NEW YORK, May 17, 2010 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2010 first-quarter 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 decreased to $0.8 million ($.10 per share, diluted), for the three months ended March 31, 2010, compared to $1.4 million ($.16 per share, diluted), for the three months ended March 31, 2009.
The Company's operating income(1) for the three months ended March 31, 2010 was $1.3 million ($.15 per share, diluted), as compared to $2.0 million ($.23 per share, diluted) for the three months ended March 31, 2009.
Revenues decreased to $22.8 million for the three months ended March 31, 2010, compared to revenues of $26.7 million for the three months ended March 31, 2009, primarily due to a reduction of premiums.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "The decrease in our financial results in the first quarter is largely due to a reduction in premiums and an increase in loss ratios due to the global economic crisis, but we believe both are beginning to stabilize. Sequentially, our operating income per share increased to $.15 per share from $.10 per share for the quarter ended December 31, 2009. Our financial condition remains strong as we have grown our book value to $10.61 at March 31, 2010 from $10.46 per share at December 31, 2009, and our investment portfolio continues to be rated, on average, AA."
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), net income attributable to the non-controlling interest, 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 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. | ||||
| FIRST QUARTER REPORT | ||||
| MARCH 31, 2010 | ||||
| (In thousands except per share data) | ||||
| Three Months | ||||
| Ended March 31, | ||||
| 2010 | 2009 | |||
| Premiums earned | $18,411 | $21,947 | ||
| MGU and agency income | 3,643 | 3,754 | ||
| Net investment income | 614 | 713 | ||
| Net realized investment gains | 186 | 226 | ||
| Other income (loss) | (10) | 42 | ||
| Revenues | 22,844 | 26,682 | ||
| Insurance benefits, claims and reserves | 12,318 | 13,846 | ||
| Selling, general and administrative expenses | 8,826 | 10,426 | ||
| Amortization and depreciation | 213 | 209 | ||
| Expenses | 21,357 | 24,481 | ||
| Income before income tax | 1,487 | 2,201 | ||
| Provision for income taxes | 453 | 746 | ||
| Net income | 1,034 | 1,455 | ||
| Less: Net income attributable to the non-controlling interest | (191) | (60) | ||
| Net income attributable to American Independence Corp. | $843 | $1,395 | ||
| Basic income per common share: | ||||
| Net income attributable to American Independence Corp. common stockholders | $.10 | $.16 | ||
| Weighted-average shares outstanding | 8,506 | 8,504 | ||
| Diluted income per common share: | ||||
| Net income attributable to American Independence Corp. common stockholders | $.10 | $.16 | ||
| Weighted-average diluted shares outstanding | 8,506 | 8,504 | ||
As of March 31, 2010 there were 8,506,489 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 | |||
| March 31, | |||
| 2010 | 2009 | ||
| Income from continuing operations | $1,034 | $1,455 | |
| Amortization of intangible assets related to purchase accounting | 34 | 34 | |
| Net realized investment gains | (186) | (226) | |
| Federal income tax charge related to deferred taxes for operating income | 422 | 698 | |
| Operating Income from continuing operations | $1,304 | $1,961 | |
| Non - GAAP Basic Income Per Common Share: | |||
| Operating Income from continuing operations | $.15 | $.23 | |
| Non - GAAP Diluted Income Per Common Share: | |||
| Operating Income from continuing operations | $.15 | $.23 | |