.0 million for the three months ended June 30, 2011, compared to revenues of $23.8 million for the three months ended June 30, 2010. Revenues decreased to $43.7 million for the six months ended June 30, 2011, compared to revenues of $46.6 million for the six months ended June 30, 2010, primarily due to a reduction of premiums.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "Operating earnings decreased due to one fully insured managing general underwriter experiencing extraordinarily high claims in this quarter. We do not currently believe that this represents a trend, nor do we expect this high level of claims to reoccur. Our financial condition and balance sheet remain strong. We have no debt, have grown our book value to $11.02 per share at June 30, 2011 from $10.82 per share at December 31, 2010, and have $273 million of federal net operating loss carryforwards. In addition, our overall investment portfolio has not been adversely impacted by the recent turmoil in the markets."
Mr. Thung continued, "The consolidation of our owned MGUs into one functional unit that we have branded as IHC Risk Solutions ("IHCRS") has significantly enhanced our ability to efficiently deliver medical stop-loss on a direct basis. The restructuring of this operation, and the addition of Mike Kemp as EVP – Underwriting, has provided us with a more controlled platform, which is beginning to deliver both improved underwriting results and increased production. As previously reported to you, on business written this year, IHCRS has achieved rate increases of almost 20%, and we are hopeful that this will yield improved profitability results beginning next year. Early indications are supportive."
Non-GAAP Financial Measures
The Company provides non-GAAP financial measures to complement its consolidated financial statements presented in accordance with GAAP: (i) Operating income is net income excluding 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 due to its federal net operating loss carryforwards, and (ii) Operating income per share is operating income (loss) on a per share basis. 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.
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 through managing general underwriters, including IHC Risk Solutions LLC.
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 income attributable to the non-controlling interest, net realized investment gains and losses, 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. | ||||
| SECOND QUARTER REPORT | ||||
| JUNE 30, 2011 | ||||
| (In thousands except per share data) | ||||
| Three Months | Six Months | |||
| Ended June 30, | Ended June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Premiums earned | $ 17,666 | $ 19,406 | $ 35,435 | $ 37,817 |
| MGU and agency income | 3,583 | 3,615 | 6,899 | 7,262 |
| Net investment income | 556 | 661 | 1,115 | 1,275 |
| Net realized investment gains | 100 | 123 | 85 | 309 |
| Other-than-temporary impairment losses | (20) | (29) | (20) | (29) |
| Other income | 85 | 9 | 178 | (5) |
| Revenues | 21,970 | 23,785 | 43,692 | 46,629 |
| Insurance benefits, claims and reserves | 12,918 | 14,013 | 23,966 | 26,331 |
| Selling, general and administrative expenses | 8,340 | 8,556 | 17,248 | 17,382 |
| Amortization and depreciation | 217 | 218 | 431 | 431 |
| Expenses | 21,475 | 22,787 | 41,645 | 44,144 |
| Income before income tax | 495 | 998 | 2,047 | 2,485 |
| Provision for income taxes | 71 | 244 | 566 | 697 |
| Net income | 424 | 754 | 1,481 | 1,788 |
| Less: Net income attributable to the non-controlling interest | (287) | (281) | (407) | (472) |
| Net income attributable to American Independence Corp. | $ 137 | $ 473 | $ 1,074 | $ 1,316 |
| Basic income per common share: | ||||
|
Basic income per common share attributable to American Independence Corp. common stockholders |
$ .02 | $ .06 | $ .13 | $ .16 |
| Weighted-average shares outstanding | 8,520 | 8,509 | 8,516 | 8,508 |
| Diluted income per common share: | ||||
|
Diluted income per common share attributable to American Independence Corp. common stockholders |
$ .02 | $ .06 | $ .13 | $ .16 |
| Weighted-average diluted shares outstanding | 8,520 | 8,509 | 8,516 | 8,508 |
| As of June 30, 2011 there were 8,519,980 common shares outstanding, net of treasury shares. | ||||
| AMERICAN INDEPENDENCE CORP. | ||||
| RECONCILIATION OF GAAP NET INCOME TO NON-GAAP OPERATING INCOME | ||||
| (In thousands except per share data) | ||||
| Three Months Ended | Six Months Ended | |||
| June 30, | June 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Net income | $ 424 | $ 754 | $ 1,481 | $ 1,788 |
| Net income attributable to the non-controlling interest | (287) | (281) | (407) | (472) |
| Amortization of intangible assets related to purchase accounting | 34 | 34 | 67 | 67 |
| Net realized investment gains | (100) | (123) | (85) | (309) |
| Other-than-temporary impairment losses | 20 | 29 | 20 | 29 |
| Federal income tax charge related to deferred taxes for operating income | 52 | 218 | 516 | 640 |
| Operating Income | $ 143 | $ 631 | $ 1,592 | $ 1,743 |
| Non - GAAP Basic Income Per Common Share: | ||||
| Operating Income | $ .02 | $ .07 | $ .19 | $ .20 |
| Non - GAAP Diluted Income Per Common Share: | ||||
| Operating Income | $ .02 | $ .07 | $ .19 | $ .20 |