Atlanta-based ASSURANCEAMERICA CORPORATION (OTC BB: ASAM) today announced its audited financial results for the twelve months ended December 31, 2009.
Twelve Months Ended December 31, (in thousand, except per ratios) 2009 2008 Change Total revenue 66,992 63,238 6 % Income (loss) before income taxes 897 (4,612 ) 119 % Net income (loss) 448 (3,215 ) 114 % ——————————————————————————-
Revenues for the twelve-month period of 2009 increased 6% to $67.0 million, compared to $63.2 million in 2008 because of increased premium production within the Carrier/MGA wholesale division.
The Company’s income before income taxes for the twelve-month period ending December 31, 2009 were $0.9 million compared to a pre-tax loss of $4.6 million in 2008, which includes a goodwill impairment of $3.4 million. Improved underwriting results in the Carrier/MGA wholesale division and benefits from cost reductions in the retail division contributed to the positive results for the year.
The Company’s net income for the twelve month period ending December 31, 2009 were $0.4 million compared to a net loss of $3.2 million in 2008, which includes an after-tax goodwill impairment of $2.4 million.
Joe Skruck, President and COO, states, “I’m very pleased that we were able to deliver improved results despite continued tough operating conditions. During 2009, we made significant progress in strengthening our claims handling capabilities, took appropriate rate and underwriting actions in our Carrier/MGA operations and achieved cost savings in our retail operations.”
Gross Premiums Produced, which includes gross written premium in the Carrier/MGA wholesale division and premiums for policies sold in the retail Agency subsidiary, increased 3% to $146.3 million for the twelve months ended December 2009 compared to $141.7 million for the same period of 2008. The increase in gross premiums produced was driven mainly by increased production within the Carrier/MGA operations, offset by lower premium volume for the retail division. Management uses Gross Premiums Produced, a non-GAAP financial measure, as the primary measure of the underlying growth of the Company’s revenue streams from period to period.
AssuranceAmerica focuses on the non-standard automobile insurance marketplace, primarily in Alabama, Arizona, Florida, Georgia, Indiana, Louisiana, Mississippi, South Carolina, Texas and Virginia. Its principal operating subsidiaries are TrustWay Insurance Agencies, LLC (“Agency”), which sells personal automobile insurance policies through its 40 retail agencies, AssuranceAmerica Managing General Agency, LLC (“MGA”), and AssuranceAmerica Insurance Company (“Carrier”).
This press release contains certain statements that may deem to be “forward-looking statements”. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements in this press release not dealing with historical results or current facts are forward-looking and are based on estimates, assumptions, and projections. Statements that include the words “assumes”, “believes,” “seeks,” “expects,” “may,” “should,” “intends,” “likely,” “targets,” “plans,” “anticipates,” “estimates” or the negative version of those words and similar statements of a future or forward-looking nature identify forward-looking statements.
The primary events or circumstances that could cause actual results to differ materially from those expected by AssuranceAmerica Corporation include determinations with respect to reserve adequacy, realized gains or losses on the investment portfolio including other-than-temporary impairments for credit losses, rising loss cost trends, actions of competitors and natural disasters. AssuranceAmerica Corporation undertakes no obligation to publicly update or revise any of the forward-looking statements. For a more detailed discussion of some of the foregoing risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see AssuranceAmerica Corporation filings with the Securities and Exchange Commission.
ASSURANCEAMERICA CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (000’S OMITTED) For the Years Ended December 31, 2009 2008 Revenue: Gross premiums written $ 107,249 $ 93,281 Ceded premiums written (71,999 ) (64,368 ) Net premiums written 35,250 28,913 Change in unearned premiums (826 ) (145 ) Net premiums earned 34,424 28,768 Commission income 21,641 21,375 Managing general agent fees 10,277 12,505 Net investment income 670 670 Net investment losses on securities (362 ) (388 ) Other fee income 342 308 Total revenue 66,992 63,238 Expenses: Losses and loss adjustment expenses 25,248 23,733 Selling, general, and administrative 38,872 38,688 Stock option expense 334 49 Depreciation and amortization expense 1,183 1,288 Goodwill impairment – 3,374 Interest expense 458 718 Total operating expenses 66,095 67,850 Income (loss) before income taxes 897 (4,612 ) Income tax provision (benefit) 449 (1,397 ) Net income (loss) $ 448 $ (3,215 ) Earnings (loss) per common share: Basic $ 0.007 $ (0.050 ) Diluted $ 0.007 $ (0.050 ) Weighted average shares outstanding-basis 65,120,526 64,922,269 Weighted average shares outstanding-diluted 65,284,661 64,922,269 ——————————————————————————-
AssuranceAmerica Corporation also makes available an investor supplement on our website. To access the supplemental financial information, go to www.assuranceamerica.com.