NEW YORK, Aug. 10, 2009 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2009 second-quarter and six-months 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
The Company's operating income(1) for the three months ended June 30, 2009 was $0.7 million ($.08 per share, diluted), as compared to $1.4 million ($.17 per share, diluted) for the three months ended June 30, 2008. Operating income for the six months ended June 30, 2009 was $2.6 million ($.31 per share, diluted), as compared to $2.7 million ($.31 per share, diluted) for the six months ended June 30, 2008.
Revenues decreased to $26.8 million for the three months ended June 30, 2009, compared to revenues of $29.2 million for the three months ended June 30, 2008. Net income decreased to $0.5 million ($.06 per share, diluted), net of a provision for income taxes of $0.3 million, for the three months ended June 30, 2009, compared to $0.8 million ($.09 per share, diluted), net of a provision for income taxes of $0.4 million, for the three months ended June 30, 2008. Revenues decreased to $53.4 million for the six months ended June 30, 2009, compared to revenues of $57.6 million for the six months ended June 30, 2008. Net income was $1.9 million ($.22 per share, diluted), net of provision for income taxes of $1.0 million, for the six months ended June 30, 2009, compared to $1.6 million ($.19 per share, diluted), net of a provision for income taxes of $0.9 million, for the six months ended June 30, 2008.
As of June 30, 2009, AMIC had approximately $274 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.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "The second quarter of 2009 was adversely impacted by significantly higher loss ratios in our fully insured health line on business generated by one producer. We have taken measures to correct the situation and are optimistic that we will see improvement in future quarters. Our premiums have decreased almost 12% for the six months ended June 30, 2009 compared to the first six months of 2008 due to recessionary pressures and tighter underwriting guidelines. Even in the current challenging economy, our financial condition remains strong. Our insurance company's statutory surplus at June 30, 2009 is at an all-time high. We have grown our book value to $10.15 per share at June 30, 2009, from $9.75 per share at December 31, 2008."
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, (ii) Operating income per share is operating income (loss) on a per share basis, and (iii) Adjusted book value per share represents AMIC's book value per share excluding the per share value of net unrealized investment gains and losses (per SFAS 115), after taxes. 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" and "Reconciliation of GAAP Book Value Per Share to Non-GAAP Adjusted Book Value Per Share" schedules 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, 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.
SECOND QUARTER REPORT
JUNE 30, 2009
(In thousands except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
---------------- ----------------
2009 2008 2009 2008
------- ------- ------- -------
Premiums earned $22,129 $24,721 $44,076 $49,965
MGU and agency income 3,684 4,055 7,438 6,483
Net investment income 765 878 1,478 1,733
Net realized investment gains 35 114 261 87
Total other-than-temporary
impairment losses -- (372) -- (372)
Other income (loss) 141 (233) 183 (330)
------- ------- ------- -------
Revenues 26,754 29,163 53,436 57,566
------- ------- ------- -------
Insurance benefits, claims and
reserves 15,541 16,918 29,387 34,470
Selling, general and
administrative expenses 10,044 10,746 20,470 20,093
Amortization and depreciation 210 185 419 361
------- ------- ------- -------
Expenses 25,795 27,849 50,276 54,924
------- ------- ------- -------
Income before income tax 959 1,314 3,160 2,642
Provision for income taxes 281 443 1,027 900
------- ------- ------- -------
Net income 678 871 2,133 1,742
Less: Net income attributable to
the noncontrolling interest (207) (87) (267) (152)
------- ------- ------- -------
Net income attributable to
American Independence Corp. $ 471 $ 784 $ 1,866 $ 1,590
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Basic income per common share:
Net income attributable to
American Independence Corp.
common shareholders $ .06 $ .09 $ .22 $ .19
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Weighted-average shares
outstanding 8,504 8,504 8,504 8,504
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Diluted income per common share:
Net income attributable to
American Independence Corp.
common shareholders $ .06 $ .09 $ .22 $ .19
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Weighted-average diluted shares
outstanding 8,504 8,504 8,504 8,504
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As of June 30, 2009 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 Six Months
Ended June 30, Ended June 30,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Income from continuing operations $ 471 $ 784 $ 1,866 1,590
Amortization of intangible assets
related to purchase accounting 34 16 67 19
Net realized investment gains (35) (114) (261) (87)
Total other-than-temporary
impairment losses -- 372 -- 372
Federal income tax charge related
to deferred taxes for operating
income 235 380 933 775
------- ------- ------- -------
Operating Income from continuing
operations $ 705 $ 1,438 $ 2,605 2,669
======= ======= ======= =======
Non - GAAP Basic Income Per
Common Share:
Operating Income from continuing
operations $ .08 $ .17 $ .31 .31
======= ======= ======= =======
Non - GAAP Diluted Income Per
Common Share:
Operating Income from continuing
operations $ .08 $ .17 $ .31 .31
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