NEW YORK, Nov. 10, 2011 (GLOBE NEWSWIRE) -- American Independence Corp. (Nasdaq:AMIC) today reported 2011 third-quarter and nine-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 increased to $0.9 million ($.11 per share, diluted), for the three months ended September 30, 2011, compared to $0.6 million ($.07 per share, diluted), for the three months ended September 30, 2010. Revenues increased to $23.0 million for the three months ended September 30, 2011, compared to revenues of $21.8 million for the three months ended September 30, 2010 primarily due to an increase in premiums.
Net income attributable to AMIC increased to $2.0 million ($.23 per share, diluted), for the nine months ended September 30, 2011, compared to $1.9 million ($.23 per share, diluted), for the nine months ended September 30, 2010. Revenues decreased to $66.7 million for the nine months ended September 30, 2011, compared to revenues of $68.4 million for the nine months ended September 30, 2010, primarily due to a reduction of premiums.
The Company's operating income1 for the three months ended September 30, 2011 was $1.2 million ($.14 per share, diluted), as compared to $0.8 million ($.10 per share, diluted) for the three months ended September 30, 2010. Operating income was $2.8 million ($.32 per share, diluted), for the nine months ended September 30, 2011, as compared to $2.6 million ($.30 per share, diluted) for the nine months ended September 30, 2010.
Chief Executive Officer's Comments
Roy Thung, Chief Executive Officer, commented, "Operating earnings increased this quarter primarily due to improved underwriting results from our stop-loss line, which was positively affected by the reorganization of our stop-loss business. During the past three years we successfully changed the way we manage this line of business by consolidating the operations of our owned managing general underwriters (MGUs) into a direct writing operation known as IHC Risk Solutions. We are gratified with the increase in our fully-insured segment which experienced improved loss ratios. Our financial condition and balance sheet remain strong. We have no debt, have grown our book value to $11.14 per share at September 30, 2011 from $10.82 per share at December 31, 2010, and have $272 million of federal net operating loss carryforwards."
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.
1Operating 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. | ||||
| THIRD QUARTER REPORT | ||||
| SEPTEMBER 30, 2011 | ||||
| (In thousands except per share data) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Premiums earned | $19,138 | $17,833 | $54,573 | $55,650 |
| Fee and agency income | 2,906 | 3,183 | 9,805 | 10,445 |
| Net investment income | 615 | 612 | 1,730 | 1,887 |
| Net realized investment gains | 238 | 136 | 323 | 445 |
| Other-than-temporary impairment losses | -- | -- | (20) | (29) |
| Other income | 72 | 35 | 250 | 30 |
| Revenues | 22,969 | 21,799 | 66,661 | 68,428 |
| Insurance benefits, claims and reserves | 12,150 | 11,808 | 36,116 | 38,139 |
| Selling, general and administrative expenses | 9,099 | 8,584 | 26,347 | 25,966 |
| Amortization and depreciation | 214 | 215 | 645 | 646 |
| Expenses | 21,463 | 20,607 | 63,108 | 64,751 |
| Income before income tax | 1,506 | 1,192 | 3,553 | 3,677 |
| Provision for income taxes | 443 | 324 | 1,009 | 1,021 |
| Net income | 1,063 | 868 | 2,544 | 2,656 |
| Less: Net income attributable to the non-controlling interest | (150) | (245) | (557) | (717) |
| Net income attributable to American Independence Corp. | $913 | $623 | $1,987 | $1,939 |
| Basic income per common share: | ||||
| Basic income per common share attributable to | ||||
| American Independence Corp. common stockholders | $.11 | $.07 | $.23 | $.23 |
| Weighted-average shares outstanding | 8,524 | 8,512 | 8,518 | 8,509 |
| Diluted income per common share: | ||||
| Diluted income per common share attributable to | ||||
| American Independence Corp. common stockholders | $.11 | $.07 | $.23 | $.23 |
| Weighted-average diluted shares outstanding | 8,524 | 8,512 | 8,518 | 8,509 |
| As of September 30, 2011 there were 8,523,702 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 | Nine Months Ended | |||
| September 30, | September 30, | |||
| 2011 | 2010 | 2011 | 2010 | |
| Net income | $1,063 | $868 | $2,544 | $2,656 |
| Net income attributable to the non-controlling interest | (150) | (245) | (557) | (717) |
| Amortization of intangible assets related to purchase accounting | 34 | 34 | 101 | 101 |
| Net realized investment gains | (238) | (136) | (323) | (445) |
| Other-than-temporary impairment losses | -- | -- | 20 | 29 |
| Federal income tax charge related to deferred taxes for operating income | 451 | 314 | 967 | 954 |
| Operating Income | $1,160 | $835 | $2,752 | $2,578 |
| Non - GAAP Basic Income Per Common Share: | ||||
| Operating Income | $.14 | $.10 | $.32 | $.30 |
| Non - GAAP Diluted Income Per Common Share: | ||||
| Operating Income | $.14 | $.10 | $.32 | $.30 |